THE Sunaner Daily ol. LXXXIIl, No. 53-S Ann Arbor, Michigan-Thursday, August 2, 1973 Ten Cents Eight Pages eth iehe :0 come tax on 4-year profit By DAN BIDDLE Copyright 1973, The Michigan Daily Over the last four years, the second largest steel company in the United States reported a profit of nearly $700 million but paid a net federal income tax of less than zero. A Daily investigation has shown that Bethlehem Steel Corp., a Pennsyl- vania-based firm with assets in ex- cess of $1 billion, paid far less in federal income tax for 1969-72 than it received in federal income tax re- funds during the same period. THE CORPORATION'S eye-opening tax situation violates no existing laws, and ap- parently stems from differences in the sepa- rate accounting methods used by Bethle- hem in filing tax returns and over-all finan- cial statements to the government. The corporation paid some $45 million in federal income tax for 1971-72, but that sum was more than offset by some $66 million re- ceived in federal refunds for 1969-70. Bethle- hem paid no federal income tax during those two years. For the four-year period, Bethlehem re- ported a net income - after expenses and before federal income taxes - of $675.3 mil- lion. IN THAT SAME PERIOD, however, the company received $21.9 million more in federal income tax refunds than it originally paid the government. According to the Internal Revenue Service (IRS), the manufacturers of primary metals -including steel - give an average of about 50 per cent of their net income to IRS coffers. Bethlehem Steel has for four years aver- aged a negative number: a little more than three cents returned by the government on every dollar of the company's reported net income. THE DAILY learned of the uncanny dis- crepancy between profit and income tax from the steel company's own annual re- ports to stockholders, and from its 1969-72 10-K statements (see chart) to the Securi- ties and Exchange Commission (SEC). Corporations are annually required to file 10-K, which is a complete financial account- ing, to the SEC in order to establish the com- panies' ability to distribute dividends to stockholders. A spokesman for Bethlehem Steel at the corporation's headquarters in Bethlehem, Pa., expressed surprise at his company's tax figures and told The Daily he would "have to check this with the people in the account- ing office." THE SPOKESMAN, when contacted Tues- day, insisted that "there must be something wrong" with the figures. "I can't believe this," he continued. "This See BETHLEHEM, Page 5 Dash accuses Mitchell of ITT perjury WASHINGTON (I)-Former Atty. Gen. John Mitchell was accused of an act of perjury yesterday in connection with last year's settlement of the antitrust case against the International Telegraph & Telephone Corp. (ITT). Samuel Dash, chief counsel to the Sen- ate Watergate committee, released a March 30, 1972 memo from former presi- dential counsel Charles Colson to H. R. Haldeman, then White House chief of staff. THE MEMO said Mitchell knew about the ITT pledge of $400,000 to help under- write the 1972 Republican National Con- vention a month before settlement of the antitrust case. Mitchell has testified he had no such knowledge. Dash said the memo appears to show "an act of perjury on the part of Mit- chtll." COLSON'S MEMO briefed Haldeman on the status of administration records deal- ing with the ITT controversy that arose last year during the confirmation hearings of Mitchell's successor as attorney gen- eral, Richard Kleindienst. Clson said another document not in his possession would show the President also knew of the ITT convention finance plede". In a statement issued last night, Colson said ITT files that were not shredded but sent to the Securities and Exchange Com- mission (SEC) would show that Mitchell was put on notice about the ITT conven- tion arrangement a month before the anti- trust suit settlement took place. COLSON SAID the files contained a June 30, 1971 memo from Herbert Klein, then White House communications director, to Haldeman, setting forth a $400,000 ar- rangement with ITT. Copies were ad- dressed to Mitchell and William Timmons, a White House aide. "This memo put the AG (attorney gen- eral) on constructive notice at least of the ITT commitment at that time and be- fore the settlement, facts which he has denied under oath," Colson said in his memo. During the Watergate hearings yester- day Dash questioned Haldeman about the memo. The former White House aide said he was not familiar with it nor did lie remember receiving it. COLSON'S MEMO said also there was a second document in the SEC file which would contradict Mitchell's testimony be- See MITCHELL, Page 2 ^AP Pho JOHN WILSON, chief legal counsel for both John Ehrlichman and H. R. Haldeman, suddenly became the center of attention at the Watergate hearings yesterday. During a condemnation of the questioning tactics of committee member Sen. Daniel Inouye (D-Hawaii), Wilson referred to the Hawaiian senator as a "little Jap." Pressed on the point Wilson later admitted, "That just the way I talk."