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June 29, 1977 - Image 7

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Publication:
Michigan Daily, 1977-06-29

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Wednesday, June 29, 1977 THE MICHIGAN DAILY Page Seven
Grand jury may investigate GM

DETROIT (P) - A federal turn over pny grand jury evi-
judge ruled that a grand jury dence to the Internal Revenue
may investigate the possibility Service (IRS).
that General Motors Corp.
(GM) tried to cheat the feder- CHURCHILL M A D E the
al government out of millions ruling yesterday on motions by
of dollars in taxes. the world's largest auto maker
But U. S. District Court to throw out subpoenas and,
Judge James Churchill also or- failing that, to limit the inves-
dered federal prosecutors not to tigation.

GM said the grand jury pro-
ceeding was an unlawful at-
tempt by the IRS to collect
money in what should be a civil
proceeding.
The government had accused
GM of trying to block the IJRS
investigation and had said the
grand jury was needed for a
criminal probe.

House nixes own cost-of-living raise

WASHINGTON () -- House
members, skittish about the
$12,900 pay raise they voted
themselves earlier this year,
cancelled yesterday a cost of
living raise amounting to about
$3,500 for members of Congress
and top federal officials.
The 397-to-20 vote was only
the curtain raiser in a major
struggle over whether to roll
back the pay raise members
have been receiving since
March 1. The test on that issue
begins today when the House
takes up the legislative appro-
priations bill.
AN AMENDMENT will be
offered to that measure deny-
ing 'funds to continue the pqy

raise for senators, representa-
tives, high executive officials
such as Cabinet members and
the top brackets of the civil
service. Those categories total
more than 20,000 persons.
The Senate already had voted
to cancel the cost of living in-
crease.
Members of Congress now'
make $57,500 a year. The cost
of living increase was sched-
uled to go into effect in Octo-
ber.
T H E DEMOCRATIC lead-
ership is fighting to preserve
the pay raise. Opponents charg-
ed yesterday that scheduling of
the cancellation vote on the cost
of living adjustment was a ploy

to enable members to claim
an anti-pay raise vote one day
while voting against the roll-
back on the next.
However, Rep. Stephen So-
larz, (D-N.Y.), handling the bill,
told the House "it would be po-
litically obscene for members
of Congress at such a time to
get two pay raises in a year."
The bill, which now goes to
President Carter, denies the
cost of living increase to those
who received the bigger raise
in March, including senators,
representatives, the vice presi-
dent, Cabinet members and
other high executive officials,
top civil servants and federal
judges.

THE DECISION, de-
livered orally from the bench,
was a half-victory for GM. The
firm had asked the court to
prevent grand jury evidence
from being used by the IRS if
its motion to throw out the sub-
poenas were denied.
Churchill said information ob-
tained by the grand jury
through its subpoenas may not
be given to the IRS except
where the grand jury itself
needs the technical help of
IRS employes. Such disclosures
may only be made with his ap-
proval in advance, he said.
The judge also said that none
of the information may be given
to top IRS employes in order to
help the grand jury return an
indictment. He ruled further
that a special government at-
torney on loan from the IRS
may participate in the grand
jury proceedings. But Church-
ill warned the attorney not to
disclose any evidence to the
IRS. General Motors had asked
that the attorney be barred
from the jury room.
U. S. ATTY. PHILIP Van
Dam said he was satisfied with
the court's decision and would
reconvene the proceedings with-

in a few days.
Attorneys for GM said they
were pleased with the restric-
tions the court placed on jury
disclosure but would review the
full decision before deciding
whether to appeal.
The government turned an
audit of GM's income taxes for
1972-1975 into a criminal inves-
tigation last year while accus-
ing GM of trying to "stymie"
IRS agents in their work. The
word "stymie' appears in IRS
manuals as a condition for us-
ing a grand jury.
RACKHAM
GRADUATE
STUDENTS
if you intend to graduate this
term with either a master's
detree or an intermediate de-
tree awarded hy the Rurlsham
Graduate School, you must
submit a Diptoma Application
to the Records Office, toom
1014 Rackham Graduate School,
no tater than Fridsy, July 0,
1977 in order to be placed on
the August degree list.
iploma applications are avail-
able in the tackham Graduate
Schoot, Room 1014, as well as
to your department or program
office.

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