Wednesday, June 30, 197%

THE MICHIGAN DAILY

Page "three

Teamster pension fund to be taxed

WASHINGTON (AP) - The Internal
Revenue Service (IRS) has revoked the
tax-exempt status of the Teamsters
Union Central States Pension Fund in
a move that could force the payment
of millions of dollars in back taxes,
government sources said yesterday.
The action, which is subject to ap-
peal, was taken because of alleged
mismanagement and questionable loan
practices, said a source involved in the
government's investigation of the $1.4-
billion fund.
AN IRS SPOKESMAN refused to con-
firm or deny the report, which was first
disclosed by the New York Times.
The fund, with headquarters in Chi-
cago, issued a brief statement through

its legal counsel in Washington, saying
only "it is inappropriate to comment in
any way on newspaper accounts which
do not refer to a proceeding which is
a matter of public record."
If the IRS decision is upheld in the
courts, it could mean that millions of
dollars in taxes could be levied against
the fund, used for controversial invest-
ments including an estimated $200 mil-
lion in loans to hotel and gambling
operations in Las Vegas.
THE EFFECTS could hit employers
and workers as well.
Employers who contribute to the fund
would no longer be allowed to deduct
their contributions from their federal
income taxes.

For employes, an IRS official said
revocation could lead to tax assessments
based on their guaranteed pension
rights.
Once employes work a given length
of time under a pension plan, they ob-
tain vested rights to a pension. Vest-
ing means they are entitled to receive
pension benefits at retirement age even
if they quit or change jobs before re-
tirement.
THE IRS OFFICIAL said amendments
to the 1969 tax-reform act generally re-
quire the IRS to levy back taxes on
an employe's vested pension rights and
any future vested rights if a pension
fund loses its tax-exempt status.
IRS officials could not say immediate-
ly what impact revocation of tax-exempt

Council debates housing funds

By MIKE NORTON
In a jam-packed meeting Monday
night that lasted until 4 o'clock yester-
day morning, City Council became the
scene of fierce factional battles. But this
time the snarling wasn't among Council
members, it was in the audience.
Three highly explosive issues brought
angry citizens groups to the Council
chambers, where their leaders mar-
shalled them like troops - hand counts
were demanded, partisans jumped up
to the microphones, and rounds of ap-
plause greeted fist-shaking citizens.
Perhaps the most bitter clash occur-
red in what was the first public hear-
ing on the proposed senior citizens' high-
rise near Briarwood Mall. Nearly two
dozen disgruntled citizens, including the
elderly, labor leaders, contractors, and
civic spokespersons presented their
views to the Council.
OPPONENTS of the high-rise largely
argued in favor of a more centrally-lo-
cated site, blasting the Briarwood loca-
tion for its isolation and lack of support
facilities. Defenders maintain that peo-
ple will be found who are willing to live
in the building, and that those who are
unwilling are under no compulsion to
move there.
Don Barton, an associate of the de-
velopment company in charge of the
highlrise, said that Council should not
reject the building merely because there
might be other sites available. The
Council, said Barton, should "get this
bird in the hand right now, and catch
the other two when they come out of
the bush."
Another big conflict was over the pro-
posed special assessment of Maynard
area residents to finance repairs to the
Maynard St. parking structure. Out-
spoken foes of the assessment came
before Council again, pleading that, be-
cause they did not use the structure
they should not be required to pay for
its upkeep.
THEY CLASHED for the first time
with representatives of local businesses,
who are set firmly against the alterna-
tive solution: the raising of parking fees
at the Maynard ramp. Such a move,
they argued, would drive shoppers away
from the downtown area and do irrepar-
able damages to the city.
"We've got to be competitive," said
Alan Mandal, president of the State
Street Merchants' Association. Mandal
proposed the establishment of a special
committee to study the parking prob-
lem "without hurting the taxpayer."
Mayor Albert Wheeler agreed with
him, and informed the Council that he
would appoint a committee made up of
citizens and Council members to study
the entire city's parking problems.
See COUNCIL, Page 14

status could have on persons already re-
ceiving benefits from the Central States
fund.
A letter notifying fund trustees of the
revocation was sent from the IRS of-
fice in Chicago, the sources said. The
revocation is retroactive to Jan. 31, 1965.
TEAMSTERS PRESIDENT Frank Fitz-
simmons and seven other union officials,
along with eight representatives of em-
ployers, oversee the fund as its trustees.
A majority of the trustees must ap-
prove any loan, but investigators say
the management representatives usually
go along with decisions made by the
union officials.
The IRS action is not related to in-
vestigations into the fund by Congress
or the Departments of Labor and Jus-
tice.
TIE INVESTIGATION by the Labor
and Justice departments began last fall
and has turned up millions of dollars
in loans that have not been repaid. In
addition, the Labor Department, which
is pursting a civil investigation tinder
the 1974 pension reform act, has re-
ferred to Justice evidence of possible
criminal violations in two fund trans-
actions, sources say.
Questioned about the Justice Depart-
ment's role in the investigation, a de-
partment official said it could take as
long as two years before the wide-rang-
ing probe is complete.
But he said department officials could
make decisions about prosecuting some
parts of the case much sooner. "Some
matters already are tinder consideration
for criminal potential," the official said.
He declined to elaborate.
y, I"Yis,;HAPPM 'tAI. XD
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"
Never the Twain
shall meet
Mark Twain's classic "The Adven-
tures of Huckleberry Finn" has been
removed from the required reading list
at the New Trier High School in Win-
netka, Ill. because of complaints from
black parents that it includes the word
"nigger." The school board voted 4 to
2 yesterday to remove the novel after
parents complained that their children
were offended by the word, and by
relics of 19th century race relations de-
picted in the book. The book will be
allowed to remain on the library shelves
for independent study. The American
Civil Liberties Union responded, warn-
ing that the school board has "sefi-
ously undermined their obligation to
academic freedom."
Happenings ...
..are slow today. Unless you plan
to attend the Project Outreach open
house, from 7-9 p.m. at 554 Thompson.
"
Weather or not
It will be partly cloudy with a slight
chance of showrs this afternoon. ighs
will be in the mid 70's. Chance of rain
is 20 per cent.

Muscle Cart
It may not exactly be a Firebird with an overhead cam V8 and four on the
floor, but even in Pennsylvania's Amish country the young turks can usually
find a suitable vehicle for cruising. These kings of the road are shown driving
a one-horsepower cart with four on the blacktop near Quarrysville, Pennsylvania.
Low-iUncomeg s on
share consumer confidence

By LOIS JOSIMOVICH
High - income consumers continued a
trend of rising economic optimism, but
the outlook of their lower-income coun-
terparts dampened between February
and May of this year, a survey released
'yesterday by the University's Survey
Research Center (SRC) revealed.
In the quarterly nationwide survey,
the Index of Consumer Sentiment drop-
ped 2.3 points to 82.2. Among the over-
$15,000 income group, optimism rose 4.4
points, while lower-income people, still
affected by the recent recession, "were
less cheerful about the state of the na-

tion. The decline in their enthusiasm,
not large in itself, becomes significant
only when in comparison with the long
but slow upward trend in consumer
confidence since it reached its lowest
point in December 1974.
"THE POORER people still remember
the recession, when they suffered very
badly," said survey founder George Ka-
tna.
However, Katona termed the lowered
outlook aas "very slight" and expressed
optimism himself that the figures will
rise again by the next strvey.
"People realize that the recession Is
See POOR, Page 8