FUND CALLED CIA 'CONDUIT'

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75-00149R000300430001-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: November 17, 2016
• Document Release Date: December 21, 1998
• Sequence Number: 1
• Publication Date: September 1, 1964
• Content Type: NSPR

SLIN
Approved For Release 2000/%~7 :I,~--
CPYRGHT
FUND CALLED
CIA 'CONDUIT
Aug. 41: -
nel through, which the Central
Intelligence Agency dispensed se-
cret funds-a private New York-
based foundation-was disclosed
at a congressional hearing today.
Representative Wright Patman
(D., TeAas); chairman of a House
small business subcommittee,
said the CIA told him it made
such use of the J.; M. Kaplan
k und.
. Officials of the Internal Reve-
nue Service, which is auditing
the-fund to determine whether it
should keep its tax exemption,
reluctantly confirmed the CIA
connection. CIA declined com-
ment.
Asks Of Other Contributors
Patman told the revenue offi-
cials'to provide information about
the addresses, officers and organ-
ization, of. eight other foundations
which, he said, together contrib-
uted almost $1,000,000 to the Kap-
lan Fund in 1961-19G3.
When Acting Commissioner Ber-
trand M. Harding said IRS might
not have the information in its
files, another subcommittee mem=
ber sharply disagreed.
"If these are dummy corpora-
tions or corporations we don't
want to talk about, come in and
say' so-but don't say you don't
know anything about it," Repre-
scnlativc James Roosevelt (D.,
Cal.), told Harding.
Several hours after the hearing,
the subcommittee. members. met
CPYRGHT
losed? doors and then, told news-
men the subcommittee' would not
pursue' the CIA aspects of the
Kaplan Fund matter. '
Patman said in a statement,
"The discussion i convinced the
committee that no matter of in-
terest~to the subcommittee relat-
ing to the CIA existed."
pursued and a full report will
made to the committee."
"Does Not Belong In"
Expanding on his statement,
atman said nothing had been
stimony at the hearing, but that
e subcommittee was convinced
undation investigation."
There was 'no more specific
stimony about the amount of
IA money, nor about its depti
The. subcommittee has been in-
stigating the tax-exempt. status
joyed by some 15,000' charitable
Came Into Study Angust 10
-
ice and sugar companies, came
for study August 10. .
lined to give any information
its background and also de-
The subcommittee is looking
to reports of borrowings and
fice twice in the past recom- ducting the audit has never been
mended that the Kaplan founda-
tion's tax exemption be revoked,
but the national office of IRS
overruled this recommendation.
Another audit by the district of-
fice now is in progress.
Patman indicated today that on
August 10 Mitchell Rogovin, as-
sistantto the commissioner and
the IRS contact man with CIA,
told. him privately of CIA's con-
nection with the Kaplan Fund.
"Used As Conduit"
Subsequently, Patman, said a
CIA official. called on him and
told him "the J. M. Kaplan Fund
has been used as a conduit," but
he said he did not know the de- ?1
tails. he said they had contributed to:.
Patman complained the CIA the Kaplan Fund; are: '
had not complied fully with his Gotham Fouadation, $83,000F`t
request to provide privately addi. Michigan Fund, $63,000; Andrew.,,
tional inforrrlation-"I feel like Hamilton Fund, $62,950; Borden's
this committee has been trifled Trust, $140,000; the Price Fund,
with ... it looked to me as $185,000; the Edsel Fund, $130,..
though this information was ' put 000; the Beacon fund,' $130,000;1
out with the purpose of stoppingi
the KentfjeldFuxtd, 130,00qD)
..-..w-...~..........~/~~.
the committee investigation."
CIA Learns Of Audit
In reply to questions, Harding
and Rogovin said IRS had not
been consulted when the CIA
made its arrangements with the
Kaplan Fund, was not a party to
any such arrangements, and
would not be influenced. by them
in deciding whether the Kaplan
tax exemption should be con-
tinued.
Rogovin said a CIA representa-
tive came to him iii late 1961,
after, the secret agency bad;
learned of the IRS audit, and told:
him "they had-been using the',
fund and they just wanted to alert
the ' Washington office ... theyi
were concerned whether their in
terest would be made public and
whether- the fund_ would, bejeop-,
told of the CIA connection.
As Patman :attempted to dig
deeper into the . eported CIA-Kap-
lan Fund arrangement, Harding
and Rogovin -repeatedly advised
him to question the CIA. The
chairman final?y agreed to, S
closed-door meeting later with
revenue and CIA officials.
CIA Appropriatlnns Hidden "
The CIA operates!. so 'secretly
that its appropriations are hidden
in the budgets for other. agencies
and are, known only to a handful
of members of Congress.
The other foundations' Patman
inquirer( about, and the amounts;