INVESTIGATIONS: Mulligan Stew

Like many businessmen going into Government service, New York's Harold Elstner Talbott Jr. gave up a good deal to join the Eisenhower Administration as Secretary of the Air Force. He sold his stock holdings (more than $700,000 worth), resigned as director of Chrysler Corp., cut all his business connections except one: half ownership of Mulligan & Co., a small Manhattan firm (15 employees) engaged in clerical-efficiency studies. Last week that side interest had Harold Talbott in trouble.

Out of the Files. Before taking office in 1953, Talbott told the Senate Armed Services Committee about Mulligan & Co. Under an agreement with Partner Paul Mulligan, he explained, "no work was to be done while I am in Washington that had to do with defense work essentially." But recently the Senate's Permanent Investigations Subcommittee heard that, from his Pentagon office, Secretary Talbott was still drumming up business for Mulligan & Co. When questioned,

Talbott had a quick answer: "Everything I have done is proper and ethical. I did not solicit any business." From the firm's files, however, sub committee staffers picked up correspondence written by and to Secretary Talbott.

On his "Secretary of the Air Force" stationery, Talbott had written many letters to get business for Mulligan & Co. from firms with defense contracts: Chrysler Corp., Olin Industries Inc., Baldwin-Lima-Hamilton Corp., Avco Manufacturing Co.

Avco's President Victor Emanuel, who has a $200 million defense backlog, gave Mulligan a contract and enthusiastic recommendations to his friends.

At Talbott's request, the subcommittee quickly called a public hearing. The Air Force Secretary, at 67 still black-haired and straight-backed, marched into the hearing room with four officers, including a major general. "This is a shocking thing," he protested heatedly, "to point a finger of suspicion at a man that does not deserve it." Talbott, whose Government pay is $18,000 a year, said that his income from Mulligan & Co. is more than $50,000 a year (no significant change since 1953). Said he: "I was very anxious to retain my interest in Mulligan on account of the income, which I felt I needed." However, he offered to give up the partnership and income completely if the subcommittee would clear him of any misconduct, and "if ... I will be helping the Air Force and the Administration."

Then Subcommittee Counsel Robert F. Kennedy* began questioning him about Mulligan & Co.'s attempts to renew a contract with RCA a few months ago.

Talbott replied: "RCA had questioned the propriety of having another contract with Mulligan with me as a partner [and requested] that a letter be procured from the Attorney General. I said, 'My goodness, if there is any such suspicion, forget it.' " Repeatedly, Talbott was asked whether he and his Air Force general counsel, John Johnson, had called RCA Attorney Sam Ewing to complain. "My memory," he said, "is very hazy." Next day, after checking with Air Force Counsel Johnson, Harold Talbott remembered that he had indeed complained over the phone to RCA's Ewing about the contract for Mulligan & Co.