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Elzinga Questions Government Procedures

Had the case reached the
Supreme Court, Mr. Elzinga
said he felt ITT would have
lost since "the government is
batting 1,000 in these cases."

Mr. Sussman agreed with
Mr. Elzinga, noting that the
decision to let a private
financier make the
recommendation, rather than
an anti-trust government
economist, was questionable
procedure. "The guy's name
apparently came out of the
White House, and the
likelihood of his being
objective on this thing, I think,
is very small," Mr. Sussman
added.

Concern at the White House
and the Justice Department
about the Anderson charges,
revealed by Mr. Kleindienst's
speedy request for yesterday's
hearing, was also indicated by
the government's interest in
Sen. Kennedy's attempts to
consult with persons involved
in the settlement decision.

After talking with Mr.
Sussman Wednesday night, Mr.
Elzinga was called at 6:30 a.m.
yesterday by Walker "Brock"
Comeguys, who replaced Mr.
McLaren as head of the
anti-trust division of the
Justice Department. Mr.
Comegys said he had heard a
"garbled" version of the
information that Mr. Elzinga
had given to Sen. Kennedy and
that he would like to know
exactly what the Senator's
office had been told.

Wiretap Possibility

Neither Mr. Elzinga nor Sen.
Kennedy's office knew how
the Justice Department learned
of the original conversation,
and both raised the possibility
of a wiretap on the Senator's
phones. Mr. Sussman thought
that the man who replaced Mr.
Elzinga in the Justice
Department, George Eades,
might have been the source of
the leak, but Mr. Eades
yesterday denied this.

Mr. Eades was one of a
number of Justice Department
officials and former officials
contacted by Mr. Sussman
Wednesday night. Sen.
Kennedy's aide said that, as his
staff was making its
investigation, they joked about
the possibility of the Senator's
phones being tapped. It was
also hinted that the phones of
some of those they were
contacting might have been
tapped.

Questions have been raised
concerning the possible
involvement of other Justice
Department officials as well as
Mr. Kleindienst. In his column,
Mr. Anderson charged that
Attorney General Mitchell was
linked to the settlement, even
though he officially
disqualified himself from the
case because of an old
relationship with ITT.

Private Conversation

According to the Anderson
column, the top lobbyist for
ITT admitted Tuesday that she
had arranged the settlement
with Mr. Mitchell in a private
conversation after last year's
Kentucky Derby. Mr.
Anderson claimed to have seen
a memo from ITT files which
"suggested strongly that the
settlement was made in
exchange for ITT's pledge of
cash support for the
Republican convention."

A Justice Department
spokesman denied the charges
involving Mr. Mitchell but
refused to answer any further
questions.

Mr. Elzinga said yesterday
that he considered Mr.
McLaren to have been sincerely
committed to the government's
efforts to bring the ITT case
before the Supreme Court. He
wondered why Mr. McLaren
accepted the decision to settle
out of court.

'White Wash'

Mr. Elzinga, along with
other economic experts
involved in the case, especially
Wisconsin economist Willard
Mueller, apparently considered
the settlement a "white wash."
Mr. Mueller acted as the
department's expert witness in
the suit against ITT.

Mr. Elzinga added, "given
my own prejudices about the
federal government, that they
never operate in the public
interest no matter who's
running the shop, I had
assumed that there was some
sort of sellout. This has
happened in the past with
anti-trust cases, but I had no
idea it was so juicy until the
Anderson column came out,"
he said.

"I thought a great deal of
McLaren," Mr. Elzinga noted.
"He was a constant thorn in the
President's side" because he
refused to submit to President
Nixon's desire that the
"department lay off ITT. I'll
be very disappointed if
Mitchell and Kleindienst today
simply used McLaren, as they
indicated they would, by
saying he handled the whole
matter. We didn't have
anything to do with it and then
if McLaren goes along with it, I
can't believe that it's true. If
McLaren had done the whole
thing, there would have been
staff involvement, he wouldn't
have worked it all out
himself," Mr. Elzinga said.

"It's hard for me to say this
because I have such admiration
for him but it is of course
possible that when he took the
judgeship he agreed with the
administration that he would
never come back to haunt
them. And maybe he's willing
to take the role of the
scapegoat," Mr. Elzinga
declared.

'Wheeler-Dealers'

"The relief was a white
wash," Mr. Elzinga continued.
"Economically it didn't make
any sense. McLaren will look
bad, and I'd hate to see that
happen because the real
operators, the wheeler-dealers,
are apparently Mitchell and
Kleindienst.

"It's astonishing that they
settled for so little. I was
talking to a colleague of mine
today who reminded me that if
Lyndon Johnson were involved
in this- in something of this
magnitude, the amount of
money involved- that Lyndon
Johnson surely would have
picked up a couple of million
dollars instead of a pittance -
$400,000," he said.

Mr. Elzinga concluded by
calling the settlement "a
tragedy." "As an economist I
didn't think the decree made
any sense. I think it's a shame
that ITT got off the hook that
way and also that the Supreme
Court never had a chance to
clarify the law on
conglomerate mergers."

"If the Supreme Court let
ITT go, I'm quite certain that
people like Sen. (Phillip) Hart
would have struck for new
legislation, which would have
been called for if the law as the
court interpreted it did allow
mergers of this nature. Mr.
Hart and those people were
waiting to see what the court
would say on this," he
explained.