The CHAIRMAN. Congressman Karth of the Fourth District of Minnesota has submitted a letter which will be placed in the record in full; also the statement from the White House at the time the President announced Mr. Loevinger's appointment. (The letter from Joseph E. Karth and the White House press release follow :) Hon. WARREN MAGNUSON, Chairman, Senate Commerce Committee, Senate Office Building, Washington, D.C. DEAR MR. CHAIRMAN: I would like to take this opportunity to lend my personal endorsement of the nomination of Mr. Lee Loevinger to the Federal Communications Commission. I have been personally acquainted with Judge Loevinger for many years. It is my opinion that he will be an excellent member of the Commission. Lee Loevinger has been one of the most respected attorneys and judges in Minnesota. Lawyers, as well as laymen, have considered him to possess a fine legal mind and an unusually keen sense of respect for civil and legal rights of the individual. His record of public service speaks for itself. However, one must know him to really understand his unusual qualities of dedication, honesty, and integrity. He is a man who is firm, but fair, and will make an outstanding record as Commissioner of the Federal Communications Commission. Sincerely, JOSEPH E. KARTH. [Immediate release, Tuesday, May 14, 1963] OFFICE OF THE WHITE HOUSE PRESS SECRETARY THE WHITE HOUSE The President announced his intention to designate Commissioner E. William Henry to be Chairman of the Federal Communications Commission succeeding Newton N. Minow, whose resignation was accepted today by the President. President Kennedy also announced his intention to appoint Assistant Attorney General Lee Loevinger as a member of the Federal Communications Commission to fill the unexpired term of Newton Minow. E. William Henry, 34, is a native of Memphis, Tenn. He was graduated from Yale University in 1951. He continued his education following service in the U.S. Navy and earned a law degree from Vanderbilt University Law School in 1957. Mr. Henry was admitted to the bar of the State of Tennessee that same year. Prior to his appointment to the FCC in August 1962, he was a member of the law firm of Chandler, Manire & Chandler in Memphis. Mr. Henry is married and father of three children. His term of appointment expires June 30, 1969. Assistant Attorney General Loevinger was born April 24, 1913, in St. Paul, Minn. He attended the University of Minnesota where he completed both his undergraduate and graduate law studies. He practiced law in Kansas City, Mo., before becoming a regional attorney for the National Labor Relations Board. In 1941 and again in 1946 he was an attorney with the Antitrust Division. Between 1942 and 1945 he was on active duty with the U.S. Navy. From 1947 until his appointment to the Supreme Court of Minnesota in 1960, he was a partner in the Minneapolis law firm of Larson, Loevinger, Lindquist & Fraser. He was appointed to head the Antitrust Division in February 1961. A Democrat, he is married and father of three children. Judge Loevinger will continue to represent the United States on the OECD Committee on Restrictive Business Practices, of which he is Vice Chairman. will be succeeded by William H. Orrick, He The CHAIRMAN. Now, Mr. Loevinger, the chairman of the committee, as is the custom in the committee on nominations, asked you to prepare for the committee a financial statement. You conferred with the chairman briefly on the matter, and the committee counsel, and you sent a letter to the Department of Justice on May 27. Mr. LOEVINGER. I believe I directed the letter to you, sir. The CHAIRMAN. Excuse me, sir. Mr. LOEVINGER. Not to the Department of Justice. The CHAIRMAN. Excuse me. You sent a letter to the chairman on this matter, and we received a reply from the Department of Justice. We will place your letter, to me, in the record in full, and the Department of Justice's answers to the letter. Pertinent parts of the Department of Justice's letter we will bring up just a little bit later. But you listed all your shares of stock in your letter to me and your fiscal holdings. The main thing involved was some shares in a mutual fund and a trust which the Department of Justice passed on. We will put both letters in the record in full, and I will probably ask you to elaborate a little more further on in the hearing. Mr. LOEVINGER. Yes, sir. There is a supplementary letter. The CHAIRMAN. Oh, yes, pardon me. There are two letters, one of May 27 and one of June 3. We will place them all in the record in full, and also replies from the Chairman of the FCC, from the Commission's General Counsel on this matter. They will all go in the record. (The letters referred to follow :) Hon. WARREN G. MAGNUSON, Chairman, Senate Commerce Committee, DEPARTMENT OF JUSTICE, DEAR SENATOR MAGNUSON: In connection with the hearings upon my nomination by the President as a member of the Federal Communications Commission, I am submitting to you herewith for the information of the Senate a list of the securities which my wife and I own. None of my children own securities. I have included a brief description of the securities and some other pertinent information. You will note from the attachment that both my wife and I own stock in a mutual investment company, General Securities, Inc., 133 South Seventh Street, Minneapolis, Minn. I am also attaching a copy of the latest prospectus of that company, dated March 27, 1963, from which it appears that the net assets of the company are on the order of a million and one-half dollars and that it has about 160,000 shares outstanding. Our interest in the company arose from the fact that I did the legal work involved in its incorporation in 1951 and thereafter was its general counsel and secretary until I left the private practice of law in 1960. My wife and I have from time to time acquired shares in the company and have been reinvesting distributions in order to provide a fund for the education of our three children. We now own somewhat under 2 percent of the outstanding shares of General Securities which, as of November 30, 1962, in turn owned 1,040 shares of stock in Radio Corp. of America having a market value at that time of $59,930. Accordingly, our total beneficial interest in RCA amounts to less than $1,200. This interest raises problems both under section 4 (b) of the Communications Act of 1934 (47 U.S.C. 154 (b)) and 18 U.S.C. 208, as recently added by Public Law 87-849. Section 4 (b) provides that "No member of the Commission or person in its employ shall be financially interested in the manufacture or sale of radio apparatus or of apparatus for wire or radio communication; in communication by wire or radio or in radio transmission of energy *** or in any company owning stocks, bonds, or other securities of any such company nor own stocks, bonds, or other securities of any corporation subject to any of the provisions of this Act." I am advised by both the General Counsel of the Federal Communications Commission and the Office of Legal Counsel of the Department of Justice that this provision prohibits a Commissioner from owning stock in a mutual company. such as General Securities, which owns stock in any company described in section 4(b), such as RCA. However, they also advise me that the requirements of section 4(b) extend to financial interests directly held by a Commission member,1 and that where holdings of wives or relatives of Commission members are concerned, the provisions of 18 U.S.C. 208 would apply. Title 18 United States Code, section 208 (a) prohibits any Government officer or employee from participating in a matter in which his spouse, as well as he personally, has a financial interest unless the prohibition is waived as provided in 18 U.S.C. 208 (b). Under the latter provision, the prohibition is inapplicable if the officer or employee receives an advance written determination from the official responsible for his appointment "that the interest is not so substantial as to be deemed likely to affect the integrity of the services which the Government may expect from such officer or employee." In the case of a Commission member, such a determination would, under the statute, be the responsibility of the President or his delegee. However, I have been assured by the Office of Legal Counsel of the Department of Justice that, as a general proposition, such a stock interest in General Securities as that described above, if held by my wife, could well be regarded as too insubstantial "to be deemed likely to affect the integrity" of my services. In view of the foregoing and of the advice I have received, it is therefore my intention, if my nomination is confirmed by the Senate, immediately to transfer my shares in General Securities to my wife and upon my qualification as a Commissioner to seek an appropriate exemption as provided in 18 U.S.C. 208(b). Since the action I propose to take will meet the standards recently adopted by Congress when it enacted Public Law 87-849, I believe it is justified in this case, and will constitute compliance on my part with the requirements of law and ethics. Respectfully, LEE LOEVINGER, Assistant Attorney General, Antitrust Division. DEPARTMENT OF JUSTICE, Washington, D.C., June 3, 1963. Hon. WARREN G. MAGNUSON, Chairman, Senate Commerce Committee, U.S. Senate, Washington, D.C. DEAR SENATOR MAGNUSON: This is supplementary to my letter of May 27, 1963, and contains additional information concerning my securities which is submitted to you in connection with my nomination by the President to be a member of the Federal Commuications Commission. In the list of securities submitted to you on May 27, there was included a "blind trust" which was a fund over which I have no control and as to which I have no information as to the nature of the investments. I have asked the attorney for the trustee to review the investments held by the trustee in the light of the statuory limitations on the holdings of a member of the Federal Communications Commission. I attach hereto a letter from Mr. Gerald E. Magnuson, attorney for the trustee, in which he states in substance that there are no investments in this trust which are inconsistent with the limitations of the Communications Act. I have also been informed by Mr. Magnuson that Craig-Hallum, Kinnard, Inc., has in its investment account portfolio securities of a company which manufactures communications equipment that is sold to Western Electric Co., and others for use in communications. As indicated by my prior letter, my stockholdings in Craig-Hallum, Kinnard are less than 1.5 percent of the outstanding shares of that company. It appears to me that the problem thus raised by my ownership of a small amount of stock in a company which in turn has investments in another company that manufacturers communications equipment sold, directly or indirectly, to a communications carrier is the same as the problem referred to in my May 27 letter with respect to my holdings in a mutual investment company. Accordingly, I propose to follow the same course with respect to my stock in Craig-Hallum, Kinnard as that proposed with respect to my stock in General Securities, Inc. If and when my nomination to the Federal Communications Commission is confirmed by the Senate, I will immediately transfer 1 Sec. 4(j) relates to other pecuniary interests directly held by a Commissioner; for example, ownership of land proposed as a site for a radio transmitter tower, and would simply require nonparticipation in the specific matter pending before the Commission. my shares in Craig-Hallum, Kinnard, to my wife and upon my qualification as a Commissioner will seek an appropriate exemption as provided in 18 U.S.C. 208(b). I will be happy to submit any further information concerning my holdings or financial affairs that may be requested by any Member of the Senate and will be happy to answer any questions that any member of the committee may have concerning these matters. Respectfully, LEE LOEVINGER, Assistant Attorney General, Antitrust Division. (List of Mr. Loevinger's financial holdings are in committee's file.) LINDQUIST, FRASER & MAGNUSON, Hon. LEE LOEVINGER, Assistant Attorney General, Department of Justice, DEAR JUDGE LOEVINGER: I am writing this letter in response to yours of May 20, 1963, in which you have requested my opinion with regard to the “blind trust” set up some time ago for you, the trustee of which is John P. Robinson. As you are aware. I have represented Mr. Robinson in connection with this trust, as well as other legal matters, for some time. I have reviewed with Mr. Robinson the present securities held in the said trust with a particular view to the requirements of section 4 of the Communications Act (47 U.S.C.A. 154(b)). It is my opinion that there are no securities of companies of the nature specified in said portion of the act included in the portfolio of the said trust. Accordingly, it is my further opinion that if you become a member of the Federal Communications Commission, your beneficial interest in the said trust will not disqualify you by virtue of the terms and provisions of said section of the act which relate to your financial interest in certain companies. I understand that you may desire to furnish this letter to a committee of the U.S. Senate, and want to at this time consent to your so furnishing this letter. Please feel free to contact me if you desire any further information. Yours very truly, GERALD E. MAGNUSON. FEDERAL COMMUNICATIONS COMMISSION, Hon. WARREN G. MAGNUSON, Chairman, Senate Commerce Committee, DEAR SENATOR MAGNUSON: In accordance with a request from your committee there is enclosed herewith a memorandum from our General Counsel with respect to those provisions of the Communications Act of 1934, as amended, which relate to "conflicts of interest." I have been advised that this memorandum, in effect, confirms the advice previously given by Mr. Paglin to Mr. Lee Loevinger concerning the impact of these provisions of the Communications Act on the latter's private financial interest in General Securities, Inc., a mutual investment company in Minneapolis, Minn. Sincerely yours, NEWTON N. MINOW, Chairman. FEDERAL COMMUNICATIONS COMMISSION, Interoffice memorandum to: Chairman. Subject: Scope of the conflict of interest prohibition against financial interest contained in sections 4(b) and 4(j) of the Communications Act. We have previously been advised by Mr. Lee Loevinger, who has been nominated by the President to be a Commissioner of the Federal Communications Commission, of his ownership of stock in a mutual investment company, the General Securities, Inc., of Minneapolis, Minn. Mr. Loevinger has indicated the stock interest held by him and his wife is somewhat less than 2 percent of the outstanding shares of this mutual investment company which in turn owns some 1,040 shares of stock of Radio Corp. of America. We have already indicated to Mr. Loevinger that the prescribed financial interest set forth in section 4(b) encompasses not only a broad range of companies but also a variety of financial interests. Thus, all kinds of companies engaged in communication by radio or wire, various companies providing service or apparatus to such companies, and also other companies owning stocks, bonds, or other securities in such types of companies or in any corporation subject to the provisions of the Communications Act are included within the language of section 4(b). The statutory prohibition would therefore include ownership of stock or shares in a mutual investment company which, in turn, had a financial interest in other companies such as RCA. Further, the financial interest forbidden by the act to Commissioners and employees encompasses not only direct ownership of stock but other kinds of direct financial interest. Thus, it has been determined that the receipt of a pension by a former employee from a company engaged in the manufacture of telephone equipment and with financial ties to licensed telephone carriers, precludes the employment by the Commission of such person (22 Comp. Gen. 843 (1943)). A like conclusion was reached by this office in April 1961 with respect to a former employee of a broadcast network company who had pension rights under a company pension plan. Similarly, in June 1960 the Attorney General construed the term "financially interested" to include a direct beneficial interest in a testamentary trust, the corpus of which contained stock interests in companies which were covered by the language of section 4(b). However, in no instance has the prohibition in section 4(b) been held to encompass other than a direct beneficial interest immediately held by a Commissioner or employee. Where financial interests in companies described in section 4(b) have been held by wives or close relative of Commissioners or employees, we have adhered to the view that the general "conflicts of interest" statutes in title 18 of the United States Code set forth the governing principals in such cases. Thus, on March 8, 1963, the Commission adopted revised procedures in this area in the light of Public Law 87-849 which became effective on January 21, 1963. In its policy statement relating to standards of conduct of employees, set forth in administrative order No. 10, the Commission has required the nonparticipation of employees in any matter in which a spouse or minor child has a financial interest unless an appropriate determination has been made in accordance with 18 U.S.C. 208 that the interest is not so substantial as to be deemed likely to affect the integrity of the employee's services. The question of whether the financial interests of his immediate family in General Securities, Inc., to the extent indicated by Mr. Loevinger would require his disqualification in any matters involving RCA coming before him as a Commissioner is one upon which the Office of General Counsel cannot appropriately comment. Since Mr. Loevinger would be serving as a Presidential appointee, this question would, under 18 U.S.C. 208(b), be one for resolution by the President or his delegate. In this connection, we understand that the Office of Legal Counsel of the Department of Justice has indicated that, in general, the financial interests of Mr. Loevinger's immediate family in RCA, through their 2 percent stock interests in General Securities, could be regarded as too insubstantial to require his nonparticipation in such matters. This Office has recently come to a similar conclusion in the case of an employee whose wife owns 18 shares of A.T. & T. stock, acquired pursuant to an employee stock purchase plan while she had been in the telephone company's employ. In recommending waiver of the nonparticipation requirements in this case, this Office relied in part upon the legislative purpose and history of the statute and particularly the letter of Deputy Attorney General Katzenbach to Senator Jackson during congressional consideration of Public Law 87-849, dated June 20, 1962 (hearings, "Conflict of Interest," Senate Committee on the Judiciary, 87th Cong., 2d sess., pp. 95–99). It was pointed out by the Senate committee that this letter was placed in the hearing record because "it could be useful legislative history in connection with any future use of the newly proposed language as a guide in connection with the confirmation matter." This letter contained the following pertinent statements: *** Although section 208 includes spouses and minor children, it permits exclusion from its coverage of interests which are not so substantial as to be likely to affect, or which are too remote or inconsequential to affect, the integrity of the service of an official. This exclusion, it seems to me, would rule out the property holdings of most spouses or minor children as financial interests which the committee might consider as possible subjects for divestiture. This would |