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About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (Jan. 15, 1975)
Former Bell manager says THE BATTALION WEDNESDAY, JANUARY 15, 1975 records distorted Page 9 SAN ANTONIO, Tex. (AP) — outhwestern Bell Telephone Co. fficials regularly encouraged ex- cutives under them to distort re- rds to reflect payment of ques- ionable company expenditures and llegal political contributions, ac- rding to a former Bell division anager in Austin. Bill Holman, now on “special as signment” for Southwestern Bell, outlines in a taped conversation with Bell executive James H. Ash ley expenses ranging from a case of whiskey in return for favorable tes timony in a rate-setting case to retir ing a politician’s $20,000 phone bill. Expenses of this nature, Holman tells Ashley in the taped conversa tion, were distorted to reflect legitimate expenditures. The tape, an exhibit unsealed by a federal court judge here this week, is part of the record in an antitrust suit by the San Antonio Telephone Co. and several other defunct firms against Southwestern Bell. The ex change between Ashley and Hol man was taped last October shortly before Ashley was dismissed by Bell following an internal probe. Bell’s top man in Texas, T. O. Gravitt, killed himself during the probe and left notes accusing the company of unfair rate setting practices. Subsequently, Ashley and Gravitt’s family filed a $29 millioh libel and defamation suit against Bell. Holman, who knew the conversa tion was being taped, acknowledged several instances of what Ashley cal led “a distortion of expenses show ing an item as a legal expense on company books which in effect was an illegal political contribution.” He added that ultimately such expenditures helped inflate rate set ting bases in the state. Holman told Ashley of purposely falsifying records in the case of Southwestern Bell president R. A. Godson taking an unidentified Texas governor hunting. He said that such falsifications were a condition of employment and that it was understood that when such expenditures were made Southwestern Bell employes were to make up the costs as best they could. “Did you feel you had to do this as a condition of employment?” Ashley asked. “Well, yes,” Holman answered, “because, let’s face it, I was in structed to be the front man for the company wherever I might have been.” Officials of the federal Securities and Exchange Commission SEC are exploring allegations contained in a $29 million civil damage suit against Southwestern Bell Telephone Co. The allegations made by a dismis sed Bell executive in San Antonio “conceivably could bear upon the financial report in the registration statements and annual and periodic reports that any corporation is re quired to file with the SEC," said James Sims, assistant SEC regional administrator in Houston. “It behooves us as securities reg ulators to ascertain what degree of accuracy, if any, there is in those allegations,” said Sims. SEC Regional Administrator Robert Watson, in Fort Worth, con firmed Tuesday the commission has made inquiries to Bell about the suit and is continuing to do so. Fired Bell executive James Ash ley, a plaintiff in the suit against Bell, said Sims also had questioned him “several times” in recent weeks. Ashley declined to discuss the nature of the SEC questions on the advice of his lawyer. Sims confirmed he had ques tioned both Ashley and his lawyer, Pat Maloney, about charges made in the suit. He also declined to discuss specific questions. A spokesman for Bell in Dallas confirmed it has received SEC in quiries, but said they related to the possible effects of the suit on the company’s operations and financial position. “Southwestern Bell issues large amounts of debentures bonds, Sims noted, and financial state ments made by the company have a bearing on whether the SEC ap proves the sale of these bonds. The suit by Ashley and the family of suicide victim T. O. Gravitt of Dallas accused Bell of wrongful dis charge and wrongful death. Until his death last October, Gravitt headed Bell’s Texas operations. Senators allocate pay raise AUSTIN (AP) — Senators voted Tuesday to increase the amount of money for running their offices by $500 a month but rejected attempts by three Houston lawmakers to go even higher. Sen. Walter Mengden, R-Houston, probably the most out spoken conservative in the legisla ture, sought an unlimited office ac count but received only four mo tions for his motion in a private ses sion. Sen. Jack Ogg, D-Houston, at tempted to raise the maximum of fice expenses from $5,000 to $7,500, but he, too failed, and Sen. Bob Gammage, D-Houston, lost an at tempt to go to $6,500. A motion was finally adopted set ting the monthly limit at $5,500. That amount, said Mengden, “may be too much for some rural districts, but it’s not enough for mine.” He said he probably would have to close one of his several legislative offices, most likely the one on Farm Road 1960 in his district. House members approved $4,000 per month to run their of fices, a huge increase over the $2,395 they received during the 1973 session. Old members received permis sion, 105-39, to carry over as much as $3,000 of their balances from the previous legislature and between- sessions period. Rep. Richard Reynolds, R-Richardson, failed twice to trim the $4,000. “I don’t think we should make av ailable to those that will spend it the opportunity to spend it . . . 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