WEDNESDAY, DECEMBER 18. I9H3
IMEDFORD .MAIL TRIBUNE, .MEDFORD. OREGON
ble Oil Scandal May
Reveal $150,000 in Skullduggery
Bv ROBERT .!. REGAN
NEW YORK (UPI) - To a
horde ot investigators wading
through the burgeoning edible
oil scandal, the mess resembles
an iceberg most of it hidden
from view.
But observers say that when
all the facts are brought to the
surface, the scandal may re
veal $150 million in skullduggery.
A scorecard won't be large
enough to list the potential los
ers and victims.
These already include a num
ber of bankrupt edible oil firms
and their employes, two large
Wall Street brokerage com
panies, American banks, foreign
banks and insurance companies.
The big loser, however, may
well be Mrs. American House
wife every time she buys salad
oil for the dinner table.
As things now stand, the pub
lic will have to pick up the tab
for cosily government investi
gations no matter how the
whole business turns out.
The crux of the matter is a
huge amount of edible oil which
"disappeared" from a big tank
farm in Bayonne, N. .1.
How much oil is missing, who
look it, where did it go and
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Four Frozen Corpses, Nearly
Frozen Man Found in Ocean
NAMSOS, Norway (UPI) -Two
fishermen tending their
nets along the icy Atlantic
shore spotted a strange object
bobbing through the freezing
breakers Inward coastal rocks.
A ghastly sight greeted them
when Ihcy drew near in their
fishing boat.
Four frozen corpses and a
man barely alive were lashed
In a battered timber raft, all
that was left of the 4!H)-ton Nor
wegian freighter .Innctla, sunk
in a storm Iwn days earlier.
Fishermen Hans llartvikoy
and his brother, Sigfrcd, stared
at the lone survivor, who man
aged a taint call (or help.
"His mouth was almost ho
7cn," Hans said today. "His
arms and Irgs were stiff from
cold and he could scarcely
raise his head."
The man was the Jonetla's
raptain, Ole Johansen, .14. He
had watched four of his 10
crewmen freeze to death and !
had seen the other six swept I
away by the sea, but some
thing kept him awake and
fighting for survival. I
He lold of his ordeal today in
the Nnmsos Hospital where he
Grange
was reported in good condition
and expected to recover, thanks
to the llartvikoy brothers.
The .lonetta was sailing north
through a storm and intense
polar darkness Friday along i
the northwestern coast of Nor
way when the cargo shifted in I
the storm, leaving the vessel !
unmaneuverablc and at the
mercy of the seas.
A huge wave hit Ihc ship and
capsized it.
There was no time lo radio a
distress signal. Two crewmen
lowered a life boal down the
side as the .lonrlta listed badly.
A wave smashed them and the
lifeboat against the side of the
ship and they were gone.
Johansen and his ci it rc
m a i n i n g crew m unhors
launched the timber raft, hasti
ly stocked with provisions, jjst
as the Jonetta went down.
Waves singed into the raft,
washing away four of the men
and all the provisions. I
Johansen and his men w. 'e
wearing only shirts and trous
ers. One by one, the .iii'.-iin
saw the others freeze to dt a'h.
Johansen forced him iclf to
slay awake, fighting lo keep h:s
Wood circulating. His determi
nation saved his life.
where can it be found? The
answers are being sought by a
federal grand jury, private de
tectives, lawyers and a host of
auditors who would make the
investigative staff of the Inter
nal Revenue Service envious.
The answers won't come easy,
according lo all appearances
and the testimony of Nicholas
Papaccio.
Papaccio, a former employe
of Allied Crude Vegetable Oil
Refining Corp.. testified in U.S.
District Court in Newark, N. J.,
in connection with his firm's
bankruptcy proceedings.
He said it was simple to
transfer oil from one tank to
another at the 200-unit storage
tank farm in Bayonne. Not all
the tanks are used by the same
firms. The tanks are connected
above and below ground by an
involved system of transfer
pipelines, and once the oil
from one tank is piped into an
other, it is next to impossible
lo trace it.
Files Destroyed
Files dealing with the assign
ment of some of those tanks
were destroyed bv fire, and
harassed investigators reported
difficulties in matching tags on
other tanks with listed owners
or leasees.
The whole business came to
light when Allied Crude filed for
reorganization under Chapter II
of the Bankruptcy Act last
month. The firm had failed lo
cover multi-million-dollar marg
in calls on positions in vegetable
oil futures.
This means that Allied, which
had purchased the oil on credit
in hope of selling it at a profit,
was unable to come up with the
balance of its payments.
I he first phase of the mess
was confined mostly to the fu-i
turcs market. Two Wall Street
houses, Ira llaupt & Co. and ;
J. R. Williston & Beane, which
had acted for Allied Crude in
oil dealings, were suspended by
the New York Stock Exchange
after Allied Crude (ailed to
meet their margin calls.
Ultimately, Ira llaupt was
liquidated with the New York
Stock Exchange stepping in
with up to $11! million to care
for its customers; J. R. Willis
ton & Beane was acquired by
another member firm.
This sparked a scries of in
vestigations dealing with the fu
tures market in general, the re
sults of which are not in yet.
While Phase One has not run
its course, Phase Two the
search for the oil itself is in
full swing.
Lawyers for Allied Crude ob
tained an injunction preventing
two other (inns with tanks in
Bayonne from removing oil
from their tanks.
Ravin & Ravin, attorneys for
the Allied Crude receiver, said
it had information that oil be
longing to Allied Crude had
been "diverted" lo Hudson
Tank Storage Co. and Interna
tional Refining and Packaging
Co.
Another oils storage firm,
I Harbor Tank Storage Co. of
! West New York, N.Y., which
. leases 41 Bayonne tanks from j
i Allied, filed for reorganization
under bankruptcy laws last
I week. The firm listed its debt
I at $225,000 but said its contin-
' gent liabilities could go as high j
' as $40 million. j
Harbor Tank said claims in
: an "unknown amount" have
been made against it for the
delivery of certain edible oils
against which certain ware- i
house receipts allegedly have
been issued in connection with
Allied Crude.
Seeks .Missing Oil
i Meanwhile, Bunge Corp., a
large exporter of agricultural .
products, is pursuing its own !
', investigation in an effort to lo
icate 690 million pounds of veg-i
etable oil it said was removed
from tanks of another firm in
Bayonne American Express
Warehousing, Ltd. lasl month.
Bunge said it has receipts for
160 million pounds of oil, but
only seven million pounds can
be located.
Last week, the Senate perma
nent investigations subcommit
tee said it would look into the
situation to see if present laws
covering purchase and sale of
commodities need strengthen
ing. At least two Department
of Agriculture agencies have
moved into the picture, as have
FBI and the Securities and Ex
change Commission. A federal
grand jury also put its oar into :
the muddied waters. j
The investigations, however,
have been stymied because An-,
thony De Angelis, Allied!
Crude's president, declined to
answer questions relating to Ihe
case at the Newark bankruptcy
hearings.
Federal bankruptcy referee
William Tallyn ordered De An
gelis and Ben Rotello, control
ler of Allied, to show cause by
Wednesday before a federal
judge why they should not be
sent to prison "or otherwise
dealt with" for refusing to an
swer. De Angelis denied reports
that he built up his huge posi
tions in cottonseed and soybean
oil futures on the premise that
contracts would move higher if
the Soviet Union turns its in
terest from grains to edible
oils.
He said his positions were
built up long before the com
modity "thaw" with Russia.
At any rate, there was a
sharp decline in vegetable oil
futures on Nov. 18, reflecting a
downturn in the fluctuating for
tunes of the Russian grain deal.
Margin calls went out. Allied
Crude went bankrupt and the
scandal began to blossom.
We never guess We look it up
WORLD BOOK
ENCYCLOPEDIA
1 In Sales
s!, In Service
for your LOCAL representative
Write Box 62 Ph. 482-3196
Ashland, Oregon
We never guess We look it up
"Oil
To
Burn"
S&H Green Stamps
MEDFORD FUEL CO.
Phone 772-2111
ews
t'liper Applegale
A plaque for outstanding com
munity service in I'JM and a
savings bond were presented to j
the community service chair- j
man of Upper A p p I e g a t e
(Irange at the December meet- j
ing. The Grange won first hon-1
oralile mention in Oregon in
Ihc National Grange-Scars Roe-i
buck Foundation sponsored con- j
test..
Mr. and Mrs. Phil Hull were'
obligated in Ihe third and fourth
degrees by Past Master George
Redhead.
Members voted lo cancel the
sccund December meeling since
tt would be so close to Christ-
ill,:,. !
Sewn members of Upper Ap
plegale attended Ihe national
Grange in Portland and received
the seventh degree in November.
Following Ihe business session
Lecturer Vicva Saltmarsh pre
sented a Christmas program (on
lining readings by Florence
l.anco. Cyrena Darius, and Dana
Gerhard!, a soprano solo by Mil
dred Redhead, a duel sung by
Marie Krugel and Nell Ramsay
and group singing of Christmas
carols.
A gi(l exchange followed Ihe
prnciam Madlaine llohnker and
Mi. and Mrs Curt Gerhardt
wore hosts for the evening and
Ihe tables were decorated with
Christmas decorations.
Charity Art Raffle
Offers Picasso Works
LONDON (UPI) -The Insti
tute of Contemporay Art said
today it will hold a charily arl
raffle, wilh Ihe winner taking
home a Picasso painting for
only M.
As each of the tU tickets to
Ihe raffle are pulled from a hat,
Ihe owner will try lo identify
the unmarked Picasso from
among lil other paintings on
sh.iw. Each contestant will keep
the painting he picks and
Ihe lucky one will get the Pica-
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