SAM WOOTEN, F. M. MALOY, AND MRS. ALETHEA ARTHUR MAY 24, 1949.-Committed to the Committee of the Whole House and ordered to be printed Mr. BYRNE of New York, from the Committee on the Judiciary, submitted the following The Committee on the Judiciary, to whom was referred the bill (H. R. 2090) for the relief of Sam Wooten, F. M. Maloy, and Mrs. Alethea Arthur, having considered the same, report favorably thereon without amendment and recommend that the bill do pass. The purpose of the proposed legislation is to relieve S. 1. Wooten from liability to refund or pay to the United States the sum of $879.17, as his share of the liability as acting postmaster and postmaster at Bradenton, Fla.; to relieve F. M. Maloy in the amount of $6,000 as his share of the liability as assistant postmaster; and to relieve Mrs. Alethea Arthur in the amount of $9,451.70 as her share of the liability as acting postmaster, for a shortage in the accounts of the post office caused by the embezzlement by Clarence E. Dickey, a postal clerk. STATEMENT OF FACTS It appears that Clarence E. Dickey, a clerk in the Bradenton, Fla., post office, was in charge of the postal-savings funds and while holding such position he converted to his own personal use during the administration of Mrs. Alethea Arthur as acting postmaster, the sum of $12,697.50; and during the administration of Mr. S. I. Wooten as postmaster, he converted the sum of $7,040.99 to his own personal use. The sum for which Mr. Wooten was technically liable was reduced to $6,879.17 by crediting $105.53, representing the deductions for his retirement fund from Mr. Dickey's salary during Mr. Wooten's incumbency, and $56.29 of salary due him at the time he was discharged. It appears from the evidence that Mr. Dickey had the entire confidence of both postmasters and all clerks in the post office. The monthly postal-savings reports that were later reviewed in determining the extent of the defalcations showed no entries or corrections leading to any suspicion of incompleteness or inaccuracy in the accounts. With all credits due Mr. Dickey there was a balance of $16,330.87, which is the aggregate sum carried by this bill. The evidence does not indicate that these three claimants were personally connected with the losses sustained. Mrs. Arthur who was technically liable for the largest amount appears to have been entirely inexperienced in post office work. She completed the unexpired term of her deceased husband, W. E. Arthur. While the embezzlement was facilitated by inadequate supervision and the fact that Postmasters Arthur and Wooten and Assistant Postmaster Maloy placed too much reliance in the honesty and integrity of the former clerk, Dickey, it is clear that they were not otherwise culpable. As to the $6,000 charged to Mr. Maloy, this was the full penalty on his bond as assistant post master. The Post Office Department has no objection to the enactment of the proposed legislation. Mr. Dickey was suspended from the service July 31, 1941. He pleaded guilty at Tampa, Fla., on August 13, 1941, to an indictment charging him with the embezzlement of these funds. The United States Fidelity & Guaranty Co. paid the sum of $2,000 which was credited to the postal-savings account of former Postmaster Alethea Arthur. It appears from the record that Dickey, the former clerk, finding Mrs. Arthur lacking in experience in postal matters and willing to depend completely upon his representations to her as to the administration of the postal-savings branch, used her as a tool in his fraudulent practices. These same conditions appear to exist under the administration of Mr. Wooten also. Therefore, your committee is of the opinion that these people should be relieved of this liability, due to the fact they had no part or received any financial gain from the embezzlement of the funds by Clarence E. Dickey, and recommends favorable consideration to the proposed legislation. Appended hereto is the report from the Post Office Department and the Comptroller General of the United States, together with other pertinent evidence. Hon. DAN R. McGEHEE, POST OFFICE DEPARTMENT, Washington. D. C., April 14, 1943. Chairman, Committee on Claims, House of Representatives. MY DEAR MR. MCGEHEE: Your letter of March 4, 1943, requested a report upon H. R. 1760, a bill for the relief of S. I. Wooten. There are also pending before your committee H. R. 1758, for the relief of F. M. Maloy, and H. R. 1759, for the relief of Mrs. Alethea Arthur. These bills relate to embezzlement of $19,738.49 in postal savings funds by Clarence E. Dickey, a former clerk in the Bradenton, Fla., post office. It was determined by inspectors' investigations and review of records in this Department and the General Accounting Office that $12,697.50 was converted to the clerk's personal use during the administration of the office by Mrs. Alethea P. Arthur as acting postmaster, and $7.040.99 during the administration of the present postmaster, Mr. S. I. Wooten. The sum for which Mr. Wooten was technically liable was reduced to $6,879.17 by crediting $105.53, representing the deductions for his retirement fund from Mr. Dickey's salary during Mr. Wooten's incumbency, and $56.29 of salary due him at the time of his suspension from office. On April 30, 1942, the Chief Inspector was requested to take steps to collect the balance due, after applying all credits collected from Dickey's assets. Request was made to collect $6,000 from former Assistant Postmaster Finley M. Maloy or his surety, the Standard Accident Insurance Co. of Detroit. This was the full penalty on Mr. Maloy's bond. There was then remaining $879.17 stated, for accounting purposes, as a liability on Mr. Wooten's postal-savings account. It appears from the inspectors' findings that Mr. Dickey had the entire confidence of both postmasters and all clerks in the Bradenton post office. Monthly postal-savings reports that were later reviewed in determining the extent of the defalcations showed no entries or corrections leading to any suspicion of incompleteness or inaccuracy in the accounts. As indicated above, the amount embezzled by Clarence E. Dickey was $19.738.49 against which have been credited $2,000 collected from his surety; $1,245.80 representing Mr. Dickey's retirement deduction prior to the incumbency of Sam Wooten; $105.53 representing retirement deductions during the latter's incumbency, and $56.29 representing salary due Mr. Dickey at the time of his suspension from office, the total of these credits being $3,407.62 which items have reduced the net amount of the responsibility to $16.330.87, which is the aggregate sum carried by these three relief bills. It is not considered that any one of them was personally connected with the losses sustained. Mrs. Arthur, who was technically liable for the largest amount, appears to have been entirely inexperienced in post-office work. She completed the unexpired term of her deceased husband, the late Postmaster W. E. Arthur. While the embezzlement was facilitated by inadequate supervision and the fact that Postmasters Arthur and Wooten and Assistant Postmaster Maloy placed too much reliance in the integrity and honesty of former clerk Dickey, it is clear that they were not otherwise culpable. Therefore, this Department will offer no objection to the relief provided for in the bills. It has been ascertained from the Bureau of the Budget that this report is in accord with the program of the President. Very truly yours, FRANK C. WALKER, GENERAL ACCOUNTING OFFICE, Hon. DAN R. McGEHEE, Chairman, Committee on Claims, House of Representatives. MY DEAR MR. CHAIRMAN: Reference is made to H. R. 7552, H. R. 7553, and H. R. 7554, Seventy-seventh Congress, second session, bills now pending before your committee proposing to relieve Mrs. Alethea Arthur, former postmaster, S. I. Wooten, present postmaster, and F. M. Maloy, assistant postmaster at Bradenton, Fia., respectively, and their sureties, of any liability to refund or pay to the United States amounts apportioned to such persons as their share of the liability for the shortage in the accounts of said post office caused by the embezzlement of Clarence E. Dickey. For the use of your committee in the consideration of said bills, there is submitted the following report containing pertinent facts relative thereto as disclosed by the records of this office. It appears that Clarence E. Dickey was employed as a clerk in the Bradenton post office from 1925 until July 31, 1941. In an affidavit signed by him on June 12, 1941, a copy of which is on file in this office, he states in pertinent part as follows: "A little more than 4 years ago I began the practice of making applications for duplicate postal-savings certificates which had been issued to depositors. I signed the depositors' names to the applications for duplicates and took them to the postmaster for her certification. She did not question the transactions. The postmaster at that time was Mrs. Alethea P. Arthur. "About the middle of October 1939, Mr. Sam Wooten was appointed acting postmaster at Bradenton and he has been in charge of the office since that time. Since Mr. Wooten took charge of the office I had not prepared any forged applications for duplicate certificates. "When the owners of the original certificates, which had been duplicated on my forged applications, presented the originals for payment, I had to secure the money to cover them. * * * "Inspectors checked the Bradenton office at the time Mr. Wooten took charge. At that time there were no irregularities in my cash or accounts which would have been apparent, my manipulations prior to that time having been confined to the payment of duplicates issued on the forged applications. After that time, when original certificates, on which I had issued forged applications for duplicates and paid the duplicates, were presented, I paid the originals out of funds in my cash account and made up the shortage at the close of the statement period by failing to report certificates issued up to the close of the period This practice has been carried along from day to day and from monthly statement to monthly statement, my statements of certificates issued and on hand all being falsified since that time. "All of the actual shortage in the postal-savings account occurred during the administration of Mrs. Arthur. Since Mr. Wooten took charge of the office my manipulations have been confined to failure to report certificates issued at the time of issue in order to carry the payments of original certificates on which forged duplicates had been issued and paid along in the hopes of obtaining funds with which to wipe out the shortage finally. "When forged applications for duplicate postal-savings certificates were prepared and sent to the Department, the duplicates were issued and returned to the postmaster, who, in turn, gave them to me. I then forged the name of the depositor on the duplicate certificates and put them in my paid certificates, taking out the corresponding amount of cash for my own use. * * Dickey was suspended from duty June 10, 1941, and removed from the service July 31, 1941. He pleaded guilty at Tampa, Fla., on August 13, 1941, to an indictment charging him with the embezzlement of approximately $20,000 in Government postal savings funds. The sentence of the court in the matter does not appear of record in this office. Charges arising from said embezzlements have been entered in the postal-savings accounts of the present and former postmasters, as follows: Mrs. Alethea Arthur, former postmaster. S. I. Wooten, present postmaster.. Total... $12, 697.50 7, 040.99 19, 738. 49 Clarence E. Dickey was bonded by the United States Fidelity & Guaranty Co., in the sum of $2,000, which has been collected from said company and deposited to the credit of the postal-savings account of the former postmaster, Mrs. Alethea Arthur. (See 17 Comp. Gen. 457). The records indicate that further deposits will be made consisting of unpaid salary and retirement funds due the former clerk. When these deposits are certified and entered in the accounts, the net shortage will amount to $16,330.87, as follows: ALETHEA ARTHUR, FORMER POSTMASTER Debits: Postal-savings account, audited charge---- Credits: Deposit received from the United States Fidelity & Guaranty $12, 697.50 Retirement funds due former Clerk Dickey, apportioned to account of former postmaster (to be deposited).. 2. 000. 00 1, 245. 80 3, 245. 80 9, 451. 70 Total credits_- - - . Shortage in postal-savings account of the former postmaster___ S. I. WOOTEN, PRESENT POSTMASTER Debits: Postal-savings account, audited charge.- Credits: Unpaid salary due former Clerk Dickey (to be deposited).... Shortage in the postal savings account of the present post- Total shortage.. $7,040. 99 56.29 105. 53 161.82 6, 879. 17 16, 330. 87 How It is noted from the bills that F. M. Maloy, assistant postmaster, has been held responsible for $6,000 of the shortage carried in the present postmaster's account. No accounts are rendered to this office by assistant postmasters. ever, the note to paragraph 7. section 473. Postal Laws and Regulations. 1940. provides in part: "The taking of bonds by the United States directly from assistant postmasters and clerks in post offices does not in anywise affect the liability of post masters upon their official bonds for the proper discharge of all the duties of their office and the due accounting for all public funds which may be in, or come into, their custody as postmaster: * (See also 3 Comp. Gen. 297.) Mrs. Alethea Arthur was appointed acting postmaster at the Bradenton post office on November 24, 1936, to complete the unexpired term of her deceased husband, W E. Arthur, and in a letter dated November 28, 1941, to the Postmaster General she states that she had no previous experience in this work; that Mr. Dickey was a trusted employee who had been in the employ of the Government for a number of years and who had a "good working knowledge" of postal affairs; that she certainly did not sanction the fraud perpetrated by Dickey; that she assumed his bond was proper and sufficient; and that she was shocked to learn of the embezzlement and more shocked to learn that she might be held responsible under her bond for the losses thus incurred. It appears further from the affidavit singed by Dickey, quoted in part above, and also from the report of a postal inspector, that Mrs Arthur certified without question the forged duplicate applications presented to her by the clerk Thus she assisted, though in all probability innocently, in the embezzlement of these funds. There should also be noted the following portion of a report dated June 28, 1941, submitted by one of the postal inspectors who investigated this matter, to the inspector in charge, a copy of which is on file in this office. "Supervision at this office has been almost entirely lacking on the part of the assistant postmaster, who is in the same room with the postal-savings and moneyorder clerks If has not been his practice to check the accounts prepared by the clerks. No postal-savings cash book has been kept since June 30, 1940. and the assistant postmaster did not know it. The postal-savings reports have been delayed to enable the clerk to manipulate the paid certificate account to cover a shortage carried from month to month, and nothing was done about it. Later, a report will be submitted on supervision or the lack of it at this office. and a suitable recommendation made.' The situation in the instant case seems clear. Dickey, the former clerk, finding Mrs. Arthur lacking experience in postal matters and willing to depend completely upon his representations to her as to the administration of the postalsavings branch of the office, used her as a tool in his fraudulent practices. The faulty administration of the financial affairs of the office by the assistant postmaster facilitated concealment of the defalcations. And it would appear that this latter condition existed not only under Mrs Arthur, but also under her successor, Mr. Wooten. A postmaster is the supervisory official in charge of a post office, and it is his responsibility to observe and keep in close contact with the work of the office. Where that responsibility has been shirked or lightly assumed as appears to have been the case at the Bradenton post office-and loss of public funds has resulted thereby, there would appear to be little justification for relieving such officials of the liability which the law places upon them. To do so would be conducive to widespread laxity in the administration of the public business and tend to encourage diregarding the respect for the responsibilities of the office of postmaster which the incumbent of such an office should feel and without such efficient administration of the postal system is impossible. Hence, I am of the opinion that the three bills referred to should not be given favorable consideration for enactment into law. Sincerely yours, LINDSAY C. WARREN, Comptroller General of the United States. STATE OF FLORIDA, County of Manatee: Personally appeared before the undersigned attesting officer, F. M. Maloy, who being sworn on oath says: My name is Finley M. Maloy. I have been in the employ of the postmasters in the city of Bradenton, county of Manatee, and State of Florida, as a clerk and |