European Stars And Stripes (Newspaper) - September 7, 1985, Darmstadt, Hesse                                Saturday september 1965 the stars and stripes Page 5 Bel s Huffon report 3 top managers leave major corporate shake up planned Washington a former attorney general Griffin b. Bell blamed lax management for allowing . Hutton & co. To slip into Legal trouble Over its banking practices and the firm said later thursday that it would implement Bell s recommendations for an extensive reorganization. Three top officials Are leaving corporate Headquarters and 3 company statement said the Board of directors will be restructured to ensure that a majority of the members Are from outside the firm. In i report and 90-minute news conference on Iii three month investigation Bell Drew a picture of a corporate giant with so Little control from the top that it had no Way to detect wrongdoing by several of its mid dle managers. It also was a picture of a firm so eager to maximize the interest earnings on its huge daily Cash flow that abuses were practically invited. The absence of controls is particularly noticeable Given Hutton s intense desire during 1980-82 to Maxi Mize interest income. And the knowledge of senior Hutton management that substantial interest income could be generated through Bank  the re port said. Bell said his investigators were unable to link wrong doing to lop new York officers from a standpoint of  it was a management failure not an ethical failure Bell said. He said there was wrongdoing by a group of Middle managers who were Given immunity from prosecution by the Justice department in an unsuccessful Effort to Trace improper Check Over drawing practices to corporate Headquarters. The report recommends that six Branch managers be assessed penalties ranging from $25,000 to $50,000 with the Money being paid to a Charity and the firm said this will be done. The six Are among those Given immunity. Hutton chairman Robert for non hired Bell to conduct an internal investigation after the firm pled guilty on May 2 to 2,000 counts of wire and mail fraud in connection with Bank  that the Justice department said cheated hundreds of Banks out of millions of dollars in interest on Hutton accounts. Despite its assessment of Hutton As a company with an aggressive Cash management culture that tempted some managers into crossing the line into illegal activity the report said the extent of the injury to the Banks has been  the report says just Over a Quarter of the 397 Banks that May have suffered interest losses have signalled their intention to file claims for restitution and Bell said he believes the $8 million fund Hulton has reserved for restitution will be More than enough. Investigators were unable to link wrongdoing to top new York officers from a standpoint of criminality. It was a management failure not an ethical failure Bell said Bell attorney general under president Carter said he could not fault the Justice department for granting immunity to some employees in an attempt to Trace wrongdoing to the top. Noting that a House subcommittee is investigating the department s handling of the Case. Bell said the fight is almost now Between the Congress and the jus Tice  he suggested that the department May have done too Good a Job. They May have made something larger than life by securing a guilty plea to 2,000 counts. I would t have pled guilty to 2,000 counts based on what i know he said. The report says two top corporate officials singled out for failing to exercise their management responsibilities Thomas p. Lynch the executive vice president and Thomas w. Rac chief Legal counsel Are leaving their posts. It recommended that so called Money Mobilizer Thomas Morley a Central figure in the firm s Cash management practices be reassigned to other duties. Fomon announced later that Morley is leaving the  in a Section on Morley that underscores the Central findings of its investigation the Bell report said we do not suggest that Morley be discharged because his de fal cations were More than just his Deal cations they were part of a failing in a management system. It was possible to abuse the system and profit thus abuses  the lengthy document said Lynch As do Facto chief financial officer failed in his responsibility to ensure that adequate controls were established to prevent abuses in the Hutton Cash management  it said Hutton s Legal division left something to be desired. Rac. Bears responsibility for this although we specifically note that Rae was not involved in the activities that gave Rise to the  the report said the boards of the interlocking Hutton companies were organized and existed in a manner where it would be difficult to say that the boards were in charge of the  the document specifically states that we do not hold Fomon responsible for failing to detect and cumin at the improper Over drawing and other abusive practices which occurred at  it said Fomon chose qualified people to fill top positions and was entitled to rely on them to run the company. Fomon. However does have inc responsibility to take action against those people who failed in their Ulics As corporals officers in said. The report also said inc Peculiar management Struc lure at Hutton placed no responsibility on former presi Deal George l. Ball who headed inc brokerage opera Lions of the firm during the 1980-82 period in which the improper a Lively occurred for financial accounting or Legal compliance. He was in of Eccl an executive sales  the report said. Reagan urged to Back overtime exemption Bill Washington a president Reagan s advisers have urged him to endorse a Bill allowing state and local governments to avoid paying their employees billions of dollars each year for working overtime. The Domestic policy Council of Cabinet officers decided wednesday to recommend that Reagan support a Mea sure exempting states and municipalities from overtime provisions of the fair labor standards act a senior administration official said. The Bill sponsored by Sens. Don Nickles r-okla., and Pete Wilson r-calif., is designed to overturn a feb. 19 supreme court ruling that states and local governments must pay employees for working overtime instead of giving them compensatory Lime off. Judy Gorman a spokeswoman for Nickles said the White House ha-1 informed the senator that it would sup Sands of time port the measure. Gorman said labor Secretary William Brock was scheduled to testify in favor of the Bill a Cal tuesday before Nickles labor and human resources subcommittee. Labor Depar Lmont spokesman Paul Williams said Brock was scheduled to testify before the Senate subcommittee next week but declined to say what position the Secretary would take on the measure. The supreme court decision came in the Case of the san Antonio Texas metropolitan transit authority which had been giving compensatory time off to employees who worked overtime. The Cabinet Council s decision was made a week after 150 mayors county executives and other municipal representatives urged Reagan advisers at a meeting to support the Bill. The meeting was organized by the National association of counties and the National league of cities. The two groups estimate the Cost of the court decision will be $1.5 billion for cities. $500 million fur counties and $300 million for stale governments. Randolph c. Arndt spokesman for the National league of civics. Said his organization was informed wednesday of the Cabinet Council s decision. The proposal is opposed by one of the Nalion s largest Public employees unions. Application of the overtime provisions of the Flea is a matter of Law Gerald Mcentee. President of the Amer ican federation of state county and municipal employees. Apsche is fighting to ensure that the Law is applied to Public sector employees and that it is enforced. We will oppose any move to Amend the Law by the administration or its supporters in Congress Mcentie said. In the stars and stripes 40 years ago today. Emergency Landing enabled awol go to evade maps sept 7 1945 _ president Truman put before Congress an extensive legislative and executive program for the Post War reconstruction of the United states. 30 years ago today. Sept 7 1955 _ a common european Market within the next decade is expected to be approved by the foreign ministers of six West european nations who Are meeting in Noordijk on sea. Netherlands. 20 years ago today. Sept 7 1965 _ in due Eldorf Germany nine former nazis have been convicted for him tinier of 700 000 jews at Treblinka extermination Camp in Poland. A former Camp Cor san Kurt Franz 51, was Given a life term on  of murder. 10 years ago today. Pm try 7 1975 a massive earthquake swept Eastern and Southeastern Turkey at lunch Mem e and killed at least 1 .300 people the National radio said. Abilene Texas a an awol army private ducked an appointment with military police in Dallas when an american airlines dc-10 made an emergency land ing this week. Army officials say. After the Dallas bound Jet was forced to land at Dyess fab on tuesday Manuel Mancebo told helpful airline officials he would rather ride a bus to Lawton okla., than catch a connecting flight. American airlines gave him bus fare not knowing that he was a Federal prisoner said airline spokesman John Volara. Mancebo 23, who had been apprehended in Las Cruces n.m., was put aboard the High at fort Bliss in Elpaso but was not escorted because the flight was a non Stop one and military police were waiting at the Gale in Dallas. A spokesman at fort Sill said that Man Echo of Atwater calif., went absent with out permission from the Post on May 8. On june 7 he was dropped from the  an action that declares him to be a deserter officials said. Most of the other passengers took other flights after the emergency Landing. Armond Edwards a National transportation safety Board investigator said wednes Day that a wire in the engine fire warning system had burned or melted causing a fire indicator Light to turn on. No evidence of fire was found after the plane landed. Thirty two people were injured most of them slightly in the emergency Landing the airline said