December 28, 1972

Blue Cross of Greater NY on Dec 27 announces it will seek avg rate increase of 9.3% in hosp ins rates for community-rated subscribers in 17 lower counties of NYS, to be effective Apr 1, '73; increase, if granted by NYS Ins Dept, will mean rise of more than 25% in Blue Cross rates in 1 yr for 1.5-million contract holders because it will be compounded on 14.8% increase granted in May; avg contract for group family subscribers, which currently costs $22.26 per mo, will rise to $25.33 or $36.84 more per yr; Blue Cross pres E R Werner says public hearings will be held Jan 12 before formal filing for approval of new rates; says avg rise of 5.3% is needed to cover increases in hosp costs and replacement of deficit in statutory reserve, part of which would be needed to provide benefits in early part of '73; additional 4% sought would be needed to finance benefit improvements; improvements listed; Blue Cross says it will ask increases ranging from 12c to 14c per mo more for 600,000 subscribers over 65 who pay for Senior Care under various supplemental coverages to Medicare; Werner says increases sought are based on assumption that present wage-price guidelines affecting hosps will be maintained

Final Knapp Comm rept asserts that high NYC police officials ignored Fed information that some of their men were suspected murderers, extortionists and heroin dealers; comm says investigators discovered evidence of 3 separate instances in which police officials, including former 1st Deputy Police Comr J F Walsh, failed to investigate allegations of serious misconduct made by US Narcotics Bur; concludes that as of Oct, '71, police corruption in NYC was extensive, dept-wide phenomena, indulged in to some degree by sizable majority of those on force; outlines other instances of official inaction it discovered involving serious allegations regarding police involvement in heroin; cites J Kriegel, close assoc of Mayor Lindsay, A G Fraiman, NYC Comr of Investigation from '66 to '68, and Walsh for failure to act when informed by Police Detective F Serpico and Sgt D Durk of widespread bribery among plainclothes policemen responsible for enforcing gambling laws in Bronx; Fed allegations of corruption in dept involved 72 policemen, none of whom were investigated by dept; Govt repts alleged various types of police misconduct including bribery, extortion, purchase of stolen goods and direct involvement of ptl in sale of narcotics; rept notes that NYC Council Pres S D Garelik, formerly chief police inspector, testified to comm that as field comdr he had recd gratuities from businessmen he came in contact with during course of his duties; says that instead of refusing or returning gifts, Garelik attempted to respond by giving gifts of equal value; Walsh, Kriegel, Fraiman and Garelik illus

NYS Appellate Div Presiding Justice Stevens, commenting on Manhattan Criminal Ct Judge Wright releasing J Gruttola on $500 bail, says that widespread reaction against Wright's action can be attributed to fact that NYC policeman was shot;says that if civilian was shot he doubted that same 'emotional outcry' would have occurred; in other developments, Manhattan grand jury investigating incident has completed its questioning of witnesses and is prepared to return an indictment against Gruttola and spokesmen for ACLU NY unit and Legal Aid Soc score remarks by Lindsay, Police Comr Murphy and Repr Koch as injuring suspect's presumption of innocence and seeking to justify preventive detention; Stevens por

special NYS prosecutor Nadjari says on Dec 27 that he is 'speculating' about legal action to prevent Special Asst Dist Atty Rogers from conducting his own investigation into thefts of large quantities of narcotics from NYC Police Dept; says he is 'dismayed' by Rogers's issuance of subpoenas to Police Comr Murphy and other dept officials to obtain documents and testimony for citywide grand jury investigation; indicates case falls within his mandate to prosecute police corruption

Pearson, Lester B