August 1, 1974

NYC Investigation Comr Nicholas Scoppetta and Manhattan Dist Atty Richard H Kuh announce that special task force investigating mystery of $5.4-million in securities reptd missing from city vault by S D Leidesdorf & Co audit can be traced to sloppy bookkeeping in Controller's office, news conf; say finding, which is based on conversations with 5 civil servants, including munic securities div chief Russell T Aldag, and supplementary records in Controller's office, took only 2 days; announcement appears destined to cause embarrassment for several reasons to Controller Goldin, who released Leidesdorf audit on July 14 and has been feuding with Mayor Beame ever since; Scoppetta-Kuh team is able to account for all but $84,000 in securities and of that amt $75,000 left vault in 2 installments to Balport Construction Co during last wk in May after Goldin had been in office almost 5 mos; team's speed in making discovery raises possibility that Goldin could have done same without publicizing discrepancy; team found everything they needed to reach conclusion in Controller's custody; assert that Leidesdorf auditors actually overlooked $114,087 in security accts in their physical count taken on Mar 31 inside city vault; Kuh refers to audit as 'so-called' audit' and notes with disapproval that it raised 'rampant suggestion' of missing trust funds; investigation and findings detailed; Beame says he is 'pleased' that findings redeem reputations of civil servants who served under him as Controller, news conf; says he would have hoped that Goldin had checked audit findings before making them public but refuses to attack him; Goldin's office appears subdued; Goldin spokesman issues statement saying that office is 'reassured' by investigation's conclusions but says that office is still awaiting completion of $20,000 Leidesdorf follow-up study, which is attempt to reconcile books; Goldin repr theoretically was included in task force set up by Beame but as investigation proceeded team assumed command of inquiry and began to complain of 'resistance' from Goldin staff in regard to amt of hrs they were permitted to spend in Controller's office; charge was denied; Balport accountant claims that co never recd money; sources close to investigation believe $75,000 was accidentally added to contractor's credit in 1st place by bookkeeping error in '71 and feel he is not entitled to it; Kuh and Scoppetta emphasize role of civil servants in investigation in contrast to disparaging remarks made by Goldin staff about such employes; Goldin's office is informed of inquiry's disclosures on same day that announcement is made when Controller special asst Jerome H Turk meets with Scoppetta and Kuh; 1st Deputy Controller Seymour Scher says Goldin, who is on vacation, is suspending judgment until 2d Leidesdorf audit; City Council Pres O'Dwyer, in statement attacking 1st audit, which he calls 'mischievous,' says he will refuse to vote in favor of contract for 2d one when it appears before Estimate Bd; Leidesdorf sr partner Louis Arovas, who supervised audit, cannot be reached for comment; illus of Scoppetta and Kuh; Beame illus (L)

Prices of raw farm products climbed 6 per cent from June 15 to July 15 after four months of declines, the Agriculture Department reported. Details on Page 35.

MTA Chmn David L Yunich says MTA has sold 300,000 mass transit tokens at 35c each to East River Savings Bank to sell at slightly reduced rate; is pushing for plan that would have selected banks and stores selling tokens at 10 for $3; Steeplechase Pk at Coney Is is giving 2 tokens free with weekday purchase of $5.50 book of tickets; Edison Theater is giving token with purchase of ticket at box office; another major merchandising program being worked out involves extension of half-fare program to days of big store sales; program is coming at time when 35c fare is in jeopardy; Yunich predicts fare will not be increased in '74; says cut-rate token plans would continue if fare goes up (L)

FDA publishes rules designed to save millions of Amers unnecessary dosages of med and dental X-rays; estimates that new rules will save Amers $170-million yrly that would otherwise be spent on illness to which unnecessary X-ray exposure is contributing factor; rules are effective Aug 1; strict manufacturing and assembly standards are expected to raise aggregate costs of diagnostic X-rays by $20-million yrly, all of which will probably be passed on to consumer; net saving in med costs will still be $150-million yrly; new regulations require that any diagnostic X-ray equipment built after Aug 1 must meet Fed standards and be certified as doing so; major objective is to insure that X-ray beam emitted by any machine cover area of body no greater than that of X-ray film to be exposed; John C Villforth, dir of Bur of Radiological Health, says new standards will directly affect 130-million Amers who are exposed to med or dental X-rays yrly (M)

HR Appropriations Subcom, acting on fiscal '75 mil budget request, pares Navy's $143-million request for beginning construction of new class of helicopter carriers for use in antisubmarine warfare (S)