October 12, 1974

NYS Controller's office, contending that state has been overcharged by Port Auth of NY and NJ for office space in World Trade Center, NYC, refuses to pay over $3-million in rent bills and is continuing to withhold payments at rate of $115,000 per mo; according to Controller's audit, over-charges for 1st yr of state occupancy, Apr '72 to Apr '73, amounted to one-third of state's rent bill of $3.9-million; Port Auth insists charges are legitimate and says state has misinterpreted lease; authority spokesman says matter is expected to be resolved soon by negotiators; details (M)

Northrop Corp vp James Allen has admitted co has maintained covert pol 'slush' fund of up to $1.2-million from which contributions to campaigns of Richard Nixon, Hubert Humphrey and others were made, deposition filed in Fed Dist Ct, Los Angeles; deposition is made in connection with civil suit filed in May '74 that alleged contributions were made by altering corp documents and laundering funds in complex internatl scheme; co chmn Thomas V Jones, Allen and Northrop pleaded guilty under Fed Corrupt Practices Act; rev of ct actions and of fines levied; suit, filed by Center for Law in the Public Interest, seeks immediate removal of Jones and vps Frank W Lloyd and James D Wilson, unspecified amt in damages, ct supervision of new proxy material for co's thrice-postponed '74 annual meeting and injunction prohibiting further donations of Northrop funds for pol purposes; US Dist Judge Warren Ferguson has opposed co attempts to limit scope of inquiry; recent disclosures came in connection with affidavit filed by Brent N Rushforth, atty for plaintiff shareholder, seeking information on William A Savy, Paris-based Northrop consultant, identified by Sen Watergate Com as co's 'launderer'; ct papers say Savy was paid about $ 1.2-million, allegedly for consulting work, of which $600,000 remains unaccounted for; Rushforth also seeks to discover Savy's relationship with other Govt defense-contracting firms, including Gen Dynamics, Boeing, North Amer Rockwell and McDonnell Douglas; Northrop is currently competing with Gen Dynamics for Air Force contract for lightweight fighter plane prototype, estimated to be worth $ 13.5-billion in sales; Jones por (L)

Arlington House, publisher of derogatory biog of Arthur J Goldberg, Dem candidate for NYS Gov in '70, says that publication was arranged by John A Wells, close pol assoc of Nelson A Rockefeller, who offered to purchase 100,000 copies for distribution during campaign; says that Wells recruited writer, Victor Lasky, and arranged for publication and distribution; disputes statement by Rockefeller that his bro, Laurance S, invested $60,000 in book purely as business venture; Arlington House pres Neil McCaffrey says that he knew book was to be used for campaign; says that $60,000 from L Rockefeller paid for entire publishing project; William F Buckley Jr, chmn of Starr Broadcasing Group, which owns Arlington House, says that it would be 'naive' to believe that investment by L Rockefeller constituted 'businesslike approach' to publishing; Goldberg says that he has asked HR Judiciary Com and Sen Rules Com to hold formal hearings into circumstances surrounding publication of book; attacks N Rockefeller's veracity; N Rockefeller, at meeting with reporters in NYC on Oct 11, says that he had nothing personally to do with book; says that he does not know if Wells recommended project to L Rockefeller; says that Wells had no connection with '70 campaign; Lasky says that idea for book came from Wells; Wells unavailable for comment; financing for book was arranged through Literary Properties Inc, Del corp that recd funds from both NY and Phila (L)

John D Ehrlichman contends in legal papers made public on Oct 11 that Nixon could testify about unrecorded conversations in which 'instructions were given that all matters pertaining' to White House plumbers unit 'were impressed with highest security classification and were not to be revealed by any Govt employe or other person having knowledge of them'; says that he 'advocated' to Nixon in '72 that prosecution of Ellsberg in Pentagon papers case be discontinued

Joel Dolkart, former partner in Simpson, Thacher & Bartlett law firm charged with misappropriating more than $1.5-million in fees paid his firm, pleads not guilty and is released on his own recognizance; is alleged to have diverted funds recd from Gulf & Western Industries, firm's largest client, and deposited them into 2 bank accounts (M)