A Catholic priest testified in court here today that one of the defendants in the trial on charges of conspiring to fix real estate commissions had told him that a second defendant had refused to go along with raising the commissions.
Fr. Henry O'Meara was testifying for Robert W. Lebling, president of Bogley, Inc., and his statement surprised lawyers for the other defendants.
Fr. O'Meara, of the Holy Redeemer College in Washington, stated that John T. (Tommy) Carruthers, president of Colquitt-Carruthers, said something like, "'We were talking about commissions going higher and Bob (Robert W. Lebling, president of Bogley, Inc.) wouldn't go along.'" The priest did not recall anything more specific about the conversation, which took place in May 1975 in a car enroute to a health class they both attended.
In this first criminal trial under the Sherman Antitrust Act involving alleged real estate price fixing, the government has alleged that six area realty firms and three of their presidents conspired at a dinner meeting on Sept. 5, 1974, to raise commissions from 6 to 7 per cent.
The defendants in the case are Bogley, Inc., and its president, Robert W. Lebling; Colquitt-Carruthers, Inc., and its president John T. Carruthers Jr., Jack Foley Realty, Inc.; and its president John P. Foley Jr.; Robert L. Gruen, Inc.; Schick & Pepe Realty, Inc., and Shannon & Luchs Co.
O'Meara's vagueness prompted Judge C. Stanley Blair to send the jury out of the room while he recounted his conversation with Carruthers. Later he gave a slightly different version in front of the jury. Defense lawyers for Carruthers demanded to know what rates, what properties and what time periods Carruthers had mentioned. O'Meara did not recall hearing any.
Then they asked him to whom the word "we" referred but the priest said he didn't know, adding, "That line of work (real estate) is not even germane to my life." He subsequently recounted the conversation to Lebling who, he said, had no response. Defense motions to strike the priest's testimony as "prejudicial speculation" were overruled.
Another witness also had difficulty recalling events of 1974. Robert W. Dorsey, a Bogley vice president, changed his testimony concerning a Bogley board of directors meeting Sept. 27. As U.S. Attorney Charles S. Stark reminded him, Dorsey had told a grand jury last January that Lebling had announced at the meeting that the firm intended to raise the commission to 7 per cent.
Since then, Dorsey said today, he had done a lot of "soul searching" and was now convinced that "the testimony I gave at that date was too emphatic." He explained the he was engrossed in reading adverse financial statements during the meeting, so he was not sure what Lebling actually said. "My recollection is that he had given it some serious thought. Whether his mind was made up or not, I could not say."
Dorsey was asked by Stark whether Lebling had mentioned the realtor' Sept. 5 dinner at the congressional Country Club during the subsequent board meeting. Dorsey replied "I think he did: I can't be absolutely certain." Then he added, "but I was aware that another firm had announced there it was going to 7 per cent."
That other firm was Jack Foley, Inc. Foley testified today that he made up his mind to go to 7 per cent during the summer of 1974 because sales were down and costs were up. He mentioned his decision at the Sept. 5 dinner. During the "chit chat" that followed, Foley said he could recall hearing no one agree to raise commissions. Lebling had simply remarked, "Good luck to you."
Foley insisted the purpose of the dinner was to get his fellow realtors involved in working for the Montgomery County Board of Realtors which had elected him incoming president. When asked why he mentioned his decision to raise rates on the occasion, Foley replied, "People would have thought it strange if I didn't because he planned to send out a "Dear Fellow Realtors" letter Sept. 15 to 250 collegues announcing his decision.
Dorsey is not the only witness who has changed the testimony about the 1974 dinner. Last week, Allyn J. Rickman, a partner in Schick & Pepe who had been given immunity from prosecution, swore he heard Robert L. Gruen say on that occasion that he too was going to 7 per cent. But Gruen attorney's, William O Bittman, found on cross examination that Rickman never had told his firm's counsel or the prosecutors previously about Gruen's alleged statement. Furthermore, he conceded during the trial that he was not sure what, if anything, Gruen really had said that Sept. 5.
In this second week of the trial in U.S. District Court, the defendants maintained they raised rates as the result of adverse economic conditions, not as a result of a conspiracy. The prosecution is attempting to show that the higher commissions deprived sellers of "free and open competition." Lebling, about whom so much of today's testimony revolved, will be on the stand Tuesday.