The president of Bogley Inc., one of the Montgomery County realtors on trial here on charges of price fixing, today rebutted testimony given earlier by his own vice president.
Robert W. Lebling said that Robert W. Dorsey, sales manager of Bogley's Chevy Chase office, ahd been "mistaken" when he testified Monday that during a Sept. 27, 1974, board meeting Lebling had brought up the subject of a dinner three weeks before at the Congressional Country Club.
The Department of Justice alleges that officials of six firms conspired at the Sept. 5 dinner to raise commissions from 6 to 7 per cent, and that Bogley's decision at the Sept. 27 meeting to go to 7 per cent was the result of an agreement Lebling and the others made at that dinner.
Lebling's testimony today was seen as further weakening the prosecution's case. On Monday Dorsey softened the story he had given a grand jury last January. He said then that Lebling had announced the rise to 7 per cent at the board meeting. This week he said he couldn't be sure who had suggested the increase. As for Lebling's mentioning the dinner at the board meeting. Dorsey said, "I think he did but I can't be absolutely certain."
Today Lebling denied he had ever mentioned what was said at the dinner to anyone before or during the board meeting or that he himself had broached the subject of commission rates. Rather, he said, it was the sales agents who brought it up and declared themselves in favor of a 1 per cent increase.
This is the government's first criminal trial of the real estate industry on antitrust charges. It convicted of $1 million, and the individuals up to three years in prison and a $100,000 fine each.
The defendants in the case are Bogley, Inc., and its president. 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.
The prosecution's opening statement last week alleged that the defendants and co-conspirators entered into "a continuing agreement, understanding and concert of action . . . to fix raise and maintain commission rates for the sale of residential real estate in Montgomery County. Since then defense counsel has presented many witnesses who have testified that the increases occurred separately and as the result of adverse economic conditions at the time. Sales of existing homes were substantially lower in 1974 due to a lack of mortgage money while the cost of gasoline and advertising rose sharply.
As for what happened during the dinner at the country club, Lebling told the court "it was no big deal to me." He added, "I've been working on agreement for 32 years and I know when I am in one. There was no agreement there."
He acknowledged that after Foley announced he was going to 7 per cent, he (Lebling) told WIlliam M. Ellis, a vice president of Shannon & Luchs, that he "liked the idea" (of 7 per cent). But he also told two other realtors present that he had a board of dirctors to work with and that he couldn't make any decision. On cross examination Lebling admitted that as chief stockholder of Bogley with 70 per cent of its outstanding shares, he would have had the power to decree an increase in rates if he had so wished.
During the dinner Lebling also testified that Allyn J. Richman, a vice president of Schick & Pepe who was given immunity by the government, told him he was going to 7 per cent. Ellis, Dean Maury of Stuart & Maury, and realtor Griffin B. Holland all indicated they would stick with 6 per cent, according to Lebling.
He declared Carruthers said he was going to 7 per cent and thereupon added "in fact I'm already there." The prosecution had offered as evidence a Colquitt-Carruthers internal memo dated Sept. 24, 1974, showing the company's policy would thenceforth be to charge 7 per cent. Today Richard Connell, a Colquitt-Carruthers accountant testified that his firm had 48 listings at 7 per cent between January and August 1974, though he admitted they represented only a small part of Colquitt's business. (A listing is an owner's agreement to list his home for sale with one or more real estate agents in exchange for a percentage of the sale price.)
Thus far three firms have presented their defense. Carruthers, the only one of the company presidents not to testify, said today he did not know whether he would take the stand. The remaining defense witnesses will be heard this week and next.