A federal grand jury in Columbia, S.C., is weighing evidence against Southern Railway Co. to decide if there are grounds for indictment on a possible conflict of interest charge.
The evidence consists in part of Interstate Commerce Commission audits of Southern's entertainment expense accounts during 1974. The audits were turned over to the Justice Department. One audit concluded that Southern "regularly provides state officers, officials and employes lunches, dinners and free use of its owned recreational facilities."
Another listed the names and positions of federal agency employes who wre entertained at Southern's hunting preserve 40 miles outside of Charleston, S.C., and its fishing camp, 28 miles south of St. Augustine, Fla.
While the names were deleted from material supplied the press, the agencies included officials of the Interior Department, the Social Security Administration, the FBI, the U.S. Postal Service, the General Services Administration, the Federal Railroad Administration, the Transportation Department and all branches of the military.
Just over two years ago, then-Secretary of Agriculture Earl L. Butz acknowledged that he and his administrative assistant had been Southern' guests along with agriculture commissioners from several Southern states over Christmas of 1975. The secretary said at the time that Southern had paid his own and his aide's expenses. He characterized his visit as a mixture of business and pleasure.
The recreational facilities near Dorchester, S.C., are wholly owned by Southern and cost $1.5 million, the audit noted. Operating costs during 1974 were approximately $1.2 million. The average length of stay for guests was over three days and nights.
The facilities include a swimming pool, horseback riding, a golf course and game preserves for hunting. Three cabins used by guests were constructed in 1962 at a cost of more than $130,000.
The lodge is used for much of the year by Southern's employes who reimburse the company. In the hunting season, said a Southern spokesman at the time of the Butz incident, "we often invite people we have business interest with; many government types come to the facility."
Southern president in 1974, W. Graham Claytor Jr., subsequently became Secretary of the Navy. Southern had no comment yesterday.
The entertainment of government officials at company resorts became an issue several years ago when it was revealed tha Pentagon military and civilian officials were being wined and dined at hunting lodges by defense contractors doing business with the federal government. The revelations led to creation or tightening of canons of conduct governing acceptance of gratuities. Southern now says it conforms to the canons.