Firestone Tire & Rubber Co. agreed yesterday to plead guilty to federal grand jury charges of filing false tax returns in 1972 and 1973 and failing to report millions of dollars of income in earlier years.
Earlier in the day, a grand jury in Cleveland charged the company with the false filings and with a conspiracy to defraud the IRS. Later, the company said it had reached "tentative agreement" with the U.S. attorney there to plead guilty to the false filing charges if the government drops the conspiracy to defraud charge.
The agreement is subject to court approval. It also calls for the company to pay two $5,000 fines, and to negotiate any resulting back-tax bill, which sources say could go as high as a million dollars.
The indictment charged that Firestone diverted some of its income from 1966 through 1971 into "suspense" accounts in an apparent attempt to protect itself if it had any lean years in the future.
When the company finally decided to report that income - totaling about $12.5 million - in its 1972 and 1973 income tax filings, Firestone apparently failed to mention that the money was actually earned much earlier, according to U.S. attorney James R. Williams.
In failing to disclose that the money had been earned before, the company thus avoided interest and possible penalties, which the government says totals up to between $600,000 and $1 million.
The grand jury sat for several months in the case and heard testimony from several former company officials, including former vice president Robert Beasley, who is at present serving a jail term in Florida for charges relating to misuse of corporate funds.
Beasley is openly feuding with Firestone over his conviction, claiming he was always acting with the knowledge of high corporate officials and contending that the company set him up to take the blame for its improper political slush fund.
Beasley, in sworn statements, has accused the company of illegally evading taxes and "illegal, criminal and wrongful conduct," that he said could result in the company being fined in excess of $30 million.
Firestone has denied these and other allegations.
Yesterday, Firestone said it decided to plead guilty to the false return charges "in view of the technical nature of the charges . . . and in order to bring this lengthy and costly proceeding to a conculsion.