Shortly after retiring in 1973, former Rep. Edward A. Garmatz (D-Md.) was asked about his accepting large campaign contributions from shipping interests that receiving U.S. subsidies worth close to $1 billion a year.
"Who in the hell did they expect me to get if from, the post office people, the bankers?" answered Garmatz, who headed the House committee in Congress responsible for authorizing the subsidies. "You get it from the people you work with, who you helped some way or another. It's only natural."
This generous flow of campaign gifts - he received $37,000 for his 1970 re-election drive - illustrates his close relationship with shipping interests while serving as chairman of the powerful House merchant Marine and Fisheries Committee.
For Garmatz, who was indicted by a federal grand jury Monday on charges of conspiring to take $15,000 in bribes from two East Coast shipping firms, the courtship of the maritime industry was part of the job of representing district that included the major Port of Baltimore.
The 13-term congressman, known as "Mr. Merchant Marine," proudly recalled the large turnout at a 1972 cocktail party thrown for him by the shipping industry. "They came over to see Garmatz," he said in a later interview. "Had six presidents of steamship companies there."
From his chair at the head of the House committee. Garmatz was able to look after the interests of his East Baltimore constituents who worked along the 42-mile waterfront as well as the nations merchant marine fleet, which he helped nurture for years.
When he announced his unexpected retirement in February, 1972, he declared that shipping and port issues were "closest to my heart" and said his crowning achievement was passage of legislation that extended the U.S. subsidy program from passenger and cargo liners to bulk carriers.
"If he was not a supporter of the shipping industry, he would not have been doing for his constituents what he should have been doing." Helen Delich Bentley, who was a member and chairman of the Federal Maritime Commission during Garmatz's years as committee chairman, said yesterday.
That Garmatz often promoted interests of America's shipping industry has never been in doubt. Nor is that considered inappropriate in Congress for the head of a committee whose mission is in part to foster growth of the maritime trade.
Garmatz has not been alone in receiving campaign largesse of shipping interests. Twenty-five members of the Merchant Marine committee took more $100,000 from the political arms of three maritime unions in the 51-year period ending June 30, 1976.
Those same unions, all affiliated with the AFL-CIO, gave a total of almost $1 million to the campaigns of House and Senate members during the same time.
It was his sponsoring of a piece of legislation in 1971 - just one of numerous maritime bills that received his blessing - that prompted a 12-month investigation by federal prosecutors in New Jersey and eventually led to Garmatz's indictment Monday.
The indictment, which ironically was returned in the federal courthouse in Baltimore that bears Garmatz's name, charges that the 74-year-old former lawmaker entered into a conspiracy to take $15,000 in bribes in return for his sponsorship.
When the Garmatz legislation was enacted a year later, it benefited two shipping firms named as sources of the alleged bribes. One of the firms was able to sell two federally-subsidized passenger vessels to a Dutch concern for $20 million, while the other firm could sell is subsidized cruise ship to the U.S. government for $4 million.
Garmatz has denied the federal charges "unequivocally and without reservation."
The Garmatz indictment opens up one more chapter in the long-running saga of dubious dealings within the highly competitive and heavily subsidized shipping industry.
The office of the U.S. attorney in New Jersey happened on the allegations against Garmatz while conducting a much broader probe into alleged illegal rebating within the industry.
In light of the broad swath of campaign contributions that the shipping industry and its related unions have left behind them, the number of indictments and convictions connected with illegal campaign contributions is not large.
In 1970, officials of two West Coast shipping firms were fined a total of $50,000 for making illegal contributions to Garmatz's campaign. That same year, the Seafarers International Union and eight of its officials were indicted for conspiring to undermine election laws; the indictment was dismissed in 1972 by a U.S. District Court judge.
Last fall, the election campaign of former President Ford was under a cloud for several weeks after newspapers revealed that the Watergate special prosecutor's office was investigating possible irregularities in contributions the Seafarers and another powerful maritime union had made to Ford's earlier congressional campaigns.
In mid-October, Special Prosecutor Charles R. Ruff announced he found no corroboration of allegations that Ford misused these campaign contributions.
Investigations into the dealings between large shipping firms and their client companies have produced some substantial results.
Last January, Sea-Land Services Inc., a New Jersey-based firm that operates the world's largest containerized fleet, agreed to pay a $4 million fine for making $9 million in questionable rebates to the customers who shipped their goods with Sea-Land.
The firm, a subsidiary of R.J. Reynolds industries, the tobacco company, did not admit that the payments were illegal; however, a September, 1976, report from the Reynold firm indicated that Sea-Land's rebates were "possibly illegal."
Rebating, or giving customers discounts or kickbacks from the established tariff schedules, specifically is prohibited under a 1916 law but there have been numerous allegations that, under the fierce pressure of competition within the industry, these questionable rebate payments have been a common practice.
United States Lines Inc., one of the two firms mentioned in connection with the Garmazt indictment, also has been charged by the Securities and Exchange Commission with giving customers substantial illegal rebates. About two months ago, the SEC accused the firm of kicking back some $2.2 million to its customers.
That $2.2 million was part of a total of $2.5 million in "substantial, improper and illegal" payments that the SEC accused United States Lines of making; a $5,000 payment to Garmatz - listed only as a "U.S. government official" - was included in the charge.
While neither admitting nor denying that they made the illegal payments, USL has consented to a U.S. District court injunction that prohibits any similar actions in the future.
Shipping industry experts, who said the industry grosses about $7 billion annually from the construction of merchant ships and from their operation, say that no other industry in this country is as heavily dependent on government subsidies or the whim of the people who dispense them.