338.1121 Zrike Bros. and Johnson/70

The Minister in Haiti (Armour) to the Acting Secretary of State

No. 87

Sir: I have the honor to inform the Department that on June 14 last, the Zrike Brothers were permitted to leave prison with provisional liberty after having agreed to pay the Government $100,000 in settlement of the civil claim, that is, for the actual losses to the Government brought about through under-payment of customs duties.

On June 12, the Financial Adviser-General Receiver wrote the Legation that the Minister of Finance had notified him that such a settlement was being discussed. After talking the matter over with the Legation, Mr. de la Rue wrote the Minister for Finance stating that he could take no part in such negotiations nor could he give advice on the question as to whether or not the Government should settle out of court, so to speak. This action was considered advisable in view of the possible repercussions of a political nature later. It was also felt to be in accordance with the spirit of the Department’s telegraphic instruction No. 30 of April 24, 5 p.m. A copy of Mr. de la Rue’s letter to the Minister of Finance is enclosed herewith.6 The settlement as finally effected calls for a payment of $50,000 in cash, $30,000 in twenty months at the rate of $1,500 a month, and $20,000 in forty months at the rate of $500 a month. (It is not clear whether the forty months date from the expiration of the twenty-month period or are to run concurrently therewith.) Mr. de la Rue informs me that the $50,000 cash has already been paid in to the Banque Nationale to the credit of the General Receiver.

Just before the conclusion of the settlement the Foreign Minister called me in and asked me what I thought of it. I was careful to explain to him that our Government would prefer not to be brought into the settlement; that upon the completion by the office of the [Page 793] Financial Adviser-General Receiver of their reports and the furnishing by them of all data, etc., we considered that their part also had been completed. In other words, we felt that all details connected with the trial and judgment rested with the Haitian courts and government, subject to the assurances requested by the American Government and given by the Haitian Government prior to Johnson’s surrender. M. Blanchet assured me that he understood our position and merely wished to put me “au courant” of the progress of events. He explained that this settlement for $100,000 would not affect the prosecution of the penal side of the case.

The Financial Adviser-General Receiver states that he has been given to understand that while it is the intention of the Government to bring the Zrike Brothers to trial and sentence them, their sentences will be immediately commuted by the Executive. The Minister for Finance stated that similar action was planned in the case of Mr. David Johnson, formerly American Collector of Customs at Port au Prince, who has confessed his guilt in the transactions. However, the Government feels that before Johnson can be released on bail he should have made full restitution to the Haitian Government of the bribes he received from Zrike Brothers. The Haitian Government, accordingly, asked Johnson to sign a document authorizing his bank in the United States to furnish a full statement of his account for the past three years so that the prosecutor could convince himself that Johnson’s statements of the amount of the bribes he had received might be confirmed. Upon advice of his counsel, Johnson has so far refused to authorize the bank to furnish this information. I understand that the Haitian Government, through its Legation at Washington, is asking the State Department to transmit an official request to the State of New York that information concerning Johnson’s bank account be furnished for the use of the Haitian courts.7

It is to be noted that Johnson is understood to have said that he received less than $10,000 from the Zrike Brothers. Recently the Zrike Brothers admitted to the Haitian Government that they had given Johnson a total of $22,000. Later, it is reported, they amended this statement to claim that they had paid him more than $30,000 in bribes.

Further developments in this case will be promptly reported to the Department.

Respectfully yours,

Norman Armour
  1. Not printed.
  2. Haitian communication not printed. The Department suggested to the Haitian Minister that the matter should be handled in New York by the Haitian Consul General there. (338.1121 Zrike Bros. and Johnson/63, 66)