AVIATION INQUIRY.

New Zealand Herald, Volume LXVI, Issue 20176, 9 February 1929, Page 11

AVIATION INQUIRY.

ALLEGATION OF BRIBERY.

OFFICERS AND COMPANY.

(Received February 8, 10.45 p.m.)

MELBOURNE, Feb. S

Tho inquiry into tho suspension of Mr. Malcolm L. Shepherd from his post as secretary to the Defence Department was continued to-day, before Mr. H. I'. Brown, Director of General Postal Services. There arc two allegations against Mr. Shepherd. Tho first aroso out of a remark he is alleged to liavo made at a dinner given to Mr. Bert Hinkler. Captain 11. Larkiu, managing director of the Australian Aerial Services, stated at the dinner in question that he was reluctantly forced to the conclusion that it was necessary to bribe Lieutenant-Colonel H. C. Brinsmead, Controller of Civil Aviation, in order to secure even a fair hearing.

To that Shepherd is alleged to have replied: " Why do you not pay? You will not get on if you do not pay." The second allegation arose out of a peace gathering in October, 1928, at the house of Mr. Herbert Campbell-Jones, managing editor of the Sun Newspapers, Limited, at which Captain Larkin and Colonel Brinsmead were present.

Shepherd is alleged to ha've said to Captain Larkiu: "I know how to handle Cabinet Ministers. I arrange documents in two piles One they sign without reading, the other I advise them to read. Now, it rests with you which pile I put your stuff in." Edward Flack, a director of Captain Larkin's company, was examined. He said ho was shocked when Captain Larkin told him what had occurred at the dinner to Mr. Hinkler between himself and Mr. Shepherd, and also with what was supposed to have occurred at Mr. Campbell-Jones' house. " Captain Larkin made notes of the conversations. These were handed to witness some weeks afterwards.

The Chairman: Did you form the conclusion that certain highly placed officers were trying to get some kind of consideration from your company ? Witness: I had no reason to doubt that what Captain Larkin said was true. The Chairman: May I take it that the directors of your company are supporting Captain Larkin ? Witness: Yes.

The Chairman: Did you have any impression that the officers of the Defonco Department were open to accept bribe.,?

Witness: There were certain transactions which, on what Captain Larkin said, were not above suspicion.

The Chairman: Did Captain Larkin consult you or t lie other directors about tailing this matter up against tho depart merit ?

Witness: No. Two of the directors were away.

Counsel then guvo their addresses and tho inquiry was adjourned.