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Witness Says Rent Payments Did Not Substitute For Royalties

December 2, 1988

ALEXANDRIA, Va. (AP) _ Lyndon LaRouche’s rent for two residences was paid by a publishing company that considered the perennial presidential candidate its ″prime asset,″ according to testimony at his tax fraud trial.

Marielle Kronberg, former chief operating officer of the publishing house, told jurors Thursday that she made the payments as an expression of gratitude for the firm’s best-selling author - not as a substitute for taxable royalties.

The prosecution contends that the rent payments should have been declared as taxable income, along with household and personal services purchased for LaRouche by his organizations over the last decade.

The political eccentric is charged with conspiring to defraud the Internal Revenue Service by failing to declare personal financial assistance as income, and by failing to file income tax returns beginning in 1979.

In addition, LaRouche and six associates are charged with conspiring to defraud people who lent LaRouche organizations some $30 million, by intentionally failing to repay the bulk of the money.

Two other witnesses told jurors in U.S. District Court on Thursday that LaRouche was waited upon hand-and-foot by employees who cooked for him, his wife and his dogs, bought his clothes, cleaned his house and performed concerts for him.

Before the two-week-old trial recessed until Monday, Ms. Kronberg identified a $900 rent check for a residence used by LaRouche in Michigan in 1980, and a $5,100 rent check for an apartment he used in New York City the next year.

The checks came from the New Benjamin Franklin Publishing Co. in New York City. Ms. Kronberg said LaRouche was not involved in the company’s operation.

The indictment identifies the firm as a company established ″ostensibly for the purpose of publishing the work of LaRouche″ and members of his political movement.

Asked by Assistant U.S. Attorney Kent Robinson why she made the rent payments, Ms. Kronberg said, ″Because he was our principal author and in that sense our prime asset.″

″I didn’t think it was in lieu of paying″ royalties to LaRouche, she testified, adding that many others also used the New York apartment.

Ms. Kronberg said the publishing firm did write checks to LaRouche totaling $6,000 for royalty payments, but said she learned they were never cashed.

The indictment says LaRouche signed a 1980 federal tax return showing $7,963 in taxable income, including the $6,000 in uncashed royalty checks. But the return was never filed.

Another witness, Pam Cowdery, testified that she played the violin and sang at LaRouche’s Leesburg, Va., estate when he and his wife ″just wanted to hear some music.″

The former employee of a LaRouche graphic company also said she cooked for the LaRouches, helped clean the house and even prepared ″very special meals″ of boned chicken breasts for the couple’s dogs.

LaRouche’s security chief, Richard Magraw, testified that LaRouche carried no money, and said he would buy suits, underwear, tobacco and even haircuts for his balding boss from a ″security″ fund.

Magraw testified under a grant of limited immunity from prosecution.

On trial with LaRouche are his chief fund-raiser William Wertz; his legal adviser, Edward Spannaus; and four fund-raisers: Michael Billington, Dennis Small, Paul Greenberg and Joyce Rubinstein.

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