The Nome Nugget

U.S. Govt. Will Pay $1,867,545 Damages To Dixon-Yates

WASHINGTON, (AP)—The U.S. Court of Claims today upheld the claim of the Dixon-Yates combine for damages because the government cancelled its controversial power contract.

Dividing 3-2, the court rejected the government's contention that the activities of Adolphe H. Wenzell constituted a conflict of interest. It ruled that Dixon-Yates should be reimbursed for out-of-pocket costs before the contract was cancelled.

The court awarded $1,867,545.56 which was about what Dixon-Yates finally asked.

Wenzell served as a consultant to the Budget Bureau at the same time he was a salaried official of the First Boston Corp., which became financial agent for Dixon-Yates interests.

It was on this ground that the Justice Department contended the government should be relieved of paying anything to Dixon-Yates as a result of the contract cancellation.

The Dixon-Yates contract, entered into by the Atomic Energy Commission at the time it was headed by Lewis L. Strauss, called for a 107 million dollar power plant at West Memphis, Ark.

The contract stirred up a battle in Congress over charges that private power was usurping a public power area.

Eisenhower ordered the contract cancelled in 1955.