Before the Grand Jury, Sherwin was closely questioned as to one of Mr. Halsey’s “Special expense” claims. The following is from his testimony:
“Q. Now, then, that shows that it was charged against what fund? A. That got in the legal expense finally, we charged it to Reserve for Contingent Liabilities, and each month we credit that account, I have forgotten maybe $2,000, and charge it to legal to make it run even in the expense each month.
“Q. Why does it go to legal? A. Because—instead—to what else would it go?
“Q. What makes it legal? A. Oh, that’s just a subdivision of our expense.
“Q. Was this $600 legal expenses? A. I don’t know what it was.
“Q. Who told you to put it under legal expenses? A. You mean who told us to put it in that account?
“Q. There is nothing on that paper that indicates that it goes into legal expense? A. No.
“Q. Now, then, you say it was finally charged to the legal department. Why? A. Simply because everything that is charged to that reserve finally gets into legal expense.
“Q. Everything that is charged to that reserve fund? A. Yes, that reserve fund is charged off for legal expense.