In the matter of the bribery of the Supervisors by T. V. Halsey, agent of the Pacific States Telephone and Telegraph Company, the Grand Jury had information that eleven Supervisors had been paid over $50,000 to oppose the granting of a franchise to the Home Telephone Company. A majority of the payments were made in an unfurnished suite of three rooms in the Mills Building. Frank Drum, a director of the company, admitted having engaged the rooms at Halsey's request. E. J. Zimmer, auditor for the company, testified that Halsey held the position of General Agent of the company. Halsey's duties, the testimony showed, were assigned him by Louis Glass, vice-president and general manager, and for a time acting president of the company. Halsey, under the company's organization, reported to Glass. Zimmer testified that Halsey could not spend the company's money except on the proper approval of the executive officer of the company. From October, 1905, when President Sabin of the company died, until February, 1906, when Henry T. Scott, Sabin's successor, was elected, Glass acted as president and as executive officer. He had, according to Auditor Zimmer, authority to approve expenditures made by Halsey. After Scott's elevation to the presidency, either Glass or Scott could have approved such expenditures. Zimmer testified further to giving Halsey, at Glass's order,[189] as high as $10,000 at a time. Halsey[190] gave no vouchers for these large sums; they did not appear on the books;[191] they were carried on tags. Zimmer stated that he did not know for what the funds were used; had merely followed out Glass's instruction, and given Halsey the money. The testimony of Thomas Sherwin threw some light upon the bookkeeping methods followed. Sherwin had been traveling auditor for the American Bell Telephone Company, which concern owned 51 per cent. of the stock of the Pacific States Telephone and Telegraph Company. Later he took Zimmer's place as auditor of the Pacific States Company. Mr. Sherwin admitted that some of Mr. Halsey's "special expenses," at least, were finally charged to the company's legal department.[192] Passing from the investigation of the bribery transactions of the Pacific States Telephone and Telegraph Company to the activities of the Home Telephone Company, the Grand Jury examined prominent business men of Los Angeles as well as of San Francisco. The plan of operation followed by the capitalists behind this enterprise was to organize a construction company, whose part was to establish the plants, put them into operation and turn them over to the operating companies, taking their pay in the securities of the local operating company. Thus, at San Francisco, the Empire Construction Company played an important part in the Home Telephone Company enterprise.