Mass. Treasury Official Says Coop Violates Law on Rebates

The Harvard Cooperative Society has violated a state law that would require it to hold unclaimed rebates and eventually turn them over to the state, a spokesman for the Massachusetts Treasury Department said yesterday.

Howard F. Lake, director of the abandoned property department, said he informed Coop officials in a letter last November that they were in violation of the abandoned property law, but that he received no reply.

Lake said he will ask the Coop management why it has not complied with the law and then he will turn the matter over to the attorney general's office for investigation and possible court action.

Under the abandoned property law, the Coop must hold all unclaimed rebates for 14 years. If they remain unclaimed after that time, the rebates must be turned over to the Treasury Department where they will be kept until the owners pick them up. However, in the minutes of a Coop board of directors' meeting held on January 30, Howard W. Davis, Coop General Manager said that unclaimed rebates from the year before are credited to the current year's business.

Redistributed

About half of the unclaimed rebates are then redistributed to Coop members in the new year's rebates, Davis said.

In the minutes, Davis did not say how the Coop spends the unredistributed half of the rebates.

Davis is on vacation this week and could not be reached yesterday for comment.

Louis S. Loss, Coop vice president and Cromwell Professor of Law, said yesterday that the abandoned property law does not apply to the Coop.

Loss said that under the statute of limitations Coop members lose their rebate money if they do not claim it after six years, so the Coop does not have to turn it over to the Treasury Department. But Lake said yesterday that Assistant Atty. Gen. W. Channing Beucler had told him in a letter last November that the abandoned property law does apply to the Coop.

The two laws are contradictory, Lake said, and their enforcement is a matter of interpretation by the attorney general's office. In this case the office has decided that the abandoned property law applies, he said.

Loss said that the attorney general's office based its decision on incomplete evidence. He said that a member of the Coop board of directors, Donald E. Steele, brought the matter to the attorney general's attention but did not supply him with all the relevant information.