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[[underlined]]LITIGATION REPORT[[/underlined]]

Petition of the United States on behalf and for the benefit of the Smithsonian Institution, Trustee
[[line]]

The petition for construction of provisions of the J. Seward Johnson and Hunterdon Medical Center School of Health gifts was filed by the Justice Department in February 1977. On January 31, 1980, Judge Barrington Parker decided the case and on February 29, 1980, he entered an order and judgment on the decision stating that there are two separate charitable gifts, i.e., the Johnson gift and the Hunterdon Medical Center gift each one subject to different requirements.

Judge Parker decided that:

1. The Smithsonian shall use the income from the Johnson gift to develop, operate, and maintain the [[underlined]]Johnson-Sea-Link[[/underlined]] submersible, including the use of a tender vessel such as the [[underlined]]R/V Johnson[[/underlined]], and a second submersible to the extent the latter is necessary to operate the [[underline]]Johnson-Sea-Link successfully and safely.

2. So long as Harbor Branch is in a position to operate the submersible, expresses a willingness to do so, and continues to do so, it shall remain the instrumentality for such purpose.

3. The Smithsonian shall, insofar as the amount of income is sufficient, reimburse Harbor Branch in the amount of the income from the Johnson gift which accrued from January 1, 1977, to the present for the experiences incurred by Harbor Branch during the same period in developing, operating, and maintaining the submersible.

4. The Smithsonian shall use the income from the Hunterdon gift for "support of its programs of oceanography, including the education, research and publication connected therewith with special emphasis on underwater oceanography." The Smithsonian may exercise its discretion as to the programs and the means of carrying out those programs.

By order dated March 17, 1980, Judge Parker appointed Arthur Anderson & Company as an independent accountant to determine within 90 days the income from the Johnson gift from January 1, 1977, to the present, and prepare an audit of the [[underlined]]Johnson-Sea-Link[[/underlined]] operation expenses of Harbor Branch up to an amount equal to the income from the Johnson gift since January 1, 1977, and a similar audit of Smithsonian's expenditures for the same activities.