Keppel's Release of Chicago Funds Stirs Angry Protest from All Sides

WASHINGTON, Oct. 7--The brief freeze of $30 million in federal aid to Chicago schools last Friday and the surprise release of the funds yesterday drew angry comments today from all parties involved in the controversy.

Francis Keppel '38, U.S. Commissioner of Education, had announced the temporary suspension of funds -- granted to Chicago under the 1965 Elementary and Secondary Education Act -- last Friday after an investigation by the Office of Education substantiated charges by Chicago civil rights groups that the city's schools were willfully segregated and therefore should be barred from receiving federal aid under the 1964 Civil Rights Act.

The funds were released yesterday when the Chicago Board of Education and the Department of Health. Education, and Welfare reached agreement on corrective action to be taken by the Board.

But the resolution of the controversy only added more ammunition to the ongoing battle between Chicago's civil rights groups and the city's Democratic leadership. Senator Everett M. Dirksen (R.-III.) demanded a Congressional inquiry into the temporary suspension of funds. Speaking at a news conference in Chicago, Dirksen suggested that the Senate Committee on Labor, Education, and Welfare take up the matter and declared that he was "going to get to the bottom of this." Rep. Roman C. Tucinski (D-Ill.) asked the General Accounting Office -- the watchdog over distribution of federal funds -- to investigate the legality of withholding funds under the Civil Rights Act.

Officials in the office of Senator Paul Douglas (D-Ill.) felt that the whole issue had been "badly handled." "We didn't hear about the withdrawal of funds until the Office of Education announced it," complained Douglas' legislative assistant. "I don't think they informed anyone."

Crediting the sudden reversal by the Office of Education to a phone call by Mayor Richard J. Daly, a powerful figure in the Democratic Party, to President Johnson, Chicago civil rights leaders decried the release of the $30 million as "a shameless display of power." The Coordinating Council of Community Organizations, the Chicago civil rights group that made the original charge of de facto segregation in July, triggering the HEW's investigation, announced that it will file a complaint with the State Superintent of Public Instruction and with the Department of Health, Education, and Welfare to try to stop the use of federal funds