« ÎnapoiContinuă »
EXCHANGE OF CORRESPONDENCE BETWEEN SUBCOMMITTEE CHAIRMAN NIX AND HON. ROBERT J. MCCLOSKEY, ASSISTANT SECRETARY FOR CONGRESSIONAL RELATIONS, DEPARTMENT OF STATE, REQUESTING DECLASSIFICATION OF CERtain DocumENTS RELATING TO MILITARY SALES CONTRACTS
OCTOBER 7, 1975.
Hon. ROBERT J. MCCLOSKEY, Assistant Secretary for Congressional Relations, Department of State, Washington, D.C.
DEAR MR. SECRETARY: I have received your letter dated October 1, 1975, which is in reply by the Executive Branch to a letter from members of the subcommittee on International Economic Policy and myself dated July 31, 1975, to the Secretary of Defense. His reply dated August 19, 1975, reported that our request had been referred to the Department of State. Your reply 61 days from the date of the original subcommittee letter and 41 days from the time of the referral by the Department of Defense denies the request of the Subcommittee to receive information on individual agents fees, the identity of agents, and contractors on a per contract basis.
Representatives of the Department of State have been in contact with Subcommittee staff members on this question and it was our understanding from them that the reply from the Department of State would be definitive.
The paragraph of your letter which follows is that definitive statement. It follows;
"We are of course, most anxious to accommodate you in this matter. However, as you are aware, proprietary information is involved and declassification would appear to be in violation of the provisions of 18 U.S.C. 1905."
As to the legal theory which supports your position that under the terms of 18 U.S.C. 1905 this data is proprietary data, I would like to know what United States Court decisions support your view with citations, analysis and quotation of relevant paragraphs of such decisions. In view of the previous delay in our correspondence and the time in which your staff has already had to give its most earnest consideration to this question, I would like to have the reply by return mail. I would also suggest that a copy be sent to Mr. Thomas R. Kennedy, Counsel, Room 606 Congressional Annex, International Economic Policy Subcommittee, International Relations Committee. In order to avoid possible loss in the mail I suggest that the letter and copies be delivered by your messenger service.
I would also like to know whether or not you take the position that a Member of Congress is an officer or employee of the United States or that the Congress is an Agency or Department thereof?
I would like to receive citations, analysis of cases and quotations from Federal Court decisions which hold that the material we are discussing while proprietary would not be admissible as evidence in criminal proceedings.
I would like to learn by your reply what you mean when you refer to a compromise involving the release of information cited in your letter. What does the Department of State expect the Subcommittee to do in return for information which has largely been published in the public press. This information should be referred to the Subcommittee through official channels since it is in the public interest that the public business be conducted in a government forum.
ROBERT N. C. NIX,
Chairman, Subcommittee on International Economic Policy.
Hon. ROBERT N. C. NIX,
DEPARTMENT OF STATE, Washington, D.C., October 1, 1975.
Chairman, Subcommittee on International Economic Policy, Committee on International Relations, House of Representatives, Washington, D.C.
DEAR MR. CHAIRMAN: Subsequent to the appearance of Mr. Thomas P. Stern, Deputy Director of the Bureau of Politico-Military Affairs, before the Subcommittee on September 18, 1975, members of your staff raised a question about release of classified information relating to agents fees. The information in question was provided by Lt. General Howard Fish (USAF) at the time of his appearance before your Subcommittee on July 29, 1975.
We are, of course, most anxious to accommodate you in this matter. However, as you are aware, proprietary information is involved and declassification would appear to be in violation of the provisions of 18 U.S.C. 1905.
I should like to propose a compromise where Foreign Military Sales (FMS) transactions are concerned. This would involve release of: (a) a chart listing FMS contractors with the aggregate figure of their total sales during the period covered by DOD's submission and the aggregate figure of commission payments reflected in that submission; and (b) a chart listing the agents with the aggregate figure of their total commission payments as reflected in the DOD submission. There would be no mention of any country and no linkage between agent and contractor.
Mr. William H. Lewis of the Office of the Under Secretary of State for Security Assistance and a member of the legal staff are available to discuss this matter further should you desire.
ROBERT J. MCCLOSKEY,
Assistant Secretary for Congressional Relations.
LETTER FROM HON. EDWARD C. SCHMULTS, EMERGENCY LOAN GUARANTEE BOARD, SUPPLYING INFORMATION ON SUBSIDIARIES AND AN AGREEMENT BETWEEN THE DEPARTMENT OF THE TREASURY AND LOCKHEED, OCTOBER 10, 1975
THE UNDER SECRETARY OF THE TREASURY,
Hon. ROBERT N. C. NIX,
DEAR MR. CHAIRMAN: During my appearance on September 30, 1975, before your Committee, I stated that I would provide information in response to certain questions asked of me. The following is submitted for the hearing record:
1. At the present time, Lockheed has eighteen foreign subsidiaries all of which are wholly owned. In addition, one of Lockheed's domestic subsidiaries, Aviquipo, Inc., also has eighteen foreign subsidiaries which are wholly owned.
2. Lockheed has advised that none of its subsidiaries has contracts for insurance with the Overseas Private Investment Corporation (OPIC).
3. Under the agreement entered into between Lockheed and the Emergency Loan Guarantee Board, the Company committee to comply with the following covenant:
"§ 11. Particular Covenants of the Company.-From the date hereof and so long as the Commitments of the Banks shall be outstanding and until the payment in full of all loans outstanding under this Agreement and the performance of all other obligations of the Company under this Agreement, the Company agrees that unless the Majority Banks and, prior to the Guarantee Satisfaction Date, the Guarantor, shall otherwise consent in writing :"
"G. Compliance with Applicable Laws.-The Company will comply, and cause each Subsidiary to comply, with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, a breach of which would materially adversely affect its business or credit, except where contested in good faith and by proper proceedings."
If I can be of further assistance to you, please advise.
EDWARD C. SCHMULTS,
Executive Director, Emergency Loan Guarantee Board.
LETTER AND MATERIAL FROM HON. CARLYLE E. MAW, UNDER SECRETARY OF STATE FOR SECURITY ASSISTANCE TO HON. THOMAS E. MORGAN
UNDER SECRETARY OF STATE FOR SECURITY ASSISTANCE,
Washington, D.C., August 25, 1975. Hon. THOMAS E. MORGAN, Chairman, Committee on International Relations, House of Representatives, Washington, D.C.
DEAR MR. CHAIRMAN: The Department of State has today published in the Federal Register a notice of proposed rulemaking on the subject of contingent fees and commissions in international arms sales. I am sending you a copy of this proposal because of the Committee's expressed interest in the subject matter. The enclosed proposal would amend the International Traffic in Arms Regulations to require a certificate regarding contingent fees in order to obtain a license or other State Department approval for the export of arms, ammunition and implements of war, including technical data relating thereto. In connection with each direct or indirect sale valued at $100,000 or more to a foreign government, the exporter will have to certify that any contingent fee or commission of $10,000 or more and the identity of the recipient have been disclosed to the government concerned. This requirement will avoid interference with the normal commercial practice of paying commissions and contingent fees to agents involved in furthering the business of exporting firms. By requiring disclosure of such payments, however, we intend to minimize the risk that they will be used as a conduit for efforts to influence improperly the decisions of purchasing governments.
The enclosed proposal has been developed in coordination with the Department of Defense as an integral part of our effort to eliminate the involvement of American business in the objectionable business practices which have recently come to light. Another part of this effort is the issuance of an instruction by the Department of Defense regarding sales under the Foreign Military Sales Act. This instruction, dated August 6, 1975, requires disclosure to the purchasing government of any agents' fees included in an FMS contract. No fee will be allowed if it is disapproved by the purchasing government. In addition, more stringent requirements are imposed for sales to several identified governments which have expressed their general disapproval of agents' fees in FMS transactions. Because the United States Government is a party to FMS contracts, the Department of Defense reserves the right to disallow any fee on the grounds that the amount is unreasonable or the recipient is not a bona fide agent, even if the purchaser is willing to pay the fee.
I have asked the Director of the Defense Security Assistance Agency to furnish you with the full text of the above described Department of Defense instruction.
We believe the proposed amendments to the International Traffic in Arms Regulations and the new instruction of the Department of Defense on sales under the Foreign Military Sales Act will be important steps in avoiding abuses in the pay. ment of contingent fees in international arms sales made through commercial and governmental channels. We would greatly appreciate any comments or suggestions you or the members of the Committee might wish to offer in this regard. Sincerely,
CARLYLE E. MAW.
This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules.
DEPARTMENT OF STATE [22 CFR Parts 123, 124, 125, 127]
[Docket No. SD-114]
INTERNATIONAL TRAFFIC IN ARMS
as to the identity of the recipient and the amount of the fee or commission to be received.
(2) For purposes of this paragraph (b), "a material amount" shall be deemed to be $10,000 or more.
Recent reports of substantial payments PART 124 MANUFACTURING LICENSE
as contingent fees in connection with in-
The proposed amendments to Parts 123, 124, 125 and 127 of Title 22, Code of Federal Regulations, are set out below. Interested persons are invited to submit written comments, suggestions or data to the Office of Munitions Control, Bureau of Politico-Military Affairs, Department of State, Washington, D.C. 20520, on or before September 24, 1975.
(b) (1) As a further condition precedent for the approval of an application for an export license in connection with any commercial contract having a value of $100,000 or greater, and showing the consignee or end-user to be a foreign government, its designee, or an entity acting on its behalf, the Department of State requires that the applicant furnish an attested statement that:
This transaction does not involve the direct or indirect payment of any material amount for fees or commissions contingent upon the accomplishment, in whole or in part, of the terms of the transaction. Or, if the transaction does involve such payment, an attested statement that:
This transaction involves the direct or indirect payment of fees or commissions contingent upon the accomplishment, in whole or in part, of the terms of the transaction. (Applicant) has advised the Government of
2. Amend § 124.01 by designating the present section as paragraph (a), changing the parenthetical references (a) and
consignee or end-user to be a foreign government; its designee, or an entity acting on its behalf, the Department of State requires that the applicant furnish an attested statement that:
This transaction does not involve the direct or indirect payment of any material amount for fees or commission contingent
upon the accomplishment, in whole or in part, of the terms of the transaction.
Or, if the transaction does involve such payment, an attested statement that:
(b) therein to (1) and (2), and adding tingent upon the accomplishment, in whole
the following new paragraph (b).
§ 124.01 Manufacturing license and
(b) (1) As a condition precedent for
ernment, its designee, or an entity act-
This agreement does not involve the direct
terms of the agreement.
Or, if the agreement does involve such
This agreement involves the direct or in-
(2) For purposes of this paragraph (b), "a material amount" shall be deemed to be $10,000 or more.
This transaction involves the direct or indirect payment of fees or commissions conor in part, of the terms of the transaction. (Applicant) has advised the Government of as to the identity of the recipient and the amount of the fee or commission to be received.
(2) For purposes of this paragraph (b) "a material amount" shall be deemed to be $10,000 or more.
FEDERAL REGISTER, VOL. 40, NO. 165-MONDAY, AUGUST 25, 1975