Major U.S. Firms Promise to Disclose Mideast Lobbying Activity

The American Jewish Congress today said it was satisfied with agreements it reached with nine leading United States-based corporations that shareholders would be informed of the extent of the corporations’ lobbying efforts on behalf of the 1981 AWACS arms package sale to Saudi Arabia and that a number of these corporations would no longer engage in lobbying activity on behalf of U.S. Middle East policy in the future.

AJCongress president Howard Squadron, in making the announcement, also disclosed that one of the 23 corporations targeted in an AJCongress project to reveal the extent of corporate lobbying for Mideast policy, was solicited directly by telephone by officials in the White House to lobby Senate members for approval of the arms sale. Congress approved the arms package in November, 1981.

According to William Maslow, general counsel of the AJCongress and coordinator of the project, the Dallas-based Halliburton Corporation, which he claimed has no direct interests in the Middle East, was persuaded by the Administration to involve themselves in lobbying efforts “because they were led to believe that appeasing the Saudis on the sale was critical to the U.S. economy and political policies.” He added that this perception “was wrong both on economic and political grounds.”

The project, announced in December, operates through shareholders resolutions submitted by AJCongress members who own stock in the targeted corporations, requesting that management report on the nature and cost of the lobbying efforts and seeking agreement “that they will not in the future spend corporate funds for efforts of this kind.”

A corporation receiving a resolution from a shareholder is required to include the text of the proxy statement it distributes to its shareholders in advance of the annual meeting, according to the Securities and Exchange Commission (SEC).

While the AJCongress does not question the legal right of corporations to engage in lobbying efforts on behalf of issues perceived to be in their interests, Maslow said, “we do question the propriety of companies that spend stockholders money in lobbying activities when there is no direct benefit to the company or its shareholders.”

THE CORPORATIONS INVOLVED

The nine corporations that have agreed to make full disclosure of their activities rather than fight such shareholder resolutions include; Aluminum Co. of America; American Airlines; Deere and Company Eastern Airlines; Kellog; NL Industries; Republic Steel; Smith Kline Beckman; and Westinghouse. A similar agreement is now being negotiated with at least one other company, Maslow said.

In most cases, the AJCongress reported, companies that agreed to disclose their past Mideast lobbying activities also said they do not plan to engage in such lobbying activities in the future. The AJCongress quoted Frank Barman, chairman of Eastern Airlines, as saying, “I assure you that Eastern will not, as long as I remain CEO (Chief Executive Officer), engage in lobbying concerning the Mideastern situation.”

Stockholder resolutions are withdrawn in exchange for a pledge of disclosure. But seven other companies, including Dresser, FMC Corporation, Ford, Mobil and United Technologies, have declined to disclose their lobbying efforts and have included the resolution in their proxy statements. If the resolutions are passed, it would require corporate management to make such a disclosure. These companies, the AJCongress said, hope to see the resolutions defeated by vote of their shareholders.

Some companies that were unwilling to put such a shareholder’s resolution up for vote at their annual meetings, wrote to the SEC to determine whether such a refusal would violate SEC regulations. Maslow said the SEC declined to take a position.

Subsequently, the AJCongress sent letters to each of these corporations warning that refusal to allow a vote on the shareholders resolutions would lead to a suit in federal court by the AJCongress on behalf of the stockholder who filed the resolution. Six corporations have still not reacted to the shareholders resolutions, the AJCongress said.

REVELATION BY DALLAS-BASED FIRM

Regarding the White House activities with Halliburton, Maslow reported that John Harbin, chairman of the board of the Dallas-based company, visited AJCongress headquarters here on December 20 and said he had been called upon by the Administration during the AWACS debate to help President Reagan win approval of the $8.5 billion arms sale.

Furthermore, according to Maslow, Harbin said he was recently asked by the White House to lobby against increased foreign aid to Israel, but had declined because he did not want to entangle the corporation in another AJCongress shareholder resolution campaign. Squadron said today the AJCongress has not yet decided whether to raise the issue with the Administration over the revelation by Harbin.

Nevertheless, Halliburton continues to remain on the AJCongress list with six other corporations as not yet having reacted to the shareholders resolution. Harbin said he has not decided whether to present the resolution in the proxy statement or disclose the information requested by the resolution, thus preventing a vote by the corporations shareholders.

Along with Halliburton, the other companies who have not reacted to the resolution include: Dravo, Heinz, Boeing, Blount and Northrop.

NEXT STORY