Firm Accused of Boycott Violations Scraps Plan to Build Plant in Syria

Baxter International, a leading manufacturer of health-care products, announced Monday that it will abandon its plan to build an intravenous-fluids manufacturing plant in Syria.

But the move does not dispel allegations that Baxter violated U.S. anti-boycott legislation in its 1988 sale of a similar plant in Israel and subsequent decision to build one in Syria.

The U.S. Commerce Department, which had been investigating the allegations, referred the matter to the U.S. Attorney’s Office in Chicago in February, paving the way for possible criminal prosecution.

Baxter’s announcement that it is canceling plans for a Syrian plant was immediately welcomed by Jewish organizations, who had raised questions over Baxter’s willingness to enter into an agreement with a country linked with international terrorism.

Jewish organizations had also argued that the proposed plant could have been converted by the Syrian military for other purposes, perhaps to produce chemical or biological weapons.

David Harris, executive vice president of American Jewish Committee, said in a statement that Baxter’s “encouraging announcement today should lay to rest this regrettable controversy to the satisfaction of all concerned.”

The Union of Orthodox Jewish Congregations of America, whose Institute of Public Affairs last month held a meeting with Baxter officials to discuss this issue, also expressed its pleasure with the decision.

And the Simon Wiesenthal Center in Los Angeles commended Baxter’s decision “not to do business with a terrorist regime.”

Will Maslow, general counsel of the American Jewish Congress and editor of its “Boycott Report” newsletter, echoed these statements but said this “doesn’t dispose of the remaining charges against Baxter.”

REPORT’S RELEASE URGED

Baxter officials have repeatedly denied allegations that they followed the Arab-led economic boycott in their Middle East dealings.

The economic boycott of Israel forbids companies from doing business with Israel and also prohibits dealings with companies that have business ties to Israel. Adherence to the boycott is outlawed by a U.S. law enacted 13 years ago.

Baxter has been charged by Jewish groups with selling its plant in Israel in 1988 in order to have its name removed from an Arab list of companies that should be boycotted because they do business with Israel. Baxter officials say they sold the plant for financial reasons.

The company is also alleged to have paid a bribe eight years ago to have its name removed from the boycott list.

Baxter officials claim that a special report prepared by outside counsel last year found nothing improper or illegal in Baxter’s Middle East dealings.

But the company has so far refused to make the report public, despite numerous calls by Jewish groups and others for its release.

At the company’s annual meeting in April, shareholders rejected a resolution requiring that the report be disclosed.

But the 8 percent of shareholders who supported the motion was enough to have it put to a vote again next year.

“If they want to end the controversy, we have to know what’s in the report that ostensibly clears them of any wrongdoing,” said Sam Rabinove, legal director for AJCommittee.

The decision to terminate the plant agreement with Syria comes before construction was started or any investment was made, according to a statement issued by the company.

“The volatile situation throughout the Middle East and controversy surrounding Syria in particular now lead us to change our plan,” the company’s chairman and chief executive officer, Vernon Loucks Jr., said in the statement.

Baxter’s total sales in 1990 were $8.1 billion. Middle East sales accounted for $12 million, and sales to Israel accounted for $4.7 million, said a spokesman for the company, Les Jacobson.