Major U.S. Firms Accused of Violating Anti-boycott Laws

Two Jewish organizations charged before a New York State Assem- bly subcommittee that major American corporations are violating the federal anti-boycott laws and are surrendering to Arab pressure, But officers of four banks said that since they believed Arab countries are boycotting Israel for economic reasons, they process letters of credit for shipments of American-made products to Arab countries on the premise that the boycott is not necessarily anti-Semitic.

Their testimony was given last Thursday and Friday during a two-day hearing of the New York Assembly Subcommittee on Human Rights at the Carnegie International Center here.

Will Maslow, general counsel of the American Jewish Congress, said “major corporations treat the federal law as a joke. In my conversations with representatives of such firms, they have pointed out there are no penalties for violating the requirement of the Export Administration Act of 1969” which bans boycott compliance.

Maslow said his testimony was based on negotiations with major corporations as part of the AJCongress project under which members of the organization have submitted stockholders’ resolutions to 152 corporations seeking information about the companies’ policy toward the Arab boycott. “Leaders of American industry whose names are household words are cravenly surrendering to Arab pressures by refusing to do business with American companies on the Arab blacklist,” Maslow said. He declined to name or identify these leaders.

SOME VIOLATORS ARE IDENTIFIED

Daniel S. Shapiro, honorary president of the American Jewish Committee’s New York Chapter, specifically named the Exxon Corporation and Bankers Trust Co. as being among the major violators. He quoted a letter from D.L. Snook of Exxon’s public affairs department in which Snook said:

“We certainly regret the conditions which have given rise to boycotts wherever they have been imposed….We would prefer that they did not exist anywhere. However, when they do, compliance with the laws and regulations of the sovereign nations involved is unavoidable if the company or its affiliates are to continue to do business in or with such nations.”

Turning to the compliance with Arab boycott demands by Bankers Trust Co., Shapiro charged that the bank “has honored Arab letters of credit with discriminatory restrictions attached.” He related that his organization had met with Bankers Trust officials on this matter last December and that the latter “seemed to believe that there is nothing reprehensible in their practice in this regard, U.S. policy and regulations, and the then anticipated New York anti-boycott law notwithstanding.”

BANK OFFICIALS DENY VIOLATIONS

In testimony before the subcommittee, Albert Bellion, vice-president of Bankers Trust, Edwin Batch, associate counsel of Chemical Bank, Hans Angermualler, senior vice-president of First National City Corp., and Richard A. Fenn, vice-president of Chase Manhattan identified letters of credit from their banks which carried attached certificates that the goods were not made, shipped of refusal by any film commented with Israel.

They said the examples were typical and contended the letters of credit did not violate federal or state anti-bias laws. Furthermore, the officers said the policy of the banks was to process such letters of credit without examining the “underlying documents” or considering the standards used by the Arab countries in choosing targets for blacklisting.

Batch testified that “these procedures are consistent with the distinction drawn by the United States government itself between actions which discriminate against United States firms and citizens on the basis of race, color, religion, sex or national origin and the separate and distinct issue of the Arab boycott against the State of Israel.” All of the officers testified they had never seen the Arab League blacklist and did not know what names were on it.

STRICT ENFORCEMENT URGED

The officials of the two Jewish organizations urged strict enforcement by the State Division of Human Rights of New York State’s anti-boycott law which went into effect Jan. 1. Shapiro urged that all contracts signed with business companies by the state, any of its agencies, or any country or city in the state, contain a clause prohibiting adherence to the boycott.

Maslow noted that the New York State law “has already had an impact in England.” He said he was informed by Dr. Stephen Roth of the World Jewish Congress in London that several British-American companies were able to resist the boycott by pointing to the New York law.