Senate Votes 86-1 to Penalize U.S. Firms Complying with Arab Boycott

The Senate voted 86-1 yesterday to penalize American corporations that resort to bribery or compliance with the Arab boycott of Israel to generate sales abroad. The provisions, known as Title Ten of the Tax Reform Act, incorporate the recommendations of the Senate Finance Committee and are much tougher than the Ford Administration has recommended. They must be approved, however, by the House.

Title Ten would subject corporate executives to penalties including up to a year in jail for failure to report any corporate income derived as a result of a bribe or earnings in any country that requires participation in a boycott. Congressional aides estimated that the provisions on boycotts and bribes will cost offending firms 3100 million in 1977.

The Finance Committee acted in the wake of disclosures that some of the nation’s largest corporations cooperated in the Arab boycott of Israel and Jewish businessmen in the U.S. and that others routinely paid bribes to foreign officials to generate business. The anti-boycott provisions would affect transactions made 30 days or more after the provision becomes law. The anti-bribe section would become effective retroactive to Jan. 1, 1976.

The lone vote against Title Ten was cast by Sen. Floyd Haskell (D.Colo.). An aide to Haskell told the Jewish Telegraphic Agency today that the Senator had favored the anti-boycott and anti-bribery provisions which were prepared by Sen. Abraham Ribicoff (D.Conn.). However, Haskell opposed the Tax Reform Bill as a whole and therefore was voting against individual sections of it, the aide said.

OVERSEAS ANTI-BIAS MEASURE CONSIDERED

Meanwhile, the House subcommittee on government information and individual rights, chaired by Rep. Bella Abzug (D.NY), is considering legislation to make non-discrimination mandatory in the overseas assignment policies of federal agencies, Representatives of Jewish organizations, testifying before the subcommittee today, welcomed Administration efforts to eliminate discrimination based on sex, color, religion or national origin. But they stressed that legislation is required to make such efforts effective.

Witnesses today included Hyman Bookbinder, Washington representative of the American Jewish Committee, David A. Brody, Washington director of the B’nai B’rith Anti-Defamation League, and Lawrence Rubin, Washington representative of the American Jewish Congress. Bookbinder said that “until and unless the Congress passes some general legislation that makes real, meaningful and effective” the country’s basic commitment to resist, Arab boycott measures, “We will never feel confident that even federal agencies will act in full support of such a policy.”

Bookbinder stressed that diplomacy “must be undergirded by a clear legislative mandate” that will impress upon “any and all nations whose self-interest requires trade relations with the United States that such relations must be free of secondary and tertiary boycotts and must not include discriminatory actions against any Americans based on religion, race or sex.”

Brody welcomed Treasury Secretary William Simon’s July 6 letter reporting that the Saudi Arabian government no longer requires certificates or proof of religion from visa applicants. However, Brody observed that “As the Secretary himself acknowledges, the question concerning religion … is still on the visa application form.” He said the elimination of proof only means that American Jews who want to go to Saudi Arabia either will have to leave the question (on religion) unanswered which may, of course, be a signal to the Saudis, or dissemble about their religion.”