Tire Firm Concedes It Ended Business Relations with Israel; Paid $150,000 to Get off the Arab Blackl

The General Tire and Rubber Company has acknowledged that it ended its business relations with Israel and paid an intermediary with the Arab League $150,000 to get off the Arab blacklist of business concerns dealing with Israel and Jewish companies.

U.S. government and Congressional sources told the Jewish Telegraphic Agency that prosecution of the company was unlikely inasmuch as its actions took place when U.S. legal restrains were not in effect as they are at present under legislation adopted three months ago.

While U.S. officials indicated the company’s payments and severance of ties with an Israeli company is the first detailed report of such compliance with the boycott by payoffs to intermediaries or providing pro-Arab favors, it came as no surprise to specialists here familiar with the boycott and its practices.

“I suspect we would have to assume any company that got off the list did so by undertaking a campaign and very likely has been involved in payments, if not directly, then indirectly,” a specialist told JTA. “Who is put on or taken off the Arab blacklist has been somewhat of a secret for the past two years and only spotty information was available before 1975,” he added. “Nevertheless, it has been known for some time that paying to get off the list and lobbying for the Arabs were among the ways.”

The U.S. Securities and Exchange Commission (SEC) directed the tire company last year to file a report in conjunction with the settlement of a civil suit involving alleged misuse of corporate funds, such as illegal payments to foreign officials and illegal contributions in American political campaigns. At the SEC, an official indicated that since the company has now complied with the decree for the settlement, that could be considered the end of the case.

BACKGROUND OF INVOLVEMENT

The tire firm’s involvement was summarized as follows: in 1951 it acquired an interest in an Israeli tire manufacturing company. Within two years, its business in the Arab world faded. In 1963, it sold its interest in the Israeli firm but continued a technical assistance contract. In 1969, it began negotiations with an affiliate of the Triad Corporation which is controlled by Saudi businessman Adnan Khashoggl, who has wide and powerful connection, it is said, in the Western business world as well as with Arab leaders.

In 1970, the company paid the affiliate $50,000 as a retainer and paid $100,000 more in 1972. It also ended its agreement with the Israeli firm and certified that it would not give similar assistance to any other Israeli company in the future. A subsidiary, Aerojet-General Corp., had to certify it would make no investments in Israel.