State Department Official Scores Congressional Legislative Efforts to Curb Arab Boycotts, Blacklists

Deputy Secretary of State Robert S. Ingersoll has scored “most” attempts in Congress to advance new legislation to curb Arab boycotts and blacklisting of American businesses linked to Israel or with the American Jewish community. In an address last night before the Southern Council in Atlanta on the theme of “economic inter-dependence,” Ingersoll, who is in charge of the State Department while Secretary of State Henry A. Kissinger is abroad, said, “We are opposed to legislative initiatives that would make it more difficult for other nations to invest responsibly, in the United States.”

Ingersoll observed that “our traditional support for freedom of international investment flows must be responsive to the new situation created by the large capital accumulations in the hands of a few oil producing countries.” But he warned that “we must improve our capacity to monitor capital flows, enforce laws designed to protect our vital national industries and safeguard against abuses such as the use of investments for political purposes.”

SAYS PROPOSED LAWS GO TOO FAR

The State Department official contended, however, that “Most of the proposed legislation dealing with foreign investment goes beyond what is necessary to safeguard our national interests. Proposals such as the Williams Bill (introduced by Sen. Harrison Williams, D. NJ) to grant the President authority to screen and block, at his discretion, any investment leading to foreign control of more than five percent of a U.S. company could well discourage investments we would find desirable,” Ingersoll said. He did not specify what legislative proposals he favored.

In hearings in both the Senate and House, State Department and other government witnesses appeared totally opposed to any of the numerous proposals advanced by members of Congress. In addition to the five percent recommendation, the Williams Bill would require disclosure and authorize control of foreign investment in U.S. companies. It would also allow the President to prohibit foreign investments in an American company where he deemed it inappropriate to the national security. An amendment to the bill would prevent foreign investors who participate in a boycott against a U.S. firm from buying a significant interest in any American company.

KENNEDY CHALLENGES U.S.-SAUDI ACCORD

In a related development, Sen, Edward M. Kennedy (D.Mass.) again challenged the recent Saudi Arabian-U.S. agreement by which the American government guarantees private investments in Saudi Arabia. In a letter yesterday to Controller General Elmer Staats, Kennedy charged that the agreement serves to support the Arab blacklist with U.S. tax funds. The Senator asked Staats to review the agreement that provides protection against losses in certain private operations through the Overseas Private Investment Corporation which is a U.S. government agency.

“The conclusion of this agreement followed disclosure by the Senate Foreign Relations Committee of continued participation of the government of Saudi Arabia in the Arab blacklist policy,” Kennedy wrote Staats.

“It is my opinion that this agreement, therefore, plainly violates several provisions of the Foreign Assistance Act and puts the government of the United States in a position of implicitly acquiescing, approving and participating in this policy of discriminatory financial investment and business relationships. It means that the United States government and the U.S. taxpayer will be engaged in guaranteeing the investments of those companies which are acceptable to Saudi Arabia, that is, those which have not engaged in activities which result in being placed on the blacklist.”

Kennedy added that the agencies of the U.S. government “are legally bound to discourage such discriminatory practices.” The Senator previously questioned the agreement’s legality while the blacklist is in force in a letter to Marshall Mays, OPIC’s president. The accord was signed Feb. 27.

LEGISLATION TO BAR BOYCOTT COMPLIANCE

In an earlier action, Rep. Jonathan Bingham (D.NY), introduced legislation last Friday in the House to prohibit American business firms from complying with the boycott demands after accusing the Ford Administration of speaking in opposition to discrimination but not taking action against it. Bingham’s legislation would amend the Export Control Administration Act of 1969 that would penalize companies supplying information to the Arab Boycott Office about their participation in blacklisting Israel or sign agreements discriminating against concerns that refuse to abide by the boycott. His proposal was referred to the House Foreign Affairs Committee.

Testimony Thursday by high government officials before the Foreign Affairs Subcommittee on International Trade and Commerce, of which Bingham is chairman, showed that no company has yet been punished for going along with the Arab boycott demands that have been in effect for 27 years.

Officials of the State, Justice, Treasury and Commerce Departments all opposed new legislation to fight the boycott and its discrimination against Jews. They were Gerald L. Parsky, Assistant Secretary of the Treasury; Sidney Sober, acting Assistant Secretary of State for Middle Eastern Affairs; Antonin Scalia, Assistant Attorney General; and Charles W. Hostler, Deputy Assistant Secretary for International Commerce.

After two hours of testimony and questioning, Bingham told the witnesses: “I am tired of hearing the Administration say it is opposed to the boycott and taking very little action” that would deal effectively with the Arab campaign.