Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
25360440
label
Personnel - Conflict of Interest: Hoose, Harned
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
25360440
sourceUrl
contentType
document
title
Personnel - Conflict of Interest: Hoose, Harned
citationUrl
collections
Philip W. Buchen Files
Philip Buchen's General Subject Files
subjects
Employees
Presidential appointments
Conflict of interests
Ethics
Civil service
Affirmative action programs
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
25360440
coverageEndDate
logicalDate
1976-12-01
month
12
year
1976
coverageStartDate
logicalDate
1974-08-01
month
8
year
1974
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
18e2bb61e142f98c
ocrText
The original documents are located in Box 38, folder "Personnel - Conflict of Interest,
Hoose, Harned" of the Philip Buchen Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Hoose
Dr Harned
Friday 3/7/75
11:15 Jay French wanted to talk with you about the material
from Dr. Hoose.
He wants to get a signoff on
what he feels should be done -- and also to see if you
want to call Dr. Hoose or if you want Jay to call him.
11:45 Dr. Hoose called and said he wasn't pushing at all --
but wanted to know if you have anyone you would want
him to see while the he's here -- will be here through the
10th or 11th -- and then will be going back to China.
Embassy Row Hotel Rm. 510 265-1600
FORD is LIBRARY
Digitized from Box 38 of the Philip Buchen Files at the Gerald R. Ford Presidential Library
Hoose
11:00 a.m.
Friday, August 15 (tarned
ed
Harned doose called and ask/that I give you the following
message:
He has made excellent progress at the staff level
on China matters. The matter is being staffed
through Arthur Armstrong (State Dept.) ; Michael
Dunn (CIEP) i and Roger Shields (Pentagon).
The Fluor memo is now on Dr. Kissinger's desk,
Secretary Schlesinger, Bill Seidman and Mel Laird's.
These were all set up by Fluor.
Mr. Hoose is on his way back to China and will be in
tough with you on his return in about a month.
FORD is LIBRARY 071830
HARNED PETTUS HOOSE
ATTORNEY AT LAW
CABLE ADDRESS
AREA CODE 213
HARNHOOSE
129 NORTH ROCKINGHAM AVENUE
277-3811
LOS ANGELES, CALIFORNIA 90049
472-2828
Temporary Washington, D. C.
Address (Through March 10th).
1975:
The Embassy Row Hotel - Suite 510
2015 Massachusetts Ave., N.W.
Washington, D.C. 20036
(202) 265-1600
SECRET
March 5. 1975
TO:
PHILIP W. BUCHEN, COUNSEL TO THE PRESIDENT
SUBJECT:
SECRET REQUEST BY THE PEOPLE'S REPUBLIC OF
CHINA (PRC) TO FLUOR CORPORATION AND FLUOR
ENGINEERS AND CONSTRUCTORS, INC. (FLUOR),
WHICH ARE U.S. CORPORATIONS AND ARE AMONG
THE LARGEST, IP NOT THE LARGEST, PETROLEUM
ENGINEERING AND CONSTRUCTION FIRMS IN THE
WORLD, TO SUBMIT TO THE PRC BY MARCH 15,
1975, TECHNICAL AND BUSINESS PROFOSALS:
1. For the Design, Engineering and Construe-
tion of a Major Oil Refinery and Petro-
chemical Complex to be Built in Hengkeng,
Macao or Possibly in South China, with
Most or All of the Feedstock (Crude oil
and Gas) to Come from the PRC, and
2. For the Joint Ownership and Cooperative
Operation of the Refinery and Fetrochemical
Complex by a Consortium of U.S. Chemical
and/or Petroleum Companies Acting Together
with a "Nominee" of the PRC (That 15, a
of Hongkong: and
Administrativo Marking
NARA, Date 1/13/16
"Front" for the PRC), Probably to be a
Prominent and Substantial Chinese Resident
Determined to be an
FLUOR'S REQUEST FOR THE PRESIDENT'S AND THE
U.S. GOVERNMENT'S SUPPORT, GUIDANCE AS MAY
BE APPROPRIATE UNDER APPLICABLE LAWS AND
REGULATIONS, AND IF POSSIBLE, AN EXPRESSION
OF INTEREST AND WILLINGNESS TO COOPERATE IN
THE ASPECTS OF THE PROPOSED PROJECT WHICH
WILL TOUCH UPON THE U.S. INTERESTS AND OUR
By TMH
ENERGY AND ECONOMIC POLICIES
-1-
HARNED PETTUS HOOSE
ATTORNEY AT LAW
FROM:
HARNED PETTUS HOOSE
1. This memorandum is addressed to Philip W. Buchen, because
of his relative familiarity with the writer's background
as to and involvement with U.S. corporations doing business
with the PRC. A summary of the writer's background is
attached, as Appendix I.
2. It is respectfully requested that this memorandum and its
subject matter be taken up with the President, if possible,
and also with other appropriate senior U.S. government
officials as may be required. In view of the PRC's request
for secrecy, it is requested that this matter be handled
on that basis at this stage, to avoid any possibility of
premature news stories during this period of delicate
negotiations with the PRC. The PRC has set at deadline for
Fluor's initial and preliminary proposals: March 15, 1975.
The PRC request for a Fluor proposal and also the PRC's
deadline of March 15, 1975 were conveyed to the writer of
this memorandum very recently in Kwangehow (Canton), China
and in Hongkong. To meet the PRC deadline, the writer will
have to carry the Fluor proposal to the Chinese by hand,
which will require departure via air from the U.S. West
Coast on March 13th, our calendar. That will mean arrival
in Hongkong late at night on March 14th, Asian calendar,
with delivery to be made by hand to the PRC representatives
the following morning, March 15th.
Therefore, it is hoped that this matter can be handled
by the White House and any other appropriate senior U.S.
officials, within the next week. The writer can remain here
in Washington, D.C. for whatever period may be necessary
within that week, if desired, to provide any oral informa-
tion which may be required.
3. As is known by George Bush, Chief of the U.S. Liaison
Office in Peking (and in particular, by Herbert Herewitz,
Commercial Officer, and William Rope, Assistant Commercial
Officer), and also by Philip T. Lincoln, Jr., Country Officer
for PRC Affairs, U.S. State Department, and various U.S.
officials at the Department of Commerce and the U.S.
Consulate General in Hongkong: Fluor has been seeking
business opportunities with the PRC for the past two years.
During that period, the writer has represented Fluor in
general preliminary discussions with PRC petroleum and trade
officials in China, during six business trips to the PRC.
On two of those trips, the writer accompanied Fluor executive,
and technical teams. General exploratory discussions took GREAT
-2-
HARNED PETTUS HOOSE
ATTORNEY AT LAW
place in Kwangchow (Canton) and in Peking.
4. Fluor may be well known to the U.S. government, and especially
to our various administrative entities dealing with energy and
related fields. Fluor has handled a large number of major
pretroleum-realted engineering and construction projects through-
out the world. One current major undertaking is Fluor's parti-
cipation in the Alaska pipeline work. For the convenience of
those who may desire additional information as to Fluor, some
background materials are submitted herewith, and by reference
here are Appendix II to this memorandum.
S. The writer most recently was in the PRC from January 28th to
February 17th, handling the business interests of a number of
U.S. corporate clients, including Fluor. Discussions with key
petroleum, trade and political officials in the PRC at that time
and also with PRC officials in Hongkong, between February 17th
and February 22nd, resulted in the PRC secret request that Fluor
submit its technical and business proposal to the PRC for the
major refinery and petrochemical project outlined below:
6. Description of the Proposed Project:
The scope of the facility is to include a grass-roots refinery
with capacity of two to three hundred thousand barrels per day.
Most or all of the feedstock (crude oil and gas) is to come
from the PRC, probably initially from the Taching and Takang
oil producing areas and then eventually from the recently dis-
covered oil producing areas in Kwangtung Province, which adjoins
both Hongkong and Macao. Except for certain small quantities
of petroleum products for the local area, the majority of the
output of the facility will be converted to petrochemical inter-
mediates and finished products. These ethylene and aromatic-
based chemicals will be sold to the PRC and consumed in the
Hongkong area.
The Hongkong (or Macao) facility is to be owned entirely or to
a major extent by a well-known and substantial Chinese resident
of Hongkong. This Hongkong Chinese is very close to and cooperates
with the PRC. The Chinese "very confidentially" have informed
the writer that the Chinese resident of Hongkong actually is a
"PRC official." He has not been identified yet, but will take
a Fluor negotiating team to Peking in late March or early April,
for concrete disoussions.
The anticipated cost of the facility will approximate US$4 billion,
to US$5 billion. As visualised by the PRC, the facility will be
one of the largest of its kind in the world. The scope of the
project will require the involvement of a consortium of U.S.
corporations, if the transaction is consummated between Fluor
(and its fellow consortium members) and the PRC. In addition
to the substantial earnings by U.S. firms for design, engineer-
ing, construction and equipment, joint operation of the facility
by the PRC's nominee ("front") and the U.S. firms will follow.
-3-
HARNED PETTUS HOOSE
ATTORNEY AT LAW
Depending on the negotiated terms of the agreement, it
seems probable that the project will result in petroleum
products and quite probably, crude oil's being made available
to the U.S. market.
If this project consummates, also it would appear quite likely
that the U.S. participants in this project also might well
have a favored position as to subsequent projects involving
the PRC (as has been the PRC practice with established working
partners in the past), including further development of
the PRC petroleum industry and further exploration for oil
and gas on the PRC coast.
7.
Japanese Competition
The PRC has advised us that our competition for the project
is a Japanese consortium. Fluor believes that the Japanese
group may be headed by C. Itch. As is well known, the
Japanese government cooperates very substantially with its
corporations in situations such as this.
Fluor feels that the U.S. national interests are involved,
and that not only a substantial sale of U.S. services and
equipment is involved, but also an important ongoing relation-
ship with PRC petroleum sectors, with attendant implications
as to alternate energy sources for the U.S.
Accordingly, Fluor hopes that the U.S. government will support
the U.S. consortium in every way possible, during the current
effort to obtain this major business for our own petroleum
industry.
8.
Request for Initial Assistance by the President and the
U.S. Government
Initially, it is respectfully requested that our government
will indicate its general and informal approval of the
U.S. petroleum industry's involvement in the project, and
will render informal advance guidance affirmatively, as to
applicable laws and regulations (bearing on transactions with
communist countries and other relevant matters).
A letter from the appropriate senior U.S. official to Fluor,
indicating the U.S. government's interest and encouragement,
and possibly generally indicating an interest in rendering
assistance (for example, as to any semi-barter or "in-kind,"
1.0., allocation of crude oil and/or refinery and/or petro-
is
FORD
chemical products, etc.) would be very helpful in assisting
the U.S. consortium to cope with the competition from
GERALD
Japan, Inc. Fluor would like very much to include such a
letter in its March 15th presentation, if possible. In
addition, Fluor would appreciate any affirmative government
thinking as to the possibilities of Eximbank or similar partial
support in this instance, in which the owner would be a
&
HARNED PETTUS HOOSE
ATTORNEY AT LAW
Chinese resident of Hongkong, outwardly (although actually,
the "front" for the PRC.
Fluor and the writer feel that this project has large
strategic, energy source, quasi-diplomatic and other
implications, all in the U.S. interest.
The approval, cooperation and assistance of the President,
the U.S. government, and of our appropriate agencies are
respectfully urged.
Harned Pettus Hoose
GERALD R. FORD
-50
info. for UPI EDICON Panel - The Economic Outlook for 1975 - Oct. 1, 1974,
HARNED PETTUS HOOSE
(Biographical Sketch)
Dr. Harned Pettus Hoose, an international lawyer, educator
and foreign trade consultant based in Los Angeles, was born. and grew
up in China, where he lived for twenty-three years before the People's
Republic of China was established in 1949. His father was a Methodist
missionary and his mother was superintendent of nurses at a mission
hospital in Peking.
Hoose was born on Mount Lu [pronounced "Loo"] in Kiukiang
Province [pronounced "Gee-you Gee-yang"], south of the Yangtze River.
By coincidence, both that mountain and the province are closely identi-
fied with China's present regime and its rise to power. In the 1920's,
the próvince was the first area in China formally governed for a while
by China's present leaders; and Mount Lu has been the site of several
historic meetings, the most recent of which initiated the struggle
between Chairman Mao Tze-tung and Lin Piao.
After an early childhood period in Kiangsi Province, Hoose
lived for thirteen years in the northern city, Peking. He became
bi-cultural and fluent in Chinese, and was educated in part as an
American and in part among the Chinese. Hoose received his A.B.
degree at the University of Southern California, and then returned to
China for approximately five years as an officer with our U.S. combat
troops during World War II. His guerrilla unit, with other similar
American units in China, was awarded the Presidential Unit Citation.
Following the war and an LL.B. degree (Juris Doctor, 1967)
at U.S.C., Hoose began a law practice which has extended for 25 years,
with heavy involvement in international trade and business. In addi-
tion, he has served for periods on the law faculties at the University
of California, Hastings College of Law and variously at the Schools
of Law, Commerce and Graduate Business Administration, U.S.C. Currently,
he is a consulting professor of international business at that graduate
school. His published works include chapters on U.S. - China economic
relations, trade and negotiations, in Trade With China (Praeger 1974)
and Doing Business With China (Praeger 1973)
Hoose's work for a number of our largest American and inter-
national corporate clients has involved many business trips through-
out Asia and Southeast Asia. He has handled extensive business trans-
actions in Japan, Korea, Taiwan, Hongkong, Singapore, Malaysia,
Indonesia, Laos, the Khmer Republic (Cambodia) and the People's Republic
of China.
Since late 1971, he has been an occasional voluntary and non-
governmental advisor to the White House and the National Security
Council. He helped in President Nixon's preparations for the journey
to Peking, and has provided similar voluntary advisory assistance to
the White House since President Ford's assumption of office. Hoose
also serves as an occasional voluntary consultant to our departments
of State and Commerce.
A number of Hoose's recent radio, television and conference
talks have been broadcast to Asia by the Voice of America. His
interviews and reports as to China have been reported widely in our
national media. Among others, Hoose has spoken before the American
Society of Newspaper Editors in Atlanta; the Council on Foreign
Relations in New York; the Chamber of Commerce and Industry in
Chicago; Town Hall and the Center for the Study of Democratic
Institutions in California; and many similar groups elsewhere on the
West Coast. Hoose also spoke in 1973 before a group of graduate
students and trade officials at Peking University in China.
Hoose was in the first handfull of Americans who attended the
Canton Trade Fair in April, 1972, and he returned to Peking in May,
1972, as one of the group of five American businessmen who were the
first to enter Peking after President Nixon's trip to China. Since
then, Hoose has made six trips to China in all involving seven months
there. During those working trips, he has worked and lived with the
Chinese in Canton, Hangchow, Shanghai and Peking. In late 1973,
Hoose traveled throughout South China with and as a guest of senior
FORD
-1-
GERALD
LIBRARY
APPENDIX I
members of the Chinese government. He is well acquainted with many
of China's business and trade leaders, among others. A few days ago
[mid-September, 1974], the Commercial Counsellor of the People's
Republic of China, Mr. Chang Tsien-hua, and other senior members of
the commercial staff of the Chinese Liaison Office in Washington were
dinner guests in Hoose's home in Los Angeles.
Hoose will return to China within the next few weeks, and
in addition has just received a cable from trade officials in Peking
requesting him to stand by for yet another business trip there early
next winter.
Probably, Hoose's contacts with the Chinese in the People's
Republic in the past two years have exceeded by several times those of
any other non-Chinese American outside of our own Liaison Office in
Peking. Unlike our government representatives in Peking, Hoose has
been allowed to mingle freely with the Chinese and has traveled
extensively in China.
Hoose, in his capacities as a foreign trade consultant and
occasionally as an informal advisor on the American side is in close
communication with trade and other officials in the U.S. and in China.
However, his remarks before the UPI EDICON convention, of course, will
be solely his own and will represent the comments and view of a
private citizen, only.
GERALD LIBRARY FORD
-2-
info. for UPI EDICON Panel - The Economic Outlook for 1975 - Oct. 1, 1974,
HARNED PETTUS HOOSE
(Biographical Sketch)
Dr. Harned Pettus Hoose, an international lawyer, educator
and foreign trade consultant based in Los Angeles, was born. and grew
up in China, where he lived for twenty-three years before the People's
Republic of China was established in 1949. His father was a Methodist
missionary and his mother was superintendent of nurses at a mission
hospital in Peking.
Hoose was born on Mount Lu [pronounced "Loo"] in Kiukiang
Province [pronounced "Gee-you Gee-yang"], south of the Yangtze River.
By coincidence, both that mountain and the province are closely identi-
fied with China's present regime and its rise to power. In the 1920's,
the province was the first area in China formally governed for a while
by China's present leaders; and Mount Lu has been the site of several
historic meetings, the most recent of which initiated the struggle
between Chairman Mao Tze-tung and Lin Piao.
After an early childhood period in Kiangsi Province, Hoose
lived for thirteen years in the northern city, Peking. He became
bi-cultural and fluent in Chinese, and was educated in part as an
American and in part among the Chinese. Hoose received his A.B.
degree at the University of Southern California, and then returned to
China for approximately five years as an officer with our U.S. combat
troops during World War II. His guerrilla unit, with other similar
American units in China, was awarded the Presidential Unit Citation.
Following the war and an LL.B. degree (Juris Doctor, 1967)
at U.S.C., Hoose began a law practice which has extended for 25 years,
with heavy involvement in international trade and business. In addi-
tion, he has served for periods on the law faculties at the University
of California, Hastings College of Law and variously at the Schools
of Law, Commerce and Graduate Business Administration, U.S.C. Currently,
he is a consulting professor of international business at that graduate
school. His published works include chapters on U.S. - China economic
relations, trade and negotiations, in Trade With China (Praeger 1974)
and Doing Business With China (Praeger 1973)
Hoose's work for a number of our largest American and inter-
national corporate clients has involved many business trips through-
out Asia and Southeast Asia. He has handled extensive business trans-
actions in Japan, Korea, Taiwan, Hongkong, Singapore, Malaysia,
Indonesia, Laos, the Khmer Republic (Cambodia) and the People's Republic
of China.
R.
FORD
Since late 1971, he has been an occasional voluntary and non-
GERALD
governmental advisor to the White House and the National Security
LIBRARY
Council. He helped in President Nixon's preparations for the journey
to Peking, and has provided similar voluntary advisory assistance to
the White House since President Ford's assumption of office. Hoose
also serves as an occasional voluntary consultant to our departments
of State and Commerce.
A number of Hoose's recent radio, television and conference
talks have been broadcast to Asia by the Voice of America. His
interviews and reports as to China have been reported widely in our
national media. Among others, Hoose has spoken before the American
Society of Newspaper Editors in Atlanta; the Council on Foreign
Relations in New York; the Chamber of Commerce and Industry in
Chicago; Town Hall and the Center for the Study of Democratic
Institutions in California; and many similar groups elsewhere on the
West Coast. Hoose also spoke in 1973 before a group of graduate
students and trade officials at Peking University in China.
Hoose was in the first handfull of Americans who attended the
Canton Trade Fair in April, 1972, and he returned to Peking in May,
1972, as one of the group of five American businessmen who were the
first to enter Peking after President Nixon's trip to China. Since
then, Hoose has made six trips to China in all involving seven months
there. During those working trips, he has worked and lived with the
Chinese in Canton, Hangchow, Shanghai and Peking. In late 1973,
Hoose traveled throughout South China with and as a guest of senior
-1-
members of the Chinese government. He is well acquainted with many
of China's business and trade leaders, among others. A few days ago
[mid-September, 1974], the Commercial Counsellor of the People's
Republic of China, Mr. Chang Tsien-hua, and other senior members of
the commercial staff of the Chinese Liaison Office in Washington were
dinner guests in Hoose's home in Los Angeles.
Hoose will return to China within the next few weeks, and
in addition has just received a cable from trade officials in Peking
requesting him to stand by for yet another business trip there early
next winter.
Probably, Hoose's contacts with the Chinese in the People's
Republic in the past two years have exceeded by several times those of
any other non-Chinese American outside of our own Liaison Office in
Peking. Unlike our government representatives in Peking, Hoose has
been allowed to mingle freely with the Chinese and has traveled
extensively in China.
Hoose, in his capacities as a foreign trade consultant and
occasionally as an informal advisor on the American side is in close
communication with trade and other officials in the U.S. and in China.
However, his remarks before the UPI EDICON convention, of course, will
be solely his own and will represent the comments and view of a
private citizen, only.
VObEnDIX
H
-2-
R.
GERALD
FORM
LIBRARY
APPENDIX I
DETASCO OUTX.
pe SOJEJA ure OMU sug MITT cue COMMONCE sug atem or g
HOMGAGL' UTS rewsike perore FUG ПЫ EDICON CONAGUETON' of CONIRG' MITT
communics.com MT fV cisqe 9ug offer a TD FUG n'a' 9Ug IN CHING*
98 9U INFOLW9T squarer ou FUG erge Je TU cToBe
HOORS' TU pTe 92 or cisqe gug
TU CHING*
peeu STJOMGQ CO штудте MTCP cue CUTUGES sug pga FIGAGJES
Bekrud. one doagruwenf IN BOKIDA' HOOSE use
guň offer VWGLTCYN опретде of ONL OMU Office TU
кебпртта TU fue bear EMO Aegre руде exceedeq pl стшев ΓpoeB or
Блоруртл' Hoose,a controre MTFP cue Curvese TU cue
uexp MINCEL*
rednesçind ртш FO Brync pl for Aec sworper рлетнога FITH cyere estyl
TU use Dnef recerved S cypTe ILOW figgs TW Boxrud
HOOSE MITT LOCALU FO CUTUS MIFPIN FUG Dexp tem Meexe' sug
gruner areace TN HOOSE powe TO Γoa ywdejee
cye commercis] of fue CUTVOSS гіятеон OFFICE TU mwentud.com MGIS
кебпрттс of CUTUS WE CpyBa детер-рля' sug oryer eGUTOR mempers of
[wrg-zebrewper' TOAVI' cue COMMERCIS] Commentor of FUG Seobje,
of CUTUS, sug sigge resqere' swoud orpere y TGM gsha gdo
шешрела of FUB CUTDOSS HC TO MOJI ведлутиред MTFU went
TODAY
appointment
scheduled
3/5/75
)
2 pm
Dr Harned GENERO R.
GE
LIBRARY
Wednesday 3/5/75
Meeting
3/5/75
2 p.m.
9:25 Dr. Harned Hoose called at the suggestion
of Geoff Shepard (Dr. Hoose's nephew).
He has just come in from Chicago and there is something
he feels is absolute dynamite which has occurred in
China -- and he would like to come in and talk with you
about it.
He is staying at the Embassy Row Hotel.
265-1600
Room 510
R.
I have scheduled an appointment for him today
(Wednesday 3/5) at 2 p.m.
GERALD
FORD
(((Just to refresh your memory -- attached is your
LIBRARY
exchange of correspondence with Dr. Hoose)))
Hise,
THE
March 1, 1975
Dear Harn:
Many thanks for your interesting and informative letter.
I am very glad that you were able to settle the compli-
cated dispute arising from the imports of Chinese shrimp.
The success is indeed a tribute to your good relations
with the Chinese and your skills as a negotiator.
Insofar as I am able to have any influence in such
matters I shall be more than happy to cits your
experiences and familiarity with the Chinese as they may
relate to our future relations with this important Nation.
We very much enjoyed our evening with you at Geoff Shepard's
home and to learn that we had friends in common from
Michigan. I regret that Geoff is no longer in the White
House but inasmuch as he will be remaining in Washington,
I trust I will be able to see him often.
Bunny and I send our warmest regards to you and your wife.
Sincerely,
Philip W. Buchen
Counsel to the President
Mr. Harned Pettus Hoose
129 North Rockingham Avenue
Los Angeles, California 90049
PBuchen:sk 3/1/75
DEALO
FORD
LIBRARY
TUNG FANG
BINGUAN
Kwangchow
People's Republic of China
February 14, 1975
U.S.A. Address:
129 North Rockingham Ave.
Los Angeles, Calif. 90049
(213) 472-2828
Phil Buchen
Counsel to the President
The White House
Washington, D. C.
United States of America
Dear Phil:
My wife and I so much enjoyed the evening with you and your
wife at the home of my nephew, Geoff Shepard and his Saundra,
last December 18th. The visit with you is a pleasant memory,
and it was expecially interesting to find that we know a number
of people in Grand Rapids and Holland, in common - including
our memories of the formidable Katie Cheff!
I have been here in China for three weeks, this time - the latest
in a series of trips here representing various U.S. corporations
in their trade and business with China.
This trip involved something of importance to the U.S., and its
relations with the People's Republic of China. I believe this
direct report may be of interest to you and to the President.
As a brother lawyer, and also in your present very responsible
capacity, I want to tell you directly about the excellent result
achieved here in a major trading crisis which threatened our
U.S. - China trade. Phil Lincoln, China Desk at State, George
Bush and other have been following theproblem closely because of
its impact on overall relations with China. The crisis arose
because a substantial Chinese shipment of frozen shrimp
(US$1,200,000.00) was rejected by our FDA as below our standards.
The Chinese quite naturally took the position that the problems
(spoiling) must have occurred encoute, and declined responsibility.
Our U.S. buyer, Seabrook Foods, Inc. and its insurance carrier,
Insurance Company of North America, faced losses of approximately
$1,000,000.00 in U.S. dollars, and naturally threatmed liti-
gation against the Chinese, or at least formal adversary arbi-
tration (which the Chinese regard as hostile and repugnant to
2 degree that enmity follows). All Western World insurance coverord
-1-
GERALD
LIBRARY
TUNG FANG
BINGUAN
age of Chinese food imports was withdrawn, and our insurance
industry was on the verge of refusing insurance coverage as to
all Chinese imports subject to FDA clearance, because of what
was thought to be China's unwillingness to take responsibility.
In the event of litigation and/or because of total lack of
essential insurance, a breakdown in all U.S. imports from China
was imminent, with obvious reciprocal breakdown in China's
purchases from the U.S. to follow, in response. In my personal
but well informed opinion, the wheat sales' cancellations were
related to our crisis, and the grave dispute on the frozen
shrimp matter also threatened our overall relationships, in
substantial degree. What had begun here in China with ping
pong balls was threatened by a dispute as to shrimp! How
ironic - but we all remember the famous War of Jenkin's Ear in
England's early history.
Seabrook Foods, Inc. and Insurance Company of North America,
apparently because of my twenty-three years in China and my
continuing friendly relationships with the Chinese, retained me
as counsel to handle the dispute. I was greatly assisted by the
informal concern and advice of Phil Lincoln and others at State,
and also by Ambassador (Retired) Chris Phillips and others
at our National Council for U.S. - China Trade. Other valuable
assistance was rendered by my Chinese friends and key contacts,
variously in Washington, D. C., New York, Canada and Hongkong.
Our initial move was towithdraw all threats of litigation, and
to seek an amicable resolution through friendly negotiations.
Massive data as to the passage of the shrimp from China via Japan
to New Yorkwers assembled, and we devoted over two months to
the preparation of FDA data, U.S. standards, U.S. laboratory
testing procedures, and actual large color pictures of the
storage, testing and other processes involved. I took state-
ments from all available witnesses in North America, and collected
all applicable files in various U.S. and private offices,
After the nadir, involving a cable from China declining any
responsibility, gradually we achieved a situation in which the
Chinese were willing to dispose of the question throughfriendly
negotiations in China. I came here as Chief Negotiator for
Seabrook Foods, Inc. on January 28th, with credentials also from
FORD
the Seabrook Chairman and Board. As a courtesy to our Chinese
friends, who do not recognize any insurance company's involve-
ment or subrogation, my role also as a representative of
Insurance Company of North America was discarded at the Border,
GERALD
temperarily (to be resumed upon my exit!). Also on our
negotiating team were Murry Berger, President of Seabrook Foods,
-2-
TUNG FANG
BINGUAN
Inc., and two Hongkong Chinese who are Seabrook's representa-
tives in Asia.
We brought six very large briefcases of evidence, pictures
and business records to China with us, all of which were
presented to the Chinese during formal discussions, and gone
over by me with the Chinese, in detail. The negotiations
were conducted formally, with eight days - some around the clock
- consumed in frank but friendly talks. Our opposites in the
formal negotiating sessions were: Jeng Wei, a Senior Official
with the Chinese National Cereals, Oils & Foodstuffs Import
and Export Corporation (Chief of the Aquatics Division) and
the Senior Representatives of the Branches Involved (in the
dispute).
The Chinese were well prepared, and were firm, strong in their
own views, which differed entirely from ours in a number of
ways, painstaking, detailed and hard-working - but very fair
by their own standards. At stake were mutual dignity, mutual
respect and an accommodation of our two widely different
practices, procedures and attitudes in trade and other things.
It wasquite evident during the negotiations that the Chinese
Liaison Office in Washington, D. C. and also other Chinese
friends had been kind enough to intervene and request that
every effort be made to resolve the problem amicably and fairly.
The Chinese team's patient and friendly attitude contributed
greatly. I believe, also, that our side's genuine respect for
China and for Chinese ways was of critical importance in
resolving the problem.
We were able to settle the dispute to the full satisfaction of
all parties involved - a formal settlement agreement was signed
by me, as Chief Negotiator for Seabrook Foods, by Murry Berger,
Seabrook's President, and by Jeng Wei, for the Chinese side,
at 1:30 A.M. on the last day of our negotiations - eight in
all! The work during the conference by the President of
Seabrook, a distinguished American executive with American
views, was able, patient and effective. The work done by the
Chinese side certainly matched that of Mr. Berger in patience
and quality. As the one man there who is familiar with both
the Chinese and American worlds, I was proud of the representa-
tives of each. The settlement by the Chinese side was very
fair and even handsome. The details are confidential, but I
can report that of the 1.2 million U.S. dollars loss, the
FORD
R.
recovery (including salvage of the rejected shrimp, and also
China's voluntary contribution, in the name and spirit of
LIBRARY
friendship) will fall only about US$200,000.00 short of the
total.
-3-
TUNG FANG
BINGUAN
I am very pleased to report to you and possibly through you,
to the President, that the crisis has been resolved; insurance
coverage by Western World firms of China's sales to the U.S.A.
will be resinstated; imports from China to the U.S.A. can
continue; and, therefore, purchases by China from us will
continue. I must compliment the Chinese on their fair and
responsible handling of the first serious dispute on a major
commercial matter with the U.S.A., involving China's products.
Although this case involved the lowly shrimp, I feel its
enormous impact on U.S. - China friendly relations warrants
this direct report to you and the President.
I feel strongly that this amicable settlement by our Chinese
trading partenrs, following their tough attitude in the wheat
blight situation, reflects their goodwill and their responsible
approach to world trade. They made this goodwill besture,
in a spirit of friendship and on the basis of what is mutually
beneficial for our two peoples and countries, as they expressed
it.
The Chinese well deserve reciprocal fair treatment by the
U.S.A., in every way possible, including the early granting to
China of "Most Favored Nation" status, in return for similar
and other concessions we desire from the Chinese. Please be
kind enough, Phil, to convey my views in this respect to the
President, if you will.
As for myself, although I do not share the Chinese ideologies
and am a loyal American, I am thankful that my birth and twenty-
three years in China, my bilingual and bicultural condition as
between the U.S. and China, and my ability to understand and
communicate well with our Chinese friends, all had equipped me
to. be of some real service inthis crisis.
As you may know, Iwould like very much to be of some official
and formal service to the Administration with respect to China,
if ever needed. Please call on me if the need should arise.
Sincerely yours,
Harm
"Harn"
Harned Pettus Hoose
BLRALD FORD LIBRARY
MEMORANDUM
THE WHITE HOUSE
5112
WASHINGTON
CONFIDENTIAL
ACTION
August 19, 1975
MEMORANDUM FOR:
DONALD RUMSFELD
PHILIP BUCHEN
WILLIAM SEIDMAN
FROM:
Brent Scowcroft
B
SUBJECT:
Mr. Harned Hoose
In the past your offices have been contacted by a Mr. Harned P. Hoose,
a Los Angeles businessman actively engaged in trade with the People's
Republic of China. We have had dealings with Hoose for several years
now, and have discovered that he typically uses very casual and self-
initiated contacts with White House officials to promote his own com-
mercial activities with the Chinese in a very self-serving manner.
Mr. Hoose is currently trying to broker a very large investment project
in Hong Kong involving the construction of a petro-chemical complex by
the Fluor Corporation and financed with American money. To be success-
ful, this project would require support from the People's Republic of China;
there is no evidence that Mr. Hoose has the support of Chinese officials
which he claims to have. Without commenting on the merits of the project as
a purely commercial venture, we are concerned about Mr. Hoose's efforts
to link up his investment scheme with the political dimensions of the
President's forthcoming trip to Peking.
Given the manner in which Hoose has misrepresented his contacts with
White House officials in the past, I strongly suggest that any attempts by
Hoose to contact you directly be diverted and that he instead be referred
to the appropriate official at the Department of State concerned with our
economic relations with the PRC. That official's name is Mr. Philip
Lincoln, and his telephone number is 632-2656.
DECLASSIFIED
E.O. 12958, Sec. 3.5
NSC Memo, 11/24/98, State Dept. Guidelines
By WHM , NARA, Date 5/8/00
FORD is LIBRARY GERALD
MEMORANDUM
House
THE WHITE HOUSE
Harned
WASHINGTON
5112
CONFIDENTIAL
ACTION
August 19, 1975
MEMORANDUM FOR:
DONALD RUMSFELD
PHILIP BUCHEN
WILLIAM SEIDMAN
FROM:
Brent Scowcroft B
SUBJECT:
Mr. Harned Hoose
In the past your offices have been contacted by a Mr. Harned P. Hoose,
a Los Angeles businessman actively engaged in trade with the People's
Republic of China. We have had dealings with Hoose for several years
now, and have discovered that he typically uses very casual and self-
initiated contacts with White House officials to promote his own com-
mercial activities with the Chinese in a very self-serving manner.
Mr. Hoose is currently trying to broker a very large investment project
in Hong Kong involving the construction of a petro-chemical complex by
the Fluor Corporation and financed with American money. To be success-
ful, this project would require support from the People's Republic of China;
there is no evidence that Mr. Hoose has the support of Chinese officials
which he claims to have. Without commenting on the merits of the project as
a purely commercial venture, we are concerned about Mr. Hoose's efforts
to link up his investment scheme with the political dimensions of the
President's forthcoming trip to Peking.
Given the manner in which Hoose has misrepresented his contacts with
Hoose White House officials in the past, I strongly suggest that any attempts by
to the to contact you directly be diverted and that he instead be referred
appropriate official at the Department of State concerned with our
Lincoln, and his telephone number is 632-2656.
economic relations with the PRC. That official's name is Mr. Philip
DECLASSIFIED
E.O. 12958, Sec. 3.5
NSC Memo, 11/24/98, State Dept. Guidelines
By WHM NARA, Date 5/8/00
GERALD FORD LIBRARY
Determined to be an
Dipls
Administrative Marking
Kolemon
By TMH
NARA, Date 1/13/16
Bor filing Hoosey Harned
HARNED PETTUS HOOSE
CABLE ADDRESS
ATTORNEY AT LAW
AREA CODE 213
HARNHOOSE
129 NORTH ROCKINGHAM AVENUE
277-3811
LOS ANGELES, CALIFORNIA 90049
472-2828
By Hand - July 31, 1975
The Watergate Hotel - Rm. 611
CONFIDENTIAL - PERSONAL
(202) 965-2300
Philip W. Buchen
Counsel to the President
The White House
Washington, D.C.
Re: Political Gains Available to President Ford
Dear Phil:
in Connection with the China Refinery Project
Enclosed is your information copy, which last Monday you suggested I
send you, of my memorandum report for Fluor Corporation to the State
and Commerce Departments and to Brent Scowcroft, dated July 31st. It
deals with Fluor Corporation's negotiations on behalf of a U.S. Con-
sortium of construction, oil, chemical and banking companies, with the
People's Republic of China (PRC), to build for China the world's largest
refinery and petrochemical plant in Hongkong, where it will use PRC
feedstocks (crude oil and natural gas).
The negotiations have been successful, after four months of continuous
sessions variously inside China and in Hongkong. As you know, since I
speak Chinese fluently and was raised in China, gaining a bicultural
background as to the U.S. and China during my twenty-three years there,
I am Fluor Corporation's representative to the PRC and handle a senior
position on the Fluor Negotiating Team, as its Liaison Man to China's
senior government officials and to the other PRC trade representatives.
Fluor Corporation heads the U.S. Consortium, the leading companies of
which include Bank of America, Chase Manhattan Bank, Phillips Petroleum
Corporation and Union Carbide Corporation. The project not only greatly
affects our relations with the PRC, but also will bring the U.S. a
US$13.6 billion balance of payments credit; an alternate source of
petroleum and petrochemical products (which can offset the squeeze by
the Middle-East oil countries), of great significance to U.S. strategic
interests in the Western Pacific, East Asian, South China Sea and Indian
Ocean areas, and also of importance to the U.S. in its search for greater
and alternate energy sources. Because of the project's importance and
also because the PRC demands secrecy at this stage, the U.S. Consortium
inter-company communications all are being handled at the highest executive
level: By J. Robert Fluor, Chairman of Fluor Corporation (who also is
a member of President Ford's Export Council); David Rockefeller, Chairman
of Chase Manhattan Bank; Chauncy J. Medberry, III, Chairman of Bank of
America; F. Perry Wilson, Chairman of Union Carbide Corporation (who
also is a member of President Ford's Export Council); and Wm. C. Douce,
President of Phillips Petroleum Company.
Because the project has great political potential in support of the
President and if handled properly can bring the President, personally,
great credit in the fields of his international policy and his domestic
economic policy, I urge you please to read the enclosed memorandum,
personally. To facilitate that, I have deliberately prepared a Table 69PD
-1-
GERALD
LIBRARY
HARNED PETTUS HOOSE
ATTORNEY AT LAW
Contents containing the essential information, which can be read in
less than five minutes. In addition, the essential details are
underlined in the memorandum, itself.
As you suggested, I am handling the initial "staffing" and the strictly
diplomatic and trade aspects directly with State and Commerce. How-
ever I cannot speak with the people there about the political aspects,
which I feel strongly can help us to get the President elected next
year. On the strictly political aspects, and because I feel strongly
that some circumstances involved in this massive project offer an
excellent potential for the President personally, won't you please
let me have a confidential session with you face-to-face and simply
as two individuals mutually interested in helping President Ford
prepare for next year's election? Perhaps you might find time for
that, after you have had a chance to read the Table of Contents, in
the enclosure.
Here are a few points you might consider, Phil:
1. On the Political Issues Affecting Our Domestic Economic
Policies: The U.S. Consortium - China project in Hongkong
will provide the U.S. with a US$13.6 billion balance of payment credit;
140,000 man-years of directly related employment within the U.S.,
and with the multiplier effect on indirectly generated employment,
Fluor's statisticians estimate that the figure could reach 560,000
man-years; the full-time and continuous use of 44 U.S. cargo ships
for four years, between U.S. and Hongkong; and nation-wide industrial
and employment involvement. The economic aspects of the project
might be of interest to L. William Seidman. From the political view-
point, the President can make the economic aspects a strong plus with
the voting public, as an example of our anti-recession but non-
inflationary steps in supporting private industry, and as another
example of improving economic conditions, just before the election.
Although I am a moderate and middle-of-the-road Democrat, I supported
the Nixon economic and foreign policies and also support those of
President Ford. We need President Ford for the next four years.
It would be unfortunate and unnecessary politically if this project
should receive its initial support from the opposition, and also it
would be poor politics, in my view, for this Administration to fail
to take the justifiable credit for the project and be subject to the
opponents' inevitable charge that the project succeeded wholly on its
own, and without Administration planning and support.
2. In the energy field, the project will provide the U.S. and
its allies with a very large alternate source of petroleum and petro-
chemical products, in Asia (suitably far from the USSR and the Middle-
East), not far from Diego Garcia, for example. That aspect has poli-
tical overtones, in addition to its own merits. The President should
receive the justifiable credit. Perhaps Frank G. Zarb should become
involved with the project.
FORD
3. Other significant aspects, all with political overtones,
are discussed generally at pages 32-33 of my memorandum. Although I
LIBRARY
cannot discuss political aspects at State or Commerce, the project
offers another good answer by President Ford to his occasional
"detente critics," to those feeling that our China affairs are static,
and to those who say the President's trip to Peking will be barren.
-2-
HARNED PETTUS HOOSE
ATTORNEY AT LAW
3. J. Robert Fluor, Fluor Corporation Chairman, is a
strong supporter of President Ford's. Also, as mentioned, he is
a member of President Ford's Export Council. Bob Fluor is a major
financial and political supporter of Republican causes, especially
in California and on the West Coast. Also, he is close to Barry
Goldwater and David Rockefeller. Bob Fluor feels strongly that this
project has reached a stage at which President Ford and his senior
Assistants should be involved, in view of the great economic impact
and the international and political aspects. In due course, either
via David Rockefeller or via Barry Goldwater, Bob Fluor will request
that he, I and three other key Fluor men involved at a senior level
in this major project with China, be granted a meeting with the
President. Hopefully, the meeting can be scheduled some time after
the President returns from Europe, but prior to August 15th, when
the Fluor Team must return to Hongkong and China to work on the
project negotiations. Still in complete confidence and off-the-
record between us, Phil, from the political viewpoint - as well as
on the merits - it would be in the President's interest to see the
Fluor men led by J. Robert Fluor. I hope you will give thought to
that and, if you agree, help.
As you suggested, I am working directly with State and Commerce
on the routine international and commercial aspects of this matter.
A Fluor senior team is joining me here in Washington next week, to
assist in that work. Also, I plan to speak to Brent Scowcroft, whom
I have met with in the past, about the high level oral messages I
have been given by China to convey orally to President Ford, or to
someone in a position to assure me that the message will be conveyed
directly by him to the President.
But I have not discussed the political aspects with anyone other
than you, and you are the only recipient of this letter and of the
thoughts expressed through the end of numbered Paragraph 3, above.
If you are so inclined, after reading this letter and the memorandum's
Table of Contents, you alone have the ball in the political areas
I have mentioned, Phil. Please let me have your thoughts. I shall
be at the Watergate Hotel, Rm. 611, until around August 15th.
Just in case you might decide to involve any others at the White
House informally and pending the "staffing" now in process at State
and Commerce, I am enclosing three additional copies of the
memorandum.
Hope to see you this trip - and many thanks for the telephone call
and the time you took to make it, last Monday.
Sincerely yours,
Hom Harned Pettus Hoose
"Harn". FORD
GERALD
LIBRARY
-3-
HARNED PETTUS HOOSE
CABLE ADDRESS
ATTORNEY AT LAW
AREA CODE 213
HARNHOOSE
129 NORTH ROCKINGHAM AVENUE
277-3811
LOS ANGELES, CALIFORNIA 90049
472-2828
Temporary Washington, D. C. Address
(Through Approximately August 15, 1975):
The Watergate Hotel - Room 611
2650 Virginia Avenue, N.W.
Washington, D.C. 20037
July 31, 1975
Telephone: (202) 965-2300, Rm. 611
TOP SECRET
Determined to be an
Administrative Marking
By TMH
NARA, Date 1/13/16
TABLE OF CONTENTS
TOPICS
PAGES
Action Addressees:
1
Philip C. Habib Department of State
1
Attention Philip T. Lincoln, Jr.
1
Tilton H. Dobbin - Department of Commerce
1
Attention William W. Clarke
1
Brent Scowcroft - White House: National Security
....
1
Information Addressee:
Philip W. Buchen, Counsel to the President
1
Subject:
Secret Informal Decision by the People's Republic
of China to Have a U.S. Consortium Headed by Fluor
Corporation Design, Engineer, Finance, Build and
Help Operate the World's Largest Refinery and Petro-
chemical Complex, to be Owned by China Through Its
Chine se "Patriots" Residing in Hongkong; To Be
Supplied by Chinese Feedstocks (Crude Oil, Gas, Etc.);
to Cost Between US$4.5 Billion to US$7 Billion to
Construct; Which Complex, During the Construction
Period and the Initial Operating Period While
Financing is Being Repaid, Will Provide the U.S.
LIBRARY GERALD R. FORD
-i-
TOPICS
PAGES
Subject (Continued) :
With US$13.6 Billion Balance of Payments Credit
And at Least 140,000 Man-Years of Labor in the
U.S.; Will Involve a Number of Beneficial
Intelligence, Defense, Strategic, International
Power Balance, Economic and Political Aspects
for the U.S.; and Can Provide the President
with a Significant and Substantial Subject for
Discussion and Possible Public Announcement
During His Visit to Peking Late This Year
1-2
1. Status Report
2
2. Analysis of Implications for:
A. The United States of America and
the People's Republic of China; and
2
B. The U.S. Economy, Business and Labor
....
2
3. Request on Behalf of Fluor Corporation,
the Leader of the U.S. Consortium, for
Additional and Continuing Cooperation,
Assistance and Guidance by the President
and His Administration
2
From:
Harned Pettus Hoose, Fluor Corporation's
Representative and Liaison Man to the
People's Republic of China
2
References:
2-3
(Prior Reports and Communications on This Matter
to the White House, the U.S. Department of State,
and the U.S. Department of Commerce)
2-3
Request for Presidential and White House
Involvement and Assistance, When This Matter
Has Been Preliminarily Processed and Evaluated
by the Action Addressees at the U.S. Departments
of State and Commerce
3-5
The U.S. - PRC Relations Are Affected
3
Great Economic Significance
3
Cost: US$4.5 Billion to US$7 Billion,
to Be Paid by the Chinese for Construction
3
is
FORD
GERALD
-ii-
LIBRARY
TOPICS
PAGES
Chinese Will Allocate 42,000 Metric Tons
of Their Crude Oil Per Day, or 14,000,000
Metric Tons of Their Crude Oil Per Year,
to the Hongkong Refinery and Petrochemical
Complex to Be Built by Fluor Corporation
3
The Project Will Provide the U.S. With
a US$13.6 Billion Balance of Payment Credit
3
The Project Will Provide Direct Employment
in the U.S. of 140,000 Man-Years of Labor
3
And by Multiplier Effect, the Project
Will Provide Indirect Employment in
the U.S. Equivalent to 560,000 Man-Years
of Labor
3
The Project Will Provide the U.S. and Its
Allies With a Significant Alternate Source
of Petroleum and Petrochemical Products
3
Prior Help and Guidance by State and
Commerce in This Matter
4
Additional and Continuing Help Requested
4
Fluor Corporation's Senior Men Working on the
Project Will Be Available in Washington, D.C.,
to Work with the U.S. Government on this
Matter, From Now (July 29, 1975) Until Around
August 15, 1975
4
Harned Pettus Hoose is Available Here Now
4
A. C. Ewert, Vice President, International
Sales (and Fluor Negotiating Team Leader),
and Charles M. Wuhrman, Executive Manager,
Projects (and the Project Director), Will Be
Available Here From August 4th to August 15th
...
4
All Can Be Reached Via Hoose, Rm. 611,
Watergate Hotel - (202) 965-2300
4
Request for a Meeting with President Ford
By the Following Fluor Corporation Executives
and Fluor Team Members
4-5
J. Robert Fluor, Chairman of Fluor Corporation,
and a Member of President Ford's Export
Council
4-5
David S. Tappan, Jr., President
4-5
A.C. Ewert, Vice President
Charles M. Wuhrman, Exec. Mgr., Projects
Harned Pettus Hoose, Representative and Liaison
4-5 4-5 4-5 GERALD B. FORD LIBRARY
-iii-
TOPICS
PAGES
Because of the Great Impact of the Project
on the U.S. Economy, Suggestion That the
Fluor Team Also See L. William Seidman,
Assistant to the President for Economic
Affairs
5
Because a Major Alternate Energy Source is
Involved and Will Be Created and Tapped
By This Fluor Project in Hongkong with the
PRC, Suggestion That the Fluor Team Also
See Frank G. Zarb, Administrator, Federal
Energy Administration
5
Status Report, Description of the Project and
Steps in Process, Identification of Entities and
Individuals Involved, and Analysis; and Report
as to PRC Inquiries and Messages About the
Project
6-37
As a "Quick-Scan Device," the Essence of the
Memorandum Report is Underlined
6
1. The People's Republic of China (PRC)
Requires Absolute Secrecy as to this
6
Project
2.
The PRC is Handling this Project Simul-
taneously at Two Levels: (1) Through
Normal State Trading and Business Corpora-
tions; and (2) Through a Secretly Function-
ing "High Political Channel" (Also Called
the "Yeh Chien-ying Channel" or Simply,
"The Channel," Headed by One of China's
Highest Officials, Marshall Yeh-Chien-ying,
Apparently in Cooperation with Vice Premier
Teng Hsiao-ping
6, 14-18
A. The Normal State Trading and Business
Corporations Channel
6, 6-13
(1) Hongkong Chinese "Patriots"
Who Will Front for the PRC
6-7
Henry Y. T. Fok (Ho Ying-tung)
....
6-7
(2) PRC State Trading Channels in
7-8
Hongkong
(3) Chinese Advisors and Assistants
to the Henry Y. T. Fok Group
8
FORD : LIBRARY 070839
-iv-
TOPICS
PAGES
(4) Fluor's Work and Contacts with
the Above Normal State Trading
and Business Channels,
February Through July, 1975
9
(5) Status of the Project, According
to the Normal State Trading and
Business Channels
10
(6) The Normal State Trade and Business
Channels Are Completely Unaware
That Fluor Also is Working With
the "High Political Channel"
11
(a) Reason for this Secrecy,
According to "High Political
Channel" Sources
11
(b) Hoose's and Fluor's Assumptions
as to the Real Reasons for the
Above Procedures, Involving the
Secrecy Strictures Placed Upon
the Fluor Team by the Members
of the "High Political Channel"
12-13
B. The "High Political Channel" Headed
by Marshall Yeh Chien-ying
14-18
Yeh Chien-ying
14
Wang Chen-chuan
14, 14-18, 18
"Lao" Wu
14-15
"Lao" Chu
15-16
Chen Hung
16-17
Yeh P'ing
17
The Civilian Volunteer, Working
with this Channel: Lee Pay-chu
17-18
The Hoose Working Relationship with
Lee Pay-chu
18
3.
Secret Informal Decision by the People's
Republic of China (PRC) to Proceed with the
Hongkong Project
19
A. The High Level Decision to Proceed
20
FORD is LIBRARY 078830
-V-
TOPICS
PAGES
B. A Public Announcement Will Be Made
Either: (i) Soon After President
Ford's Visit to Peking, if U.S. -
PRC Relations Continue to Be Friendly,
and if No Unexpected Difficulties
Arise Before Then
19
Or (ii) the Public Announcement and
Implementation of the Project Will
Be Earlier Than the President's
Visit, if the U.S. Can Provide the
PRC with Some Suitable Trigger Device
or Propaganda Excuse for China to
Use with Its Senior Cadre, Its People
and Its Allies
19
1. The Kind of Trigger Device the
PRC Wants, Described
19
2. It Does Not Require Recognition,
Exchange of Ambassadors, Abrogation
of the U.S. - Taiwan Treaties, or
Any Such Grave or Controversial
Step
19
3. PRC Suggests Could Be Any One or
More of Following
20
a.
First Procedural Steps Toward
MFN, By Announcement, Etc.
20
b.
Blocked Funds and Frozen
Assets
20
C.
Removal of All Armed Forces
of U.S. From Taiwan
20
d.
Or Some Similar Token and
Friendly Public Gesture
20
C. Evolution of the Affirmative Decision,
Within the PRC
20-22
4.
In Addition to and Apart from the Fluor and
PRC Hongkong Project Information and
Inquiries Conveyed Via the Yeh Chien-ying
Channel, That Channel Very Recently Has
Conveyed the Following Important Messages
is
FORD
to Hoose, to be Relayed by Hoose to
President Ford:
23, 23-28
quantity
-vi-
TOPICS
PAGES
4. (Continued)
Certain Oral Messages from Yeh Chien-ying
and His Group, With Respect to Informal
and Off-the-Record Suggestions and Inquiries
as to Possible Solutions of the U.S. - PRC
Problems, Including the Taiwan Question
23
The Oral Messages Are Secret, and
Hoose Promised the Yeh Chien-ying
Channel That:
A. They Would Be Kept Secret,
Excepting from the President and
His Most Senior Relevant Assistants
...
23
B. And That Hoose Would Do His Utmost
to Deliver Them as Soon as Possible
and in a Manner That Will Assure
Their Receipt by the President,
Himself
23
In View of the Messages' Subject Matter,
Contents, Origin and Intended Recipient,
of Course, Their Contents Are Not Known
to Fluor Corporation
23
However, the Fluor Team Leaders Were
Told in Hongkong by One of the Yeh
Chien-ying Channel Members That
Messages from Them to President Ford
Have Been Given to Hoose, Although
the Contents Cannot Be Disclosed to
Fluor Corporation
23
Prior Messages from PRC Officials
Were Given to Hoose in the Past, for
His Secret Conveyance to the President
...
23-28
Hoose's Special Contacts with Certain
"Political Cadres" in the PRC
23
Prior Reports to the White House
23
Examples of Those Special Contacts'
Roles in Hoose's Business Work with the
PRC, When Those Contacts Felt That Their
Assistance to Hoose Was in the PRC
Interest
FORD is 07V839 LIBRARY 24
-vii-
TOPICS
PAGES
An Important Message in the Past
Was Conveyed by the PRC Via Hoose (Via Haig)
to President Nixon (Message
Generally Identified But Subject
Matter Not Disclosed Here, of
Course)
25
The Chinese Reasons for Conveying an
Important Oral Message from the PRC
Government to Our President, Via a
U.S. Civilian, Without Portfolio, Rather
Than Via the Usual Diplomatic Channels
or Via Some Officially Recognized Channel
....
26-28
The American Viewpoint as to Civilian
Messengers Between Governments - Some
Aspects of Hoose's Background, Tending
to Satisfy the American Criteria Here
Applicable
28
Hoose's Request for an Opportunity to
Deliver the Message, as a Loyal and
Patriotic American
28
5.
Description of the Fluor and PRC Project
(Hongkong Refinery and Petrochemical Complex)
and of the U.S. Consortium Headed by Fluor
Corporation
28-30
A. The Project (Described and Data Given)
...
28-29
B. The U.S. Consortium
29-31
(1) The Consortium is Led by Fluor
Corporation
29
Brief History of Fluor's Efforts
29
Description of Fluor Corporation
30
(2) Other Members of the Consortium
Selected to Date
30-31
In view of the secrecy required by
the PRC, only the respective cor-
porate Chairmen and/or Presidents
of the corporations involved in
the Consortium are in communication
as to the project
30
FORD & 038830 LIBRARY
-viii-
TOPICS
PAGES
5. (Continued)
(2) Other Members of the Consortium
Selected to Date (Continued)
The Other Consortium Members
- Identified (With Names of
Their Most Senior Officers,
Who Are Personally Involved
with the Project)
31
a. Phillips Petroleum Company
31
By Wm. C. Douce, President
31
b. Union Carbide Corporation
31
By F. Perry Wilson, Chairman
of the Board
31
Note: F. Perry Wilson, also
(as is J. Robert Fluor) is a
Member of President Ford's
Export Council.
31
C. Bank of America
31
By Chauncy J. Medberry, III,
Chairman of the Board
31
d. The Chase Manhattan Bank
31
By David Rockefeller,
Chairman of the Board
31
The above corporate leaders, each of
a corporation or banking institution
which is an important member of the
U.S. Consortium led by Fluor Corporation,
communicate exclusively and directly
with the following two leaders of the
Fluor Corporation Entities:
J. Robert Fluor, Chairman of
the Board, Fluor Corporation
(and a Member of President Ford's
Export Council)
4-5, 30
David S. Tappan, Jr., President,
Fluor Engineers and Constructors,
Inc.
4-5,30 DERAZ R. FORD LIBRARY
-ix-
TOPICS
PAGES
6.
The Project Will Have a Very Substantial
Affirmative Impact Upon the U.S. Economy,
Industry and Labor
31
The Project Will Gain for the U.S. a
US$13.6 billion balance of payments
Credit
31
Value of U.S. Components of Goods
and Services for the Project Ranges
from a Minimum of US$3.9 Billion,
Through a Probable Amount of US$5
Billion, to a Maximum Amount of
US$5.5 Billion
31
Examples of Requirements of the
Project, from U.S. Industry:
2,800 Miles of Pipe; 360,000
Valves; 5,000 Pumps; 200,000
Instruments; 10,000 Electric
Motors; 3,400 Large Towers,
Drums and Storage Tanks; and
47,000 Miles of Electrical Wire
31
The U.S. Will Have the Opportunity
to Supply US$3.6 Billion Worth of Raw
Materials to the Project
31
The Complex Will Provide for the Con-
tinuing Employment of 140,000 Man-Years
of Labor in the U.S.
31
And Considering the Multiplier
Effect, the Continuing Employment
Generated by the Complex Could
Be the Equivalent of 560,000 Man-
Years of Employment in the U.S.
31
Shipping the U.S. Equipment and Construction
Materials to Hongkong Will Provide
Availability of Continuous Employment
for Approximately 44 Ships Per Year for
a Four Year Period
31
And During the Initial Period of
Construction, There Will Be a
Requirement to Employ About 17
Ships Continuously Per Year
31
FORD is 03330 LIBRARY
-X-
TOPICS
PAGES
7.
An Alternate Source of Petroleum and
Petrochemical Products Will Be Available
to the U.S. and Its Allies, Through the
Hongkong Complex Supplied by Chinese
Crude Oil and Natural Gas
32
8.
Beneficial Defense, Strategic, Inter-
national Power Balance, and Political
Implications for the U.S.
32-33
A. The Project Will Effect a Major Commer-
cial Enterprise Involving U.S. Private
Industry and Labor with the PRC, in
What the Chinese Like to Call "The
Spirit of the Shanghai Communiqué of
February, 1972, and Thereby Advanc-
ing the Implementation of U.S. - PRC
Trade and Business Relations, On a Scale
Which Greatly Exceeds the Entire Trade
Both Ways Between the U.S. and the PRC
Since 1972
32
B. The Project Will Balance Our Detente
With the USSR and Its Related Trade
and Other Aspects, With a Very Large
Trade and Business Transaction with the
PRC, With the Resultant Impact Upon
(i) The PRC's Allies in Asia, and
the Discouragement They Will
Experience as to Their Hopes
for PRC Support Against the U.S.A.,
for Example, in Korea, and
Elsewhere
32
(ii) The PRC, Which Will Have a
Very Large Economic and Financial
Stake in Continuing Its Improv-
ing Relations with the U.S., and
Will Be Reassured Also as to the
U.S.'s Steps in Our Detente with
the USSR
33
(iii) The USSR, Which May Be Made
Somewhat More Cautious in Its
Own Foreign Policy and More
Faithful in Its Performance of
Obligations to the U.S., by
is
FORD
the Knowledge That the U.S. -
PRC Relations Also Are Progress-
ing Well and On a Large Scale
33
GERALD
LIBRARY
-xi-
TOPICS
PAGES
(iv) The American Public, Especially
in This Pre-Election Period,
When Occasional Critics of Our
Foreign Policies and of Our
Administration's Domestic Econo-
mic Policies Will Be Confronted
With a Very Substantial Offsetting
Move Between the U.S. and the
PRC, More Closely Balancing Those
Involving the USSR, Which At The
Same Time Provides Significant
Domestic Economic Advantages,
Affirmatively and Substantially
Affecting U.S. Industry and
Employment
33
C.
The Project Has Military and Defense
Implications of Having a Substantial
Part of the PRC's Oil Refining and Petro-
chemical Manufacturing Industry Concen-
trated in Hongkong, Where There is Ready
Access by Sea and Where the General
Political Situation is Friendly to the
U.S.
33
D. The Project Has Strategic Implications
Relating to the Availability of a Major
Petroleum Source in the South China Sea
Area, Relatively Near the East Asian,
Pacific and Indian Ocean U.S. Strategic
Zones and Yet Suitably Remote from the
Mid-East and the USSR, Where the U.S.
Bases Including Diego Garcia Can Have a
Potential Source of Fuels to Offset the
Mid-Eastern Near Monopoly in That Regard
33
E. The Project Has U.S. Intelligence
Implications, Which Are Inherent in a
U.S. - PRC Project Involving the PRC's
Energy Materials, Their Availability and
Reserve, The Mechanics of Their Trans-
Portation and Distribution, and the
Identities of the PRC Personnel Involved
33
9.
The Hongkong Colonial Authorities Have Secretly
Granted Their Preliminary Approval of the Pro-
ject, and Have Informally Assured Fluor
Corporation That The Necessary Sites Will Be
FORD
Held Available for the Project
33
LIBRARY
-xii-
TOPICS
PAGES
10.
Fluor Has Kept the U.S. Government Advised
37
11.
Fluor's Careful Adherance to Applicable U.S.
Laws
37-38
REQUESTS BY FLUOR CORPORATION FOR SPECIFIC
ASSISTANCE AND GENERAL GUIDANCE BY PRESIDENT
FORD, HIS SENIOR ASSISTANTS, AND THE APPROPRIATE
EXECUTIVES IN STATE AND COMMERCE
38-39
1.
The President is Respectfully Requested
to Meet With the Fluor Senior Executives
and the Fluor Team's Three Senior Members,
After This Matter Has Been Processed and
Studied by the Appropriate Staffs and Upon
the President's Return from Europe, to
Discuss the U.S. Role and the PRC Requests
of the U.S. Government in Connection with
this Project
38
The Fluor Senior Executives and the Fluor
Team's Three Senior Members Who Request
the Meeting With the President Are:
J. Robert Fluor, Chairman and Chief
Executive Officer of Fluor Corporation,
Who Also is a Member of President Ford's
Export Council
38
David S. Tappan, Jr., President, Fluor
Engineers and Constructors, Inc.
38
A. C. Ewert, Vice President, International
Sales, Fluor Engineers and Constructors,
Inc. (who also is the Fluor Negotiating
Team Leader, in the work with the PRC)
...
38
Charles M. Wuhrman, Executive Manager,
Projects, Fluor Engineers and Con-
structors, Inc. (who also is the Project
Director for this project)
38
Harned Pettus Hoose, Fluor Corporation
Representative and Liaison Man to the
People's Republic of China
38
R.
FORD
-xiii-
GERALD
LIBRARY
TOPICS
PAGES
2.
The President is Respectfully Requested
to Include the Joint U.S. Consortium -
PRC Project for Construction of the
Hongkong Refinery and Petrochemical Plant
in His Planning, Preparations and U.S. -
PRC Communications Preliminary to the
President's Visit to Peking Late This
Year
38-39
It Is Respectfully Pointed Out That
the Above Steps, If Taken By the
President, Should Be Effected With
Careful Regard for the Delicate
Circumstance That Fluor Is Advised
That At This Time Only China's Most
Senior Officials Are Aware of the PRC's
Affirmative Intentions As to the Project
38
3.
The President is Respectfully Requested
to Authorize Fluor's Representatives to
Indicate to the PRC Side That the U.S.
Government Continues Generally to Support
the Fluor Efforts as to the Hongkong Refinery
and Petrochemical Complex
39
4.
The President is Respectfully Requested to
Determine Whether He Feels With Fluor
Corporation That It Would Be In The
National Interest to Provide the PRC With
Some Form of "Trigger Device" or Friendly
Signal, As Reported in Paragraphs 3.B.1. and
3.B.2., Pages 19-20, Above, To Enable The
Highest Officials in the PRC to Use Such
Trigger Device or Friendly Signal With Its
People and Allies, as an Excuse to Them for
the PRC's Policy Changes. Apparent in Proceed-
ing with the Project
39
If the President So Determines, He is
Respectfully Requested to Take Whatever Steps
He Feels Are Appropriate in That Connection,
and to Advise Fluor Corporation as to Its
Role in Calling the PRC's Attention to Any
Such Impending or Accomplished Steps
39
SIGNATURE BY WRITER OF THIS MEMORANDUM,
HARNED PETTUS HOOSE, REPRESENTATIVE AND LIAISON
MAN TO THE PEOPLE'S REPUBLIC OF CHINA, FOR
FLUOR CORPORATION
39
&
FUND
(End of Table of Contents)
GERALD
-xiv-
LIBRARY
HARNED PETTUS HOOSE
ATTORNEY AT LAW
CABLE ADDRESS
AREA CODE 213
HARNHOOSE
129 NORTH ROCKINGHAM AVENUE
277-3811
LOS ANGELES, CALIFORNIA 90049
472-2828
Temporary Washington, D. C. Address
(Through Approximately August 15, 1975):
The Watergate Hotel - Room 611
2650 Virginia Avenue, N.W.
Washington, D.C. 20037
Telephone: (202) 965-2300, Rm. 611
TOP m SECRET
July 31, 1975 - By Hand
TO:
1. PHILIP C. HABIB, ASSISTANT SECRETARY FOR
EAST ASIAN AND PACIFIC AFFAIRS, U.S.
DEPARTMENT OF STATE
Attention: Philip T. Lincoln, Jr.,
Country Officer for People's
Republic of China, Etc. Affairs,
U.S. Department of State
2. TILTON H. DOBBIN, ASSISTANT SECRETARY FOR
DOMESTIC AND INTERNATIONAL BUSINESS,
U.S. DEPARTMENT OF COMMERCE
Attention: William W. Clarke,
Bureau of East-West Trade,
U.S. Department of Commerce
3. BRENT SCOWCROFT, DEPUTY ASSISTANT TO THE
PRESIDENT FOR NATIONAL SECURITY AFFAIRS
INFORMATION:
PHILIP W. BUCHEN. COUNSEL TO THE PRESIDENT,
THE WHITE HOUSE
SUBJECT:
SECRET INFORMAL DECISION BY THE PEOPLE'S REPUBLIC
OF CHINA TO HAVE A U.S. CONSORTIUM HEADED BY
FLUOR CORPORATION DESIGN, ENGINEER, FINANCE,
BUILD AND HELP OPERATE THE WORLD'S LARGEST
REFINERY AND PETROCHEMICAL COMPLEX, TO BE
OWNED BY CHINA THROUGH ITS CHINESE "PATRIOTS"
RESIDING IN HONGKONG; TO BE SUPPLIED BY CHINESE
FEEDSTOCKS (CRUDE OIL, GAS, ETC.); TO COST
BETWEEN US$4.5 BILLION TO US$7 BILLION TO CON-
STRUCT; WHICH COMPLEX, DURING THE CONSTRUCTION
PERIOD AND THE INITIAL OPERATING PERIOD WHILE
FINANCING IS BEING REPAID, WILL PROVIDE THE U.S.
FORD
WITH US$13.6 BILLION BALANCE OF PAYMENTS CREDIT
AND AT LEAST 140,000 MAN-YEARS OF LABOR IN THE
LIBRARY
-1-
SUBJECT (CONTINUED)
U.S.; WILL INVOLVE A NUMBER OF BENEFICIAL
INTELLIGENCE, DEFENSE, STRATEGIC, INTERNATIONAL
POWER BALANCE, ECONOMIC AND POLITICAL ASPECTS
FOR THE U.S.; AND CAN PROVIDE THE PRESIDENT WITH
A SIGNIFICANT AND SUBSTANTIAL SUBJECT FOR DIS-
CUSSION AND POSSIBLE PUBLIC ANNOUNCEMENT DURING
HIS VISIT TO PEKING LATE THIS YEAR
1. STATUS REPORT
2. ANALYSIS OF IMPLICATIONS FOR:
A. THE UNITED STATES OF AMERICA AND
THE PEOPLE'S REPUBLIC OF CHINA; AND
B. THE U.S. ECONOMY, BUSINESS AND LABOR
3. REQUEST ON BEHALF OF FLUOR CORPORATION, THE
LEADER OF THE U.S. CONSORTIUM, FOR ADDITIONAL
AND CONTINUING COOPERATION, ASSISTANCE AND
GUIDANCE BY THE PRESIDENT AND HIS ADMINISTRATION
FROM:
HARNED PETTUS HOOSE, FLUOR CORPORATION'S
REPRESENTATIVE AND LIAISON MAN TO THE PEOPLE'S
REPUBLIC OF CHINA
REFERENCES (PRIOR REPORTS AND COMMUNICATIONS ON THIS MATTER TO
THE WHITE HOUSE, THE U.S. DEPARTMENT OF STATE, AND THE U.S.
DEPARTMENT OF COMMERCE)
1. Hoose's Conference with Philip W. Buchen at
the White House, March 5, 1975;
2. Hoose's Memorandum to Buchen ("Subject:
Secret Request by the People's Republic of
China (PRC) to Fluor Corporation, Etc.")
dated March 5, 1975;
3. Hoose's Conferences with Philip T. Lincoln,
Jr. (U.S. Department of State) and William
W. Clarke (U.S. Department of Commerce)
Between March 5th and March 12th, 1975;
4. Hoose Letter of March 11, 1975 (On Behalf
of J. Robert Fluor, Chairman of Fluor
Corporation) to Philip C. Habib, Assistant
Secretary, East Asian and Pacific Affairs,
U.S. Department of State;
5. Hoose's Letter of March 12, 1975 (On Behalf
of J. Robert Fluor, Chairman of Fluor
Corporation) to Tilton H. Dobbin, Assistant
Secretary for Domestic and International
Business, U.S. Department of Commerce;
-2-
QUARTO FORD LIBRARY
REFERENCES, ETC. (CONTINUED):
6. Two Letters by Tilton H. Dobbin, Assistant
Secretary for Domestic and International
Business, U.S. Department of Commerce, Both
Dated March 25, 1975, to J. Robert Fluor,
Chairman of Fluor Corporation; and
7. Letter by Lester E. Edmond, Deputy Assistant
Secretary, Bureau of East Asian and Pacific
Affairs, Dated March 26, 1975, to J. Robert
Fluor, Chairman of Fluor Corporation.
REQUEST FOR PRESIDENTIAL AND WHITE HOUSE INVOLVEMENT AND ASSISTANCE,
WHEN THIS MATTER HAS BEEN PRELIMINARILY PROCESSED AND EVALUATED BY
THE ACTION ADDRESSEES AT THE U.S. DEPARTMENTS OF STATE AND COMMERCE:
1. Because this project by Fluor Corporation and
its U.S. consortium with the People's Republic of China (PRC) directly
affects U.S. - PRC relations and the President's visit to Peking
later this year, has international power balance and political
ramifications, affirmatively affects our economy, balance of pay-
ments, employment and alternate petroleum and petrochemical products
sources, and has some strategic significance - all on a large scale -
and also because the PRC has requested certain official steps on the
part of the U.S. government to help in expediting and implementing
the project, it is respectfully urged that the President and the
White House become involved herein and provide guidance and assis-
tance to Fluor Corporation.
2. The basic cost to the PRC or to its designated
"front" or nominal Hongkong Chinese "Patriot" owners for engineer-
ing and construction of the complex will be between US$4.5 billion
and US$7 billion, depending on PRC final decisions as to selections
of complex units and product slates. The PRC will allocate about
42,000 metric tons of its crude oil per day, or approximately
14,000,000 metric tons per year, to the complex. Some of the products
will be used within China and some will be marketed in foreign trade.
Operation will be by the Hongkong Chinese "Patriots" (directed by
the PRC), in cooperation with U.S. operating participants. Technology,
engineering, construction, most of the machinery and equipment,
much of the materials, financing, skilled labor and operational
direction will be provided by U.S. interests. Fluor conservatively
estimates that during the construction period (about four years)
and the financing repayment period (about ten to twelve years), the
project will provide the U.S. with a US$13.6 billion balance of pay-
ments credit and with directly involved employment in the U.S. of
140,000 man-years of labor. Considering the multiplier effect,
the continuing employment generated in the U.S. by the complex could
be the equivalent of 560,000 man-years of employment. In addition,
a significant alternate source of petroleum and petrochemical
products will become available to the U.S. and its allies in Asia,
through the complex. The impact upon the U.S. position in Asia,
the Pacific and the Indian Ocean can be significant. U.S. - China
relations will be affirmatively affected; U.S. - China trade will
be substantially increased, as a very substantial step forward im
FORD
-3-
LIBRARY
that area under the Shanghai Communiqué of February, 1972; and
the U.S. will have become significantly involved in China's oil
industry and a substantial portion of its crude oil and gas process-
ing industries, with the resultant potential for further U.S.
involvement in China's petroleum exploration and development program.
In view of the size, scope and implications of the project, Fluor
Corporation would very much appreciate Presidential and White House
guidance and assistance, supplementing that of the U.S. Departments
of State and Commerce.
3. The preliminary assistance and guidance of
the U.S. Departments of State and Commerce provided to Fluor
Corporation and Hoose in Washington, D.C. in March, 1975 (as
reflected in References 3 through 7, above) and the help and counsel
of the U.S. Consul General in Hongkong provided to Fluor and Hoose
during March through July, 1975, have been very much appreciated:
Continuing assistance and guidance of that nature are respectfully
requested, as the appropriate State, Commerce and White House
personnel process and evaluate this matter and the within memorandum.
Hoose is now available here in Washington, D.C. to work with State,
Commerce and the White House on this matter, as may be needed and
desired by them. He will remain here until around August 15th, when
a return to Hongkong and China on this project will be required.
In addition, the following two Fluor senior executives will be
available here in Washington, D.C., from August 4th until around
August 15th, when they too will be required to return to Hongkong
and China on this project: A.C. Ewert, Vice President, International
Sales, Fluor Engineers and Constructors, Inc. (who is the Fluor
Negotiating Team Leader, in our work with the PRC and its Hongkong
"Patriots"); and Charles M. Wuhrman, Executive Manager, Projects
(who is the Project Director for this project, and the Fluor
Technical Team Leader). Ewert, Wuhrman and Hoose will cooperate
in all ways possible in the various U.S. government studies and
discussions relating to this matter and the within memorandum.
4. Request for a Meeting with President Ford,
by J. Robert Fluor, Chairman of Fluor
Corporation, and David S. Tappan, Jr.,
President of Fluor Engineers and Constructors,
Inc. (Accompanied by Their Senior Assistants
in this Project: Messrs. Ewert, Wuhrman and
Hoose)
J. Robert Fluor, who is a member of
President Ford's Export Council and also is the Chairman and Chief
Executive Officer of Fluor Corporation, respectfully requests that
after President Ford returns from Europe, the President and his
applicable advisors and Assistants please meet with the following
Fluor men, to discuss the project, guide Fluor Corporation as to
aspects touching upon our national interests, including the
economy, alternate energy source aspects, and U.S. - China trade
relations, and to consider the Fluor Corporation's specific requests
-4-
FORD & LIBRARY 078830
to the President and the White House, which are set forth in
Paragraph 12 hereinbelow:
J. Robert Fluor, Chairman and Chief
Executive Officer of Fluor Corporation
David S. Tappan, Jr., President, Fluor
Engineers and Constructors, Inc.
A. C. Ewert, Vice President, International
Sales, Fluor Engineers and Constructors,
Inc. (and the Fluor Negotiating Team
Leader, in the work with the PRC)
Charles M. Wuhrman, Executive Manager,
Projects, Fluor Engineers and Constructors,
Inc. (and the Project Director for this
project)
Harned Pettus Hoose, Fluor Corporation
Representative and Liaison Man to the
People's Republic of China
In view of the requirement that Fluor
Corporation resume its active discussions with the PRC and its
Hongkong "Patriots" around August 15th, it is respectfully requested
that the meeting with President Ford and his applicable advisors
and Assistants be scheduled at the President's convenience, some
time after his return from Europe and prior to August 15th.
5. Suggestion That the White House May Wish
to Involve, At Least in Preliminary
Discussions with Fluor Corporation's
Messrs. Ewert, Wuhrman and Hoose, the
Hon. L. William Seidman, Assistant to the
President for Economic Affairs, and the
Hon. Frank G. Zarb, Administrator, Federal
Energy Administration
Because of the substantial and significant
impact of the project upon the U.S. economy and the project's
affect on planning and work as to alternate or expanded crude oil,
gas, petroleum products and petrochemical products, the White House
might feel that it would be useful to involve the following two
senior U.S. governmental officials in discussions with Fluor's
senior men who are handling the project:
The Hon. L. William Seidman, Assistant
to the President for Economic Affairs; and
The Hon. Frank G. Zarb, Administrator,
Federal Energy Administration.
FORD is LIBRARY
Fluor Corporation's senior men who are handling the project,
Ewert, Wuhrman and Hoose (who are described in Paragraph 3, page
4, above) would be available for such discussions in Washington,
D.C., at the convenience of Mr. Seidman and Mr. Zarb, between
August 4th and August 15th. The Fluor men can be reached through
Dr. Hoose, Rm. 611, Watergate Hotel.
-5-
STATUS REPORT, DESCRIPTION OF THE PROJECT AND STEPS IN PROCESS,
IDENTIFICATION OF ENTITIES AND INDIVIDUALS INVOLVED, AND ANALYSIS;
AND REPORT AS TO PRC INQUIRIES AND MESSAGES ABOUT THE PROJECT
Note as to a Quick-Scan Device Herein:
To enable readers to absorb the substance
of this rather long report quickly, the essence
(including titles and sub-titles of paragraphs)
is underlined.
1.
The People's Republic of China (PRC) Requires Absolute
Secrecy as to this Project
PRC officials in China and in Hongkong have stressed to
Fluor that this matter must be kept absolutely secret
until China is prepared to announce it, either itself or
through its so-called "Patriots" in Hongkong (Chinese
residents in Hongkong who are loyal to the PRC and who
will "front" this project for China, acting as the nominal
owners and operators). The PRC has stressed that any
public announcements or news leaks may necessitate the
termination of discussions, and possibly denials by the
PRC that the discussions have been in progress for four
months and are continuing. Reasons given: The PRC must
first prepare its senior internal opposition group and
its people, as well as its allies, for the announcement
that a U.S. consortium will carry out the project in
Hongkong in cooperation with and for the PRC, using
Chinese crude oil and gas.
2.
The PRC is Handling this Project Simultaneously at Two
Levels: (1) Through Normal State Trading and Business
Corporations; and (2) Through a Secretly Functioning
"High Political Channel" Headed by One of China's Highest
Officials, Marshall Yeh Chien-ying, Apparently in Cooperation
with Vice Premier Teng Hsiao-ping
A.
The Normal State Trading and Business Corporations
Channel
(1)
The "Hongkong Patriots," Who Will
Be the Nominal Owners and Operators of
the Complex (Fronting for the PRC)
Mr. Henry Y. T. Fok (Ho Ying-tung), who
is a very wealthy pro-PRC Chinese industrialist
and businessman in Hongkong. His net worth
is estimated by one of his bankers, W. Chan,
FORD is 03RALD LIBRARY
Sub-Manager of the Hua Ch'iao, etc. Bank
in Hongkong (PRC-controlled) as "over fourteen
billion dollars, Hongkong money, (about
US$2.8 billion).
-6-
Henry Y. T. Fok and his background are
well known to our U.S. Consul General in
Hongkong. Fok now fronts for all PRC
petroleum business in the Hongkong area,
usually through his corporation, Feoso Oil
Limited. He is handling the PRC's con-
struction of oil storage depots in Hongkong's
Shatien area and on Hongkong's Ch'ing-yi
Island. Fok has wide real estate interests
in Hongkong and Macao, and operates about
80% of the gambling casino establishments
in Macao. One of his several hotels in
Macao is the largest one there, the Lisboa.
Fok owns the larger of the two hydrofoil
fleets operating between Hongkong and Macao;
is closely associated in some business
ventures with Ho Yin (also called Ho-hsien),
leading businessman in Macao, President of
the Macao Chinese Chamber of Commerce and
Macao delegate to the PRC 4th Congress.
Henry Y. T. Fok (Ho Ying-tung) formerly was
the notorious "smuggler" (backed by the PRC,
which regards Fok as the PRC's John Paul
Jones or its Sir Walter Raleigh), who ran
the Seventh Fleet blockade during and after
the Korean War. Fok has been designated by
the PRC as its nominal owner and operator
of the complex, who will front for China.
With Henry Y. T. Fok and also serving as the
PRC's "Hongkong Patriots" in this venture,
are: Timothy T. T. Fok, the eldest son;
H.T. Liu, Managing Director, Feoso Oil
Limited; Paul L.Y. Yang, Director of Feoso;
L.L. Pong, a Fok relative and Fok's personal
business manager; and others of Henry Fok's
corporate and personal families. We have
been told (by members of the "High Political
Channel") that Ho Yin - also known as Ho-hsien -
the Macao Delegate to the PRC 4th Congress,
will be a silent partner with Henry Fok in
the venture.
(2)
PRC State Trading Channels in Hongkong
At this level, the project is being handled
by China Resources Co., the PRC trading
and business representative in Hongkong.
The Fluor contact there is: T. M. Chow,
Assistant Manager, Industrial Products &
Minerals Dept. He has little or no dis-
FORD is LIBRARY
cretion, and has to work with Peking trade
channels.
-7-
Chow's function has been to receive
communications from Fluor, deliver
communications from Peking trade and
technical channels to Fluor, request
additional information or clarification,
and the like, and to attend social functions
variously given by the Chinese side for
Fluor or by Fluor for the Chinese side.
Chou has been involved in Hongkong with all
of Henry Fok's and Feoso's oil business with
the PRC. Chow does not appear to be connected
with the "High Political Channel."
(3)
Chinese Advisors and Assistants to the Fok
Group
Valentin Nan Yeh (Yeh Nan), a U.S. citizen
of Chinese origin, and a resident of N.Y.,
althugh he has been in the PRC for substantial
periods recently. He is President of Da Sing
Corp., in N.Y., and is very pro-PRC.
Those who do not happen to be familiar with
the Chinese perhaps should realize that
the coincidence of similar or identical
surnames among the Chinese is meaningless.
There are only some 400 Chinese standard
surnames, and widespread duplication is
inevitable. So this Yeh is not related at all
to Marshall Yeh Chien-ying, the leader of the
"High Political Channel." Nor does Valentin
Nan Yeh (Yeh Nan) appear to be connected with
the "High Political Channel." He represents
Mr. Fok in business matters, certainly in Asia
and possibly also in the U.S. Yeh Nan has
handled Fok's liaison work on this project
with Peking, where his contacts include
Liao Chen-tze, a senior official with the PRC
involved with overseas "friendship groups,"
including Japanese.
James Lau (in Mandarin: Liao Hsing-chien),
Managing Director, Top Trading Co. (H.K.) Ltd.,
in Hongkong. Lau (or Liao) is a business
friend of Henry Fok, an intimate personal
friend of Fok's relative, L.L. Pong, and
advises Fok, through Pong, in this project.
We have been told (by the "High Political
Channel") that Lau (Liao) was among the pro-
PRC overseas Chinese who assisted in the
removal of Li Tsung-jen, formerly Vice
President and briefly President, Republic of
FORD is LIBRARY 038870
China, from his refuge in the U.S. to the
PRC, during the cold war. Li was exhibited
by the PRC in Peking as part of the PRC's
cold war against us and Taiwan. He has passed
on.
-8-
(4)
Fluor's Work and Contacts with the
Above Normal State Trading and Business
Channels, February Through July, 1975
The Fluor Negotiating Team, numbering
from one to nine members at various times
in the period indicated but with the
largest number of members present in
Hongkong between May 21st and July 13th,
has dealt intensively and extensively
with the above channels in Hongkong.
Work with Henry Y. T. Fok's (Ho Ying-tung's)
group has been particularly heavy, as the
Fluor Team enlarged upon, explained and
developed its conceptual proposals as to
the project, in the technical, financial
and business areas. One meeting of the
entire Fluor Team and the entire Fok team
was attended by both the China Resources
man (T.M. Chow, or Chow Tak-ming in Cantonese,
or Chou Teh-ming in Mandarin) and a PRC man
from Peking, H. T. Tung (or Tung Hang-to in
Cantonese, or Tung Hen-tao in Mandarin).
One other meeting involved the entire Fluor
Team, the entire Fok team and H. T. Tung.
Numerous conferences and sessions involving
parts of each team (Fluor and Fok) were con-
ducted; daily conferences between a Fluor
Team member, Hoose, and Henry Y.T. Fok's
eldest son, Timothy T.T. Fok (Ho Chen-ting
in Mandarin, and Ho Tsen-ting in Cantonese)
took place; and a number of sessions involv-
ing one or two Fluor men and one or two Fok
men occurred. Fluor's representative, Hoose,
also met separately with Chow on other
occasions. In addition, potential sites for
the complex were inspected via sea and by car
by the Fluor Team, on two occasions accompanied
by two members of the Fok team (Lantao Island
and Macao). Fok supplied the launches for
two days of site inspection via sea, and the
vehicles for another two days of site
inspection by land vehicles. In addition,
during the working period in Hongkong from
February through July 19th, and presently,
Lee Pay-chu (identified in connection with
the "High Political Channel, below, maintained
and maintains almost daily liaison between
the Fluor side and the PRC side comprising
the normal trading channel, including China
FORD is LIBRARY GENALD
Resources and that entity's T.M. Chow.
-9-
(5)
Status of the Project, According to
the Normal State Trading and Business
Channels
Henry Y. T. Fok went to Peking for con-
sultations with the Chinese government
about the project, on three different
occasions between February and July, 1975:
Once in February, when both he and Ho Yin
(Ho Hsien), Delegate to the 4th Congress
of the PRC from Macao, were there (and
when we have been told, the Fok and Ho Yin
interests in the project were resolved);
once in May, when he was accompanied into
China by his aide, Yeh Nan, and by his
son Timothy Fok, and Hoose met with them
all and worked with them in Kwangchow;
and again in July, when Fok was in China
with the Hongkong Football (soccer) Team,
as the President of the Hongkong Football
Association, and visited Peking and the
Ta Ch'ing oilfield area, among other places.
Fok conferred in person with Fluor's
representative, Hoose, both in China and in
Hongkong, about his trips. The following
report in part is based on those conferences
and in part is based on Henry Fok's, Timothy
Fok's, Lau's (Liao's) and others' comments
and reports also to other Fluor Team members.
According to this normal state trading and
business channel, including Fok and China
Resources (to Fluor men, via Hoose and via
Lee Pay-chu):
"Peking is very much interested in this
project, and is studying it carefully
at the highest political and also at
the technical levels.' Final and
formal decisions are expected from
Peking, says this channel, "around
next October and November." This
channel also cautiously says, "off-
the record," and with evident hesitancy
to go beyond any authority from Peking,
that "things look very positive as to
our project, and we have a green light."
Unknown to the Fok group, we are told, the
"High Political Channel" in Hongkong gave
Fluor almost daily whereabouts and progress
i
FORD
reports about Fok's Peking trips, and two
GERALD
LIBRARY
weeks before he returned, told Fluor that Fok
would tell us the above things upon his return.
The predictions were verbatim and were exactly
fulfilled by Fok on his later return.
-10-
(6)
The Normal State Trade and Business
Channels Are Completely Unaware That Fluor
Also is Working With the "High Political
Channel"
According to the "High Political Channel"
contacts of Fluor's, the normal State trade
and business channels are completely unaware
that Fluor also is working with the "High
Political Channel." We do not know whether
that is true, either in part or completely,
but of course must assume it is true in
conducting ourselves, or run the risk of
angering our important and helpful contacts
in the "High Political Channel," who have
repeatedly instructed the leaders of the
Fluor Team and Hoose not to mention the
existence of the "High Political Channel" in
this matter, its reports and communications
to Fluor and Hoose, or the presence of one of
its members (Lee Pay-chu) at almost all of
our meetings with the members of the normal
trade and business channels, including the
Fok group.
(a) Reason for This Secrecy, According
to "High Political Channel Sources"
The Fluor Team leaders themselves
have been told by Lee Pay-chu, and
Hoose has been told by him and also
by other positively identified members
of the "High Political Channel," both
within China and also in Hongkong:
i. That the Fok group, including
Henry Y.T. Fok, himself, and the
commercial and business-related
men in the PRC trade entities
must not know about the "High
Political Channel" and our direct
contacts with it, because the
"High Political Channel" is
charged with "watching" the normal
channel and with guarding the
PRC interests in Hongkong; and
ii. That if the presence and involve-
ment of the "High Political Channel"
were known to the normal channel,
the latter would become angry,
perhaps frightened, and "less
FORD is 07V830 LIBRARY
cooperative.
(b) Hoose's and Fluor's Assumptions as to
-11-
(b) (Continued)
the Real Reasons for the Above Procedures,
Involving the Secrecy Strictures Placed
Upon the Fluor Team by the Members of
the "High Political Channel"
i. We assume that probably at least
Henry Y. T. Fok, himself, and
probably some or all of the PRC
Chinese are generally aware of the
"High Political Channel's" involve-
ment, interest, and contacts with Fluor.
Perhaps the motive for the strictures
upon Fluor as to mentioning the
"High Political Channel" to the members
of the normal channel includes the
quite commonly secretive nature of
many Chinese communist procedures; a
desire to keep the Americans and the
relatively westernized Hongkong Chinese
from communicating too freely with each
other or comparing notes as to their
respective communications from Peking.
ii. We also assume that the "High Political
Channel" men are communist party
members, political men and probably
intelligence service related. At least
most of the normal commercial channel
men are just businessmen and traders.
The former are watching the latter,
especially with respect to activities
with the American Fluor Team.
iii. We assume, too, that when the project
is implemented, the PRC and the Fok
group will have to work out what
financial rewards or benefits Fok will
receive in return for fronting the
transaction for PRC. Fok now has small
interests in the PRC's Hongkong busi-
ness ventures involving petroleum
products, which Fok fronts. The same
is true of his Hongkong sales of sand
and other products from China. It
is not illogical to assume that the
PRC is dealing with Fluor directly
through the PRC "High Political
Channel" simultaneously with the PRC
dealings through normal trading channels,
LIBRARY GERALD ? FORD
in part to guard against any efforts
on the part of the Hongkong "Patriots"
to gain some side advantage with Fluor
in the project (which, of course, Fluor
-12-
iii. (Continued)
would reject in any event).
iv. The Fluor Team leaders and Hoose
also know, personally, from direct
exposure to one of the "High Political
Channel" senior members - Wang Chen-
chuan - in Peking, that the "High
Political Channel" selected Henry Fok
and introduced Fluor to him. Fluor
also met Lee Pay-chu in China, in
connection with Wang Chen-chuan.
Wang and his associates in Peking
involved themselves directly with
the Fluor Team's early negotiations
and conversations in Kwangchow (Canton)
in the Autumn of 1973 and in Peking,
in February, 1974. Wang's and his
associates power and authority were
clearly apparent to the Fluor Team
members during the several weeks in
Peking, and it also was very evident
that the normal commercial channel
men in Peking were somewhat afraid of
Wang. Among other things he did in
the Americans' presence, he once
ordered two obviously senior People's
Liberation Army officers to vacate a
train compartment, to make room for
a Fluor executive. He was driven around
Peking during Fluor's several weeks'
work with Machimpex and Techimport there,
and conducted the Fluor Team members,
in a military vehicle driven by a
military driver.
Wang also was Hoose's host during a
subsequent trip they took together, at
PRC expense, to Shanghai and Hangchow,
for ten days. Wang told Hoose that
his host on that trip was the govern-
ment of the PRC. That too was evident
from the privileges exacted by Wang,
who was equipped with written authority,
from the Revolutionary Committees in
charge of the Shanghai and Hangchow
areas. So although the motives of the
"High Political Channel" in demanding
the secrecy described above are not
clear to the Fluor Team, the authenticity
FORD : 978839 LIBRARY
and authority of that channel is very
clear indeed.
-13-
B.
The "High Political Channel" Headed by Marshall
Yeh Chien-ying
As the U.S. government knows, Yeh Chien-ying is close
to Chairman Mao Tse-tung, Premier Chou En-lai and
Vice Premier Teng Hsiao-ping. Yeh is one of the
PRC's original marshals, a veteran of the Long March,
the Minister of Defense, and one of China's handful
of top leaders.
This group, which refers to itself with Fluor men
as "The Channel," is composed of the following
individuals, all of whom are involved in this project,
according to bits and pieces of information variously
told to Hoose; told to the Fluor Team leaders;
possibly inadvertantly or incidentally mentioned in
the course of discussions on other topics; and over-
heard by Hoose during (i) conversations by him with
known channel members variously inside China and in
Hongkong or (ii) in the course of telephone conversa-
tions in Hoose's presence, variously inside China and
in Hongkong:
Yeh Chien-ying (In charge of the PRC side of the
project negotiations, according to our sources).
We have been told told (by this Channel's members
Chen Hung, Sub-Manager of the Bank of China, Hongkong;
T. W. Shu, Assistant Manager, Bank of China, Hongkong
- who both secretly are senior men in China's "political"
group (probably intelligence) in Hongkong - and Lee
Pay-chu (P.C. Lee), a Hongkong Chinese positively
identified by three Fluor executives and Hoose in
China, as a pro-PRC civilian residing in Hongkong but
closely connected with Yeh Chien-ying's senior aide,
Wang Chen-chuan) that Premier Chou En-lai and Vice
Premier Teng Hsiao-ping also are actively involved in
the project planning. This last cannot be confirmed,
but is likely in the light of the range and nature of
the information Fluor is receiving via this Channel,
some of which has reached the Fluor Team weeks prior
to eventual receipt of the identical information or
news via Fok and the normal trade channels.
Wang Chen-chuan - A senior aide to Yeh Chien-ying in
Peking. This man is well known by Hoose and is known
also by three of the Fluor officers, who worked with
him for about three weeks in Peking, in 1974.
Wu (or Woo)
(Given names unknown, because he
is always referred to only as "Lao" (01d) Wu - an
affectionate and respectful Chinese usage). Wu is
FORD & LIBRARY 070839
Wang Chen-chuan's approximate equal in rank, and has
been in New York City in connection with the PRC UN
-14-
Wu (or Woo) (Continued)
Mission (February, 1975). He has been in New York
several times, travels relatively often between there
and Peking, and deals directly with Huang Hua.
He was on Lushan (Lu Mountain, Kiangsi Province) in
late June, 1975, and went from there to Hongkong
around the end of June, when he conferred with Lee
Pay-chu, Chen Hung and others in the Channel in a
large and luxurious house owned by the PRC on the
Peak in Hongkong and in another large and luxurious
house owned by the PRC on the "Kowloon Side,"
Hongkong. He told Lee Pay-chu, who told Hoose
(February, 1975) that the PRC owns "over 50%" of the
Henry Fok oil interests in Hongkong, which infor-
mation was confirmed to Fluor by Fok himself in
Hongkong, in May and June, 1975. Wu travels to and
from Peking, Kwangchow (Canton) and Hongkong relatively
frequently, and gives orders on high level PRC matters
to Chen Hung, known in Hongkong as the Sub-Manager of
the Bank of China. "Lao" Wu and his senior, "Lao Chu
(or Ju) through Lee Pay-chu told Hoose and Fluor that
the PRC has selected Henry Y.T. Fok (Ho Ying-tung)
as China's "Hongkong Patriot," to front for the PRC
in being the nominal owner and operator of the Hongkong
Refinery and Petrochemical Complex. Fok himself,
Chen Hung, and T.W. Shu (the latter two, of Bank of
China, Hongkong) confirmed that to Hoose, and Fok him-
self by his conduct and indirect remarks has confirmed
that to the Fluor Team leaders.
Chu (or Ju)
(Given names unknown, because he is
always referred to only as "Lao" (0ld) Chu - an
affectionate and respectful Chinese usage). This man
is immediately junior to Yeh Chien-ying and is the
immediate senior of Wang Chen-chuan and "Lao" Wu.
He is sixty-seven years old, and quite fat physically.
"Lao" Chu is directly in charge of the PRC side of
the negotiations, and gives frequent instructions to
Chen Hung (Bank of China, Hongkong), Yeh P'ing (China
Resources Co., but a "political man" and a very senior
Channel member, behind his "front" position as Deputy
Director of China Resources Co.), and Lee Pay-chu.
"Lao" Chu issues direct instructions to Wang Chen-chuan
and "Lao" Wu, and also communicates directly in
Peking, Kwangchow (Canton) and Hongkong, with the
Chinese civilian member of the Channel, Lee Pay-chu.
"Lao" Chu does not normally leave China, unlike his
lieutenant, "Lao" Wu, and seems to divide his time
almost equally between Peking and Kwangchow (Canton).
He attended a conference with other PRC leaders on
FORD is LIBRARY 038870
Lushan (Lu Mountain), Kiangsi Province, in late June
and early July, 1975. Chu sent Wu from Lushan to
Hongkong around the end of June, 1975, to obtain
specific information from the Fluor side, to be taken
-15-
to Peking for use by Vice Premier Teng Hsiao-ping
and Marshall Yeh Chiang-ying, in their high level
"struggle" about the project, with the small but
strong "Shanghai Group" of PRC leaders, who were
questioning Fluor's and the U.S.A.'s "probable
neo-colonial motives" in pushing (or supporting)
the project. Chu has been known of by Hoose since
1973, and is the PRC senior official who obtained
high level approval for Wang Chen-chuan to escort
Hoose at PRC expense on the trip to Shanghai and
Hangchow for ten days in 1974. Hoose has overheard
Lee Pay-chu talking on the telephone between Kwangchow
(Canton) and Peking, and between Hongkong and Peking,
several times - including occasions when the calls
were placed by Lee from Hoose's hotel rooms. The
conversations with the Chinese operators and with
the one called (Chu T'ung Chih, or "Comrade" Chu)
involved identifying statements; and some of the
calls included requests for specific information,
positions or approvals - with references to Marshall
Yeh - and were followed, variously within a few hours
or a few days - by the requested matters. Chu also
was described by Wang Chen-chuan to Hoose as "my
senior" and in similar terms, at various times in
1973-1974, in China. Among other things, on some
occasions Hoose's requested visa to enter the PRC on
business has been forthcoming within a few hours after
such telephone calls were made by Lee Pay-chu to
"Lao" Chu in Peking. "Lao" Chu should be readily
and specifically identifiable by the U.S. government
by his position - immediately junior to Yeh Chien-ying;
his areas - Peking and Kwangchow (Canton); his age -
67; the identities of his fully identified immediate
subordinates - Chen Hung and Yeh P'ing, in Hongkong;
and Wang Chen-chuan and "Lao" Wu, within the PRC and
(as to "Lao" Wu, only) in New York; and his areas
of responsibility - security; intelligence; military;
and the regulation of contacts with foreigners.
Chu has personally carried Fluor materials from Kwangchow
(Canton) to Marshall Yeh Chien-ying in Peking, and
conferred there also with Vice Premier Teng Hsiao-ping,
on the project (Hongkong Refinery and Petrochemical
Plant). These trips were in May, June and July, 1975.
H. Chen (Chen Hung), outwardly known as the Sub-
Manager, Bank of China, Hongkong. Actually, he also
is a senior member of the PRC "political" (intelligence)
group in Hongkong, and exercises considerable authority
as to the Fluor project. He communicates directly with
-16-
FORD is QUALID LIBRARI
Yeh Chien-ying, "Lao" Chu, "Lao" Wu, and Wang
Chen-chuan, in China, and is the most frequent
source of information or authority used by Lee
Pay-chu in Hongkong. H. Chen (Chen Hung) is
consulted about the project almost daily by
Lee Pay-chu, and apparently can obtain instructions
or information from either Yeh Chien-ying or "Lao"
Chu (varying with the importance of the need) within
a few hours after being asked to do so. Hoose has
discussed the Fluor project in Hongkong directly with
Chen Hung (July, 1975, was the last time). Two
possibly interesting notes: (i) The Hongkong colonial
authorities identify Chen Hung as a man with great
authority, in their own dealings with the PRC; and
(ii) Chen Hung and Hoose were schoomates in their
youth (the 1930's) at Peking American Highschool.
Chen Hung has changed his name since then, and like
most Chinese communists, does not like to acknowledge
his early American schooling.
Yeh P'ing, nominally just a Deputy Director of China
Resources Co., Hongkong (and in charge of the office).
Actually, he too is a senior member of the PRC's
"political" (intelligence) group in Hongkong, and with
Chen Hung he functions as the PRC "shadow PRC
government" of the pro-PRC Chinese residents in Hongkong.
This man also is heavily involved in the Fluor project,
but works in the background with Lee Pay-chu.
Lee Pay-chu (P.C. Lee), a Chinese businessman in
Hongkong. He was met by Hoose, among other places
(in the U.S. and in Hongkong) in the PRC, in direct
connection with Wang Chen-chuan, who identified Mr.
Lee as "my friend." Lee Pay-chu is a civilian, and
heavy exposure to him in the past three years has
convinced Hoose that Lee is not a member of the PRC
Channel, as such, but serves rather in a voluntary
capacity as a nongovernment volunteer motivated by
deep patriotism for his fatherland, the PRC. Lee
is a Northerner, from Paoting. He comes from a long
line of educated and wealthy traders, reaching back
generations to the silk routes across Asia. He
owned ten "factories and large outlets" devoted to
furs, silks and other textiles and goods, in 1949.
He "gave them to China,' he claims. During the war
against the Japanese, Lee was a guerilla fighter, and
became impressed by Chairman Mao and his supporters
in that period. P.C. Lee (on behalf of the PRC) was
a key figure in cooling the "disturbances" or pro-
PRC riots in Hongkong, during the so-called Great
Proletariat Cultural Revolution, in 1967, and handled
the settlement and cooling negotiations for the PRC
side through an English solicitor, George Stevenson
on the British side. The Fluor Team met Lee Pay Ru
FORD
in China in the Fall of 1973. In the subsequent
-17-
LIBRARY
February, 1974 Fluor Team visit to Peking, Wang
Chen-chuan identified Lee to the Fluor Team members
orally, as "my friend," and recommended that if Fluor
wished to have a Chinese work with them in their
business efforts with the PRC, Lee Pay-chu would be
"very suitable for that purpose." On other occasions,
Wang Chen-chuan similarly identified and recommended
Lee Pay-chu to Hoose, both in Kwangchow (Canton) and
in Peking. Lee Pay-chu interfaces with Hoose, in
the liaison work between the PRC and Fluor Corporation,
in this project. Lee is in direct contact on a
frequent basis with Yeh Chien-ying; "Lao" Chu;
"Lao" Wu; Wang Chen-chuan; and the various Hongkong
members of what they refer to as "the Channel." He
is involved almost full time with the project, works
most frequently directly with Hoose (but quite often
with Messrs. Ewert and Wuhrman, the Fluor Team Leader
and the Fluor Project Director, respectively). In
connection with this project and Fluor approaches to
the PRC, Hoose and Lee have been in Peking together
and in Kwangchow (Canton) together, Lee has gone alone
to Peking twice, and Lee has gone alone to Kwangchow
(Canton) many times, the most recent of which were
last week and again, yesterday (July 22nd-24th- and
July 28th-29th. To date, all of Lee's promises have
been kept and all of his reports have been confirmed
exactly by subsequent events. He is painstakingly
honest, scrupulously careful in his work, and so far
has been completely trustworthy in his dealings with
Hoose and Fluor. However, it must be borne in mind
that Lee Pay-chu is absolutely dedicated in his love
of China, and obedient to the directions of what he
calls "the Channel," by which he means everyone working
for Marshall Yeh Chien-ying. Where China's national
interests and our American national interests are in
opposition, Lee cannot be relied upon at all by the
American side, of course. He is aware that Hoose feels
exactly the same way, but in reverse, and that he
cannot rely at all on Hoose as to anything which may
not serve the national interests of the U.S. However,
the working bond between Lee and Hoose is their commonly
shared respect for individual Chinese and the non-
communist aspects of Chinese culture, and above all,
Lee and Hoose share a common grave concern about the
steadily growing USSR military threat to both the U.S.
and China, and the hope that cautiously increased
Sino-American relationships may provide one of the
answers to the USSR military threats, eventually, if
that answer continues to be in the respective national
interests both of the U.S. and of China. This section
has been handled in detail, because the Lee-Hoose
cooperation has been and can continue to be of value
to the project and to the U.S., in view of Lee's
FORD
powerful PRC connections and Hoose's various contacts
in our own governments
LIBRARY
-18-
3.
Secret Informal Decision by the People's Republic of
China (PRC) to Proceed with the Hongkong Project
Fluor's A.C. Ewert, Jr., Vice President, International
Sales (Fluor Negotiating Team Leader, in the work with
the PRC), Charles M. Wuhrman, Executive Manager, Projects
(Project Director for this project, and the Leader of
the Fluor Technical Team for this project) and Harned
Pettus Hoose, all have been told the following by Lee
Pay-chu, and key portions of the following also have
been confirmed to Hoose by Chen Hung, another member of
the "High Political Channel," which is referred to by
its members as "the Channel." Note that the following
dovetails with and supports, in greater detail, the
comments and reports to Fluor by members of the PRC normal
trading channels, reported above (Paragraph (5), page 10,
hereinabove).
A. With the "approval of Chairman Mao," Premier Chou
En-lai, Vice Premier Teng Hsiao-ping and Marshall
Yeh Chien-ying, Minister of Defense (among other key
positions), together with their senior colleagues,
have decided to proceed with the Fluor plan for the
PRC to construct, own and operate (through its Hongkong
Chinese "Patriots"), the Hongkong Refinery and
Petrochemical Complex, and to allocate the necessary
B. A public announcement will be made either (i) soon
after President Ford's visit to Peking, if the PRC -
U.S. relations continue to be friendly and if no
unexpected difficulties arise before then, either
within China or externally, or (ii) earlier than the
President's visit to Peking, if the U.S. can provide
the PRC with some "suitable" trigger device, i.e. some
propaganda excuse for China to use with own senior
cadre groups and people internally, and with its allies,
externally.
1. The so-called trigger device is needed by China's
leaders as an excuse for an early announcement of
the project, and for documenting it and proceed-
ing publicly with its implementation. If no such
trigger device can be forthcoming, then the PRC
will use President Ford's visit to Peking (if the
result is generally constructive) as the necessary
excuse for the announcement and implementation,
pursuant to the Shanghai Communiqué of February,
1972 and its provisions as to trade and business
between the two countries.
-19-
2. The trigger device definitely does not have to
include recognition, the exchange of ambassadors,
the abrogation of our treaty with Taiwan, or any
such grave extreme and controversial step. It will
be sufficient if President Ford can just initiate
or announce the beginning of procedures to do one
or more of the following:
a. Make Most Favored Nation status available to the
PRC. In this connection, the PRC representatives
showed some familiarity with our laws, and with
the limitations upon the President's powers to
effect such status as to the PRC. The request
was simply that there be an announcement of
this Administration's policy favoring MFN for
the PRC, and initiating the formal procedures: or
b. Resolve the blocked funds and frozen assets
problem. Here, the suggestion was that the U.S.,
by itself, "take the first step," and then that
China, too, will comply on its side and will
reciprocate. That portion of the message is
not intelligible to the Fluor people, because
they do not know the precise status of this item: or
Co Remove all U.S. armed forces from Taiwan.
Here it was stressed that at this point and for
the limited purpòses involved (to enable the
PRC to proceed with the project, at an early
date), it would not be necessary to do anything
further at this time with respect to Taiwan: or
d. Make some other "similar" token friendly and
public gesture, of at least "some substance,"
with respect to the PRC. Such a gesture should
be designed to be suitable as an excuse for the
PRC leaders to use with its people and allies,
for the major steps and apparent shifts in
previously announced PRC policy inherent in an
early public announcement and the implementation
of the Hongkong project.
C. Evolution of the Affirmative Decision, Within the PRC
The PRC desire to construct, own and operate a major
refinery and petrochemical complex in Hongkong and to
supply it with Chinese feedstocks (crude oil, gas, etc.)
was formulated early in February, 1975, by the Yeh
Chien-ying group in Peking, in response to inquiries
by Fluor Corporation transmitted to the PRC via Hoose
and Lee Pay-chu. Approval for study of the matter
2.
FORD
was obtained from Chairman Mao Tse-tung, Premier Chouo GERAID
-20-
LIBRARY
En-lai and Vice Premier Teng Hsiao-ping, soon there-
after. The Fluor Corporation's conceptual proposals
were secretly solicited by the Yeh Chien-ying channel
through Lee Pay-chu and Hoose, the latter of whom the
Yeh Chien-ying group knew about through prior communi-
cations on other matters and also whom some of the
Yeh Chien-ying channel members knew personally.
Directions were given to Fluor Corporation via Lee and
Hoose, as to the nature of the proposals desired, their
due date, and the procedures for delivering the proposals
to the PRC. Also, via those channels, Fluor was told
to deal with Henry Y. T. Fok (Ho Ying-tung), the so-
called PRC "Patriot" in Hongkong. Fok was told by the
PRC authorities with whom he regularly works, to accept
the Fluor materials and to transmit them to the PRC via
Fok's standard PRC State trading corporation channels.
Meanwhile, copies also were transmitted directly to
Yeh Chien-ying and his close senior associates in Peking,
via his special channels. Fok also went to Peking for
consultations on the matter.
A continuous flow of materials pertaining to Fluor's
conceptual proposals, financing and business aspects
was conveyed to Peking from Hongkong and Los Angeles,
(i) via Henry Y. T. Fok and the normal PRC State trading
corporation channels and (ii) without Fok's knowledge,
also via the special Yeh Chien-ying channels, directly
to Yeh Chien-ying, Chou En-lai and Teng Hsiao-ping.
During April, May and part of June, 1975, the Yeh
Chien-ying and Teng Hsiao-ping group in the PRC variously
prepared its senior colleagues for very high level and
secret discussions about the Hongkong project. Their
opposition in the PRC government at first was not in-
formed. In June, the Hongkong project was presented
openly to the PRC highest leadership group, including the
opposition. A secret struggle ensued.
In late June, the Yeh Chien-ying group sent a high level
representative ("Lao" Wu) from Lushan (Lu Mountain, in
Kiangsi Province) to Hongkong, to request Lee Pay-chu
and Hoose to prepare and provide the Yeh Chien-ying
group as soon as possible with detailed commentaries
as to the "inner motivations" of Fluor Corporation,
the U.S. government and the Hongkong U.K. authorities,
in respectively proposing or supporting such a project,
and as to whether some "neocolonial" trick or inter-
national economic power play might be involved. The
commentary was prepared, discussing the various innocent
and sincere (though business-motivated) purposes of
Fluor Corporation, its consortium colleagues, the U.S.
=
and the Hongkong authorities; and the commentary was
FORD
transmitted by Hoose and Lee via the senior Yeh Chien
ying channel member, "Lao" Chu, to Yeh Chien-ying and
GERALD
LISA
-21-
Teng Hsiao-ping in Peking. The Yeh Chien-ying channel
members in Hongkong told Hoose and Lee Pay-chu that
the commentary as to inner motives was urgently needed
for Chou En-lai's, Teng Hsiao-ping's and Yeh Chien-ying's
use in contending with the questions raised in the
then current struggle with their very senior opposition,
i.e., "the Shanghai group," as the PRC sometimes calls
what some Western commentators variously call the
"radicals," "the extremists" or "the Madame Mao group."
The opposition, Lee and Hoose were told, had raised
questions as to whether the Fluor, U.S. and Hongkong
authorities were sincere, or whether on the other hand
some "neocolonial and imperialist conspiracy" against
the PRC was the underlying motive.
In early July and again in mid-July, Fluor and Hoose
were told secretly by the Yeh Chien-ying channel that
the supporters of the project (Chou En-lai, Teng Hsiao-
ping and Yeh Chien-ying) had prevailed; that "a green
light for the project had been obtained;" that the
project had been secretly and informally approved, at
the highest level; and that the project would be formally
approved and implemented, eventually, when and in the
manner reported hereinabove (See Paragraph 3, pages 19-20,
above).
At that time, Fluor and Hoose were told that the public
announcements and the implementation could be advanced
to a date prior to President Ford's visit to Peking,
if the U.S. government could provide some "token public
trigger advice," as is reported in detail in 3. B., pages
19-20, hereinabove. Fluor and Hoose were told that the
project and the affirmative decision continue to be
secrets, even within the PRC and in all governmental and
diplomatic "circles," excepting only among the very
highest leaders. Fluor and Hoose were told that the
PRC now will begin to prepare its people and allies.
Possibly by coincidence or possibly as part of that
preparation, a PRC-controlled Chinese newspaper in Hongkong
in mid-July published a comment by its editor, in sub-
stance stating that Hongkong should take concrete steps
to seek involvement in processing and using PRC crude
oil, and commenting on the many advantages which would
result from such steps. That PRC-controlled newspaper
commentary was published well before the UK-published
Economist magazine appeared in Hongkong, urging something
of the same sort, so the PRC-controlled commentary could
not have been prompted by that UK source and must have
been prompted, if at all, by a PRC source. We cannot
evaluate the PRC-controlled commentary precisely, of
course. But it is well known that the PRC press does
act independently of the PRC government.
-22-
GERALD nord LIBRABA
4.
In Addition to and Apart from the Fluor and PRC Hongkong
Project Information and Inquiries Conveyed Via the Yeh
Chien-ying Channel, That Channel Very Recently Has Conveyed
the Following Important Messages to Hoose, to be Relayed
by Hoose to President Ford:
Certain Oral Messages from Yeh Chien-ying and
His Group, With Respect to Informal and Off-the-
Record Suggestions and Inquiries as to Possible
Solution of the U.S. - PRC Problems, Including
the Taiwan Question.
The Oral Messages and Inquiries Are Secret,
and Hoose Promised the Yeh Chien-ying Channel
That:
A. They Would Be Kept Secret, Excepting
from the President and His Most Senior
Relevant Assistants; and
B. That Hoose would Do His Utmost to
Deliver Them as Soon as Possible and
in a Manner That Will Assure Their
Receipt by the President, Himself
In View of the Messages' Subject Matter, Contents,
Origin and Intended Recipient, of Course Their
Contents Are Not Known to Fluor Corporation.
However, the Fluor Team Leaders Were Told by
One of the Yeh Chien-ying Channel Members That
Such Messages from Them to President Ford Have
Been Given to Hoose, Although Their Contents
Cannot Be Disclosed to Fluor Corporation
As some of the National Security Council current and past
senior officials know, including Al Haig and perhaps in
somewhat less detail, Brent Scowcroft, during the past three
years and in connection with Hoose's nine business trips in
the PRC involving in all almost a year in China, Hoose has
developed close contacts with the group of "political
cadres" (probably intelligence-related men in the PRC) now
identified as the Yeh Chien-ying group.
Prior Secret memoranda by Hoose to the White House from time
to time in the past three years and particularly when Al
Haig was the Deputy Assistant to the President for National
Security Affairs, and then Chief of Staff, White House,
reflect Hoose's earlier voluntary reports, as a loyal and
patriotic American, as to this element among his PRC business
contacts.
That element, through Wang Chen-chuan, a senior aide to
Yeh Chien-ying, was Hoose's host during his 1973-74 jourhles
in the PRC, as the guest of the PRC government. That
FORD LIBRARY
-23-
element has been involved in most of Hoose's major
business transactions with the People's Republic of
China in the past three years. For example, in Hoose's
successful settlement of the major business dispute
between Seabrook Foods, Inc. and the Insurance Company
of North America, Hoose's clients, and the PRC trading
corporation, China National Cereals, Oils and Foodstuffs
Import and Export Corporation, last February, 1975,
Hoose was assisted in working out a compromise resolution
which was very favorable to the U.S. side of the
dispute, by top PRC intervention in the dispute,
brought about through the Yeh Chien-ying channel.
Further, and as an example, the Fluor Team received
a great deal of assistance in its negotiations in
Peking, from Hoose's contact, Wang Chen-chuan, who
personally entered the meetings and took part.
Another example was the obtaining of important contract
concessions for another of Hoose's clients, Hercules
Corporation, through the assistance of one of the
Yeh Chien-ying channel members in Peking, in February
and March, 1974.
All of the above examples happened to involve the
national economic interests of the PRC, in the view
of the Yeh Chien-ying group, and so assistance was
extended at a very high level, and the results were
excellent for the U.S. business entities involved at the
time. However, in each instance the lower echelons of
PRC trading companies initially involved had not per-
ceived the PRC national interest, and were not cooperating.
These few examples of many more incidents in the past
three years are cited for the purpose of reflecting the
proven authenticity and great authority of the Yeh
Chien-ying group, and its ability to speak for the
highest levels of the PRC government. The issues involved
were not daily or routine matters. Their special
resolution required very high authority. For example,
in the Seabrook Foods, Inc. - Insurance Company of
North America dispute with the PRC, the settlement
obtained for the American side by Hoose, with the assistance
of his contacts in the Yeh Chien-ying group, involved
receipt by the Americans of a settlement valued at more
than US$ one million. It takes enormous authority in
the PRC to authorize such a settlement. These commercial
incidents are concrete examples of the fact that the
Yeh Chien-ying group does have that enormous authority,
and can speak for the top level of PRC government.
That demonstrated authority should be borne in mind, in
evaluating the authenticity of the current oral message
conveyed by the Yeh Chien-ying group to President Ford,
via Hoose.
-24m
FORD : LIBRARY 070829
On the governmental messages level, from time to time
Hoose has received various comments, expressions of
views, and the like, from the Yeh Chien-ying group
in the PRC, which Hoose has understood to have been
intended by the speaker or speakers to be a "message,"
"inquiry," or sort of trial balloon, designed to be
transmitted by Hoose to White House, State or Commerce
officials with whom Hoose has been in touch, from time
to time, as a voluntary nongovernmental advisor.
The topics of some of those various comments, expressions
of views, and the like, have ranged from the sometimes
trivial, through subjects of some economic or trade
information value, up to what Hoose has believed were
matters sometimes vitally affecting the U.S. national
interests.
In each instance and providing, of course, that no client
confidences were involved, as a patriotic and loyal
American, Hoose took pains at his own expense and without
seeking or expecting any reward, to convey the supposed
comments, expressions of view, or message, to an
appropriate U.S. governmental official. Many such
reports have been delivered orally by Hoose to Al Haig,
during the periods indicated and when General Haig was
in a position to handle them, when he was Deputy Assistant
for National Security Affairs and later, when he was
Chief of Staff, White House. Two or three such reports
were made by Hoose to Brent Scowcroft. Others have been
made to individuals variously at State, Commerce and at
the National Security Council or at the U.S. Liaison
Office in Peking.
In 1974, at the specific and express request of a senior
member of the Yeh Chien-ying group (then calling itself
only a "Very senior PRC government group"), Hoose carried
an informal off-the-record but very specific message
and inquiry from the PRC to President Nixon. The
contents of that message were and are secret, and will
not be stated here. Hoose delivered the message to
Al Haig, who indicated he would transmit it directly
to President Nixon. There is absolutely no question as
to the authenticity of that message. Its source and
contents alone confirmed that, in addition to certain
other factors. As it happened, and perhaps. in some
small degree because Hoose, himself SO advised (in
addition to the independent determination in that regard
by President Nixon and his Assistants), that particular
message was ignored and thereby rejected by President,
sub silentio. Even to have answered it might have
prejudiced our relations with third nations. However,
the very content of the message, itself, was of some
value to the U.S. in the strategic informational areas.
-25-
The above information is provided here, because there
is a natural human tendency, which is admirable of
course when grave international matters are involved,
to place a very heavy burdon of proof on one who is
a citizen, without official portfolio, who offers his
government and his country an oral message of grave
import from the leaders of another nation. That is
especially the case where, as here, we do have some
official contacts with that other nation. That
properly cautious tendency on the part of our U.S.
government may be all the more accentuated where, as
here, a change of administration has taken place and
some key positions have changed.
Hoose accepts the heavy burden of proof. The fact is
that he has been entrusted this time with a very
important informal and off-the-record oral message from
the Yeh Chien-ying and Teng Hsiao-ping group in the
PRC, for President Ford. Its subject matter and content
are extremely important. It should be heard by
President Ford, and in any event it must be delivered
in such a manner and to a sufficiently senior and
responsible U.S. governmental official, as to assure
that it will be called to the President's attention.
This time the message involves informal inquiries,
suggestions and messages, in "trial balloon" form, which
Hoose believes might offer a good solution to the
U.S. - PRC problems, including the Taiwan problem.
Hoose urgently requests an opportunity to deliver the
message as and when appropriate, and in a manner that
will enable Hoose to report to the Yeh Chien-ying group
that their important message has been delivered to
President Ford.
The Chinese Reasons for Conveying an Important
Oral Message from the PRC Government to Our
President, Via a U.S. Civilian, Without Official
Portfolio, Rather Than Via the Usual Diplomatic
Channels or Via Some Officially Recognized Channel
Some private China experts andsome U.S. govern-
mental officials who may not be familiar with the
thought processes and inner attitudes of the PRC
Chinese may wonder why they would convey even informal
and off-the-record messages and inquiries via a
civilian without any official status and without
portfolio, when we have a number of official contacts,
including the Liaison Offices in Washington, D.C. and
Peking.
However, to those who really are familiar with
is
FORD
the Chinese, on the basis of a lifetime among them
perhaps rather than through scholarly studies, the
GERALD
-26-
answer is obvious:
The use of a middleman is traditional among the
Chinese, and is particularly in vogue now, with the
political and ideological uncertainties and many
pitfalls inherent in a "continuing revolution,' in
which approved viewpoints and positions change often,
and only the most agile can survive by avoiding taking
any dangerous positions.
For thousands of years and particularly since the
PRC revolution and an apparently unending series of
"movements," with the PRC's many internal conflicts
and high level struggles, the Chinese have used middle-
men and unofficial go-betweens to float trial balloons
and make preliminary inquiries which could be disclaimed
if rejected, to preserve the principals' political or
even physical skins; to save face, when a negative
response or disinterest is ascertained in advance, by
then avoiding presenting the question openly; and to
establish in advance of any confrontation, the dignified
and safe boundaries of what is and is not feasible
between two different principals who are about to meet
face-to-face.
As is required by the Chinese generally of a
prospective middleman, and as they view Hoose in this
case, he meets the necessary criteria to convey "trial
balloon" inquiries and suggestions by the PRC to President
Ford:
(1) Hoose thoroughly understands the Chinese, their
language and their feelings, perhaps as only one who was
born and grew up among them and is bi-cultural as to
China and the U.S. can.
(2) Hoose can be trusted to be accurate, without
injecting his personal feelings or interpretations.
(3) Hoose respects the Chinese, individually, and
respects the non-communistic aspects of their culture.
(4) Hoose has a proven record of maintaining total
confidentiality, and if the results of the communication
are either that it is ignored or that it is-rejected,
Hoose will not humiliate the senders by disclosing to
the press or from some platform that he conveyed the
message. The matter simply dies.
(5) Hoose is known both by the PRC and in the U.S.
as being strongly anti-communist and absolutely loyal
to the U.S., and therefore can be trusted also by the
-27-
recipient of the message and inquiry.
(6) Hoose has had some access to the White House
and to some other high U.S. officials, and has a
potential for effecting the desired delivery.
The above points provide the Chinese attitudes with respect
to the oral messages Hoose has been given to convey to the
President.
From the American point of view, Hoose is a former (World
War II) Naval Intelligence officer, with an established
record for great loyalty to the U.S., and a deep love for
America. His Naval File is: Lieut. Harned Pettus Hoose, USNR,
S(I), File No. 212334. His integrity may be known to some
in the U.S. government, and can be confirmed if desired, by
General Alexander Haig, among others. Perhaps John Holdridge
may have sufficient familiarity with Hoose's record, in
voluntarily serving the U.S., in recent years. Hoose is
a reputable lawyer, relatively well known in Los Angeles,
and enjoys an "A-V" top rating in the national independent
rating system, Martindale-Hubbell. He has practised law
very successfully for over twenty-five years, and represents
a number of U.S. corporations numbered among "Fortune's 500."
He is a former Chairman of the Board of Trustees of the
Westwood Community Methodist Church, one of Los Angeles'
largest churchès; a former holder of a number of offices
and responsibilities in the State Bar of California, the
Beverly Hills Bar Association and the Los Angeles Bar
Association; is admitted to practice before the U.S. Supreme
Court; is a Member of the American Legion; and has been
selected for inclusion in the next issue of Who's Who.
Because many of the addressees and potential readers of this
memorandum have never heard of Hoose and know little or
nothing about him, the above items are included here to
meet some of our American criteria, in evaluating Hoose's
potential for carrying important oral messages accurately
and with integrity.
As a loyal and patriotic American, Hoose urgently requests
an opportunity to deliver the message from the PRC's senior
governmental officials to President Ford.
5.
Description of the Fluor and PRC Project (Hongkong Refinery
and Petrochemical Complex) and of the U.S. Consortium Headed
by Fluor Corporation
A. The Project
The Hongkong Refinery and Petrochemical Complex will be
the largest of its kind in the world and will be designed
and constructed on world scale proportions to process
SERALD
LIBRARY
-28-
about 42,000 metric tons of Chinese crude oil per day
or approximately 14,000,000 metric tons of Chinese crude
oil per year. The complex will be capable of producing
a broad slate of products, including fertilizers,
olefins and aromatics, in substantial amounts. The
feedstocks supplied by China to the complex will include
natural gas, in addition to crude oil and other feed-
stocks. The petroleum and petrochemical products from
the refinery and petrochemical complex will be used
within China, in Hongkong and also for export to world
markets.
The PRC will own and operate the refinery and complex,
probably through its Chinese Hongkong resident " Patriots,"
who will front for the PRC in financing the project,
participating to some degree with Fluor in the engineer-
ing and construction, participating to some extent with
the U.S. operating participants in operating the facility
during the financing pay-back period and operating the
complex alone thereafter, and marketing the products not
used within China.
Depending on the final selections by the PRC of facility
units and product slates, the cost to the PRC or its
"front" owners will range from US$4.5 billion to US$7
billion.
The facility will be located in Hongkong's New Terri-
tories, with convenient access to gas and crude oil from
the PRC, power, ocean approaches, Pearl River barge
traffic from crude oil sources in Kwangtung Province,
pipelines from China into Hongkong's New Territories,
and Hongkong's connections with international financing
and marketing networks.
It is anticipated that a Preliminary Study will be
effected by Fluor Corporation, commencing immediately
after the public announcement, and extending for about
six months. Thereafter, engineering and construction
will take approximately four years.
B. The U.S. Consortium
(1) The Consortium is Led by Fluor Corporation
Fluor Corporation initiated the discussions
and negotiations with the PRC, after a three
year marketing campaign, numerous trips to
the PRC by its representative, Hoose, and two
quite long working visits to Kwangchow (Canton)
and Peking, respectively in 1973 and 1974, by teams.
In 1975, the Fluor Team assigned to this
project at this stage has worked almost con-
stantly on Fluor's conceptual proposals and
in explaining and enlarging them for the PRC
GERAL
LIBRARY
side.
-29-
Fluor Corporation is widely known as the
largest heavy-engineering firm in the world,
and is a major contractor on the Alaska pipe-
line project, among other Iarge assignments
currently under way. Fluor's background and
status were succinctly reported in the follow-
ing item which appeared in Newsweek, International
Edition, July 7, 1975, page 34:
"Fluor Corp. Wins Iranian Refinery Contract
Barely two weeks after it landed a multibillion
deal to develop Saudi Arabia's natural gas
industry, Fluor Corp. of Los Angeles, Calif.,
has won a contract to design and build a $750
million refinery complex in Iran. The new
agreement, a joint venture between a Fluor
subsidiary, Fluor Atlantic Ltd., and West
Germany's Thssen Rheinstahl Technik GmbH.
will provide the National Iranian Oil Co. with
a 0,000-barrel-a-day facility that will
produce gasoline, kerosene, jet fuel, liquified
petroleum gas and solvents, plus sulfur as a
byproduct. Fluor, whose annual turnover last
year was $801 million, has risen in recent years
to become the largest heavy-engineering firm
in the world and now has a backlog of orders
that stands at $10 billion."
J. Robert Fluor is Chairman of the Board of Fluor
Corporation, and also is a member of President
Ford's Export Council. David S. Tappan, Jr., is
President of Fluor Engineers and Constructors, Inc.
The Fluor Team in the current discussions and nego-
tiations with the PRC is led by A. C. Ewert, Vice
President, International Sales. Charles M. Wuhrman,
Executive Manager, Projects, is the Project Director.
(2) Other Members of the Consortium Selected To Date
The requirement of absolute secrecy exacted of
Fluor by the PRC has resulted in a decision to
proceed with great caution and only on a limited
basis, for the present, with the organization of
the consortium. Although the consortium eventually
will have to be larger and will include additional
major corporate entities, which in turn will draw
upon the products and services of a broad range of
U.S. industry and labor, only the key financial
participants and operating participants have been
involved to date. All communications between Fluor
Corporation and them have been limited to the
Chairman or corporate Presidential level only, to
safeguard confidentiality. Those key financial and
operating participants are:
-30-
GERALD
LIBRARY
Phillips Petroleum Company - By Wm. C. Douce,
President
Union Carbide Corporation - By F. Perry Wilson,
Chairman of the Board
Note: F. Perry Wilson, also (as is J.
Robert Fluor) is a member of
President Ford's Export Council.
Bank of America - By Chauncy J. Medberry, III,
Chairman of the Board
The Chase Manhattan Bank - By David Rockefeller,
Chairman of the Board
6.
The Project Will Have a Very Substantial Affirmative Impact
Upon the U.S. Economy, Industry and Labor
During the construction and financing pay-back periods, the
project will gain the U.S. a US$13.6 billion balance of pay-
ments credit.
The value of U.S. components of goods and services for the
project ranges from US$3.9 billion as a minimum, through
US$5 billion as a probable amount, to a maximum of US$5.5
billion. For example, the project will require 2,800 miles
of pipe; 360,000 valves; 5,000 pumps; 200,000 instruments;
10,000 electric motors; 3,400 large towers, drums and
storage tanks; and 47,000 miles of electrical wire.
The U.S. will have the opportunity to supply US$3.6 billion
worth of raw materials for the project. Fluor estimates
that during the initial operating period of the complex,
during which the financing will be repaid (10 to 12 years),
the interest earnings for funds advanced for construction
will provide an additional US$5 billion to the U.S. balance
of payments.
The complex will provide for the continuing employment of
140,000 man-years of labor in the U.S., and considering the
multiplier effect, the continuing employment generated by
the complex - in the U.S. - could be the equivalent of
560,000 man-years of employment.
Shipping the U.S. equipment and construction materials to
Hongkong will provide availability of continuous employment
for approximately 44 ships per year for a four year period.
During the initial period of operation, there will be a
requirement to employ about 17 ships continuously per year FUND
-31-
GERALD
LIBRARY
7.
An Alternate Source of Petroleum and Petrochemical Products
Will Be Available to the U.S. and Its Allies, Through the
Hongkong Complex Supplied by Chinese Crude Oil and Natural Gas
When this new Hongkong Refinery and Petrochemical Complex
is completed, it will provide an alternate source of petroleum
and petrochemical products for the industries of the U.S.,
Japan, Hongkong and others, derived from the surplus products
not used by the PRC and sold on world markets. This sub-
stantial new alternate source, with Americans involved as
engineers, constructors, suppliers of technology, equipment
and materials, and as operating participants, will provide
a negating factor for potential petrochemical material boy-
cotts by Middle Eastern and other countries.
8.
Beneficial Defense, Strategic, International Power Balance,
and Political Implications for the U.S.
Fluor Corporation, of course, is a business entity. It
should not and does not become involved in international
affairs, which of course are a province of governments,
although unavoidably Fluor's international and often major
projects may impinge upon international and geopolitical
matters.
However, Fluor Corporation is led by and composed in large
measure of loyal and patriotic American citizens, who are
generally aware of certain advantages to the U.S. in the
areas indicated in the title to this Section of the memorandum,
which will result from the successful completion and operation
of the Hongkong project.
Those advantages will be readily apparent to the U.S. govern-
ment, which is directly concerned with and responsible for
such things. The advantages of the defense, strategic,
international power balance and political natures which will
flow to the U.S. from this Fluor project with the PRC, include:
A. Effecting a major commercial enterprise involving
U.S. private industry and labor with the PRC, in
what the Chinese like to call "the spirit of the
Shanghai Communiqué of February, 1972, and thereby
advancing the implementation of U.S. - PRC trade
and business relations, on a scale which greatly
exceeds the entire trade both ways between the U.S.
and the PRC since 1972.
B. Balancing our detente with the USSR and its related
trade and other aspects, with a very large trade
and business transaction with the PRC, with the
resultant impact upon (i) the PRC's allies in Asia,
and the discouragement they will experience as to
their hopes for PRC support against the U.S.A.,
example, in Korea, and elsewhere; (ii) the PRC,
-32-
LIBRARY
which will have a very large economic and financial
stake in continuing its improving relations with the
U.S., and will be reassured also as to the U.S.'s
steps in our detente with the USSR; (iii) the USSR,
which may be made somewhat more cautious in its
own foreign policy and more faithful in its per-
formance of obligations to the U.S., by the knowledge
that the U.S. - PRC relations also are progressing
well, on a large scale; and (iv) the American public,
especially in this pre-election period, when the
occasional critics of our foreign policies and of our
administration's domestic economic policies will be
confronted with a very substantial offsetting move
between the U.S. and the PRC, more closely balancing
those involving the USSR, which at the same time
provides significant domestic economic advantages,
affirmatively and substantially affecting U.S. industry
and employment.
C. The military and defense implications of having a
substantial part of the PRC's oil refining and petro-
chemical manufacturing industry concentrated in
Hongkong, where there is ready access by sea and
where the general political situation is friendly to
the U.S. This advantage to the U.S. and its allies
is one of the prices apparently accepted by Marshall
Yeh Chien-ying and his group, in their desire to locate
the PRC complex on British soil (Hongkong), where it
will be operated in part by U.S. industry, and there-
fore where (the Yeh Chien-ying channel has said to
Hoose), the USSR would be very hesitant to interfere
with it, even in the event of war between the USSR and
the PRC.
D. The strategic implications of the availability of a
major petroleum source in the South China Sea area,
relatively near the East Asian, Pacific and Indian
Ocean U.S. strategic zones and yet suitably remote
from the Mid-East and the USSR, where the U.S. bases
including Diego Garcia can have a potential source
of fuels to offset the present Mid-Eastern near
monopoly in that regard, in those areas.
E. The U.S. intelligence implications inherent in a
U.S. - PRC project involving the PRC's energy materials,
their availability and reserves, the mechanics of
their transportation and distribution, and the
identities of the PRC personnel involved.
9.
The Hongkong Colonial Authorities Have Secretly Granted Their
Preliminary Approval of the Project, and Have Informally
Assured Fluor Corporation That The Necessary Sites Will Be
Held Available for the Refinery and Petrochemical Complex
-33-
The Fluor Team leaders and Hoose have consulted at some
length twice, on an off-the-record and secret basis, with
the Hon. J. J. Robson, Secretary of the Environment, of
the Hongkong Colonial Government. He has jurisdiction as
to the sites, and is one of the senior officials in Hongkong
whose approval is required. He reports directly to the
Governor and to the Colonial Secretary of Hongkong, who
together constitute the real and almost entirely authoritative
government of the Royal Crown Colony of Hongkong.
By express oral "gentlemen's agreement" between Mr. Robson
and the Fluor men, it is understood that during this period
of absolute secrecy exacted by the PRC, only Mr. Robson,
the Governor and the Colonial Secretary in Hongkong are and
shall be aware of the secret negotiations between the U.S.
consortium led by Fluor Corporation, and the PRC. Apart
from those three Hongkong officials, we understand that
Whitehall in London has been advised, also on a secret basis.
Secret inquiries from that source in the UK may be expected,
if they have not already been received by the U.S. government.
In that connection, Fluor Corporation has called the atten-
tion of Mr. J. J. Robson to the following portion of
the Hon. Lester E. Edmond's (Deputy Assistant Secretary,
Bureau of East Asian and Pacific Affairs, U.S. Department
of State) March 26, 1975 letter to J. Robert Fluor, Chairman
of Fluor Corporation, with respect to the project:
"Since the refinery would be located in Hong
Kong, the project would of course require the
blessing of the local government authorities.
In the absence of such an endorsement, and in
the present, very preliminary, stage, we believe
it is a little too early for us to provide any
definitive views." (The balance of the letter
cites the Shanghai Communiqué, and indicates
the U.S. government's view that the Fluor
initiatives with respect to the project are
fully consistent with the commitment undertaken
by both sides in the Shanghai Communiqué "to
facilitate the progressive development of trade
between (our) two countries.") (Emphasis added)
Fluor's purpose in calling that portion of the U.S. Depart-
ment of State's letter to Mr. J. J. Robson's attention was
Fluor's desire to make sure that the U.S. government's
correct deference to the desires of the Hongkong authorities
with respect to the project to be built in the Colony,
were understood by the Hongkong authorities, and would be
included in any Secret communications on the subject between
the Governor of Hongkong and Whitehall.
Through Mr. J. J. Robson, Fluor has been advised (i) that
FORD is LIBRARY GERATO
-34-
the project will receive the formal blessing of the Hongkong
government, when such blessing is formally requested by the
PRC or its "Hongkong Patriots" who will front for the PRC
in the transaction, provided that an established and
reputable engineering and construction firm, such as and
specifically including Fluor Corporation, is to handle
the construction, and further provided that at least initially,
the same calibre of U.S. operating participants, such as
and specifically including Phillips Petroleum Company and
Union Carbide Corporation, will oversee the operations of
the complex at least in its initial years of operation -
to assure high standards and thereby to protect Hongkong's
interests, including the regular and profitable receipt by
the Hongkong government, of the rentals for the site (based
on "throughput"); and (ii) that two different potential sites
under consideration by Fluor and the PRC, both in Hongkong's
New Territories, will be held available for a reasonable
time while the secret negotiations between Fluor and the PRC
continue.
The above was reported by Fluor to the U.S. Consul General
in Hongkong, who at the suggestion of the U.S. Department of
State, personally has been kept advised by Fluor as to its
progress. He is on standby to assist Fluor in meeting the
Governor to discuss the project, when the PRC is ready to
have the matter become public.
Mr. J. J. Robson also has commented informally and off-the-
record to the Fluor Team leaders and Hoose, that although
the Hongkong government would prefer todeal with some pro-
PRC Chinese individual or group in Hongkong other than Mr.
Henry Y. T. Fok (Ho Ying-tung), because (i) of his record as
a cold war smuggler against the U.S. and the UK and because
(ii) of his extreme loyalty to and close connections with the
PRC, nevertheless since the PRC has designated Fok as its
desired "front" (as he is already as to the PRC's other
petroleum business activities in Hongkong, and as he is in
part in his sand monopoly business with the Hongkong authori-
ties and in regard to the Hongkong Shatien area and Tsingyi
Island petroleum storage depots (really owned by the PRC)
which are now being constructed), and because the Hongkong
authorities want to cooperate with the PRC and also greatly
desire the project, the Hongkong government will acquiesce
in and will support Henry Y. T. Fok's (Ho Ying-tung's)
involvement in the project.
Very much off-the-record, and as a personal communication
only (not to be attributed to the Hongkong government, under
any circumstances), J. J. Robson has indicated to one of
Fluor's English contacts with him, that the Hongkong govern-
ment might give some thought to granting some local honors
to Mr. Fok, for the purpose of trying to make him somewhat
-35-
FORD i LIBRARY
more acceptable to Hongkong's loyal (to the Colonial
government) Chinese, by the time the project becomes
known to the public. At that time, a series of somewhat
"rubber stamp" public meetings about the project will have
to be conducted by the advisory entities which serve under
the Governor. Many of the members of those advisory
entities are Chinese whom the UK has knighted or otherwise
honored, from time to time. Although the advisory entities
apparently would not have the raw power to stop the
Hongkong government in its approval of the project, they
might cause difficult press comment and some unrest among
the pro-UK Chinese elements in Hongkong. For that reason,
the Colonial government will handle the pro-PRC Henry Y. T.
Fok's involvement in the project in as delicate manner as
possible. Fok already is the President of the Hongkong
Football Association, a soccer group with pro-PRC leanings
and strong political clout, but which is recognized and
respected by the Colonial government. The Governor regularly
"kicks out the first ball each season," so to speak. But
apparently we may anticipate that Henry Y.T. Fok may receive
some further local honors, in the near future.
The Hongkong authorities realize, of course, that the project
cannot possibly succeed without the PRC's blessings and
without the PRC crude oil, natural gas, etc. In view of
the project's tremendous impact on the Hongkong economy
(more than doubling its GNP and its trade with the PRC,
for example) and its hoped for (by the UK) affirmative affect
on the desired extension of the New Territories' lease,
beyond the present expiration date of 1998, the Hongkong
authorities have indicated through J. J. Robson that full
cooperation from them can be anticipated, including their
outwardly warm acceptance of the pro-PRC Henry Y. T. Fok's
involvement and their cheerful forgiveness of his former
role as a cold war smuggler against the U.S. and the UK.
The following items are relevant for our own State Department's
consideration, with respect to Fok's identity as a former
cold war anti-U.S. smuggler: (i) Discreet inquiries by
one of the Fluor English solicitors in Hongkong, who has very
good connections with the Hongkong government, have brought
confirmation that Henry Y.T. Fok (Ho Ying-tung) has no
criminal or questionable record, even with the "Special
Branch," apart from the cold war smuggling period. He is
now a law-abiding resident of Hongkong, as far as that source
is concerned; and (ii) the only objections the Hongkong
authorities have relate to Fok's role as a former enemy or
adversary during the cold war, when he apparently was
successful in running the Seventh Fleet blockade, and the fact
that he is known to be a loyal closely connected PRC-supporter.
Those qualities, of course, are the reasons he has been
selected by the PRC to front for it in the project. Those
qualities are inherent in any East-West transaction, of
course. When they are brought out in the open and safeguards
-36-
FORD i GERALD LIBRARY
are taken by the Western side in an East-West transaction,
they can be coped with. In this instance, Fluor's well-
connected English contact with the Hongkong authorities
remarked to Hoose in confidence (possibly reflecting the
views of some of his contacts, but this is not confirmed):
"When the PRC can make its points simply by
threatening to turn off the spigot in China
controlling the crude oil flow to the complex,
it really doesn't make a damned bit of
difference that one of their blighters is
running the complex - and it might even be
an advantage to us, to have him financially
involved in the operation."
In any event, the Hongkong authorities have decided to
accept both the project and the PRC-designated Chinese
"Patriot," who will front for them in its construction
and operation.
10.
Fluor Has Kept the U.S. Government Advised
Fluor has taken pains to keep the U.S. government advised
as to its progress in the secret negotiations with the PRC,
and has very much appreciated the government's assistance,
informal guidance as to aspects which touch upon the U.S.
national interest, and also the U.S. government's coopera-
tion in maintaining strict secrecy at this stage, in view
of the PRC's requirements in that revard.
See References 1. through 7., caption to memorandum,
pages 2-3 hereinabove, for Fluor's March, 1975 reports to
the U.S. government, by reference.
In addition to the indicated conferences and correspondence,
Fluor representatives have made periodic confidential oral
reports, variously in person and on the telephone, to
Philip T. Lincoln, Jr., Country Officer for People's Republic
of China, Etc., Affairs, U.S. Department of State, and to
James Cross, U.S. Consul General in Hongkong, between March
and July, 1975.
11.
Fluor's Careful Adherance to Applicable U.S. Laws
In their talks with the PRC men and with the PRC's Chinese
"Patriots" in Hongkong, the Fluor Team members have been
very careful to limit their statements and materials to
matters clearly in the public domain and not involving any
technology transfers, either orally or in writing. When
necessary and appropriate and in whatever manner possible
under the U.S. government's guidance as to how the presently
required (by the PRC) strict secrecy, Fluor Corporation will
-37-
initiate procedures seeking formal U.S. governmental
approvals and permits as to the project and its various
steps. The advice and guidance of the White House, U.S.
Department of State and U.S. Department of Commerce in that
connection would be appreciated.
REQUESTS BY FLUOR CORPORATION FOR SPECIFIC ASSISTANCE AND GENERAL
GUIDANCE BY PRESIDENT FORD, HIS SENIOR ASSISTANTS, AND THE APPROPRIATE
EXECUTIVES IN STATE AND COMMERCE
1.
The President is respectfully requested to meet with the
Fluor senior executives and the Fluor Team's three
senior members, after this matter has been processed and
studied by the appropriate staffs and upon the President's
return from Europe, to discuss the U.S. role and the PRC
requests of the U.S. government in connection with this
project.
The Fluor senior executives and the Fluor Team's three
senior members who request the meeting with the President
are:
J. Robert Fluor, Chairman and Chief Executive
Officer of Fluor Corporation, who also is a
member of President Ford's Export Council.
David S. Tappan, Jr., President, Fluor Engineers
and Constructors, Inc.
A. C. Ewert, Vice President, International Sales,
Fluor Engineers and Constructors, Inc. (who
also is the Fluor Negotiating Team Leader, in
the work with the PRC)
Charles M. Wuhrman, Executive Manager, Projects,
Fluor Engineers and Constructors, Inc. (who
also is the Project Director for this project)
Harned Pettus Hoose, Fluor Corporation Representative
and Liaison Man to the People's Republic of China
2.
The President is respectfully requested to include the
joint U.S. Consortium - PRC project for construction of the
Hongkong Refinery and Petrochemical Complex in his planning,
preparations and U.S. - PRC communications preliminary to
the President's visit to Peking late this year, with careful
regard for the delicate circumstance that Fluor is advised
that at this time only China's most senior officials,
including Premier Chou En-lai, Vice Premier Teng Hsiao-ping
and Defense Minister Yeh Chien-ying, are aware of the PRC's
affirmative intentions as to the project; and the President
also is respected requested to consider including this project
which has industry-wide and broad labor benefits and deeply
affects the U.S. - PRC progress under the Shanghai Communique,
a topic for discussion and, if appropriate, a part of the
LIBRARY
-38-
expected Joint Peking Communiqué of November of December,
1975, if the PRC should approve.
3.
The President is respectfully requested to authorize Fluor's
representatives to indicate to the PRC side that the U.S.
government continues generally to support the Fluor efforts
as to the Hongkong Refinery and Petrochemical Complex, when
the Fluor Team returns to Hongkong and China in middle or
late August, 1975, to resume discussions with the PRC side.
If possible, it is hoped that such authorization by the
President this time may be in writing and signed by the
Secretaries of State and Commerce, themselves, and if
possible in even more positive terms than the preliminary
letters provided by State and Commerce last March, 1975.
See References Nos. 6 and 7, page 3, above.
4.
The President is respectfully requested to determine whether
he feels with Fluor Corporation that it would be in the
national interest to provide the PRC with some form of
"trigger device" or friendly signal, as reported in
Paragraphs 3.B.1. and 3.B.2, pages 19-20, above, to enable
the highest officials in the PRC to use such trigger device
or friendly signal with its people and allies, as an
excuse to them for the PRC's policy changes apparent in
proceeding overtly with the joint U.S. Consortium - PRC
project at an early date, or even following the President's
visit to Peking late this year.
If the President SO determines, he is respectfully requested
to take whatever steps he may feel are appropriate in that
connection, and advise Fluor Corporation as to its role in
calling the PRC's attention to any such impending or
accomplished steps.
Respectfully submitted,
Hoose
Harned Pettus Hoose,
Representative and Liaison Man
To the People's Republic of China,
For FLUOR CORPORATION
By Direction of J. Robert Fluor,
Chairman, Fluor Corporation
(Excepting as to Paragraph 4,
Pages 23-28, with which
Fluor Corporation is Not Involved)
LIBRARY
-39-