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
7634660
label
Arab Boycott - General (2)
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
7634660
sourceUrl
contentType
document
title
Arab Boycott - General (2)
citationUrl
collections
John O. Marsh Files (Ford Administration)
John Marsh's General Subject Files
subjects
Arab Boycott
Legislation
thumbnailUrl
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
7634660
coverageEndDate
logicalDate
1976-10-31
month
10
year
1976
coverageStartDate
logicalDate
1976-08-01
month
8
year
1976
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
6d287300e32ef4c7
ocrText
The original documents are located in Box 4, folder "Arab Boycott - General (2)" of the
John Marsh 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States of America his copyrights in all of his unpublished writings in National Archives collections.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.
Digitized from Box 4 of The John Marsh Files
at the Gerald R. Ford Presidential Library
HE WHITE HOUSE
WASHINGTON Date 9-14-76
TO: Jack marsh
FROM: Max L. Friedersdorf
For Your Information
Please Handle
Please See Me
E R GER AL D ALD LIBRARY FORD
Comments, Please
of
here is final
Other Per your requist,
versum of Ribreoff
amindment
insert 71 EDD-PATS
(12 pager)
SENTE
September 11 1976
3/28 p.m.
All
PART VI--DENIAL OF CERTAIN TAX BENEFITS FOR COOPERATION
WITH OR PARTICIPATION IN INTERNATIONAL BOYCOTTS AND
)no
IN CONNECTION WITH THE PAYMENT OF CERTAIN BRIBES
28
SEC. 1061. DENIAL OF FOREIGN TAX CREDIT.
(a) In General Subpart A of part III of subchapter N
===
(relating to income from sources without the United States)
is amended by adding at the end thereof the following new
section:
768
"SEC. 908. REDUCTION OF CREDIT FOR PARTICIPATION IN OR
COOPERATION WITH AN INTERNATIONAL BOYCOTT.
" (a) In General If a taxpayer, or a member of a controlled
group (within the meaning of section 993 (a) (3)) which includes
the taxpayer, participates in or cooperates with an international
boycott during the taxable year (within the meaning of section
999 (b)),
the amount of the credit allowable for the taxable
year under section 901 shall be reduced by an amount equal to
the product of--
"(1) the amount of the credit which, but
for this section, would be, allowed under section
901 for the taxable year, multiplied by
"(2) the international boycott factor (determined
under section 999).
QERALD FORD LIBRATTA
mat
71E0D
UNITED STATES SENATE
-2-
ITALIC
OFFICE OF THE LEGIST
" (b) Application with Section 275(a) (4) Section 275
(a) (4) shall not apply tc any amount of taxes denied credit
under subsection (a).
"or
(b) Clerical Amendment. The table of sections for such
subpart is amended by adding at the end thereof the following
new item:
14
"Sec. 908.
)R
Reduction of credit for participation
in or cooperation with an inter-
8ft
national boycott.
"oe
it SEC. 1062. DENIAL OF DEFERRAL OF INTERNATIONAL BOYCOTT AMOUNTS.
(a) Denial of Deferral Section 952 (a) (relating to
==
general definition of subpart F income) is amended-
(1) by striking out "and" at the end of paragraph (1),
(2) by striking out the period at the end of paragraph
(2) and inserting in lieu thereof a comma, and the word
(3)
"and", and by adding at the end thereof the following
new paragraph:
of
"(3) an amount equal to the product of--
4
"(A) the income of such corporation other
than income which
"(1) is attributable to earnings and
profits of the foreign corporation included
in the gross income of a United States person
under section 951 (other than by reason of this
paragraph), or
"(11) is described in subsection (b),
GERALE FORD LIBRARY
UNITED STATES SENATE
CFFICE CENTIFE LEGISLATIVE COUNSEL
land Edd
- 2A -
ALL ITALIO
multiplied by
" (B) the international boycott factor (as
determined under section 999).
11
170
SEC. 1063. DENIAL OF DISC BENEFITS.
(a) International Boycott Activity. Subparagraph (D) of
section 995 (b) (1) (relating to distributions in qualified years)
is amended to read as follows:
f
4
" (D) the sum of--
" (i) one-half of the excess of the taxable
income of the DISC for the taxable year, before
reduction for any distributions during the year,
over the sum of the amounts deemed distributed
for the taxable year under subparagraphs (A),
(B), and (c), and
DRD
UNITED STATES SENATE
insuled
OFFICE OF THE LEGISLATIVE COUNSEL
-3-
ALL ITALIQ
16
"(ii) an amount equal to the amount
determined under clause (i) multiplied by the
international boycott factor determined under
section 999, and",
1708
SEC. 1064. DETERMINATIONS AS TO PARTICIPATION IN OR COOPERA-
TION WITH AN INTERNATIONAL BOYCOTT.
(a) In General Subchapter N of chapter 1 (relating to
tax based on income from sources within or without the United
States) is amended by adding at the end thereof the following
new part:
1740
CAPS
"Part V--International Boycott Determinations
4
"Sec. 999. Reports by taxpayers; determinations
p8pt
ic
1768 "SEC. 999. REPORTS BY TAXPAYERS; DETERMINATIONS.
"(a) International Boycott Reports by Taxpayers
=
"(1) Report required If any taxpayer, or a.
1
member of a controlled group (within the meaning of
section 993 (a) (3)) which includes the taxpayer, has
operations in or related to--
"(A) a country (or with the government, a
company, or a national of a country) which is on
paragraph
the list maintained by the Secretary
(%3, 3 , or
"(B) any other country (or with the government,
a company, or a national of that country) in which
STATE FORD
UNITED STATES SENATE
OFFICE OF THE LEGIS (ATIVE COUNSEL
-3A-
ALL ITALIO
the taxpayer (or such member) had operations during
the taxable year if the taxpayer or member knows
or has reason to know that participation in or
cooperation with an international boycott is
required as a condition of doing business within
such country or with such government, company,
or national,
--
the taxpayer shall report such operations to the Secretary
at such time and in such manner as the Secretary
prescribes.
Participation and cooperation; requests therefor
sc
::
(2) SQUARTTS A taxpayer shall also report
whether he or any member of a controlled group
includes
which/the taxpayer has participated in or
cooperated with an international boycott at any time
during the taxablè year, or has been requested to
in
with
participate /or cooperate Ea/such a boycott, and, if so,
connection with
the nature of any operation in/which he participated
in or cooperated with such boycott (or was requested
to participate or cooperate).
GERALD FORD LIBRARY
used HEDD
UNITED STATES SENATE
-4-
OFFICE Cr THE LOGISLATIVE COUNSEL
ALL ITALIO
"(3) List to be maintained. The Secretary
shall maintain and publish not less frequently
than quarterly a current list of countries which
require or may require participation in or cooperation
with an international boycott (within the meaning
of subsection (b) 122XZX (3)):
"(b) Participation In or Cooperation with an
International Boycott.
"(i) General rule. If the taxpayer donsucher
member2/participates in or cooperates with an international
boycott in the taxable year, all operations of the tax-
in
payer or such group in that country and 1 any other
country which requires participation in or cooperation
or a member of a controlled group (within the
meaning of section 993 (a) (3)) (a)(3)) which includes
with the boycott as a condition of doing business
within that country, or with the government, a company,
or a national of that country, shall be treated as
operations in connection with which such participation
or cooperation occurred, except to the extent that the
a
taxpayer can clearly demonstrate that a partici c/ (lar
operation is a clearly separate and identifiable operation
in connection with which he did not participate in or
the taxpayer
cooperate with an international boycott.
FORD
5- insul 7/ED/7
ALL ITALIG
(2) Special rule.
(A) Non boycott operations. A clearly separate and
"(2) Special rule
(A) Non-boycott operations A clearly
separate and identifiable operation of a person,
or of a member of the controlled group (within
the meaning of section 993 (a) (3)) which includes
than person, in or related to any country within
the group of countries referred to in paragraph
(1) shall not be treated as an operation in or
related to a group of countries associated in
carrying out an international boycott if the
person can clearly demonstrate that he, or that
such member, did not zmoperatexwx participate in
or cooperate with the international boycott in
connection with that operation.
#: (B) Separate and identifiable operations
A taxpayer may show that different operations
within the same country, or operations in different
countries, are clearly separate and identifiable
operations.
FORD
insult -6-
EDD
UNITED STATES SENATE
FRICE OF THE LEGISLATIVE COUNSEL
ALL ITALIC
" (3) Definition of boycott participation and
cooperation. For purposes of this section, a person
participates in or cooperates with an international
boycott if he agrees
"(A) as a condition of doing business directly or
indirectly within a country or with the government,
a company, or a national of a country--
(i) to refrain from doing business with or in
which is the object of the boycott
a country /
or with the government, companies,
or nationals of that country;
H (ii) to refrain from doing business with any
United States person engaged in trade in a country
is the object cf the boycott
which / or with the government, companies, or
nationals of that country;
"(iii) to refrain from doing business with any
company whose ownership or management is made up,
all or in part, of individuals of a particular
nationality, race, or religion, or to remove
(or refrain from selecting) corporate directors
who are individuals of a particular nationality,
race, or religion; or
"(iv) to refrain from employing individuals
of a particular nationality, race, or religion; or
rest 71EPP
UNITED STATES SENATE
-7-
OFFICE OF THELESISLATIVE COUNSEL
ALL ITALIC
" (B) as a condition of the sale of a product
to the government, a company, or a national of a
that
country, to refrain from shipping or insuring sweke
product. on a carrier owned, leased, or operated
by a person who does not participate in or
ccoperate with an international boycott (within
the meaning of subparagraph (A)).
11 (4) Compliance with certain laws This section shall
not apply to any agreement by a taxpayer (or such member)
"(A) to meet requirements imposed by a foreign
country with respect to an international boycott
if United States law or regulations, or an
Executive Order, sanctions participation in, or
cooperation with, that international boycott,
"(B) to comply with a prohibition on the
importation of goods produced in whole or in part
in any country which is the object of an international
boycott other than the United States), or
"(c) to comply with a. prohibition imposed by
a country on the exportation of products obtained
in such country to any country which is the object
of an international boycott (other than the United =
States)
2000
-
creat NEDD
UNITED STATES SENATE
OFFICE OF THE LEGISLATIVE COUNSEL
-8-
ALL ITALIO
1
(c) International Boycott Factor.
" (1) International boycott factor. For purposes of
sections 908 (a), 952 (a) (3), and 995 (b) (3), the inter-
national boycott factor is a fraction, determined under
regulations prescribed by the Secretary, the numerator of
which reflects the world-wide operations of a person (or,
(within the meaning of section 993(a)(3))
in the case of a controlled group 31 corporative CA which
includes
that person,
done
of the group) which are operations
^
in or related to a group of countries associated in carrying
out an international boycott in or with which that person
or a member of that controlled group has
participated
or cooperated in the taxable year, and
the denominator of which reflects the world-wide operations
of that person or group. For purposes of this subsection,
the term 'world-wide operations' means operations in or related
to countries other than the United States and its terrifories
and possessions
a
LIBRARY GERALD FORD
enut 7/EDD
UNITED STATES SENATE
OFFICE OF THE LEGISLATIVE COUNSEL
-9-
ALL ITALIO
'(2) Specifically attributable taxes and income If
the taxpayer clearly demonstrates that the foreign taxes paid
and income earned by the taxpayer for the taxable year with
31-
respect to his worldwide operations are attributable to
M
specific operations, then, in lieu of applying the inter-
national boycott factor for such taxable year, the amount
of the credit disallowed under section- 908 (a), the addition
to subpart F income under section 952 (a) (3), and the amount
of deemed distribution under section 995 (b) (1) (D) (ii)
for the taxable year, if any, shall be the amounts
specifically attributable to the operations
in which the taxpayer
participated
in or cooperated with an international boycott under
section 999 (b) (1).
"(3) World-wide operations For purposes of this
subsection, the term 'world-wide operations' means
operations in or related to countries other than the
United States.
FORD i LIBRARY
71EbD
ALL ITALNG
UNITED STATES SENATE
OFFICE OF THE LEGISLATIVE COUNSEL
-9A-
"(d) Detorminations With Respect to Particular Operations
Upon a request made by the taxpayer, the Secretary shall
issue a determination with respect to whether a particular
operation of the taxpayer, or of a member of a controlled
which includes the taxpayer
group constitutes
participation in or cooperation with an international boycott.
The Secretary may issue such a determination in advance of
which
such operation in street cases 03 are of such a nature that an
advance determination is possible and appropriate under the
circumstances. If the request is made before the operation
is commenced, or before the end of a taxable year in which
the operation is carried cut, the Secretary may decline to
such a determination Deliefore
issue the operation is ended 012 the close of
the taxable year, whichever first occurs.
"(e) Special Definition of Controlled Group For
purposes of sections 908 (a), 952 (a) (3), 995 (b) (3),
and this section, a non-corporate entity (including an individual)
may be treated as a member of a controlled group of corporations
if that entity would be treated as a member of such group,
on the basis of stock ownership (including constructive
ownership within the rules of section 267 (c)) or otherwise,
if it were a corporation.
3
- - 9B -
" (e) Participation or Cooperation by Related Persons
111
If two or more corporations which are members of the same
controlled group (within the meaning of section 993 (a) (3))
are controlled by 5x five or fewer persons-
"(1) participation in or coopeaz cooperation
with an international boycott by such a corporation
shall be considered to be such participation is or
cooperation by each of those persons, and
11 (2) participation in or cooperation with such
a boycott by such a person shall be considered to
be part such participation or cooperation by those
corporations.
is
FORD
LORLO
insul 71EOD
ALL ITALIC
United STATES SENSTE
digistative COUNSEL
-10-
(f) Willful Failure to Report. Any person (within the
===
meaning of section 6671 (b)) required to report under this section
who willfully fails to make such report shall, in addition to
other penalties provided by law, be fined not more than $25,000,
imprisoned for not more than one year, or both.".
(b) Clerical Amendment. The table of parts for such
subchapter is amended by adding at the end thereof the following
new item:
4
"Part V. International boycott determinations. (8pt)
728
SEC. 1065 FOREIGN BRIBES.
expect
(a) Denial of Deferral
(1) Controlled foreign corporations. Section 952
(a) (relating to general definition of subpart F
income) is amended
(A) by striking out "and" at the end of
paragraph (2),
(B) by striking out the period at the end
of paragraph (3) and inserting in lieu thereof
a comma and the word "and", and
(c) by adding at the end thereof the following
new paragraph:
BERALD FORD LIBRARY
insult 71END
UNITED STATES SENATE
-10A-
she LEGISLATIVE COUNTRY
ALL ITALIC
"(4) the sum of the amounts of any illegal bribes,
kickbacks, cr other payments (within the meaning of section
162 (c)) paid by or on behalf of the corporation during
the taxable year of the corporation directly or indirectly
to an official, employee, or agent in fact of a government. If
(2) DISCs. Subparagarph (n) of section 995 (b) (1)
(relating to distributions in qualified years) is amended
(A) by striking out "and" at the end of clause (i),
!
(B) by adding at the end thereof the following
new clause:
"(iii) any illegal bribe, kickback, or other
payment (within the meaning of section 162 (c))
paid by or on behalf of the DISC directly or
indirectly to an official, employee, or agent in
fact of a
government, and"
(b) Bribes Not to Reduce Foreign Earnings and Profits
Section 964 (a) (relating to earnings and profits of foreign
corporations) LS amended by adding at the end thereof the
following sentence: "In determining such earnings and profits,
or the deficit in such earnings and profits, the amount of any
illegal bribe, kickback, or other payment (within the meaning of
shall not be
section 15 (c))
taken into account to decrease such earnings and profits 02 to
increase such deficit.
BERALD FORD LIBRAST
UNITED STATES SENATE
OFFICE/CE THE LEGISLATIVE COUNSEL
ment EDD
IL ITALIC
SEC. 1066. EFFECTIVE DATES.
(a) International Boycotts.
(1) General rule. The amendments made by this
(5
part (other than by section 1066) apply to participa-
tion in or cooperation with an international boycott
more than 30 days after the date of enactment of this
Act.
(2) Existing contracts. In the case of operations
which constitute participation in or cooperation with
an international boycott and which are carried out in
accordance with the terms of a binding contract entered
into before September 2, 1976, the amendments made by
(5
this part (other than by section 1066) apply to such
participation or cooperation after December 31, 1977.
(b) Foreign Bribes The amendments made by section
1066 apply to payments described in section 162 (c) of the
Internal Revenue Code of 1954 made more than 30 days after
the date of enactment of this Act.
-12
Must
EDD
UNITED SENATE
give 65 THE LEGISLATIVE could
ITALIO
SEC. 1067. REPORTS BY SECRETARY. HILL
(a) Reports To The Congress As soon after the close
of each calendar year as the data become available, the
Secretary shall transmit a report to the Committee on Ways
and Means of the House of Representatives and to the Committee
on Finance of the Senate setting forth, for that calendar
year
(1) the number of reports filed under section
999 (a) of the Internal Revenue Code of 1954 for
taxable years ending with or within such taxable year,
(2) the number of such reports on which the
taxpayer indicated international boycott participation
3
or cooperation (within the meaning of section 999 (b) (2)
of such Code), and
(3) 3. detailed description of the manner in which
the provisions of such Code relating to international
boycott activity have been administered during such
calendar year.
(b) Initial List The Secretary of the Treasury shall publish
an initial list of those countries which
may require participation in or cooperation with an inter-
national boycott as a condition of doing business within
such country, or with the government, a company, or a
national of such country, (within the meaning of section
999 (b) of the Internal Revenue Code of 1954) within 30
days after the enactment of this Act.
111170
SEP 15 1976
THE WHITE HOUSE
WASHINGTON
Date: 9-15-76
TO: Jach
FROM: Robert K Wolthuis
For your information X
Please handle
Other
I think you well be
interested in Hamilton
creivs regarding the
possibility of offering
Stevenson as a substitute
to Bingham - Rosenthel Bob
DEPARTMENT OF STATE
Washington, D.C. 20520
CONF IDENTIAL
September 14, 1976
MEMORANDUM FOR: Mr. Robert Wolthius
The White House
Subject: Export Administration Act -
Lee Hamilton's Views
Hamilton told me at 3:30 that, in his judgment,
any effort on the floor of the House would be counter-
I
productive. He said, should you stimulate a substitute
amendment along the lines of the Stevenson amendment,
you would be badly embarrassed in the vote. He said I
recommend that you concentrate on the conference.
He confirmed my impression that most of the HIRC
members who voted for Bingham in fact have reservations.
about its scope and would be inclined toward the Senate
Stevenson position in conference. He said the selection
of conferces will be critical. My advice to you, Lee
said, is to go to Doc Morgan and indicate your concern.
He normally, Lee continued, has chosen conferees on a
basis of strict seniority. In this instance, that
method would be highly favorable to your objectives since
it would exclude Rosenthal and Bingham. He said the
conferees would then be Morgan, Zablocki, Fascell and
Fountain, Broomfield and Derwinski. With that lineup,
it should be possible to assure the conferees will
choose Stevenson rather than Bingham.
Jents
Kempton B. Jenkins
Acting Assistant Secretary
for Congressional Relations
FORD
E
CONT IDENTIAL
Determined to be Administrative Marking
Date 12/3/85 By DAD
THE WHITE HOUSE
WASHINGTON
September 15, 1976
MEMORANDUM FOR:
THE PRESIDENT
FROM:
JACK MARSH
As Floor action nears, pressures are increasing as to
the Administration's position on the Export legislation
particularly the Stevenson-Bingham Amendments. Some of
these pressures are coming from American industry who
are indicating the possibility that they can live with
the Stevenson Amendment.
A group of your advisers met last evening including
representatives of NSC, EPB, Counsel's Office and
Legislative Affairs. It is our view that there are
five possible approaches to this matter which are:
1. Active Administration support for a modified
Ribicoff Amendment. (There is some question
as to whether such an amendment can be drafted
but it should be considered as a possibility.)
2. Non-opposition and quiet support of the Adminis-
tration of a modified Ribicoff Amendment intro-
duced by Congressional leaders.
3. Active Administration support for a modified
Stevenson Amendment (there is drafted language
for such an amendment).
4. Non-opposition and quiet support for a modified
Stevenson amendment introduced by others.
5. No action by the Administration to actively or
quietly support any amendment but maintain a
position of opposition until the Conference.
As you are aware, the foreign policy implications of
active support are significant and there are risks
=
FORD
-2-
involved for non-opposition and quiet support insofar
as foreign policy questions are concerned.
It was the consensus of the group that at least through
Wednesday, until we can see how the situation developes
on the Hill and the action in the Rules Committee, that
we should take no steps for either active or quiet support
but maintain the current posture against all amendments.
However, the view was expressed that we should not totally
abandon the possibilities of approach, which is non-
opposition to the modified Stevenson Amendment. The
manner in which the Tax Bill was handled and the dis-
cussions involving the Ribicoff Amendment could influence
ultimately any decision that you might wish to make.
aral
September 15, 1976
Boycole
MEMORANDUM FOR:
THE PRESIDENT
FROM:
JACK MARSH
As Floor action nears, pressures are increasing as to
the Administration's position on the Export legislation
particularly the Stevenson-Bingham Amendments. Some of
these pressures are coming from American industry who
are indicating the possibility that they can live with
the Stevenson Amendment.
A group of your advisers met last evening including
representatives of NSC, EPB, Counsel's Office and
Legislative Affairs. It is our view that there are
five possible approaches to this matter which are:
1. Active Administration support for a modified
Ribicoff Amendment. (There is some question
as to whether such an amendment can be drafted
but it should be considered as a possibility.)
2. Non-opposition and quiet support of the Adminis-
tration of a modified Ribicoff Amendment intro-
duced by Congressional leaders.
3. Active Administration support for a modified
Stevenson Amendment (there is drafted language
for such an amendment).
4. Non-opposition and quiet support for a modified
Stevenson amendment introduced by others.
5. No action by the Administration to actively or
quietly support any amendment but maintain a
position of opposition until the Conference.
As you are aware, the foreign policy implications of
active support are significant and there are risks
BERALD FORD LIBRARY
at
-2-
and
involved for non-opposition and quiet support Les insofar
as foreign policy questions are concerned.
It was the consensus of the group that at least through
Wednesday, until we can see how the situation developes
on the Hill and the action in the Rules Committee, that
we should take no steps for either active or quiet support
but maintain the current posture against all amendments.
However, the view was expressed that we should not totally
abandon the positbilities of approach, which is non-
opposition to the modified Stevenson Amendment. The
manner in which the Tax Bill was handled and the dis-
cussions involving the Ribicoff Amendment could influence
ultimately any decision that you might wish to make.
JOM/dl
FORD & LIBRA 078839
THE WHITE HOUSE
WASHINGTON
September 15, 1976
MEMORANDUM FOR:
DICK CHENEY
FROM:
JACK MARSH
You should be aware that the House Rules Committee
this afternoon granted a rule on the Export
Administration Bill by a vote of 9-6.
Also, the Rules Committee voted against granting a
rule on the Strip Mining Bill by a vote of 9-5 with
one not voting.
The B FORD
FINAL
SEP 1976
You should know
The New York Times, on Tuesday, in an editorial
Could the legislation make it impossible for
entitled "The Arab Boycott," addressed itself to leg-
American ships to call at Arab ports? We think SO.
islation now being considered by the U.S. Congress,
Could the legislation lead to inadvertent viola-
which in effect would either. penalize American
tions of criminal law by individuals in U.S. compa-
companies or prohibit them from doing business
nies? We think so.
with and/or in Arab countries. We applaud The
In our view, the end result of this sweeping leg-
Times for examining the implications of this legista-
islation could be to jeopardize America's ability to
tion; moreover, there are portions of the editorial
acquire vital Arab oil.
with which we fully agree.
It could foreclose to the U.S. economy all op-
We agree. for example, that a boycott whose
portunity to participate in the vast recycling of pet-
motivation is solely religious discrimination is TEX
rodollars. which now total some tens of billions of
pugnant and unacceptable to the American way of
dollars annually-a sum that is constantly growing.
life. [The Arab nations insist the boycott is not based
The legislation could, by foreclosing American
on religion.] Indeed, there is already a body of U.S.
business (oil: or others): from Arab markets, be the
law which makes such discrimination illegal, and
most gigantic subsidy for foreign business ever en-
we support those laws.
acted by Congress-a Marshalt Plan for America's
We think The Times has made a contribution
competitors abroad.
in speaking out on this issue. and in beginning an
Finally, we don't believe it practical: to try to
examination of what sort of legislation, if any, is
enact punitive legislation in an area in: which you
appropriate. The purpose of this message is two-
have little OF no: leverage, and at this juncture and
fold: first, to join in the debate and second, to pre-
for the foreseeable future, the United States needs
sent more fully the consequences to the American
Arab oil more than the Arabs need U.S. goods and
people and the American economy if pending legis-
know-hown
lation becomes law.
First, some relevant facts:
America, we fear, might be reduced to a sec-
ond-rate economic power; our citizens, to a second-
Fact No. 1. America imports roughty 40% of the
oillit uses.
rate standard of living. That's why we think this
Fact No. 2. About one-third of this imported oil
issue is so important and why we welcome The New
comes from Arab countries, and this proportion is
York Times" suggestion of more time for discussion.
growing every day.
We believe that this issue has such vast foreign
Fact No. 3. Even if this country develops and
policy and security implications that legislation
implements policies that will permit fuller develop-
should only be enacted after the fullest debate and
ment of our energy resources. America will still
only after adequate rellection on the implications
become increasingly reliant on Arab oil, particularly
and consequences of what is best for the United
in the next decade. There is simply no way around
States.
that fact of life. American economic growth, Ameri-
More than that, we want your voice heard. if
jobs, the American lifestyle-all will depend to a
you would like a copy of this legislation, write to
growing degree on energy from the Arab nations.
Box B, Mobil Oil Corporation, 150 East 42nd Street,
Against this background. the Senate has al-
New York, N.Y. 10017. Read it. Then ask your Con-
ready passed, and the House is now considering,
gressman what he thinks. We'd even like to hear his.
amendments to the Export Administration Act. We
views, after me relays them back to you.
have studied the proposed legislation. And we have
This may be among our more unpopular mes-
major questions as to its impact. For example:
sages. But it is better to focus on consequences
Could the legislation make it impossible for
now, rather than try later to salvage something out
American companies to import Arab oil into the
of economic chaos. Please don't think that we are
United States? We think SO.
blind or insensitive to the emotions involved on all
Could the legislation make it impossible for
sides of these issues. What we are pleading for is
American manufacturers to sell goods to Arab
that the issues be fully debated. To enact legislation
countries? We think so.
as amendments to expart-control or tax laws, par-
Could the legislation make it impossible for
ticularly in an election year, and with less than ade-
American banks to finance trade between the U.S.
quate debate and reflection as to consequences,
and Arab countries? We think so.
will not be in America's best interests.
FORD
Mobil
Mobil
1100 CONNECTICUT AVENUE, N.W.
WASHINGTON, D.C. 20036
The Honorable John Marsi
The White House
Washington, D. C.
NC SNIHSOM
RECEP. THE AND WHITE SECURITY HOUSE UNIT
1976 SEP 15 PM 12
Executive Office Building Mailroom
Entrance on 17th St. , near Pennsylvania Ave.
SEP 1 6 1976
10215
THE WHITE HOUSE
WASHINGTON
September 15, 1976
MEMORANDUM FOR:
JACK MARSH
BRENT SCOWCROFT
MAX FRIEDERSDORF
FROM:
ED SCHMULTS Q
SUBJECT:
Consequences of a Possible
Expiration of the Export
Administration Act
I am advised by Commerce that no problems of any
consequence will occur if the Export Administration
Act is permitted to expire. Commerce believes that
all of the authorities under the Act may be exercised
under the Trading with the Enemy Act. In fact, the
Export Administration Act has expired three times
during the recent past for periods up to a month
with no problems occurring.
The Commerce view is confirmed by Jack Goldklang,
Office of Legal Counsel at Justice, who is
knowledgeable in this area.
The only possible problem that anyone sees is the
possibility that a person upon whom a sanction
might be levied might assert that the authority
to levy such a sanction is ambiguous under the
Trading with the Enemy Act.
FORD is LIBRARY alvay
Washington Post
Monday, September 20, 1976
No American Boycott
T
HE ARABS' DECISION to establish an Arab boy-
vantage to themselves in ignoring the boycott than in
cott of Israel is their business. But their attempt
enforcing it. In the past, American companies had lit
to establish an American boycott of Israel is some-
tle incentive to help bring the Arabs to this sensible
thing very different. It runs against American inter-
view of their own self-interest. Now the American
ests, American values and the American grain. That
companies have an incentive. Now, too, an American
is the elementary distinction made by the Congress
company declining to participate in the Arab boycott
in writing anti-secondary-boycott provisions into the
will not face the same risk of paying a financial pen-
tax reform bill. Whether a tax bill should be the vehi-
alty for honoring the United States' longstanding an-
cle for a measure related to foreign policy is an inter-
ti-secondary-boycott policy.
esting question for the lawyers. The rest of us can
One needs to step back a pace. We think it entirely
take satisfaction that legislative teeth are being put
healthy and useful that the boycott issue has come to
into the diplomatic jawbone wielded quietly by the
the fore. It goes to the basic framework in which the
administration in the last few years. It is precisely in
United States and the Arab world are trying to ex-
those last few years, of course, that the Arabs' prac-
pand and deepen a relationship that has been, until
tice of a secondary boycott, one directed at American
relatively recently, narrow and formal and some-
firms that trade with Israel or that have Jewish or
times even antagonistic. That there is potential for
"Zionist" officers, has spread to encompass business
great mutual advantage in the relationship is evident
deals measured in the hundreds of millions of dollars.
to everyone. That is all the more reason to try to
Seldom has the inadequacy of diplomacy and the ne-
move it forward on the basis of mutual respect. It
cessity for legislation been SO overwhelmingly dem-
makes no more sense for Arabs to demand that
onstrated.
Americans now boycott Israel than for Americans to
Opponents of the new legislation argue, in effect,
demand that Arabs now trade with Israel. We would
that Arab nations are so determined to compel Amer-
not contend that, for all Arabs, it is easy to accept-the
icans to support their boycott of Israel that, if flout-
ways of the open international system they are trying
ed, they will take their billions in business elsewhere
to join. Arab states have made impressive progress,
and perhaps even diminish the flow of their oil. No
however, in halting discrimination against American
one would be surprised if some Arab-American deals
(or other foreign) firms and individuals on strictly re-
are junked in conspicuous and symbolic protest. But
ligious or ethnic grounds. The administration's diplo-
it is demonstrably false that gaining American sup-
macy, by the way, has been quite effective in this re-
port of their boycott is SO important to the Arabs
gard. It will be harder for Arabs to accept that they
that, to that end, they will jeopardize the thick eco-
cannot force Americans to discriminate in trade
nomic and political ties they have built up SO care-
against a third country. But it denigrates their intel-
fully with the United States in recent years. Arabs
ligence, and it underestimates their general passion
are spending billions on arms produced by the very
for modernization, to say that they must stick fast in
manufacturers who sell to Israel, for instance. They
their traditional ways. Certainly Americans should
are doing so presumably because they see more ad-
not be encouraging them to do SO.
SEP 2 1 1976
THE WHITE HOUSE
WASHINGTON
September 20, 1976
MEMORANDUM FOR:
JACK MARSH
BRENT SCOWCROFT
MAX FRIEDERSDORF
FROM:
ED SCHMULTS @
SUBJECT:
Consequences of a Possible
Expiration of the Export
Administration Act
Regarding my earlier memorandum, dated September 15,
1976 (copy attached), you should note that the
Congressional Research Service has expressed the
view that the boycott regulations promulgated under
the Export Administration Act may not be supportable
under the Trading with the Enemy Act. Justice and
Commerce disagree with this conclusion and I believe
they have by far the better end of the argument.
I mention the Congressional Research Service view
because it might provide the basis of a political
attack on the President if he permits the Export
Administration Act to expire. This would be a
double barrel attack, i.e., not only has the
President blocked strong anti-boycott legislation,
but his own action in November 1975 to prohibit
discriminatory practices in this country has also
terminated.
Attachment
FORD & LIBRARY GIVE
September 15, 1976
MEMORANDUM FOR:
JACK MARSH
BRENT SCOWCROFT
MAX FRIEDERSDORF
FROM:
ED SCHMULTS
SUBJECT:
Consequences of a Possible
Expiration of the Export
Administration Act
I am advised by Commerce that no problems of any
consequence will occur if the Export Administration
Act is permitted to expire. Commerce believes that
all of the authorities under the Act may be exercised
under the Trading with the Enemy Act. In fact, the
Export Administration Act has expired three times
during the recent past for periods up to a month
with no problems occurring.
The Commerce view is confirmed by Jack Goldklang,
Office of Legal Counsel at Justice, who is
knowledgeable in this area.
The only possible problem that anyone sees is the
possibility that a person upon whom a sanction
might be levied might assert that the authority
to levy such a sanction is ambiguous under the
Trading with the Enemy Act.
8. FORD
Sand
FORDO
to Breat
done 9/21
all
MEMORANDUM
SEP 20%M
CHARLS E. WALKER
DATE 9/20/76
To Jeck Mersh:
Some new
strategy.
by
(I'libe at home
tonite + in office tomorrow.)
September 20, 1976
Memorandum re: Bingham Amendment to Export Administration Act/Strategy
1. H. R. 15377 is at the top of the list of legislation to be
considered on the House floor Wednesday and Thursday of this week,
(Monday and Tuesday are reserved for Suspension Calendar). The prin-
cipal objective should be to get this legislation placed at the bottom
of the list for this week since there are two or three pieces of major
legislation which would probably take up the balance of the legislative
time available this week. NAM, Chamber of Commerce, ECAT, and indi-
vidual companies should focus their attention on the House Leadership
and sympathetic congressmen to the effect that Bingham is a counter-
boycott and goes way beyond what is necessary to protect the rights
of U. S. citizens and could have serious and unnecessary repercussions
on U. S. business and U. S. foreign policy. We can live without the
Export Administration Act if we have to for a few months. Efforts
should be directed at congressmen, particularly Democrats, who have
some Jewish influence in their districts as well as industry involved
in export to the Middle East. The objective should be to encourage
these congressmen to indicate to the Leadership that they are getting
intense pressure from both sides and don't really want to vote on this
issue before the elections. Delay is the only way out for everyone;
i.e., coming back with a short-term extension of six months to one year
of the Export Administration Act in the last days of the session.
2. Assuming that this strategy will not be wholly successful,
there are three approaches that can be taken on the floor:
a. Simply let the Bingham Amendment go through without any
opposition except statements of the Administration spokes-
men that the legislation is "unacceptable." The proponents
of this legislation will most probably push for a record
vote at some stage, in any event, and without an alterna-
tive, very few Congressmen will actually vote "no" on
Bingham.
b. Convince someone like Jim Collins of Texas who wrote the
Minority views to the House Commerce Committee report
to move to strike or move to recommit. This will surely
evoke a response from the proponents and result in a very
large vote in the House, locking the House conferees in
on the Bingham amendment. (The strategy here would be
to create a deadlock in conference by getting the Senate
conferees to go no further than Stevenson.) Again, the
Administration only states that this legislation is
"unacceptable" including Stevenson.
C. Let Bingham go through but have several sympathetic Con-
gressmen from safe districts raise questions on the floor
FORD
about the great risks involved and state that Bingham
goes too far by instituting a counter-boycott. This would
not stop the legislation, but would at least publicly
state some arguments that could later be used to support a
veto.
- 2 -
3. The next major objective should be to try to keep any con-
ference from starting prior to Monday, September 27. Stan Marcus and
Gil Bray, Senate staff, should be encouraged to hold tight to Stevenson
and not work with the House staff over the weekend on compromise language.
Once the bill gets to conference, Senator Tower should be encouraged by
the business community, but not directly by the President, to go no
further than Stevenson. The Senate conferees will likely be the Sub-
committee, and with enough work from the business community it would
be possible that a majority of the Senate conferees could be convinced
to hold tight for their language with absolutely no changes. The major
risk here is that such a move would be successful, and that the House
would, at the urging of the Jewish organizations, recede completely to
the Stevenson language. Such a bill would be much harder to veto.
While Morgan, Zablocki, Taylor, and Hamilton might be satisfied to
ultimately see a deadlock on this issue, it would be very difficult
to involve them in any intricate strategy to produce the same. They
probably would vote to recede to the Senate language. This would
probably be true also of any Republican House conferees. Even this
procedure might, however, use up enough time so that the President
could then pocket veto the legislation.
4. The next point of delay would be to have a few Senators
filibuster the Conference Report on the Senate floor. To make such
a strategy successful, ideally, the bill should not reach the floor
of the Senate before Thursday, September 30, and even that may be cut-
ting it too close to avoid a cloture vote. The key here is probably
Byrd of West Virginia who has been most instrumental in the past in
organizing cloture votes. Mansfield apparently won't be available
before October 2. The foreign policy risks might be appealing to Byrd
who could somewhat control the Senate scheduling.
5. The overall objective would be to delay final Congressional
consideration of the Conference Report until the session expires on
October 2. If a deadlock holds or a filibuster appears on October 1
or 2, there might be a chance to report out only a simple extension
and the issue would never reach the President's desk. However, given
the course of this legislation to date, it is highly unlikely that
this strategy will succeed, and it must be assumed throughout that
the President is going to be faced with a veto decision. Hopefully,
that would come in the context of a pocket veto, but in any event,
should be maneuvered so that a vote on override and suspension will
not come up until after the elections if the Congress does not adjourn
sine die on October 2.
We must also assume that, in the final analysis, the proponents
of this legislation might prefer to have some legislation enacted--
even if only Stevenson--prior to adjournment or recess on October 2.
Thus, there will be pressure on the Administration to come up with
an "acceptable compromise" that the conferees can adopt, or to simply
"take" Stevenson as it is, as the "most nearly acceptable" with "clari-
fying" report language.
If a pure Stevenson amendment is reported from conference with
the support of the Jewish organizations and labor, the case will be
made to the Administration that this is the most moderate legislation
Congress could pass (softened by report language); the President him-
self said some legislation might be necessary; it goes no further than
- 3 -
Ribicoff and a veto by the President would show that he didn't really
mean what he said to B'nai B'rith and other Jewish leaders recently.
The proponents will allege this will cost Ford the support of the
Jewish voters. This may be an empty threat since the liberals in the
Jewish community and labor won't support Ford in any event, and those
in these groups that now support Ford do so for other reasons than
support of Israel and are, in the whole, unlikely to be swayed solely
by this issue from that support.
The strategy should be based on a decision between two apparently
mutually exclusive objectives:
(a) Further legislation of any kind on this issue must be blocked
or vetoed in order to prevent any negative reaction on the part
of the Arab states. The Administration must not "shift"
position and this has the ultimate priority over domestic
politics. In this case, the President should have the
worst possible amendment to veto (Bingham) and cannot af-
ford to get "trapped" with Stevenson or anything close to
it;
TOUG
(b) A modified Stevenson might be acceptable and explainable to
the Arabs if it does not infringe on their sovereignty and,
if not obtained, anything else could be vetoed with a minimum
of adverse, domestic political effect. Again, care must be
taken to not get trapped with a "pure" Stevenson.
The only sure way to achieve (b) is with an Administration
"substitute" on a take-it-or-leave-it basis (consistent with Ribicoff
compromise and B'nai B'rith speech). Preferably, this should be made
on the floor of the House to get maximum exposure, but in any event,
clearly stated in conference. At least the outcome is certain--a
modified Stevenson or no legislation because of a veto. The latter
is the more probable result given the course of this legislation to
date and the strength of the proponents.
The result has a high degree of certainty as to outcome in (b)
and the strategy is not intricate, subtle or difficult to carry out.
Either the conferees and Jewish groups pushing Stevenson and Bingham
totally cave in to get "some" legislation or they overreact and the
Senate recedes to the House in large degree since even Stevenson is
"unacceptable" and they cannot modify it further. The veto is then
easier and political losses are minimized domestically.
The strategy under (a) is more intricate and less controllable.
The proponents can throw a curve by receding to the Senate language,
particularly if there is not a clear veto threat but only "spokesmen"
saying it (pure Stevenson) is unacceptable. Proponents can allege
that they caved; a pure Stevenson is no more than the President out-
lined in his speech to B'nai B'rith; and he thus has broken his word
to the Jewish communities, etc. There just is no sure way under
(a) to conduct the strategy SO as to end up with a "Bingham" amendment
out of conference and a "good" veto certainty lies with a strategy
based on (b). Strategy based on (a) is doable but unpredictable with-
out an "insider" of considerable influence among both the House and
Senate conferees, particularly, the House and that has to be a Democrat.
The unknown in (b) is whether the Arabs will' perceive and
understand the gambit.
Committee on International Relations
Democrats
Thomas E. Morgan (Pa.), Chairman
Clement J. Zablocki (Wis.)
L. H. Fountain (N. C.)
Dante B. Fascell (Fla.)
Charles C. Diggs, Jr. (Mich.)
Robert N. C. Nix (Pa.)
Donald M. Fraser (Minn.)
Benjamin S. Rosenthal (N.Y.)
Lee H. Hamilton (Ind.)
Lester L. Wolff (N. Y.)
Jonathan B. Bingham (N.Y.
Gus Yatron (Pa.)
Roy A. Taylor (N. C.)
Michael Harrington (Mass.)
Leo J. Ryan (Calif)
Donald W. Riegle, Jr. (Mich.)
Cardiss Collins (Ill.)
Stephen J. Solarz (N.Y.)
Helen S. Meyner (N.J.)
Don Bonker (Wash.)
Gerry E. Studds (Mass.)
(4 vacancies)
Republicans
William S. Broomfield (Mich.)
Edward J. Derwinski (Ill.)
Paul Findley (Ill.)
John H. Buchanan, Jr. (Ala.)
J. Herbert Burke (Fla.)
Pierre S. (Pete) duPont (Del.)
Charles W. Whalen, Jr. (Ohio)
Edward G. Biester, Jr. (Pa.)
Larry Winn, Jr. (Kans)
Benjamin A. Gilman (N. Y.)
FORD
Tennyson Guyer (Ohio)
Robert J. Lagomarsino (Calif.)
Subcommittee on International Trade and Commerce
Democrats
Republicans
Jonathan B. Bingham, Chairman
Edward G. Biester, Jr.
Donald M. Fraser
Charles W. Whalen, Jr.
Roy A. Taylor
Don Bonker
Gerry E. Studds
Committee on Banking, Housing and Urban Affairs
Democrats
William Proxmire (Wis.), Chairman
John Sparkman (Ala.)
Harrison A. Williams, Jr. (N. J.)
Thomas J. McIntyre (N. H.)
Alan Cranston (Calif.)
Adlai E. Stevenson (I11.)
Joseph R. Biden (Del.)
Robert Morgan (N. C.)
Republicans
John Tower (Tex.)
Edward W. Brooke (Mass.)
Bob Packwood (Ore.)
Jesse Helms (N. C.)
Jake Garn (Utah)
Subcommittee on International Finance
Democrats
Adlai E. Stevenson, Chairman
William Proxmire
Harrison A. Williams
Thomas J. McIntyre
Alan Cranston
Joseph R. Biden
Republicans
Bob Packwood
John Tower
Jesse Helms
Jake Garn
For your information
DONALD E. SMILEY
Manager-Washington Office
EXXON CORPORATION
Suite 1014
1025 Connecticut Avenue, N.W.
Washington, D. C. 20036
(202) 833-8100
aral
September 21, 1976
Boycott
Dear Don:
Just a short note to thank you for
your recent note together with the
copy of the mailgram to Members of
the House of Répresentatives in
reference to the Export Administra-
tion Act.
with kindest personal regards, I am
Sincerely,
John 0. Marsh, Jr.
Counsellor to the President
Mr. Donald E. Smiley
Manager-Washington Office
Exxon Corporation
Suite 1014
1025 Connecticut Avenue, N.W.
Washington, D. C. 20036
dl
FORD : LIBRARY 038830
MAILGRAM TO EVERY MEMBER OF U. S. HOUSE OF REPRESENTATIVES FOR DELIVERY
ON THURSDAY MORNING, SEPTEMBER 9, 1976;
SEP
The International Relations Committee recently voted to attach an
antiboycott amendment to the Export Administration Act, H.R. 7665. We
are greatly concerned by the implications of this action.
The prohibitions of the amendment are so far reaching that economic
relations between this country and Arab nations could be effectively precluded.
The reason is that the amendment would in effect outlaw compliance with the
laws of Arab countries which regulate the origin of imports into their
territory and the destination of exports therefrom, including the export of
crude oil This would apply whether. a U.S. company or its affiliate were to
--
operate in, or solely purchase oil from, an Arab country: Currently the
U.S. depends on these countries for more than forty per cent of its crude oil
imports. Moreover, last year the U.S. exported more than five billion dollars
worth of goods and services to Arab countries.
The proposed legislation while prohibiting discrimination for reasons
of race, religion or national origin, is 50 sweeping that it goes far beyond
this objective which Exxon has long supported. In any case such unlawful
discrimination is already dealt with by existing legislation.
For the foregoing reasons we urge you to oppose this and other related
pending legislation which could only do damage to:U.S. interests and relations
without effectively combating the Arab boycott. Indeed such legislation could
very well result in a stricter enforcement of Arab boycott practices and
country's
jeopardize our contry's ability to meet its ever increasing needs for oil
imports.
H. C. Kauffmann
080
President
Exxon Corporation
1025 Connecticut Avenue, N. W.
Suite 1014
Washington, D. C. 20036
1025 CONNECTICUT AVENUE, N.W.
SUITE 1014
WASHINGTON, D.C. 20036
Mr. John Marsh
HING
The White House
Washington, D. C.
RECE HITE SECURITY HOUSE UNIT
1976 AM 11 06
THE WHITE HOUSE
WASHINGTON
Date Sept. 21, 1976
TO:
JACK MARSH
FROM: CHARLES LEPPERT
Please Handle
For Your Information
Per Our Conversation
Other:
FORD i LIBRARY LIB 07 ARY
Da
Sept. 21, 1976
94th Congres:
Question:
Will you oppose the Export Administration bill, H.R. 15377
if it contains the Rosenthal/Bingham anti-boycott language?
Tally Shee
Western and Plains (Talcott)
Midwestern States (Myers)
Yes
No
Und.
N/R
Yes
No
Und.
N/R
California
Indiana
Bell
Hillis
Burgener
Myers
Clausen
Iouxa
Clawson
Grassley
Goldwater
Michigan
SPICIFIC
Broomfield
Ketchum
Brown
Lagomarsino (ARW)
Cederberg
McCloskey
Esch O/T
Moorhead
Hutchinson
Rousselot
Ruppe O/T
Talcott lianing MD
Vander Jagt
Wiggins
Minnesota
Wilson
Frenzel (ARW)
Pettis
Hagedorn
Alaska
Quie
Young
Wisconsin
Arizona
Kasten
Conlan
Steiger
Rhodes
Ohio
Steiger
Ashbrook
Colorado
Brown (ARW)
Armstrong (ARW)
Clancy
Johnson
Devine
Idaho
Gradison O/T
Hansen
Guyer
Symms
Harsha
New Mexico
Kindness
Lujan
Latta
Washington
Miller
Pritchard
Mosher
Kansas
Regula
Sebelius
Stanton
Shriver
Whalen
Skubitz
Wylie
Winn
Illinois
Nebraska
Anderson
McCollister off
Crane
Smith
Derwinski
Thone (ARW)
Erlenborn
North Dakota
Findley (ARW)
Andrews
Hyde
Oklahoma
Madigan
Jarman
McClory
South Dakota
Michel
Abdnor
O'Brien
Pressler
Railsback
Total
5
5
10
15
Total
10
6
16
9
Total pages 1 and 2
30
33
44
37
1
REPUBLICAN WHIP-ROBERT H. MICHEL
94th Congres
uestion: N.R.15377
Tally She
Border and Southern (Young)
New England and Mid-Atlantic (McDade)
Yes
No
Und.
N/R
Yes
No
Und.
N/R
aryland
Connecticut
Gude
McKinney
Holt
Sarasin
Bauman
Delaware
issouri
duPont
Taylor (ARW)
Maine
entucky
Cohen
Carter
Emery
Snyder
Massachusetts
ennessee
Conte (ARW)
Beard
Heckler
Duncan
New Hampshire
T
Quillen
Cleveland
lorida
New Jersey
Bafalis
Fenwick
Burke
Forsythe
Rinaldo
Frey Kelly leaving
Vermont
Young
Jeffords
orth Carolina
New York
Broyhill
Conable
Martin
Fish
outh Carolina
Gilman
Spence
irginia
Horton
Butler
Kemp
Daniel
Lent
Robinson
McEwen
Wampler Whitehurst (ARW) leaved
Mitchell (ARW)
Peyser
labama
Walsh
Buchanan
Wydler
Dickinson
Pennsylvania
Edwards
Biester
rkansas
Coughlin
Hammerschmidt
Eshleman
ouisiana
Goodling
Moore
Heinz
Treen
Johnson (ARW)
[ississippi
McDade leaving no
Cochran
Myers
Lott.
Schneebeli
eras
Schulze
Archer leaning
Shuster
Collins
Steelman maybe O/T
Total
4
15
10
is
Paul
&
Total
11
7
8
8
(Rev. Mar. 1975)
2
APRARI
50-323-1
CPO
September 22, 1976
MEMORANDUM FOR:
MAX FRIEDERSDORF
FROM:
JACK MARSH
Pept
19767]
We should anticipate that sometime this afternoon the
President may wish to consider the Arab Boycott
matter insofar as guidance to the conferees is con-
cerned.
Depending on what happens in the House, there are
several likely alternatives:
1. Support a compromise amendment in Conference.
2. Oppose any modification in preparation for a
veto.
3. Accept, passively, action of the Conference.
I suggest that you take steps to ascertain as quickly
as possible current views and attitudes on the Hill
as to the status of things on the Hill.
Also, your views on what might be done to get favor-
able confermes.
JOM/dl
GREATE FORD FIBRARY
September 23, 1976
MEMORANDUM FOR:
JIM CANNON
ALAN, GREENSPAN
BRENT SCOWCROFT
BILL SEIDMAN
FRANK ZARB
FROM:
JACK MARSH
It appear quite likely the House and Senate conferees
on the Export Bill will agree to a very restrictive
boycott amendment.
If this does occur, we should begin efforts to study
the impact of such legislation, particularly in the an
economic and energy perspective. These inputs will
be essential for the President when he addresses the
bill after it comes down from the Hill.
The nuclear amendment should also not be overlooked
and the information on its impact should be made
available to the President.
CC:
Dick Cheney
Jim Cavanaugh
Max Friedersdorf
Bill Gorog
JOM/dl
FORD i LIBRARY 938839
boycott
September 25, 1976
MEMORANDUM FOR:
ED SCHMULTS
FROM:
JACK MARSH
I think it would be helpful if you would simply
tough base with J. T. Smith or Elliot Richardson
just for the purpose of maintaining communications
and contact.
Elliot gave me a call just before he left for a trip
on Thursday and indicated his desire, which I believe
I mentioned to you, about having Commerce people go
up to the Hill to see what kind of a deal they could
get with the conferees.
Elliot went out of town and I did not get back to him
and, therefore, I think it might be helpful for communi-
cation purposes if you would touch base with J.T. Smith,
who Elliot designated to be his representative in
this regard.
My guess is that if this thing becomes troublesome,
we will have alot of people second guessing us by
saying that we would have taken the Stevenson Amend-
ment early on and gotten out of this whole thing. I
am already getting this view and I suspect thathhat
probably has some merit, but the problem is that we
did not do it six weeks or several months ago for
reasons which you know and we have to play the ball
from where it is.
I would like to minimize internal kibitsing of what
we did or did not do.
JOM/d1
FORD s LIBRARY 9ENALD
THE WHITE HOUSE
WASHINGTON
September 27, 1976
FOR:
JACK MARSH
FROM: BRENT SCOWCROBB
Attachment
1:10 p.m., Monday, September 27, 1976
Press Release Issued by the Saudi Arabian Embassy in New York
The Foreign Minister of Saudi Arabia categorically denies
the Washington Post story this morning that Saudi Arabia has indicated
that it would stop its rapidly growing oil shipments to the United States
if developments hypothetically raised in the story occur.
His Royal Highness Prince Saud Al-Faisal, Saudi Arabia's
Foreign Minister, today said in New York:
"Saudi Arabia believes strongly in cooperation,
not confrontation. It seeks to work out its relations
with America and all other nations of the Free World
constructively and with moderation.
"As Saudi Arabia's Foreign Minister, I have
had constructive discussions during my current visit,
with the President of the United States and a number
of Senators and Congressmen; and there has been
absolutely no intimation of anything except the desire
of our country and indeed all the Arab World for a
strongly and mutually beneficial relationship with
America.
"As for the three-decade old Arab boycott
of Israel currently in the news, Arab officials have
made clear again and again over the years that it is
an economic tool as legitimate as similar American
boycotts in effect now and in the past. It involves no
religious or racial discrimination and applies to all
groups. As long as the state of belligerency between
Israel and the Arab countries remains, the boycott
will continue. In truth, we do not understand how a
boycott by the Arabs against Israel can be a basis
for action in the United States.
FORD
- 2 -
"As has been explained to us by many Americans,
pending legislation would, however, affect trade between
the United States and Arab countries in that it would
penalize American workers and businesses trading with
the Arab World. But all that is a matter for Americans
to resolve among themselves and requires no Arab
response. If commerce is cut off between the Arab
countries and the United States, that would be the
result not of anything done by the Arabs but the conse-
quence of action taken here against Americans trading
with the Arab countries.
"America and Saudi Arabia and, indeed, the
entire Arab World have had a long and constructive
relationship. It is broader and deeper now than ever
before. I am confident that the United States and the
Arab World will continue to have a mutually useful
and rapidly growing relationship of the most fundamental
kind. "
(Dictated by Miss Judy Noonan -- 212/421-4520)
is
FORD
LIBRA
Unite House
2
DL
3
WHB018(1821) (2-051785E271)PD 09/27/76 1821
4
5
ICS IPMMTZZ CSP
1976 27 PM 7 31
&
2122490100 TDMT NEW YORL NY 77 ø9-27 ø621P EST
7
8
PMS PRESIDENT GERALD FORD
1976 SEP 28
,
WHITE HOUSE DC
10
"
THE ORGANIZED JEWISH COMMUNITY URGENTLY REQUESTS YOUR ADMINISTRATION
12
TO TAKE ALL POSSIBLE MEASURES TO ASSURE THE FINAL ADOPTION OF THE
13
14
ANTI BOYCOTT LEGISLATION NOW BEFORE CONGRESS. ECONOMIC BLACKMAIL
15
MUST BE RESISTED; AMERICA CANNOT SELL ITS MORAL PRINCIPLES FOR OUL
16
17
OIL MONEY. IT MUST NOT BECOME THE INSTRUMENT FOR FURTHERING THE
18
FOREIGN POLICY AIMS OF NATIONS WHOSE PURPOSES ARE INIMICAL TO OURS.
19
20
THE CONFERENCE OF PRESIDENTS OF MAJOR AMERICAN JEWISH ORGANIZATIONS
21
ASK YOUR PERSONAL INTERVENTION TO THAT END
22
23
RABBI ALEXANDER M SCHINDLER, CHAIRMAN
24
NNNN
25
26
FORD 079339 LIBRARY
1
2
3
4
(2-051785E271)PD 09/27/76 1821
$
5
ICS IPMMTZZ CSP
6
7
2122490100 TDMT NEW YORL NY 77 09-27 0621P EST
MAIL ROOM
WHITE HOUSE ISE
C
8
PMS PRESIDENT GERALD FORD
1976 SEP 28 AM 9 03
9
WHITE HOUSE DC
10
"
THE ORGANIZED JEWISH COMMUNITY URGENTLY REQUESTS YOUR ADMINISTRATION
12
13
TO TAKE ALL POSSIBLE MEASURES TO ASSURE THE FINAL ADOPTION OF THE
14
ANTI BOYCOTT LEGISLATION NOW BEFORE CONGRESS. ECONOMIC BLACKMAIL
15
16
MUST BE RESISTED; AMERICA CANNOT SELL ITS MORAL PRINCIPLES FOR OUL
(
17
OIL MONEY. IT MUST NOT BECOME THE INSTRUMENT FOR FURTHERING THE
18
19
FOREIGN POLICY AIMS OF NATIONS WHOSE PURPOSES ARE INIMICAL TO OURS.
20
THE CONFERENCE OF PRESIDENTS OF MAJOR AMERICAN JEWISH ORGANIZATIONS
21
22
ASK YOUR PERSONAL INTERVENTION TO THAT END
23
RABBI ALEXANDER M SCHINDLER, CHAIRMAN
24
25
NNNN
26
THE WHITE HOUSE
WASHINGTON
September 27, 1976
MEMORANDUM FOR:
JACK MARSH
FROM:
SUBJECT:
Boycott JIM CANNON Jun Amendment
New York State does have a Boycott Amendment that
restricts trade from the port of New York.
According to an authoritative Port Authority Source,
there are no figures to show that it has hurt trade
through the port. Shipments out of this port have
been about the same since the Boycott Amendment be-
came effective. Trade sources believe that there
would have been increases in shipments without the
boycott, but there is no proof of it.
FORD : LIBRARY GENALD
Jun Can't we get same
comparation figures ? on
exports, N imports July
9:44
THE WHITE HOUSE
WASHINGTON
September 29, 1976
FORD
For:
Jack Marsh
From:
Ed Schmults
STEVENSON AMENDMENT
BINGHAM-ROSENTHAL
PROPOSED CONFERENCE
CURRENT LAW
(SENATE BILL)
(HOUSE BILL)
SUBSTITUTE
NONDISCRIMINATION
Current Department of Commerce
Essentially the same as current
Forbids discriminatory acts
Same as Bingham-Rosenthal
regulations forbid the furnishing
law.
as well as furnishing information
of information pursuant to a
which would have a discriminatory
boycott-related request which
effect.
would have a discriminatory
effect.
DISCLOSURE OF
Reports filed with the Depart-
Reports filed after date of
Reports publicly available -- no
Same as Stevenson.
BOYCOTT REPORTS
ment of Commerce regarding
enactment are to be made avail-
explicit exemption for business
receipt of Arab boycott requests
able for public inspection
proprietary information.
and compliance intentions of
except for certain information
exporters are kept confidential.
regarding quantity and value
(Under the "Sunshine Act" signed
of goods if the Secretary of
into law by the President, names
Commerce determines that a
FORD
of companies filing such reports
competitive disadvantage to the
may have to be disclosed under
reporting firm would result.
the Freedom of Information Act).
REFUSALS TO DEAL
Subject not treated under the
Requires the Secretary of
Requires the Secretary of
Essentially the same as
Export Administration Act.
Commerce to adopt regulations
Commerce to adopt regulations
Bingham-Rosenthal --
However, concerted refusals to
prohibiting American firms
prohibiting any "U.S. person"
covers secondary as well
deal can constitute a violation
from "refusing to do business
from refraining to do business
as tertiary boycotts,
of Section 1 of the Sherman Act.
with any other domestic concern
with any other U.S. person,
subject to certain
The Department of Justice has
or person pursuant to an agree-
business concern, Israel or any
limited and technical
charged Bechtel Corporation
ment with, requirement of, or a
Israeli person or business concern
exceptions.
with violation of the Sherman
request from, or on behalf of,
-- with intent to comply with or
Act due to Arab boycott
any foreign country, national,
to further or support the Arab
compliance. Current law in no
or agent thereof made or imposed
boycott against Israel. Bingham-
way covers refusals to deal with
for the purpose of enforcing or
Rosenthal thus covers secondary
an foreign nation such as Israel
implementing a restrictive trade
as well as tertiary boycotts.
(a so-called "secondary boycott")
practice or boycott against a
and has not been applied to
country friendly to the United
cover refusals to deal with foreign
States or against any domestic
companies or persons.
concern or person."
(cont'd next page)
STEVENSON AMENDMENT
BINGHAM-ROSENTHAL
PROPOSED CONFERENCE
CURRENT LAW
(SENATE BILL)
(HOUSE BILL)
SUBSTITUTE
REFUSALS TO DEAL
(cont'd)
A specific exception is
made for banks refusing to
process letters of credit for
the benefit of U.S. exporters
where the exporter fails to
comply with the requirements
thereof, except where such
compliance would be a violation
of law. As is the case with
current law, Stevenson does not
FORD
cover refusals to deal with
"secondary boycotts." Rather,
Stevenson aims at prohibiting
"tertiary boycotts," i.e.,
requests that U.S. concerns
not deal with other U.S.
concerns.
FURNISHING OF
Allows U.S. exporters to
Same as current law.
In addition to forbidding
Prohibits furnishing
INFORMATION
furnish boycott-related
the furnishing of information
information with intent
information -- except
which would have a discrimina-
to further the boycott,
such information as would
tory effect, forbids the
"about whether the
have the effect of dis-
furnishing of information
person does, has done,
criminating against
about "any past, present, or
or proposes to do
American citizens.
proposed business relationship,"
business with (Israel),
etc. with any United States
or (an Israeli national)
individual, business concern,
or with any other
Israel, national or resident
boycotted person."
of Israel, etc. -- with intent
(The great preponderance
to comply with or support the
of boycott requests
boycott against Israel.
seek information about
U.S. exporters' business
relationships with
Israel. A provision
of law which forbids
the furnishing of such
information could have
sweeping impact.)
STEVENSON AMENDMENT
BINGHAM-ROSENTHAL
PROPOSED CONFERENCE
CURRENT LAW
(SENATE BILL)
(HOUSE BILL)
SUBSTITUTE
PERSONS COVERED
Current law is deemed to
Same as current law.
Does not appear to
Prohibitions and
apply to U.S. firms engaged
require nexus to export
reporting requirements
in export transactions and
transaction and would cover
apply to U.S. citizens,
not to the actions of U.S.-
conduct of "U.S. persons"
corporations organized
controlled business entities
wherever undertaken for whether
under U.S. law, con-
not engaged in exporting from
or not pursuant to an export
trolled foreign
the United States. This
transaction.
subsidiaries of U.S.
construction is consistent
corporations and persons
with the enforcement of an
FORD
doing business in the
Export Administration Act.
United States "with
It has been declared that the
respect to their
Arab boycott-related regula-
business in the United
tions would apply to the actions
States." Both the
of a foreign subsidiary of a
Conference Substitute
U.S. firm if that subsidiary
and the Bingham-Rosenthal
were being used simply as a
bill thus cover conduct
conduit for U.S.-manufactured
regardless of whether
goods on their way to Mid-East
an export transaction
countries.
is involved.
ENFORCEMENT AND
Boycott-related regulations
Generally the same as
Adds provision for private
Deletes the Bingham-
SANCTIONS
under the Export Administra-
current law -- except civil
treble damage suits by
Rosenthal treble
tion Act are enforced under
fines are increased. Increases
persons "aggrieved" by
damage provision but
the general enforcement
comport to Administration pro-
violations of the Act.
provides that all
provisions of the Act --
posal. Civil penalties for
This provision supplements
enforcement will be
usually by a civil fine.
refusals to deal can be levied
the normal range of sanctions
pursuant to APA
(Compliance action under the
only after defendant is given
provided by current law.
procedures.
Export Administration Act are
an adjudicatory hearing pursuant
specifically exempted from the
to the APA.
requirements of the Administra-
tive Procedures Act (APA)).
SEP 30 1976
THE WHITE HOUSE
WASHINGTON
September 30, 1976
MEMORANDUM FOR:
JACK MARSH
BRENT SCOWCROFT
MAX FRIEDERSDORF
FROM:
EDWARD SCHMULT$
DD
Attached is a draft of a proposed "Statement of
Managers" that might be used to describe the
proposal on the Arab Boycott reviewed with
Senator Tower yesterday.
Attachment
STATEMENT OF MANAGERS
The boycott-related provision adopted by the House
and Senate Conferees combines features of both the House
and Senate proposals. At the same time, it accommodates
strong concerns expressed by the Administration, that the
legislation not be so broadly drafted as to jeopardize
or undercut essential diplomatic efforts to achieve a
lasting peace in the Middle East.
The legislation states unequivocally that this
Nation will not tolerate any discrimination against
individuals or business concerns as a result of restric-
tive trade practices or boycotts against countries
friendly to the United States. To assure that the Arab
boycott of Israel does not have discriminatory and there-
fore abhorrent and intolerable effects in the United States,
the Conference provision would (i) forbid any action,
including the furnishing of information which has a
discriminatory effect; (ii) require public disclosure of
boycott reports; and (iii) prohibit "refusals to deal"
-- the so-called "tertiary" effect of the boycott.
Paragraph (a) strengthens existing policy provisions
of the Export Administration Act to reflect the new
prohibition against refusals to deal by making it clear
that the United States opposes restrictive trade practices
and boycotts against "any domestic concern or person" as
well as against "other countries friendly to the United
States. "
Paragraph (b) states that domestic concerns are to
be prohibited from taking any action in furtherance of
restrictive trade practices or boycotts against any
country friendly to the United States or against any
domestic concern or person which would discriminate or
have the effect of discriminating against any individual
or firm on the basis of race, color, religion, sex,
nationality or national origin.
Paragraph (c) amends Section 4 of the Export
Administration Act to require that reports of requests
for boycott compliance, made to the Secretary of Commerce,
GERALD FORD
- 2 -
be publicly disclosed, except for certain specific informa-
tion regarding quantity, description, and value of goods
if the Secretary of Commerce determines that the disclosure
of this latter information would place a domestic concern
or person at a competitive disadvantage.
Paragraph (c) further amends Section 4 of the Act
to require the Secretary of Commerce to adopt rules and
regulations implementing the Act's strong policy mandate
against discrimination and refusals to deal. Such regula-
tions are to prohibit domestic concerns or persons from:
(i) discriminating against any United States
person including company officers or
shareholders, on the basis of race, color,
religion, sex, nationality, or national
origin.
(ii) furnishing information with respect to
race, color, religion, sex, nationality,
or national origin of any individual.
(iii) refusing to do business with any other
domestic concern or person, pursuant to
an agreement or understanding with any
foreign country, national or agent thereof,
for the purpose and with the intent of
complying with a trade boycott against a
country which is friendly to the United
States or against any domestic concern or
person.
Paragraph (c) also contains certain procedural and
conforming provisions which state that this legislation
neither substitutes for nor limits the antitrust laws
of the United States and that no penalty for violation
of the refusal to deal regulations can be imposed without
an opportunity for an adjudicatory hearing on the record
in accordance with the Administrative Procedures Act.
The Conferees believe that this legislation represents
a strong step to strengthen the national resolve to oppose
the Arab boycott of Israel and especially any discriminatory
effects of that boycott on the U.S. economy. By requiring
that future boycott requests filed by U.S. firms be made
2004 :
- 3 -
public, the legislation would give the public and the
Congress an opportunity to monitor the behavior of U.S.
business and the effectiveness of measures taken by the
U.S. Government to implement our strong anti-boycott
policy. It would, at the same time, interject an element
of public accountability in the responses of U.S. firms
to boycott demands. The American public and the Congress
will have the opportunity to know the degree to which
U.S. business relations are being bent to the interests
of foreign governments. By proscribing refusals to deal,
the legislation will eliminate one of the most objectionable
features of the boycott -- its "tertiary" effect on freedom
of choice within the U.S. economy.
FORD
HERALD
OCT 1 1976
THE WHITE HOUSE
WASHINGTON
September 30, 1976
MEMORANDUM FOR: JACK MARSH
FROM:
SUBJECT:
JIM Boycot CANNON Jun Amendment
My authoritative source says there are no figures to prove
that the New York State boycott has had an impact in either
exports or imports.
Song
FORD is LIBRARY 07/139
[oct 1976?]
- 2 -
offered a compromise amendment (see attachment) and
later offered to accept a boycott amendment similar
to Senator Stevenson's with a minor modification.
However, neither of these proposals was accepted
and the Congress adjourned without passing an
extension of the Export Administration Act. Each
of the President's proposals indicated support for
prospective public disclosure of boycott reports.
10 q. FORD CIRREN,
Administration Offered Amendment
Foreign Boycotts
Sec.
.
(a) Section 3 (5) (A) of the Export Administration
Act of 1969 (hereinafter in this Section referred to as the
"Act") is amended by inserting immediately after "United
States" the following: "or against any domestic concern or
person"
(b) Section 3 (5) (B) of the Act is amended by inserting
immediately after "United States" the following: "and to
prohibit such domestic concerns from taking any action in
furtherance of such restrictive trade practices or boycotts,
which discriminates or has the effect of discriminating
against any domestic concern or person on the basis of race,
color, religion, sex, nationality or national origin".
(c) Section 4 of the Act is amended by redesignating
paragraphs (2) through (4) and any cross references thereto
as paragraphs (3) through (5) respectively, and inserting after
paragraph (1) a new paragraph (2) as follows:
11 (2) (A) Rules and regulations prescribed
under subsection 4 (b) (1) to implement the provisions
of Section 3 (5) of this Act, shall require that any
domestic concern or person which receives a request
to take any action referred to in Section 3 (5) (B)
of this Act to report that fact to the Secretary of
Commerce together with such other information as
the Secretary may require to enable him to carry
out the requirements of Section 3 (5).
"(B) Any report hereinafter filed pursuant
to this paragraph shall be made available
promptly for public inspection and copying:
Provided, however, that information regarding
the quantity, description, and value of any goods
to which such report relates may be kept confidential
if the Secretary determines that disclosure thereof
would place the domestic concern or person involved
at a competitive disadvantage. The Secretary of
Commerce shall transmit copies of such reports to
the Secretary of State for such action as the
Secretary of State, in consultation with the
Secretary of Commerce, may deem appropriate for
carrying out the purposes of Section 3 (5) of this
Act.
"(C) Rules and regulations implementing the
provisions of Section 3 (5) of this Act shall
prohibit domestic concerns and persons from:
is
FORD
- 2 -
(i) Discriminating against any United
States person, including any officer, employee,
agent, director, or stockholder or other
owner of any domestic concern on the basis of
race, color, religion, sex, nationality or
national origin.
(ii) Furnishing information with respect
to the race, color, religion, sex, nationality,
or national origin of any past, present, or
proposed officer, employee, agent, director,
or stockholder or other owner of any domestic
concern.
(iii) Refusing to do business with any
other domestic concern or person, pursuant to
an agreement or understanding with any foreign
country, national or agent thereof, for the
purpose and with the intent of complying with
a trade boycott against a country which is
friendly to the United States or against
any domestic concern or person.
"(D) Any civil penalty (including any suspension
or revocation of the authority to export) imposed
under this Act, for violation of rules and regulations
issued under subparagraph (2) (C) (iii) of this para-
graph may be imposed only after notice and opportunity
for an agency hearing on the record in accordance with
sections 554 through 557 of Title 5, United States
Code. The provisions of subparagraph (2) (C) (iii)
of this paragraph shall neither substitute for nor
limit the antitrust laws of the United States.
Further, the provisions of subparagraph (2) (C) (iii)
of this subsection shall not apply to compliance with
requirements pertaining to the identity of any carrier
on which articles, materials, or supplies are to be
shipped so long as such do not have as their purpose
the enforcement or implementation of a restrictive
trade practice or boycott against a country friendly
to the United States or against any domestic concern
or person."
FORD
THE WHITE HOUSE
WASHINGTON
October 7, 1976
5:10 p.m.
Mr. Marsh:
Charlie Leppert left the following
message:
"I was called by Tom Martin who tells
me that Senators Proxmire, Ribicoff
and Williams are expected to hold a
press conference attacking the
validity of the President's statements
last evening in the debate on the
Arab boycott issue."
Donna
THE WHITE HOUSE
WASHINGTON
October 7, 1976 5:10 p.m.
Mr. Marsh:
Charlie Leppert left the following
message:
"I was called by Tom Martin who tells
me that Senators Proxmire, Ribicoff
and Williams are expected to hold a
press conference attacking the
validity of the President's statements
last evening in the debate on the
Arab boycott issue."
Donna
FORD j LIBRARY DERALO