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Document Creation Date: 
December 16, 2016
Document Release Date: 
July 21, 2005
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Publication Date: 
August 6, 1976
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st 6,S 13807 /9Approved For ItiklitiimN/454/ffitql, : iimeipEgs4Etwito o oo 000 25-2 administer oaths or affirmations, and may by subpoena require any individual or en- tity to appear and testify or to appear and produce books, records, and other writings, or both, and in the case of contumacy by, or refusal to obey a subpoena issued to, any such individual or entity, the district court of the United States for any district in which such individual or entity is found or resides or transacts business, upon applica- tion by the Attorney General, and after no- tice to any such individual or entity and hearing, shall have jurisdiction to issue an order requiring such individual or entity to appear and give testimony, or to appear and produce books, records, and other writings, or both, and any failure to obey such order of the court may be punished by such court as a contempt thereof. CIVIL REMEDIES In-Which such gateway city is located, if an einployer in the PIade to Vrhich such immi- grant is US travel under the grant certifies that such employer till employ that immi- grant. In addition, the Secretary is author- heed te make grants of up to $250 to each Member of an" irmiligrant's- immediate family to enable such member fo accompany the immigrant in -travel assisted under this sub- section. (b) The United States Nniployment Serv- ice is directed to establish and maintain programs in gateway cities of job referrals for immigrants to jobs available in States other than that in which such gateway city is located. AtIVROFMKTIO11.b OVIZTATIO24? SEc, 9. (a) There are ati horized to be ap- propriated such sums as are necessary for the purposes of grants under sections 5, 6, and 7. If sufficient funds are net appropriated for any fiscal year for the erlizrpose,s of grants under sections 5, 6, and Tno funds shall be allocated under sectien 7 until all funds available shall have been allocated under section 6, and no funds Shall be allocated tinder section until all funds available have been allocated under section 5. (b) There is authorized to be appropriated the sum of $20,000,000, to remain available until expended, for grants and programs under sections 8(a) and 8(b). By Mr. MAGNUSON (for himself rid Mr. PEartsON) (by request) : A bill to require the disclosure o payments to foreign officials and for Other purposes. Referred to the Commit- - tee on Commerce. Mr. MAGNtTSON. Mr. President, I in- troduce for myself and' Mr. PEARSON, by request, a bill to require the disclosure of payments to foreign Ukiah and for Other purposes. Mr. President, the Secretary of Corn- rce has submitted a letter and draft o proposes egislation en es or- eign Payments -Disclosure Act:- L oijc Imanimous consent that- the text of t e VII an analis of thebin, and the state- remarks. There being no objection, the bill and Ihaterial were ordered to be printed in the RECORD, as follows: S. 3741 Be it enacted by-th-e-re.nate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Foreign Payments Disclosure Act". nErxhrriovs SEC. 2. For purposes of this Act: (a) "person" means: (1) an individual who is a citizen of the United States; (2) an individual who has been lawfully admitted for permanent residence as de- scribed in section 101(a) (20) of the Immi- gration and Nationality Act, as amended (8 1101(a) (20)); or ((3) a legal entity, other than a noncom- mercial government entity, organized under the laws of the United Slates or a State or political subdivision thereof; (b) "anything of value means any direct or indieeet gain or advantage, or anything e that might real- itably be regarded by 'the beneficiary ae. a direct or indirect gain or advantage, including a direct or indirect gain or advantage to any other individual or entity; (c) "foreign seiniate" means a legal entity organized under I he laws of a foreign coun- try, or political udedivislon thereof, at least 50 percent of which is beneflaially owned directly or indirectly by a person or persons subject to the previsions of this Act; (d) "Secretary'', unless otherwise specified, means the Secretary of Commerce; (e) "foreign p,ffilic official" means: (1) an officer (-.r employee, whether elected or appointed, of a foreign government; or (2) an individual acting for or on behalf of a foreign government; and includes an individual who has been nominated or appointed to be a foreign pub- lic official or who has been officielly informed that he will be so nominated or appointed; (f) "official action" means a decision, opin- ion, recornmeneetion, judgment, vote, or other conduct iiivolving an exercise of dis- cretion by a foreign public official in the course of his ern.-..loyment; -(g) "State" nleans a State of the 'United States, the Distre t of Columbia, Puerto Rico, or any territory or possession of the United States; and (h) "foreign r,vernmont" means: . (1) the goverinnent of a foreign country, irrespective of eecognition by the United States; (2) a deparineeet, aeency, oz branch of a foreign government; (3) a corporei ion or other legal entity established or owned by, and sebject to con- trol by, a foreign government; (4) a political i-ubdivision of a foreign gov- ernment, or a di partment, agency, or branch of the political subdivision; or (5) a public reternational organization. REPORT E NG REQUIREMENTS SEC. 3. A perse-i shall report to the Secre- tary, in accordaleie with regulaeions promul- gated by the Sr retary, payments hereafter made on behali of the person or the per- son's foreign afti.ate to any other individual or entity in connection with: An official ac- tion, or -sale to or contract with a foreign government, for the benefit of the person or h ee foreign affiliate, - ercorire,TG REQUIREMENTS SEC. 4. In order to insure that a person who is required to report under section 3 of this Act has sufficient information in his pos- session to repor-i. accurately, :he Secretary may promulgate rules and regulations re- quiring Such peeeon to keep streh records, in the form and is tuner prescribed by the 'Sec- retary, as he deems necessary to carry out the purpose of lids Att. In devising the rec- ordkeeping rec.oirements, the Secretary shall consult ad tee other Federal agencies tn eliminate unnecessary duplication in rec- ords acquired by the agencies. The agencies are authorized, where appropriate, to com- bine in a single form the recerds required under this Act; and under any other Act. EN} ORCELI_. ST; COMPLIANCE WITH ii QUIRE NEE NTS SEC. 5. To the extent necessary or appro- priate to the enforcement of this Act, the Secretary, aDd officers and employees of the Department of ,Commerce specifically desig- nated by the , eecretary, may make such ileVestigettons s od obtain suet information from, make sure. inspections ef the books, records, and oil or writings of, and take the sworn testimone of, any indivie.ual or entity. In addition, sri 1 officers or employees may SEC. 6. (a) CIVIL PENALTIES .?A person who fails to file a report required under section 3 of this Act, or who falls to maintain the records required under section 4, or, who files a report under section 3 but negligently omits information required to be reported under section 3 or negligently states false information required to be reported under section 3, shall be subject to a civil penalty of not more than $100,000. (b) IntuNCTioN.?Upon evidence satisfac- tory to the Attorney General that a person is engaged in an act or practice that consti- tutes a violation of this Act, the Attorney General may bring an action in a district court of the United States to enjoin witch an act or practice, and, upon a proper show- ing, a permanent or temporary injunction or restraining order shall be granted by the court together with such other equitable relief as may be appropriate. SEC. 7-. (a) FAILURE TO FILE.?A person who knowingly; (1) fails to file a report required under section 3 of this Act; (2) fails to maintain records required under section 4 of this Act; or (3) omits required information from, or falsifies information in, records kept under section 4 of this /Lot; shall be fined not more than $10,000 or im- prisoned for not more than one year, or both, except that a legal entity shall be fined not more than $100,000. (b) KNOWING FA LSIFICATION .?A petioli who files a report required by this Act' which he knows or should know contains a false statement, or which he knows or should know omits required information, shall he fined not more than $100,000 and imprisoned not more than three years, except that a legal entity shall be fined not More than $500,000. DISSEMINATION OF REPORTS SEC. 8. (a) DISSEMINATION WITH THE UNITED STATES.?The secretary shall,aupon receipt of a report, disseminate copies of the report to the Department of Justice, the De- partment of State, and the Internal Revenue Service. If the person who filed the report is subject to the jurisdiction of the Securities and Exchange Commission, the Secretary _ shall also transmit a copy of the report to -the _Securities and Exchange Commission. e Until the report is released to the public, it shall be maintained in accordance with sec- tion 1905 of title 18, United States Code. The report shall be transmitted, upon request, subject to an appropriate arrangement to assure its confidentiality, to Committees of the Congress having legislative jurisdiction over the subject matter of the report. A re- port shall be made public one year after re- ceipt in accordance_ with rules and regula- tions promulgated by the Secretary, unless Approved For Release 2005/08/03 : CIA-RDP79-00957A000100100025-2? Approved For Release 2005/08/03 : CIA-RDP79-00957A000100100025-2 BEST COPY Available Approved For Release 2005/08/03 : CIA-RDP79-00957A000100100025-2 S 13808 Approved Forft TNIMP8M3lifa5kBP7fics9E1000100100025-2 August 6, 1/'1j nos reporting requirement will be turtner delineated by the issuance of regulations pursuant to election 9(5) of the bill, which requires the ;monetary, by regulation, to isee a threenold amount below which payments need not be reported, and to define typeE of payments which need not be reported. Thos, while the reperting requirements of the hill will extend to proper as well fie improper or illegal payments, the regulations issued by the necretary will exclude from reporting cer- tain regular business payments not incon- sistent with die purposes of the bill tied bona fide payments such as taxes. The terms -individual or entity," as mied in Section 3, refer to foreign public officials, foreign governments, and agents or inter- meellaries used in connection with covered trannactIone or official actions. Recordkeek:ng requirements Section 4 allows the Secretary of Comment cc to promulgate rules and regulations prescrib- ing record keeping necessary to carry out the purposes of the Act. The Secretary 1i3 to consult in the design of these record keeping requirements with other federal agencies as to elinithate unnecessary duplication of recatd keeping. It is anticipated that -.he SEC's record keeping requirements for Anne regulated by, the SEC may suffice for pur- ple:0e of compliance with this bill. Enforcement Section 5 grants the Secretary of Cola- meree authority to inspect books and records, lasue subpoenas and take sworn testimony as eieconnery and appeopriate to the enforee- merie of the Act. Civil remedies Se:tion 6 provides a civil penalty of not more than $100,00( for failure to thea re- port required by Section 3, failure to main- tain records required by Section 4, or for negngent orrreedon or inclusion of false in- fore:onion In a report required under Sse- lion 3.-Seetion 6 also gives the Secretary the power to request the Attorney General of the United States to bring an action In federal district court to erjoin a person from eon- theieng to engage hi any act or practiee that COlictitUtffi It violation of the bill. Criminal penalties Section 7(a) provides criminal penalties for knowing violations of the requirements of Sections 3 and ti of the Act. Individuals may be fined not more than 810,000 or im- prisoned for not more than one year, and a fine of 8100,000 Is provided for legal entities such as oerporstiors. Section 7(b) penalizes an a felony, knowing falsification of reports required by Section 3. Individual offenders may be fined not more than 8100,000 ead Imprisoned not more than three years. A legal entity le subject to a criminal nee of tip te e500,00n. Desennineition of report:: Section 8m) requires the Secretary, upon receipt of a report, to disseminate it to the Departments of State and Justice, the En- ternel Reeetene Service and, where appropen ate, to the Securities and Exchange Conn menion. Section 8, is I states that the Departinen1 Justice or the State Department can, as ap- propriate, re:ay information contained In such reports to authorities in foreign juris- dictions. Except for the aforementioned Mee- pemination. the Secretary of Commerce must keep reports confidential in accordance with Ja r s.c. I If105, for one year from date of receipt. This one-year period will help pro- tect business competitive information vod the Secretary of State makes a speenie deter- mination in writing that foreign policy inter- ests dictate against dieclosure, or melees the Attorney General makes a specific deter- mination in writing that the statue of an ongoing investigation or prosecution dictates against public disclosure through Meer than conventional judicial procesen. (b) DISSEMINATION TO A POp.EMN GOVERN- MRINT.?The Attorney General, with Elie con- currence of the Secretary of State. may fur- nish any information contained in a report made under this Act to the appropriate law enforcement authorities of the foreign gov- ernment Concerned In accordience with ap- plicable procedures and Mtn-nation:el time- meats. The Secretary of State, with the con- ounence of the Attorney Cletieral, I my pro- vide any such information to the foreign government concerned. REGULATION S Sec. 9(a). PROIMILSATIOn Or RECULA- TIONS.?The Secretary shall promulgate such regulations as are necessary to carry out the purposes of this Act. The regulaticen shall include: (1) a requirement that the .npori include the name of every recipient who receives any- thing of value over a specified amount and the amount received by each such recipient; (2) a requirement that the report include information concerning nnetiple pannente with respect to a single trainactio i which total over a specified amount, and (3) a definliton of certain types id pay- ments which are not required to be reported because they are regular buneuese payments not inconsistent with the purposn of this Act, or are bona fide payments to a foreign government, such as taxes or fees paid pur- suant to duly promulgated lens, reg nations. decrees, or other legal action. (b) CONSULTATION WTE11 0In 4R Aca IFM-- - In devising the reporting regulate no, the Secretary shall coneult with other federal agencies to eliminate unnecessary duplica- tion in reports required by the ageneine. The agencies are authorised, where appropriate. to combine in a single Term the report, re- quired under this Act and ender aly other act. COMPORMINO AMENIMENT SSC. 10. The provisions of this A ether than section 0(b), shall not apply to pay- ments meede in connection with le) sales of defense articles or defense sex-vices under section 22 of the Arms Export C-ontr al Act or (b) commercial sales of defense 111 tlEIes or defense services licensed or Approved tinder section 38 of the ATMs Export Control Act. PROVISIONS OF LAW NOT Arm- ref. Sec. II. (a) Ricans Arm Dtrrrr s Ulmer Orsza.Liws ineAriscrste?Notbing In this Act shall be construed as affretelng tie rights or duties arising under the Securitieb Act of 1983, 15 Cf.S.C. 77a et seq., the Seoul iti.)a Ex- change Act of 1934, 15 U.S.C. 78a et seq, the Public Utilities Holding Company nit of 1935, 15 D.S.C. 79a et sem, Cie Truet. Inden- ture Act of 1939, 15 U.S.C. elann tee In- vestment coMpany Act of 1940, 15 II SC. ens- 1 at seq., and the Investment Advise re Act of 1940, 15 U.S.C. 80b-1 et seq., and al y itunee- quent amendments thereto. Person ; sehject to this Act shall be required to mdcc uch public disclosure of the seaters dee:nixed In section 3 of this Act as naly be otherwise required under the statute it Move, Nothing in this Act shall preclude peening reporting pursuant to the provisions of this Act from making public dirclootre ef any payment described in section 1. ib) Avritoerry Or EIECERITIRS AND Eiclialatie Comselsoion.--Nothing in this Act snail be cenatruedas sleeting ur conditioning the authority of the Securities and Exchange Cocarnitelon to enforce the statutes listed in oineection (a) or to investigate violations tnereof, The Commissiori shall have the an- reeor1ty to premise such enforcement or in- vestigation on thionnatkei received pursuant eectiun Ina) of this Att. aneers AND RESIXOULS PaViLeVED Sac. 12. The right's and remedies provide-1 Os tills title shall be in addition to, and emit not be in derogation of, any and all other nghte and remedies that may exist at law or ill equity. Famernerneeteucton PAY Wi nes Lerecnosenz Ace incenvon-ne-secrion efeeelrere TIM DILL Short tole Section I of the bill provide that It may Or' cited as the Poreign Payments Dieclosure Definitions nectin. 2 denims certain terms used lii e;te bill. "nereon" 1 detnied no mean incite vicluale who are the citizens or resident aliens of the United States or legal entities oreeo Intel under I lie laws of the United States or airy slate or political subdiviarion thereof. A e exteptien 13 made for government entities a leen lire riot organized for eornmercial pm-- pines. Federal, state or local government having commerail or trade promo- teem purposes would be subject to the Act. Anything of volute' is defined broadly to I: nude rIty direct or Indirect gain or advert- rpm to ii direct beneficiary or to any third piney teneficlary. -Foreign affiliate" is defined to mean any ieeel orgenleed ender the laws of a f ,reign country, whenever It is at least 60 renceet eeneficially owned by persona 'rub- e-et to the Act. More complex definitions et ownership or control were rejected for the purposes of clarity and simplicity of ednitnietration. "Foreign public official' is defined to mean In ?freer or employee of a forelim govern- ment, whether elected or appointed, or an individual acting for or on hamlet of a for- eign government. The term further is de- fined to include sit individual who has been eonunated or appointed to be a foreign pub- lic official but who hes not yet formally eritereu othee. "Officiel action" ia defined to mean any decision, opinion, recommendation. judg- ment, vote, or other conduct involving an eeercne of discretion by a foreign public ulimelaS u. um course of lin employment. 'Foreign government" or defined broadly to. e.clude soy government ul it foreign country, is ilepoi teneut or agency thereof, a corpora- noel or other legal entity under control of a torten, government; any polities; eubdigesion el a foreign govertuneon ared any public L. oational oreanientiori. neporttng regziftremcntr S,:ct ion :1 or the hill sets forth class's of vv;niurtz which must be reported to the eenntary of Commerce In accordance with rentelatione promulgated by the Secretary. There trvelocie payments made, after passage cf the bel, on behalf of ri person subject to the Act or the person's foreign affiliate to nie other individual or entity in connection %nth: in official action, or sale to or contract with is foreign government for the COTainer- t1S1 i+sneni of the pennon or his foreign veinal f? Approved For Release 2005/08/03 : CIA-RDP79-00957A000100100025-2 gust 6, 167tppr0ve1 ForManffpaRtfaiiat9P7Mi9A5R000100100025-2 lessen possible foreign relations problems. Reports ere to be shared, however, upon re- quest and subject to appropriate assurances of Confidentiality, with Committees of Con- grails having appropriate legislative jurisdic- tion.. After the .expiration of the one-year period, reports are to be available for public insPection and -copying, unless- a specific determination is made in Writing by the Secretary of State that foreign policy inter- ests dictate against public disclosure, or the Attorney General makes it specific deter- mination in writing- that the status of an ongoing investigation of pfosetution dictates against public disclosure through other than conventional judicial process. '4egulations' - Section 9(a) grants the Secretary of Corn- ' merce broad rePtilatory authority. Regulatiens are tb include a requirement ? that names of recipients of Payments be re- ported. Further, they are to contain a Mini- time of types of payments not required to ? reporte d because they are regular business payments not inconsistent with the purposes of the Act, or are bona fide payments to a foreign government, such as taxes or fees paid pursuant to law, regulation, decree or other action. In addition, in accordance with Section 9 (a) (1), the Secretary is to set a threshold amemit below which payments need not be reported. An exception is -made to this threshold concept for multiple payments totaling the threshold amount with respect to a single transaction. The purpose of this threshold will be to exclude so-called "grease" or "facilitating" payments, i.e., small pay- ments made to expedite low level official ac- tions such as, customs processing. Reporting of such minor payments could create bur- dens far outweighing the benefits sought by the Ant. Section 9(b) directs the Secretary, in de- vising reporting regulations, to consult with other federal agencies to eliminate unneces- sary duplication. Agencies are authorized, where appropriate, to combine in a single form, reports renpired under this bill and Any other law. - ' CcmforMing Antendment - Section 10 states that the previsions of the Act, other tlian'SectiOn 0-(b), shall not ap- ply, to Certain seise of defense articles and service's Pursnant. to The Arms Export Con- trol Act. This, exemption is based upon the fact that the Arms Export Gotitrol Act 'Pro- vides_ for 'comprehensive reporting to the State Department and the Congress of in- formation regarding payments with respect to such transactions (Section 604 of P.L. 94-229). Provisions of Law Not Aftected Section 11 makes -clear that the require- /netts of the bill in no way alter or affect - rights and duties arising under laws ad- ministered by the Securities and Exchange Commission. Similarly, it states that nothing in the bill is to be construed as affecting or conditioning the authority of the Securities and Exchange Commission. rt provides fur- ther that the Commission shall have the au- thority to premise enforcement or investiga- tive actions on information received under Section 8(a) of the bill from the Secretary of Commerce. Rights arid Remedies Preserved - ? Sealer; 1240.*tlas.tAbe_lilli does ;lot take away :any /''lg? te, and remedies which may , exist at law or inequity. Thus, nothing in the bill should be colvtrued to affect rights and remedies of individuals who may bring share- holder derivative suits under state law. PROPOSED OREIGN P.1,:eatENT5 roISCLOSTJRE ACT: STATEMENT OY PURPOSE AND NEED The proposed Foreign Payents Disclosure Act was prepared by the Cabinet-level Task Force on Questionelele Corporate Payments Abroad, created by President Ford on March 31, 1976 to conduct a sweeping policy review of the questionable payments prob:_em. Based upon an interim report a! the Task Force, President IFerd on June 14 directed that legislation be prepared requiring report- ing and disclosure of certain payments made in relation to busisess with foreign govern- ments. The proposed legislation is designed to help deter improper payments in international comMerce by American corporations and their officers; to help restore the good rep- utation of American business; to help deter would-be foreign et, tiorters from seeking im- proper rewards trot a American businessmen; and to set a forcefel example to our trading partners and competitors regarding the im- perative need to eni improper bus:ness prac- tices. Most important, as stated by President Ford in his message to the Congress regard- ing this legislation it: "will help ::estore the confidence of the American people and our trading partners is; the ethical stsndards of the American business community. In so do- ing, it can yield suestantial long-term bene- fits to American business, to American for- eign policy, and to international commerce." In deciding upon a legislative approach, the President and the Task Force: (1) re- viewed the Ongoing efforts of the Federal Government with regard to the questionable payments problem (ii) analyzed, the ade- quacy of current :DIVS in dealing with the problem; and (ii evaluated alternative means to strengthen deterrence of improper .payments and to increase conedence in American, husinese. ONGOING APPROACII TO TIIE QUESTIONABLE PAYMENTS PROBLEM The current Administration approach to the questionable payments problem includes both (a) vigorous enforcement if current law and (b) pursuit of effective International payments. (a) Enforcet.tcnt of current law Investigative enforcement activities are be- ing conducted by the audit agencies, the In- ternal Revenue Service (IRS), the Federal Trade Commission t FTC) the Department of Justice, and the iiiecuriiies and Exchange Commission (SEC). The investigative activities of all these agencies are ongoing?and the product of their investigation., will continue to emerge in accord with fair and orderly legal process. It is reasonable to conclude that the ex- posures to date have increased the attentive- ness, of responsible enforcement agencies in general?and that they have increased the deterrent effect ol current law thereby. A particule,rly notewerthy example ..s provided by the IRS's guidelines of May le, 1976?re- quiring affidavits concerning "slush funds," bribes, kickbacks cc other payments regard- less of form, math:: directly or indirectly to obtain favorable treatment in securing busi- nest or special concessions; or made for the use or benefit of, ,sr for the purpose of op- posing any government, political party, can- didate or committit. A4 is well kner4o, the SEC has played a leadership role in . lens area, Its prompt and Vigorous actions to discover questionable or illegal corporate payments and to require public disclosure of material facts relating to them, is contributing an important meas- ure of deterrence to such practices. S 13809 ' (5) Pursuit of International Agreements The recent Organization for Economic Co- operation and Development (OECD) Minis- terial Conference adopted the following de- claratory policy: "Enterprises should: Or not render?and they should not be solicited or expected to render?any bribe or other improper benefit, direct or indirect, to any public servant or holder of public office; (11) unless legally permissible, not make contributions to candidates for public office or to political organizations; (in) abstain from any improper involve- ment in local political activities.". Ambassador Dent has asked the General Agreement on Tariffs and Trade to take up the questionable payments issue, as called for in Senate Resolution 265. The resolution proposes negotiation in the Multilateral Trade Negotiations of an international agree- ment to curb "bribery, Indirect payments, kickbacks, unethical political contributions and other such similar disreputable activi- ties." The U.S. has indicated that negotiation of such an agreement is a matter of top priority. Most significantly, the U.S. has proposed negotiation in the United Nations of a treaty on corrupt practices. The proposal is for an agreement to be based on: the following prin- ciples; (i) It would apply to international trade and investment transactions with govern- ments, i.e., government procurement and other governmental , actions affecting inter- national trade and investment as may be agreed; (11) It would apply equally to those who offer to make improper payments and to those who request or accept them; (111) Importing governments would agree to establish clear guidelines concerning the use of agents in connection with govern- ment procurement and other covered trans- actions, and establish appropriate criminal penalties for defined corrupt practices by enterprises and officials in their territory; (iv) All governments would cooperate and exchange information to help eradicate cor- rupt practices; (v) Uniform provisions would be agreed upon for disclosure by enterprises, agents and officials of political contributions, gifts and payments made in connection with covered transactions. The proposal is currently under review in the TIN Economic and Social Council (ECOSOC) with a strong U.S. recommenda- tion that ECOSOC give the Issue priority consideration. The U.S. objective is to have ECOSOC pass a resolution on corrupt practices which will create a group of eXperts charged with,writ- ing the text of a proposed international treaty on corrupt practices and reporting that text back to ECOSOC in the summer of 1977. The U.S. goal would then be to forward an agreed text to the UN General Assembly for action in the fall of 1977. It is the view of the President and the Task Force that the ultimate legal basis for adequately addressing the questionable pay- ments problem must be an international treaty along the lines proposed by the United States. A treaty is required to make the "criminalization" of foreign bribery fully en- forceable?for, in the absence of foreign co- operation, it would be extremely difficult, and In many cases impossible, for U.S. law en- forcement officials and potential defendants to be assured of access to relevant evidence. A treaty is also required to treat the ac- tions of foreign as well as domestic parties to Approved For Release 2005/08/03 : CIA-RDP79-00957A000100100025-2 S 13810 Approved FotftimtgliVAV4aqdra9P7?LCNASI*000100100044ust 6, 1,2,6 questionable transaction. And xi treaty is requited to minute that all 114iI0DR, Mil the cospeting Mane of cfifferine mitiene, are trefttcl on the same beda DI Order to fidtanoe the pro 3pects t f favor- able international action with respect to the 1311. proposal, the State Department hes co- ordinated a special series of direct represen- tation:: to foreign govefnmeres We will mis- time to pursue a satisfactory inter lath-mei Agreement by every approprbite means While continuing to pursue the long--term approf ch toward an interrnitietial agi eement, It is nonetheless necessary so supplement current U.S. law--as indicated by tie follow- ing discussion. errITICIENCY Or CURREvr The Task Force undertetel a oei is and analysis Of the sufficiency of current lass to deal eith the problem Of dettrring q set lion- able payments by American belies-seinen and to restore public conlideme in muteness standerds It concluded that cern et while providing a number of indirect nteene to deal with the problem Ails not fully sualcient. It le clear that existing sec eitite live; and the leternal Revenue Code tin hese impor- tant bearing upon the queoltmatie pay- manta problem?the former by requeing dis- eh:metro Of "material" Improper payment". and the latter by denying tex deduction of U11 payments. In addition, ye:erode rap- pffehtion of securities and tee standards Is prompting increased internal cirporate accountability. Farther, the Task Force Identified e settee of antitrust provisions which Might be ap- plied to questionable or illegal piyinents abroad. However, effective application of these laws to transactions Ii voicing e reign payments Is problematical. Fnaliy, the Task Pore Identified a number of certificetlen re- quirements Imposed on cctnpanies doing been' as abroad with federal as-sister ea, such as that provided by the Export-Impel Dank and tee Agency for International Develop- went Deliberate falsification of such certifi- cations can give rise to criminal ilanility. Nevertheless. these certification rein' reenenta can Only apply to firms wh:ch ava I them. selves of -these federal assistance programs. The Tata Force is persuaded that the SECS; system of reporting and Mace -sure otters hits- stantial deterrence to future improper-prac- tices by SEC-regulated fines. To further strengthen the SECei capacity to pm forru its vital functions, the Adm.nistret on en- doreed--and.will continue to eappote tie, en- actment of--le-gielation firm propeatd by Chairman H.Uis of the SEC. By maalt,g ex- plicit What Is already implicit in the SEC's authoritles, this legislation can enhince the effectiveness of the SEC disclosure system as It pertains to SEC-regulatal companies by assuring integrity of ecrrponve reporting sys- tems and the accountabilhy of ((operate ofiledale, However, by no means all firms ozgand In International commerce are regulated under the securities laws and subject to the dis- closuee requirements of the Conon salon. Also, the Commission requires disc os Ire of payments only When neceesery or uppropri- ate for the protection of in-restore. Fertner, It has not generally required reportieg of the name of a recipient of a nusteriel, mproper payment, a requirement which the Task Force believes can be an Important tieteerent to extorters. In addition, the Coincelesiones system Of disclosure?focusing as It does pri- marily on the interests of the investing' pub- lie?is not designed to respond to some of the broader public policy and urchin reletione ir tereste related to the toes, tenable pay- problem. eccordingly, the Former, Fermenta DIE- A_.flire Act deals with el US participants in foreign commerce--net juie: Copsmlssion rtgelat-ed arms?and it coils for the active iLeolvement of the Secretaries of State and Cisionierce and the Attorney General in ad- iceeete deg a sire em which addreesan the full ;thee cf public policy interests Inherently It solved 'n the questionable payments prob- Orr:. 1.155 'cat ma NALryarlois - Ari io She Task Force consiecred two principal competing legislative approaches?a "dis- closure" approach and is ecritainalization" approach. While it Is poesible so design leg- islation which requires diacireeire of foreign pity meets and makes eeriest payments erine- taai tinder U.S. law, the Task Force uneist- iterusly rejected this approach. The disclo- oire-plus-criminalizatlon scJacine would, by a- very ambition, be Inteective. The eeist- slice of U.S. criminal penalties for certain iteeetuniebiti payments- would deter their die- elosure and thus the positive value of the tbeeloeure proviaious would be reduced In the Ta.sit. Furceh opinion, the leo approachte oinuot be compatibly ?Mined. lime 'leak Force carefully esesidered Slit optima or "criminalizing", under U.S. law improper paymeote made to lorenos olfleisi be U.S. corporation's. duce legislation would leave represented the.moie, forceful possible rhetorical condemnation of amen conduct It would have placed bueinese executives or elate and unequivocal notice that such prac- occe 'should stop. It would have made le ieteter Inc some corporations to resist pree- surer. TA make questionable pisymentie l'he 'reek Force concluded, however, that 14te criminalize-ion apprtesch would repre- sent little more than a policy sestertion, for tete enforceinent of such' a law would be vera dintelie If not timetable. Successful prose' mitten re onerupes?and lair defense in Teta- eion to euch proseastions?would typicalle depend upon access to vet Melia and infer- nistion beyond the Teeth cit VS. judicial process Other nations, rather than asest- mg in Inch prorrchilOra, might resat co- op/iodises beiceuee of considerations of na reonal preference or sovereignty, Other ns- tions might be espeollally offended if we sought to apply rill:mime sanctions to for- eign-incorporated ancleer foreign-managed setedelterion of American corporations. The Task Fierce concluded the; unless reasonably enforceable criminal sanctions were devised, Site criminal approach would represent poor penile policy. awed 111)011 analysis ,5 the sufficiency if current law anct of the options described &Dove, the President decided to bax the 0:M- errell Le elmet legislate:us providiLlg for full and systematic reporting and disclosure of payments in connection with their emnares- clal relations with foreign govenunents. mopes= Tairrlice13Orl lire Foreign Payments Diecleeure Act ven tomtit- ,aportine to the Secretary of Com- merce of teeter. Mama of payments Made butilneases and their foreign subedi- t, ie and &Milstein In relation to blueness ith foreign goverm-nente. Specifically, re- ports will be required of all pep:tient* Made ii esainection with sale* to or contracts with teenier: governments or official actieris by foreign publics facials, where such are for the commercial benefit of the payer or his Sireen affiliate. The report lag require r sen. ('oters fees of agents and otter intermediaries and political contelbutions ae well as payments made cli- ne:tit to foreign public officials. The legislation provides that the Secretary of Cenuneree Wean lame regulations necessary to wry out Its purposes. These regulatione shall contain a requirement that reports in- clude names of recipients of payments a rd ehall establish a tfareshold amount below which payments need not be reported, An excePtion is made I..) this threshold concept for Multiple pitymente totaling the threshold amount with respect to a single transact:en The Purpose of this threshold will be to ex- clude so-called "grease" or "facilitating" pay- ments. i.e., small payments to expedite low les-el official actions such as customs process- ing. Reporeng of such minor payments meld create burdens far outweighing the benefes ',ought by the; legislation. The Secretary will further have the authority to define by regulation certain types of payments which will uot be required to be reported becaree they are regular business payments not in- consistent with the pm-poses of the Act, or 15? bona fide payments to a foreign government such as taxes or other fees paid purseant it law, regulates,' or other legal action. The Secretary is aeso authorized to require. by regulation, the keeping of records neces- sary to carry out the purposes of the Act and to make investigations, inspect bete,' and issue subpoenas as necessary and ap- propriate to the entercement of the Act. Civil penalties are provided for failures tc, report. or maintain required records or neg- ligent omissions or misstatements In reports flied. Criminel misdemeanor pereallies ere provided for Knowing failures to file or to maintain records or to Include complete or correct information in records. Filing of a so- port containing false statements of know- ing Omission of required informat on will tie penaezed as a criminal felony. Reoorte tiled pursuant to this legislation shall be kept confidential for one year from the date of filing so as to protect busineei proprietary concerns and to lessen possiole foreign relations problems. On receipt, hew- ever, the reports submitted to the Secretary of et,mrnerre would be made available to the Departments of State and Justice, the IRS slid, where appropriate, to the SEC. The Department of Justice or the State Department can as appropriate relay infer- inatien contained hi such reports to auther- Cies in foreign jurisdictions. The reports ain al-so be tranermeted upon request and with appropriate senangements for confidentiality to appropriate Contrrattees of the Congress;. After the expiration of the one-year period, reports will be made available for public inspection and copying mime a specific writ- ten determination :a made by the Secretary of Slate that foreign policy interests diotate against public disclosure, or a specific writ- ten cleterminntion i inane by the Attorney General that the status of an ongoing in- vestigation or prosecution dictates against public diecloeure through other than cen- rent:one judicial processes. Tie bill will Beek to avoid duplication of reporting and recoed keeping requiremente. First, it exerrpts ales of defense articles or defense services under the arras Export Gen- teel Act from the reporting requirements-3. This exemption Is eased upon the fact test the Army Export Control Act, as recently amended, provides eor comprehensive report- Li-mg to the State Department and the ?:'n- graft of information regarding payments with respect to as ch transactions. Sexed, the Secretary of Commerce is given anther- Sty to work wish other agencies to eemirette Approved For Release 2005/08/03 : CIA-RDP79-00957A000100100025-2 oust 6, 1976Approved FCMCWiliSIKOSOVISIASCOaks;0&14130155190195/A000100100025-2 S t'3811 Ainnebessary duplication in reports and rec- First, -repayment of the readj uStment or& The legislation eicPricitTy states! that stipend shall be ex banded over a 10-year ___, ,, it is not desIgned`66 amend in any way cur- period with no int-nest charge; and - rent legal requirementl relating to reporting _. and disclosure, enforced by other agencies Second, the out tanding balance will be forgiven if the serviceman dies as a of government such as "the SEC and the IRS. result of the service-connected illness .. y,lfr. HUGH SCOTT: prior to repayment of the entire stipend. S , '74 A bill to amend section 3102 I believe this legislation deserves our 31. support. The currelt regulations cast the of t,tle:atc United States Code; relating to the recover 'bthe United States of Government in a most unfavorable light. i y -- I know you would agree if you had had certain payments made to Veterans. Re- to explain to Mrs Perkis and her two ferted to the Cennnittee-on Veterans' , --, - small children the t they would have to Affairs. wait more than a year before they could Mr. HUGI-1 scOrr. IVIr; President, to- receive any money , notwithstanding the day I am introducing legislation that will fact that her hus-Jand was mortally ill correct a "Catch 22"- Situation in our Federal bureauciatic 'Machinery. "Catch with a service-connected disability. 22" Is a phrase Joseph Heller used in his I ask unanimoth- consent that the text , , _ war novel of that name to refer to bu- of this bill be priitted in the RECORD. reaucratic iliogiarom which the hapless There being no objection, the bill was victim has no escape.r Or ed to be prir ted in the RECORD, as Tragically, a Particidar'Catch 22" in follows: our Federal regulations erniatiShed a late s 3743 conslituent Of Mine, John W. Perkis, a Be it enacted by the Senate and House captain In .the kir porci Ttetierva, in its of Representatives o f the United States of America in Congres assembled, That (a) web Of frustratiOn and illogic. Captain Perkis was, mustered Out Of the service section 3102 of title 38, United States Code, is amended by redesttnating subsections (c), In a reduction in force. At that time, he (d), and (e) as subsections (d), (e), and received a $15,000 'Stipend -for readjust- (f), respectively, and by adding after subT merit to civillah hie. With this money he section (b) a new subsection (c) as follows: Wight a home for his Vilfellid tw-o ChB.- "(c) (1) In any case In which a veteran is dren and began a job' as --aProbation. of- determined to be aititled to coineensa.tion - ficer with the PennsYlfania, 'Parole for a service-conneeted disability rated total Board. in degree and the determination is made sub- There was only one problem with this s sequent to the time uch veteran was award- ed a readjustment payment under section new life: Captain Perkis felt ill much of 687 of title 10 by the armed forces, the re- the -time. A physical exkmination resulted payment of any an ount of such readjust- in the diagnosis of leukemia. The doctor mel a p yment required by law shalt be made confirmed that he had contracted the ill- bylittheveteran over such period of time as ness 2 years earlier, and that It had gone the veteihn-may e'ect, not to exceed ten undetected by routine Air Force physi- years from the date on which such veteran IS first paid disability compensation. The CMS, veteran shall not be required to pay any Captain Perkis applied fora veteran's interest on such readjustment payment. disability pension and received 1t?$740 "(2) In any ease described in paragraph a mOrith.,13,4, Rien the catch intervened. (1) in which the veteran dies as a result of The GeverMhent said that since e , his 6PrviCP-,90nUec .tsc 0. di6AbilitY b efore the wa.s" receiving the disa'bility pay he was total amount of the readjustment payment required to return 75- pereenf of the re- has been repaid, the obligation to repay the adjustment Stipend. That *mild be $11,- unpaid balance sha,l be. automatically can- 259. His disability checks would be with- held until repayment tirainiacie_The Air Force, to its great credit, tried its best to help Captain Perkis, but it Vitas blocked at every turn by the unarn-biguous lan- guage of the statute. On December 4, 19'75, shortly after he and his family were informed of the catch, Captain Perkis died Ofthe illness, an entire year before he would have be- gun Collecting his pension benefits. PreSiderit, find it distressing that an American who has served his country SO Well was forced to suffer in such a heartless thinner. MY bill attempts to ease the hardship on the veteran and his family if this highly unniuil 'situation occurs again. It provides that if, after honorable discharge _Re aLr:esult of re- duction in force And the piyinent of the readjustment Stipend a reserve service- man is tliagposed to lip,ve;4 service-con- neCted,illneses Jhat resulta,ip. 00-percent celled.". (b) Section 31021e), as redesignated by subsection (a) of title 38, United States Code, is amended by striking out the period at the .end of such section and inserting in lieu thereof ,the foliewing: "or cancelled un- der subsection (c).". Sac. 2. -Nothing.ii. this Act shalt be con- strued to require the refund of any amounts repaid to the Unite( States prior tc the date of enactment of this Act. ADDITIONA), COSPONSORS A. 2925 At the request o Mr. MUSKIE, the Sen- ator from Kansas (Mr. PEARSON) was added as a cospon.ur of S. 2925, the Gov- ernment Econom r and Spending Re- form Act of 1976. 8 3441 At the request pf Mr. HUGH p-Jorr, the Senator from Maryland (Mr. BEALL) and the Senator from New Mexico (Mr. ? MONTOYA) were added as cosponsors of S. 3441, relating to the Congressional Cemetery. S. 3520 At the request of Mr. DOLE, the Sen- ator from Minnesota (Mr. HUMPHREY) was added as a cosponsor of S. 3520, to extend the rural community fire pro- tection program, and for other purposes. S. 3606 At the request of Mr. INOUYE, the Sen- ator from Tennessee (Mr. Mimic) and the Senator from Alaska (Mr. GRAVEL) were added as cosponsors of S. 3606, to amend part B of title XI of the Social Security Act. S. 3665 At the request of Mr. BEALL, the Sena- tor from Montana (Mr. METCALF) was added as a cosponsor of S. 3665, a bill to amend the Internal Revenue Code of 1954. , AMENDMENT NO. 2155 At the request of Mr. FANNIN, the Sen- ator frqm New York (Mr. BUCKLEY) and the Senator from Alaska (Mr. STEVENS) were added as cosponsors of amendment No. 2155, intended to be proposed to S. 2657, the Education Amendments of 1976. SENATE RESOLUTION 513?ORIG- INAL RESOLUTION REPORTED RELATING TO THE CONSIDERA- TION OF S. 3554 (Referred to the Committee on the Budget.) Mr. PROXMIRE, from the Committee on Banking, Housing and Urban Af- fairs, reported the following original resolution: S. RES. 513 Resolved, That the previsions of section 402(a) of the Congressional Budget Act of 1974 are waived with respect to S. 3554, a bill to establish a National Commission on Neighborhoods. AMENDMENTS SUBMITTED FOR PRINTING DEPARTMENT OF DEFENSE APPRO- PRIATIONS, 1977?,H.R. 14262 AMENDMENTS NOS. 2180 THROUGH 2185 (Ordered to be printed and to lie on the table.) Mr. GOLDWATER, submitted six amendments intended to be proposed by him to the bill (H.R. 14262) making ap- propriations for the Department of De- fense for the fiscal year ending Sep- tember 30, 1977, and for other purposes. AMENDMENTS NOS. 2186, 2137, AND 2188 (Ordered to be printed and to lie on the table.) Mr. GOLDWATER submitted three amendments intended to be, proposed by him to amendment No. 2,146, intended to be proposed to the bill (H.R. 14262) supra. Approved For Release 2005/08/03 : CIA-RDP79-00957A000100100025-2 S 13812 Approved FoOk/Maiiiiia0/0011101LECIAMDP7SE04111.53A00010010002t4ust 6, 191t The development and exploration*" costs, which our fishing industry- has ex- pended to develop those fiehing grounds has neen tremendous. They have long fished those areas arid have gained lei:- tot:ice' rights which must be recognized. especially those fishing grounds which are not overfished. Many of these areas are not even fuLy fished. In feet, catch data indicates they have not tome anywhere near the limns of their potential. In the case of shrine.). in particular if they are not caught, tins die and go to waste, and they certainly are not presently being caught by the Mexican fleet. As I understand it, the Mexican fleet hae re catch statistics to support the( they "are presently fully harvesting the shrimp, and their only argument is thee mathematically they may be able to catch them il they move some more boan into toe area. I tell m. colleag-aes that from my re- lationship with our great number of Lean isiana fishermen there is a big difference 'oeta-een having a boat and a net. and catching shrimp, and if you do not be- lieve it, I can show you a lot of "former fishermen" who can verify that taking a boat ond a ret out into the gulf does not gearantee you are going to come in with any shrimp. 11 .the Mexicans can substantiate by catch statistios that they are, in fact catching the full quantity of shrimp that is available, and that no surplus existe our people are entliled to go after that surplus of shrimp. I for one am going to see that every- thing is done to insure that they have that right, and if that means the fun implementation of 'an embargo measure, then to be it. Yes, it le a matter of law', and that is why ye put :t into the .law. Anyone who thinks; we are not going to undertake to enforce et ery aspect of that law has an- other thins comine, and he had better change his mind, quickly. I do not believe in passing laws if you are not going to implement them, and I do not believe in implementing them unless you are goin.t to enferce then. When you In someone who says he nut gclng to adhere to the law, you hate to convince lien. If we do not have back- bone enough to do that, then we do not deseerve to be in the Senate, and if any Meeic ii or Russian or any other foretell natiot il thinks we're going to do other- wise, he has not Wired to me lately. As far at this Senator is concerned, if NV cannot go. into that area after the shrine-, tht t is et:at:able in surplus, then we do not need one shrimp in this coun- try that (tomes out of that area. They can just keep it down there in Mexico and do anything they want to with it. One thing is for certain?I will not have the concern of going to the table in this country and eating a shrimp and wondering if it is coming from a country that it denying a livelihood to our Amen- ADDITIONAL STATEMENTS S. 3720?PROMOTION OF THE AMER- ICAN SHRIMPING INDUSTItY Mr. LONG. Mr. President, I avant to congratulate my colleague from Florida (Mr. Canis) for the outstanding work he is doing in sponsoring S. 3720, to in- sure the survival and good health of the American shrimping industry. I thank the Senator for the explanation of the bill he gave the Senate yesterdi y and appreciate in every instan:e the points he has covered. I fully support his efforts In this regard, and I am Lonorec to be joining the Senator as an acti *la- sponsor on this legislation. I think it is long overdue that e give the kind Of protection offered by se 3720 to our shrimp industry, the kind of sen- Bible and enforceable protection winch these independent hardworking. ( seientiaus fishermen sp richly desetvc Mr. President, I tusk tie Sen to take note of the fact, as Senator Caters; Feinted out yesterday, chat our country represents a market for approeitnately ;200 million worth of shrlrap eace ;:( at from Mexico. A considerate fraction of all Mexican seafood production comes Into our markets. However, in recent talks with ::;c an ; officials, I am informed teat our Ctov- eneMent and its industry represen- atives have teen faced with an nconside nte and intransigent neighbor who his ad- vised that It could care less of our inter- est and needs, or the fact that a veluable resource will waste because of its ex- treraele short lifespan. The Mexican ne- gotiations have merely poirted to Is31-10- thetical mathematical projectio is as Justification for denying out fleets, many of which happen to be coestituean of mine, access to traditional finery grounds. I have been told that the Mexican ee- getiators have ignored reasonable offers by U.S. negotiators, I undorstanel they have cited our 200-mile economic zone provisions when it suited their cease. and ignored them when they tended to conflict with the Mexican interest Furtner, they have bluntly Indic t( (I a belief that the 'United Sta.' e3 the will and the backbone to enforce that law?a,; Senator Cinees stressed y csar- day, the Mexican negotiators feel tint we be particularly hesitant -in en- forcing those provisions a hich tcel re embareoing seafood product, from coun- tries which refuse to negoi tete it peon, conscience to provide accets to :in (ry surplus es. Now Mr. President I do at. th( Members of this body ben( no en: rush thing. This Senator cert.:July that the 200-mile economic :01.0 pro-o- sion, just like any other late shall(' be totally and fully enforced agairst ill parties. It was intended as a compie- hensive fishermen's protectite act. Ls, a cosponor of the legislatior, . I cei taitly intended it as such. I agree eet Sete tor CILILES that if it is not honored, if it is not fully enforced, It 011 be worthless a.r.d a fraud on the fishermen. Now that it if? law, I will undertake every effort, as cbatrman of the Finance Committee which has ittriediction over trade legis- lation to see that it is fully implemented and stringently enfOrced---eaCh and every aspect of it. may I emphaaize. - Among other things, S. 3720 would pro- vin- for : An annual quota on shrimp imports, or a country-by-country basis. Quota to oqual the average of 1971, 1972: and 1973 ccc-ports from such country. The anntml :quota would be further deined to prevent more than 10 percent re the annual quota in any 1 month. !eve and one-halt percent duty to be teemed to improve and stabilize the mar- ket. establish research and consumer ed- nosotton pregrams. Additionally. estab- t funds?to be used to Purchase shrimp or sertfood surphis for sehool lunch pro- !et:ens-nein:1i as agricultural section 32 nrwrann whereby imports duties on for- eign acricultural commodities are used to purchase domestic commodity surplus tor the school lunch and food assistance IINVTRTTIS. The Secretary of Commerce could be authorized to adjust the quota levels an- nually or monthly as the mareet demand riatifled :vir. President, rather than discuss egem the basic and ooropelling rationale welch argues so strongly for this bill. I weed like to comment further on one tispect of the subject discussed by Sen- ator CHILES yesterday. That is tite trade reletionship which exists between this country anti Mexico. Pi tinkly. I have long considered shame- Jul the a-ay we have refused to stand toes and to implement and effectively enforce our laws when dealing with for- eign emu-Ate:es. We consistently .impose untielievable restrictions ,and regulations coi our own citizenry and blast them into otievion if they fail to heed each and every aspect of them. Lot whet: we establish laws that have in impact on foreign rettionels or cOUn- 11.3;-t,o-country relationships. our State leeitatenent typically finds some way to t. oil awe Justify that country paying little or rto attention to them. Further, tte beed r backwards giving aid and 6ilkor: to every country in the world, O;l'?i?-ho merit it and some who do not, :en went ask whet is only a reason- :. eeno to;. of well-established I oat hate long since deserved, v :tois ese developed and gained, they vetrele, tvil us they could care less. ':.?)'r:Llty tuc-7, our tails, come !ionic . anecr. ,).!neiiran people tlo lot 'rant us 1itt tine'.Vay. I koow for a fact they -i.,stand and be counted like co. Tee Inedreci years ago our fore- it en s tousle. and died to give us this cotaate , -.oe should nqt give it. away? .01' hind or III 'Oahe., or in resources, to v7lits ntinel Over the sears, Approved For Release 2005/08/03 : CIA-RDP79-00957A000100100025-2 gust 6, 1 97Approved ForeTO1*GRE3800/618i0,3RIMADRDP-ZMNATS000100100025-2 , 910 fishernien y p119w#4 a surplus re- sterce to (Xie. arid waste aNiaY at sea. 7_ ss-liits*= - FOOD PROSPECTS_IN TITh nIvEtOisiotf vcrptirx, Mr. HUMPE1REY,, MrPresident I - _ wish to bring to your attention an August 3 article in the New' York Times by Victor K. Metlheny entitled "Dou- bling of Food peficit of Tropical Nations Possible." The article was based :On a study by the Food Policy Research Institute, an ?organization tonna- after' the World Food Conference of late 1974. The In- stitute estimated that, in contrast to the food deficit of 45 Million tons of recent Years In the food deficit coun- tries, that level could rise to 95 to -108 million tons by 1985-86. I recall at the time of the World `11o&d t?Orerence that many experts had estimated that the food deficit could reach as high as 85 million tons. The study of the institute, under Dr. Dale E. Hathaway, formerly of Michi- gan State University and the Ford Foundation, pointed out that in the 15 years UP to 1974, food production rose on an ,average of 2.5 percent per year, biit In :the last _haft' of the period that rate had dropped to 1.7 percent. If the more recent trend's were to con- tinue the food deficits could range as high as 200 million tons. In this rather somber' Picture, one bright spot is the Asian Wheat produc- tion, which has increased an average of 6.9 percent over a 15-year period ending in 1974, and these increases are based largely on the high-yielding wheat va- rietie,s developed at CIMMyT in, Mexico under Dr. Norman Borlang. The study did project that Pakistan, Biazil, and also the People's Republic of China could turn into toocl exporters by ;985-86. Ir. President, I ask unanimous con- sent that this article_ be printed in the ORD. ,here being no objection,, the article waS ordered to be printed in the RECORD, asfollows: DOLTBLING OF V9013 DEFICIT OF TROPICAL NATIONS PosSIBIS (By Victor K. McElheny) Food deficits in many pisor tropical na- tions could be double those of the,, crisis year 1974-75 in less than a decade, accord- ing to a study by the International Food Policy Research Institute. To overcome the expected, shortages, the Washington-based institute estimates, na- tions with surpluses will be called on to make large increases in fOod aid, and deficit nations will be ferced to ett*pt a doubling of their annual increases in food _prdduc- tion, to four from roughly two percent. In the 1974-75 span, food deficits in poor countries, largely in the tropics, totaled 45 Million tons, the recently formed food policy institute said. In the 198544 , period, de- pending on whether economic growth has been slow or fast, the deficits would be 95 to 108 million tong. - The report containing these forecasts was discussed at the annual meeting in Wash- ington last week of the agencies that finance a group of international -agricultural research ? penters.?1es, Ann to increase the yield of inajor food crops of the tropics. The meet- ing of the supporting agencies' Confirmative Group on International Agricu:tural Re- search is known informally an "centers week." 'Dr. Dale E. Hathaway, an economist form- erly at Miehigan snsite University and the Ford Foundation, heads the institute, which was formed in the aftermath of the World ,,Food Conference in. Rome late Ir.. 1974. The institute's report said that the short- ages it was forecasting could even be greater. In the 15 years ene)ing in 1974, food produc- tion rose an avetage of 2.5 peicent each year, but in the last half of the period? becanse'bf 'weashes or Other din -mities yet' to be measured--thc rate of vIncrease dropped to an average of 1.7 percent The report called this drop in 1:he rate of increased production "pervasive" among re- gions and major cereal grain crops. Thus, the report said, "it may well be difficult for de- veloping, market-esonorny. food-deficit na- tions to maintain t heir longer-term produc- tion trends." If the more recsnt trends prevailed, the food deficits of 1985-86 could add up to 200 million tons instead of 100 million, the re- port said. ? The institute said this amount of food would be ditficit so transport where it was needed, even if sitch surplus praducers as the United Stretef-. Canada, South Africa, Australia and Argentina had enough to ship, and financing for all the needed food could be arranged. The institute report said, "Such a large transfer of food, largely from developed countries, could well be unmanageable phys- ically or financially." The declining rate of increase in poor countries' food-grain production occurred in spite of widespread introduction of so- called "green revolution" varieties of wheat and rice, the report noted. The only exception to this was the raising or wheat in Asia, Over the 15-year period ending in 1974, Asian wheat production in- creased an -average of 63 per cent annually: In the last half of the period, starting iii 1967, the rate jumped to 8.2 per cent. It was in 1967 that large-scale ;growing of high-yielding wheat varieties, developed in ,ivexice, began in such regions as the Punjab in India and Pakiviana _ Of the food deficits projected by the in- stitute for 1985- 86. about 40 per cent would fall in five areas; India, Bangladesh, Indo- nesia, Nigeria and a group of low-income na- tions south of the Sahara. According to the institute, two food-im- porting market-economy nations of today, Brazil and Pakistan, could turn into ex- porters by 1985-86, and so could the People's Republic of China. China, the ins' itute suggested, might choose to use its surpluses to improve local diets or those of nearby Communist states rather than enter world export markets. CLEAN AIR ACT AMENDMENTS OF ? 1976 Mr. CURTIS. Mr. President, I am not opposed to clean air. I think that the program implemented to date under the Clean Air Act has been most effective in cleaning up the Nation's air and in pre- venting air pollution. However, lie Clean Air Act amendments which we:re passed by the Senate yesterday go far beyond S13813 what in my opinion is a reasonable and economically justifiable program for air pollution abatement. Under the Clean Air Act, ambient air quality standards of two levels have been established to insure the health and wel- fare of the Nation. They are levels that have been deemed to be minimum air quality levels required to protect the health of human beings and welfare of animal and plant life around us. They include substantial margins of safety be- tween actual levels of pollution that would endanger health and welfare, and the minimum pollution level standards. We are achieving the degree of health and welfare protection that has been our objective under the existing program. But, the new standards which will call for a level of no significant deterioration to be added have ominous implications. Under this provision, the Environmental Protection Agency will proceed with plans to establish areas nationwide where no additional pollution of any signifi- cance will be permitted even though the areas may be virtually pollution free. Such areas will include much, if not all, of the Western States. Nebraska will be among those States. The new standard will mean that no electric generating plant or other power production facility will be able to be built if it adds any pollution to the at- mosphere; that no new manufacturing plant or industry will be allowed to be built if it cannot completely eliminate its discharges of pollutants into the air; that no new municipal solid waste or other waste treatment facility or utility will be permitted unless it is devoid of any air pollution. I have heard many claims by propo- nents of this measure that it would not affect housing and normal business ex- pansion and community growth. Yet, under the terms of the bill with its em- phasis on the aspect of "significant de- terioration," I fail to see where any area of growth or development would not have some effect on air quality by adding to air pollution. Just what amount of pol- lution will be considered "significant" we do not know. Proponents of this new provision re- fused to consider the economic ramifica- tions it would have in the floor debate. Their conclusion, from the remarks I heard and read, was that any price is worth paying to have completely pure areas maintained in the pristine and pol- lution-free West. A major problem I have with that posi- tion relates to the fact that to date there has been no scientific development or technical achievement that can provide , us With the devices necessary to keep our air absolutely pure. That leaves us with- out the ability to develop the critical energy production facilities that are needed to meet our future energy needs. And, as we may be able to develop such facilities the costs for, our energy may quadruple in a short time because of the unreasonable expenses in cleaning up the Approved For Release 2005/08/03 : CIA-RbP79-00857A000100100025-2 S 13814 last ore-tenth of 1 percent or so of air pollution. While it is admirable that we strive for absolute pure air, I think it is un- reasonable to demand that we take a stand at this time against any and all polluti m when we do not have the tmli- nological improvements necessary to achieve the goal and still allow far nor- mal economic growth. The obvious re- sult of this position will be ecielciaic stagnation. We hhould be concerned about the ,e- vere energy crisis and its effect on our economy, As we spend hundreds of cf dollars to install onprois n and poorly !auctioning air pollution devices, and as other electric generation facilities cannot be built to meet growing needs. our dependence on foreign energy Four!es will increase. We are already running a deficit balance of trade fer fore rr oil purchases in the tens of billions of dol- lars. There are other side effects that will be as disastrous to our economy. Money that will be used for short-term file pol- lution solutions will take away from the hundreds of millions of dollars that are needed in other segments of the ecenomy to provide housing, business operating loans, capital expansion and indiiidual and business credit, all of which spur the economy. The shortage of capitol and the slowdown of energy pi oduction will adversely, affect our employment Attie - tion. Mr. President, hopefully the 11 ng of Representatives will give greater ...on- sideration to the impact of the no signif- icant deterioration provision as ?..t rem- siders this bill. I think the Senate has unwisely passed another bel on the basis of emotion rather than reason. I -errand my colleagues of past ill-conceived legis- lation that has returned to haunt le in the Congress. One such bill is the Occupialorsil Safety and Health Act of 1970. At the time we considered that legislation, we were all taken up with e concern for the safety and health of the Nation's Workers. What could be less control, er- ste.' than a measure to insure safety and health in the work place? Few members of Congress found any fault in that tests- latiOn. but few Members thought to con- sider the cost and effect of the leg ala- tiorf on the Nation. What it boils down to is a need to apply the time-proven test of cost effec- tiveness. I am not saying that a Dr-kr should be put on the level of es'ety we should seek for human beings What T am saying is that we too often fall to consider the overall impact of let iela- tion, both on the economy and on the people directly. In the case of OSHA, little attention was paid to the impact the act would have on small businesses. As I reeall, OSHA was primarily intended to get at large Industries that had poor or no work safety and health programs and standards. Yet the act teamed csit to be a nemesis for small business arcl seri- Approved FocemciffsnmskyokEgffitty:27,kparirm0001001000.a5h3ust 6, 19Z0- the life expectancy of Arndricans in gen- eral without, to any appreciable extent, diminishing the ravages of age. As a re- sult, we have a vast and growing army of homebound elderly Americans denied association with the outside world, al- most in the nature of persons imprie- oned on a remote desert island. That is the giant social problem involved. But. there is also a gloat economic problem. A notable proposal to help solve this situation is S. 3681, a bill to amend the Older Americans Aet of 1965 to provide a national meals-on-wheels program for the elderly. II enacted, this measure tt7M rescue millions of our elderly from sev- eral enemies at once?malnutrition, poe- erty and loneliness. The meals-on-wheels program wal provide food and company to those un- able, in consequence of infirmity and age. to seek et on their own, which ex- pedites their institutionalization. Info:- matron gathered by the Senate Sele:t Committee on Nutrition and Human Needs estimates indicate that as many as 3 to 4 million older persons?repre- senting 1 out of elderly?are unable to benefit from the regular meals-on- wheels program as offered by title vn of the Older Americans Act. As matters stand today, under title VII, some 430,000 hot meals a day and various supportive services are available to persons able to attend a congregate setting. Unfortunately, this arrangement excludes the 3-4 million homebound el- derly. Often the need for an adequate diet has forced many elderly into institu- tions or nursing homes?a most certain costly waste of dollars and human re- sources. Under the current congregate approach, feeding the estimated needy homebound would require a title VII pro- gram expo.nsion in the area of 1,700 per- cent, Attempting to meet the need of the homebound elderly under the present design of title VII without a separate and additional commitment is impractical and highly unlikely. I, therefore, wish to give my whole- hearted support for S. 3685, the National Meals-on-Wheels Act of 1976, a conune- nity-oriented seri/Ice project based upon the elements of kindness and concern that have rendered our country, not only the strongest in the history-of man, but the best in every vital particular. culture. Because Congress ambiguous approach to OSHA failed to consider the overall impact of the legislation, we have had regulations of such detail that the act has plagued the smill business community ever since. With the implementation of OSHA. mens- small bsinesses have been forced to close. Employment has been adversely affected. Yet we spend millions of dol- lars on publications of pamphlets such as that warning farmers that "manure ,f; slippery and could cause a fall.- OSTIA is not the only example of Fed- eral law and regulation that has ad- mealy impacted on the economy and rreployment. The air pollution programs being carried out by the Environmental Piatectlon Agency have led to forced eta ins s of businesses and have resulted to eneniployment of thousands of per- son; as reported by the Labor Depart- ment. Mr. President, at a time when we have been wrestling with high unemployment in the United States. I am amazed that Cor,grees could enact laws that seem bent or a nonemployment course. When we erect legislation that leads to a drain on available capital, that results in Job leases. that forces small businesses out of existence. and that adds another bu- reaucracy on top of our already too large Federal payroll, are we truly acting in she interest of the Nation? No. We are only increasing the unem- ployment rolls and the need for welfare while decreasing the tax revenues of bus- mes and individuals which are necessary to meet those growing welfare costs. Where will it end? Truly the American taxpayer is becoming an endangered spe- cies, and just as truly our American way of life is being endangered. I sincerely hope that our colleagues in the House will give the issue of significant deterioration the consideration needed to evaluate Its impact on the citizens and the economy. If they should fail to weigh the dk;astrous effects of this bad legisla- tion. I will urge the President to veto the Mr. President if significant deteriora- tion is implemented, I suspect that those or us who will be here in the 95th Con- gress will again be wrestling with the issue as the States and communities arross the nation begin to feel the impact of the program, It Is inconceivable to me why we must establish programs only to nave to spend our time and efforts to rectify our mistakes later, where in the first place we could have given careful cesisideration to all aspects of a bill and tiwored it accordingly. '1 s, esT ONA L MEALS-ON -WHEEL.a ACT OF 1976 Mr. riOMENICI. Mr. President, I would like at this time to express my support for a measure of the most profound im- ecotone-e to millions of American cit- ens--.the National Meals-on-Wheels art of 197e. The benefits ef science have increased ACTIVITIES OF THE UB. RAILWAY ASSOCIATION Mr. STONE. Mr. President, I would like to commend Treasury Under Secre- tary Jerry Thomas, a fellow Floridian, for his effort on behalf of Amerieen tax- payers to scrutintm the activities of the U.S.' Railway Association. The associa- tion is a public entity and is supported by taxpayer funds. Under Secretary Thomas, a member of the USRA board, requested an audst of the association's financial records when he heard ane- gations that high efficials of the associa- tion' were receiving special benefits at puble expense. The Washington Star of Approved For Release 2005/08/03 : CIA-RDP79-00957A000100100025-2