DAYCO FILE DUBBED SECRET

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00364R001502640041-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: January 4, 2017
• Document Release Date: January 16, 2008
• Sequence Number: 41
• Publication Date: September 25, 1983
• Content Type: OPEN SOURCE

STAT
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UM1LU rxtss INTERNATIONAL
25 September 1983
DAYCO FILE DUBBED "SECRET"
Citing a potential "serious ' ' threat to national security, the federal
government has refused to release files relating to Dayco Corp., and the Ohio
firm's Dispute with a New York trade agent about bogus Soviet orders for Dayco
goods, it was reported Sunday.
The government said nearly all of the more than 200 pages of documents, which
include CIA and FBI files on the Investigation, are highly sensitive and
"secret", Cox News Service reported.
The investigation centers on a dispute between Dayco, based in Dayton, Ohio,
and trade agent Edith Reich, who placed $120 million in phony Soviet orders
written by.Ms. Reich for industrial hoses and V-belts manufactured by Dayco.
In opposing the release of the information,,the government revealed that it-
had conducted covert investigations- both in the U.S. and overseas- in
connection with either Dayco, Ms. Reich, or the companies "she heads.
The government's ''acknowledgement of involvement by the Central
intelligence Agency, plus its admission that the CIA investigations relied
on 'undercover' agents to 'collect foreign intelligence' raise new questions in
the controversy,'' said the news service.
Until recently the controversy, which began in 1975, has been looked at as a
complex business-fraud case.
References to the CIA and FBI documents were contained in papers filed in
U.S. District Court in Washington in response to an attorney representing a
Dayco stockholder who has sued company officers and directors.
Donald B. Lewis, Philadelphia, had requested that the Justice Department
release any information on the Dayco investigation, the background of Ms. Reich
and the two companies she heads, Foreign Transactions Corp., New York, and
Trachem Co. Ltd., London.
In the suit, Lewis' client charges " mismanagement and waste" " in connection
with the losses the company sustained from-the phony orders.
In a response to Lewis' request, the government disclosed that the documents
contain detailed descriptions of intelligence investigations conducted by the
FBI and CIA.
The government did release copies of most: of the 200 pages, but .with. the most
of pages blacked out with the exception of the word ' 'SECRET"' or
''CONFIDENTIAL''. The article stated that several documents indicate that the
files were directed to or were authored by the director of the. FBI.
"The withheld information relates to the consideration, implementation and,
orresults of certain intelligence activities conducted by the CIA, '.' stated
an. .affidavit accompanying the government's response.
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' 'Disclosure of the withheld information would compromise the activities
themselves, as well as certain procedures and methods used by the CIA to
accomplish the activities. Such a compromise could result In the loss of
important intelligence concerning the activities and intentions of a foreign
country, with potential of severe ramifications for the national security of
this country 'I the affidavit
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The article said Ms. Reich could not be reached for comment, however, Larry
Glaister, an official with Foreign Transactions Corp. said Ms. Reich and the
company continue to do business in, the Soviet Union.
Dayco spokesman Thomas E. Ryan said late last week that Dayco was unaware of;_
the CIA and FBI documents and had no reason to believe that it was the focus
of.any investigation by the agencies.
The U.S. Attorney's office in New York is continuing the investigation into
the phony orders. The Securities and Exchange Commission is also investigating..
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