Y 4. In 84:95-11 UNLAWFUL CORPORATE PAYMENTS ACT OF 1977 H.R. 3815 AND H.R. 1602 BILLS TO AMEND THE SECURITIES EXCHANGE ACT OF COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE HARLEY O. STAGGERS, West Virginia, Chairman JOHN E. MOSS, California LIONEL VAN DEERLIN, California PHILIP R. SHARP, Indiana JAMES J. FLORIO, New Jersey ANTHONY TOBY MOFFETT, Connecticut JIM SANTINI, Nevada ANDREW MAGUIRE, New Jersey MARTY RUSSO, Illinois EDWARD J. MARKEY, Massachusetts THOMAS A. LUKEN, Ohio DOUG WALGREN, Pennsylvania BOB GAMMAGE, Texas ALBERT GORE, JR., Tennessee BARBARA A. MIKULSKI, Maryland SAMUEL L. DEVINE, Ohio JAMES T. BROYHILL, North Carolina Adams, Dr. Gordon, Director of Military Research, Council on Blumenthal, W. Michael, Secretary of the Treasury__ Kennedy, William F., cochairman, Ad Hoc Committee on Foreign Payments, Association of the Bar of the city of New York.... Moss, John E., a Representative in Congress from the State of Cali- Pitt, Harvey L., general counsel, Securities and Exchange Commission. Schell, Orville H., cochairman, Ad Hoc Inter-Professional Study Solarz, Stephen J., a Representative in Congress from the State of von Mehren, Robert B., chairperson, Ad Hoc Committee on Foreign Payments, Association of the Bar of the city of New York. Williams, Hon. Harold M., Chairman, Securities and Exchange 196 Tested cases of U.S. jurisdiction_.. 40 Federal Regulation of Securities Committee, Kenneth J. Bialkin, chairman and Stephen J. Weiss, chairman, Ad Hoc Committee on UNLAWFUL CORPORATE PAYMENTS ACT OF 1977 WEDNESDAY, APRIL 20, 1977 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON CONSUMER PROTECTION AND FINANCE, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D.C. The subcommittee met, pursuant to notice, at 11 a.m. in room 2218, Rayburn House Office Building, Hon. Bob Eckhardt, chairman, presiding. Mr. ECKHARDT. The Subcommittee on Consumer Protection and Finance will be in session. Today, the Subcommittee on Consumer Protection and Finance begins 2 days of hearings on H.R. 3815, The Unlawful Corporate Payments Act of 1977. During the waning days of the 94th Congress, the subcommittee held hearings on a similar foreign bribery bill, but was unable to report it out because of end-of-session legislative pressures. H.R. 3815 would amend the Securities Exchange Act of 1934 and other acts to prohibit bribes to foreign officials. Violators would be subject to criminal sanctions. Since 1974, approximately 200 American corporations have admitted making questionable foreign payments exceeding $300_million. The majority of these firms are Fortune 500 industrials. They are involved in aerospace, airlines and air service, drugs and health care, oil and gas production and services, and food products. As Pitney-Bowes Chairman Fred Allen observed: "Corporate corruption is big business." There is a broad and growing concensus that foreign bribes are not only unethical, but bad business as well. They short-circuit the free marketplace by directing business to those companies too inefficient to compete in the traditional criteria of price, quality, or service. The publicity attendant to disclosure of such payoffs often jeopardizes corporate assets through cancellation of important contracts and confiscation of valuable overseas properties. Not only is corporate bribery unethical and bad business, it may also be unnecessary. SEC Chairman Hills testified before the Senate: "Indeed, we find in every industry where bribes have been revealed that companies of equal size are proclaiming that they see no need to engage in such practices." A substantial number of the foreign bribes disclosed have not been made to "outcompete" foreign firms, but rather against American companies for the same business. (1) |