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FOREIGN INVESTMENT DISCLOSURE
UNITED STATES SENATE
TO AMEND THE SECURITIES EXCHANGE ACT OF 1934 TO
FOR OTHER PURPOSES
MARCH 16, 1977
Printed for the use of the Committee on Banking,
Housing, and Urban Affairs
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1977
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
WILLIAM PROXMIRE, Wisconsin, Chairman
EDWARD W. BROOKE, Massachusetts
H. JOHN HEINZ III, Pennsylvania
RICHARD G. LUGAR, Indiana
HARRISON SCHMITT, New Mexico
KENNETH A. MCLEAN, Staff Director
Metcalf, Lee, U.S. Senator from the State of Montana :
Exhibits accompanying prepared statement--
Commission regulatory information system--
Response to subsequent questions of Senator Williams--
ing committee on uniform corporate reporting, established by GAO---
Holdings of American Airlines' common stock---
used for the registration of securities--
R. Heath Larry, chairman.-
aspects of corporate accountability-
Beneficial ownership disclosure requirements, reprinted from Federal
gressman Moss on regulatory delay of subsection 13(f) of the Secu-
rities Exchange Act of 1934..
Proposed section 21(c)---
bers of United Nations Working Group on Corrupt Practices represent-
ing the U.S. Government---
title I, foreign corrupt practices.
FOREIGN CORRUPT PRACTICES AND DOMESTIC AND
FOREIGN INVESTMENT DISCLOSURE
WEDNESDAY, MARCH 16, 1977
• U.S. SENATE, COMMITTEE ON BANKING, HOUSING AND URBAN AFFAIRS,
Washington, D.C. The committee met at 10 a.m., in room 5302, Dirksen Senate Office Building, Senator William Proxmire, chairman of the committee, presiding
Present: Senators Proxmire, Sparkman, Williams, Sarbanes, Brooke, Tower, Garn, Heinz, Lugar, and Schmitt.
OPENING STATEMENT OF CHAIRMAN PROXMIRE
The CHAIRMAN. The committee will come to order.
Today the committee will hear testimony on S. 305 which is sponsored jointly by Senator Williams and myself. This is Secretary Blumenthal's first appearance before this committee and we look forward to Secretary Blumenthal's statement and appearance. He is obviously a very brilliant man and a great addition to the administration and we are proud and happy to have him as our witness this morning.
We are also pleased to have Rod Hills, Chairman of the Securities and Exchange Commission, testifying. Mr. Hills, in my judgment, has been an excellent chairman of the SEC, one of the very best. Under his leadership the SEC has maintained the position in my view as the most effective regulatory agency in the Government.
Title I of S. 305 outlaws the bribery of foreign officials by American companies. The SEC has recently uncovered 300 instances in which U.S. companies engaged in the bribery of foreign officials involving over $300 million. Public confidence in the business community, the heart of our free enterprise system, has been seriously affected by these revelations. Bribery is not only morally bad, it's bad business. Companies which engage in such practices run the risk that when uncovered substantial business may be lost or, even worse, property may be confiscated by hostile governments. The image of our Government abroad is tarnished and the effectiveness of our foreign policy diminished. Bribery undermines fair competition between American firms. Price and quality no longer contro] the market. The growth, profitability and employment levels of firms operating in such circumstances are distorted. There's just no disagreement on these principles or on the venal effect of bribery, that it is wrong.
Former Secretary Simon spoke with eloquence before this committee against bribery. The business community has spoken out as with one voice against bribery. The only dispute is how to stop it and how to make any prohibition we write into law effective.