BANKING, HOUSING, AND URBAN AFFAIRS NINETY-FIFTH CONGRESS FIRST SESSION ON S. 305、、- TO AMEND THE SECURITIES EXCHANGE ACT OF 1934 TO 87-232 O MARCH 16, 1977 Printed for the use of the Committee on Banking, COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS WILLIAM PROXMIRE, Wisconsin, Chairman JOHN SPARKMAN, Alabama HARRISON A. WILLIAMS, JR., New Jersey THOMAS J. MCINTYRE, New Hampshire EDWARD W. BROOKE, Massachusetts H. JOHN HEINZ III, Pennsylvania KENNETH A. MCLEAN, Staff Director JEREMIAH S. BUCKLEY, Minority Staff Director (II) W. Michael Blumenthal, Secretary of the Treasury_ Roderick Hills, Chairman, Securities and Exchange Commission__. Edward I. O'Brien, president, Securities Industry Association, accom- panied by James W. Walker, Jr., executive vice president_ Richard P. McGahan, vice president, New Jersey National Bank, accom- panied by Martin F. Shea, vice president, Morgan Guarantee Trust Co., and Robert L. Bevan, associate, Federal Legislative Counsel, American American Airlines, review of ownership information. American Council of Life Insurance, views on title II of S. 305--- American Life Insurance Association, letter and statement received from Letter to Senator Proxmire from Wallace E. Olson, president_-_. Letter to Securities and Exchange Commission from Philip B. Chenok, Federal Reserve Board, letter to Depositary Trust Co., from Arthur F. Federal statutes directing that agencies shall tabulate information so as to maximize its usefulness to other agencies and the public_ Machinery and Allied Products Institute, letter received from Charles W. Metcalf, Lee, U.S. Senator from the State of Montana : Page Exhibits accompanying prepared statement__ 6 Reprint of remarks in the Congressional Record on the Federal Power 20 Response to subsequent questions of Senator Williams-- 17 Model corporate disclosure regulations developed by the interagency steer- ing committee on uniform corporate reporting, established by GAO____ 30 Holdings of American Airlines' common stock_. 43 Letter to Senator Metcalf enclosing list of the names of all nominees 41 Report to the Civil Aeronautics Board regarding capital stocks held 47 National Association of Manufacturers, letter and statement received from 201 Beneficial ownership disclosure requirements, reprinted from Federal Price Waterhouse & Co., views on title I, sec. 102 concerning certain Joint letter received from Senators Williams and Metcalf and Con- Letter to Depositary Trust Co. from Roderick M. Hills, chairman. Treasury Department, letter from W. Michael Blumenthal, detailing mem- 106 Wolfson, Nicholas, professor of law, Connecticut University, statement on 215 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 control 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. |