Page images

Department of Justice as an agent of such foreign principal for inclusion in the records of the committee as part of his testimony."

SEC. 5. Section 5 of such Act is amended by inserting after “the provisions of this Act," where they first appear the words "in accordance with such business and accounting practices,".

SEC. 6. Secion 6 of such Act is amended by inserting the letter "(a)” after the section number and by adding at the end thereof the following new subsection :

“(b) The Attorney General shall, promptly upon receipt, transmit one copy of every registration statement filed hereunder and one copy of every amendment or supplement thereto, and one copy of every item of political propaganda filed hereunder, to the Secretary of State for such comment and use as the Secretary of State may determine to be appropriate from the point of view of the foreign relations of the United States. Failure of the Attorney General so to transmit such copy shall not be a bar to prosecution under this Act.

"(c) The Attorney General is authorized to furnish to departments and agencies in the executive branch and committees of the Congress such information obtained by him in the administration of this Act, including the names of registrants under this Act, copies of registration statements, or parts thereof, copi of political propaganda, or other documents or information filed under this Act, as may be appropriate in the light of the purposes of this Act."

SEC. 7. Section 8 of such Act is amended as follows:

(1) Subsection (a) is amended by adding before the period at the end of paragraph (2) a comma and the following: "except that in the case of a violation of subsection (b), (e), or (f) of section 4 or of subsection (g) or (h) of this section the punishment shall be a fine of not more than $5,000 or imprisonment for not more than six months, or both”.

(2) Such section is further amended by adding at the end thereof the following new subsections:

"(f) Whenever in the judgment of the Attorney General any person is engaged in or about to engage in any acts which constitute or will constitute a violation of any provision of this Act, or regulations issued thereunder, or whenever any agent of a foreign principal fails to comply with any of the provisions of this Act or the regulations issued thereunder, or otherwise is in violation of the Act, the Attorney General may make application to the appropriate United States district court for an order enjoining such acts or enjoining such person from continuing to act as an agent of such foreign principal, or for an order requiring compliance with any appropriate provision of the Act or regulation thereunder. The district court shall have jurisdiction and authority to issue a temporary or permanent injunction, restraining order or such other order which it may deem proper. The proceedings shall be made a preferred cause and shall be expedited in every way.

"(g) If the Attorney General determines that a registration statement does not comply with the requirements of this Act or the regulations issued thereunder, he shall so notify the registrant in writing, specifying in what respects the statement is deficient. It shall be unlawful for any person to act as an agent of a foreign principal at any time ten days or more after receipt of such notification without filing an aménded registration statement in full compliance with the requirements of this Act and the regulations issued thereunder.

"(h) It shall be unlawful for any agent of a foreign principal required to register under this Act to be a party to any contract, agreement, or understanding, either express or implied, with such foreign principal pursuant to which the amount or payment of the compensation, fee, or other remuneration of such agent is contingent in whole or in part upon the success of any political activities carried on by such agent.'

SEC. 8. (a) Chapter 29 of title 18, United States Code, is amended by adding at the end thereof a new section as follows:


"§ 613. Contributions by agents of foreign principals

“Whoever, being an agent of a foreign principal, directly or through any other person, either for or on behalf of such foreign principal or otherwise in his capacity as agent of such foreign principal, knowingly makes any contribution of money or other thing of value, or promises expressly or impliedly to make any such contribution, in connection with an election to any political office or in connection with any primary election, convention, or caucus held to select candidates for any political office; or

“Whoever knowingly solicits, accepts, or receives any such contribution from any such agent of a foreign principal or from such foreign principal

"Shall be fined not more than $5,000 or imprisoned not more than five years or both.

“As used in this section"(1) The term 'foreign principal' has the same meaning as when used in the Foreign Agents Registration Act of 1938, as amended, except that such term does not include any person who is a citizen of the United States.

“(2) The term 'agent of a foreign principal' means any person who acts as an agent, representative, employee, servant, or in any other capacity at the order, request, or under the direction or control of a foreign principal or of a person any substantial portion of whose activities are directly or indirectly supervised, directed, or controlled by a foreign principal."

(b) Chapter 11 of title 18, United States Code, is amended by adding at the end thereof a new section as follows:

"& 219. Officers and employees acting as agents of foreign principals

"Whoever, being an officer or employee of the United States in the executive, legislative, or judicial branch of the Government or in any agency of the United States, including the District of Columbia, is or acts as an agent of a foreign principal required to register under the Foreign Agents Registration Act of 1938, as amended, shall be fined not more than $10,000 or imprisoned for not more than two years, or both:

"Nothing in this section shall apply to the employment of any agent of a foreign principal as a special Government employee in any case in which the head of the employing agency certifies that such employment is required in the national interest. A copy of any certification under this paragraph shall be forwarded by the head of such agency to the Attorney General who shall cause the same to be filed with the registration statement and other documents filed by such agent, and made available for public inspection in accordance with section 6 of the Foreign Agents Registration Act of 1938, as amended."

(c) (1) The sectional analysis at the beginning of chapter 29 of title 18, United States Code, is amended by adding at the end thereof the following new item : “613. Contributions by agents of foreign principals."

(2) The sectional analysis at the beginning of chapter 11 of title 18, United States Code, is amended by adding at the end thereof the following new item: “219. Officers and employees' acting as agents of foreign principals."

SEC. 9. This Act shall take effect ninety days after the date of its enactment.

Mr. WILLIS. The purpose of these measures is to strengthen the original Foreign Agents Registration Act which in turn has the object of protecting the interest of the United States by requiring complete public disclosure by persons acting for, or in the interests of, foreign principals where their activities are political or border on the political.

Such disclosure serves the purpose of enabling the Government of the United States and its people better to appraise activities of persons so acting.

The Chair understands that H.R. 290 and S. 693, as introduced, were identical with S. 2136 as it passed the Senate in the 88th Congress. Further, that S. 693 as it passed the Senate in the present Congress differs from H.R. 290 principally in the addition of a new subsection (g), to section 3 of the Foreign Agents Registration Act, exempting from registration attorneys who do no more than appear openly of record for disclosed principals in courts or in administrative agencies.

From the Senate committee's report on S. 693 it appears that focus of the present amendments is not so much on subversion as upon protecting the integrity of the Government decision-making processes.


No inference should arise from the Chair's position on the House Committee on Un-American Activities that the Chair or that committee approves or otherwise evaluates the Foreign Agents Registration Act or the pending amendments as the appropriate method of combating subversion.

The Chair regrets that commitments of the full committee have made it necessary to schedule all the witnesses for the same day, canceling tomorrow's hearing. Under the circumstances witnesses are urged to present their testimony with the greatest possible conciseness so that all who have appeared may be heard today.

Furthermore, the Chair observes that the House will go into session at 11 o'clock this morning, that we may be interrupted by quorum calls and, further, that a number of members of this subcommittee have indicated to me the desire to hear the President's statement on the Vietnam situation, and perhaps other matters, scheduled for 12:30. For these reasons we are in a difficult situation, gentlemen, not to our liking or through our making, but those are the facts.

We shall do the very best we can. We will have to respond to quorum calls if and as they come, and if they come with more rapidity than we now contemplate it may even necessitate our suggesting, or requesting, that witnesses whom otherwise we would want to hear merely submit their statements, if that is their preference, or postponing the hearing to another mutually agreeable date.

The first witness will be Mr. Arthur Dean, of the firm of Sullivan & Cromwell, New York, a most distinguished member of the bar with whom I have had some association in the past elsewhere, and we look forward with great anticipation to his enlightening views.

Mr. Dean, we are glad to have you.


SULLIVAN & CROMWELL, NEW YORK, N.Y. . Mr. DEAN. Thank you, Mr. Chairman.

Mr. Chairman and members of the subcommittee, my name is Arthur H. Dean, and I am senior partner of the law firm of Sullivan & Cromwell in New York City. I appreciate the committee's invitation to testify on the proposed amendments to the Foreign Agents Registration Act. I have previously testified before the Senate Foreign Relations Committee on S. 693 in February of this year, and on S. 2136, the predecessor to S. 693, in November of 1963.

In the course of successive appearances to testify with respect to the same matters, some repetition becomes unavoidable. I think, however, that some points are worth repeating.

In particular, I should like once more to express my complete support for the objectives of the Senate Committee on Foreign Relations in proposing amendments to the Foreign Agents Registration Act. I wholly endorse the committee's basic purpose of requiring full public disclosure of the type of activities exposed by the committee's hearing in 1963.

I should like especially to express my admiration for the untiring efforts the chairman of the Senate Committee on Foreign Relations, Senator Fulbright, whose appreciation of the need to amend and sharpen the present act has been primarily responsible for the efforts that have been made in this regard. I had the privilege of working with Senator Fulbright in the course of the nuclear test ban negotiations and disarmament and learned to admire his clarity of thought, energy, and dedication at that time. I also had the privilege of working with your chairman when he gave me excellent advice, at the Law of the Sea Conference, at Geneva in 1958, with regard to shrimp fishing in our negotiations with Mexico.

For purposes of my testimony today, as a matter of convenience, I shall refer to S. 693 as the "bill.” The provisions of the bill in its present form embody a number of significant improvements over that originally proposed as S. 2136 in the past session of Congress, and I. am assuming that H.R. 290 will incorporate the changes which have already been made in S. 693.

You will probably say I will never be satisfied, but, nevertheless, despite the amendments and improvements that have been made, sub

antial and troublesome areas of ambiguity remain. These continue to cause concern and have evoked considerable critical comment by businessmen, lawyers, and other professional men.

Last month, for example, the Committees on International Law and on Federal Legislation of the Association of the Bar of the City of New York published a report analyzing in detail some of the important problem areas, and pointing out the serious need for clarification (the record of the Association of the Bar of the City of New York, vol. 20, No. 6, June 1965, p. 383, et seq.).

The bill's principal problem, in my judgment, continues to be the breadth of some of its definitions. The sponsors of the bill have stated that it is designed to be applicable to political activities. Thus, in the Senate report, No. 143, 89th Congress, 1st session, it is stated on page 4 that anindividual or firm undertaking political activities, public relations, or similar services for a foreign principal [has] placed himself in a most sensitive position between his own governmental institutions and a foreign principal-an area traditionally reserved for the diplomatic corps, with all its formalities and restrictions.

But, with its present broad definitions, the bill might apply not only to those who have placed themselves in this sensitive position (and I agree that its application to such persons is quite proper), but also to persons who are engaged in day-to-day, nonsensitive activities which businessmen and their advisers normally conduct. Put another way, the bill may make activities “political” that have always been regarded in ordinary usage as professional, business, or commercial and therefore not "political."

It is no real solution to the problem to refer to the curative power of the legislative history, which itself raises questions, some of which I shall refer to presently. Nor do I think it appropriate to impose upon businessmen and their advisers, who have not put themselves in this "sensitive position,” the burden of negotiating with the Department of Justice to see whether and to what extent the Department of Justice feels that it will make compliance with the act in their case less burdensome than that required of persons who are political agents in the ordinary sense of the term. Finally, I might point out that, to me, it is a term of opprobrium to be designated a foreign agent.

[ocr errors]

Let me explain, as briefly as possible, how it would be possible for the bill's provisions to produce these consequences. The bill would require a person to register as a foreign agent if he engages in political activities for a foreign principal.

The bill in its present form would define the term “political activities”. (S. 693, from line 25 on p: 3 through line 10 on p. 4) so broadly that it might include many activities that have traditionally been regarded as commercial and nonpolitical. As a result, a wide range

of bona fide business and professional men, as well as organizations, could be brought within the bill's scope whenever they engaged in performing such commercial, nonpolitical activities for a foreign principal.

The bill would define foreign principal” (S. 693, from line 9 on p. 1 through line 5 on p. 2) in terms so broad as to include, among other things, any U.S. citizen outside the United States who is not domiciled within the United States, and any corporation, even if organized under the laws of the United States and wholly owned by 100 percent American interests, that has its principal place of business outside the United States.

It is required to have your principal place of business outside the United States under the laws of certain foreign countries.

The report of the committees of the City Bar Association to which I just referred, concludes at one point (op. cit., at p. 397):

We believe that no public purpose is served by applying the broad requirements of the act to ordinary representation of private foreign principals before Government agencies, in matters which are, in the true sense of the words, commercial and nonpolitical *** A criminal statute which is as broad as the act could become a trap for the unwary person unable to pinpont, for example, the dividing line between seeking "administrative action on a matter where the basic policy is not in question” and seeking “decisions relating to or affecting departmental policy.” * * *

The breadth of the bill's definitions and its use of words to mean things they normally do not mean in ordinary, everyday language, create uncertainty. Distinguished businessmen, lawyers, other professional men, and lawmakers have been engaged in discussions and analyses for more than a year now as to the possible meanings of some of the bill's definitions.

That fact alone, in my view, illustrates the need to clarify those definitions before such a bill is enacted.

I recognize that a number of helpful statements have been made in the course of the Senate debates and in the committee reports about what the bill is intended to cover. However, there are also many statements that are not helpful, and, taken all together, the legislative history of this bill with respect to the precise meaning and intent of many provisions has become, in fact, somewhat confused.

As an example, Senate Report 143, 89th Congress, 1st session, at page 12 contains a discussion which is meant to clarify the coverage of the exemption of certain U.S. corporations with foreign subsidiaries and foreign corporations with U.S. subsidiaries. But, then, the report proceeds to incorporate the debate on the floor of the Senate relating to the predecessor bill (S. 2136) in the previous year, referring to specific examples which could raise a number of interpretative questions (Congressional Record July 6, 1964, pp. 15490–15495).

Even if the legislative history were clear, and a court could be persuaded to admit into evidence statements made on the floor of the




« PreviousContinue »