A Tough Bribery Probe?

Elliot Richardson, former Secretary of Defense, former Attorney General, former Ambassador to Britain and present Secretary of Commerce, added another line to his resume last week. He was appointed by President Ford to head a new ten-man panel to probe the damaging issue of foreign bribery by U.S. companies (TIME cover, Feb. 23). The Task Force on Questionable Corporate Payments Abroad--the Administration never mentioned the word bribery in announcing it--includes Cabinet Members Henry Kissinger, William Simon, Donald Rumsfeld and Edward Levi along with Richardson and five other top-flight Presidential Counsellors. It is supposed to study how extensive corporate bribery has been and what can be done to stop it; its final recommendations are due by year's end.

The creation of the panel is the latest step in what appears, at least on the surface, to be a stepped-up Government campaign to get to the bottom of the problem of corporate bribery. The Securities and Exchange Commission has urged corporations to disclose questionable payments voluntarily rather than be found out by investigators. More than 50 companies have confessed to such payments so far; another 35 have either come to the SEC for guidance on making disclosures or are the subject of SEC probes.

The Internal Revenue Service, which regards as unlawful any tax deductions taken by companies for money passed out in foreign bribes, is pushing a "large case audit" program against companies with more than $250 million or so in assets. In about 35 cases, according to IRS Commissioner Donald Alexander, "we have special agents involved"--meaning that the IRS scents possible criminal tax fraud.

The Senate Subcommittee on Multinational Corporations, headed by Idaho Democrat Frank Church, voted last week to turn over to the Justice Department information about Lockheed Aircraft Corp.'s overseas payoffs, to be forwarded to countries involved in the scandals. The Justice Department itself signed agreements with The Netherlands and Italy providing for an exchange of findings about bribegivers and -takers. They are similar to an agreement signed the previous week with Japan, where Lockheed has admitted payoffs totaling $12.5 million.

Yet skepticism is growing in the U.S. and abroad about how eager governments really are to force out all the facts. Agreements between the U.S. Justice Department and The Netherlands, Italy and Japan provide that Washington will hand over the names of suspected bribetakers only to foreign law-enforcement agencies, which can disclose them only during the course of actual legal proceedings against miscreants in government or business. That means that the names may not become public for a long time--if ever.

Unprincipled Man. In The Netherlands, the Justice Ministry has indicated that legal action against Prince Bernhard, who has been accused of taking $1.1 million from Lockheed, is very unlikely. So, under terms of the agreement with the U.S., the three-man committee that is investigating the scandal may not be able to make public any of its findings about the prince. In Japan, opposition parties are branding Premier Takeo Miki a man without principle for having accepted Washington's conditions of confidentiality in receiving information about Lockheed's payoffs.

In the U.S., too, cries of cover-up are being heard. Harvard Asian Expert Jerome Alan Cohen has suggested that the U.S. did not want to see the names of Lockheed's Japanese payoff recipients come out because Lockheed may have been "operating in intimate contact" with certain segments of the American Government. Indeed at week's end the New York Times reported that in the 1950s, the CIA was aware of Lockheed bribes in Japan, and that Yoshio Kodama had on a few occasions been paid by the CIA for services rendered. A U.S. intelligence official confirmed for TIME that the agency knew about the bribes, adding that "Kodama has been a well-placed, influential and knowledgeable individual and therefore a useful contact for American intelligence."

Consisting as it does of high-level Administration officials, the Richardson panel will have to struggle to persuade skeptics that it is not part of a further coverup. In announcing its creation. President Ford proclaimed that the commission's task "is not to punish American corporations." The White House also distributed a "fact sheet" noting that an American law prohibiting foreign bribery might involve the U.S. in investigating foreign officials; that requiring U.S. companies to disclose the names of foreign bribetakers might raise diplomatic hackles wherever U.S. companies do business; and that prohibiting foreign payoffs by U.S. executives could put them at a disadvantage in world trade. Those are all legitimate points, but they will hardly disarm those who feel that such a law would be the best deterrent to further payoffs abroad.

Meanwhile, Lockheed last week finally published a 1975 financial report, which showed sales up $110 million, to $3.4 billion, and profits nearly doubling from 1974, to $45 million. However, the company also announced that over the next ten years it would write off--and deduct from future profits--$502.5 million in development costs for its TriStar jet. Daniel Haughton, the company's deposed chairman, made a comment of sorts about payoffs: "I increased profits and sales for the shareholders and employees. If they want to change the rules of the game now, let them."

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