BACKGROUND WHY? BECAUSE IT'S THERE. Keeping up with the news these days can be a mountainous task. But a subscription to the JEWISH NEWS can increase your knowledge — of issues concerning our Jewish community — and lift your spirit. For subscriptions Call 354-6060 122 Friday, December 12, 1986 THE DETROIT JEWISH NEWS The Bechtel Corp. Not Exactly Boycotting The State Of Israel 11111=i1111111 ■ IP JUDITH KOHN Special to The Jewish. News E ver since the passage of the 1977 anti- boycott law, it has been illegal for American companies to comply with the Arab boycott of Israel. But if laws are there for the imag- inative lawyer to circumvent, the anti-boycott law has un- doubtedly provided work for many a creative mind. An illustrative case con- cerns Bechtel, the huge engineering and construction . firm which has extensive dealings in the Arab world. A 1983 memo obtained by Yale University student Jacob Weisberg and reported by him in a recent issue of the New Republic, lists Israel among ten nations that "will be excluded from any current business development ac- tivity." The stated reason: "political sensitivities and unstable conditions." Asked why Israel was on the list, a Bechtel spokesper- son told Weisberg it had to do with instability, rather than "political sensitivities." In its status as a forbidden zone for Bechtel's commercial under- takings, Israel thus joined Iran and Iraq, which have been actively at war since 1980; Lebanon, which is em- broiled in a decade-old civil war and virtually lacks a government; and Afghanis- tan, where Soviet troops have long been battling Afghan re- sistance fighters. Also on the list are the Soviet Union, Mongolia, North Korea, North Vietnam and Cuba. Thomas Flynn, the Bechtel spokesperson, told Weisberg: "I've just been reading issues of Time and Newsweek from the period. Relations between the U.S. and Israel were icy at best." His examples included the "violent street demonstra- tions" in Israel protesting the refusal of then — Premier Menachem Begin to fire then — Defense Minister Ariel Sharon for his failure to pre- vent the massacre of Palesti- nians at the Sabra and Shatila refugee camps in Lebanon. Also cited was what Flynn described as "U.S. marines going barrel to barrel with Israeli forces" in Lebanon. But the spokesperson, ac- cording to the New Republic, called the exclusion "momen- tary," and asserted that it was no longer in effect. Nevertheless, officials ap- peared hard-pressed, Weis- berg wrote, to name the date on which the memo was in- validated or to provide writ- ten proof that the Israel ban had been lifted. The Bechtel case highlights what observers suggest are the necessary limits of the anti-boycott law. The law Secretary of State George Shultz and Secretary of Defense Caspar Weinberger: Bechtel Alums. prohibits compliance with foreign boycotts of U.S. allies, but it states specifically that the absence of a commercial relationship does not in itself mean a boycott. And even William Maslow, the editor of Boycott Report, a monthly newsletter of the American Jewish Congress, says "There's some logic to that." But it does mean that no- body should have been sur- prised when companies bent on staying off the Arab blacklist failed to turn around and open up offices in Tel Aviv after the law was passed nine year ago. "If a company decides not to do business with Israel, they could do it for a million rea- sons," Maslow observed. Consequently, even if Bechtel still maintains the Israel exclusion policy as stated in the 1983 memo, it seems unlikely that it could ever be charged with violat- ing the anti-boycott law. "You need a little bit of a smoking gun," said Jess Hordes, associate director of the Anti-Defamation League of B'nai B'rith's Washington office. "You need a situation where they've had a business opportunity and they've re- fused it — that is, where they've explicitly complied with the boycott." But the same observers maintain that despite its shortcomings, the anti- boycott law has been rela- tively effective. Commerce Department officials, they say, have cracked down on companies for substantive violations of the law. These often include the signing of documents affirming that a company refuses to deal with Israel, and discrimination against Jewish job applicants. Also common are cases where companies fail to re- port requests from other firms for confirmation of compliance with the boycott requirements. Lateness in re- porting receipt of these re- quests to the Commerce De- partment has also brought charges of violations and, ul- timately, heavy fines. Another important aspect of the boycott law is the pro- hibition of discriminatory conditions on letters of credit issued by banks. But Ameri- can banks represent only one industry which has managed to avoid dealing with Israel without getting itself into trouble with U.S. law. No American bank. has a branch in Israel, Hordes ob- served. The closest thing to There should be no surprise that companies bent on staying off the Arab blacklist failed to open offices in Tel Aviv such an American-Israeli banking relationship is the role played by Chase Man- hattan as fiscal agent for Government of Israel Bonds. Then there is, of course, the petroleum industry. • And even in these oil-glutted times, when Arab states have lost so much clout, the large American petroleum com- panies have hardly been rushing to set up drilling op- erations in the Jewish State. Some Arab countries have made it easier for American firms to comply with the anti-boycott law without vio- lating the boycott. Saudi Arabia, for example, no longer requests American companies with which it does business to provide "negative certification of origin," which states that their products did not originate in Israel. In- stead, they are now more commonly asked to declare where their products origi- nated — a request that is not prohibited by the anti-boycott law. Another aid that the Saudis have reportedly pro- vided is a telephone service that allows a company to find