AMENDMENT OF THE FOREIGN MISSIONS ACT TO INCLUDE COMMERCIAL ENTITIES (H.R. 1947)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87M01152R001101420006-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: March 24, 2010
• Sequence Number: 6
• Publication Date: December 23, 1985
• Content Type: MEMO

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OLL85-3920
23 December 1985
STAT
MEMORANDUM FOR: Counsel/DDO
Chief, Counterintelligence Staff/DO
Deputy Chief, Intelligence Community Affairs/OGC
Deputy Chief, Legislation Division/OLL
STAT
STAT
STAT
SUBJECT: Amendment of the Foreign Missions Act to
Include "commercial entities" (H.R. 1947)
1. Attached for your review and comment is a bill introduced
by Senator Durenberger and cosponsored by Senator Leahy, to amend
the Foreign Missions Act. Specificially, S. 1947 would expand the
coverage of the Foreign Missions Act (FMA) to include commercial
entities. If the bill becomes law the restrictions that now apply
to official missions would apply to foreign commercial entities.
2. Under the new law, the Secretary of State would have the
authority to control foreign commercial endeavors in the United
States that may pose a threat to our national security. It has
not been uncommon for Soviet bloc countries to use "commercial
cover" for intelligence purposes. Imposition of foreign mission
type controls on foreign commercial entities would alleviate
somewhat the counterintelligence threat.
3. Please provide your comments in writing or by phone
Attachment
as stated
by 21 January 1986.
Distribution:
Original - Addressee(s)
1 - D/OLL
1 - DD/OLL
1 - OIL Chrono
1 - OLL/Legislatio n Subject File
1 - JBM Signer
OLL/LDG~ (pap): 23 December 1985
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---??
?~+aWwavl'%AL 9Ln% WAM - b HATE December l t, 1985
other Senators to loon m i
n
ing this bill. sponsor-
Mr. President. I ask that the bill be
printed in the Racoan.
There was ordered being to ?beobjection, rrittd the the
Rtcoxn, as follows:
8.1945
Be it enacted by the Senate and Howe of
Representatims of the united States of
America in Cbnpress assembled, That such
&m0unt as may be necessary of the Polish
currencies held by the United States which
have been generated by the sale to Poland
of surplus United States dairy products
shall be available for construction and ren?
ovation projects to be undertaken in Poland
under the auspices of the Charity Commis.
Sion of the Polish Catholic Episcopate for
the benefit of handicapped and orphaned
children. Such currencies may be utilized
without regard to the requirements of sec.
tion 1306 of title 31, United States Code, or
any other provision of law.*
S
in this almon Restoration Program. Its part Mr. President, I am also pleased to
could
m
ington Rivver
WAU the roposal to ranch of the Farmington the
an I
mportant salmon west b
sport fishing area. ton River
has the unanimous support of the
e
The river's recreational potential is Connecticut communities in the Farm-
immense and its use is growing every Ington River Valley.
year. There is white water canoeing I urge prompt consideration of this
and kayaking through the river's legislation by the Senate.
gorges and rapids. One segment of one
river, the Tarifh?ille Gorge, is used for By Mr. DURENBERGER (for
the National Olympic Kayaking Trials and Mr. Lamm
and the Watt---,
to enhance the protec-
ships. o t f U.S. under the For-
Twenty sites in the
i
i
r
ver corridor e
gn At t th
c;oe Committee
have been recognized as National His- On Foreign Relations.
tonic Landmarks and National Historic COVERAGE OF COMWMCIAL ENTITIES UNDn THE
Register sites. The
Farmington River POa1ree, it is
and the the shame Federal Govern-
in on the basis of their involvement Quality services are furnished to revel- tBeem that supports these Institutions Go a n
in any -activities" of a foreign govern- opmentally disabled ladtvldns.M and
ment or organization; the current re- mentally fit Individuals in residenU&I by certifying them as acceptable and
dundent and confusing specification faculties and by providers of home and funding them with Federal dollars.
that such activities must be diplomat- community-based services which re- You might ask how this can happen.
Ic, consular, or governmental would be celve funds under the Medicare or I certainly did. I asked bow our Feder-
eliminated. Finally, the phrase "or Medicaid Programs, and to amend the al system of monitoring to assure qual-
which is substantially owned or effec- Developmental Disabilities assistance ity care in programs receiving Federal
tively controlled by" is added to the and Bill of Rights Act to require that funds could allow such conditions to
definition, so that a commercial entity residential programs meet Medicaid exist After all, when we provided for
can also be subjected to Foreign Mis- standards; to the Committee on F1- Federal audits of institutional care as
sions Act restrictions strictly on the nonce. part of Federal funding, we expected
basis of an ownership or control test. QTALrTT SERVICES FOR DISAXIM I/DIVIDOALS sr tax money would be linked direct-
We believe that these changes are Acr ly to quality rare.
advisable to clarify the ability of the Mr. WEICKER,. Mr. President. I rise But that is not the case. Indeed the
Secretary of State to apply Foreign today to introduce the Quality Serv- monitoring of State facilities Is mini-
Missions Act controls to commercial ices for Disabled Individuals Act. This mat and Ineffective and focuses on pa-
entities operating in the United States bill is my second legislative initiative perwork rather than people. For the
which are involved in the activities of in response to the hearing I chaired most part. States certify their own fa-
foreign governments or organizations, this session on the care of institution- cilities as acceptable for receipt of
or which are owned or controlled by ized mentally disabled persons, and Federal funds. And while statutory au-
such governments or organizations. It the 9-month investigation which pre- thority exists for the Department of
is clear that certain of these eomrner- ceded them. My interest in initiating Health and Human Services to "look-
cial establishments may be performing this investigation was not solely be- behind" or validate the State certifica-
activities which pose a threat to U.S. cause of my role as chairman of the lion decision, such validation reviews
national security. We must give those Subcommittee on the Handicapped. As -have been limited and do _not ensure
charged with defending U.S. Interests a parent and a citizen I have been reg- timely corrections when deficiencies
the tools that they need to deal effec- ularly shocked by reports in the media are identified. In fact, many facilities
tively with such threats. of physical abuse, violence, and death have repeated deficiencies yet still
It should be emphasized that the In State facilities for the mentally dis- maintain their certification. At our
changes made by the bill that Senator abled. hearings, a nurse told us of a State
Lwrx and I have introduced today So last year. I initiated an Intensive hospital operating below "minimally
would not require application of For- Investigation into care and treatment acceptable 'standards- for 2 consecu-
eign Missions Act controls to any eorn- In our Nation's Institutions for the tive years. Still no action was taken by
mercial establishment Instead, the mentally disabled. This was a followup State or Federal officials.
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S 17700 CONGRESSIONAL RECORD - SENATE Demmber 16, J &
entista are stW collecting data from
that station.
Mr. President. I behove this b411 will
significantly improve national and
international research coordination
and cooperation. In time. It will
produce the vital data Congress needs
to make the appropriate policy deci-
sions regarding the greenhouse effect-
I urge my coileagues to support this
legislation.?
WEEKLY BUDGET
SCOREKLEPINQ REPORT
? Mr. DOMENICI. Mr. President. I
hereby submit to the Senate the
budget scorekeeping report for the
week of December 9. 1985. prepared by
the Congressional Budget Office in re-
sponse to section 5 of the first budget
resolution for fiscal year 1986. This
report also serves as the scorekeeping
report for the purposes of section 311
of the Congressional Budget Act.
The report follows:
V.8 COwcn=SS.
COr0mumsTOIIAL BrDGrr ORIC[.
Washtapton. DC December If. roes.
Hon. Pen V. Doiwnr cb.
Chairman. Committee on the Budget U
SebSate. Was'iapton. DC
DVAa Ma_ Cza*^wsw: The attached report'
shows the effects of Congressional action on
the budget for fiscal year 1966. The estimat-
ed totals of budget authority. outlays. and
revenues are compared k the appropriate
or recommended levels contained in the
most recent budget resoiatim. B. t ba Res.
32. This report nets the reslriraenta for
Senate ac ekeeping ad Seetl? b W 8 Can.
Res. 32 and is current through December 13.
1965. The report is submitted under Section
308(b) and to aid of Section 311(b) of the
Congressional Budget Act.
Since my last report the Congrea has
cleared for the President's signature the
Further Temporary Extension (Medicare)
and Lx tension of Tobacco Liaise Tax (H.R.
31018). changing outlay and rev'emw esti-
mates.
With best wishes.
Sincerely.
Ett9oot ra G. Pmrlmt.
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EXTENSION OF FOREIGN MIS
SIONS ACT TO COVER FOP.
EIGN COMMERCIAL ENTITIES
? Mr. LEAFY. Mr. President, I rise as
cosponsor with Senator DvltExaaacca
of S. 1547, a bill to extend the Foreign
Missions Act to cover certain foreign
commercial entities operating in the
United States.
The Office of Foreign Missions in
the State Department is empowered
under the act to control various actici-
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December It. 1985 CONGRESSIONAL LECO)LD - SENATE
ties of foreign diplomatic and ooinsular
missions, certain other foreign official
organizations-such as commercial
missions and official news bureaus-
foreign missions to the United Na-
tions. and United Nations Secretariat
employees from countries whose offi-
cials are subject to such control But
currently there is no explicit legal au-
thority for the Office of Foreign Mis-
sions to regulate the activities of com-
mercial entities which are actually
owned or controlled by foreign govern-
UNon. Cur ntly . UK Soviets Station
city to extend the restrictions applied "at
Wage activities against the United by the Office of Foreign Missions to about 320 officials in their embassy and cur
States may originate from such orga- sulates here while the US has only about
nizations. Foreign governments are foreign commercial entities which are 200 American employees in the U.SS.R. and
free, through their quasipublic trading currently entirely free to operate also hires over 700 Soviet nationals to wort
firms, to form or join commercial enti- throughout the United States at our embassy and consulates there. The
ties in the United States which are not , Earlier this year, on October 22, Sen- - President has endorsed this approach. and I
S 17701
parently based to large part on Infor- the Congress has woven over the pea
mation purloined from this country. several past years on the sire and ac-
Mr. President, the Select Committee tivities of the hostile intelligence pres-
on Intelligence Is currently conducting ence In the United States. I am proud
a major review of security and noun- to have taken a leading role to this
terintelligence programs not only In effort, which has also included the fol-
the intelligence community but lowing elements-
throughout the national security The Leahy.-Cohen Amendment to the
agencies and programs of the Govern- State Department Authorization Act signed
meat. While we expect to release a into law last summer. Vnder this amend-
preliminary report next year. we have meat, the President must we to it that the
already reviewed considerable material number of Soviet officials allowed to serve
and formulated some beginning recom. at their embsm and consulate in the
mendations. One of the areas that has United States not exceed the equivalent
It is clear that considerable espio- emerged from this rev-ieu is the mecca- number of American ofncials serving in the-
currently subject to control by the
Office of Foreign Missions. This en-
ables them to establish In areas that
would otherwise be denied to officials
from their country or into which their
officials would not be completely free
to travel into such areas
It is clear that the existence of such
free arrangements provides the oppor-
tunity for espionage by governments
which engage In intelligence activities
against the United States. I can state
based on Information which has been
provided to the Select Committee on
Intelligence that some foreign com-
mercial entities are actually a source
of considerable espionage, especially in
the area of the transfer of high tech-
nology-particularly military technol-
ogy-to the Soviet bloc.
One case is particularly enlightening
in this regard. In 1981 William Holden
Bell, an employee of the Hughes Air-
craft Corp., was arrested for having
served as an agent of Marian Za-
charski, then president of the Polish
Government-owned commercial corn-
pany Polamco. Bell was cultivated by
Zacharski In a highly professional
agent recruitment scenario which
began with a social contact and devel-
oped In Zacharski's providing Bell fi-
nancial assistance. Bell was experienc-
ing serious personal and financial dif-
ficulties when he was first contacted
by Zacharski at his residence in the
high-technology area outside Los An-
geles.
Bell ultimately received about
$170,000 In money and valuable items
from Zacharski. In return, he turned
over numerous documents between
1979 and 1981 dealing with a variety of
sensitive military technologies includ-
ing the P-1S look-down shoot-down
radar system, "quite" radar systems,
all-weather radar for tanks, naval
radars, components of the Phoenix
air-to-air missile and the Patriot air
defense missile. and other systems
used by the United States and NATO.
The Soviets are kiocnim to be develop-
ing and deploying similar technologim
particularly look-down, shoot-down
radar systems and radar-guided air-to-
air missiles for their new fighters, ap-
Permanent Subcommittee on Investi-
gations. which Is also conducting a
review of security programs. We testi-
fied at that time on the Importance of
regulating foreign-controlled commer-
cial entities as part of an overan pro-
gram to directly control the presence
and activities of hostile intelligence
services In the United States, which
would also include equalizing the
number of United States and Soviet
diplomats in one another's countries:
applying Office of Foreign Missions
travel restrictions to Warsaw Pact
country representatives: and reducing
the size of the Soviet mission to the
United Nations. We said at that time:
The Foreign Missions Act applies not only
to diplomatic establishments such as embas-
sies and U.N. missions, but also to state
trading organizations and other entities
that perform governmental functions
There Is, once again. clear counterinteni-
gence information establishing that Soviet
and Warsaw Pact trading companies and
other commercial entities in the U.S con-
trolled by those countries are engaged In es-
pions.ge-related activities There are two
avenues to pursue in regulating their oper-
ations.
First, the Export Administration Act as
adopt earlier this year authorizes the
Commerce Department to acquire a license
for transfer of controlled goods or technolo-
gy to an mbassy or other ".affiliate" of a
Communist government In the United
Stabs. This language should be applied by
the Commerce Department to commercial
entities that are owned or controlled by
Communist governments and that may be
used to transfer technology abroad surrepti-
tiously.
Second. the Foreign Missions Act require-
ments should be applied to these same enti-
ties. Under the law as it now stands, each r -
quir'ements clearly can be applied to state
trading organizations such as the Soviet
company AMTORG. It is more difficult,
however, to apply the Foreign Missions Act
to other Soviet bloc-controlled businesses.
To close this gap. legislation should be en-
acted to amend the Foreign Missions Act
and authorize the State Department to
apply Its requirements to 'affiliates" of for-
eign government. with the same meaning
as to the Export Administration Act. A bill
for this purpose will be Introduced shortly.
Enactment of the Durenberger-
Leahy bill Introduced today would
help to complete the fabric of controls
tion by the &a..t Department, which has
unfortunately been very aloes to undert:t.artd,
accept and apply this policy.
The Itchy-Cohen bill. S. 1773. Introduced
last October I5- Under this bill. the Press
dent would be required to reduce the size of
the Soviet Mission to the United rations in
-New York City. With a staff of nearly 300.
the Soviet Mission is more than twice the
size of the U.S. Mission (130) and the next-
largest mission. that of the Chinese (125
and more than three times as large as all
the rest.
The Huddleston-Leahy Amendment to the
Fiscal Year 1085 batellit-once Authorization
Act, enacted in 1554 Under this amend-
ment, the President was galled upon to we
to it that the numbers and privileges of offi-
cial representatives hvm eeusttries Involved
In intelligence activities against the U.S. not
exceed the corresponding numbers and con-
ditions; permitted by their governments for
our diplomats there. This amendment also
required that either the Director or Deputy
Director of the Office of Foreign Missions
be a career etsimterintelligenee official, who
would be sensitive to the Importance of ooo-
trolling certain activities by foreign govern-
ment representatives In the United States
And other initiatives by Congress to
expand the jurisdiction of the Office of For-
eign Missions over certain foreign officials.
I would like to conclude. Mr. Presi-
dent, by saying that. abase measures
have received strong sapport at the
White House. The President has
spoken on several of them, and White
House spokesmen have recently indi-
cated that additional measures on this
subject are contained In the Presi-
dent's new National Security decision
directive on counterintelligence policy.
The bill which Senator DuaExa asst
and I have Introduced today will pro-
vide addtional legal authority to help
implement these policies.
Finally. Mr. President, I would like
to say that nothing inthe bill-requires-
the Office of Foreign Missions to con-
trol the activities of all or even any
particuair foreign government associ-
ated commercial entities The lan-
guage of the bill brings certain
?"entitffeal to the United
States ? ' ' which is substantially
owned or effectively controlled by" a
foreign power within the scope of the
act. The Secretary may determine
which foreign powers to apply this
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817702
CONGRESSIONAL RECORD - SENATE
provision to and may also develop
guidelines or procedures to determine
the nature of ownership or actual con.
trol which should trigger application
of this power. We expect that the Sec.
retary will move to apply his authority
under this provision to commercial en-
tities which are associated with for-
eign govenments which conduct intel-
ligence activities against the United
States and which actually employ
such entities as bases for such activi-
ties.
? Mr. DURENBERGER. Mr. Presi-
dent. in today's changing economy,
those businesses that succeed are
those that are innovative and well-
managed. They are not afraid of com-
petition, rather they welcome It be-
cause they, are at least one step ahead
of their competitors.
Cub Foods, headquartered in my
home State of Minnesota, is a shining
example of this successful business.
Now a member of the Super Valu
family. Cub has grown from one small
warehouse store into a national dis-
count food chain. And It did so be-
cause of my friend Jack Holey. Jack
began his career as a grocery stock boy
over 40 years ago, and worked his way
up to become chairman of Cub Poods.
Along with his brother Charlie and
friend Cub Davis, Jack has dedicated
his career to providing consumers
quality products of affordable prices-
a valuable service In today's economy.
And in recognition of his many con-
tributions to the industry, Jack has re-
cently been named Minnesota's 1985
Grocer of the Year by his peers in the
Minnesota Grocers Association. It Is
especially fitting that Jack receive the
honor this year, for this year he is re-
tiring from Cub and leaving his son
John to carry on the family tradition.
Mr. President, I ask that an article
from the September-October issue of
the Minnesota Fbod Guide be printed
In the Recoitn as a tribute to Jack's
commitment to serving the people of
Minnesota through Cub Foods.
The article follows:
[Prom the Minnesota Pood Pei ie,
September-October 1985]
MrhrrzsoTA's 1985 GaoccR or THE Yx"
Prom a stock boy in the post-Depression
WW 11 en to president of a billion dollar
corporation in the 1980's. Jack W. Hooey
Is
a true example of the American Dream.
Named 1985 Grocer of the Year by his col-
leagues in the Minnesota Grocers Associa-
tion. Hooley was presented the award in rec-
ognition of his leadership role in setting the
standard for discount superstores in the
United States. He is chairman of Cub Poods.
How does Hooley feel about Cub's success?
"There were so many people involved in it.
There were so many ideas that came from
the people who worked here. A real compa-
ny effort"
As chairman of the Cub Pbod empire,
Hooley manages a conglomerate of 27
stores. 13 of which are corporate. And 12
new stores will be opening this year, the
latest one In Atlanta. Georgia.
ACK HOOLEY-MINNESOTA'S
1985 GROCER OF THE YEAR
"Most of the growth from now on will be
in franchising." said Hooley during an inter.
view in his Stillwater office.
COMMUNITY SDVies
Hoo)ey's Community service record also is
impressive. In his hometown of Stillwater,
he serves on the Board of Directors for
Lakeview Hospital and the First National
Bank. He also serves on the Church Ad%iao-
ri Council at St Michael's Catholic Church
and is active with the Boy Scouts of Amer-
ica as well as a boys rehabilitation center in
Minneapolis.
A FAMILY TRADrTIOM
Hooley began his life-long career in the
grocery business by sweeping floors and
stocking shelves in stores owned by his
father and grandfather In the early 1940 s.
The family business, which had begun as
a meat delivery sere ice for lumber camps be-
tween Stlilwat.er and Taylor's Pails. had
grown to include four grocer) stores in the
St Croix Valley. The stores were located in
Stillwater, Red Wing and Hudson. And it
was there that the self-service concept in
the grocery business was born.
THE EARLY YEARS
After graduating from high school.
Il;ooley served in the U.S. Navy for four
years, and then returned to attend college
at St. Thomas. After graduation, he became
manager of his first store.
He transferred to Hooley's Downtown Su-
permarket, Stillwater. in 1950 and became
store manager in 1955. By 1958. he was
named president of Hooley'a Supermarket.
BIRTH or A CONCEPT
It was in 1980 that Hooley. his brother
Charlie and friend Cub Davis )oined forces
to open a discount foodstore operation and
bought a franchise with rood Bonansa out
of Decorah, Iowa.
"We decided on a warehouse market
format," Hooky said.
What did that mean? Well, no air condi-
tioning, no musk, no employee uniforms.
Wooden planks served as shelves, and
checkout stands were nailed together by
hand. All equipment was second-hand.
Choosing a name was the next step. Con-
sumers United for Buying (CUB) was final-
ley decided upon. "It pretty well said what
we wanted," Hooley said. No, he said, the
name had nothing to do with Cub Davis,
"Just a coincidence,"
"It was unbelievably, bard when we first
started out to let people know who we
were," Booley recalled. "We relied on word
of mouth. We wanted people to think of it as
their store."
The soultion? They changed ad agencies
and stopped using the bear cub and shadow
as their logo. "We wanted to emphasize our
low prices, not our bear cub logo." Hoole)
said.
EEPANSioN BEGINS
At the same time that the logo changed,
Davis and Hooley traveled to California to
inspect produce departments. They had de-
cided to add produce to the store as well as
complete dairy, and frozen departments.
"We are doing about $150,000 a week and
-thought _-we should be doing about
$200.000," Hooey said.
At that time, the store had only limited
frozen and dairy departments-no bakery,
no deli,.no meat and no refrigeration de-
partments.
The rest is history. With an expanded in-
ventory, the $200,000 mark was passed
within two weeks. By the third week, busi-
ness was up to $250,000, and the $400,000
mark was reached by the-end of the year.
With the added resources came improve-
ments In decor. Air conditioning, tiled floors
and music were added
December 16, 1985
Uniforms, too. were added. This was a
definite change in policy from the old cort-
eept Hooley noted. "Everyday clothes" had
been the standard at the old stores, and It
was a standard that worked. "We thought it
was kind of quaint," Hooley said.
What chanced all of that?
"Some kid came up to check me out In his
[long] underwear." Hooky said. "Thats
when we d"?cided things had to change. It
wasn't a warehouse anymore. It was a com
piste superstore."
THY MODERN DAY CLOG
In order to upgrade and expand. CUB war
sold to Super Valu in 1980. and Jack war
named chairman. That was the beginning of
national expansion Today there are store.-
In Illinois. Wisconsin and Indiana in add,
Non to the six stores in Minnesota (Aft"r
Super Valu acquired CUB Inc In 1980. thr
name was changed to Cub Foods. )
Although Cub is now a corporate giantr
remnants of the old family atmosphcrt.
linger or.. Brother Charlie retired in March.
and Boole) himself will be retiring in Octo
ber. But son John will carry on the family
tradition. H. currently heads up the Minne
sots division of Cub.
Other family members In the business in
elude Maureen Hooey, who serves as direr.
for of advertising, and Charles "Chip"
Howley. Jr., who serves as assistant store
manager for Stillwater.
What impact has Cub had on the grocery
industry?
"Wherever we go. we reduce the price
level." Boole) said. Most Cub stores. he ex
plained. operate at about one-half the oper-
ating costs of most eonventionals. Hooley
credits this to the reduced labor costs in
Cub stores and the efficient use of recent
technological Innovations.
What does he think about the grocery
business in general today?
"It's simpler. You don't have to know so
much about the products. There are more
standards. The product overall is much
better.
That attitude Is easy to understand since
Rowley spent his younger years cutting cans
of peas to test for quality. choosing cuts of
meat and picking out produce.
"Nos you have to know more about man-
agement," Boole) noted.
Overall. "It's an awfully good business,"
Hooley concluded. "To me. that's the best
business in the world.'.
NEW JERSEY LEADING THE WAY
IN TOXIC WASTE RESEARCH
? Mr. LAUTENBERG. Mr. President.
I note with pride that the Newark
Star-Ledger has published an illumi-
nating seven-part series by Gordon
Bishop, which describes how the "In-
dustry/University Cooperative Center
for Research in Hazardous and Toxic
Substances," located on the Newark
Campus of the New Jersey Institute of
Technology INJITI, is blitzing a trail
-In-toxic bhemica7 research The Star-
Ledger is to be commended for this in-
formative and interesting series, and I
commend these articles to my col-
leagues
This national toxic substances re-
search center at NJIT is the largest of
Its kind in the world. The center's
focus Is on developing the most ad-
vanced technologies yet designed for
solving America's environmental
cozies crisis. As implied by the name of
?,.-, n.,.l,,..? Y i,.,.. , Sanitized Copy Approved for Release 2010/03/24: CIA-RDP87M01152R001101420006-2