Gulf Comes Clean

One outgrowth of the Watergate scandal has been an intensified Government probe into contributions by American-based multinational corporations --especially oil companies--to foreign politicians. Two years ago, the Watergate special prosecutor's office, while investigating illegal contributions to Nixon's 1972 campaign, discovered clues indicating that some U.S. firms had also been donating to political parties in other countries. The Securities and Exchange Commission later began looking into the matter. Reason: giving corporate cash to a foreign political party does not in itself violate U.S. law, but disguising the contributions on a company's books might contravene the SEC'S reporting requirements. Testifying at a secret SEC hearing early this year, Gulf Oil Chairman Bob Dorsey admitted that his company had indeed given $4 million to a political party in another country, which he did not name. A Senate Foreign Relations subcommittee decided to look into the foreign policy implications of Gulfs contribution and pressed Dorsey to come clean.

Last week Dorsey did. The $4 million, he admitted, was paid to the ruling Democratic Republican Party of South Korea. According to Dorsey, the party's financial chairman, the late S.K. Kim, demanded a $10 million contribution, but settled for $1 million in 1966 after "heated discussions." Gulf forked over another $3 million in 1971. Both payments, Dorsey told the committee, were made in response to "pressure which left little to the imagination as to what would occur" to Gulf's Korean holdings if the company said no. Gulf has invested $300 million in shipbuilding, refineries and polyethylene and fertilizer plants in Korea; the Korean government is a partner in most of these.

Korean politicians have not been the only beneficiaries of Gulf's--or the oil industry's--largesse. Dorsey admitted that Gulf had also donated $460,000 to former political rulers in Bolivia and had channeled another $50,000 through Beirut, as he euphemistically put it, to "defray the expenses of a public education program ... to bring about a better understanding in America of the Arab-Israel conflict." He did not say specifically who got that money. Meanwhile, Exxon and Mobil Oil acknowledged last week that they had also made gifts, which they insisted were legal, to political parties in Canada and Italy. For Gulf, there was one painful irony. Prior to Dorsey's Senate testimony, the speculation had been that most of the company's contributions had gone to Latin America. Last week the leftist military in Peru nationalized $2 million worth of Gulf service stations, accusing the company of "notorious, immoral conduct"--presumably meaning interference in Peruvian politics--even though there has been no evidence so far that Gulf made any contribution in Peru.

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