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Pickens Says Japanese Keep Corporate Affairs Closed

July 12, 1989

WASHINGTON (AP) _ Corporate raider T. Boone Pickens Jr. told Congress that the Japanese are resisting his foray into corporate ownership there to prevent him from exposing a closed, monopolistic economy.

The millionaire Texas oilman, known for his often hostile raids on U.S. companies, purchased a 20.2 percent stake in Koito Manufacturing Co., an automobile lighting company, for $800 million. But he was rebuffed two weeks ago at a shareholders’ meeting in Tokyo when he sought three seats on Koito’s 20-member board.

Pickens said Tuesday he poses no threat to the company’s management because the web of interconnected stockholders, including Koito’s customers, can easily outvote him.

″They must want to exclude me so that an American won’t see how their cartel works. They don’t want their system exposed for what it is,″ Pickens told the Senate Committee on Commerce, Science and Transportation.

In fact, he said the Japanese may be exporting their system of close links between companies and suppliers when they build factories in the United States.

″American suppliers are already complaining that they cannot get a piece of the action,″ he said.

Sen. Ernest F. Hollings, D-S.C., chairman of the panel and a strong advocate of an aggressive trade policy, praised Pickens for having given the committee a ″wonderful understanding″ of the barriers Japan erects to outside investment.

″This is a matter of policy. ... They try to finesse it with the word ‘culture.’ They’ve got the same culture you and I’ve got - money talks,″ Hollings said.

Picken’s testimony came as the committee considered a bill, sponsored by Sen. Tom Harkin, D-Iowa., and Rep. John Bryant, D-Texas. It would require foreign investors to register with the Department of Commerce when they purchase more than a 5 percent stake in a U.S. company or real estate valued at more than $5 million.

According to a report issued by the Commerce Department in June, foreign holdings in the United States have tripled since 1980 to $1.79 trillion, $533 billion more than Americans own abroad, making the United States the world’s largest debtor.

Great Britain held the largest stake in the United States, followed by Japan and the Netherlands.

Harkin said under the current system of tracking foreign investment it is often impossible to determine the true ownership of individual companies and properties. Ownership is often cloaked through shell corporations under the current system of tracking and Harkin said he fears some of the investment represents recycled drug profits.

He also said the government needs better information to determine whether or not foreigners are acquiring too much control over strategic industries, such as oil and chemicals.

Commerce Undersecretary Michael R. Darby said the Harkin-Bryant bill would compromise the anonymity of foreign firms reporting information to the U.S. government and discourage foreign investment, which the administration welcomes because it helps modernize U.S. industry.

″Enactment of this proposal would ultimately increase the cost of capital in the U.S., and result in slower economic growth, weaker productivity performance, lower rates of employment and American products which are less competitive in world markets,″ he said.

Darby said the administration prefers, with some adjustments, a bill sponsored by Sen. Frank H. Murkowski, R-Alaska, which imposes no new reporting requirements but provides for more sharing among government agencies of currently collected data.

Jerry Jasinowski, chief economist of the influential National Association of Manufacturers, said his lobby group also opposes the Harkin-Bryant measure. He said he did not believe it would give U.S. negotiators any leverage to lower Japanese barriers.

Pickens supported the bill, saying he was required to file an extensive report with the Japanese government before he purchased his share of Koito.

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