A federal judge refused a request by International Telephone & Telegraph Corp. yesterday to seal a government suit that details some $9 million in questionabwe foreign payments allegedly made by the company between 1970 and 1975.
In denying the ITT motion, U.S. District Court Judge Goerge Hart Jr. gave ITT 20 days to appeal his decision before he will make public the complaint by the Securities and Exchange Commissions.
The SEC filed the complaint with the court about two months ago, and ITT has been fighting its publication ever since. A company attorney said ITT would appeal Hart's ruling.
At yesterday's hearing, John Shafer of Covington & Burling, ITT's Washington law firm, argues: "All we are trying to do is to protect the identification of people, companies and countries involved."
He said the company did not oppose the SEC's right to make a "generic disclosure" of the alleged payments.
But, he said, if the SEC insists on including names and countries in the complaint, the ITT wants the complaint sealed at least until it has a chance to challenge in court the SEC's authority to do this under securities laws.
"There is a substantial issue of whether the commmision is exceeding its authority," Shafer said "We should be allowed to test it."
Arguing that the court challenge could be completed in about six weeks, Schafer described it as "a simple, neat boxed-up issue."
Judge Hart, however, allowed that it may be boxed up, but (the issue) is not simple."
Stanley Sporkin, director of the SEC's division of enforcement, which prepared the complaint against ITT, told Judge Hart, "The SEC is entitled to its day in court - to file a complaint and fulfill its mandate."
He noted that even as ITT fights disclosure of the details in the complaint, the SEC has asked Judge Hart to find ITT in contempt of an order is issued on May 5, 1976, directing ITT to comply with a subpoena issued in March of that year.
Judge Hart noted that "the business of sealing" complaints troubled him. He said: "When a doctor is accused of malpractice, the very filing of the complaint is going to hurt him. Are we going to seal all malpractice complaints?"
The judge also found it ironic that "at the same time we are trying to force Korea to disclose if an ambassador bribed a certain congressman," ITT is seeking permission to seal the details of its activities in foreign countries.
Hart concluded: "I don't have any doubt that making the complaint public will do harm to ITT," but he denied the company's motion nonetheless.
ITT will now take its argument to the Court of Appeals for a second time. Earlier this month, the appeals court returned the ITT case to Judge Hart saying "denial of access to court records . . . is a matter within the sound discretion of the trial court."
Now that Hart has refused "denial of access," ITT will try to persuade the appeals court to reverse the decision.