The government has sued to force the E.I. Du Pont de Nemours & Co. to turn over records that could show whether the giant chemical company violated a federal antiboycott law in more than 400 sales to Arab countries between 1978 and 1982.
The Commerce Department said that in two Du Pont transactions it found "apparent violations" of the 1977 law banning American companies from complying with an Arab boycott against Israel. The two transactions were with Kuwait and Syria, according to a suit filed Tuesday with the U.S. District Court in Wilmington, Del., where the chemical company has its headquarters.
The suit, which a Commerce official said was the first of its kind, said checks of 11 additional sales by investigators from Commerce's Office of Antiboycott Compliance showed other possible violations, leading the probers to seek information on 392 more sales identified in court papers as "potentially violative of the antiboycott laws."
The department said it needs the information to see if Du Pont is violating the antiboycott law and, if it is, whether the department should prosecute under criminal laws or institute administrative proceedings.
The suit said the government investigation of Du Pont's response to antiboycott laws has been going on since early 1980.
The government said it filed the suit after Du Pont failed to reply to an administrative subpoena issued in February to Du Pont's chief executive officer, Edward J. Jefferson, demanding documents on the sales. The government said the law requires companies to supply information that can show if there have been violations of the antiboycott law.
"To date, Du Pont has produced no documents in response" to the government subpoena, William V. Skidmore, head of Commerce's Office of Antiboycott Compliance, said in an affidavit filed with the suit.
Du Pont associate general counsel John F. Schmultz denounced the government's request for documents as "too broad and too burdensome. We refused to comply" he said, contending it would require searching "thousands of boxes of materials just to get these documents.
"We are prepared to cooperate on a reasonable inquiry and we think we had," he added.
The giant chemical company, which acknowledges that it does business with both Israel and Arab states, played a key role in helping to shape the law in such a way as not to prevent American companies from doing business in oil-rich Arab states while still meeting concerns of American Jewry over the boycott.
At that time Du Pont's chief executive officer was Irving S. Shapiro, who was active in Jewish organizations as well as being one of the country's most influential business leaders.
The documents demanded in the subpoena and the suit include internal Du Pont reports; communications "discussing Arab boycott requests and U.S. antiboycott laws, both in general and with regard to specific requests or transactions;" documents relating to the "solicitation, sale and shipment" of American products to Du Pont foreign subsidiaries for resale or transshipment to "boycotting countries," and boycott reports Du Pont has filed with the Internal Revenue Service.
Skidmore said that Commerce does not want any documents located outside the United States. The records it is seeking concern transactions between Du Pont subsidiaries in Switzerland, West Germany, Belgium and the United Kingdom and companies in Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, Syria, the United Arab Emirates and Yemen, from March 1, 1978 to Dec. 31, 1982.
According to the suit, Du Pont cited Swiss secrecy laws for its refusal to turn over some documents to the government. But Commerce official Skidmore said identical documents had been provided during a government review of an earlier Swiss transactions "which formed the basis for OAC's Office of Antiboycott Compliance decision to proceed with an in-depth investigation of Du Pont.