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95th Congress 1
2d Session J
COMMITTEE P R I N T
S T A F F INVESTIGATION
RELATING TO T H E NOMINATION OF
G. WILLIAM MILLER
TO BE CHAIRMAN OF T H E BOARD OF GOVERNORS
OF T H E F E D E R A L RESERVE SYSTEM
PART 3
CONTAINING ADDITIONAL MATERIAL R E C E I V E D
FOR T H E RECORD
PRINTED
FOB
OF
THE
USE
THE
COMMITTEE ON BANKING,
AND URBAN
HOUSING
AFFAIRS
UNITED STATES
SENATE
FEBRUARY 27, 1978
U.S. GOVERNMENT PRINTING OFFICE
23-586 O
WASHINGTON
: 1978
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
WILLIAM PROXMIRE, Wisconsin,
JOHN SPARKMAN, Alabama
HARRISON A. WILLIAMS, JR., New Jersey
THOMAS J. McINTYRE. New Hampshire
ALAN CRANSTON, California
ADLAI E. STEVENSON, Illinois
ROBERT MORGAN, North Carolina
DONALD W. RIEGLE, JR., Michigan
P A U L S. SARBANES, Maryland
KENNETH
A.
Chairman
E D W A R D W. BROOKE, Massachusetts
JOHN TOWER, Texas
J A K E GARN, Utah
H. JOHN HEINZ III, Pennsylvania
RICHARD G. LUGAR, Indiana
HARRISON SCHMITT, New Mexico
MCLEAN,
Staff
Director
JEREMIAH S. BUCKLEY, Minority
Staff
Director
BRUCE F. FREED, Professional
Staff
Member
CHARLES
L.
MARINACCIO,
Special
Counsel
JOHN T. COLLINS, Special Counsel to the
Minority
DAVID P. DOHERTY, Associate
Director,
Division of
Enforcement,
Securities
and Exchange
Commission
(JI)
C O N T E N T S
I.
II.
III.
IV.
V.
VI.
VII.
Second submission of Textron, Inc. Documents submitted by Tex- Pase
tron, Inc. after disclosure of Bell-French documents
1
Documents voluntarily submitted to committee by William II.
French and his attorney, C. Robert Bell (February 13, 1978)
75
Material received from the Office of Legislative Counsel, Central
Intelligence Agency
163
Responses to committee request for affidavits from U.S. State Department and U.S. military personnel stationed in Iran, Defense
Department auditors, Textron accountants, and Textron's Board
of Directors on knowledge of General Khatami's ownership of
Air Taxi
173
Response from Defense Contract Audit Agency and U.S. Army
Aviation Systems Division
293
Securities and Exchange Commission reply of inquiry into Textron, Inc. to Senate Committee on Banking, Housing, and Urban
Affairs
361
Response from Citibank attorney to subpena from committee
365
(in)
STAFF
INVESTIGATION
RELATING TO THE
G.
SECOND
WILLIAM
SUBMISSION
DOCUMENTS
NOMINATION OF
FILLER
OF T E X T R O N , I N C .
SUBMITTED BY T E X T R O N , I N C .
AFTER DISCLOSURE OF
DOCUMENTS
a)
BELL-FRENCH
EeCB KeEgc©p£erEESS233
Division of Textron Inc.
Washington Office
Suite 300
1666 K Street, N.W.
Washington, D C. 20006
(202) 659-9191
F e b r u a r y 1 5 , 1978
BY H A N D
Charles L. Marrinaccio, Esq.
Special Counsel
Committee on B a n k i n g , Housing and Urban Affairs
5300 D i r k s o n B u i l d i n g
Washington, D. C.
20510
Dear M r . M a r r i n a c c i o :
In a c c o r d w i t h y o u r r e q u e s t , w e h a v e c o n t i n u e d o u r
e x a m i n a t i o n of f i l e s a n d d o c u m e n t s in r e s p o n s e to M r .
M c L e a n ' s l e t t e r of J a n u a r y 2 5 , 1978 a n d t h e s u b p o e n a o f
January 31, 1978. As you know, the previous search,
r e f e r r e d to in M r . S o u t t e r ' s l e t t e r o f J a n u a r y 2 7 , 1 9 7 8
w a s e s s e n t i a l l y f r o m 1968 f o r w a r d , t h e y e a r t h a t A i r
T a x i w a s r e a p p o i n t e d a s B e l l ' s r e p r e s e n t a t i v e in I r a n .
T h i s t i m e , w e h a v e e x a m i n e d a l l a v a i l a b l e f i l e s . 1/
We
have i n c l u d e d a s f a l l i n g w i t h i n t h e s c o p e o f t h e s e a r c h
a n y d o c u m e n t s of B e l l H e l i c o p t e r t h a t m a y r e f e r t o W i l l i a m
F r e n c h , International Helicopter Consultants I n c . and that
r e l a t e t o a n y of t h e m a t t e r s s e t f o r t h in t h e s u b p o e n a .
C o p i e s of t h e a d d i t i o n a l d o c u m e n t s d i s c o v e r e d in t h e
course of this search are attached hereto, including an
October 4 , 1970 Dun & Bradstreet report on Air T a x i ,
management and ownership.
+
1/
-*-
*
M o s t f i l e s of d o c u m e n t s p r i o r to 1967 h a v e b e e n
d e s t r o y e d in t h e n o r m a l c o u r s e .
(3)
4
Y e s t e r d a y w e l o c a t e d a m i c r o f i l m r e c o r d of w e e k l y
r e p o r t s to m a n a g e m e n t p r e p a r e d b y M r . J o s e , C o m m e r c i a l
S a l e s M a n a g e r , for t h e p e r i o d 1 9 6 6 - 7 0 . A t t a c h e d to t h i s
l e t t e r a r e c o p i e s of a l l of t h o s e r e p o r t s t h a t r e f e r , in
a n y m a n n e r , to I r a n , G e n e r a l K h a t e m i , A i r T a x i , M r .
Zangeneh, Mr. French, International Helicopter Consultants
or Aviation Development Consultants.-/
T h e r e a r e no a d d i t i o n a l files in e x i s t e n c e , of w h i c h
w e a r e a w a r e , t h a t m i g h t be s e a r c h e d in c o n n e c t i o n w i t h
this n a t t e r .
A s to I n t e r n a t i o n a l H e l i c o p t e r C o n s u l t a n t s , I n c . ( I H C ) ,
B e l l ' s r e p r e s e n t a t i v e in Iran f r o m M a r c h 5 , 1964 to
D e c e m b e r 3 1 , 1 9 6 7 , t o t a l c o m m i s s i o n s e a r n e d b y IHC d u r i n g
t h i s four y e a r p e r i o d a m o u n t e d to $ 7 , 9 1 3 . 2 6 . Of t h i s ,
o n l y $400 w a s p a i d d i r e c t l y to IHC; t h e r e m a i n d e r w a s
c r e d i t e d to t h e i r a c c o u n t a g a i n s t t h e p u r c h a s e of h e l i c o p t e r
spare parts, No Bell business, correspondence, or communic a t i o n in a n y f o r m w i t h , or B e l l p a y m e n t s to t h e c o m p a n y
k n o w n a s S K P (SKERXAT S H A H A M I T A Y A R ~ P A R S ) is r e f l e c t e d
in a n y of t h e f i l e s a n d d o c u m e n t s r e v i e w e d in c o n n e c t i o n
with the subpoena.
O t h e r m a t t e r s t h a t t h e C o m m i t t e e h a s i n q u i r e d of a r e :
1.
1973 I n t e r n a l A u d i t of $ 2 . 9 5 m i l l i o n p a y m e n t t o A i r T a x i
A s y o u k n o w , this m a t t e r w a s r e v i e w e d b y b o t h
the Internal Revenue Service and by the Defense Contract
Audit A g e n c y . There was therefore no reason to perform
an internal audit on this matter and none was p e r f o r m e d .
2.
Costruzioni Aeronautiche Giovanni Agusta
(Agusta)
Inquiry has been made regarding the possibility
of h e l i c o p t e r s a l e s b y A g u s t a , a s a B e l l l i c e n s e e , t o
countries against w h i c h there was some sort of e m b a r g o ,
trade sanction or other form of disapproval of sale by
the United States Government at the time of sale. To
t h e b e s t of o u r k n o w l e d g e and b e l i e f , t h e r e h a s b e e n n o
s u c h s a l e o r d e l i v e r y of B e l l m o d e l h e l i c o p t e r s .
All
license agreements between Bell and Agusta provide that
*
*
*
*
*
*
*
2/
T h e r e a r e n o r e f e r e n c e s to A i r T a x i , M r . Zanc ^ s r
M r . F r a n c h , I n t e r n a t i o n a l H e l i c o p t e r Consult;
A v i a t i o n D e v e l o p m e n t C o n s u l t a n t s in t h e w e e k l y
o n e r e f e r e n c e is m a d e t o G e n e r a l K h a t e m i (report o f
N o v e m b e r 2 7 , 1967) in c o n n e c t i o n w i t h t h e p o s s i b l e
s a l e b y B e l l of 36 UII-1H h e l i c o p t e r s , a p r o p o s e d s a l e
that did not materialize.
5
t h e l i c e n s e s h a l l t a k e e f f e c t o n l y a f t e r a p p r o v a l by the
U . S . D e p a r t m e n t o f S t a t e a n d t h a t the l i c e n s e a g r e e m e n t s
a r e s u b j e c t a t a l l t i m e s to a l l r u l e s , r e g u l a t i o n s , p r i o r i t i e s , r e s t r i c t i o n s , a l l o c a t i o n s a n d r e q u i r e m e n t s of the
U n i t e d S t a t e s . T h e c o u n t r i e s to w h i c h A g u s t a m a y c o n s i d e r
s a l e s o f h e l i c o p t e r s u n d e r the License a g r e e m e n t s h a v e b e e n
e i t h e r a p p r o v e d b y t h e D e p a r t m e n t of S t a t e o r r e q u i r e p r i o r
approval by the Department of State on a case-by-case b a s i s .
In t h i s r e g a r d , m e n t i o n h a s b e e n m a d e of t h e p o s s i b l e
sale b y A g u s t a of B e l l m o d e l h e l i c o p t e r s to A l g e r i a .
The
q u a r t e r l y r e p o r t s , d a t i n g b a c k to 1 9 6 1 , s u b m i t t e d b y A g u s t a
in c o n n e c t i o n w i t h r o y a l t y p a y m e n t s u n d e r t h e l i c e n s e s h a v e
b e e n e x a m i n e d . T h e s e r e p o r t s i d e n t i f y the p u r c h a s e r s of t h e
helicopters and no sale of a Bell-licensed helicopter to
A l g e r i a is n o t e d .
3.
Uganda
Sales of Bell helicopters by Bell Helicopter Textron
t o t h e G o v e r n m e n t o f U g a n d a (Uganda P o l i c e A i r W i n g ) a r e a s
follows:
MODEL
1968
206
1
1969
1970
N
1
1971
1972
1973
1974
1975
1976
1977
2
N
N
N
N
N
N
205
0
1
O
0
0
0
0
0
212
N
4
N
N
N
N
N
N
E
E
E
E
E
E
E
F o l l o w i n g a r e l a t i v e l y r e c e n t a c c i d e n t to o n e o f
U g a n d a ' s M o d e l 212 h e l i c o p t e r s , t h e B H T R e g i o n a l S a l e s M a n a g e r
w a s r e q u e s t e d b y t h e G o v e r n m e n t of U g a n d a to v i s i t K a m p a l a to
discuss the procurement of a replacement helicopter, at which
t i m e a p u r c h a s e a g r e e m e n t for a M o d e l 214 h e l i c o p t e r w a s e x e c u t e d
by Uganda.
D e p a r t m e n t of C o m m e r c e e x p o r t a d m i n i s t r a t i o n r e g u l a t i o n s
do not require the issuance of a specific validated export
l i c e n s e in o r d e r t o e x p o r t a M o d e l 214 t r a n s p o r t h e l i c o p t e r ,
c o m m e r c i a l l y c e r t i f i e d , to t h e U g a n d a P o l i c e A i r W i n g .
This
s a l e a n d e x p o r t to U g a n d a c o u l d h a v e b e e n m a d e u n d e r t h e G - D E S T
c a t e g o r y w h i c h is a b l a n k e t e x p o r t l i c e n s e for D e p a r t m e n t of
Commerce listed commodities and countries which include Uganda
a n d t h e c e r t i f i e d M o d e l 214 h e l i c o p t e r . H o w e v e r , b e c a u s e of
t h e s e n s i b i l i t y of the h u m a n r i g h t s i s s u e . B e l l d i d a p p l y to
t h e -Lo^artment of C o m m e r c e for a s p e c i f i c v a l i d a t e d e x p o r t
l i c e n s e . W e w e r e i n f o r m e d b y letter from the D e p a r t m e n t of
C o m m e r c e d a t e d 10 N o v e m b e r 1 9 7 7 , t h a t t h e sale of t h i s h e l i -
6
copter under present conditions would be inconsistent with
the U n i t e d S t a t e s ' w o r l d - w i d e h u m a n r i g h t s c o m m i t t m e n t a n d
t h a t it w o u l d n o t be in t h e n a t i o n a l i n t e r e s t t o a p p r o v e
the a p p l i c a t i o n . A c c o r d i n g l y , B e l l i n f o r m e d t h e G o v e r n m e n t
of U g a n d a t h a t t h e sale of t h e h e l i c o p t e r c o u l d n o t b e m a d e
and p r e p a y m e n t s w e r e r e f u n d e d . C o n c u r r e n t l y w i t h t h e a p p l i c a t i o n for e x p o r t l i c e n s e for t h e M o d e l 2 1 4 , B e l l h a d m a d e
a p p l i c a t i o n for an e x p o r t l i c e n s e for a M o d e l 212 h e l i c o p t e r
to U g a n d a in a n t i c i p a t i o n of a p o s s i b l e s a l e . T h a t a p p l i c a tion h a s a l s o b e e n w i t h d r a w n . T h e r e a r e n o p e n d i n g a p p l i c a tions for e x p o r t l i c e n s e b y B e l l for t h e s a l e o f B e l l h e l i c o p t e r s to U g a n d a .
4.
1 9 7 1 S a l e of t w o M o d e l 2 1 2 ' s to T r o p i c a l A i r c r a f t S a l e s
(Nigeria) L t d . for G h a n a .
TO d a t e o u r i n v e s t i g a t i o n of t h i s m a t t e r i n d i c a t e s
the f o l l o w i n g : A t t h e P a r i s A i r S h o w (25 M a y - 7 J u n e 1971)
a r e p r e s e n t a t i v e of t h e A i r F o r c e of G h a n a e x p r e s s e d a n
i n t e r e s t in t h e p u r c h a s e of t w o M o d e l 212 h e l i c o p t e r s for V I P
t r a n s p o r t a t i o n . B e l l r e l a y e d t h i s i n f o r m a t i o n to T r o p i c a l
A i r c r a f t S a l e s (Nigeria) L t d . (TAS), i t s m a n u f a c t u r e r ' s r e p r e s e n t a t i v e for G h a n a . A b o u t o n e m o n t h l a t e r , B e l l r e c e i v e d a
Bell Standard Export Purchase Agreement
, prepared by TAS,
c o n s t i t u t i n g an o f f e r b y G h a n a for t h e p u r c h a s e f r o m B e l l of
two M o d e l 212 h e l i c o p t e r s , w i t h s p a r e s a n d a c c e s s o r i e s , a t a
t o t a l p r i c e of $ 1 , 9 6 7 , 5 9 4 . 2 0 . T h i s p r i c e w a s h i g h e r t h a n t h e
B e l l l i s t p r i c e for s i m i l a r e q u i p m e n t , a s it i n c l u d e d c h a r g e s
for a c c e s s o r i e s t h a t w e r e c o n s i d e r e d s t a n d a r d e q u i p m e n t o n
the M o d e l 2 1 2 . B e l l o f f i c e r s , a c c o r d i n g l y , d i r e c t e d t h a t t h e
offer be refused.
T h e r e a f t e r , a t t h e r e q u e s t of T A S , a B e l l S t a n d a r d
Export Purchase Agreement was prepared constituting an offer
by T A S for the p u r c h a s e o f two M o d e l 212 h e l i c o p t e r s , w i t h
accessories and spares, at the Bell standard list price
( $ 1 , 6 6 7 , 6 0 8 . 9 6 ) . T h i s o f f e r to p u r c h a s e w a s n o t s u b m i t t e d t o
B e l l o f f i c e r s for a c t i o n a n d w a s a c c e p t e d b y B e l l e x p o r t
s a l e s m e n . In c o n n e c t i o n w i t h t h i s s a l e , B e l l r e c e i v e d f u n d s
a m o u n t i n g to $ 1 , 9 8 4 , 3 8 2 . 6 2 f r o m t h e R e p u b l i c of G h a n a f o r t h e
a c c o u n t of T A S . B e l l t h e r e u p o n d e d u c t e d $ 1 , 6 6 7 , 6 0 8 . 9 6 (Bell's
s t a n d a r d l i s t p r i c e for t h e two h e l i c o p t e r s , a c c e s s o r i e s a n d
s p a r e s ) and $ 6 , 7 7 4 . 5 6 (for s p a r e s air f r e i g h t charges). A t t h e
d i r e c t i o n of T A S , in w h o s e a c c o u n t t h e f u n d s w e r e r e c e i v e d b y
B e l l , B e l l d e p o s i t e d t h e r e m a i n d e r of t h e f u n d s ($310,000) b y
b a n k t r a n s f e r to the a c c o u n t of T r o p i c a l A i r c r a f t S a l e s , M i a m i ,
Florida.
7
N o o f f i c e r of B e l l w a s i n v o l v e d w i t h o r a w a r e of t h e
t r a n s a c t i o n s i n v o l v i n g the sale of t h e s e two M o d e l 212
h e l i c o p t e r s t o T A S , a n d t h e r e is a b s o l u t e l y n o t h i n g to
i n d i c a t e t h a t t h e s e t r a n s a c t i o n s w e r e k n o w n to T e x t r o n
c o r p o r a t e m a n a g e m e n t or t o G . W i l l i a m M i l l e r in p a r t i c u l a r .
W h i l e t h e r e is n o i n d i c a t i o n of a n y u n l a w f u l a c t b y
B e l l p e r s o n n e l in c o n n e c t i o n w i t h t h e f o r e g o i n g s a l e (or
of t h e i r h a v i n g p e r s o n a l l y p r o f i t t e d f r o m such s a l e ) , t h e
B e l l p r o c e d u r e s a n d c o n t r o l s in c o n n e c t i o n w i t h t h e e x p o r t
sale of helicopters are currently being r e e x a m i n e d .
Very truly yours
Chief Legal Counsel
GG/lc
8
(INTERNATIONAL)
HELICOPTER C O N S U L T A N T S IN
14 J a n u a r y 1967
povsa. c
Cpbler OIDISH-Beirut
Mailr Office 73 Saroulla B l d g
Hamra St, Beirut
M r Janes Feliton
Export Area Manager
Bell Helicopter Company
. W
WoirthT
V .
Dear, Jim:
•
-
^
J
j
v
t after coming into t e l l m e •
J o h n B o l t o n j u s t l e f t \ 3 e i r u t l a s t "night
w e h a v e f i n a l l y g o t t e n tie n e w c o m p a n y c o m p l e t e d a n d r e g i s t e r e d , a n d w i t h
t h e n e w s e t u p i t s h o u l d open m a n y d o o r s n o w t h a t w e h a v e General K h a t a m i
a s partner silently a l o n g with D r Safavi the head of the legal department
o f c i v i l a v i a t i o n a n d o t h e r s , v/e o w n A 9 ? of t h e n e w c o m p a n y a n d i t i s
51/' I r a n i a n •
Me a r e s u b m i t t i n g a p r o p o s a l f o r f i v e o r JLO
f o r the Ministry o f
A g r t c u l t u r e . T h e M i n i s t r y of A g r i c u l t u r e w a n t e d 20 C e s s n a A g w a g o n s a n d
J o : m w a s bo be i n a m e e t i n g t o d a y . H e is g o i n g to p u s h i t or try to rushno h e l i c o p t e r p i l o t s periodWe also are
i t to GG —- 5 a. latlhtohio^ugg h t h e y h a v e no
s u b m i tfeting
t
' a p r o p o s a l w h e r e b y t h e M i n i s t r y ffould b u y t h e 0 - 5 ' s . w e w i l l
c o n t r a c t to o p e r a t e t h e m f o r t h e M i n i s t r y .and a l s o l e a s e them f r o m the
M i n i s t r y f o r u s e in o t h1 e r c o u n t r i e s ' in t h e off
is the de
:
l i v e r y t i m e n o w on G - 5 s? ' P l e a s e s e n d m e t h i s b a c k r i gitaway.
h
T h e n e w c o m p a n i e s n a m e i s S k e r k a t S ah a m i T a y a r P a r s , a n d w e i n t e n d
to m a k e t h e m o u r a g e n t s u n d e r o u r f r a n c h i s e , o r o u r d e a l e r . This" w a y w e
car> c o n t r o l t h e m if t h e y ever s t a r t b l e e d i n g the c o m p a n y b l i n d . "John i s
n o w f o l l o w i n g a l o n g t h e NICC5 h e l i c o p t e r s a l e , the T r a f f i c P o l i c e , a n d
M i n i s t r y of A g r i c u l t u r e . H e w i l l f o l l o w t h e c o n s o r t i u m a s w e l l . V/e h a v e
a l s o a l l i e d f o r 2 0 , 0 0 0 m e t e r s of land .at M e r h a b a d w h e r e t h e n e w m a i n t e n ance set u o w i l l be b u i l t .
I b e l i e v e ,iin s i n c e r e l y t h a t w k a h t h i s E0n0}50ly, w e w i l l b e a b l e to
r e a l l y do s o m e t h i n g w e s t a r t e d to b e f o r e , and s l o w l y s t a r t e d to s u c c e e e2d .
3 a v in th3 c set \?.r> w c l)r.ve a l l t h e b l e s s i n g s of e v e r y b o d y .
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CCVSERCLAT
SALES
DEPA3T\!E:,7
(INTERNATIONAL)
H E L I C O P T E R
C O N S U L T A N T S ^ ! ^
17 N o v e m b e r 1 9 6 6
Kr. Janes Feliton
Sxrort
Area
Manager
Bell Helicopter Conpany
F o r t ^ o r t h , Texas
^
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S o r r y I h a v e n ' t w r i t t e n s o o n e r , b u t ^have r e a l b e e n o n t h e go s i n c e
I g o t b a c k h e r e t r y i n g to f i n d s o r e u s e f o r t h e h e l i c o p t e r s i n c e G e o t ronicsr c a n n o t g e t iraoort p e r m i s s i o n to I r a n . H o w e v e r I d i d r e c e i v e a
c a b l e t o d a y i r o n A l C o c k i n g o f G e o t r o n i c s , a n d h e is c o n i n g o u t h e r e i n
a c o u p l e of weeks,- t i n e a n d h e is i n t e r e s t e d i n u s u s i n g t h e h c l i o p t e r
in another country for t h e n .
A t t a c h e d i s a c o p y of a l e t t e r I r e c e i v e d f r o n J a s i n a n d I ' l l k e e p
a f t e r h i m so t h e r e is p l e n t y o f p u s h i n g ,
I a l s o w a s a d v i s e d b y S a g o n e L l o y d a n d J o h n B o l t o n t h e two g u y s I
h a v e i n I r a n r u n n i n g t h e o p e r a t i o n u n t i l I g e t b a c k in w h i c h I w o u l d
t h i n k s h o u l d b e f a i r l y s o o n a f t e r w e g e t t h e n e w .company f o r c e d . R e - c e i v e d w o r d t o d a y t h a t t h e H i g h Cour.oil of C i v i l A v i a t i o n h a s a p p r o v e d
t h e n e w c o m p a n y w h i c h w e h a v e f o r c e d o u t Ir.tJl H e l i c o o t e r C o n s u l t a n t s ,
I n o . , this a n y turn into something everybody w i l l be p l e a s e d withj
T h r o u g h t h i s n e w s e t u p I ' n s u r e w e ' S I be a b l e to b l o c k Karean in e v e r y
p o s s i b l e - w a y s h a p e a n d f o r m . 'He w i l l s e e .
Z>ayene L l o y d c a n e in t h i s l a s t w e e k end a n d h e told m e t h a t h e a n d
Join: B o l t o n b o t h h a d l o n g d i s c u s s i o n s w i t h L t C o l B a l a n t y n w h o i s t h e
A v i a t i o n a d v i s e r to t h e G e n d a r m e r i e . G e n e r a l S a r n a d a n d B a l a n t y n j u s t
returned f r o m the l-SA a n d t h e y w e n t to
R u e k e r ar.d t h e - G e n e r a l is sole
on the HI" 1 3 a n d D ' s . B a l a n t y1 n told b o t h G e n e a n d J o h n t h a t t h e y w i l l
b u d g e t f o r t w o HI" 1 3 ' s o r
s a n d - u r c h a s e t h e n t h r o u g h I-llS o r I.iAP,
n o w 1 ' n n o t s u r e e x a c t l y h o w this w i l l w o r k , b u t I h a v e i n s t r u c t e d G e n e
f o l l o w it a l o n g olos-oly so w e k n o w w h a t is h a o o e n e i n g . A n y w a y X a n a n is
c u t of t h e v i e T a r e f o r the G e r d a r n e r i e „
B a l a n t y n says they can get two
s h i p s f o r 2-•oil, C I O , A n d t h e p r o g r a m w i l l b u i l d y e a r to y e a r a s it g o e s
on,
j.'n g o i n g to E y i a d t h i s w e e k a n d s e e if I can do a n y t h i n g in l e a s e
i n g a B e l l f o r s p r a y i n g t o t h e Saudi* s h a v e h e a r d t h e y T o r e t h i n k i n g o f
St. ray p i a n o s , n a y re I c a n g o t s o m e t h i n g p u t t o g e t h e r . C a n y o u p l e a s e
t e l l n o w h a t I e w e on t h e B e l l so I c a n m a k e s o n e a r r a n g e m e n t f o r gettira
ncno.^ r.oving to y o u f o r p a y m e n t . A l s o w h a t w a s t h e l a s t G e o t r o n i c s P a y
~<"r.t?
Sineerejv yours
V/ill^in
Managing Directc
10
(INTERNATIONAL)
HELICOPTER CONSULTANTS
14 J a n u a r y
M r . A 1 Spirtas
Export Administrator
Bell Helicopter Company
PO Box 482
Port Worth, Texas
1967
C A B L 3 AITDKSSS:^ O L D I S H - B e i r u t
M a i l : O f f i c e 7 3 S a r o u l l a Bid*-Hanxa Street, Beirut
Dear Air
A 1 t h i s i s t h e f o u r t h s e t o f f o r e s I s e n t to y o u , f i r s t 21 D e c e m b e r
second 10 J a n u a r y , 3rd 12 J a n u a r y and new these.
Owner should be International Helicopter Consultants, Inc., 129
South State Street, Dover Delaware for registration purposes.
H e l i c o p t e r shoxild b e c o n s i g n e d to I n t e r n a t i o n a l H e l i c o p t e r C o n sultants, Inc., £ Middle Bast Airlines Beirut, where wo will assemble
a n d t e s t f l y t h e s h i p . A l s o it s h o u l d b e n a r k e d t r a n s i t B e i r u t so
cxistoics d o n ' t g e t i n t o t h e a c t I
Untilimate destination is S a u d i Arabia where we have a surveying
c o n t r a c t w i t h t h e M i n i s t r y o f P e t r v l e u m , and w e w i l l f e r r y the h e l i - ^
c o p t e r to S a u d i A r a b i a f r o n B e i r u t .
S h o u l d I h a v e n o t trade t h e o t h e r f o m s o u t r i g h t , y o u c o n f i l l
t h e s e in f o r I o n l y s i g n e d the.3.
Sincerely yeurs,
PS:
Willian H . French
3 r.naging P i r e c t o r
T h e b a n on r y s e l f is f i n a l l y b e i n g l i f t e l fraa. I r a n , n o w that
w e f o m e d t h e n e w c o m p a n y a n d i n e l u i e a v r o - l o of i m p o r t a n c e w i t h
u s it l o o k s l i k e w e ' l l b e g e t t i n g out re a f e w h e l i c o p t e r s i n , p l u s
o u r l o n g w a n t e d ro.intona.nee f a e i l i ty to s - - - c r t it a l l .
S e n d a l l r o p e r s on the h e l i c o p t e r to r e h - r e , a m i p l e a s e rush
through.
this
S e r r y t h e s e s bo--: taie de.t^y A l a f t e r a. 11 y o ^ p e o " l e w e n t to bat to
g e t v." ta- s h i n , I »v - be--- voa> tain a f o r
format- on fro-: C o o l i n g of
G e o t r o n i c s , b u t t h i s c o n t r a c t c a r e va- f..;-t a.nl w e
tins one to
r e c o p e w h a t w ? l o s t t h r o u - k t h e c t h r r cor.:, "a. or l o s s e s .
~ - lew Year I
11
/ u
- 7
(IN ifcRNAIIONAL )
HELICOPTER CONSULTANTS IN
US CORPORATION COMPANY
US REGISTERED OFFICE
129 S O U T H S T A T E S T R E E T
14 J a n u a r y 1 9 6 ?
pOVSR,t>»_AWARE
M r James Feliton
Export Area Manager
Bell Helicopter Company
^PO Box 482
-x
"Port Wor"th7"Texas-
C a b l e ? OLDISH-Beirut
M a i l : Office 73 Saroulla Bldg
Hamra S t , Beirut
P O B 1969
- :
'
V
sr
Deai\Jim:-
A
V.
-
, t
J o h n B o l t o n j u s t l e f t NBeirut l a s t n i g h t a f t e r c o m i n g i n t o t e l l m e
w e h a v e f i n a l l y g o t t e n "frie n e w c o m p a n y c o m p l e t e d a n d r e g i s t e r e d , a n d w i t h
t h e n e w s e t u p it s h o u l d o p e n m a n y d o o r s n o w t h a t w e h a v e G e n e r a l K h a t a m i
a s p a r t n e r s i l e n t l y a l o n g w i t h D r S a f a v i t h e h e a d of t h e l e g a l d e p a r t m e n t
o f c i v i l a v i a t i o n a n d o t h e r s , v/e o w n 4 9 $ o f t h e n e w c o m p a n y a n d i t i s
Iranian•
W e a r e s u b m i t t i n g a p r o p o s a l f o r f i v e o r _1Q G - 5 f o r t h e M i n i s t r y o f
A g r i c u l t u r e . T h e M i n i s t r y of A g r i c u l t u r e v/anted 20 C e s s n a A g w a g o n s a n d
<J ohn w a s to b e i n a m e e t i n g t o d a y . H e i s g o i n g to p u s h i t o r t r y to -push
i t to G - 5 , a l t h o u g h t h e y h a v e n o h e l i c o p t e r p i l o t s p e r i o d . W e a l s o a r e
feubmitting
a p r o p o s a l w h e r e b y t h e M i n i s t r y ^gould b u y t h e G - 5 ' s . v/e w i l l
c o n t r a c t to o p e r a t e t h e m f o r t h e M i n i s t r y a n d a l s o l e a s e t h e m f r o m t h e
M i n i s t r y f o r u s e in o t h1 e r c o u n t r i e s i n t h e o f f s e a s o n . W h a t i s t h e d e l i v e r y t i m e n o w on G - 5 s? P l e a s e s e n d m e t h i s b a c k righ"baway.
The new companies name is Skerkat Sahami Tayar Pars, and w e intend
to m a k e t h e m o u r a g e n t s u n d e r o u r f r a n c h i s e , o r o u r d e a l e r . T h i s w a y w e
c a n c o n t r o l t h e m if t h e y e v e r s t a r t b l e e d i n g the c o m p a n y b l i n d . J o h n is
ROW f o l l o w i n g a l o n g t h e N I C Q h e l i c o p t e r s a l e , the T r a f f i c P o l i c e , a n d
M i n i s t r y o f A g r i c u l t u r e . H e w i l l f o l l o w t h e c o n s o r t i u m a s w e l l . W e hn.ve
a l s o a l l i e d f o r 2 0 , 0 0 0 m e t e r s of l a n d a t M e r h a b a d w h e r e t h e n e w m a i n t e n a n c e set u n w i l l b e b u i l t .
I b e l i e v e ;jin i n c e r e l y t h a t wiitih t h i s m o n o p o l y , w e w i l l b e a b l e to
1 y do
B u t in thi
set u n v.c h a v e a l l the b l e s s i n g s of e v e r y b o d y .
|N>
J o h n a l s o a s k o i m e to h a v e $ o u m a k e u n profori:; ixivolc's f o r
47G3
a a l (?) G - 5c w i t h t.vo t a n k s o r e q u i n e d . T h i s i s f o r che Gpndar.^erieT
As
—.... - ^ r ~ v.-,
t.iciseives i n t o a c o r n e r cn Cecsr/a S k y h o o k srared", I
v.-rote
a l e t t e r l a s t w e e k to the Ccr: a n d i n y G e n e r a l t e l l i n y hir. t h a t the
r
C --r:'- h"V- c o o t e r s c a r e 1s a r c terr.ini;..ting, a s w e l l a s t h e c n ^ i n e c f and
t ' v t t k o Goa'.k-.rr.erio sho .'.!-1 s t a r t p l a n n i n g a n o t h e r sra.ll h e l i c o p t e r . Jo}
tela r.p they w e r e u l a a s e i w i t h t h e l e t t e r , and a sk c d f o r n u o tat i o n s a g a i r
C a n y o u m l c a s e s^nd t h a1 y c t h r o u g h a s s o o n a s ^ o s a i b l e . A l s o w h a t is cieliv
no\i o n the Ik;ID a.a' 204k? B o y o u s t i l l h a v e U H 1 D i n : c hiately a v a i l
p
"
.
,—
;
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S i n c e r e l y your S /^V/i>1 iar H . Fre-
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if;TE?AATic::.AL MIL-CO^TH^CO::S-:LTA::TS IS SOLI HILL'rriPprsr^TATiv.iron
itla;:
XLir-G
LLC HAFT
13
In reply refer to:
0 3 : J H O : BUS 1 5 4 3
17 J « D o a r y 1967
M r . C . Robert Bell
I M o r r i s , LaituC. E v a n s & B r o c k
- 214 First F e d e r a l Savings Building
123 South Market Street
Wichita, Kansas 67202
Dear M r . Bell:
T h a n k y o u f o r y o u r l e t t e r to M r . F e l i t o n I n f o r m i n g o f t h e
current status of the International Helicopter Consultants,
Inc. operation in I r a n . M r . Feliton is leaving Bell at the
e n d o f t h i s e o n t h , a n d is b e i n g r e p l a c e d b y M r . G e o r g e Klin;*.
I t is o u r f e e l i n g t h a t t h e a r r a n g e m e n t s f o r h a n d l i n g s a l e s c
through Persian T a y a r Company are not satisfactory to Bell a s
long as Bill French is unable to personally follow through
with Iranian contacts.
H o w e v e r , a t e m p o r a r y a u t h o r i z a t i o n i s h e r e w i t h g i v e n f o r con-*
tinuing Bell's business interests in Iran as y o u have outlined in y o u r letter of 5 January 1967, until such time as
w e have h a d a n opportunity to personally assess the s i t u a t i o n
b y a v i s i t t o I r a n . T h i s w i l l c o s t l i k e l y take p l a c e s o x e t i s e
this s p r i n g . W e w i l l k e e p S i l l i n f o r m e d o n t h i s .
Sincerely yours,
:
Lc-LL H a L I C O r T L : C O ^ M i Y
23-586 O - 78 - 2
14
LAW O F F I C E S
OF
M o r r i s , Laing, E v a n s & B r o c k
214 F I R S T FEDERAL SAVINGS BUILDING
123 SOUTH MARKET S T R E E T
W i c h i t a , K a n s a s
tV»NS,J».
•BROCK
o o s e p h w.kenhedy
sect
ROBfRT UDBI3COLL
January
c.»oe£»T
19,
67202
1967
/
s*
C^C^yC^
(3I6)aMhe»st +
M r . J . H . Orpen
Export Sales Manager
Bell H e l i c o p t e r Company
P . 0 . Box ^ 8 2
Fort W o r t h , T e x a s , 76101
RE '03:JH0:su:15^3
^
• i'Ct
,
r
.,« ' /
p 7
y"
v
Dear M r . O r p e n :
T h a n k you very m u c h for your letter of January 17, 1967, and for
the temporary authorization therein. I have just received a telex
/fromlBill French in Beirut requesting information on what d e l i v e r y
^ ^ i s on U H T D r a n 3 ^ 5 ^ "Bill 'also asked that I request M r . Feliton to
a n o t h e r h~] G3B1 for himself in case Cocking of G e o t r o n i c s gets
c l e a r a n c e s . In v i e w of the information in your letter c o n c e r n i n g
the c h a n g e of personnel I w a s uncertain to w h o m I should a d d r e s s
these requests so will send them on to you for forwarding to the
proper p e r s o n . W i l l you please request that they m a k e reply directly
to Bill French in B e i r u t . I believe you have his address and telex
n u m b e r , and in addition he has since acquired a cable address there
w h i c h is " O l d i s h " .
15
In reply refer to;
G3:GMK:surl587
3 0 January 1967
K . French
Managing Director
International Helicopter Consultants, I n c .
73 Saroulla B l d g .
Haabra Street
Beirut, Lebanon
D e a r Bills
J i m Feliton is i n t h e process of leaving Ball Helicopter Company, and I have b e e n assigned as his replacement. I look
f o r w a r d t o w o r k i n g w i t h y o u , a n d s u g g e s t t h a t y o u r cosacunications be addressed to o e - as o f now - s o that w e w i l l not
waste time.
J i m h a s p a s s e d t o m e y o u r l e t t e r o f X** J a n u a r y , a n d t h e r e quested proformaa are enclosed. Per a telephone conversation f
w i t h M r . B*ll i n Wichita I have reduced tha quantity o f G - 3 3 - l s
frora t w o to o n e .
Your letter did not stipulate w h a t accessories were required,
so I have taken the liberty of including accessories a n d recosraended s p a r e s a n d t o o l s . I f m y recocKsenda t i o n s a r e n o t
c o r r e c t p l e a s e a d v i s e , a n d w e w i l l r e w o r k the p r o f o n n a s p e r
your desires.
Y'C± h o p e y o u r new a s s o c i a t i o n w i l l p e r a i t you t o r e s u s s r e s i d e n c e
and b u s i n e s s i n T e h r a n , cu.I want y o u to k e e p us a d v i s e d .
£csi re^.nrds.
Very truly y o u r s ,
H U L L i^LICC^Turt C0\'?,V/iY
c . »j. i a i n :
E x p o r t Arou
-ncl:
N o . 67-6 anO.
Lo. 6 7 - C A
v;or
16
Commander
*
41 *
IMPERIAL
IRANIAN
AIR
FORCE
TEHRAN • IRAN
31 May, 1967.
Dear Sis,
Y o u r l e t t e r of i n v i t a t i o n o n the o c c a s i o n of 2 7 t h
S a l o n I n t e r n a t i o n a l d e 1 ' A e r o n a u t i q u e A e r o p o r t d u Bour g e t , on M a y 2 6 - J u n e 4 , 1 9 6 7 is h i g h l y a p p r e c i a t e d "but
u n f o r t u n a t e l y d u e to p r e v i o u s e n g a g e m e n t I w i l l not "be
a b l e to p a r t i c i p a t e .
I t a k e this o p p o r t u n i t y to e x p r e s s once m o r e m y
a p p r e c i a t i o n and t h a n k you f o r y o u r k i n d
invitation.
COMMERCIAL SALES DEPARTMENT
REFERENCE M . F
-
J ^ G
y
J U N 1 2 1967
II. Khatami
777
17
LAW O F F I C E S
O F
M O R R I S , LAING, E V A N S & BROCK
f i r s t f e d e r a l SAVINGS
building
133 S O U T H MAFiKET S T R E E T
W i c h i t a , K a n s a s
July 7 ,
6 7 2 0 2
1967
COMMERCIAL SALES DEPMTMEST
REFt
ACTfC
is 8
QtS
JUL 1 0 1S57
Mr. Dwayne Jost
Bell H e l i c o p t e r Company
P . 0 . B o x k$2
Fort W o r t h , T e x a s , 76101
RE
Dear
Z><1T
J
. —
International Helicopter Consultants,
|
Inc.
Owayne:
T h i s l e t t e r is in c o n f i r m a t i o n o f o u r t e l e p h o n e c o n v e r s a t i o n o f
y e s t e r d a y , July 6 , 1957. As you a r e a w a r e International Helicopter
C o n s u l t a n t s , I n c . , h a s for s o m e t i n e h a d t h e f r a n c h i s e a s y o u r d e a l e r
in I r a n a n d o t h e r p a r t s o f t h e M i d d l e - E a s t .
You are a l s o familiar
w i t h t h e n a t u r e o f t h e p r o b l e m s it h a s b e e n e n c o u n t e r i n g in I r a n s o
I wi11 not detai 1 that.
I n t e r n a t i o n a 1 H e l i c o p t e r C o n s u l t a n t s , I n c . , is o w n e d
by W i l l i a m
H . F r e n c h and
by h i s w i f e , B e v e r l y W . F r e n c h . A s I r e p o r t e d to y o u
last N o v e m b e r I m a c e a t r i p to I r a n o n b e h a l f of M r . F r e n c h a n d h i s
c o r p a n y and m a d e a r r a n g e m e n t s at that t i m e , with a r e p r e s e n t a t i v e of
G e n e r a l K h a t a ~ i , w h o s e n a m e is D r . H a s s a n S a f a v i , a n d w h o is t h e V i c e
P r e s i d e n t of the high Counci 1 of Civil A v i a t i o n of I r a n , for the formation of a P e r s i a n c o r p o r a t i o n t o a c t a s t h e r e p r e s e n t a t i v e of I n t e r n a t i o n a l
H e l i c o p t e r C o n s u l t a n t s in I r a n . T h i s c o r p a n y w a s f o r m e d a n d its n a m e is
Sherkat Sahami Tavar P a r s , which roughly translates as Persian Flying
S o c i e t y A n o n y m o u s . A f t e r m y r e t u r n a n d the n o t i f i c a t i o n t h a t t h i s c o m p a n y
w a s f o r m e d w e w e r e d i s a p p o i n t e d to f i n d that n o c o m m e r c i a l a c t i v i t y w a s
r e s p i t i n g f r c o t h e f o r m a t i o n of t h i s c o m p a n y .
This especially disturbed
M r . F r e n c h b e c a u s e in a d d i t i o n t o a l l of the m o n e y h e h a s i n v e s t e d in I r a n
o v e r t h e p a s t y e a r s h e h a s i n v e s t e d c o n s i d e r a b l e s u m s in sending
me t o
n e g o t i a t e for h i m and in c o n n e c t i o n w i t h the f o r m a t i o n of S T P h e w a s
r e c u ; r e d to p u t up al 1 of the c a p i t a l , w h i c h w a s 1 m i l l i o n r i a l s , or
s 1 ; c h t l v in e x c e s s of $ 13
p l u s f o r m a t i o n f e e s to D r . S a f a v i of
S C O p d . s t e r l i n g . p k : s $ 1 . 0 ^ 0 e x p e n s e m o n e y to D r . S a f a v i f o r the n e c e s s a r y
b a v s ^ e e s h i n v o l v e d in g e t t i n g a c o r p o r a t i o n r e g i s t e r e d .
Dr. Safavi had
18
told u s that S T P s t o c k , other than the
cvmed by I n t e r n a t i o n a l
H e l i c o p t e r C o n s u l t a n t s and A v i a t i o n D e v e l o p m e n t C o n s u l t a n t s , I n c . .
the latter of w h i c h is a K a n s a s c o r p o r a t i o n o w n e d 50^, by W i l l i a m H .
F r e n c h and 5 0 % by his w i f e B e v e r l y W . F r e n c h , w o u l d be o w n e d by other
m e m b e r s of t h e H i g h C o u n c i l of Civil A v i a t i o n , including General
K h a t a m i , a l t h o u g h it w o u l d b e h e l d in the n a m e of other p e r s o n s and
not d i r e c t l y in their n a m e s .
A s you k n o w I w e n t to Iran again recently to a s c e r t a i n , if p o s s i b l e ,
w h a t t h e p r o b l e m w a s in the failure of STP to p r o d u c e any results so
far.
U p o n m y a r r i v a l I d i s c o v e r e d that d u r i n g the interim p e r i o d w h i l e ST?
w a s b e i n g f o r m e d and b e f o r e it w a s o p e r a t i v e , M r . F r e n c h ' s r e p r e s e n t a t i v e
in T e h e r a n , M r . J o h n B o l t o n , h a d , in an a t t e m p t to keep o r g a n i r a t ions such
as t h e G e n d a r m e r i e s u p p l i e d w i t h n e c e s s a r y p a r t s to keep their a i r c r a f t
o p e r a t i v e , b e e n c o n t i n u i n g to deal w i t h them d i r e c t l y until STP b e c o r e
o p e r a t i v e . D r . Safavi and the o t h e r P e r s i a n s involved thought he h a s
trying t o d o this b e h i n d their b a c k and that w e w e r e going to cheat
t h e m . A c c o r d i n g l y , they c a l l e d e v e r y t h i n g to a halt until the s i t u a t i o n
c l a r i f i e d . T h e r e w a s a l s o a f a i l u r e of conrTuni cat ion between D r . Safavi
and the w r i t e r w h i c h o c c u r r e d w h e n Dr. Safavi s t a r t e d sending parts
o r d e r s t o t h e w r i t e r ' s o f f i c e . I told him not to c o n r u n i c a t e direct K
w i t h this o f f i c e on t e c h n i c a l n a t t e r s as that oct N* c a u s e d d e l a v , b e c a u s e
I then h a d to send it b a c k to Beirut for p r o c e s s i n g . Dr. S a f a v i ' s E n g l i s h
is not all it m i g h t b e a n d h e thought I w a s telling hia not to c o n - u n i c a t e
w i t h m e d i r e c t l y on a n y t h i n g . A c c o r d i n g l y , w h e n S T P w i s h e d to have its
a g r e e m e n t w i t h Bill F r e n c h ' s ccvrpany reduced to a w r i t t e n c o n t r a c t , this
i n f o r m a t i o n w a s not ccxnnunicated.
I assured D r . Safavi that the r a t t e r of the interim sales w a s no p r o b l e r
and M r . F r e n c h ' s c o m p a n y w o u l d account to STP on those sales and I a><*.-ec.
h i m , a s a V i c e P r e s i d e n t of the two c o m p a n i e s i n v o l v e d , i f h e w o u l d d r a w
the c o n t r a c t he w i s h e d to h a v e I w o u l d sign the!- w h i l e t h e r e . H e dre>
them and I signed them and a c o p y of the I n t e r n a t i o n a l H e l i c o p t e r C o n s u l t a n t s
a g r e e m e n t is e n c l o s e d h e r e w i t h . H e informed ~ e that the Persian 51*- of S T P
w a s o w n e d 2 6 X by his o w n f a t h e r - i n - law and
bv Vr. Taghi Era-i . w h o is the
cousin of G e n e r a l K h a t a m i . T h e M a n a g i n g Director of S T ? is a K r . G o l s h o y a n
w h o is a f o r m e r M i n i s t e r of nrany d e p a r t m e n t s and a p e r s o n of c o n s i d e r a b l e
s t a n d i n g in Iran a c c o r d i n g to D r . S a f a v i . S a f a v i a l s o informed r e that
the " g r e a t g e n e r a l " by w h c m h e r e a n j General Khat-a-i, Had d e c i d e d to h a n d l e
t r a n s a c t i o n s w i t h S I P in trcuch the fashion he had set up for Air-taxi and
H e l i - t a x i , that is o n e c o m p a n y for fixed w i n e a i r c r a f t and the other for
helicopters.
19
A c c o r d i n g l y , a c o m p a n y c a l l e d H e l i c o p t e r S e r v i c e s h a d b e e n f o r m e d in
w h i c h M r . Bristow had no interest and with which M r . Bristow had no
c o n n e c t i o n , e i t h e r d i r e c t l y or i n d i r e c t l y . This c o m p a n y w a s to b e
t h e h e l i c o p t e r s a l e s c o m p a n y a n d a l s o is to h a v e o p e r a t i n g r i g h t s
a n d o n e o f i t s d i r e c t o r s is G e n e r a l R a f a a t , w h o h a s b e e n G e n e r a l
K h a t a m i ' s f r o n t m a n in H e l i - t a x i for q u i t e s o m e t i m e .
I had several
m e e t i n g s w i t h General Rafaat and at first General Rafaat w a s i n s i s t i n g
that H e l i c o p t e r Services must have the Bell Helicopter franchise.
I
a s s u r e d h i m t h a t it w a s b e y o n d t h e p o w e r o f I n t e r n a t i o n a l H e l i c o p t e r
C o n s u l t a n t s t o g i v e h i m t h a t f r a n c h i s e e v e n if t h e y w i s h e d t o a n d t h a t
t h i s w a s a m a t t e r s o l e l y w i t h i n t h e control
of t h e B e l l H e l i c o p t e r
Company.
D r . S a f a v i s t r o n g l y r e c o m m e n d e d that w e try and a r r i v e at s o m e a r r a n g e ment with Helicopter Services and both he and General Rafaat assured m e
t h a t H e l i c o p t e r S e r v i c e s w i l l b e in a p o s i t i o n t o b o t h p u r c h a s e f o r i t s
o w n o p e r a t i o n s a n d s e l l m a n y h e l i c o p t e r s . T h e y a l s o a s s u r e d m e t h a t it
has s e c u r e d the helicopter o p e r a t i n g c o n t r a c t s w i t h all of the oil
c o m p a n i e s in I r a n , i n c l u d i n g t h e c o n s o r t i u m .
General Rafaat further
s t a t e d t h a t h e w i l l n e e d f o u r B e l l J e t R a n g e r s q u i t e s o o n for H e l i c o p t e r
Services.
W e w o r k e d o u t an o r a l a g r e e m e n t b e t w e e n G e n e r a l R a f a a t , D r . S a f a v i a n d
m y s e l f w h e r e b y a three-party agreement would be entered into between
I n t e r n a t i o n a l H e l i c o p t e r C o n s u l t a n t s , S T P a n d H e l i c o p t e r S e r v i c e s in
w h i c h H e l i c o p t e r S e r v i c e s w o u l d h a v e . t h e s a m e f u n c t i o n s in I r a n o n
b e h a l f of I n t e r n a t i o n a l H e l i c o p t e r C o n s u l t a n t s as STP had and the r e s u l t ing n e t p r o f i t s t o H e l i c o p t e r S e r v i c e s w o u l d b e d i v i d e d 2 / 3 r d s t o H e l i c o p t e r S e r v i c e s a n d l/3rd to S T P . T h i s a g r e e m e n t is i d e n t i c a l w i t h
t h e o t h e r o n e w h i c h I h a v e e n c l o s e d e x c e p t t h a t it a d d s a p r o v i s i o n
t h a t H e l i c o p t e r S e r v i c e s a n d S T P w i l l s h a r e the p r o c e e d s o f t h e i r
e n d o f t h e c o n t r a c t as a f o r e s a i d .
It t o o is b e i n g d r a w n b y D r . S a f a v i .
I w a s then taken to a c o n f e r e n c e w i t h the Managing Director of H e l i c o p t e r
S e r v i c e s , a g e n t l e m a n n a m e d M a h v i , w h o w a s introduced to m e as a l s o b e i n g
the M a n a g i n g D i r e c t o r o f P a n A m e r i c a n I r a n i a n Oil C o m p a n y . M r . M a h v i
stated that he could not take the p r o p o s e d agreement to his Board of
D i r e c t o r s u n t i l h e h a d a c o p y of o u r f r a n c h i s e w i t h B e l l H e l i c o p t e r a n d
I a g r e e d to p r o v i d e h i m w i t h s u c h a c o p y u p o n m y r e t u r n . M r . F r e n c h ' s
c o p y w a s u n a v a i l a b l e a t t h a t t i m e s i n c e it w a s in B e i r u t and he h a d n o t
b e e n a b l e t o c a r r y all of h i s f i l e s w i t h h i m w h e n he w a s e v a c u a t e d f r o m
B e i r u t ( i n c i d e n t a l l y M r . F r e n c h is n o w p e r m a n e n t l y b a c k in B e i r u t ) .
Nevert h e l e s s , t o s a v e t i m e , as I t o l d y o u o n t h e p h o n e , I w o u l d a p p r e c i a t e it
if y o u w o u l d s e n d m e a c o p y o f h i s f r a n c h i s e .
20
W h i l e in Iran I a l s o c o n f e r r e d w i t h General J a b l o n s k i , the Commanding
General of all o f the U . S . A r m e d Forces A d v i s o r s in I r a n . At this
c o n f e r e n c e I inquired a b o u t the p r o p o s e d Iranian A r m y A i r Cavalry Unit
f o r m a t i o n and he informed m e at that time that this is m e r e l y in the
p l a n n i n g s t a g e and w i l l not be ready to commer: 2 n e g o t i a t i o n s for the
p u r c h a s e o f h e l i c o p t e r s for a c o n s i d e r a b l e time yet - p e r h a p s as m u c h
as five y e a r s . H e d i d , h o w e v e r , s t a t e that if Bell H e l i c o p t e r w i s h e d
to m a i n t a i n its p o s i t i o n it w o u l d be n e c e s s a r y in the not too distant
f u t u r e to c o m m e n c e the p r e p a r a t i o n of p r o p o s a l s for the formation of
such a u n i t , w h i c h p r o p o s a l s s h o u l d be c o m p l e t e w i t h respect to recomm e n d a t i o n s and s u g g e s t i o n s and p r o p o s a l s for t r a i n i n g of pi lot p e r s o n n e 1 ,
a c q u i s i t i o n and type of e q u i p m e n t , t r a i n i n g of m a i n t e n a n c e personnel
and m e t h o d s of s u p p l y . T h e s e p r o p o s a l s w i l l be s t u d i e d by C o m m i s s i o n s
of the I r a n i a n A r m y and t h e M i n i s t r y of W a r , t o g e t h e r w i t h the A r m y
A d v i s o r y g r o u p , and from p a s t e x p e r i e n c e in Iran this will u n d o u b t e d l y
c o n s u m e a large a m o u n t of t i m e . T h e i r C o m m i s s i o n there is the e q u i v a l e n t
of our C o m m i t t e e s and p a r e n t h e t i c a l l y I m i g h t add that if a camel is
a h o r s e that w a s put together by a C o m m i t t e e you s h o u l d see the results
of a P e r s i a n c o m m i t t e e .
W h i l e in Iran D r . S a f a v i , M r . B o l t o n and I a l s o c o n f e r r e d w i t h n u m e r o u s
other g o v e r n m e n t o f f i c i a l s , i n c l u d i n g G e n e r a l O v e s i , the C o m m a n d i n g
General of the Iranian G e n d a r m e r i e and Lt. C o l . B a l l a n t y n e w h o is
the A m e r i c a n A r m y A d v i s o r to t h e g e n d a r m e r i e . T h e g e n d a r m e r i e , as
you k n o w , is a c t i v e l y c o n s i d e r i n g a p r o p o s a l for the formation o f a
h e l i c o p t e r s t r i k e force and C o l . B a l l a n t y n e informed us that the
v a r i o u s C o m m i s s i o n s w h i c h h a v e been m e e t i n g for a b o u t - t w o years o n ..
this m a t t e r h a v e d e c i d e d that the e q u i p m e n t w h i c h should be used for
this force w i l l be Bell U H I D ' s . C o l . B a l l a n t y n e a l s o stated that this
d e c i s i o n had been m a d e s o m e m o n t h s ago and f o l l o w i n g this d e c i s i o n G e n e r a l
Ovesi had c o m e into his o f f i c e o n e day w i t h a p i c t u r e of a Kaman and had
stated that this w a s the h e l i c o p t e r that they had d e c i d e d on and h e
didn't w a n t it b e c a u s e the I r a n i a n Air Force and A r m y had K a m a n s and
they had had v e r y bad o p e r a t i n g e x p e r i e n c e w i t h t h e m . Their actual
o p e r a t i n g c o s t s to d a t e had run in the v i c i n i t y of $ 1 , 5 0 0 per hour
and their range w a s so little that they could travel n o faster than a
g a s o l i n e transport truck c o u l d a c c o m p a n y them. C o l . B a l l a n t y n e e x p l a i n e d
to him that that w a s not w h a t they d e c i d e d on and got o u t a p i c t u r e o f
a H u e y and put it next to a p i c t u r e of a Kaman and labeled them for
General O v e s i ' s i n f o r m a t i o n .
I should add at this p o i n t that General
Ovesi is h i g h l y r e g a r d e d and a p p e a r s to be an e x c e l l e n t g e n e r a l , e s p e c i a l l y
by Persian s t a n d a r d s , but even the best of them h a v e some curious gaps
in their c o m p r e h e n s i o n .
21
D u r i n g m y c o n f e r e n c e w i t h General O v e s i w e again discussed t h e H u e y s
and d u r i n g the discussion he turned and p o i n t e d to a model of a K a m a n
w h i c h w a s on the shelf behind his d e s k , a n d said"that's the kind o f
h e l i c o p t e r w e a r e going to b u y . " I told h i m " n o , n o G e n e r a l , t h a t ' s
a K a m a n - you a r e going to buy a B e l l . " H e said " o h yes t h a t ' s r i g h t ,
isn't that a B e l l ? " I s t r o n g l y r e c o m m e n d that y o u send a m o d e l of
a H u e y to John Bolton for p r e s e n t a t i o n to General O v e s i . I t h i n k it
w o u l d a l s o b e a good idea to p r e s e n t a m o d e l of the Huey to G e n e r a l
K h a t a m i and to General G h a n d a h a r i , w h o is the Commanding G e n e r a l o f
the I r a n i a n A r m y A v i a t i o n B a t t a l i o n . T h i n g s like having these m o d e l s
o n their d e s k s s e e m to be m u c h m o r e i m p o r t a n t to the Persians than
they w o u l d be t o their A m e r i c a n e q u i v a l e n t s . A l s o , perhaps it w i l l
h e l p keep them s t r a i g h t e n e d o u t .
A l s o , as I told you w h i l e I w a s in Iran I secured the r e l e a s e of Bill
F r e n c h ' s C e s s n a 180 and the log books t h a t g o w i t h it, and D r . Safavi
i n f o r m e d m e that the P e r s i a n s n o w feel that they no longer h a v e any
c a s e a g a i n s t Bill F r e n c h . Bill is g o i n g to apply for a v i s a to s e e
w h a t r e s u l t s he can get a l o n g that line,~and I feel that w i t h i n a
m a t t e r o f n i n e m o n t h s or s o there is a p o s s i b i l i t y that h e w i l l be
a b l e to travel f r e e l y to a n d from I r a n . H e h a s , h o w e v e r , d e c i d e d
in v i e w o f the a c t i v i t y in the rest of the M i d d l e - E a s t that it w o u l d
b e m o r e a p p r o p r i a t e for h i m to m a i n t a i n his headquarters in B e i r u t
and h e w i l l b e m o v i n g his f a m i l y to B e i r u t s o m e t i m e in the not t o o
d i s t a n t f u t u r e . H e wi11 c o n t i n u e to m a i n t a i n a-resident r e s p r e s e n t a t i v e
in I r a n , but w e a r e c u r r e n t l y in the p r o c e s s of looking f o r " a m a n w i t h
t h e right q u a l i f i c a t i o n s to send t h e r e to replace Bolton. B o l t o n is
t h o r o u g h l y f a m i l i a r w i t h h e l i c o p t e r s a n d is an experienced h e l i c o p t e r
p i l o t a s w e l l as h a v i n g s o m e b u s i n e s s e x p e r i e n c e but it w o u l d b e better
f r o m our p o i n t o f v i e w not to h a v e to m a i n t a i n an e x p e n s i v e p i l o t there
b u t rather to h a v e s o m e o n e w h o is f a m i l i a r w i t h the types of a i r c r a f t
that w e h a n d l e , and w h o m a y i n c i d e n t a l l y be a p i l o t , but not such an
e x p e r i e n c e d o n e as the o n e s w e u s u a l l y h i r e , and w h o s e b a c k g r o u n d is
m o r e in b u s i n e s s a d m i n i s t r a t i o n w i t h p e r h a p s a touch of d i p l o m a c y . As
soon as w e find the right m a n w e w i l l r e p l a c e B o l t o n .
I a m , of c o u r s e , not in any p o s i t i o n to g u a r a n t e e you that the n e w
p r o p o s a l is going to w o r k . In f a c t , I think all of our p a s t e x p e r i e n c e
i n d i c a t e s that the o n l y w a y w e w i l l k n o w w h e t h e r something is w o r k i n g
or not is w h e n the o r d e r s start c o m m i n g t h r o u g h .
22
I d o n o t think it is q u i t e a c c u r a t e to say that B i H Frcnch has d o n e
n o t h i n g for you in this a r e a since he has s u c c e e d e d inspite of tremendous
o b s t a c l e s in k e e p i n g your C o m p a n y ' s name in the forefront of d i s c u s s i o n
in all of the g o v e r n m e n t a g e n c i e s in Iran. F u r t h e r m o r e , the I r a n i a n
g o v e r n m e n t has p u r c h a s e d n o h e l i c o p t e r s in recent y e a r s from a n y o n e
e l s e . B e s i d e s , Bill has p e r s o n a l l y bought two G - 5 ' s and sold another
o n e on your behalf in the last two y e a r s . A l s o , I understand that
there is a good c h a n c e if e v e r y o n e " h o l d s their m o u t h right" s e l l i n g
8 H u e y s to K u w a i t .
I am e n c l o s i n g for your information a resume w h i c h w a s f u r n i s h e d to
m e by D r . S a f a v i , w h i c h he is a l s o giving the U . S . S t a t e Department
in c o n n e c t i o n w i t h his request that they e n d o r s e his efforts to become t h e next P r i m e M i n i s t e r of I r a n . I a l s o w a s informed that D r .
Safavi has c u r r e n t l y been n o m i n a t e d for a Nobel P r i z e , so this w i l l
give you s o m e idea of the caliber of p e o p l e w i t h w h o m w e a r e d e a l i n g
in I r a n . In the e v e n t I can p r o v i d e further i n f o r m a t i o n or if you
have any q u e s t i o n s p l e a s e do not h e s i t a t e to c o n t a c t m e .
CRB/cs
cc: W i l l i a m H . French
23
&
PERSIAN TAYAR CO.
10 AVENUE BAHAR/SHAHREZA
TEHERAN
IRAN
CONTRACT
/
REF.
YOUR/
OUR
REP.
TEHERAN
This agreement is between International Helicopter Consultants
I n c . , a Delev/are C o r p o r a t i o n w h i c h h a s t h e s o l e a g e n c y a n d r e p r e s e n tation for Dell Helicopter Corporation for Iran o n , one p a r t , a n d
Sherkat Sahami Tayar P a r s , a company formed and registered in Iran under
N u m b e r 1 1 7 0 on 4 D a y 1 3 4 5 (25 D e c e m b e r 1 9 6 6 ) , a c c o r d i n g to the f o l lowing articles.
A R T I C L E 1 B y t h i s a g r e e m e n t I n t e r n a t i o n a l Helecojrter C o n s u l t a n t s
I n c . a D e l e g a r e C o r p o r a t i o n d e s i g n a t e s S h e r k a t Sahara! T a y a r P a r s i t s
sole and exclusive agent in Iran for S e l l i n g , h i r i n g , buying,maintaini n g a n d T/orlring w i t h B e l l H e l i c o p t e r s C o r p o r a t i o n p r o d u c t s , t o d o a l l
other cor^ercial business with said aircraft, and to sell, purchase,
hire o r r e p a i r a n d m a i n t a i n m o t o r s a n d spare parts of said a i r c r a f t
in I r a n and to d o a n y o t h e r b u s i n e s s w i t h t h e n , a n d S h e r k a t Sahara!
Tayar Pars accepts this appointment.
.ARTICLE 1 1 S h e r k a t S a h a m i T a y a r P a r s a l s o h a s t h e r i g h t t o
u t i l i z e the B e l l H e l i c o p t e r in I r a n in a n y w a n n e r and f o r a n y p u r p o s e
it chooses. Note attached a l l e i g h t s and powers mentioned in Article
1 a n d 1 1 g i v e n t o S h e r k a t Sahaini T a y a r P a r s r e g a r d s a l l I r a n i a n
Government I n s t i t u t i o n s , Private Institutions ar any o t h e r o r g a n i z a t ions or i n s t i t u t i o n s e s t a b l i s h e d in I r a n .
A R T I C L E 1 1 1 D u r i n g the v a l i d i t y of t h i s c o n t r a c t I n t e r n a t i o n a l
H e l i c o p t e r C o n s u l t a n t s I n c . h a s u o r i g h t to give its r e p r e s e n t a t i o n
i n I r a n t o a n y o t h e r p h y s i c a l o r m o r a l p e r s o n o r t o ivake a n y a c t i v i t i e s m e n t i o n e d i n a r t i c l o s 1 a n d 1 1 d u r i n g t h e v a l i d i t y of t h i s c o n t -
onsible for insuring that all Iranian Government Agencies purchase all
D e l l p r o d u c t s t h r o u g h S h e r k a t Saharau. T a y a r P a r s o r i n t h e a l t e r i ; a t i v e
that the Iranian Government pays Sherkat Sahami Tayar Pars f i f t e e n
0 1 5 ) p e r c e n t on a l l such p r o d u c t s w h i c h it p u r c h a s e s in a n y o t h e r w a n ner.
A u T I C L D IV F o r a l l t r a n s a c t i o n s w h i c h S h e r k a t S o h a n i T a y a r P a r s
c o n d u c t s in I r ^ i f o r P-oll h e l i c o p t e r s a n d t h e i r s p a r e p a r t s , i t h a s
t h e ri;.ht t o r e c e i v e a c o m m i s s i o n o f f i f t e e n ( 1 5 ) p e r c e n t f r o u t h e
i:urch:..'or a n d f i v o ( 5 ) p e r c e n t f r o m I n t e r n a t i o n a l h e l i c o p t e r C o n s u l t a n t s I n c . , o r n o r m a l d e a l e r s cor.:iuission, w h i c h e v e r i s l e s s .
24
-—auTICLE V S h o r k a t S a h a n i T a y u r P a r s a c c e p t s t h o r e s p o n s i b i l i t y
t o m a k o o CQXIDUD o f f o r t t o i n t r o d u c o , d o n o n s t r a t o a n d a d v o r t i s o Utfll
H e l i c o p t e r s in I r a n , to dovolopo a narkot f o r this typo of aircraft
to sell and to put into operation Boll holicoptors, and also to soil
n o t o r s and sparo parts f o r this typo aircraft.Shorkat S a h a n i Tayar
P a r s a l s o accepts the responsibility to exploit a n y o t h o r connercial
a c t i v i t i e s in Iran w h i c h c a n bo dono b y Doll holicoptors w i t h i n tho
laws of Iron.
A R T I C L E V I Sherlcat Saharai T a y a r P a r s a g r e e s t o n o t c a k e a n y t r a n s a c t i o n s w i t h a n y o t h o r t y p o o f a i r c r a f t w h i c h i s in c o n p e t i t i o n w i t h
B a H r - p r o d u c t s d u r i n g t h o v a l i d i t y of t h i s contracrt.
ARTICLE V I I S h o r k a t S a h a n i T a y a r P a r s a g r e e s n o t t o c h a r g e n o r o
t h a n t w e n t y fivo ( 2 5 ) percent f o r the solo of a n y a i r c r a f t , no tor o r
s p a r o p a r t s a n d if i t d o o s H e l l h a s t h o r i g h t t o s u o t h e n f o r d a n a g e s
caused by such a s a l e .
ARTICLE Vlll International Helicopter Consultants Inc. shall acco p t tho responsibility to a n s w e r a l l orders and proparo a l l orders whic
are subnitted b y Sherkat Sahani Tayar Pars for Boll Helicopters, its
tsotors a n d s p a r o p a r t s i n t h o s h o r t e s t p o r i o d p o s s i b l e b y r e a s o n a b l e
c o c n o r c i a l s t a n d a r d s , and,if it doos n o t do so International H e l i c o p t e r
C o n s u l t a n t s w i l l p a y tho d a n a g e s caused b y non-execution of said agreeD e n t . It is agreed b y both contracting parties that all transactions
between Shorkat Sahani Tayar Pars and any othor persons for tho executi o n o f t h o a c t i v i t i e s n c n t i o n o d I n a r t i c l e s 1 a n d 1 1 of t h i s a g r c e n o n t
s h o u l d bo approved in advance b y International Helicopter C o n s u l t a n t s
Inc.
ARTICLE IX A n y dispute between tho contracting p a r t i e s caused
b y taisunderstanding o r f a i l u r e t o e x e c u t e t h e a r t i c l e s i n c l u d e d i n this
agrceraentshall b e s u b n i t t o d f o r a r b i t r a t i o n i n a c c o r d a n c o w i t h t h e laws
a n d regulations of I r a n . E a c h party can solloct ono arbitrator who will
p r o v i d e h i s v e r d i c t t w o c o n t h s f r o n t h o d a t o of h i s n o m i n a t i o n . I n c a s o
t h o p a r t i o s of t h i s a g r e e m e n t c a n n o t a g r e e o n o n e p o r s o n a l a r b i t r a t o r
then both arbitrators shall soloct a third arbitrator after fifteen
d a y s • A f t e r a c c e p t a n c e o f s a i d a r b i t r a t o r a n a ^ r e o c o n t c a s t bo rcachec'
w h i c h i s coxspatiblo t o b o t h p a r t i e s . In c a s o o n e of t h o p a r t i o s abstai::
f r o n d e s i g n a t i n g o n a r b i t r a t o r o r the a r b i t r a t o r s a r o in d i s a g r e e m e n t '
t h e c a s o s h a l l bo s u b n i t t o d to t h e I r a n i a n C o u r t s .
Mado this F i f t h of D a y 1345
( 26 Dccesbcr 1DGC)
I n t e r n a t i o n a l lIolicor>tor C o n s u l t a n t s I n c .
in Iran
'Shorkat S a h a n i Tayar
25
DR. HASSAN SAFAVI
114 A v e n u e F e r i d o w s i
TEHERAN
IRAN
O r . H a s s a n S a f a v i , B o r n in 1909 at T e h e r a n , I r a n .
D r . at L a w
a n d E c o n o m i c a l S c i e n c e , L i c e n s e d in P o l i t i c a l , C o m m e r c i a l
S c i e n c e , and C r i m i n o l o g y , and has held the following p o s i t i o n s :
A t t o r n e y G e n e r a l , M i n i s t r y of J u s t i c e
C h i e f of C a b i n e t , M i n i s t r y of F i n a n c e
Director General Propaganda & Publications
19^2 - 19^+5
F o u n d e r and M e m b e r o f t h e H i g h C o u n c i l
of the first Seven Year Plan
Professor of Political Economy
in t h e H i g h S c h o o l o f F i n a n c e
M e m b e r of the High Council of Legislation
Under Secretary, Minister of Economy
Managing Director, Iranian Insurance Co.
M e m b e r of t h e B o a r d of D i r e c t o r s o f P o r t s
a n d N a v i g a t i o n O r g a n i z a t i o n of I r a n
V i c e Presiderlt, H i g h C o u n c i l of C i v i l A v i a t i o n
Delegate of Iran to I.C.A.O. '
M e m b e r of the I n t e r n a t i o n a l A s t r o n a u t i c a l F e d e r a t i o n
V i c e P r e s i d e n t , I n s t i t u t e of S p a c e Law o f I . A . F .
Managing Director of Persian Shipping Services
Managing Director of Iranian Lloyds
Dr. Safavi
is a l s o the A u t h c r of t h e f o l l o w i n g
books:
T h e E c o n o m y of I r a n and t h e P o s s i b i l i t y
its D e v e l o p m e n t ( F r e n c h )
T h e H o m e I n d u s t r y o f C a r p e t In
(Persian and French)
D e c l a r a t i o n of F r e e d o m , Its
(Persian)
The Civil Aviation
Regulations
Iran
Progress
Law of I r a n a n d
Its
of
26
03:JHO:lg-74U9
16 February 1968
M r . A . H* Z a n g a n e h
Air Taxi Company
Mehrabad Airport
Tehran, Iran
Dear Jose:
Bell has taken the necessary action to cancel its repr e s e n t a t i o n f o r the c o u n t r y o f I r a n .
W e w o u l d l i k e to d i s c u s s w i t h y o u t h e p o s s i b i l i t y t h a t
the f i r m of A i r T a x i C o m p a n y r e p r e s e n t B e l l f o r t h e
s a l e o f i t s h e l i c o p t e r p r o d u c t s i n I r a n , b a s e d o n the
favorable recommendations w e have received.
Would you please indicate w h e t h e r your company would
h a v e s u c h a n i n t e r e s t , t o g e t h e r w i t h a n y s p e c i a l steps
o r c i r c u m s t a n c e s t h a t m i g h t p e r t a i n to this subject*
Upon receipt of your communication, w e will be able
to p r o c e e d w i t h f u r t h e r n e c e s s a r y a c t i o n .
Best regards.
Sincerely,
B E L L H 2 L I COP TER - C O M P A K Y
BC:
Jose
Kling
Suiter
J„ H» O r p a n
E x p o r t Sales M a n a g e r
27
BELL H E L I C O P T E R C O M P A N Y
INTER-OFFICE MEMORANDUM
9 April 1968
03:GMK:sk-836
MEMO T O :
M r . J . H . Orpen
COPIES T O :
M e s s r s - Jo F . A t k i n s , E* J . D u e a y e t . Do
J . M a s h m a n , D- M c C l e n n y , C . E . M c G u i r e ,
D . Eo M i t c h e l l , A . 0 . P i e r r o t , W . Y a t e s
SUBJECT:
T r i p R e p o r t , Iran
Jose,
T h e r e is v e r y l i t t l e c h a n g e h e r e s i n c e o u r l a s t v i s i t , b u t
t h i n g s s h o u l d b e g i n to h a p p e n s o o n . O u r p r o p o s a l w a s w e l l
received, b u t Jablonsky says our prices are too high®
He
e x p e c t s t h e D o 0 & D 0 l e t t e r of o f f e r to b e q u i t e a b i t l o w e r —
we'll wait and see„
Next week D » 0 « D o should make a decision on W h e t h e r the loan
can b e m a d e , t h i s is a n e w d e v e l o p m e n t , a n d if i t c a n , a
letter of offer should ba sent out about 1 May»
Jablonsky
leaves here 10 June for retirement, and he wants the UH-1
c o n t r a c t s e t t l e d b e f o r e then,, U K - 1 d e l i v e r i e s w i l l a l l ba
m a d e in c a l e n d a r y e a r 1 9 7 1 , b e c a u s e of t h e l e n g t h o f t h e
t r a i n i n g program,, C h i n o o k (12 e a c h ) d e l i v e r i e s w i l l a l l b e
m a d e in 1 9 7 2 .
A g u s t a h a s m e t w i t h the S h a h a n d p u t in a p i t c h f o r d e l i v e r y
of b o t h U H - 1 a n d C h i n o o k n o w t h a t t h e y h a v e t h e V e r t o l l i c e n s e „
J a b l o n s k y i s a l i t t l e worried* a b o u t t h i s . 'If t h e U . S . Arsay
loan i s n o t toade a v a i l a b l e A g u s t a w i l l h s v e a g o o d c h a n c e .
W a l l b e r g is h e r e n o w a n d I w o u l d n ' t
s u r p r i s e d if C o r r a d o
w e r e coining.
Zanganeh
ramts
to r e p r e s e n t u s , e n d h e can k e e p h i s e a r o p e n
sbctiit Agusta progress with the Sbsh'., 1fcn-jetold him there
wi3.1 proclin-bly b e no cCwisissioii if s
to ^overer^snt
ic
e n d h e b ^ s a c c e p t e d ilir.r.o 7. b e v e nlsr* t o l d h i a
fcot to clo er^fcbing G ^ c p t Xicter.
s e n d hi-": c rep^rvetiv-i&icli
eh cult! n
c^.-.
rvjtril
t
r^jrtPv:-.lorr*
svr
- P:tor:-ox:
-.i
to Mr.-.-. XI* ^ hrrr-^ to r e l y ot: evue
in c o r - b d ^ o j
"tr. r.
'.icuc?:*r:?. v;-ill
28
It looks as if it w i l l bs a month or m o r e b e f o r e h e can visit
us so I suggest we. s e n d h i d a copy of the Aerodynamic outline
a n d the small booklet on l e a r n i n g to F l y Y o u r Bell H e l i c o p t e r "
to h e l p hicu He doubts if h e can spend m o r e than a weelc at the
f a c t o r y , but that s h o u l d h e l p h i n .
G . K . KLing
29
I n r e p l y refer to:
03: JHO;mh: 2108
12 J u l y 1 9 6 8
Mru A . H . Zanganeh
Managing Director
Taxi ComBaB^
kenraoad Airport
Teheran, Iran
D e a r Jose*
Enclosed are some details on the high powered
for the helicopter as promised.
searchlight
T h i s S X - 1 6 s e a r c h l i g h t is c e r t i f i c a t e d f i r s t f o r t h e B e l l
Models 47G-4A and 47G-3B-2 helicopters. It m a y also b e
installed on other helicopters with sufficient electrical
power provided.
A t the present t i m e , the Allison engine manufacturer, has
i m p o s e d a t e m p o r a r y l i m i t a t i o n o n t h e a m o u n t of e l e c t r i c a l
load which can b e drawn in flight b y any helicopter using
t h e i r 2 5 0 - C 1 B e n g i n e . T h i s , of c o u r s e , i n c l u d e s t h e J e t R a n g e r m o d e l w h i c j ^ h es S h a h is u s i n g . T h e r e s t r i c t i o n is
a m i n i m u m of 6 0 d o y a ^ B e c a u s e o f t h i s ? t h e r e w i l l b e a
delay before the searchlight installation can be engineered
f o r t h e J e t R a n g e r , s i n c e i t s u s e r e q u i r e s a 60 a m p e l e c trical l o a d .
Should G e n . K h a t a m i desire a quotation for other m o d e l
h e l i c o p t e r s h e m a y o b t a i n this d i r e c t l y f r o m S p e c t r o l a b .
Under separate c o v e r , I will be forwarding the completed
proposal for the National Iranian Gas Company and the
Iranian N a v y .
A s s o o n as y o u r e c e i v e t h e m , p l e a s e s e e t h a t t h e y a r c
delivered end stress our offer to have someone review the
d e t a i l s i n - c o u n t r y if d e s i r e d .
N o t e t h a t for t h e N a v y p r o p o s a l w e
that t h e h e l i c o p t e r s b e f i n a n c e d as pjirt of t h e U . C . l o a n g u a r a n t e e
a r r a n g e d b y t h e G o v e r n m e n t of I r a n f o r p r o c u r e m e n t of
23-586 O - 78
30
m i l i t a r y e q u i p m e n t . T h i s is t h e o n l y w a y t h a t long t e r m ,
low cost f i n a n c i n g c a n b e o b t a i n e d . T h i s r e q u i r e s a n
i n t e r n a l b u d g e t r e q u e s t b y t h e N a v y f o r e s t a b l i s h i n g its
p r i o r i t y f o r this e q u i p m e n t , w h i c h w o u l d n a t u r a l l y r e q u i r e
G e n . Tufanian* s a p p r o v a l .
I w a s e x p e c t i n g to h e a r f r o m y o u , p r o v i d i n g y o u r s c h e d u l e d
t r i p to t h e U . S . w a s n ' t p o s t p o n e d .
T~~recommend a s p e c i a l t r i p b y y o u to t h e f a c t o r y as s o o n
a s y o u c a n c o n v e n i e n t l y a r r a n g e it in o r d e r t o b e c o m e m o r e
f u l l y v e r s a n t w i t h o u r f a c i l i t i e s and p r o d u c t s .
W h a t is t h e l a t e s t status of t h e A g u s t a U H - 1 / 2 0 5 p r o g r a m
for the Iranian Army? W e have heard that they were attempti n g to s u b s t i t u t e t h e B r i s t o l - S i d d e l e y G n o m e e n g i n e ( s i m i l a r
t o G E T - 5 8 ) i n l i e u of t h e L y c o m i n g L ~ 1 3 e n g i n e , w h i c h A g u s t a
h a s h a d d i f f i c u l t y i n o b t a i n i n g b e c a u s e of U . S . A r m y p r i orities. I believe this substitution should b e resisted
b y t h e I r a n i a n G o v e r n m e n t , since this e n g i n e h a s not p r o v e n
to b e a s r e l i a b l e i n t h e 2 0 5 i n s t a l l a t i o n , p a r t i c u l a r l y
w h e r e f o r e i g n o b j e c t d a m a g e is l i k e l y t o r e s u l t f r o m l a n d i n g
in unprepared landing sites.
The Lycoming engines will b e available in increasing quantities l a t e r t h i s y e a r , b u t p r o b a b l y n o t i n t i m e f o r t h e
A g u s t a f i r s t d e l i v e r y c o m m i t m e n t , a n d I b e l i e v e this is w h y
they were consideringrsubstitution.
Piease follow up on our proposal, and keep us informed on
competitive situations.
Best personal regards.
Sincerely,
BELL HELICOPTER COMPANY
J. H . Orpen, Manager
International Marketing
Enclosures:
Nightsun Price List
end I n f o r m a t i o n S h e e t (2)
31
A I R TAXI C O
Mehrabad
Airport
TEHRAN
t.-xav j
40257
Tel. 68992
611967
Cob!®5 Tehron AIR TAXI
Dote J L ^ A u g u s t , 1 9 6 8
No .
yr.
••
21/30399
:mh : 2 1 0 8
COMMERCIAL SALES DEPARTMENT
REFERENCE WO. / ^ Y fj fr.
Mr. J.H. Orpen,
Manager-International
Bell Helicopter
P . O . Box
Marketing,
Company,
AuG
7 1968
INFp tu^JES TO:
482,
Fort Worth,
Texas,
U.S.A.
0
Dear Mr. Orpen,
Thank y o u v e r y much for y o u r l e t t e r dated 12th J u l y , and
the enclosed
l i t e r a t u r e on the high powered
General Khatemi w a s given an explanation
and
I w i l l a d v i s e y o u l a t e r of h i s
searchlight.
on t h e
searchlight
comments...
I p e r s o n a l l y gave the p r o p o s a l for the N a t i o n a l
Iranian
G a s Company to I n g . F a r k h a n and he h a s promised t h a t he w i l l "
study this
carefully.
.On c h e c k i n g
the p r o p o s a l f o r t h e I m p e r i a l I r a n i a n
I f i n d t h a t in A t t a c h m e n t
(a) i t e m s 1 to 8 h a v e b e e n
c a l c u l a t e d ar.d I a m t h e r e f o r e r e t u r n i n g ' the c o m p l e t e
to y o u for r e c h e c k i n g .
proposal
C o m m a n d e r A r d a l a n is a t p r e s e n t
in T e h r a n so t h i s w i l l n o t c a u s e a g r e a t
F I s a s e r e t u r n the c o r r e c t e d
I!
AV
\
i
suggested.
not
delay.
p r o p o s a l to me a s s o o n
p o s s i b l e ar.d I w i l l a l s o e x p l a i n to t h e m the f i n a n c i n g
ycu h^ve
Navy
incorrectly
as
method
^.jlr
32
I had a long d i s c u s s i o n w i t h G e n e r a l K h a t a m i on A u g u s t a
B e l l s u b s t i t u t i n g the Bristol-Siddafley G n o m e engine and he
a d v i s e s re t h a t so f a r t h e r e h a s b e e n no m e n t i o n of any c h a n g e
by Augusta.
I shall h o w e v e r be p l e a s e d to for.vard any f-urther
i n f o r m a t i o n I can o b t a i n a t this e n d .
I am l o o k i n g for.vard tc spending a fe.v d a y s with ycu w h e n
I c a n make a round of y o u r factory and f a c i l i t i e s , but u n f c r t u n a
d u e to p r e s s u r e of v.crk I d o not think I can find time to m a k e
t h i s trio u n t i l mid
Best personal
fall.
regards,
Sincerely,
AIR
TAXI
COMPANY
33
In r e p l y r e f e r
04:ARM:cr-478
to:
4 June
1970
A1 r Tarxi C o m p a n y
Mehrabad Airport
T e h r a n , Iran
Dear
Sir:
This will confirm electrically transmitted message
27 M a y 1 9 7 0 , t h e t e x t of w h i c h w a s as f o l l o w s :
THE FOLLOWING
INFORMATION
IS F O R Y O U R A D V A N C E
A N D IS B E I N G .IMMEDIATELY C O N F I R M E D
BY
P R I C E I N C R E A S E S HAVE B E C O M E N E C E S S A R Y
C O S T OF L A B O R A N D M A T E R I A L .
CHANGES
PLANNING
LETTER.
DUE TO
IN A D D I T I O N ,
INCREASED
ENGINEERING'
IMPROVING A P P E A R A N C E , PERFORMANCE AND
E F F E C T I V E N E S S OF THE H E L I C O P T E R S H A V E BEEN
IN NEW
COST
INCORPORATED
PRODUCTION.
W I T H THE P R I C E
INCREASES, SUBSTANTIALLY
S I O N S H A V E B E E N P R O V I D E D FOR M O D E L S
IMPROVED COMMIS- -
206A, 205A-1, AND
T H E NEW C O M M I S S I O N S ON M O D E L 4 7 ' S R E C O G N I Z E THE
BETWEEN
dated
INCREASING
COSTS AND THE N E C E S S I T Y
FOR
SQUEEZE
KEEPING
THE P R I C E C O M P A T I B L E WITH THE M A R K E T , AND HAVE BEEN
A T E L Y R E D U C E D ON THE BASIC
UNFORTUNATELY
OF
YOUR
IT
HAS
COMMISSIONS
BEEN
212.
MODER-
AIRCRAFT.
NECESSARY
ON SPARE
PARTS.
TO
REPUCE
THE
PERCENTAGE
34
FOLLOWING
IS A R E V I S E D PRICE A N D R E P R E S E N T A T I V E
DISCOUNT
STRUCTURE:
MODEL
LIST P R I C E
47G-3B-2
47G-4A
47G-5
206A
205A-1
212
ALL S P A R E P A R T S
AND .ACCESSORIES
THE COMMISSION
DISCOUNT
60,000
58,000
49,500
112,500
425,000575,000
(%)
7h
7H
7h
7h
4
4
10
IS TO BE N E G O T I A T E D ON ALL SALES IN
OF FIVE H E L I C O P T E R S
G O V E R N M E N T TO
($)
EXCESS
OR ON A L L I N D I R E C T S A L E S T H A T A R E
MADE
GOVERNMENT.
S E P A R A T E P R I C E S C H E D U L E S ON A C C E S S O R I E S A N D S P A R E S
ARE
FORTHCOMING.
T H E NEW P R I C E S T R U C T U R E
I N C L U D E S 12 TO 16 HOURS OF
S C H O O L A N D FIVE H O U R S OF T R A N S I T I O N A L
GROUND
FLIGHT TRAINING
FOR
ONE P I L O T IN THE C U S T O M E R ' S H E L I C O P T E R A F T E R A C C E P T A N C E
THE BELL F A C I L I T Y .
IT ALSO
M A I N T E N A N C E OR O V E R H A U L
ONE
DURATION
FIELD
FOR
MECHANIC.
BELL
DY
I N C L U D E S T H E BELL S T A N D A R D
C O U R S E OF T H R E E W E E K S
AT
WILL
HONOR
ALL
20 MAY
1970.
IN
APPROPRIATE
FIRM
PURCHASE
ADDITION,
DEPOSITS,
RECEIVED
AGREEMENTS
MEW PURCHASE
AfiD
ACCEPTED
ACCEPTED
AGREEMENTS,
BY
BELL
BY
BELL
WITH
PRIOR
TO
35
P l e a s e n o t e t h a t this A g r e e m e n t includes a new S c h e d u l e A
w h i c h r e f l e c t s the new c o m m i s s i o n s t r u c t u r e as d e f i n e d a b o v e .
P l e a s e sign and r e t u r n the o r i g i n a l and two c o p i e s of b o t h
the A g r e e m e n t and the S c h e d u l e A for o u r s i g n a t u r e . A f u l l y
e x e c u t e d c o p y w i l l then be r e t u r n e d to you for y o u r f i l e s .
-f-f-ctny a d d i t i o n a l
information
1s r e q u i r e d , p l e a s e
Yours
advise.
truly,
BELL H E L I C O P T E R
COMPANY
A . Rex M a r i o n
.International M a r k e t i n g
Admi n i s t r a t o r
Enclosures
(4)
36
AIR TAXI C O
M*Krabod Airport
TEHRAN
(
i-XAY )
\A\\T|
WWW
)
CobJ. Ultra* AIR TAXI
Yr. R e f ^ i m i e r - 4 7 8
Bell Helicopter Co.,
P.O. Box 482,
Fort Worth,
TEXAS 76101,
U.S.A.
Attention International Marketing Administrator
Dear Sirs,
Re:
Manufacturer's Foreign Representative Agreement
Schedule A
In reply to your letter of June 4 , 1970, as requested, ve
enclose, herewith, original and two copies of the above
Agreement and Schedule A duly signed by our Managing Director,
Mr. A.H. Zanganeh. Ve now await the return to us of a signed
copy of same for our file.
Tours faithfully
AIR TAXI C O M P A Q
IJUER.VxTlQ.iW.k-AK.^r^G
JUL 22 1370
Sales ^ar.ager,
37
In reply r e f e r to:
04:ARM:cr-544
22 July 1970
A i r Taxi Company
Mehrabad Airport
T e h r a n , iraji
REFERENCE:
Manufacturer's Foreign Representative and Schedule
A (dated 15 June 1 9 7 0 }
Dear Sir:
It has been noted that you have n o t returned the o r i g i n a l
and two. signed copies of the referenced Agreement and resp e c t i v e Schedule A .
Please be a d v i s e d that a formal A g r e e m e n t between B e l l and
yourselves w i l l n o t exist until these documents are fully
e x e c u t e d . . T h e r e f o r e , we request that you take immediate
action to return the referenced A g r e e m e n t s .
If any additional information is r e q u i r e d , please a d v i s e .
Respectfully,
BELL HELICOPTER COMPANY
A . Rex Marion
International Marketing
Administrator
38
VFBELL_
|-f E L I C O
P O S T OFFICE B O X 482
P T E
• FORT WORTH, TEXAS
COMPANY
R
76101
A
fextrOfl|
2 3 J u l y 1970
In reply reffer tos
0 * A R M j g r 1693
Air Taxi Company
Mehrabad A i r p o r t
Tehran, Xr&n
Gentlemen:
T h a n k you for returning to us the signed copies of
our M a n u f a c t u r e r s Foreign Representative A g r e e m e n t
and Schedule A .
Your copy of the Agreement and S c h e d u l e A signed by
M r . Sylvester is enclosed for your f i l e .
P u r s u a n t to our electrically transmitted message
dated 27 M a y 1970, separate-Price Schedules on
accessories and spares are e n c l o s e d .
If any additional information'is r e q u i r e d , please
advise.
Respectfully yours
BELL H E L I C O P T E R COMPANY
A . R e x liar ion
International Marketing
Administrator
Enclosures
COMPANY
39
i
AIR TAXI CO.
Mehrabad
-
Airport
Tel.
.if>*>
i'ldY]
T E H R A N
40257
68992
611967
\A\\Y> & &
www)
Cobl. Tehran AIR TAXI
o1 J& *
DaleMly.^l2.h.:.l970.
No...S/?LZXQ243..-
Bell 'Helicopter Co.,
P.O. Box 482,
Fort Worth, •
TEXAS 76101,
U.S.A.
Attention International Marketing Administrator
Dear Sirs,
Re:
Manufacturer's Foreign Representative Agreement
Schedule A
.
In reply to your letter of June 4 , 1970, as requested, we
enclose, herewith, original and two copies of the above
Agreement and Schedule A duly signed by our Managing Director,
Mr. A.H. Zanganeh. We now await the return to us of a signed
copy of same for our file.
Yours faithfully,
AIR TAXI COMPANY,
40
'
PLEASE NOTE WHETHER NAM/*"* INESS AND STREET ADDRESS CORRESPOND tflTH YOUR I
un & Bradstreet® INTERNATIONAL
—
...
H137/JCT
BRADSTREETrlNC.-- ' — E S T A B L I S H E D 18-41
—
4Til OCTOBiiil, 1970
CI).965
S l & R K A T SAIIAI-'I H A V A P ^ Y M A l A I R
( A I R T A X I CO.LTD). )
REPORT
TAXI
• TISHKIUI?, I R A N .
NORTH I.1IC1 IRA 13AD.
AIRPORT.
DIRECTORS: (with thoir f i n a n c i a l intorosta) 1
A m i r IIon3Gi}i4 A n s a n Z a n g a n o h (50;-S) C h a i r m a n &
Managing Director
Ahmad Shafik
C255»)
I
Fredric Issue
(25/0
STARTKD:
T. Khorrara
•
1958
SUMMARY I-
INCORPORATED 1958.
OPERATING ON A LAIK^ SCALK.
O F 1IICH
AMD STANDING.
C0H:5IP>;R};D TRUST.VOKTilY F O R KilGAGlif'JiNTS.
REPUTE
HISTORY:
Thin in a j o i n t s t o c k c o m p a n y r o g i s t e r o d in T o h o r a n o n 1 9 . 4 . 1 9 5 8 .
Capital: Tha capital, originally Rials 6,000,000 hao been incroas
to Rialn 2 0 , 0 0 0 , 0 0 0 dividod into 1 0 0 n h n r e o i o f R i a l o 2 0 0 , 0 0 0 each
a l l i s s u e d a n d p a i d u p , b y the p r i n c i p a l s , a n n h o v m a b o v o .
C o r r o s p o n d o n t o r e p o r t t h a t the c a p i t a l has bean increanod to
R i a l a 5 0 , 0 0 0 , 0 0 0 , b u t t h i s i n c r o a a o lian n o t j y e t b o o n o f f i c i a l l y
rogiatored.
j
A f f i l i a t e s : A m i r H o s n o i n Aa^aia Z a n g a n e h w a n ; b o r n i n 1 9 3 0 , a n d
a t ono tino n c o n n o r c i a l a i r c r a f t p i l o t , b y ! p r o f e s s i o n .
Ahmad S h a f i k w a a b o r n in 1 9 1 0 .
H o h a s h o l d ; p o s t s w i t h t1 h e
I r a n i a n G o v o r n m a n t is n o w C h a i r m a n and M a n a g i n g Director o f
Bank Ettobarat Iran.
i
INTEftNATiCNAL "'RKETINS DEPT.
FINANCES:
Balance
s'uaot d a t o d
20.3.1970.
NOV
Rci. t'Q..'.. ..
1970
f
was
41
5.
\K137/JCT
SIDJRKAT SAHAMI HAVAPKY1UI A I H
TAXI...
3RAN, IRAN.
Shoot 2
FINANCES: ( c o n t ' d )
ASSISTS
Building
Plane/aircraft
Vohiclos for transportation
.Offica f u r n i t u r o / i n v o n t o r y
Ilichinory
Technical aquipaents and t o o l s
Ready parto o f tho p i a n o / a i r c r a f t
P o p o s i t s , orders placod and goods on route
Bankers' guarantaoo
Sundry debtors
Cash i n hand and in Bank3
Rials
10,340,602.00
59,923,930.00
4,119,760.00
5,439,697.00
3,890,894.00
4,745,929.00
38,222,477.00
5,412,761.00
11,207,593.00
15,479,694.00
3,634,436.00
162,417,773.00
LIABILITIES
Capital f u l l y paid up
O f f i c i a l and omor{';Gncy rooorvo
Rosorvo d e p r e c i a t i o n
J>ocumont3 paynbla
Sundry c r e d i t o r s
P r o f i t s of l o s t y o a r s
46,763,927.00
P r o f i t s f o r tho yoor onding
20.3.70.
5.568,365.00
P R O F I T T: LONN
inco:.e-::
Incores oar nod f r o n f l i g h t s
, ft-ims
20,000,000.00
6,364,648.00
69,944,007.00
1,373,419.00
12,403,407.00
52,332,292.00
162,417,773.00
ACCOUNT
Rials
105,567,162.00
105,567,162.00
42
5.
H137/JCT
S1I12HKAT 3A1IAMI H A V A P K Y M A l A I K
TAXI
TEHERAN,' H U N . .
Sheot 3
FINANCES:
(cont'd)
JffPj^NPITUKK ,
Rials
Sparo p a r t s consumed
Fuol f o r a i r c r a f t and v o h i c l o s
S a l a r i o s of oiaployoos
•Insurance proiaiura
Depreciation
Gonoral exponoo3
Profits .
14,193,440.00
15,725,949.00
35,855,950.00
• 3,374,694.00
'9,484,859.00
20,745,198.00
• 6,187,072.00
105,567,162.00
OPERATION;
Tho company are a i r c r a f t o p o r a t o r s and engiriaors, t h e i r
a c t i v i t i o s b o i n g d i v i d o d i n t o throo s o c t i o n s , o p e r a t i o n a l ,
t e c h n i c a l and s a l e s .
Thoy own the f o l l o w i n g a i r c r a f t : 4 Dakota,
7 A>ro Commander, 2 P i p e r 2 2 , 1 Sparrow Comiiander,. 4 Piper 1 8 ;
thoy carry o u t s c h e d u l e s , non schodulod and jchartor f l i g h t s ,
mail d o l i v o r i o 3 , ambulance work, p h o t o g r a p h i c s u r v o y s , . a n d
a g r i c u l t u r a l spraying.
Thoy o p e r a t e and m a i n t a i n , on b o h a l f o f
the I r a n i a n Govcrnraont and o t h e r c u s t o m e r s , 112 f u r t h e r a i r c r a f t ,
and a l s o m a i n t a i n and carry o u t t o c h n i c a l and r o p a i r work on .
a l a r g o number o f othor a i r c r a f t ownod by tho Govornoont,
nombor3 of tho Royal f a m i l y , o t c .
Thoy a l s o d o a l i n a v i a t i o n
products, a c c e s s o r i e s o t c . , and aro tho e x c l u s i v e I r a n i a n
d i s t r i b u t o r s f o r tho f o l l o w i n g f o r o i g n monufacturors: '
AERO COtiMANDER BETHANY DIVISION-of Rockwall-Standard,
LYCOMING D i v i s i o n o f Avco C o r p . , U . S . A . ;
HAVFLOJR SIDD12L3Y A V I A T I O N , E n g l a n d ;
D E UAVILLAND AIRCRAFT o f C a n a d a L t d . ,
KING RADIO C O R ? . , U . S . A . ;
SUN AIR ELECTRONICS CORP. U . S . A . ;
CHAMPION S P A R K P L U G COMPANY, I J . S . A . ;
U.S.A.:.
Canada;
A l t o g o t h o r tho company maintain an a c t i v e b u s i n e s s o f l a r g o
thoy havo about 120 oinployoos.
oxtent
/
43
5.
1U37/JCT
SlIiJRXAT SAHAI.1I IIAVAP12YMAI AIR T A X I . . .
Shoot
OPERATION:
-.TEH3RAN,
IRAN.
4
(cont'd)
L o c a t i o n : Their headquarters aro a t North Mojirabad A i r p o r t ,
Tahoran, whore thoy occupy modern o f f i c e and; e n g i n e e r i n g
workshops.
Thoy have s i m i l a r branch accoinrno'dation a t Abadan
"Airport, Abadan, and anothor branch a t Gongad Kavoo's, I r a n .
PAYMENTS & CONCLUSIONS:
Tho company aro of good r e p u t e and s t a n d i n g and payments are
r e p o r t e d a s prompt. P r e s e n t a u t h o r i t i e s considor thora t r u s t w o r t h y
f o r t h o i r o r d i n a r y b u s i n e s s engagements.
Bankers: Bank E t t e b a r a t I r a n
Bank Sadorat I r a n .
44
11 April 1972
TELEX NO:
2 5 7 5 A T A X I TN
TELEX TO:
A I R TAXI COMPANY
TEHRAN
-AOTr
12:15 FM
ph
IRAN
ZANGANEH
I M P E R A T I V E F O L L O W I N G M E S S A G E B E D E L I V E R E D TO G A L L A G H E R O N
P R I O R I T Y B A S I S F O R S U B S E Q U E N T D E L I V E R Y TO C O L . D U N C A N , M I L I T A R Y
ASSISTANCE GROUP.
FORWARD
QUOTE ARMY INTL LOGISTICS HAS REQUESTED THAT W E
P E R F O R M A N C E ^ D A T A A P P L I C A B L E BELL M O D E L 2 1 4 A A T S E A L E V E L
53° C.
AT
(128° F . ) A N D 6,000 REPEAT 6,000 FEET SAME TEMPERATURE
D I R E C T L Y TO Y O U F O R Y O U R U S E .
DATA AS FOLLOWS:
SEA LEVEL:
HOVER OGE W I T H INTERNAL LOAD M A X GROSS 13,000, EXTERNAL
14,500.
M A X I M U M R A N G E W I T H INTERNAL L O A D 270 N A U T I C A L
MILES; W I T H EXTERNAL L O A D 180 NAUTICAL M I L E S .
A T M A X RANGE INTERNAL LOAD 3,470 L B S .
L O A D 2,540 L B S .
5,740;
PAY LOAD
W I T H EXTERNAL
P A Y L O A D A T ZERO R A N G E I N T E R N A L L O A D '
EXTERNAL L O A D 7,240.
CRUISE SPEED INTERNAL LOAD
. 130 KNOTSj EXTERNAL L O A D 185 K N O T S .
6,000
FEET:
HOVER OGE I N T E R N A L
LOAD 1 1 , 4 7 0
LBS.
NAUTICAL M I L E S :
LOAD MAX G R O S S
11,470
MAXIMUM RANGE W I T H
WITH
LBS,
INTERNAL LOAD
EXTERNAL LOAD 2 1 8
NAUTICAL
PAY L O A D A T MAXIMUM RANGE I N T E R N A L L O A D 2 , 4 8 0
EXTERNAL LOAD 2 , 4 8 0
LOAD 4 , 4 8 0 ;
LOAD 1 3 0
LBS.
P A Y LOAD A T
EXTERNAL LOAD 4 , 4 8 0 .
KNOTS;
EXTERNAL L O A D 8 0
EXTERNAL
MILES.
LBS.
ZERO RANGE
CRUISE
KNOTS.
SPEED
320
WITH
INTERNAL
INTERNAL
45
B E L L WILL B E PLEASE TO P R O V I D E PROIX)-TYPE O F THE M O D E L 21kA
F O R DEMONSTRATION P U R P O S E S IN IRAN DURING JULY/AUGUST TIME
F R A M E PROVIDED THAT TRANSPORT O F THE A I R C R A F T FROM F O R T
W O R T H TO IRAN A N D R E T U R N IS A V A I L A B L E A T N O CHARGE F R O M I R A N I A N
A R M E D FORCES A N D / O R A L T E R N A T I V E L Y , U . S . A R M E D FORCES*
REGARDS
SYLVESTER
BELLCRAFT
23-586 O - 78 - 4
46
o
BELL. H E L I C O P T E R
POSI OfFICI
FRANK
VICE
BOX 4 82
•
COMPANY
FO AT WORTH, TEXAS 76101
M.SYLVESTER
PRESIDENT-INTERNATIONAL
MARKETING
M a y 4 , 1972
M r . A. H . Z a n g a n e h
Managing Director
Air Taxi Company
M e h r a b a d Airport
T e h r a n , Iran
Dear M r . Z a n g a n e h :
E n c l o s e d i s a l e t t e r t h a t s h o u l d b e u r g e n t l y d e l i v e r e d t o Lt.
G e n . T o u f a n i a n and a c o p y f o r M r . H . D e h e s h .
Your c o p y i s a l s o e n c l o s e d .
Jack G a l l a g h e r w i l l s e n d i m m e d i a t e l y a l i s t of i t e m s t h a t
n e e d t o b e d i s c u s s e d w i t h a p p r o p r i a t e o f f i c i a l s during our
f o r t h c o m i n g v i s i t . It i s e x t r e m e l y i m p o r t a n t t h a t a l l of t h e s e
p e o p l e b e c o n t a c t e d and informed prior t o our a r r i v a l .
W e w i l l r e l y on you to a r r a n g e a f u l l and p r o d u c t i v e s c h e d u l e
from S a t u r d a y morning, M a y 2 0 t h , t h r o u g h t h e e n s u i n g w e e k ,
and w o u l d l i k e t o r e v i e w t h a t s c h e d u l e w i t h you i m m e d i a t e l y
upon our a r r i v a l . P e r h a p s you c o u l d , by return t e l e x , g i v e
me your p r e l i m i n a r y t h i n k i n g a s t o t h e p e o p l e w e m u s t c o n t a c t
and a s c h e d u l e t h a t w e can s t a r t p l a n n i n g a r o u n d .
I look f o r w a r d with a g r e a t d e a l of p l e a s u r e t o t h i s v i s i t and
p a r t i c u l a r l y t o s e e i n g you and your a s s o c i a t e s o n c e m o r e .
Sincerely
Frank M . S y l v e s t e r
FMS:pb-106
47
<8D
BELL HELICOPTER COMPANY
f 0 51 OFFICE
F R A N K
BOX 4 8 ?
T O R I W O R T H , 1E X A S 76101
M.SYLVESTER
VICT PRESIDENT-INTERNATIONAL
MARKCTINO
Q Y
4 ,
1 9 7 2
Lt. G e n . H . Toufanian
Deputy M i n i s t e r of War for Armament
Saltanat-Abad
Tehran, Iran
Dear G e n e r a l Toufanian:
This should s e r v e to confirm my c a b l e of M a y 3rd in which
I informed of p l a n s for a group of Bell Helicopter o f f i c i a l s
to arrive in Tehran on May 19th. In addition to the u n d e r s i g n e d , the group will c o n s i s t of:
C . R. Rudning
Vice President Program Management
E. J . Smith
Chief Flight Operations
Engineering
J . E. G a l l a g h e r
Regional Marketing
Manager
The p u r p o s e of t h e v i s i t is to f i n a l i z e p l a n s and t o complete
d e t a i l e d p r e p a r a t i o n s for the demonstration of our Model
AH-1J and Model 214 h e l i c o p t e r s to t h e Imperial Iranian Armed
F o r c e s . This i s in a c c o r d a n c e with your l e t t e r dated April 18th
to M r . I . F . Atkins, P r e s i d e n t , and h i s reply dated April 2 5th.
By s e p a r a t e l e t t e r to Air Taxi, our r e p r e s e n t a t i v e , we h a v e
provided him with a detailed l i s t of items that need to be
r e v i e w e d , studied and resolved during our s t a y . These i n c l u d e
s u c h things a s demonstration' s i t e s , s c h e d u l e s , t r a n s p o r t a t i o n ,
supporting f a c i l i t i e s and s e r v i c e s , performance d a t a , e t c .
In a d v a n c e of our arrival our r e p r e s e n t a t i v e will h a v e alerted
appropriate organizations and o f f i c i a l s of our need to explore
48
t h e s e important a r e a s with them and to plan with them what
we are confident will r e s u l t in a most s u c c e s s f u l and productive program.
I was greatly disappointed that I w a s unable to be in Fort
Worth at t h e time of your recent v i s i t to Bell.
M e s s r s . Ducayet and Atkins join me in sending our warmest
personal r e g a r d s , and I look forward to renewing our a c q u a i n t ance in about two w e e k s .
Sincerely,
Q u j ^ R I S ^ I ^ F E R - Frank M . Sylvester
FMS:pb-105
cc:
M r . H . Dehesh
Mr.- A. H . Zanganeh
49
(£0
BELL
HELICOPTER
f 05? Off ICC 8 0 X 4 8 2
•
F R A N K M. S Y L V E S T E R „
VICE
PRESIDENT-INTERNATIONAL
FT^Qy
MARKETING
COMPANY
fORT WORTH,TEXAS 76101
9f
.1972
M a j o r General Ellis W . Williamson
C h i e f , ARMISH MAAG
APO New York, New York 09205
Dear General Williamson:
This i s a-somewhat tardy reply t o your c o n s i d e r a t e l e t t e r of
April 8th, c o n t e n t s of which were v e r y welcome to a l l of u s
h e r e at Bell. Actually, when your l e t t e r arrived I w a s in
Brazil on the s e c o n d of two v i s i t s s i n c e February. I n c i d e n t a l l y ,
George a n d Helen Beatty send t h e i r b e s t r e g a r d s .
In h i s note t o you of April 25th Jim Atkins informed of our
intent t o mount a maximum-effort r e s p o n s e to the Letter of Intent
from t h e Government of Iran, and of our plans for an " a d v a n c e
party" v i s i t to a c c o m p l i s h d e t a i l e d coordination and planning
for the AH-1J and 214 d e m o n s t r a t i o n s now scheduled for e a r l y
August.
Last w e e k we informed General Toufanian, and have s i n c e
r e c e i v e d h i s e n d o r s e m e n t , of p l a n s for t h i s group to arrive in
Teheran on May 19th. In addition to the u n d e r s i g n e d , the group
w i l l c o n s i s t of:
C . R. Rudning
E. J . Smith
J . E. G a l l a g h e r
- Vice President - Program Management
- Chief Flight Operations Engineering
- Regional Marketing M a n a g e r
It goes without saying that one of the primary p u r p o s e s of our
v i s i t i s to coordinate our a c t i v i t i e s with you and your staff and t o
s e e k your c o u n s e l and a s s i s t a n c e where a p p r o p r i a t e .
P e r s o n a l l y , I am delighted at the p r o s p e c t of continued c o n t a c t
with the country and the p e o p l e . Equally, the prospect of making
a s u b s t a n t i a l contribution to the s e c u r i t y and to the development
50
of Iran i s most gratifying to a l l of us here at B e l l .
I look forward to seeing you and the r e s t of our good f r i e n d s in
t h e ARMISH MAAG very s o o n .
Sincerely,
FMS:pb-112
51
BELL
HELICOPTER GO/VIF-AISJY
* o » t O M I C I »o« < i i . » o « T W O M H U U M
A DIVISION o r BELL ACHOSPACS CORPORATION
r—r—
* t"lro"J
COMPANY
MANUFACTURER - F O R E I G N SALES REPRESENTATIVE AGREEMENT
TUTS AnRP.TTMTT.Xrr marlo
And pntprwl intrt thi«* 5th J a v nf March
19^?, by and between BELL HELICOPTER COMPANY, A Division of Aerospace Corporation, a Delaware Corporation, (hereinafter called the "Manufacturer"), of P. O. Box 482, Fort Worth, Texa3 and
-nf
T N T ^ l ^ N A T T O N A T , Helicopter Consultants,
Inc.
P. O. .box 1702, Tehran, -Iran
.
. .
.
(hereinafter called the "Sales Representative"), whereip it is mutually agreed as follows:*\,
1. T h e Manufacturer hereby appoints the Sales Representative as a Sales Representative for articles
specified in paragraph 2 for it in
Iran
upon the following t e r m s and conditions:
2. T h e Sales Representative shall use his best efforts to further the sale of B E L L H E L I C O P T E R S
and helicopter accessories and parts (hereinafter s o m e t i m e s referred to as "Manufacturer's products"),
m a d e by Manufacturer for sale through Sales Representatives.
3. All such sales shall be m a d e in accordance with the t e r m s and conditions of B E L L ' S Standard Export Purchase A g r e e m e n t at Manufacturer's export list prices then In effect, and shall be subject to acceptance by the Manufacturer.
4. T o enable Manufacturer to appraise the sales efforts of the Sales Representative, the Sales R e p r e sentative shall notify the Manufacturer promptly in writing as to the n a m e and address of each prospective
c u s t o m e r contacted by h i m , and shall m a k e written reports not less than once a m o n t h setting forth in detail
the sales efforts m a d e with respect to each prospect and the status of such efforts, the probable n u m b e r of
helicopters involved, and the approximate timing as to w h e n an order might be expected.
5. T h e Sales Representative shall be compensated on purchases m a d e during the t e r m of this agreem e n t on the following basis:
(a) O n purchases by the Sales Representative f r o m the Manufacturer, the Sales Representative
shall be allowed a discount of 1 0 % f r o m the export list price f.a.f of complete standard helicopters and a
discount of _ 1 5 % f r o m the export list price of accessories and parts.
(b) O n purchases by customers in the territory above referred to, w h o purchase a s the result of
the efforts oi the Sales Representative as s h o w n by the reports received by the Manufacturer f r o m the Sales
Representative prior to the purchase, the Manufacturer will pay the Sales Representative a c o m m i s s i o n of
1 0 % o n the sale price f.a.f. of complete standard helicopters and a c o m m i s s i o n of
* o n the sale price
of helicopter accessories and parts; such c o m m i s s i o n to b e c o m e d u e and payable upon full p a y m e n t and delivery of the articles purchased. Subsequent purchases of Manufacturer's helicopters by a purchaser shall
entitle the Sales Representative to the above stated c o m m i s s i o n only w h e n the Manufacturer, in Its sole discretion, is satisfied that such subsequent purchase Is the result of further sales efforts a s set forth above.
Subsequent purchases of accessories and parts by a purchaser shall not entitle_the Sales Representative to
any c o m m i s s i o n unless the order is placed through the Sales Representative and not direct with the factory.
6. (a) T h e Manufacturer m a y f r o m time to time without notice m a k e such changes in its export list
prices a s it m a y find desirable.
(b) T h e Manufacturer reserves the right to discontinue the manufacture or to m a k e changes in
design, specifications, equipment or method of construction of its products or any part thereof, without
incurring any obligation to install s a m e on helicopters previously sold by it, and no such change shall constitute grounds for refusal to accept delivery by the Sales Representative nor constitute a variation f r o m
his order as placed. .
:
_ • (c) This a g r e e m e n t *shall not restrict, the right of the Manufacturer to negotiate for and m a k e
sales of its products within the above-mentioned territory, and the Manufacturer shall have the right to
exclude particular prospective customers f r o m this a g r e e m e n t upon notice to the Sales Representatives.
(d) • In order to. avoid the use,.in connection w'ith Manufacturer's products, of parts and accessories which m a y interfere with " the operation, safety or appearance thereof," and in order to maintain the
standard of excellence set by the Manufacturer for its products, the Sales Representative hereby agrees,
. to the extent only that it m a y be lawful for the parties hereto to contract, to use only parts manufactured
or approved by the Manufacturer, in making repairs or doing other service w o r k on Manufacturer's products, and further agrees to the extent only that it m a y be lawful for the parties hereto to contract, that he
will not purchase for resale for Manufacturer's products any part or accessory which has not the written
approval of the Manufacturer.
• (e) T h e Sales Representative agrees that he will not purchase, sell, maintain, operate or repair
helicopters, accessories or parts other than those manufactured by Manufacturer without its written permission.
(f) Neither the Representative nor any of his officers, agents, salesmen, or e m p l o y e e s shall
have the right or authority for o r on behalf of the Manufacturer to m a k e any proposals, p r o m i s e s , warranties,
guarantees, or representations with respect to the Manufacturer's products. N o r shall they, or any of t h e m ,
have any right or authority to a s s u m e or create any obligation of any kind/express or implied, on behalf
of the Manufacturer, or to enter Into contracts in the n a m e of the Manufacturer, or to m a k e any p r o m i s e
or representation with respect to any matter in the n a m e or on behalf of the Manufacturer, or to bind the
52
(g) The S a l e s Representative shall not t r a n s f e r or assignir. any .
rnent or any part of it, nor any of the rights or benefits accruing under it without the written consent of
the Manufacturer.
(h) T h e Sales Representative agrees that the decision of the Manufacturer as to any claim,
dispute or controversy between himself and any other Sales Representative of Manufacturer or as to the
Sales Representative's right to discounts or.commissions shall be conclusive and binding.
(1) This agreement Is m a d e and executed at
Fort W o r t h , Texas
and is
t
to be governed by and construed according to the laws of the State of Texas, provided, however, that any
provisions herein which m a y in any wise contravene the laws of any country, state or jurisdiction, shall
not be a part of this agreement, if executed by any Sales Representative w h o is to deal in the products
of the Manufacturer in any such country, state or Jurisdiction.
(J) T h e Sales Representative agrees not to use the Manufacturer's registered trade-marks or
n a m e s , or anything closely resembling s a m e , as part of the corporate or business n a m e of the Sales Representative in any m a n n e r which the Manufacturer considers misleading, detrimental or objectionable.
(k) U p o n termination of this agreement, the Sales Representative shall discontinue the use of
all signs, placards and stationery likely to lead to misunderstanding or uncertainty on the part of potential
purchasers of Manufacturer's products.
(1) T h e Sales Representative acknowledges the validity of Manufacturer's patents, copyrights
and trade-marks and agrees not to infringe or assist ethers in the infringement of such rights and agrees
to cooperate fully with Manufacturer in the protection thereof. T h e Sales Representative further agrees
to disclose to Manufacturer any Inventions or improvements for use on or in connection with its products
which m a y be m a d e by the Sales Representative, his employees, or representatives and hereby gives M a n ufacturer the option to purchase for . a reasonable sura, rights to any such inventions or improvements
within six months from the date Manufacturer receives such disclosure thereof.
7. This agreement shall b e c o m e effective on the date thereof and shall continue for a period of one
year f r o m said date except w h e n terminated by either:
(a) Written notice of termination delivered personally or mailed to the other party, by registered or ordinary mail, to be effective sixty (60) days after the date of personal delivery or mailing of
such notice, except in instances in which the notice specifies an effective date, in which event termination shall be effected on such specified date or on the date of expiration of the sixty (60) day period
following the date of perscr-al delivery or mailing of such notice, whichever is later, or
(b) After expiration of this agreement or after notice of termination under subdivision (a) of
this paragraph, the Sales Representative shall continue his rights and duties as Sales Representative to the
extent only of purchase agreements of the Sales Representative and of customers w h o purchase as a result of the efforts of such Sales Representative accepted by the Manufacturer and supported by satisfactory irrevocable letters of credit for the full purchase price received by the Manufacturer in the United
States prior to the expiration date of the agreement or of such notice of termination. T h e Manufacturer
shall, at its option, have the right to cancel any and all orders for products placed by the Sales Representative or customers procured by the Sales Representative and not delivered by the Manufacturer prior to the
expiration. of the agreement or of such notice except as above provided and except orders covering products the resale of which has been contracted for by the Sales Representative. Nothing contained in this
agreement shall be d e e m e d to prevent the Manufacturer, after the service of such notice and before the
expiration thereof, from negotiating and contracting for the appointment of a new Sales Representative
for the s a m e territory or a part thereof, such appointment to b e c o m e effective not earlier than such expiration date. Neither party shall be liable to the other for d a m a g e s of any kind or character whatsoever
on account of such termination whether such d a m a g e s m a y arise from manufacture of helicopters or parts,
failure to fill orders hereunder, or from the loss of present or prospective profits on sales or expenses incurred in connection therewith, or expenses or investments m a d e or incurred in connection with the establishment, development or maintenance of the Sales Representative's business, or from any other cause,
claim or consideration whatsoever. In the event of such termination or the expiration of this agreement,
the Manufacturer shall for thirty (30) days thereafter have the first right or option to purchase any and
all Bell helicopters a:*i parts which the Sales Representative m a y o w n or have an interest in on the date of
such termination or expiration at the Manufacturer's invoice price at the time of purchase (net of discounts, allowance or adjustments) to the Sales Representative, plus freight.
IN W I T N E S S W H E R E O F , the parties hereto have caused this agreement to be duly executed as of
the day and year first above written.
*Th:s Acrrtvrr.rnt K:r.i:ed to Miliiarv sjilfj ortly.
IX iV.i JN.-«VIC' v. JL.
CON'S 17.7 ANTS . I N C .
SALES REPRESENTATIVE
pv^ -
c
Viliii-a
'
BELL HELICOPTER COMPANY
O«V.»ION or
co«*K>**Tto*
- / A /
'
u . / r c u c n
—
"
(TITLE)
P r v s i d r m t , Liaiiaoins Director
j
- ir/> Itt-r/.v
icvorly
Vrclich
(WITNESS)
Authorized Representative
^
. "X
(TITLE)
y*
*
(WITNESS)
53
OMB
RIDER NUMBER
to M a n u f a c t u r e r Foreign S a l e s R e p r e s e n t a t i v e
A g r e e m e n t b e t w e e n BELL H E L I C O P T E R C O M P A N Y , a D i v i s i o n of Bell
INTERNATIONAL
A e r o s p a c e C o r p o r a t i o n , and
Helicopter Consultants, Inc.
t h e
5 t h
Tehran, Iran
day of
March
,
19
T h i s Rider A g r e e m e n t is h e r e b y incorporated in the aforesaid S a l e s
Representative A g r e e m e n t , a n d the parties agree that all d i s c o u n t s
a l l o w a b l e to the M a n u f a c t u r e r - F o r e i g n S a l e s Representative b y the
M a n u f a c t u r e r u n d e r the t e r m s o f such agreement s h a l l
be the f i x e d
s u a o f Seven T h o u s a n d ( $ 7 , 0 0 0 . 0 0 ) D o l l a r s per h e l i c o p t e r v h e n
such h e l i c o p t e r i s o f the M o d e l 47J c o n f i g u r a t i o n , and s o l d p u r s u a n t
to the Bell p r i c e c h a n g e n o t i c e effective J a n u a r y 1 , 1 9 6 3 .
INTERNATIONAL.
HELICOPTER CONSULTANTS, IXC.
1 1 .
A A
LOGINS D I R E C T O R ,
B E L L HELI C O P I E R C O M P A N Y
Division of
Bell Aerospace Corporation
PRESIDENT
Title
Witness
AUTHORIZED R e p r e s e n t a t i v e
54
HELICOPTER COMPANY
PORT WORTH. TEXAS 761OT
AEROSPACE CORPORATION
p o s t office box 41
'
A
M A N U F A C T U R E R ' S FOREIGN REPRESENTATIVE A G R E E M E N T
This Agreement made
January
1
, 19 6 5
, between BELL H E L I C O P T E R
Division of Bell Aerospace Corporation (hereinafter called "Bell"), and
^
lOTESttJATIOXAL HELICOPTER CONSULTANTS,
INC*
of
COMPANY,
__
0 . Sroc 1702
Teharanf Iran
(hereinafter called the "Representative") is made for the purpose of defining the rights and obligations of the parties.
If there has been a Manufacturer's Foreign Dealer Agreement or a Manufacturer's Foreign Sales Representative Agreement in effect between the parties, this agreement is a continuation of such relationship, but the terms of this agreement supersede and replace completely all prior agreements.
The parties mutually agree:
1. A P P O I N T M E N T A N D T E R R I T O R Y .
Bell appoints the Representative to sell in
Iran
the Bell products listed in Schedule A of this Agreement (hereinafter called the Listed Products). Bell shall have the
right to make sales of Listed Products to any local or national government within the Territory, or any agency or instrumentality of such government, whether such sales are made directly by Bell or indirectly through the United
States Government.
2. A G R E E M E N T S O F R E P R E S E N T A T I V E .
T h e Representative agrees:
(a) T o use his best efforts —
(1) T o promote the reputation and the sale of the Listed Products in the Territory.
(2) T o obtain offers to purchase such products from responsible purchasers in the form of Bell's Standard
Export Purchase Agreement at Bell's export list prices then in effect.
(3) Promptly to transmit to Bell any such offers for Bell's acceptance or rejection.
(b) T o furnish necessary technical advice and product support to customers including:
(1) Advise customers relative to technical specifications and available configurations of Listed Products.
(2) Assist in ar.d/or conduct demonstrations of Listed Products.
(3) Assist ar.-d advise customers in the proper operation and maintenance of Listed Products.
(4) Serve in a liaison capacity between the customers and Bell.
(5) Assist the customer in spare parts support for the Listed Products.
55
Render tcchnic.il advice and product support on a continuing basis ar.d especially during the post delivery
period.
(c> T o display, advertise and offer for sale only that part of the Be!! product line which has been incorporated as
Listed Proov.cts in this Agreement.
(d x T o permit Bel: to inspect his facilities at any time during business hours and to furnish such reports pertaining
to his business in the Listed Products as Bell may reasonably request.
(eN T o b ; solely responsible for the payment of all costs ar.d expenses incurred by him in the promotion ar.d sale
c:\the Listed Products.
(f x
T o permit in ar.y settlement of accounts between the parties an offset of amounts due the Representative for
nissior.s or other rtasons against indebtedness of the Representative to Be".
(g^ In order to avoid the \:se in connection with Bell helicopters of parts or equipment which mav interfere with
their operation or safety, and to maintain the reputation of Be" products. the Representative agrees to sell and 'or use
only Bell appro\-ed parts for purpose of the maintenance and overhaul of the Listed Products.
S. A G R E E M E N T S O F BELL.
Bell
(a) T o support the Representative in his efforts to promote the sale of the Listed Products, to furnish appropriate
salt^s literature and descriptions of such products, to refer inquiries received from prospective purchasers within the
Territory, and generally to render such sales assistance as mav in Bell's sole judgment be reasonable and appropriate,
without assuming ar.v responsibilitx- for the Representative s sales efforts or any obligation to render assistance beyond
what in Bell's sole discretion is deemed xdecuate.
(bN T o permit the Representative to use the Bell Helicopter r.ame and trademark in connection with sales of the
Listed Froducts, but only to the extent and under the conditions which. Bell may in writing approve.
(c) T o seli and deliver the Listed Products for which, the Representative
has obtained
Beii's Standard
Export
Purchase Agreements acceptable to Fell and net unrxv-sor.ab'v to wimhold acceptance of offers to purchase
such
products obtained by the R ep reseat at i veld"1 T o p-av to the Representative cc:r.p*-rsa.tivn as provided in the next succeeding paragraph.
4. C O M M I S S I O N S PAYABI.F. T O T H E
-
SuVect :.> rv.irAjn:>.-.<
\
v
^ \ ..
f.e.. \x-
1
.^•v.-.. l:
c
".^v
«.-••>
: !• T
c" .-•*..-"i* Be:, w .
comtmsstor.s to tr.e Representative at the rates pro-
L
ikv.o * r i . e with Beii's Standard
-
........
Co-, e----- --•
ar.d
r>' r . '
-
- CC------XS
-w
t. : ..
-A\
v
RFPRFSFNTATfVF.
-o
-----
- ... j,--<s-
* - -
-.--. •
• . \ o-
---
u
a
«aio ot I.'-tt.-vi Froouct* rs maae directly by Bell to any
— v A^r:;. \
A I
i ::>. L L.
T-'r iv.
.u: _v C'l S'.L^.L government.
L
bv or by detection of the
- , -v tr.eriv: t>> a national or tocal government within the
56
( 2 ) At the t i m e of the initial contractual negotiations between Bel' and the l Y . i t r d S ; a : r s Govern::: f r . \ the
Representative had advised Bell that the l i s t e d PrWv.ct was to be so delivered.
( d ) All negotiated conunissions shall be due and payable at the time agreevi upon K ' t w a Be"! and the Representative in such negotiations. All other commissions sha!l be due and pavable upon the
of each Star.dArd Expert
Purchase Agreement by the d e l h r r v of the required products and receipt bv be'I of :Vd pavro.ent therefor AH commissions will be calculated on F.O.B. or fiy-away p r i c e s Bel! factorv.
5. G E N E R A L
AGREEMENTS.
( a ) T h e relation created by this .Agreement is
that
of Manufacturer m d
the Representative nor a n y of his officers, agents, salesmen or
employees
independent Representative, And neither
have A : : V right or Authoritv—
S;AL:
( 1 ) T o conduct a n y business in the n a m e of o r f o r the Account of Be"'
(2) T o m a k e any proposals, promises, warranties, guaranties or represent A txvns with regard to anv Bell product
(S) T o assume or create any obligation of any k i n d , express or unp'ied. on behal: o.f re?..
( 4 ) T o enter into contracts or commitments in the name of Belt.
( 5 ) T o m a k e a n y promise or representation with respect :o any :r.At:er in the natne of or on be-hai: of Be":.
( 6 ) T o bind Bell in a n y respect whatsoever.
(b) Bell m a y from time to time, without notice, make such char e s
and its export list prices as Bell m a y determine, but n o such chance
in its S t a r c a r d Export Purchase Agree ~ rr.t
AppN to AT.V orders for w h i c h Be:' shall have
previously accepted its Standard Export Purchase Agreentent.
( c ) Schedule A hereto m a y f r o m time to time be revised in anv respect bv '.r.v.ti:^ agreer-ient of the parties expressed by their official signatures upon such revis:oi\ without affecting Ar.v other provision of this Agreement, but no
letter, telegram or other communication between the parties hereco shall bocccne A part of or in any \ o , v modifv or
change this Agreement unless it is distinctly stated in such co;r.r.r.:r.k-a:kMi ;ha: i: is to become a part of this Agrcement by attachment thereto and bears the official signatures of both parties. which may be accocnplished by separate
signatures of duplicate counterparts of such communication a r o exchange of <aro.e.
(d) This Agreement is t o be governed b y arid oocstruec under the h w of the State of N e w Y o r k , U S A If ar.v
provision of this Agreement shall be C\rasidered or held bv A:-.V authority or court having jurisdiction o\rr C e of the
parties or over the subject matter of this contract to be prohibited A n d or void. such Action shAli not affect the \ -aiiditv
of the remaining provisions of this Agreement w h i c h shaV- be W.IN'.WA'I separable from the prohibited or void provision and this Agreement shall thereupon be d a r n e d to b e written, or to be :e-wri:ten. a> the case m a y be, without
such prohibited or void provision.
(e) T h e Representative shaft not- tnx:yder or assign this
or A:-.V -V=N of it in ar.y MANNER without the
written consent of Bel!.
6. T E R M A N D
TERMINATION.
(a) T h i s Agreement shall become effective on the d : - hereof And shall con: r u e until the following December
31st and thereafter for periods of one * ! v w a r until terminated bv written notice of termination delivered personally
or mailed to the other party, bv registered, cer::'nod or regu'ar mail. to he c^fectix? on a date specified in such notice
which shall be not less than sixty '60> d a \ s after the d f l i c e i v or m a i l i n g of such notice I n the following circumstances
this Agreement can be terminated at a n y time bv either p a i t v effective immediately upon receipt of notice of termination:
57
(1) Death or incapacity of the Representative.
(2) The institution of any proceedings by or against the Representative under any bankruptcy or insolvency
law.
(3) Any breach by or failure of the other party to comply with any of the provisions of this Agreement which
shall have remained uncorrected for thirty (30) days after written notice thereof.
(b) Notwithstanding any such termination, the Representative shall be entitled to commissions upon sales pursuant to
Standard Export Purchase Agreements for Listed Products accepted by Bell prior to the effective date of termination,
when and if Bell receives full payment therefor.
(c) The Representative shall not be entitled to receive any termination payment or compensation of any nature
because of termination of this Agreement.
(d) Neither party shall be liable to the other for damages of any kind or character whatsoever on account of such
termination, whether such damage may arise from manufacture of helicopters or parts, or from the loss of prospective
profits or commissions on sales or expenses incurred or investments made in connection with the establishment, development or maintenance of the Representative's business, or from any other cause, claim or consideration whatsoever.
7. SUCCESSION.
This Agreement shall be binding upon and inure to the benefit of Bell and any person, firm or corporation sue
ceeding to all or substantially all of the helicopter manufacturing business now conducted by Bell.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day an'
year first above written.
X g T S a K A f l E O H A l H S i a C Q g T E S CCftTSttlff/grTS,
T? pnr^pntatlv^
BELL HELICOPTER COMPANY
Division of Bell Aerospace Corporation
By(Title).
Witness l^.i'.^ui/i
»
(Title).
LI
Witness
58
. AEROSPACE l
SCHEDULE A
( T o Manufacturer's Foreign Representative Agreement)
LISTED P R O D U C T S AND APPLICABLE
COMMISSIONS
T h e Representative is authorized to solicit orders for the Listed Products set forth below in accordance with the
terms contained in the Manufacturer's Foreign Representative Agreement to which this Schedule is attached. The
commissions payable to the Representative in accordance with Section 4 ( a ) of such Agreement are set forth below.
Standard Export Purchase Agreements Covering O n e ( 1 ) to Five (5) Helicopters:
Listed-Products
Commission on Basic Helicopters
**7G^3B~1
10%
10%
$7,000.00
$15,000.00
To be negotiated
To be negotiated
20**B
UK«*1
OH-13
Standard Export Purchase Agreements Covering M o r e T h a n Five ( 5 ) Helicopters;
Listed, Products
Commission
47G-V
**7G-3B-1
)
)
47J-2A
y
m
OH-13
]
>
. _
, .
Negotiated
Standard Export Purchase Agreements Covering Spare Parts and Accessories:
Listed Products
Commission on Spare Parts and Accessories
Modal k7 Numbered Parts
Modal 20 ^B Series - 20** Numbered Parts
Simplex Agricul. Equipment
AN and Vendor rurts
Engines, Engine Parts & Accessories
Special Equipment
UIi-1 Series Parts
011-13 Series Parts
T h i s S c h e d u l e A revision i$ e f f e c t i v e s
15%
15%
10%
15%
To be
To be
To be
To be
negotiated
negotiated
negotiated
negotiated
J u l y 1 , 19 6 5
CO:IS ULTA::T s r IIIC_.
BELL H E L I C O P T E R
Representative
COMPANY
Division of Be!! Aerospace C o r p o r a t i o n
ucprciieutative
•
.
!
(Title) _
vj
l o v e r l y \ . I'Yenca, S e c r e t a r y
Tro.
Witness
59
\S4IF H E L I C O P T E R
COMPANY
POST Office BOX 482 • rORT WORTH. TEXAS JBI01
A DIVISION Of BELL AEROSPACE CORPORATION A l,"f0.fl] COMPANY
SCHEDULE A
( T o Manufacturer's Foreign Representative Agreement)
LISTED PRODUCTS A N D APPLICABLE
COMMISSIONS
T h e Representative is authorized to solicit orders for the Listed Products set forth below in accordance with the
terms contained in the Manufacturer's Foreign Representative Agreement t o w h i c h this Schedule is attached. T h e
commissions payable to the Representative in accordance with Section 4 ( a ) of such Agreement are set forth below.
Standard Export Purchase Agreements Covering O n e ( 1 ) to Five ( 5 ) Helicopters:
Commission on Basic Helicopters
Listed Products
A7G-SB-1,
k7J-2A
201*3
t!H-l Sferi.es
OH-13 Series
10*
$7,000.00
$13,000*00
To b e negotiated
T o b e negotiated
k70-$
Standard Export Purchase Agreements Covering M o r e T h a n Five ( 5 ) Helicopters:
Listed Products
47G-4A, 470-5 )
47J-2A
)
20*8
)
tfH-1 Series
)
OH-13 Series
>
Commission
T o be Negotiated
Standard Export Purchase Agreements Covering Spare Parts and Accessories:
Listed Products
Commission on Spare Parts and Accessories
teodel h7 Numbered Parts
AN cmd Vendor Parts
Model 20*43 Series - 20^ TTur.bercd To:
AgMaster Agriculture Equipment,
leeo n o b l e s , riot installed
Engines, Engine Psrts & Accessories
Special Equipment
UII-1 Serie3 P.rrts
CS-13 Series Parts
15%
15%
15?,
ICS
T o be
To be
To be
To be
negotiated
negotiated
negotiated
negotiated
This Schedule A revision is e f f e c t i v e s
'lift!T.vricx. nCLioeorn^. CON:;
Representative
BELL H E L I C O P T E R
(Title) _
Loverly i. # Ifveach, Treasurer
5e.craiUir.y_
COMPANY
Division of Bell Aerospace C o r p o r a t i o n
60
Manufacturer's Foreign Representative Agreement
- Amendment N o . 1 T h i s A m e n d m e n t N u m b e r 1 to t h e M a n u f a c t u r e r ' s
Foreign Representative Agreement made between Bell Helic o p t e r C o m p a n y , D i v i s i o n of T e x t r o n , I n c .
(hereinafter
-ealled B e l l ) , a n d A i r T a x i C o m p a n y of M e h r a b a d A i r p o r t
T e h r a n , Iran (hereinafter called the R e p r e s e n t a t i v e ) ,
is m a d e f o r the p u r p o s e s of f u r t h e r d e f i n i n g the r i g h t s
a n d o b l i g a t i o n s of t h e p a r t i e s u n d e r t h e M a n u f a c t u r e r ' s
Foreign Representative Agreement made between Bell and
t h e R e p r e s e n t a t i v e on t h e 1 5 t h d a y of J u n e 1 9 7 0 .
This
Amendment recognizes the contributions m a d e by the R e p r e s e n t a t i v e i n c o n c l u d i n g t h e c o n s u m m a t i o n of t h e m a j o r
p r o g r a m s as s e t f o r t h b e l o w .
WITNESSETH:
I t is a g r e e d b e t w e e n B e l l a n d t h e R e p r e s e n t a t i v e
that this A m e n d m e n t N u m b e r 1 s h a l l b e c o n s i d e r e d
the
g o v e r n i n g a g r e e m e n t s p e c i f y i n g the o b l i g a t i o n s a n d r i g h t s
of the p a r t i e s c o n c e r n i n g t h e s a l e b y B e l l of t h e B e l l
p r o d u c t s a n d s e r v i c e s l i s t e d b e l o w to t h e I m p e r i a l I r a n i a n
G o v e r n m e n t a n d c o n c l u d e d b y d e l i v e r y of s u c h B e l l p r o ducts.
100
50
200
The program anticipated consists
M o d e l 20OA/0H-58A
Mode]. 205A/UH-1
M o d e l 209/AH-1J
200
M o d e l 214
Related spare parts, accessories,
tooling, services^or data
of:
equipment,
61
/ouuject co cne p r o v i s i o n s 'o£ P a r a g r a p h s B . a n d
C . below. x ' B e l l w i l l p a y to t h e
Representative
a c o m m i s s i o n o f 2 . 5 % of t h e v a l u e of any c o n t r a c t
e x e c u t e d b e t w e e n B e l l and t h e I m p e r i a l I r a n i a n
G o v e r n m e n t for t h e d e l i v e r y o f t h e L i s t e d
Product s^
B.
In the e v e n t t h a t t h e I m p e r i a l I r a n i a n
Government
elects to p r o c u r e a n y B e l l p r o d u c t s ( d e f i n e d
as
a i r c r a f t o n l y ) t h r o u g h the U . S . G o v e r n m e n t , the
p a y m e n t of a c o m m i s s i o n o f ~ 2 . 5 % b y B e l l to t h e
R e p r e s e n t a t i v e s h a l l b e s u b j e c t to the
approval
o f the U . S . G o v e r n m e n t .
G . _ In the e v e n t t h a t t h e I m p e r i a l I r a n i a n
Government
e l e c t s to p r o c u r e t£Ce ISLgctj&d- P r o d u c t s ~C€bcd4jai.nghelicopters"^ through the U . S . Government, B e l l
shall; i n c u r n o o b l i g a t i o n to p a y • any
commissions
to the R e p r e s e n t a t i v e ^ J ^ ^ ^ r ^ ^ ^ r t r J L .
D.
C o m m i s s i o n s shall, b e c o m e p a y a b l e to the
Representative
u p o n d e l i v e r y of the L i s t e d P r o d u c t s and r e c e i p t b y
Be.ll of p a y m e n t t h e r e o f .
In the e v e n t B e l l o b t a i n s
advance p a y m e n t s f r o m the I m p e r i a l I r a n i a n
m e n t for the L i s t e d P r o d u c t s c o n t r a c t e d
23-586 O - 78 - 5
for
Govern-
62
b e t w e e n B e l l and the I m p e r i a l I r a n i a n Governm e n t , B e l l shall pay to the R e p r e s e n t a t i v e
as advance c o m m i s s i o n s , 2.5% of those advance
payments r e c e i v e d .
U p o n receipt of f i n a l p a y m e n t s
from the Imperial Iranian G o v e r n m e n t , B e l l shall
liquidate the advance c o m m i s s i o n s paid to the
R e p r e s e n t a t i v e at the time of payment of the
final c o m m i s s i o n .
This Amendment s h a l l become e f f e c t i v e on the
date h e r e o f and shall c o n t i n u e u n t i l t e r m i n a t e d
in accordance w i t h Item 6 , T e r m and Termination^
of the Basic M a n u f a c t u r e r ' s F o r e i g n
Representative
A g r e e m e n t , dated 15 June 1 9 7 0 .
A l l provisions of the basic M a n u f a c t u r e r ' s
Representative A g r e e m e n t , d a t e d 15 June 1 9 7 0 ,
n o t specifically amended h e r e i n , remain u n c h a n g e d .
63
IN W I T N E S S W H E R E O F , t h e parties h e r e t o h a v e c a u s e d t h i s
A m e n d m e n t to b e d u l y executed as of t h e d a y and y e a r
set f o r t h b e l o w :
By
By
(Title)
Witness
Date:
.
(Titled
Witness
Date:
64
©
^ ^ I r a n ' s geophysical
IRANIAN
PROGRAM
SUMMARY
location d i c t a t e s its tactical a n d
economic
s i g n i f i c a n c e in t h e M i d d l e East a n d is w h e r e the N i x o n d o c t r i n e
CcuXb,
- come i n t o p l a y , e x p e c i a 1 l y w i t h t h e w o r l d energy
-and potential
energy
demands
crisis.
T h e Iranians well realize the need to develop effective military
a n d e c o n o m i c b a s e s to m a i n t a i n its s u p e r i o r i t y a s a M i d d l e
Eastern
pewer.
( S ) A s a key m i l i t a r y a l l y to t h e U n i t e d S t a t e s , Iran t o o has
followed
t h e c o n c e p t of a i r m o b i l i t y a s e s t a b l i s h e d a m o n g t h e a r m e d
of t h e U n i t e d
forces
States.
Iran i_£ m a k i n g giant s t r i d e s t o d e v e l o p a m o d e r n m i l i t a r y
posture.
V ^ O f h r o u g h r e s e a r c h a n d s t u d y of Iran's c u r r e n t f o r c e s t r u c t u r e a n d
i n t i m a t e d i s c u s s i o n s w i t h b o t h Iranian m i l i t a r y c o m m a n d e r s a n d
U.S.
ri)
a d v i s e r s , Bell's International
Marketing Department obtained a
s o u n d u n d e r s t a n d i n g of Iran's p r o b l e m s , c u r r e n t a n d f u t u r e n e e d s .
>ne o f t h e key m e m b e r s of t h e Imperial
Iranian A r m e d F o r c e s
Brigadier General M . Khosrodad,
C o m m a n d e r of t h e Imperial
Iranian Army Aviation
General K h o s r o d a d is a g r a d u a t e of our U . S . A r m y ' s A v i a t i o n
training
schools.
structure
65
I r a n i a n Program S u m m a r y
^ ^ A s
Page 2
a r e s u l t of r&e-hMs s t u d i e s of I r a n ' s g e o g r a p h i c a l a n d c l i m a t i c
c o n d i t i o n s a s w e l l a s its m i l i t a r y
•
needs,
l
^
^ 7 ) T h u s t h e Bell Model A H - 1 J twin e n g i n e C o b r a w a s c h o s e n t o m e e t
the attack helicopter
requirement
T h e twin e n g i n e m e e t s Iran's h o t , h i g h c o n d i t i o n s a n d its a v a i l a b i l i t y m e e t s t h e t i m i n g r e q u i r e m e n t s e s t a b l i s h e d by t h e Shah
for o p e r a t i o n a l a t t a c k h e l i c o p t e r
Q
units.
he troop 1 if?"requirement however presented a more difficult
roblem.
T o meet Iran's temperature a n d a l t i t u d e
extremes,
m a i n t a i n u n i t i n t e g r i t y a n d a d d i t i o n a l l y p r o v i d e a v e h i c l e for
a r t i l l e r y t r a n s p o r t , Bell d e v e l o p e d t h e Model
21^A.
TJiis a i r c r a f t w a s d e v e l o p e d - f r o m e x i s t i n g a n d p r e v i o u s R
s
W'-VjAprograms —
\;
V
\
I
the H>^and the M o d a l ^ u y ^ ^ ^ ^ ^ ^ ^
\
1
*
\
J
\
/
T;W
, C r v ^ >>^7
^ ^ W ^ A *
Y o t V t h e \ A H - j ^ J ^ n d .21 f+A w e r e B ^ - ^ j j / S M ^ F ^ ^
(juix/ment.
U v
^
^
C
^
T h e G o v e r n m e n t of Iran e x p r e s s e d in w r i t i n g its f i r m i n t e n t t o
j purchase both aircraft contingent upon demonstration and
evaluation
in c o u n t r y d u r i n g t h e m o s t e x t r e m e c o n d i t i o n s of e n v i r o n m e n t
(Ai/gu^Vl972).
ti
^
66
Page 3
Iranian Program Summary
T o this end, Bell mounted a major demonstration effort in Iran
IV
cfj Jh'is
^cur A u g u s t -67
yzA-n.
T h e Iranians chose 5 locations throughout
the country to conduct their t e s t s :
Tabriz
Sannandaj
_
Ahwaz
Bushehr.
I s f a ha n
A l t i t u d e s ranging from sea level to 6,000 feet w i t h
temperatures
reaching 126.5°F at A h w a z .
Bell net or exceeded
~RK£L
performance at all
CLO>'^V^VA^O - ^
locations.
G-it-OU^Si
F^ALQJEIS
.Mirib^^^TF^U^^J^:^r
the Bell t ^ J i ^ ' t e a m
requested
to d e m o n s t r a t e the A H - 1 J during the
Imperial Iranian special forces annual show to the S h a h .
The
results of this show keyed requests for private showings of both
.a/c to the Shah,
Commander of Imperial
Iranian
A i r Force <
A s a final showing of the Bell e q u i p m e n t , a special
demonstration
w a s given to the General Staffs of all services to show the helicopter a d v a n t a g e ^ ! n the air m o b i l e c o n c e p t in a mid
environment.
intensity
T h i s program w a s prepared and presented by our
Genera 1 H a v z e . -Over £35 generals representing all services w e r e
present.
Both the Ccrrrranders of the S u p r e m e Co.T.rand Staff a n d the Imperial
Iranian Ground Forces stated: 'Ve now for the first time really .
understand how to use the helicopter t o its best a d v a n t a g e . "
67
Tr.e o f f i c e of t h e S e c r e t a r y
of D e f e n s e ISA a c c o m p a n i e d by 3al *
i s i n I r a n f o r t h e p u r p o s e of o b t a i n i n g t h e Government of
s i g n a t u r e en t h e l e t t e r
Subject to t h i s ,
of o f f e r f o r t h e p r o c u r e m e n t
t h e t r a i n i n g and l o g i s t i c s
of
Iran's
hardware.
Questions will
be
answered.
In c o n c l u s i o n ,
t h i s a c c e p t a n c e of t n e U. S . a i r m o b i l e
i n key c o u n t r i e s
of
i i : r c p e s u c h a s Germany, t h e Far
concept
East
such
a s V i e t n a m and now I r a n i n t h e >*.:dele East Should open up new
potential
m a r k e t s i n many o t h e r c o - n t r i e s
i nt er na t i c.-%a i ma r k e t ? 1 a c e .
throughout
tne
68
-
/ty/Uono,
10-25-72
— — z z
V&or^a^
^
^ p j ^ T h i s aircraft was developed from existing and previous R & D
programs
namely, the H u e y + , from which the Lycoming T 5 5 L 7 C , 2,950 s h p . engine was
incorporated and the Model 309 KingCobra provided the transmission of
2,050 shp and other basic dynamic components such as rotor and drive
system?
^ p T ^ B r i ef ly, the Huey+ has an internal gross weight of 11,000 pounds w i t h a
200 NM range and 1*40 kt. c r u i s e . ^ K e
external capacity is 1*t,000 pounds
with a 110 NM range and 80 k t . c r u i s e .
With the incorporation of the larger engine in the beefed up KingCobra
(7X5)
dynamics, T^re maximum internal gross weight of the 2 1 hA is 13,000 p o u n d s .
A t this gross w e i g h t , the aircraft can carry an internal cargo of ^,000
and an increased full fuel capacity of 1,9^0 p o u n d s .
lbs.
Hover out of ground
effect at 6,000 f t . on a 9 5 ° d a y , maintaining 1^0 k t . c r u i s e , h o w e v e r ,
increases range to 260 N M .
The maximum external gross weight of the 21^A is 15,000 pounds.
At this
gross weight the aircraft can carry 6,000 pounds of external cargo and
hover out of ground effect at *4,000 ft. 9 5 ° d a y .
'l. j-*) A s a troop transport, the Iranian 21*4A has no equal.
The slide indicates
the a 1titude/temperature combination at which the aircraft can hover out
of ground effect with a fully equipped ten-man squad and a crew of four;
e.g., in T e h r a n the 21**A can hover out of ground effect with a squad of
troops and full fuel on a ^6°C (115°F) hot cay.
1 /,.;v'- Of prime importance to the infantry is the direct support artillery
must be delivered w i t h the t r o o p s .
that
One of the nuinstays in the Iranian
arsenal is the towed 105 howitzer weighing approximately 5,000 p o u n d s .
The Iranian 2]*jA can provide this support to the ground forces by sling
loading and delivering the howitzer and its crew to the strategic
location
at a speed of SO knots.
The shaded area on this slide indicates the altitude/temperature combination
in which the 21UA can provide this support.
For example, in Kerrr^nshah
ft. with fuel for one hour endurance a howitzer can be lifted in temperatures of 35°C
(95°F).
69
Iranian Program
Summary
ZQzams frfemy A-v(4rr<.cn\
In January of this y e a r , Irani on-JWmy-Avi at i owSu force structure
was r e o r g a n i z e d .
Initially, Iran's Army A v i a t i o n requirement
ffeJLicotfcvi^TtkS
for helicopters was 30 gunships and 100 troop liftjito c r e a t e a
stepping stone for a m u c h larger requi rement^at that time a n
i n d e f i n i t e number.
Today the requirement is defined as a firm
202 a t t a c k and 287 troop transport h e l i c o p t e r s .
Accompanying
this r e o r g a n i z a t i o n , the need to train 1500 pilots and 1*000
m e c h a n i c s c a m e into sharp focus as a major p r o b l e m .
T h e Shah's d i r e c t i v e is t o h a v e this force structure completed
a n d operational within 5 years from g o - a h e a d .
^
T
h
^
p
f
^
g
T
^
D
-
s
^
i
a
-
t
T
h
e
question
of training and logistical support is yet t o be determined a s
to procurement method -- that is to say direct to Bell or zfpigt
through FMS p r o c e d u r e s .
A s w e a r e talking w i t h you t o d a y , a
team of Bell and a p p r o p r i a t e U . S . Government personnel a r e
in country to finalize the . ^ ^ p r o c u r e m e n t of equipment and t o
answer the training and logistic q u e s t i o n .
UJCtS
fc
70
Kcao To?
Due aye t
Copy To5
J, F* Atkins
SubjectJ
Car;r.ercial Seles Deportment Activity*
ffyport
SgJW
K"
A proposal for 12 UU-lO'u hsa b*nn mad* to the Iranian
Gendcrxcrl*, vhich would ba * direct govarraifcnt to Bell
procurement• V* hsva assurance of £x«Im Dank Approve} for
^ h i * lalft^
.
.,—
i
I
[
November 13. 1967
• 15 tDKJ:lg~7j**9
Memo To 1
E, J, Ducsyet, J. F. Atkins
SubJ«ct J
Coinniftrelal Sales Activities
Export
r
Pierrot mat vith Gen. Jablonsky1 of Iran recently and he
indicated purchase of 26 UK-ID s has been accaleratdd to
third priority (after the F-5 and ammunition purchase).
i8rDKJilg-735Q
November 20, 1967
Page 3
rsOrpen
L
left yesterday for { Iran to attempt1 to accelerate buy of
36 ships plus three 205A s for tha Shah ® personal use.
November 27. 1967
18!DKJslg-7373
Meao To:
E. J* Ducayet, J* F. Atkins
Subjecti
Commercial Sales Activities
Export
______
P1
r
t
w i t h
Lt
^ f°, ^
* General Khatami last veek
UH m l J i . l i l ^ and helped organize program for purchase of 36
UH-LH helicoptersp U n Msj.
Gen.
Jablonsky,
head of commission,
t 0 t h e S h f l h cri
Xtlbl
Thursday, however, he has
with
* long range program
^ with 12 ships per year starting in 1970.
^ ^ ^ ^ ^ ^ ^ j j a L i m m n i wii-1 ^ ^ W B I T I w« r
u<
\ i lmMun^m
mmm***.
71
- February
1
•/Subject iv:
J* P« Atkins | £• J* Bucayet*
•i • i
•-• . •
Cotemerciel Sales Activities
EXPORT
i 3 E L L > 4 E U O O F » T E R cwMrn*V'
March 11, 1968
18:DKJ:lg-7467
Mamo Tb: ,
J. F» Atkin* and E» J, Eticayafc
Subject:"
Commercial Sales Activities
Export
,--Ro\Word has'been/received regarding tha 36 UH-lH's
"TOt.tbftra.'ls ati indication an additional ten will be needed
for tha Ccndansftry.
o e U . hEucor**mR . w w w
March 18, 1$68,
ie$DKJtig-7469
-Mono To:'
J* P . Atkins, £* J* tXicayet
"Subject*
C o h e r e i*i8ele* Activities
Export
72
BELL. HRLJOOfntSR OOMm*Y .
April 1, 1968
18 jDKJilg-7^81
Memo To:'
J*
Subject!
Commercial Sales Activities
F. Atkins, E. J. Ducayat
•uiwuuxea zor early spring.
Iran
HT^TH.' Jablonsky, Chief. Artcish T MAAG, is taking another look
at the requirement for 36 UH-1H » because of altitude performance,. • V
.;'•
pflBeJ
18»BKJ«lg-7$79
\
,' I r m u
Pantrurk (Sell representative inTurkey) atatea that he
r helicopters (up to 100)
,^SS~validated the Iranian requirement for
• -'fPff I'
Tk&a 1
18tBKJilg*?88&
Irani ~ An order for * 206A for KRB la expeoted> ^
(fj^f a n u . HRUcpoi'TiZft. ec*imi*v
April 8, 1968 .
18 :DKJilg-7493
Memo To:
J, F, Atkins, E. J, Ducayefc
Subject*
Commercial Sales Activities
Iran
; , ; ^ I r a n i a n Oeneral i: froa the Iranian Oendanaery trill visit
I
^o v f^t approximately 12 UH-l'a on their
^SL^S^-^Sffi^f
* ^ . ^ t tvo years*
73
}. crnuu I icn.icof»rct^ cowrwr
April 15| 1903
18:DKJ:lg-7496
Memo Tot
J. F* Atkina,
Subject t
Commercial Sales Activities
J . Ducayet
Export
Iran . . .
•
"."T ..7- • 7" • ' "
:
1
"
1
I Ifll^ v H v
a t S f 7 t^
h f t^ m u l n
a n d Gendarmerie visited the plant
ZtZZJi l£
^ t R a n g a r . , Apparently ther
mora*.tar ,th*. program and a g r e e d *
l-JSJhJSS'
Page 2
18:DKJtlg-7496
>!ay 11, 1 9 M
UtOKJtt>b-m
>too Tot
J* Ducayet, J . P . Atkins
Subject!
Cwataorciel Seles Activities
SXIPRT
• f^pos&L for IfiLserial Iranian Gendan&erie for 10 UH-lH'a W l
£ 206A.*»< vaa cent to Crpert to be hand tarried to
1
D C Li. H U L i O O P T E R
OOMMIW
June 10, 1968
18:EKJtpb-843
Memo Tot
E. J» Ducayet, J . F. Atkins
Subject!
Commercial Sales Activities
EXPORT
18tIKJtpb-8*f3/(
Page No*/2
;
1
'EXPORT. ( COnt d •)
Iritn
Government of Iran is ready to order 2 Modal' 212 helicopters
las soon as ve can give them firm prices and delivery schedules*
74
l8tVKJil$-l62S
October -28, 1968
?age 2
Irani. Gendarmerie is to procure U JetRangers, but it is
not icnovuif purchase will be from Agusta or Bell.
111mi n«i n •~irtr«i nnm , • •
1 .
il* X9$8
18 xDJCJ tlg*763J
ltaa To j'
J . Fa Atkins* E*. j; Ducayat
Swbjecti
Ceteierciol Marketing Activities
Irant ' A letter from Iranian Procurement Staff inviting Bell to
bI7T"on 100 JetRan^ero is expected and a proposal is being
prepared. Count Corrado Aguata and Prince E&anuel arc currently in Tehran negotiating on behalf of Aguata*
November 18, 1968
18tfcKJtlg-7636
• «emo ioi
Subjcctx
E
o• f• At<uins)
u* Micayet
Comeroial Marketing Activities
Irani Taylor departed last week with the proposal for the
Iranian Armed Forces*
,,„,—.•---•.
-ii
in -
• r'Y-i
-
.. .
December 2 1 9 6 8
18tDKJ*lg-76i*2
:
Kemo To I .
J . F« Atkins, E. J . Ducayet
Subject!
CoOTaercial Marketing Activities
INTERNATIONAL M\RKKTXMO
Iran: Proposal for 100 JetRongera was presented,however,
becausc of better finance terms offered by Agusta, it is
felt they will purchase from Italy. Agusta finance terms:
nothing down, 3*%, ten years.
_
BBlX HBUCOPTCrt «
November
1969
18iEXJxlg-7667
Hcao To:
' Subjecti
J . P . Atkins, E# J . Ducayet
Commercial Marketing Activities
International Ifarketing
DOCUMENTS SUBMITTED
VOLUNTARILY
TO COMMITTEE BY W I L L I A M H,
AND H i s
ATTORNEY C,
FRENCH
ROBERT
BELL
2-13-78
./ < /fr
%
m y -
jljll
AVIATION D E V E L O P E M E N T C O N S U L T A N T S
*
SOUTH MARKET STREET
WICHITA
I
KANSAS
T E H R A N FIEUD O F F I C E
r o s r OFFICC BOX 1701
CA»LI: T I C E S S C O
tor* LJw&ao !>• ^allaea, Preslctoai
Tbd
Aircraft Cawpany
uijtXita, Kanaaa
United btatoa of A f r i c a
1 April 1561
Tha uaderai&aod is eapleyad by Killias Kre&ch, Cassia
Distributor for Iran and the Middle Cast* as a» admin—
istratlva ami op^r&iioaa assistant. Bill has as^tad ek>
to writ* you in ay oa^aelty «» the foraer.
I 2*av© work©d for Sill aiaca Octobar of Aa»t y»ar. In
this tiaa I hav© bad th* opportunity to b*ea»» well
acquainto-U crith Cessna, their fine product® and thoir
3alas pataatial aad problooa in the Middle Kast, particularly Iran*
C&aaaa aircraft products bava a vary eacouragiag futar^
ia Iraa. At thia eioseat bo eould
except for a
condition explained latar ia this latter, a solalaua of
sdvaa units with a total valua of 425 thousand dollars*
b>i.ac» KP& concluded arraa^asaats crith local Persian
partnara on tha basis of a joint dealership, wa have
received many additional iaijuirios ahoat Ceasaa products
frtwa previously untapped sources.. ftoth and our partners
are confidaai of a successful future for Caapaa aircraft
ia Iraa.
Tba.aircraft Bales esontionod abova, thacstabiishswant ofa protj^r taainioaanca—<*ervica cantor anil tb© public pro—
motion of Coaana aircraft through the usa of de*oastratioa
fligata have all baoa surprassad by ono porsoa» il« and
his activities aro alaa Jinawi to lir. iJgjrbart &c3illiat*s,
Cessiia ivo^ioaul Sales
Thi3
aar*s» is Gcnaral Kbateai- Ua is ^ir ?
Cu^w»d«r-ii>—Chi<fef of tha Imperial iraniaa Air ! orc»,
ovsiv*r C according to tha U.S. i>oparin»»t of C o ^ ^ r c a )
of an air taxi cos^any t»ith exclusive charter rights ia
Ir&n, Aorocou^ajjder end rial I ilelicaptar distributor Vor
iUit; tha Middle
krathir-ia-liiv i© hi*
Majesty, tha S!\ab of Iran*
(77)
78
Spoc 1 f i 1 y,
N.hatS!:'<i and hia Xirai hav« ;
1. Pr-s vented th* flaet Hale of Cessna 130 aircraft to
the Ministry of A&ricultur-j of ths Govarnrxynt of
I ran for vfida-.scale spraying operations on tha
grounds tivut the aircraft vnzrv
latlyaJly not certificated for this purpose.
2. Hold back the sale of ens Cessna 1S5 aircraft to
the Ministry of Industries mid
of the Government of Iran for u»© on a low—level scinialloiceter
survsy on tbe -rounds that the aircraft was alledgedly inadequate for this purpose.
3. Held back tho sala of four Cessna 310—F aircraft to
a large private Iranian bank on the grounds that liill
French ia »>ot the authorised sales—aaintanance
representative for Ira^a.
4- Absolutely prevented tha establishment of a proper
service—uaintenanctf center at tho Tehran civil airport aftar it was designated ami approved by tha
Director u^neral of Iranian Civil Aviation.
5. Unilaterally cancelled two days of deaon3tration
flights by a Cessna }_'oJal 310-T aircraft on a r&cont
goodwill tour thorough t£>e Middle t-ast on tha sroun4a
that a non—existent demonstration clearance had not
been granted. This ca>s on top of approval by the
LXiCA, and indeed bis participation, and occured at
th? cos»encewont of a proposed flight by 5>ir„ kcviilliays
for the Oiroctor of XCA to Iran and me^b^ry of his
staff.
6. Countered several years of goodwill built by Bill
trench with potential sal^s prospects by insisting,
through his firr»t that he would drive Ur. Trench and
bis associates out
of business.
The laperiiil Iraniau Air i*orc« with General Ixhate»i at
its head fly aircraft'donated thrx>ua,h the U.S. Military
Assistance Program, with pilots traiive-d in tho United
;»tat3i4 at U.o. oxp^nio^ fre*a airfields financed through
rraats imd ioaxx-i, mid on op-sratioxiaJL bud^its supported
by U.S. aid fuads.
1 fcava frequently jrsvifc^A this situation with c^sewercial
official:* of th*
t.:jba»s»y in Tehran, Thay auyi&^d uvs
to ijiXora you an Iro^danl of tho Cs>3«va Aircraft Company,
vhich according to tbw fir:a;vci«i
of tha 1250
Annual import
appr-ox.l^.t»>.ly £3 nillion in
79
Kttdaral Isvs©?*®
, 1ui>i bo*
cospaxxy and
lt» forsi^pa r^pr^s^ntativ^s ar<>
treated in a country
eo
upon ths Uai&ad StAisa *
aid and a^aistaaco.
A» lb« Caa^n* Aircraft Coinpasy h^s r«ported aaiwt* of $33
Billion and oajoyad I960 caloa of $103 million, it taunt
play an laportaat rol* la th* public and financial lifo of
Stat* of k a n » u » I
certain that tba
o^.o^tor
froa
a re*id«nt of S i c M t a
your factory i»
loeat*4 »»d a raekia£ rsprssantati-ra on tba Soaaid Cosai tt»®
for Ini«T9tata and
Co«aa*rc<d9 ha* right to iaX or station
display! AX th* IjlIjsJ of gratitud* th* United Stat*a racoivos
fron tboa* our goveraatdnt trios to help through financial
aavd technical
K&atosti'B c l o s e r o l a t l o B s M ? to th*
Iranian throaw» noraal chaaoala of ccuaplaiat, includiajt
\
tba coaa»areiaJl a t t a c k ' s office of tho A»*rican fcssbassy
aod tb* Director G-aoaral of Iranian Civil Aviation, have
not, and will not hay* aay offoct.
.v
^
•
•-
—
If th* Cessaa Aircraft Co»pasgr
to soa tbair products
satisfactorily rapreaaated, s&rviodd
displayed in Iran,
I respectfully a u g u s t that tha c-otmactioa
tho aourca
of our £z>d Coaaaa's problems aad tha rociplant of so s&ucb
U.S. old be thourou^hly laysstl^t&d by coapstoat authority.
Sincerely yours,
J.G. Lay11a
Administration
for artd on tho behalf of
M l l i a * U . French
Cesarva Aircraft distributor
Irani and th» !Uiddi* East
JGL/hX
cc:
Tba Co«»»rcial A t t a ^ ?
Tehran
M r . H*rb*rt r^'illlosaa
n^^i^rwil
l aua^r—LViiXir t
Cassrwa .VirsraX i C e ^ a a y
VYzdiita , ^an
United S b t a s of A
80
123
SOUTH MARKET
WICHITA
STREET
KANSAS
T E H R A N FIEUD
OFFICE
POST OfFtCB BOX 1702
TCHNAN IRAW
CABLE : T l C E S S C O
l\r. J o h n
Economic CoimasXlor
A f r i c a n Embassy
tfalsh
S April 1961
Tohran
Doar John;
T h a a t t a c h e d d r a f t to M r . W a l l a c e is e n c l o s e d f o r y o u r
s u g g e s t i o n s p r i o r to w r i t i n g the f i n a l c o p y .
W h l l a w ® stick to the facta a a w© k n o w thesi* I sioceroly
a p o l o g i s e for th© jaiaintarpretation and raisuse of the
Embassy's
counselling.
Sincerely yourst
J . G . Lay!in
8i
AVIATION D E V E L O P E M E N T
123 S O U T H M A M K ^ T
WICHITA
CONSULTANTS
STREET
KANSAS
T E H R A N FIEL.D
r
F-osr
OFFICE
OFIIC-L
oox 1702
TEHKA', |1?AN
CABLE : T L C E S S C O
Iv;r» A>v/ane
a l l a e e , ^ r*j$i lent,
9
j I l„,ui
1
Tha C e s s n a -Aircraft ^c : -Any
Wichita, Kansas
U n i t e d Stater,
of A m e r i c a
Jo or M r . tvall&co:
T h i s is i n r o f c r e n c e to m y letter
of I April,, svnt 4 •* iviX,
aad ray t e l e - m i s of 5
A l t h o u g h facta osaind the a l l e g a t i o n s 1 »uade a g a i n s t O s u a r a l
Khateiwi h a v o ia
M a j o r i t y of c a s a s been r e p o r t e d
the
s a l e s s ^ r o s ^ c * ^ t h o r n s ' - 1 1 thoroughly m i s j u d g e d l»oth our
c a p a b i l i t y o'i ei i:?*er p r o v i n g ib&rn or ^ L i n i . i I •<.»;,i a t x c * .
F u r t h e r m o r e the
^atesiaat that coȣ*erc.tal o f f i c i a l s of the
U . S . E m b a s s y sm; • •.-rteti or nug^&sted us to ror>ort thos«&
a l l e g a t i o n s to / o u is-not correct ar«u I have
to
t h o s e conc^rr.-.^: /or ivspAicatir*^ th&su
A s far u s one c- a In a rtcrsounl let t o r , I waat to stale that
I strongly
that if you take the action. I
In
l e t t e r of t A>,ril thero is mo.- ? pos-sibi. ?. Aiy t.lmt
and iti> p r o d u c t 3 ,vili snf' or wore h a r m than b-raof it froji a
^enorriA e x p a a A t
of oar problems* ffconc or o L i l o s ?;cl 1
a a sia.ilar »«ro'
of ©t»N?r business?-^:: ir ,ir-va%
bcirij::
!
handleJ on v.
Jcvi-,1 «>£ discus ion v- ith t• Govrrviroont v.-.
Iran arui any in^^fi.ry or hai£c-.>cV.'ct) a c t i c u , t^tch
e-- i'C'ii J TvOviM? Jo irr 2 l i r a i . a r ; ;
;» a* ? ••JOaCw'^Ui -
82
1
-
to :;rv vhasi -ri
'*:» ny l e t t e r yvo^ cor;
the
oi ^ c t v o u
->y" ov^',
;
^
I. i > renc:; v - s
aw art* oX* t h e Xa.li c o n t e n t s a v- 1 h-jpe «ny roti • t,i
. oi vh< se
c o n t e n t s w i l l AOi in* iuot'.ce y o u r .Ceoliu&h toy-ara^ h i m .
lastly
f
coui a 1 p l e a s e ro-iue&t thut if you hr.ve a n y
questions
a s to h o l d i n g t h i s i n f o r m a t i o n p r i v a t e or v,it h o l d i n g
c o u l d y o u d i r e c t their- to us
w a n t to e m p h a s i z e
prior
action,
to tckinc. any a c t i o n , I
that I did a v e r y f o o l i s h tU.in^- by
the s u g g e s t L>n*> 1 d i a .
I ng
that o u r f i r m in u ; u > ' c
or
the- b r o a d e r i m p l i c a t i o n s of u:r« p r o b l e m s , i can a^fuir^ y o u
t h a t we a r c c o - o p e r a t i n g in t h e x a i i c s t A o g r & e w i t h
a c t u a l l y involve--: in the s e t t io&i&nt of those
;
i f i C ^ r o i y
y o a r •
;
those
oblcr.\s,
s ,
avx^'iorf j.:v.v(.pv rj ..vr c ^ h U U ' . ^ i v ^ j£:c.
Laylin
-;trat.i on
jGL/tr
83
BELL
HELICOPTER
COMPANY
POST OFFICE BOX 482 • FORT WORTH 1, TEXAS PHONE f3UU(» 2-711
March 17, 196b
In reply refer to:
International Helicopter Consultants, Inc,
P. 0 , Box 1702
Teheran, Iran
Attention:
French
Gentlemen:
Otu^iSales Department-has^iiiforined us^that you" have been -appoijited *Vur
Representative ;for Iran,
Under separate cover we have sent to you one (l) each of the following
manuals for your information:
U7G-3B-1 Flight Manual
ii7G-3B-1 Maintenance and Overhaul Manual
U7G-3B-1 Parts Catalog
U7G-3B-1 Service Bulletins
U7G-3B-1 Service Instructions
One set of Service Letters
Your name and aidress, as it appears on this letter, has been adied
to our distribution list and in the future you will receive copies of
all new or revised issues of these technical pablications.
Please feel free to contact us at any time you have a problem or question
regarding the helicopter and its operation.
Very truly yours t
BELL HELICOPTER COMPANY
/t'
W m . J. Diehl
Manager - Service
84
EAE3F£G7B3EB'8
This Agreement made
J
FQBEieQ
1
Ea?BE35G?S?S05
',19
55
, between BELL HELICOPTER
Division of Bell Aerospace Corporation (hereinafter called "Bell"), and
id'IATICilAI* I-ISL*£GC?xS3. G O ^ S U - J T ^ S ,
fiQ2222Z:j»
cf
CpMPAXY,
P ^ C , So:: 1702
Vc^rea,
Xjwhi
(hereinafter called the "Representative") is made for the purpose of defining the rights and obligations of the parties.
If there has been a Manufacturer's Foreign Dealer Agreement or a Manufacturer's Foreign Sales Representative Agreement in effect between the parties, this agreement is a continuation of such relationship, but the terms of this agreement supersede and replace completely all prior agreements.
The parties mutually agree:
1. A P P O I N T M E N T A N P TERRITORY.
Bell appoints the Representative to sell in
—*"*"
the Bell products listed in Schedule A of this Agreement (hereinafter called the Listed Products). Bell shall have the
right to make sales of Listed Products to any local or national government within the Territory, or any agency or instrumentality of such government, whether such sales are made directly by Bell or indirectly through the United
States Government.
2. AGREEMENTS OF REPRESENTATIVE.
The Representative agrees:
(a) T o use his best efforts —
(1) To promote the reputation and the sale of the Listed Products in the Territory.
(2) T o obtain offers to purchase such products from responsible purchasers in the form of Bell's Standard
Export Purchase Agreement at Bell's export list prices then in effect.
(3) Promptly to transmit to Bell any such offers for Bell's acceptance or rejection.
(b) To furnish ncccssary technical advicc and product support to customers including:
(1) Advise customers relative to technical specifications and available configurations of Listed Products.
(2) Assist in and/or conduct demonstrations of Listed Products.
(3) Assist and advise customers in the proper operation and maintenance of Listed Products.
(4) Serve in a liaison capacity between the customers and Bell.
(5) Assist the customer in spare parts support for the Listed Products.
85
(6) R e n d e r technical advice a n d p r o d u c t s u p p o r t o n a c o n t i n u i n g basis a n d especially during the post delivery
period.
( c ) T o display, advertise and ofTcr for sale only that part of the Bell product line which has been incorporated as
Listed Products in this Agreement.
(d) T o permit Bell to inspect his facilities at any time during business hours and to furnish such reports pertaining
to his business in the Listed Products as Bell may reasonably request.
(e) T o be solely responsible for the payment of all costs and expenses incurred by him in the promotion and sale
of the Listed Products.
(f)
T o permit in any settlement of accounts between the parties an offset of amounts due the Representative for
commissions or other rfcasons against indebtedness of the Representative to Bell.
(g) In order to avoid the use in connection with Bell helicopters of parts or equipment which may interfere with
their operation or safety, and to maintain the reputation of Bell products, the Representative agrees to sell a n d / o r use
only Bell approved parts for purpose of the maintenance and overhaul of the Listed Products.
3.
AGREEMENTS OF BSLL.
Bell agrees:
( a ) T o support
the Representative in his efforts to promote the sale of the Listed Products, to furnish appropriate
sales literature and descriptions of such products, to refer inquiries received from prospective purchasers within the
Territory, and generally to render such sales assistance as m a y in Bell's sole judgment be reasonable and appropriate,
without assuming any responsibility for the Representative's sales efforts or any obligation to render assistance beyond
what in Bell's sole discretion is deemed adequate.
(b) T o permit the Representative to use the l^ell Helicopter n a m e and trademark in connection with sales of the
Listed Products, but only to the extent and under the conditions which Bell m a y in writing approve.
( c ) T o sell and deliver the Listed Products for which the Representative
Purchase Agreements acceptable to Bell and not unreasonably
to withhold
has obtained
Bell's Standard
Export
acceptance of offers to purchase
such
products obtained by the Representative.
(d) T o pay to the Representative compensation as provided in the next succeeding paragraph:
4.
COMMISSIONS PAYABLE T O T H E
REPRESENTATIVE.
(a) Subject to paragraphs (b) and (c) below, Bell'will pay commissions to the Representative at the rates provided in Schedule A of this Agreement on all sales of the Listed Products m a d e in accordance with Bell's Standard
Export Purchase Agreement and concludcd by delivery within the Territory.
(b) Bell will pay fair commissions to be negotiated where a sale of Listed Products is m a d e directly b y Bell to any
local or national government within the Territory or to any agency or instrumentality of such government.
(c) Re!! will p a y fair commissions to be n e g o t i a t e d w h e r e a Listed Product is delivered b y or b y direction of the
U n i t e d States G o v e r n m e n t or any a g e n c y or i n s t n n n e n t a l i t y
thereof
to a n a t i o n a l or local government within
the
T e r r . ; n r y or to a n y a g e n c y or i n s t r u m e n t a l i t y thereof, if, b u t only if:
(1) T h e R e p r e s e n t a t i v e was active in developing t h e r e q u i r e m e n t for, a n d the p u r c h a s e of, t h e Listed P r o d u c t ,
and
"
86
(2) At the time of the initial contractual negotiations between Bcil and the U n i : c d States Government
;h-.
R e p r e s e n t a t i v e h a d advised Bell t h a t the Listed P r o d u c t was to be so delivered.
(d) All negotiated commissions shall be d u e and payable a : the time agreed upon b e t w e e n Bell and the R e p r e s e n t a tive in such negotiations. All other commissions shall be due and payable upon the completion of each Standard Export
Purchase Agreement by the delivery of the required products and receipt by Bell of full payment therefor. All commissions will be calculated on F.O.B. or fly-away prices, Bell factory.
5.
GENERAL
AGREEMENTS.
(a) T h e relation created by this Agreement is that of Manufacturer and independent Representative, and
neither
the Representative nor any of his officers, agents, salesmen or employees shall have any right or authority —
( 1 ) T o conduct any business in the name of or for the account of Bell.
(2) T o make any proposals, promises, warranties, guaranties or representations with regard to a n y Bell product.
( 3 ) T o assume or create any obligation of any kind, express or implied, on behalf of Bell.
(4) T o enter into contracts or commitments in the name of Bell.
(5) T o make any promise or representation with respect to any matter in the n a m e of or on behalf of Bell.
(6) T o bind Bell in any respect whatsoever.
(b) Bell may from time to time, without notice, make such changes in its Standard Export Purchase Agreement
and its export list prices as Bell may determine, but no such change shall apply to any orders for which Bell shall have
previously accepted its Standard Export Purchase Agreement.
( c ) Schedule A hereto may from time to time be revised in any respect by mutual agreement of the parties e x pressed by their official signatures upon such revision, without affecting any other provision of this Agreement, but n o
letter, telegram or other communication between the? parties hereto shall become a part of or in any w a y m o d i f y or
c h a n g e this Agreement unless it is distinctly stated in such communication that it is to becomr a part of this Agreement by attachment thereto and bears the official signatures of both parties, which may be accomplished by separate
signatures of duplicate counterparts of such communication and exchange of same.
(d) T h i s Agreement is to be governed by and construed under the laws of the State of N e w York, U . S . A . If a n y
provision of this Agreement shall be considered or held by any authority or court having jurisdiction over o n e of the
parties or over the subject matter of this contract to be prohibited a n d / o r void, such action shall not affect the validity
of the remaining provisions of this Agreement which shall be considered separable from the prohibited or void provision and this Agreement shall thereupon be deemed to be written, or to be re-written, as the case m a y be, without
such prohibited or void provision.
(e) T h e Representative shall not transfer or assign this Agreement or any part of it in any manner without the
written consent of Bell.
G
- Ti R M AND
TERMINATION.
x
(a . T h i s A g r e e m e n t shall b e c o m e effective on the d a t e hereof a n d shall c o n t i n u e until the following D e c e m b e r
ar.d t h e r e a f t e r for periods of one (1) y e a r until t e r m i n a t e d by w r i t t e n notice of t e r m i n a t i o n delivered
o; "..lih'J
v
personally
the o t h e r p a r l v , by '.egisteied. certified o r r e g u l a r mail, to be effective on a d a t e specified in such notice
h vh.-.l! ; e no: 'i ns than sixty {of)} davs after the delivery or mailing of such notice. In the following circumstances
th-s A . . c e m e n t can i v t e r m i n a t e d a ; any time bv either p.-"->' effect.ve i m m e d i a t e l y u p o n receipt of notice of t e r m i n a -
87
(1) Death or incapacity of the Representative.
(2) T h e institution of any proceedings by or against the Representative under any bankruptcy or insolvency
law.
(3) Any breach by or failure of the other party to comply with any of the provisions of this Agreement which
shall have remained uncorrected for thirty (30) days after written notice thereof.
(b) Notwithstanding any such termination, the Representative shall be entitled to commissions upon sales pursuant to
Standard Export Purchase Agreements for Listed Products acccpted by Bell prior to the effective date of termination,
when and if Bell receives full payment therefor.
(c) The Representative shall not be entitled to receive any termination payment or compensation of any nature
because of termination of this Agreement.
(d) Neither party shall be liable to the other for damages of any kind or character whatsoever on account of such
termination, whether such damage may arise from manufacture of helicopters or parts, or from the loss of prospective
profits or commissions on sales or expenses incurred or investments made in connection with the establishment, development or maintenance of the Representative's business, or from any other cause, claim or consideration whatsoever.
7.
SUCCESSION.
This Agreement shall be binding upon and inure to the benefit of Bell and any person, firm or corporation suc-
ceeding to all or substantially all of the helicopter manufacturing business now conducted by Bell.
IN WITNESS W H E R E O F , the parties hereto have caused this Agreement to be duly executed as of the day and
year first above written.
BELL HELICOPTER C O M P A N Y
Division of Bell Aerospace Corporation
Representative
„ .....
WILLiVuV: li, >-\;..;vct:
DII&CTOU
(Title)
. ...•/,
Witness S S V S i c L Y
^ .
F^vXC-I
,f\
By(Title) _
dl/c
/ f y
88
SCHEDULE A
(To Manufacturer's Foreign Representative Agreement)
L I S T E D P R O D U C T S A N D APPLICABLE C O M M I S S I O N S
The Representative is authorized to solicit orders for the Listed Products set forth below in accordar.cc with the
terms contained in the Manufacturer's Foreign Representative Agreement to which this Schedule is attached. The
commissions payable to the Representative in accordance with Section 4 ( a ) of such Agreement are set forth below.
ts Covering One (1) to Five (5) Helicopters:
Standard Export Purch;
Listed Pre
i on Basic Kelicoptcvs
iT/G-S
$7,000,00 '
b7j-Z\
2 0*3
$15,000.00
UII-1 Ssriea
dZ-13 Sariec
To ba negotiated
To ba negotiated
Purchase Agreements Covering More T h a n Five (5) Helicopters:
Listed Products
470-313-1, ir/G-CA, k7G~5
K73-2P*
2C&3
T o be Negotiated
m-l Series
01?-13 Series
Standard Export 1
Commission on Spare Parts ar.d Accessories
KoS&l
Parts
ASH avsd Ve.r.dcr parte
Kcdcl
20k-3
Sarise
-
20^
15%
ftursbercd
Parts
A g i s t e r Agriculture
lose norssies, r\ot instcllcc
Ersgir.es, Engine Parts £• Accssccrieo
Special Equi^acnt
UK-l Ssriec r-o.rtG
CJ2-13 SERIES PARTS
This Schedule A revision is effectives
15%
10%
bo
To ba
be
?o be
1 Kay I960
BELL H E L I C O P T E R
COMPANY
Division of Bell Acrospacc C
i
(Title)
:'_vor.-.y V..
L
Witness
I
'-.Y-oasuror
Scsi^t.-ry
negotiated
negotiated
negcticted
negotiated
89
'HELO'
TEHRAN,
ji\
IRAN
„
j\j^
P . O . B O X 1702. T E L . 6 2 0 3 1 6 . C A B L E A D D R E S S , T I C E S S C O
w r •• j^i J i ^
:
\r*rw -
J^A*
EARTH MOVING - ROADS - RUNWAYS - GENERAL ENGINEERING
Teheran, Iran
_ . .
10 September
1965
JOINT VENTURE
between
HELO, SA and AVIATION DEVELOPMENT CONSULTANTS, INC., 123 South
Market Street, Wichita, Kansas, USA., hereinafter known as A D C , Inci
This agreement is entered into this day 10th September 1965>
with the intention to create an incentive in the field of US foreign
investment and development of various Iranian Projects in the engineering and aviation field.
It is agreed that A D C , will purchase a Cessna 180 Aircraft,
and supply either complete insurance coverage for hull, survey crews,
and 3rd party or carry only part of this coverage and Helo, SA will
carry the Remaining uncovered insurances. A D C , will have one of its
staff, or jointly between Helo and ADC a pilot who is American licensed
to fly and maintain the aircraft as maybe required for various survey
projects or routing projects as Helo and ADC may bid on together or
seperately by H e l o , S A .
The cost of the aircraft, insurances and pilot who will also have
other duties and responsibilities' to perform will be classified as
the participating foreign investment actions of A D C , Inc.,
All costs for gasoline, landing fees, taxes, local finances,
vehicles e t c . , will be to the charges of llelo, SA., as the Iranian
participation.
When any large amounts of financing for bonds, tenders e t c . ,
have to be arranged this cost will be carried jointly between both
parties, except that A D C , must make arrangements through its USA
financiers to get adequate financing either from Banks, or US A I D ,
or other development financing institutions.
It is further agreed that this basic agreement maybe amended
from time to time to meet the various situations as work and projects increase, and responsibilities become more diversified.
Signed:
Paul Steinheil
Engineering Manager
_
S
C C . R E G . No. 9707
ly.y o j s c^S ojUi
i
g n e d .
William II. French
Aviation Manager
90
Teheran, Iran
11 September 1965
Director General of
Civil Aviation
Mehrabad Airport
Teheran, Iran
Your Excellency:
This is to advise you that our firm llelo, SA., has entered
into a joint venture working agreement with Aviation Development
Consultants, Inc., a US F i r m . The reason for this agreement is
basically that there are not the proper types of aircraft and helicopters for the various diversified engineering and aviation projects which are now in the development stages.
Further, it is with the intentions to create an incentive in
the field of US Foreign investment and development in Iran, and
with plans to put more Iranians in our firm and train them in the
technical fields which are not presently being accomplished.
Aviation Development Consultants, Inc., will purchase one
used Cessna 180 model aircraft, the registration number will be
N7751A, and this aircraft will be based at Mehrabad Airport. It
will be fully covered with insurance both hull, survey crew coverage for seats, and third party liability. The pilot whom ever we
choose for the limited flights will be an American Licensed pilot.
Our first flight will most likely be 22 September to Khermanshaw to inspect a possible future water works line, and returning
the same day. We will fill out the normal flight plan for all
flights in accordance with Iranian Civil Aviation requirements,
whereever, Civil Aviation has the facilities. However, as I'm
sure you are aware there are areas in Iran where survey projects
are required and civil aviation does not have flight, plaiv fncilitie
Y\e look forward to the Department of Civil Aviation Assistance
in this new joint venture which we llelo, SA an Iranian firm is now
undertaking. Should you require additional information, please
advise us as soon as possible.
91
HSAD'^L'ARTSPi 3
UNITED STATES MILITARY MISSION WITH THE IRANIAN ARMY
AND
UNITED STATES MILITARY ASSISTANCE ADVISORY GROUP TO IRAN
APO NSW YORK 09205
OFFICE OF CHIEF, ARNY ADVISORY SECTION
ARAA
10 March 1956
SUBJECTi
Letter of Appreciation
TOs
M r . William H , French
Cessna Parts Representative
Post Office B o x 1702
T e h e r a n , Iran
1 . I wish to take this opportunity to express my appreciation
for the valuable assistance you rendered to the Imperial Iranian Army
Aviation program in supplying spare parts for the Cessna fixed wing
aircraft assigned to the Iranian A r m y .
2 . Your energetic and persistent efforts to assure a smooth
and efficient flow of spare parts has contributed immensly to the
progress achieved "by the Aviation Battalion. Your close coordination
and cooperation with the Iranian military departments and commercial
agencies in connection with the off—shore purchases v/as paramount in
establishing a functioning parts supply system. In addition, your
positive attitude and tact in dealing v/ith the members of the Army
Aviation staff reflected very favorably on yourself and the United
States.
3 . Your valuable assistance end the support you gave the spare
parts program contributed signifioantly towards the maintenance and
readiness of the Iranian Army's aircraft. I congratulate you for this
splendid performance and the contribution it has made to the
modernization of the Armed Forces of Iran,
}-. i,. AS:;
92
GEOTRONICS
DiVlSlON OF TELtTOYNE I
(
T£LE»MOHt: 4*«30
Our Eef. So. 013/20
April 10, 1966
International Helicopter Consultants
P.O. Bex 1702
Toheran, Iran.
Ino.
Oentleaeai
T k i s is w i t k r e f o r e a o e t o y o u r l e t t e r of 2 A ? r i l 1 ^ 6 6 .
P l e a s * b e a d v i s e d t h a t r s o e n t a n d o u r r s a t a c t i o n (as ©f t h i s d a t a )
by t h e D e p a r t m e n t o f C i v i l A v i a t i o n , w h i o h i n c l u d e d t h e o e i a i a g
a n d i a p o u n d i n g o f thai B e l l 4 7 0 3 3 1 H a l i o o ^ t o r i a ? o r t e d b y t k l a
Ceapany on lease tkrough y o u r f o o i l i t i o s , has demonstrated that
o u r f u t u r o c o n t r a c t i n g p o s s i b i l i t i e s in I r a a o e u l d
haaardeua,
a n d e n d a n g e r e d by f u r t h e r a s s o c i a t i o n w i t h y o u r f i r a i a its p r e s e n t a l l e g e d s t a t u * , tfo h a v e b e e n i n f o r m e d b y t h e C i v i l A v i a t i o a
Authority that Civilian registered Helioepters operating f o r
c i v i l i a n o r n i l i t a i y p r e j e o t s in I r a a o u s t h a v e the p r i o r p*rt»iSBion of the C A A , w h o first o h e o k w h e t h e r Iranian Registered
operators oan or oannot provide suoh Helioopter roquiro»*nts.
V » h a v e f u r t h e r b e e n a d v i s e d t h a t t h e E e l i - t a x i C o a p a a y is the
only suck Iranian Begisterod Caapayy here and that y o u r qualific a t i o n s a s of t h i s d a t e in t h i s c o n t e x t r e a & i n s u b - j u d i o e .
T o u have given ua to u n d e r a t » d that y o u are ths only Dell
Helicopter representative in Iran, and additionally the ouly
F . A . A . a p p o i n t e d M a i n t e n a n c e I n s p e c t o r in I r a n . A s s u o k it
w o u l d be our n a t u r a l oheioe to give y o u r Ceapaay precedence of
c o n s i d e r a t i o n f o r a r r a n g i n g o u r b u s i n e s s w i t h t h e u s e of U S .
R e g d . H e l i c o p t e r s . H o w e v e r in the oircu»stanc<*», y o u w i l l
r e a d i l l y u n d e r s t a n d o u r oauition,
and regretfully suggest that
M
y o u c a n c e l y o u r " a t a » d - b y o r d e r f o r the Second Bell 4 7 0 3 m
H e l i c o p t e r , f o r e c a s t f o r p o s s i b l e l e a s e b y iu».
V e w o u l d a p p r e c i a t e h a v i n g c o n f i r m a t i o n as to w h e n H e l i o o p t e r
C o n s u l t a n t a I n o . o b t a i n s ita o p e r a t i n g r i g h t s w a d p 9 r « i » s i » n » f r o a
the C i v i l A v i a t i o n D a p a r t a e n t of t h e I a p e r i a l O o v e m ^ e n t of I r a a .
per pro
Voiy truly y o u r s ,
frs^tronios ( D i v i s i o n of ?t>lodyae
Ove
Cl/i/sh
RCJi-XT:
r
F-. O. POX 1 G O TCHL !(AfJ:
C.yil'xvxrj !Jv>?t\rlains
Pr-J j ycX 3 A d a in 1st
^
/ * i^'v
"
Ino.)
or
Gt'OTfiONlCS TEHERAN
93
T E H R A N ,
j\j>\
IRAN
- jf^r
P . O . B O X 1702. T E L . 6 2 0 3 ) 6 . C A B L E A D D R E S S 1 T l C: E S S C O
wr: ^
'\r*rY\:
J^j^
E A R T H MOVING - ROADS - RUNWAYS - GENERAL. E N G I N E E R I N G
12 April 1966
Teheran, Iran
-
Director General
^Iranian Department of Civil Aviation
Mehrabad Airport
Teheran, Iran
Your Excellency:
It is with misgivings and embarrassment to ourselves as Iranians to see the action being taken by the Department of Civil Aviation against the foreign investment field. Uur firm llelo, SA enter- *
ed into a joint venture agreement with an American firm Aviation
Development Consultants, Inc., on 10 September 1965. Part of this
agreement was that our American joint venture partner would purchase
an aircraft for our own contract projects, along with pilot, maintenance etc, as its participation in foreign investment and dcvelopercent work in Iran. V»e now find the aircraft has been impounded, otc.,
-and we: have not been notifiod as to the reasons why! I'ca suro you
are aware that flight plans have been filed at all possible points
in the name of llelo, and that your Department has previous correspondence with our firra over the past several months.
His Imperial Majesty's white revolution, the Prime Ministers
efforts, and D r . Eqbals continuous encouragement to encourage the
incentive of foreign investment and development work in Iran has
completely been disregarded by the Department of Civil Aviation's
actions*
Our firm llelo, S A , has a contract for the routing and survey
of the Iranian Gas Trunkline Project through IMEG. Tho project is
now being delayed in corpletetion due to the fact that we do not
have access to our aircraft which is urgently needed. Crews, now
mist do all the routing from the ground, which is more costly to tho
Iranian Government in the end, as v.oll as to ourselves, and embarrassing. llis Imperial Majesty issued instructions for the ccmpletetion of
the Gasline Project as soon as possible, and now we find your department impounding a much needed aircraft. You arc aware that there is
no other aircraft accept a Cessna 180 which can safely be used for this
job and contract. We sincerely request that your department release
this aircraft so that our firm nay make use of its service in the routing and coapletction of this nuch needed survey, and aid aviation requirements instead of causing unnecessary delays etc.
Yours faithfully,
C C . ' R E G . N o . S707
Aw m
23-586
O
-78-7
.-
* .( - Paul Steinhei 1
Engineering .Manager
94
'HELO'
TEHRAN, IRAN
Jt ji\ - jlrf
P. O . DOX 1702. T E L . 620316. C * OLE A D D R f c S S . T l C E S S C O
EARTH MOVING - ROADS - RUNWAYS - GENERAL ENGINEERING ( K e f !
^
^
L t r
NO
2 )
16 April 1966
Teheran, Iran
Director General of
Civil Aviation
Merhabad Airport
T e h e r a n , Iran
excellency:
In accordance with our discussion this morning in which you
advised rec we did nut have operating permission for our Cessna 130
N 7 7 5 1 A , we hereby fire requesting operation permission be granted
and that our work can continue.
Attached you will find a copy of the joint venture agreement
between H e l o , SA and Aviation Development Consultants, Inc., who
are supplying one aircraft for our w o r k , plus financial backing.
This financial backing is frcn US financing institutions, US Aitt,
or possible European Companies interested in financing various
projects in Iran.
Ilxanmles are through Aviation Development Consultants, association with one European f i r n , M r French has encouraged theso people
to C O G O to I r a n . They have been shown how aerial surveys for High
Tension lines can be conducted from the a i r , through low level profile flying. These people nou have gotten their government to offer
the Government of Iran $30,000,000. for an electrification project.
Tliis companies final decision to c o m o n c e the job v.ill party depend on our firn using its aircraft for approximateLy one month to
do tiie ronaining portion of the actual routing to s a v e , and shorten
the roult' as rach as possible before ground survey groups start their
work .
/.ttached also von v. ill find a copy of our agreenent with 1MKG
for the basic routing of the Gas line. JJef ore the aircraft was stoped,
part of the routing was cocpletod. The aircraft is now required to
continue to find a shorter route to save the Government of Iran more
roney by finding a shorter route. This work can only be done with a
Cossj>a U>0. It cannot bo accomplished by a higher speed aircraft.
Ground crews cost the i;o\\ nr.ent of .Iran still uore money• At present
with the stopago of our o; and survey only the Government of
Jr.iii is loosing. This work is not cowpoteting with either Iranair
nor o irtaxi who still will c.vrrv I MS (J*s balk of people to Isfahan or
Gviaii S a r a n . llis Imperial Majesty we were told had ordered this pipeline be completed as soon as j-ossible. V-ith the aircraft not being
able to continue operation:- doing the surveying etc., naturally the
work vi11 be delayed.
95
Approximately 4-G rcoro weeks of flying exist before the routing
of tho first phase is couple tod.
After the Gas line route is e s t * M i s h e d the a i r c m i t rest likely
will be used to go weekly to Ka~vin a: 1 two other areas between hazvin and Sefi Kud Uau whex*o our fira u t inspect weekly the three
different 11T Power Stations which wil ,bo built in the very near future .
In addition wo will havo to r:ako several trips to hherrcanshah
to inspect the work on the kheroanshoh City water supply systen and
puap station. This is what we flew to Khercmnshuh for the* first timo
on 22 September 1965, to establish the basic routing of the line*
and check the pump house site.
This work is nil for and in the benefit of the Governrent of Iran,
and is not conpototing; with anyone. Therefore wo would appreciate if
you would release our aircraft so that
nay do the necessary work
on the piano. We want to strip the i>uint and repaint it. V.e will not
fly the aircraft until we receive pernission from vou t the DGCA Offico.
V;e will continue to use the uore costly way of survey and routing with
ground crews until your office approves the flights of our aircraft.
V.e also request that this aircraft be allowed to ron.iin under
American registration, because v.)ien the* survey anJ routing work is
ccupleted here in Iran, the aircraft will have to go to Acrsan, Jordan
or possibly on a project in Turkey. If it is not on ancrican registration it will bo rcore difficult to change it back before it con: ences
work on those projects. Any projects which are financed by the US
Government, the contractors are to uso Aaorican registered aircraft.
Similar as Pan Ascrican carry's .ill US Military personnel etc. Also
with financing cooing fron the U S A , one cannot get financing very easy
on any equipment unloss th«ra is recourse for repossessing if paynents
lure not trade on tine. US financing institutions require guarantee's
or collateral on their investments and loans.
Sincerely yours,
iniF/bf
17111 iaic II. i'rci.ch
96
TEHRAN,
IRAN
o'yj - J j i j j
P . O . B O X 1702. T E L . 6 2 0 3 1 6 . C A B L E A D D R E S S i T I C E S S C O
FARTH MOVING - ROADS - RUNWAYS - GENERAL ENGINEERING
( L t r
No
16 April 1966
Teheran, Iran
Director General
of Civil Aviation
Merhabad Airport
Teheran, Iran
Excellency:
In reference to our discussion this morning in your office
I ;>ish to confirm
again that I turned my Iraniun Commercial Lic%
ense in to ili Ghodsi two years ago,
I handed bin a photo copy of my first class physical, I went
bad; three times to get the license. Each tinio somebody else was
responsible, and I got a general run around. To the best of my
knowledge the license is still there. It was the old form license
cither number 23 or 27 I'm not sure of the number.
If you will recall three years ugo the sane thing happened
and I went four times to tho office, at v.hich time 1 got tired
of argueing c*i\d called you on the telephone, at which time you
issued instructions for the renewal of the license. I thank
you very much for your aid and help in getting this license renewed so I can comply with the Iranian Civil Air regulations.
Sincerely yours,
William II. French
Incls:
Copy 1st class physical
C C . R E G . N o . 9707
97
'HELO'
TEHRAN,
J-
IRAN
P . O . D O X 1702. T E L 62(>3JG. C A B L E A D D R E S S .
EARTH M O V I N G - ROADS - RUNWAYS - GENERAL
s
TICESSCO
ENGINEERING
(Ltr No 1)
V.
16 April 1966
I
Teheran, Iron
Director General of
Civil Aviation
T e h e r a n , Iran
Excellency:
This is to acknowledge that I have been told by the DGCA's
office that the flight of Cessna N7751A has not been authorized
and the operations of this aircraft has been construed as i l l e g a l .
N o permission has been issued to d a t e , and we did not know
special permission was required^ H o w e v e r , we always filed a flight
plan before f l i g h t s , and listed as operator Ilelo, whenever there was
a DGCA flight plan o f f i c e .
We purchased this aircraft N7751A (Bill of Sale date) 13th
of September 1965,
W e will now apj^ly for flight permission because previously
we were w r o n g . The aircraft will not be flown until we obtain permission from the DGCA's o f f i c e .
We will supply the aircraft log books which contains the
flights of this aircraft for the past two y e a r s , on 17 April 1 9 6 6 ,
tomorrow.
Sinccrely y o u r s ,
William II. French
VllF/bf
CC.'UfG.
No. 9707
98
cpa
TEHRAN. IRAN.
l».0. DOX. \7+i. TIL :
c>y
CAU.K AOOmil: TIC*»»CO
Cessnc
CESSNA
• u n c i
IVM
CMABTtH
-AIHttURVSY
DOFTVIY - OINZNAL
OININAL CCNNOOIISSSStTAAHHOO MAINT3M.
MAINTIHAMCl
rCH-Ain
26 Anri1 10,
SUBrT^CT:
FOU:
Chronological Aide f-'emoi re
Excellency General Pakravan
In June 1964 m.v partner, William French (owner of four
fixed-wir.r aircraft and one helicopter, acquired with e a r n i n g
from ten .years of work in specialized air trannportation in fran),
accompanied by a representative of the Cessna Aircraf*. Company,
met
' n Mr. Arb abi , Dire c t or, of Civil .Avi ati o n M r . French and
Mr. Chuber, thP Cessna representative, were told by Mr. Arbabi
tha U—i f~Frenc?i "Van ted ~t d*""cbn tiriue light" ai rcraft—ope rat i oris in Ira
he raus^.--form^a-company::.with percent Iranian ownership. Mr.
A~tabi—reriarke.i that M.ere is enough work for
or 6 such organizations in Iran to provide better service through healthy competition.
>
2 j' Early *inS.1°65 Mr French called on V.r. Arbabi and informed
hiir. that
a 5>1 percent Iranian-owned_company was n the procoss of
4
forma ;] on,
c.e, Paul Steinheil, as" the Irani ari "partnor. ^r.
Arbabi approved~and~ said that issuance o f a n operating license
would present no problem.
5
3./ 0n__l8„?ebruar.vVI965 Helo was registered under- Irani ar. 1?.-A
x
aa^an
Iranian company by Dr. Sotoudeh
Steinheil; 49^ French).
The regi s tere'd statutes were delivered to us wj r.n copies of the
official newspaper Gazette. The registration number of '.lelo Company is 3707. The company's Acts of Associ ati ont accompanied by
our request for the operating penr.it for fixed-wing and rotarywing aircraft ,_.were sent to Mr. Arbabi.
C
4. Cn ?4 March 1 ;65 Mr. Arbabi reri i Mi to our request by
1), »Ve w«>re 1 r.letter number 1016 (copy attached as Ine") :
formed that the Jeneral commanding Hi* Ma; vy ' A : t" Force was
lopposed to our* request and our case win r"!
CO 8!3 ltr.
\ V•Y
.-J*
V
99
5 . At thin point in the chronology we firot viuited Your "Excellency and asked for help and advic^* We wero referrod to your ^Deputy,
Brigadier General Saadatmand, who in turn introduced uo to M r ,
T a b a t a b a l , an attorney. As a result of u meeting attendod by M r .
Arbabi; M r . Aboumali, Civil Aviation lawyer; M r . Tabatabai j M r . Froneb
and I , M r . Tabat -.bai concluded that General Khattuai opponoo tho :; D H U U D I ^
of an operating license to our company and that a factual monopoly had
been created for Heli-Taxi and Air-Taxi, permitting them to operate,
without corapeti tion and at a high price, off-uhoro transportation l or
Iran Pan-American Oil Company, Lavtui Petroleum Company, Iran Marine.
Petroleum Company, and Iran Off-Shore Petroleum Company. Tho ronu'it
that the amount of work for Hell-Taxi for one year to tain S1.300,000,00.
The above-listed companies were vioited by General Hafaat and informed
that Heli-Taxi has the monopoly for helicopter uorvicorj, under Oi jeru
from above, and negotiations or bids from elsewhere would be futile,
6.' Having been forced into arbitrary contracts with H e l i - T a x i ,
the companies listed in paragraph 5 above have indicated dia3atisfaction
and have written letters to us indicating they would like to deal with
our company when -we obtain an operating 11 cense| they have exhibited
an interest in the m o d e r n , reliable equipment we represent . — B e l l
Helicopters and Cessna Aircraft. In the meantime, we have had several
interviews with Gen^ral__Raf.aat, who suggested that we pay 5 to 10 percent'(the amount varies with his'disposition) to Heli-Taxi and operate /
> a itsv.sub-contractor. '* This utterly unprincipled proposal was of
course rejected. On one occasion General Rafaat went so far aa to K
threaten»me with deportation of M r . French from Iran. I suggested to
him that he try to deport me since I am the 51 percent Iranian owner of
Helo and the source of his irritation. The attitude of the Oil Cons o r t i u m , as you are a w a r e , is the same aa the other oil companies.
7 . The policy of the Iranian Government that only 51 percent
Iranian-owned companies will develop light air transportation is a
logical one. The creation of monopolistic protection for Air-Taxi and
Heli-Taxi is completely illogical, particularly in view of the tremendous potential and His Imperial Majesty's programs of d e v e l o p m e n t .
The following situation's illustrate the reactionary effect of the
establishment of monopolistic protection*
a . Harza Engineering International has an Iranian Government
contract for undertaking the engineering feasibility studies in the
Karum and Marun River Basins of K h u z e s t a n . They asked us to quote
prices for supplying a helicopter for two months, beginning 1 March
1966. O u r price was $29,000 - $32,000 (varying with choice of equipment and s e r v i c e s ) . Heli-Taxi quoted the absurd price of approximately
$50,000 and stated that it was the only company permitted to contract
for this s e r v i c e . Because of the ridiculously high price quoted by
H e l i - T a x i , Harza was forced to appeal to the Consortium to use their
h e l i c o p t e r s . Unfortunately the Consortium helicopters were being used
full-time, and Harza*a work la being delayed and hampered as a r e s u l t .
100
r
0 0
0
,.
w
w
'/
0 ** ** fytLz, < 7
b . Geotronics, an American company on a U.S. Army Map Service contract, has been continuously frightened, harraaeed and
suppressed by General Rafaat'o visits^ telephone callo, and threats
that if Geotronics does not deal directly with Heli-Taxi
they will
1
get no more work in Iran, A copy of Geotronica letter to Mr. French
is attached as Inclosure 2; it advises Mr. French to stop the standby
order for another helicopter to work on development projects in Iran,
Geotronics present helicopter was impounded by the Iranian Air Force
on 28 March 1966 and released only after approximately 10 days of
threats and harrassmentj this project is funded by the U . S. Government.
It was reported to us that His Imperial Majesty was aware of the U.S.
Army Map Service contract, that he had approved importation of the
equipment, and that he had directed expeditious completion of the contract and survey.
.
c. In the course of our interviews with General Rafaat, who
apparently has assumed almost-final authority for any decision regarding aviation in Iran, he. assured us that we could use our aircraft
for personal and professional purposes. Hence we concluded a deal
with I.M.E.G. for the new gasline to Russia. We were using our
Cessna 180 aircraft to assist in surveying and routing of the line
(.see—Inclosure 3). After twenty-one (21) days of operation the pilot
was arrested and the Cessna 180 impounded. The aircraft still is
impounded and, as a result, the work on the pipeline is slowed down,
we are in danger of serious financial losses, and the project of great
importance to the development of Iran is being delayed.
d . Inclosure 3 relates to a request for helicopter service
submitted to Kelj-Taxi by an agency Involved in another development
project in Iran — electrification.
8 . With the knowledge that normal, legal approaches are of no
avail, and at the suggestion of Your Excellency, we submitted_aletter to His Imperial Majesty through the Minister of Court. I have
been told by ?'.r. l.Totamedi , of the Imperial Court, that His Majerfty
read the letter and instructed the Minister of Court to inquire into
the matter. The Minister of Court sent our letter to Mr. Arbabi and
requested a reply. After some thirty-four (34) days Mr. Arbabi produced the answer attached as Inclosure 4, as translated to nie by Mr.
Motamedi. As the situation became stagnant again, I permitted myself
to appeal to you again.
With infinite" thanks for your kindness, I beg to remain,
PAjJL_smjmEi L
101
First
AlKTAXI
Cay.i trii
Share
-- G , 0(H)O.'O.o
Ho 1dors:
20(' S h a r e , , v a 1 u e
Nader
Amir
Jaharnb..i:\ : 36 S h a r e s
Khatami
Ahmad
Shafik
(balance
of
80
Captial
=
10,000,OOCFJS
Holders:
each
name , 4 with
name
name, 4 with
name
: 36 S h a r e s
name, 4 with
name
Shares
Zanghani:
Ahnad
Shafik
Frederick
I ' n o f f i c a l l y it w a s k n o w n
to Jananbiini f o r r o u g n l y
30 , OOOs
: 56 Shcires w i t h o u t
without
without
name)
Second
100 S h a r e s , value
Amir
:
Eshoo:
each
Registration
100,000£s
50 Shares
- 5,000,OOOte(Managiag
25 S h a r e s
-
2,500,00CPis
25 S h a r e s
-
2,500,00CRis
at Merhabad that Frederick Eshoo sola his
£ 3 5 , 0 0 0 , 0 0 a p p r o x i m a t e l y t w o y.?ars a g o .
I
LI TAXI
Frrst
Snare
-
10,000,000*
lloloors:
1000 S h a r e s , value
Kir. T a g h i
liehnam:
170
Kir. N a s r a d i n
Nasseri:
Kirs. P a t r i c a
Tandi
each
13-13 N u m b e r
9554
l'J,00CEi
Shares
(Represented
;
.Vioshtaghi
shares
Shares
170
}>ir. >. .eyheuou 4 b 0 S h a r e s r a
Mr. Javad
D Lrec
rtvgi s t r a t i o n
4 A ban
Captial
tr«it. i on
wi thout
AIKTAXI
Share
Kej-
1 Farvad i a J 3 3 7
' 'li - /
K e g i s i r - : t i o n \i-"inaer 6 0 4 7
by O r . Mohmad
of
Airwork
nii
Pars
Int'l
Co
Auditor
12-10-J3i3
M r s P a t r i c a T a n d i r e s i g n e d a n d >.ir» E d g a r B r i s t o w
rt -...i s t o r e d a s b o a r d o f . d r u c t o r s .
It is r e p o r t e d that E d g a r d r i s t o w
p a r ^ a s e P a t r i e a T a n d i S h a r e s w h i c h t o t a l e d 1 7 0 Share.-. p l u s t h e 4 9 0 S h a r e
ov.r.vd b y V . e y h o u o n m a k e s A i r w o r k I n t ' l C o r r v i n y a c t u a l l y c e u t r o 13 n g 6 6 0
c
I n s t e a d o f 5 1 j ii\ui i a n o\.ued c o m . a n y > t h e c o; m p a n y n e l i
T a ,\i is
v F o r e ii:;n o-..n«_d v. i t i. ir.inK.i; owiiorshi:> Liejrc; o n l y 34 >o.
T h e lr-a
iar. C i v i i ;<v.i
i o n A c t s t a l e s m i n i m mi p e r c e n t a g e o f 5 l.'o I r a n i a n Oarnad a n d
ot
Foreign ovned,
i'oss.i b Ly t h e r e c o u l d e v e n b e m o r e t h e n t h e
a - - J- or..- i t,a ov r.ed in L h
C o m p a n y t lie w a y t h e c o v e r u p a p p e a r s .
v
v-.as o b t a i n e d
'
i
1
'
15
'
a;-.
i:
l
-
v
te Ly
>.:i u
ihrou
m.-nths
• .. yo,: f o r
back
ha.-ic
an:! n o w
inform-
102
K ^ i ^ x w / i o n I^tjS
Capital;
4
?3
(i'^^r
1954)
*0,GOOk,CCO Til-il-j (1 ,CC0 cb-xr^, 10,000 riala oach)
of capital paid
rsgiatration
Sh^rahslu^ra1
Air^or* Invitational Co
(cub^idiary of British Cai^eS)
"aaradtn TT^sddri
•
K r . T-**hi Sshrua:
Ur.
Briatosr
490 wharss
170 siiair*3
»••»
.,.»
. 170 ahsr^s
>».•»>.».». 170 sharda
Aitioush Iranian Civil Aviation la;* rsr^iirsa
li^h^
nlrcrai^ transportation easiparJLds be 51 percent Iranian or^n^i, it
ia apparent th.v* tfca 'British intsras^s (Ai rsori In.smatiorai ersci
Bristol) control 56 pdresnt cf Keli-Tasi pharos, Alao^ it is
m s o r s d that Kr. H^sssri turned hio shtirDJi error lto sosiaona one?
tha o?a?s$ins right? vara
I-irD. 'i sndi (who sraa a
Hilton n 0 t d l errsl©7»e) do?3 nat appear an th3 I\in. r>3r^iyire?h
records
a shareholder.
103
Ir r
Sirs.
v?
—
-
I s t ^4 r In c. ro-nvsst: frr vo«r vnluad
1
! Vn? 1956, hol.i ^ - v-li*
V\vo*".Trt>
v>
»
\fj'
Tjersissio ? "to
2 nm ^
^
V* '
> - .
I
h oe nr;
w r y scne^rs*-!*
^ J A i m o r t x^cn a V-o^ines^ t2rir»
* * oirc^ a C O J I * I p jrici fcao ^las***** sine*
i ;
I h -vi>
I b^er. :fac*<i v.-lth c endue tirviC ny buoir.es*^
in o
—oriT
^ ? sfc'hrua frca
Aloo lay
cfr.il
r.r. Ir^i' i-nd
L I hare
v^peratwd
w : — eon.-Ai-ncAlc vvrAcA.
I and ^ Covwrcrssst firs Saesly nomlex^A, T^-v-its "
T5S.T3or.al incjuijry "by n y ^ l f nt tho lrv.K±an TA-'ra^v
ru fc,
derr^i^e offio&l represents*tian cxr. xy
Ay A:\iviss^vdcr
Hysr and the Arerio&n ^fbasoy Stsvf? in
thfrrr
r.-? indication of the reason for ay
barren! iVcr. iv—?r.
i ntc Ittji.
I hava
u very confide.1-5101 » vortr
ef
>v;3:.r.t»so
re^resonts* 1 by Ad years of ecstsn 're
try: :vr ciSArrts, to
dsv^Xope aviation in a country thnv :~y
_:
1 ;
' w o r e ' pxtrsrrely fend, Imai* Sy vife r»ivi I hnv*; bs^v: Ace^ly Vart by
motion of the Iranian
v-o hs-.*
felt Ah;t .. r:\n
cor second fcv.r»o. ".io hr.v®
cirrc?^: rrior./.oOii-: c v . - : ' - . 1 :
livirnials, anl — st^ir.t our business
orci .1 p ^ c r ^
hr»vl ereat^l n vrrj' fewomvole clino.te for cur life
y
ccur,try..
iy
efforts in ^rt^ot?;^- r.Ti^ti- " in I
h-o ccvrevl
ran— r\'3T>eot-.. A3 yem knov»? fcr
rv.-.Dt ^ever^ i yo.^r^ r^- ^prsicr.iil
efrcr is nrvl con^-^iy he^ t-rt^ri^.i ^ilotss
: ^cr^.rd-c«
.liriei^ccnror.Ov,
to^Tinatiovi of thia
^•"•rv-, r-ofiv.o^to.l
ir» ?
n
terrirv-^c-i c^
I x'ur^h^r ctvo~>o:"i;
r. vio- of the
vh? C o A i i ^ c r Oo - 1 v.^u^:
ir. Irr-rt
<T .9i.>5. I'iii'?
vr»o
o w o-.-c- /.i
^ 0.
re*'
:
h--:. vc !
t v>
;-o ('- ic-hi . r : ..
;
N
3::^/ ht
th-^ Iv^ior* 01 t-.o ' ^ r>. r / ov Co. - I
vr. ?.. At-.i. v:, "v,
A c^vib?.
in '-v:^
.
r
i ^^
- 11AAviA
;
?
A~r
Act ~vr-ovi
Th t
o^^vrV-i r. ~
h - AA, - -
104
Ho-h r;y principals, C a « A i r c r a f t C o z m m y , ny Iraninn partn s r , anu rzynr*If wero v.rry optimis tic, relative to our appJ ic;-.t1 on
"hoin^ quickly approved by the (rovenuriont of 'Jrunt since the Civil
Avintion Act otr.tea specifically thnt the Government of 3 ran will
assist Iranian aviation firni3 in ©stabliohin/? aviation services
on a non-nonopolistie basics.
General Khatami, since you are deeply involved in promoting
aviation in Iran, I am hopeful that you can help me in my very difficult dilemma. Any aid you can grant In facilitating the American
Kmbassy in Iran obtaining my re-entry into Iran and nermittinr; me
to rejoin irty beloved fanily, and to re-establish ny activities in
the promotion of aviation in Iran, m y government and I would b« ccctowaely {grateful.
A s a n example of m y efforts in promoting the gronrrbh and safety
of Iranian Aviation, I respectfully point out ny services as the U S
Federal Aviation Agency appointed Examiner* For the past 11 year®,
I have dedicated a v e r y considerable portion of n y time to giving
the Airframe and Powerplant examinations for the xnechanios employed
b y Iran-Air. Each ©f the examinations takes approximately
two days
of m y time to complete, but I have felt that this is a small oacrifioe
and that n y effort3 would be helping Iran, to promote the safety and
efficiency of the Iranian (Flag airlijae). £here hno been no compensation for m y many days of volunteer work in this field, nor do I expect a n y . However, ray fanily and I do feel that v/e have the right to
v/ork, in a favorable operating climate, in n country yto have ppronn extremely fond of•
General, I look forward to working with you in every w a y -possible
in our joint interent3 in dovelcroing aviation in Iran, Since I an a
citizen of a friendly country which expousa the advantages of a freely
cozxpetetive ccxrzr.orclal society, I sincerely feel that efficiency and
progress in the development of long range Iranian aviation aims can
be most expeditiously aeet b y aviation companies who freely and falreccrpste. I hope Sir, that, through our rcutue.1 interests rmd your
personal corffpas.aion you m a y help rue to r a t u m to n y hojaa an.l family
in Teheran.
Will icon H . French
105
^ © S S f l a a * AIRCRAFT
Wichita,
C O M P A N Y
Kansas
67201
July 2 2 , 1966
Air T a x i Company
Mehrabad Airport
T e h r a n , Iran
Attn: A . H . Zanganeh
Re1: #241/10612
Dear Sir:
Vp acknowledge recpipc of your above-r<~
J u l y 7 and have noted your coir.monts .
re need U t t e r dac.?d
We carl only advise chat the handling of
part? vecusir.scents
lor your area has nor changrd jtrom t'.'^ protcd-o.'? oi:t i ined in our
A p r i l 4 correspondence. We therefore request that you submit
your requirements tor maintenance spar? parts to Avisc ion Devcloptssnc C o n s u l t a n t s .
Jiy o copy ot th;.s letter Co Pr. French. we are
qu<^<. in<-. chat
he irises: ?.gate an--? ajsir.:: you in oe.y nonnor r.ec-srary to sup p. I-/
i n f a r c t i o n stsd spare ptrt&
required.
Vnvy tr;ily >;:;:V3,
l-h.WA AIF.CS.A7T CCMfANf
106
EMBASSY
OF
THE
UNITED S T A T E S
OF
AMERICA
Tehran, Iran,
J uly 1H, 1966.
Mr. William H . French,
c/o American Embassy ?
Beirut, Lebanon!
Dear Mr...French:
Thank ycu for your informative letter of June 26 regarding your
desire to return to Iran and to resume your business activities. We
have delayed replying to your letter in the hope that we would have
something favorable to report to you, but as yet the problem remains
unresolved.
On July 11 I broached the matter again with the Prime Minister's
assistant who informed us that the Prime Minister had instructed the
Foreign Minister to give us an answer to our inquiry as soon as possible. Since then the Ambassador has talked with the Foreign Minister,
who wa3 away when the problem first arose. We will, of course, continue
to follow the matter closely.
We have taken the liberty of delaying delivery of your letter to
General Khatami since it seemed to be concerned with a business problem
rather than with the question of your re-entry into Iran. We were
wondering whether, in view of your acquaintance with General Khatami,
you would wish to send him a letter seeking his intervention with
regard to your re-entry problem. It has occurred to us that, while
we do not knew if any particular individual is responsible for keeping
you out of Iran, General Khatami might be willing to inquire and possibly clear the matter up.
What we had in mind was a low-key letter pointing out in moderate
language the difficult situation posed for you by your inability to
return to this country and continue the business activities you have
built up over the last fourteen years. You might wish to mention also
that you have been separated from your family and that you wonder If
he can assist in determining why you have been prevented from coming
back.
If it is important to your business interests that we send on the
first letter, we will of course do so, though t a c t i c a l l y we wondered
if it would not be better to delay until we friave a better idea of how
your problem may turn out.
course, let
Sincerely yours
Nicholas G. Thacher
Minister-Counselor
107
EMBASSY
OF
THE
UNITED S T A T E f
OF
AMERICA
Teiiran, Iran
August 13, 1966
Mr. William H. French,
c/o Adrian T. Middleton, fisquire,
Deputy Chief of Mission,
American Bnbassy,
Beirut, Lebanon.
Dear,Mr. French:
In accordance with your request, I enclose a list of attorneys
in the Tehran Consular District. The Embassy cannot, of course,
specifically recomiena any one of these attorneys; however, we do
know that recently some American clients have liati satisfactory relations with the ones whose names are checked. Those not checked may
be equally satisfactory.
There is enclosed also a copy of the Iranian Civil Aviation Act.
When I discussed your problem with General Khatami he indicated that
the charges against you would be brought under Articles 26 and 27 and
that Articles
and 35 would be particularly germane also. Your
plan, as indicated in Embassy Beirut's telegram of August 13, of sending your Beirut lawyer to stage a thorough preliminary investigation
with the assistance of an Iranian attorney, is of course a wise thinto do.
As you may have gathered from our message, General rChat^nj is
very anxious to see that the charges are pressed, ile b»ts his attitude on wnat he regards as his own long-term endeavors to establish
firmer Government of Iran control over moveinents of S H V I L I planes
around Iran.' lie will e;Kieavor to find evidence wherever possible
that you have contravened regulations in this respect. I r.vntion
this- not, of course, to uoter you f m n wtatever coui*se you cieteraine
appropriate, but just so that you may be quite clear on the problem
you ar*e facing. .
As soon as you h'tvo ceo!ded de finitely 0:1 year course of action
and if you intend to return, we will ee hnopy to raise the vitter vat:",
the appropriate authorities who iroy then, take step? to approve issuance
of a visa. We are keeping Mrs. Frenoh posted on your deve.lo;>nents.
Witn Ivst wishes.
108
AVIATION
su ("MS
HW O. MA**£r ftr.
V>«<SrHTA. KAN^US
D E V E L O P M E N T
C O N S U L ^ K T S
INC.
MAIL ROOH, AMERICA!? EMBASSY BEIRUT,LEBANON
August 24,1966
M r . Rayroond A . Haro
Assistant Secretary for near Eastern and South Asian Affairs
The White House
Washington,D.C.
OMAJii , T K t * * * ^
Dear M r . Hare:
Thank you for your letter of August 16th. Please convey my most sincere
appreciation to M r . Popple for his recommendation and assistance.
In reading your letter it is apparent that you are aware of most of the
facts,which I find most gratifying.
Briefly the situation as I see it is; General Khatami is using his position
to*control ALL AVIATION in Iran.I
.This^includes having control of the Aviation sections of the Army and theGendarmerie,as well as all flight training both military and civilian as
well-as the Government Airline. Being the Commanding General of the Imperial
Iranian A i r Force he naturally controls their training and operations.
I He is major stockholder in AIRTAXI the only approved fixed wing charter
company in Iran
He is a stockholder ( But not of record ) in H5TLI TAXI a helicopter charter
company owned 66£ by Bristow Helicopters of England( which is contrary to
Iranian law ) as Heli Taxi is supposedly an Iranian Company.
He i3 Board Chairman of Iran National Airlines which in my opinion and
others,illegally confiscated two other Iranian carriers to form this
nationalized Airline. Iranian Airways owned by fieza Afshar and Persian
Air Services owned by M r . Ahmed Chafik.
He is President of the Civil Aviation High Council and in such capacity
controls ALL civil aviation activities.
He appoints and controls the Director General of Civil Aviation as well as
the Director of the Civil Aero Club which is the cnly a-oproved flying
school in Iran.The present director of the Civil Aero Club is a Colonel
Jnhnmbahni who is also a fellow stockholder in AIRTAX1 C o .
All this is in direct violation of the Iranian I*iw which states that no
Government official shall own shares in; or -participate as an official of;
a7\v mialic or private enterprise.
109
-
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ar
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ra-u.;.
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r .
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t
'A,:RTVIR-.VM.%HO
-.•••^JJ » . ! ran.
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.V.
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a
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.
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.
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cm"
:
'> + r
• '" •laTt^- trvv--- ; r r
w 11a t;hr> air.\ tv.r c- 53i t-:r>?
•
*
in " r;: r.. 'c<"
* '
.-
1
Having f2cnrr
Mn
n?,ty th^- Shah 9-vera! t i r 1
a?; ! r.r,> •
;
i.nvoreggM
tn r 1 rj ro. r.cere u-n ire t.r Lirp• •<. v* ^ip r4 v> v.; r-' of ! 1 v.
o
t^popj o and wi+h h I n
ns a !<?.. ^ f?r. Th« -n^t- >r.
1 r.
•?<•.
i » i o [^irbr'rif: •
. • al r
4
b'
"
:' • •:
-roTi'lr-
r
:
1
-r-^rit an ror > rr.-a a" .•: _
rr
Lh^ ']rv
f i i«» a
v
''"^atf.s
••'i .. a r.e
• :.
•• ~
\ '
:
' • • .;
••'<.
rf a
.• ' r . i. v ••.
.kr:r . • a-
/; .i
•
you.
I rrili
n rnt
5r
-ic^p^'T^
"F'CNRIL
";vt V c*
V-P'-V
^
v
Vi . • t
F o W o r t h , Tory f
: R.
.«
.
^
YR^.;
r-^d
F
UL
O o . .i u Wj r h : V : , ? - a , , . <•
r nouM
. r ; '•v^r.'-.i - • a-;
I
J R:
- -t- ; -? .1 ^ - ; f>) 1 pvp
a-c
' ' ;» T. ' " f
r
.
' A '
T :
:R ^
T :
T "
^rzc c f t^c
;
V',0 .
5->
y
y O V 'T
VilHr.rr. y.
Mann^i np l)i ru:tor
2 3 - 5 3 6 O - 78
•
" a; •
a*.
••• '
• a'
: *:"
-T
vr *
At
V R . )
v
110
iiecurd_s^ of jve^istored
/ h a ^ ^
First
C a p i t a l - 6,O00,00Uli
Share Holders:
1_ F a r v a d i ti i 3 3 7 '' » ^ .V - /
AIKTAXI.
Hegisiration" N r m b c r QQ4 7
2 0 0 S h a r e s , value each 30,otNTi,
,\'ader J a h a m b a u i : 36 S h a r e s w i t h o u t n a m e , 4 w i t h n. we
Amir Khatami
: 36 S h a r e s w i t h o u t n a m e , 4 w i t h
name
Ahmad Shafik
: 36 S h a r e s w i t h o u t n a m e , 4 w i t h
name
( B a l a n c e of 8 0 S h a r e s w i t h o u t
AIKJL'AXI
name)
S e c4 r
c
25Mlordad
C a p t i a l - 10,000,0000s
Share Holders;
~Z,(t / ?
trTTT'f uii *
100 S h a r e s , value each
{J\!
1544
•
100,000^
Amir Zanghani;
50 S h a r e s - 5 ,000 Y 001>*s(Mm
Ahnad Shafik
25 S h a r e s - •2,500,00Qtts
:
/
i ng o sec
F r e d e r i c k E s h o o : 25 S h a r e s - 2 , 5 0 0 , OOCKis
U n o f f i c a l l y it w a s k n o w n at M e r h a b a d t h a t F r e d e r i c k E s h o o sold h i s
to Jananban.i for r o u g n l y & 3 5 , 0 0 0 . 0 0 approximate!}, two } oars a g o .
i O U
HEL1TAXI
4 Aban
C a p t i a l - l0,000,00CPJs
Share Holders:
1000 S h a r e s , value each
M r , Taghi Behnam:
1313 d u m b e r
share:
•
9554
10,000'*
170 Shares
M r . Nasradin Nasseri:
170 S h a r e s
M r s . P a t r i c a T a n d i ( R e p r e s e n t e d by O r . Mohmati /il i l'ar
M r . M e y h e u o u 4 9 0 Sharea^Sn^tiefiH^f of .-ilrworU lnt'1
C
M r . J a v a d M o s h t a g h i M i d i tor
I 2- 10-J 3 13
M r s P a t r i c a T a n d i r e s i g n e d anJ Mr-. L d g a r U r i s t o w
r t c i h t c r e d as board of J i r e c t o r s . It is r e p o r t e d that" k d g u r B r i s t o w
p u r c h a s e P a t r i c a T a n d i S h a r e s w h i c h t o t a l e d 170 S h a r o n plus the 4 9 0 Sh,..o w n e d by M e y h e u o u m a k e s A i r w o r k I n t ' i C o m p a n y a c t u a l l y c o n t r o l i n g <>60
S h o r e s of the Comparty.
I n s t e a d of 5 1 % I r a n i a n owned c o m j a n y , the c o m p a n y h e l
T a x i is 6 6 % F o r e i g n owned w i t h I r a n i a n o w n e r s h i p being only 3 4 % . The Irian C i v i l a v i a t i o n A c t s t a t e s m i n i m u m p e r c e n t a g e of 51?o Iranian O w n e d a n
m a x i m u m of 4 S > F o r e i g n o w n e d . P o s s i b l y t h e n : could even be m o r e then th
66?o F o r e i g n o w n e d in the C o m p a n y the way the cover up a p p e a r s .
i
( h i s i n f o r m a t i o n w a s o b t a i n e d a p p r o x i m a t e l y throe m o n t h s back a n d now
c o u l d be c h a n g e d a g a i n , and is o n l y s u b m i t t e d to you for ha>ic inform*.tion on w h a t a p p e a r s to be some tli ; n<-; on the surface :,ti i sonet hint. e l s e
c o v e r e d u p vj tn n o n.iru"? J is tea e K /)
Ill
I^inn-Sr&iatrost Information for Holi-Ecxit
Registration Eatel
4 Abtm 1343 (Kcrvombor 1964)
Hecdotrtition Fo.t
9554
Capitals
10,000,000 Rliils (1,000 0har09 p 10*000 rialo oach;
Ons^third of capital paid at rogiotretion
Sh^roholaercI
I n - ^ m a ^ i o n a l Co
. • « • »•
>
490 rharsr;
(cubsidiary of Britioh Gni^od)
Nr.oradin Ffnssorl
K r . Teghi Bohntca
K r . E3gar Eriotow
.»•»*«'».•••••»•»••••••.•• 170 shnroa
...»•»...o».»••»..*««
•»..».»•»•...••
170 ahasrog
170 ohiixaa
Although Iranian Civil Aviation te* requires that light
d r c r & f t transportation companies t>3 91 poroent Ir:aiiE.n ovmsd , It
i o D^p&ren* tha* tho British interests (/itrwork Int or national ey-<&
M r , S r i s t o w ) control 66 pcraent ot Hali-Taiii oharoa, A l s o , it ie
ruaored that N r . H&scarl turnsd hio Bharoa over to oomeono once
th® operating rights
established
K r o . Tnndi (who vma tx
H i l t o n H 0 t s l enployae) does n o t apposr on the 3>unn-3rad street
records as a shareholder.
112
.
A% : nt :
j. Tiu-
S? o ; or. r A : <>
«;ticr. Ar-o^ion ef v
i ,
tier.
of
" v.l
.1 • r. A:~-y
\*:y* v -.A .: rani\a
V'r'C { A e c r o t
e\. i > ;v r- vi -
^cAiee
}.
ciYjr.
1. Civil Aviatvo- Ki.-h Council
2 . ^hf! C i v i l
3.
4
Avlo.t or. T ^ p t .
Ir
s-cposeily
the V i m r^ry
of
Roads
bj the r.ir*ctor General cf Civil Aviatim
v
c: v: L aviation C v ^?AN S
1. Irs^ Katicnn.A Airlines
A. A i rt?.ti
-. Civii Aero Olur%
The
C-53SKUL
pec
AKIH
of
KHATA?»I
APOT.?
tr.e
VXXRCITSS
?Y
JT'KANS
. of
H I K R : ?
tnr^
T.VD
-
W
-
*
O
?
I J X
EY
OTT
MILITARY
1*
Ccr«s.ndiri£ G e n e r a l
of
the
Imperial
7
r*miftr. A i r
force
2. 3. £
A W 7
:
;
?r
tiaviivs: hi s rofi-ior. s?
A-^rer-nl of the Asrreri * .1 Iranian Air
3e»r<st* an 1 tt- ^rv.^heo-in-iav vo the SiwOi he h^s.^i vcr a len^ hobirui the
dirv^A
*hits
w o r
f f c t x f-ur c•»«?*fd
c o n t r o l vlr.c<~A in
FLV^S
till oi* c.n*
HIR,
R
5<?C.^C.C-A
NNI
i s hiivinr. A i r
V- o f e l l o f
PR^^RFOA
? c r c »1
o^:;:
. U R A . A ^ C
IN
Ai ::;ry •'ore.-; r- i rbin Ix^.n.
J^ovli L:i loyalty to the
ercy
off i o?rc
r oic
>>ro '.tors.
^A^OOTIVCLY
CCNTROLIITA
not re\«:cn, Ac i?
a v; i,
I.
rhr.V-i is r r t , A m
*•
-O'.rh
Civ- •
c" t
•
*
ei
•• A \ v i
-' i
•. •V• ; .
• • ^
-
•
•
: /-on '
•
— .
•
113
a I VII
Cont.
3.
*ho Hiivctor General of Civil Aviation i"r.
Arbibi is diroevly
fend positively control^**! by; and in r.b'tc;, fear of; ^f-noral Ar I r
KhatAui
1.
Iran National Airlines
C I V I L AVLARICN COTTPANYS
G e n . n«atA»l ig board- Chairman of Iran National Airlines and again
exeroiees absolute control by virtue of packing the
of this
Airline vith Air Fores Generals under hia. direct occr&ni. The so called Bin American Airliuea contract io a fsreo
n. cc^rir.v a t t e s t to
coneeal the real oowor in ny opinions if you doubt thi? contact General
Robert Boll (US&£2) of Pan Ax&erloan Airwsiya In H<?tr York vho c o n d u c t s
the contract negotiations rrith Irar.air for
and have h±a jive you
the true p i c t u r e H e KAV not want to v&j anything on this subject rut
the truth ie the truth,
2*
Air Test Cowpany - ^
jS«n«rRl Khatami i» a s*ajor stockholder
in this Company although last year
1
^he had hie naa« and Col J ahasabsthn i a
record A fros the ovr.sr? of recori.
aging IHrector of Air
is nothing but
ft
vith
oiling the c^rin^ne. Ifhia ie cos-aon knowledge ari
latlxidatian and coercion wh«r. dealing -rith ^c^t all
: ^msiness firae both local .^rid foreign, to
eure that thev deal c n >
|r?ith I m p a i r , A i r Tiori er Sell taxi.
3-
Keli Taxi Cosrpany
Heli-taxi io A supposedly Iranian C o . with agnin rhatitsd and Co bein^ stockholders behind the s c e n e s It ie in fact evnei 6 b y Bristc*? Helicopter
end British Aviation interests^ K r Allen 2ristc*r ie lieted as Kana^ing
S I rector of Hcli-^sixi. (!Thie ie ccatntry to Iranian lat? trhich etates that
ANY aviation eo f mist be 5l£ Iranian GVT.«£»)
r*-cerdty TRILL UNDOUBTEDLY
fce changed shortly to conee<il this oversight on their r«rt. But tv© facts*
r i l l still regain the saso.
General Chataai also csee Air yorce G^ner&ls (In Unifora)
call or. procrpectire customers for Aisr ?iuti
Heli-Taxi. Theew Gftnorsls (Sefat £
other**} toll the eustoser that they uso their Ccr.rar.yv or r b i o net
nircrftjTt or helicopters.
Caper.o rsg t rikor eoiap^rsd to these hoy?.
O-ir l e g a l l y c o n s t i t u t e d I r a n i a n C o s r s r ^ y ( H e l e , C o r p ) v h i c h
fereed after
f i r n t Y ^ U r i a g rritrs j*r
»t«*re t o t a h e t o «>«tftblt * h & O ^ e n a a A i r c^-ft
and
e S o c h a u r r ? r t f o r t h o C e e m a f l e r t i n T»ir. s i ^ m
\ra.c>r Ui? J t l P . K v A r b & f e i s t a t e d w e c h c u l i f o r * c.n I o n i a n .
to c r e p l y
r:lt'a ilic XR&NIAN C i r i l A ^ A t i c n A c t , a n d
brji^ar CLP'IL; a n d o r ^ r a t i n ^ r i g h t H
r-oxild "bo n ^ p r o V l K s , n o r rcvJ.d h e l i c o p v - - r cv c:n;sjvv rifdi^r t o
cover the
tcohnxoal
e
t o vsvipvcrv cv.r f A l l H r i i c . ot< r ?r*vr
I^m
C^ir operating rights
t-r^le tho
c c « th/.t
high r-o^cii
coula
of
but
;
dt
o f Ctvil
••>.*
a
* •
rprovtd y Urr.er^I
a t .
-1".
r
>
-
-
. .
i-" - -
"- "
• «.:-':
,:
- • .
rho Cs.
.: r
114
•7e
hflvo
h a v e
l o t t e r y
u s
t h e « o
b i d
r i g h t a .
i n g
i e
t h e
f a c t
p o w e r
t h a t
t i o n
n.
t h e
s a f e r
a n d
t h a t
t h e
K r
I r a n
a c t
m o d e m
t* nr.a
^ r a n t i n g
a n d
u e
e t c r v l c o
a p p o i n t e d
p l u o
w i l l
bo
A r b a b i
w e l c o m e d
w a s
f / t n t i n g
a i r e . raf"<: A o
l i c e n s e s ,
b e t e l s ,
m o r e
f o r
l . e l t « r
r e s p e c t s * .
UB
f o r
o p e r a t i o n
a v i a t i o n
n o n - H B c n o p o l i n r t i o
gcir,
a
a i r f r a m e
a l l
t o
C i v i l
fr. r e i g n
r « f n o n c ?
o f f e r
p e r s o n a l l y
k n o w
i n
s t a t e d
c a n
I
a n d
t h e y
s t a n d a r d ®
I r a n i a n
s e v e r a l
u i / ^oir.-n t o
T h o i r
we
t h a t
p l a n t
l i c e n s e
f r o m
t h e i r
f o r
t h a t
a
t h e y
;nore
a n
c o n d u c t e d
I H r e c t o r
t y p e
a c c o v
of
nr.
r.ot
i>ut
w i t h i n
t o
o V t a j n
i n
r r r i ».--
p r i e s .
A3r;o
o f
t o
t h e
c u r
T - i ' / A
C i v i l
i n v e e m i n e n t ,
a v i a t i o n
wovJ d
f o r
m - ' t h o r i a a t i o n
iar:c»»
I r a n i a n
f o r e i g n
c o m p e t i t i o n
i n d u s t r y
l i k e
w a s r
i n d o c i l e i n
G e n e r a l
of
d i d
i.li
r,
. e - j n a b j r-
e n c o u r a g e m e n t
h e a l t h y
t h e y
Aviation Tirarninier
K ^ u ^ r a l
h o l d i r . g
t h i s
t h e
a v i a t i o n
v-loch
a t
US
t h a t
1 i c o p t e i r_< I f
A v i a -
a n d
e o n p & n i - e
reerjJ.t
i n
t h e •
o n
a t r o n -
c o u n t r y .
211® Director General* of Iran Civil Aviation Mr Houshang Arbabi . has under->the
orders of General Khatami refused our Iranian Company, Hole, Corp the right*
to o r n a t e our: own aircraft, a Cessna ISO carrying our o r Compctny personnel,
or supplies, or surveying personnel of our Prime contr&ctcre, or personnel
»rhe we are trying to get intereeted in developing the electrification ot Iran
and j)ip©lin'S routing and eurveying projects* Our firm e>igr.>?d a contj^ct with
the Iranian Kanatgement and Engineering Group Ltd (BiEG) who are tho contractor Coneulta.^ts to tho Iranian Government for designing
routing of ths Bigir^h Ge-oline vhioh trill be built going to Ku.nela.
ha« the rights to Inpert. jnst about anything that is required in order to got this job completed
as? «oon a s possible. K«la, our firm contracted to supply our Surveying aircraft on a leae« basic* and
would furnish our pilot to show the IKE? cozrrty ing engineer® the shortest route and B\ost practical route for the gnaline, V/o
l^iaed our Cessna in good' faith t h i n k i n g re vero h e l p i n g t h ^ Iranian Government, plus with hopes of getting eorae of the ahortor off ehoota of the gitalin* to construct when the line was to be built. We alr?o ep*nt $60,.000,
for
6
Beav*r &iroraft which M e ^o be
directly to IWJK?, and the pi J . o - t / f c e c h
>rould "be XMJSGET own personnel. The eaiee type of leae* (wet or dry) if? -jj^d
t h r o u g h - o u t
P&q
7 2 7
o n
OAnae»llft(f
period.
t h e
t h e y
t o
w o r l d .
h a v e
w h i o h
i e
a
I r a n
N a t i o n a l
o p e r a t i n g *
Greotronic®-
a n d
tfe
A m e r i c a n
loso of
r o u g h l y
a i r l i n e s
u a e
a
w e t
c o m p a n y .
$210,000.
u s e e
l e a e o
O u r
i n
i t
i n
w i t h
B e a v e r
les«*
c o n n e c t i o n
a
w i t h
H e l i c o p t e r
c o n t r a c t
f e s c
o v e r
now
a
30
we
h a s
t h e
h a v e
b e r
n o n t h
Our Cfifrwna 180 K7751&, which iu our American firn. Aviation Development Coneultante, Inc.,.. foreign inveet»«nt portion cf tho Heir? E q u i p E e n t , wo.k l e a s e d
to KeOLo, SA on 10 ^ p t w t b e r 1965. Aviation Development Consultants,. I n c a .
p\ssrol»«©d
aircraft ma 13 £ept*rab«r 196? for thie specific pn-.rv^y*. A
pvxjito copj of this rre.s givon to Kr Arbebj's office, el. so a cop/ of our Joint
Ver.true agr*«cr,ent between Helc and
Ino»
f.lso »rrotc« a letter to Mr*
Arl'V'.bi *fj office r^d cent it tc hiti gvve.^ixa^: wo
h going to v.ro
c a5rcraf'c
for itf fii-?rt flight
about 22 SepttTKbrr to n^wtejushaw to purvey n watrsr ci
r
lino pre-.lc-ct. v a made the flight filijcT a flight plr.n> Ve did not gct an
r.n-r^r i'ro?i onr letter end r.oiKryfced everything ^trs okay,
also aemrmed the
Uf,o of our n i ^ r a f t for the Gr n lino routing
okay for it ^ t r crfcly
r.««fded fftr c, thrcrw rr*Q& psrlod or bo.
TQuvt^r-il b r o u ^ : D ^ B e u r ? to bir
cn ;;r f'-r.^bj V ; r ' t c ^ ^ c our -Tll^htg en Ifi K^rcli 1506» Horfcvf}rr
Co
vh-.n
flywi
p e r ^ o t u i e l ,
hct tho <?n.r"r:r/ir.g Y-.r.d to bo done f r o n
tho
th«j rt i v-jT'.'^t
cor 7 C.
f l y
and cl&F:
ti*?-0V'.'7h
tu j;, . "f h*
lo co^c.^l '•f " V r r A r ^ r ^ In".- h. - TX .'.>j«-r
W-hii-ulov.^ vh *.>.i one- .^-..n^ot
'••r.V: i.. 'h^' ' - ' .
115
12 April 1«56 Jlr /.I'bftbi eall«& no by tolephono C.nd a*?eed K-.O to O O K O to
teo kin*. i'Ma I did on 16 April 1966, at which tine JJr Arbabi told EO that
flying cur Oaee^a ISO Aircraft waa rrong for tho E'cOA offioe had not civen
ucj perfcdueioii. at ishich vino 1 showed hia a oopy oT our lotter to hii.i dr.ted
11 September
Ho eaid ho did not rcceira it eo wo could not fly until
vjO cot i7®raie©ioa* I rrrote hint tho following letter of 16 April 1966in<g he
to have it rritten to hisr*. I at^od
oen v>o got porjuieeion
end ha e^id in a fe^r dayo r>oeing we
applied for poraiecion in the 16
April 1^66 letter. I £avofciiath® log books in c^od fcith GO ho £%uld RCO
t^hero
had flcrai einco
purchased the aircraft 13 Septedbor
Only
fles? rovgkHy 60 edd houre.
Cn rot^rnin^ to £«h»r&n ®n I'&n American Airlines flight <m 19 isay 1966, I
refused to reenter Iran with valid US Riesport and vieru /teericaa Ksiibcieeg
officer ulsa could not get
into Iran. I returned io
asd Have
bsen
ever einco. Calv en 13 August 1966 through tho grood services cud
c^or-feo of the iUieriofcn Bsoasicy la
J3? Kickoliie 0 . SSk&sheisr the Kiaieteo
©btaixasa i&fojnaation fron General Hhatoii that he io preeeing the^
eliftSYS^a e^iBjgr^ ssyeelf cf Articles 26, 27 sad 34 tind 3!F »n& I East new faecr
oiv&l etaS/fee by the Iranian Govexssaent..
In
tiwe Bsy "buain®©^® have al&oflt b*en bankrupted, the neesenary
epero air©raft and engine parto for tho
*roppli*d aircraft are delayed forI
uot in Xr&n to
uo tho n^sesssary Wndgi and guartinvsss?. I have been
Gfc-^ers^e-tl fS^sa ny fe&dly
fesr tSsree m n V a z * £ho letter I trrot© Kr Arbabi
ejtd giving tho log tseofeo cf our a i r o m f t to hi» in c©o& faith has now been
ua«6 tgainet ito.
In addition to tliio gsy Aj»erietua Pilet/Seohanio Kartin Saiith, who is flyin^cur le^eevl fcelioopter under Geotronics rights on the US Ait^y Kap Service
Cos tract ©rsiohed and
liumed to death on 23 August 19^66. W&th problems
©f C«ttisk$ hie f^rsily sent V&elc to tho States, body reasoved froxa Iron,, the
Rffmao of By fRjaily are
^trained beyond tho b r e w i n g point. In addition Gcaerai
trill n<?w use thio r.ooid«nt to cmother admntage by eayro^
there shouldn't bo any foreign registered aircraft and hclicepter?
operating in X r m w
for tho cs^ah i» not known yet! This h e l i e o ^
ier rsuQ leased froM our otiicr /jL^rieen
International Holicopter OonK^siR^SJf Ino., of
to Geoircsiics^ division of i'cslcdyne, Konrovla,Cti'
f
tl^a Gss-si*:* Airoruft Cosapaj^y o policy io that cmcli of tho re>preg«raiativ<*tr In
tho r.'orlsl should have a han/^ir ciid f^Aintcsiance facility in order to b8 able
a
«...
v*53v^»n:cTS?Ti <*
^
r.'^l^MJ e^?
lO
c.^-O'ni:
c:^. C" :
<
C. C1--11
u^a TTii^r^u
ct^t o f Zrr.UY p u t pro.uonxro t o
tryiss^
~
J^c^
t
o
vGjvany
wwimiwi iui« vt-vjsij. U«D
OU£J
on CK^csa on c h s m ^ l n ^
l^ttosrr ^ro n^f
into Co^sna aclrin<x for ^-Kppcrt
r^iiit^nl read Ocap^^:*, hsr© trcuscee^^ l a f o r o i a ^ US OovrC'J r ,
e f f o r t / inrjtc-ad c>? ccr occ^.nieo G^liivx itf^y
tho
eir^l Gc^dosrsi-^rl• l\io tJf? As&^T
c:?
to Ik^-fjolf'Fold (Jol
ilyin,-; Club
i-L'.wM
olub in i.cv; hc^dcKi by cncf Colcnol
vho w^c fori*?}
r:
rr.d rc-..irJLu.;: vUo Aiv ic^ri Uo., Kelvin rcor.-ntlv be on r;p?ointed by
cr-:l . i - p
i'liJ OcJ. l.vj b-scsit to ci;icf of ntai.J cchool in tho
"
^ v-r.i i r.;- other t»;7 Airforoe r.chooln. It ic ny vjndcretandir^ that if
116
K r . Efare rith all
3?£opect I cub nit. I hut our coiuviry hae given norc t^nn
tro Eiliion jDcllaro "to the country o*. Iran* Wo have S.IT^
present Gere*.
Kfmt fron telce over by tho Conj*unic?ta» "Both tho United States and I n w h/m
enoorortt^d Auiorican foroicn investors, to help developa the ecciiosy c? T m t (
le this the treatm&nt that oil American inventors con eventually e-tpoot? T
will continue \>itk all the legal
at nj dioposs.1 to protect ay ri^hi-i
find ny inveet$>>\cnt c9 but bolieva lis £Tr. Ears I nt>ed help* 'Can yortf
1
io why I ssu^seeied to President Johnson &n<S Kr Rv.eSc cutting K A P and ICC;
&&& to the Iranian &irfce€c?until at
ti)to
a s /jraeric&n companies who
try to coaply with tha Iranian laws have
chances and aro abl? to
port iae American to&avrf?«cturenr they represent.
If tfc^o ©harass that Ctoner&l Khat^sii ie pushing aro not dropped "by the Xr?>o:
icn ^rrersaont our bu&indss essaa lo«t„ Ktcaber one
I did giv© K r ArbaV
tho in^atrwition ha requeetad in good faith, the General intends to presh trie?;
©l&ist?* Kvsn th* courts in Iran era bought wo what chance do«s on® hava of
a feir Ifrz&fclU Aft#r wards- tfecy vrill net alloy k* to get siy reeidene* permit
Card bas^irgsuat for trs»do, nor #ork pereit. £h.at chance th*n h&j? on
sver £ttttlr\g th* bec^ar- coiS sstiintsnance facility at thot airport to support,
and th© TO UUCP given equipment
I ffu^geat a high lcv«l saseting *»ith tho Iranian Ajsbas&ador insisting on the
&ropptn£ o^ these
&
tha rctle-sec cf cur Cessna. 130 which tho Inusiit
Airforce ban tafcen ovor. I reported ths aircraft e.a stolea for it w a o perfre
airport locked, brakes awt* ohal)c«d and tied down*
brc&o
in^o
ejsd »oved it to a
and le^kaxl it ujr* With this action of
vrho knonrr if R&lie® ^ m g i i e e e ha3 iaktn place, V9 hare never txnvn
told jr-irfically by any Iranian Govemssent Agency it vraa ±ivpound«d only thrcu.?;
o u r irtsuinsuic«
ti^stors lias thits inforx^iticn ba found out. 3£r Ar^ati on
told
wi? couldn^t fly it until vt? get penaiesion, raid we reapplied for it 1
AP&IXj S<966 l%tt«r, rhy ia Khat«ufei tiaking this ftraciplQ now trying to
our
so his can havo all the bus in a BO. I don' t underetsnd thio
teo^ivm. V® neofi top fsid« help pleae®!
Vi 11 ieja H „ French
Kanp^ir^- Utreo -or
117
' / ^ V-
wn^T
^
J
^
27 Augusti1Q66
Beirut, Lebanon
M r . Robert h.:±l
M o r r i s , Laing, Evann & Brock
123 South Market Street
214 First Federal S a v i n g Bu:L.ld:irig
W i c h i t a , Kan Gar:
D e a r Bob:
If you road my
[letter of 24 August 1966 to Mr Hare, you will got
1
the general pietur - how the 'Iranian Airforee 0 en oral in Iran :i.rj forcing
or trying to force u:; oul. of business.
As Cessna repronon bati von we are required to have n hangar and
maintenance f a c i l i t y . We have been trying since 1961. It now has
reached a stage where the general is preventing myself re-entering
I r a n . All business is at stake. I could send in a replacement.
However, this w i l l not get the maintenance facility which we require,,
n o r a repair facility and operation.
Y/e have complied with all the Iranian laws, registered an Iranian
Company 5Vf° Iranian after the director general of civil aviation stated
this is what one h a s to d o .
We only have the spare narts sales, left, for our tech rep program was completed a U S government contract in June the 30th,, 1966.
We cannot even bring in a dmonstrator aircraft. I nm coming to
the states this, week trying to get Cessna behind for a real pU3h. A l l
it takes is top U S government level interveining saying what is going
on.
Bob, I harve spent 14 years in Iran,, all m y funds are tied up t h e r e .
If w e are not allowed to operate then what in Hell are US taxpayers paying the bill f o r . I need all out helpI w a n t you to go with me to see Del Roskam of Cessna, and Jack Zook
so a n approach w i t h positive results will be obtained.
You might try calling M r Hare on the telephone. If you need Washington support,, possibly^ y o u have contacts there, but I wan told that- there
is a charger b y the n a m e of Elmer Batzell of Nunn attorneys 1523 E St NW
Washington D C - N e x t thought of Richard Nixon lnwyer f i r m . This is your
decision B o b , y o u k n o w more about it then I posr-.ibly Cosnna has law firm
in Washington v/ho k n o w s pressure p o i n t s . Anyway you can call Cessna ask
for Zook or D e l Roskam and I'll be there this week, maybe before you got
this letter- Regardless of costs-, proceed we must fight it all 1-he way
for otherwise all these years pushing Cessna in will be lost-
118
27 August 1966
Beirut, Lebanon
M r . Raymond A . dare
Assistant
Secretary
The White Hou^e
Washington, D.
for near Eastern
and South Asian
Affairs
C.
Dear M r . Hare:
Attached you will find a photo cot>y of a small snare parts order
which has beer, sent to the Cessna Aircraft Company, complaining that
it was? sent to Aviation Development Consultants, Inc., on 22 May 1966*
M r H a r e , I have been blocked from entering Iran since 19 May 1 9 6 6 .
A g a i n , you can see by k e e p i n g myself out of Iran, General J O m t a m i v is
trying- to Mhnw ynv franchiaed pnpent Company's Cessna a n d ^ B e l l ^ h a t they
a r e not properly represented in I r a n . ,
"
—
—
'
M r H a r e , our firm h a s trained most of the Gendarmeri uilots and
soloed them before they went to U S Army pilot and helicopter training
in the USA from A u g u s t 1962 through June 1 9 6 3 . The US A r m y advisors
came to m e and I with two other American pilots soled the students before they went to the U S A . Previously the Iranian Airforce did this
work and the pilot failure rate from the US Army flight center** w a s
60$ or m o r e , with only 40% graduation.
When our students started completeing the flight training that
w e r e sent to the states M r Hare our percent of graduates rose to over
9 0 $ . Quite a saving to US tax payers money don't you agree* I have
submitted training costs to the Gendarmeri and Iranian Army since I960,
f o r an .in country training p r o g r a m . This w a s for helicopters and fixed
w i n g aircraft as wellIn June 1964 M r Bruce C h u b e r , regional sales manager from Cessna
and I talked with M r A r b a b i , to see what I could do to further suoport
the Cessna Aircraft coming into Iran with back uo service, snares and
m a i n t e n a n c e . M r Arbabi said form a 51$ Iranian Company, which v/e did
in February 1965,. aid applied for operating rights. This was never approved because General Khatami who controls the high council of civil .
aviation wants all business to go to his two company's. v/ho r e p r e s e n t .
D e h a v i l l a n d , britj.sh aviation and Aero Commander. They would like to
see Cessna cut out of the program and Dehavilland Beavers moved i n . If
discredit can be shown to Cessna and myself, Dehavilland Aircraft will
be moved in naiUrally as the order for ten this past spring for the RedLion and ^>un of Iran (Iranian Red C r o s s ) . To the Gendarmeri Air Taxi
has been submitting proposals for Dehavillands as w e l l . Nothing like
trying to defeat a proven fleet of Cessna aircraft operating.
M r H o r e , i t t a k e s o u r s e l v e s a b o u t 6 w e e k s to g e t a q u o t a t i o n f r o m
C e s s n a w i t h th<* r e q u i r e d c h a m b e r o f c o m m e r c e a n d I r a n i a n E m b a s s y s e a l s
b a c k so l e t t e r s of c r e d i t can be m a d e o u t .
It then takes the G e n d a r m e r i
a n y w h e r e u p t o o n e y e a r s o m e t i m e s t o f u n d th<* p u r c h a s e I P r e s e n t l y I h a v e
o u t s t a n d i n g f u n d s o f r o u a n l y 5 2 , 0 0 0 . wh:i ch t h e y h'ive n o t p a i d f o r t h e
t oru- y»nr„
C e s s en rcr
ourne.1 vers c' r: fur.d -aid -"ir-ancc pro grams unless
.\oF
119
V
C
Since our >S AT rv Tech Rep r r o m i r terrr.ina *ed ir, or on 3- June V<6
I Iv v e h a d to lr-t a l l m y c o m p a n y
rrso-.:.'?. loot' 'or o'.i.er "jobr. Since I
c o u l 1 • n o t e r . ' a b M s h a m-> i rtor.'inc fae-Mty r, or obt- : n ot crati r:/- rir.hl: ~y wh.ol husire?? h?:been
i K C "!.'(.:' IV:
:'orc^d
i n t o l a r . k r u p t c y a f t e r 1A
r
t r a ,pa RiO.^j c f n i l thf- r.vinti,
y ea rs m
a c o u r . I r y ar.d al f i r
e o p l o ir a coin
iYinir.try o f A g r i c u l t u r e f r o m 6 S e p t e m b e r
p e r s o n a l l y t r a i n e d 6 ? c r o : dust-, r.g p i l o t s a n d
Gendarrreri j o i n t l y we trained
f o r a l m o s t t h r e e y°ars A u g u s t 1 9 ^ 2
nave
1 -.52 t o 3 " J u n e 1 9 5 9 ,
meoh:jr. j c r ro u g h l y
1
h e l i c o p t e r a n d f i x e d vir.g s t u d e n t ?
t h r o u g h 30 J u n e 1 9 b ? .
ynolk.rx,
tes
b&rn
done
$c
-
for.
We only have the spare parts business leit. We have asked the US
Army and Gerinish advisors to heir ua/ou9h through rightr, as well nsr
requested help from the US Embassy/ If USA is going tt continue giving
itAP equipment, and MAS purchases to the Iranian Government, which we as
US tax payers pay for then why can) we get operating rermission and continue our business after all these years of dedicated training.
As stated before 1 suggest a complete cut off of all MAP equipment ar.d allowing purchases under MAS until at such time we are rllored
to continue our business, without theae continued h; rasements, ejnd charge
and allowed to build a hangar, stock snares, and if possible get oi^ratin
rights so that we can further demonstrate new aircraft,, and supnort the
American oil company's with fixed wing and helicopter tyre equioment. I
think the suorort of the MAP supplied equipment v.ith e technical staff is
the route to push.. Please hel$J
Sincerely yourr,
William H . French.
Managing Dire> tor
120
121
C
/
OL
/ •
-
122:
22 October
.Taclcsed herswith p l s a s s fir..1 a can!-: ch2ok to your order in
tas aisoust of v> 1>000. 00f tbi3 i a to 03 use;1. by you f o r -paynen^ of
jTi
iterm? In connection with the f o r e s t ion of the Iranian Corp— j
e r a t i sin t o b e c a l l e d ( S h a r k a t a T a y a r ^ P a r s ) .
'
• -
anclosed herevrith i s a sa^oial -ocv?sr of attorney fron
oariaticnal Haliccpter Consultants, I n c . , and one f r c r Aviation Cev^iop-r.ant O ^ s u l t s n - s , Inc»* authorising you to f c r s the aforesaid
vmre -drawn in accerianea tilth t a s agreement you and .Ja^'ji
resch^Sjrdh 2eheran Yfhils I wae there* I an having thesa called fror^ v
Vairu^rcid v?ill awn.it your n o t i f i c a t i o n that a l l approvals are road^t<
be.for^asndlng the Capital fron - 7 o f f i c e In \7ichita* I w i l l also; ; . '
v.al-ce
of" yourin. tha rannsr discus 33-i a f t e r sry return*
you have -Any* problsr.s or desire information or action. froi.v'.;V
a :ctre:?3 your -.esss^e to ziy o f f i c a in '/ichita since I - i l l bo
avail-^bls en rout3- u n t i l r^r estimated a r r i v a l on 31 Catcher*
a ^reat
easiers seating you and I wouL-l l i h e to. tako thili
to thmh you f o r a l l ths courtaaiss you o:-; tended to
j.t ia-'br^-lio^e thai
w i l l iiav? rany n e r j s a t i s f a c t o r y transactions--,
in t h ^ h r t u r * .
*
V e r y 'hruly y o u r s ,
123:
SPECIAL
POWER
0?
ATTORNEY
Know a l l men by t h e s e p r e s e n t s t h a t t h e u n d e r s i g n e d a s end f o r
t h e a c t o f I n t e r n a t i o n a l H e l i c o p t e r C o n s u l t a n t s I n c . a Delaware c o r p o r a t i o n do hereby a p p o i n t D r . Hassan S a f a v i t h e i r t r u e end l a w f u l
attorney* in f a c t for the following purposes9.to-wits
1*
To do a l l t h i n g s n e c e s s a r y t o i n c o r p o r a t e an I r a n i a n c o r p o r a t i o n t o be c a l l e d S h e r k a t e Tayare p a r s . S a i d Company t o have
no
c a p i t a l of one m i l l i o n R i a l s ,
2.
To p r e p a r e - t h e s t a t u t e s of t h e s a i d Company and t o s i g n a l l . r e g i s t r a t i o n documents on b e h a l f o f t h e u n d e r s i g n e d and t o do ..any
and a l l t h i n g s n e c e s s a r y t o r e g i s t e r t h e s a i d Company i n t h e
r e g i s t r a t i o n o f f i c e a c c o r d i n g t o t h e laws and r e g u l a t i o n s o f I r a n .
3.
S a i d Company i s t o have i t s s u b j e c t t h e s e l l i n g and m a i n t a i n i n g
of. l i g h t a i r c r a f t and h e l i c o p t e r s and e n g i n e s $ s p a r e p a r t s and
accessories therefore.
4.
The d u r a t i o n o f s a i d Company i s t o be u n l i m i t e d .
5.
The s h a r e h o l d e r s o f s a i d Company s h a l l be a s
followss-
a ) F i f t y o n e nominal s h a r e s w i t h a v a l u e o f 1 0 . 0 0 0 R i a l s e a c h 9
b e l o n g i n g t o D r . Hassan S a f a v i or h i s n o m i n e e s .
b ) Twentyfour nominal s h a r e s o f a v a l u e o f 1 0 . 0 0 0 R i a l s each
s h a l l belong t o International Helicopters Consultants Inc.
c ) T w e n t y f i v e nominal s h a r e s o f a v a l u e o f 1 0 . 0 0 0 R i a l s e a c h
t o b e l o n g t o A v i a t i o n Development C o n s u l t a n t s I n c . a Kansas
corporation.
6.
A l l t h e s h a r e s o f s a i d C o r p o r a t i o n a r e t o b e n o m i n a t i v e and t h e
s h a r e s b e l o n g i n g t o t h e C o r p o r a t i o n s e t f o r t h i n ( b ) and ( c )
above may n o t be t r a n s f e r r e d w i t h o u t t h e p r i o r approval o f t h e
o t h e r s h a r e h o l d e r or s h a r e h o l d e r s 9 however 9 t h e s h a r e s s e t f o r t h
i n ( a ) above may be t r a n s f e r r e d i n whole o r a p a r t w i t h o u t t h e
approval of the other
shareholders.
7.
The Board o f D i r e c t o r s o f s a i d Corporation w i l l be nominated
f o r a p e r i o d o f a t l e a s t f o u r y e a r s by t h e General Assembly
and s h a l l c o n s i s t of t h r e e d i r e c t o r s .
8.
The a u d i t o r s h a l l be nominated f o r a term . o f one y e a r by t h e
General A s s e m b l y .
9.
The Board o f D i r e c t o r s s h a l l c h o o s e one o f i t s members or an
o u t s i d e r a s i t s o d e s i r e s * a s Managing D i r e c t o r .
124:
10„
The power and d u t i e s ( r e t r i b u t i o n ) of the Board of D i r e c t o r s
and of the General Assemblies s h a l l be i n accordance with the
laws and r e g u l a t i o n s of Iran«
11•
Dr« S a f a v i i s hereby g i v e n a l l the r i g h t and power t o prepare
the s t a t u t e s and r e g i s t e r t h e Company and e l e c t t h e Board o f
D i r e c t o r s and a u d i t o r and t o s i g n a l l documents f o r t h e format i o n of t h e s o c i e t y and t o r e q u e s t any a u t h o r i s a t i o n from t h e
competent a u t h o r i t i e s which i s n e c e s s a r y f o r t h e formation and
e x p l o i t a t i o n o f the Company*
12*
The si&ge s o c i a l ( d o m i c i l e ) of t h e Company s h a l l be i n Tehran,
Iran and t h e address s h a l l be d e s i g n a t e d by Dr e S a f a v i $ however
the s o c i e t y may have branches i n other towns i n Iran and a l s o
in other countries*
13<»
The a t t o r n e y h e r e i n d e s i g n a t e d has t h e r i g h t t o d e s i g n a t e a n o t h e r person o r persons t o have and carry out any o r a l l of t h e
r i g h t s and d u t i e s h e r e i n granted t o him.
INTERNATIONAL HELICOPTER CONSULTANTS INC.
Attests
^
Secretary
By
president
125:
November 3» 1966
Mrv .William H. French
Apartment 73
Sourl ]a B u i l d i n g v i e }«sr.«r<-. ai2t*wj2£ n g
< jj
^ •.
Harma S t r e e t ' * ,
.
uJnr^- ;
r,c».
Beirut,^Lebanon
«
•
sw o v w r t i
-i
I
-v.
«•« rr.t -a-- f a i ' ? ^ , , i'-.";
r^f o^-v r.ds
1
D e a P ' B i l l:'-.-*»- , ^
^ fco'j.j l e f r n F o r « i , t-o /o / rf:.%ft i t :
to
»
t^-vt a t - c r tho r * r c : o -v*. w^-- r . n
-•xwafc* «After-my r e t u r n -I >made arrangements t o -go.-to J o r t fWorth a n d ; t a l k .
t o ?the Bel 1 H e l i c o p t e r people;
I spent the day down there yesterday and
t a l k e d i t o - F e l o t i n and t o J o s t a n d t o the p r e s i d e n t o f the Company.
Felotin's
p o s i t i o n was that:what.we were e s s e n t i a l l y asking,Be11 to.do w a s . t o a l l o w
STP t o - r e p r e s e n t them i n I r a n and they, would t h e r e f o r e h a v e ' t o make the same
k i n d o f - . i n v e s t i g a t i o n they do with.any. new d e a l e r .
I t o l d "him ;I / a p p r e c i a t e d
the f a c t : t h e y would have to make.some s o r t o f i n v e s t i g a t i o n but they were" now'"
i n ' f u l l - p o s s e s s i o n o f the i n f o r r n a t i o n t h a t > w e had so they should , b e ; c a u U o u s '
i n the manner i n - w h i c h they proceed and. he agreed that they wou
aI so -^stated that . the deci s i o n wou 1d ; p robab1y no t be fo rthcomi ng f o r several 5 *"
mori th sTf* He'Va I so-, requested; that f-have .Dr. r 'Safavi <rwri te a ^ l e t t e r ^ t o . m e ; d r t o 1 ' '
Bel H.Helicopter;*-whicheverfhe wished, e x p l a i n i n g the new set-up and b a s i c a l l y
a s s u r i n g s B e l 1 that the,,new corporatipn_wi 11 have the b l e s s i n g s of' t h e ' 5 C "
CouncilT.of C i v i l Aviation^and-General^Khatami 1 I wi l l ..arrange f o r this^"^
d i r e c t j y i w i t h : ; $ a f a y i r a n c l w i l l ; s e n d you a copy o f the l e t t e r which you should
thermforward:to B e l l w i t h . y o u r r c o m m e n t A
- '
Wvvi IV i nlA have'been unable to t a l k - w i th Cessna 'as '.everyone'. that^I'neec! to'
t a l k . tol:is7but o f . townr for; the : ( rest o f t h i s week. However",^ Ij" wi 11 see them
early;?-next week..-;In.-...the meantime, I got your l e t t e r o f October 27 and 1 t h i n k
you are jumping to c o n c l u s i o n s .
I d i d t a l k to Mr. Knoblauch who i s i n charge
Df the P a r t s D i v i s i o n a t Cessna and he. t o l d me that no order has come through
and that i f one does, come through they wi U not honor, it', as i t i s t h e i r '
p o s i t i o n v t h a t you are. the dealer and they must- come from you.
I have a c a l l
i n now to. Dusty Rhodes to get f u r t h e r i n f o r m a t i o n on. the matter and w i l l t r y
and i n c l u d e i t l a t e r on i n t h i s l e t t e r .
I have prepared the nsw powers of- a t t o r n e y and o r i g i n a l and one
copy or each o f the f o u r are enclosed herewith s i g n e d by m e as v i c e p r e s i d e n t .
23-586 0-78-9
126:
By t h e way, F e l o t i n s a i d f o r me t o t e l l you not t o send any more
t e l e x e s t o B e l l a s t h e i r o f f i c e r u l e s r e q u i r e t h a t whenever t h e y g e t a t e l e x
t h e y have t o t e l e x an answer and t h a t t h i s i s c o s t i n g them a l o t o f money
and t h e y a r e unhappy a b o u t i t .
So d o n ' t send any t e l e x e s t h r o u g h B e l l .
By
t h e way, y o u r t e l e x from t h e P h o e n i c i a t e l e x s e r v i c e was b a d l y g a r b l e d and
I t h i n k t h e y a r e a crummy b u n c h .
I b e l i e v e a i r m a i l l e t t e r s w i l l do t h e j o b
from B e i r u t a l m o s t a s q u i c k l y a s t h e t e l e x and c e r t a i n l y w i l l be much more
clear.
A t t o t h e l e t t e r s a u t h o r i z i n g B e l l and Cessna t o d e a l d i r e c t l y
w i t h STP, i t a p p e a r s t h a t B e l l m i g h t be a b o u t t o i n s i s t on t h i s manner o f
p r o c e e d i n g anyway.
I w i l l l e t you know what Cessna t h i n k s a f t e r I have
t a l k e d t o Zook and Roskam,
By t h e way, F e l o t i n s t r o n g l y recommends t h a t
whoever you have i n I r a n s h o u l d l e a r n F a r s i , so you m i g h t t e l l B o l t o n t o
get busy.
I t a l s o a p p e a r s t h a t a f t e r t h e f i r s t o f t h e y e a r I wi11 have
someone a v a i l a b l e h e r e i n V / i c h i t a who can t r a n s l a t e F a r s i f o r me i f you need
it.
F e l o t i n a g r e e d t h a t he w o u l d send you an a c c o u n t i n g o n what you
owe B e l l and t h a t you s h o u l d be i n f o r m e d t h a t t h e c o n t r a c t w h i c h you had
w i t h G e o t r o n i c s i s now no l o n g e r a b a n k a b l e c o n t r a c t so some o t h e r a r r a n g e m e n t s
a r e g o i n g t o have t o be made f o r payment.
F e l o t i n a l s o wants you t o send him
s h i p p i n g i n s t r u c t i o n s on t h e h e l i c o p t e r r i g h t away.
He had no s u g g e s t i o n s a s
t o what c o u l d be done w i t h i t o t h e r t h a n s e n d i n g i t t o B e i r u t .
I am e n c l o s i n g
a copy o f a l e t t e r I h a v e s e n t t o t h e house c o u n s e l f o r t h e p a r e n t c o r p o r a t i o n
or G e o t r o n i c s , which I b e l i e v e i s s e l f - e x p l a n a t o r y .
I am a l s o e n c l o s i n g
h e r e w i t h some i n v o i c e s w h i c h came i n from B e l l H e l i c o p t e r f o r shims and w a s h e r s
and a l e t t e r I r e c e i v e d from an o u t f i t i n S t . L o u i s i n q u i r i n g a b o u t u s e d
aircraft.
I am g e t t i n g t h e name o f t h e p a t e n t l a w y e r s i n W a s h i n g t o n , D . C .
and w i l l send i t d i r e c t t o you i n two c o p i e s so you c a n g i v e o n e t o C o g n i .
I am a l s o e n c l o s i n g h e r e w i t h t h e A i r F r a n c e t i c k e t s w h i c h have t h e unused
p o r t i o n f r o m B e i r u t t o Rome so t h a t you can t u r n them i n f o r r e f u n d .
Those
d e v i l s i n A i r F r a n c e n a i l e d me f o r $65.00 w o r t h o f o v e r w e i g h t c h a r g e s f r o m
P a r i s to Chicago.
Oh, w e l l , c e l a v i e .
We had a f i n e t i m e i n Rome and P a r i s ,
a l t h o u g h much t o o s h o r t *
I j u s t t a l k e d t o Dusty Rhodes and he s a i d t h a t t h e y h a d , i n an
i n t e r i m p e r i o d u n t i l we f o u n d o u t where we w e r e , m e r e l y t o l d t h e I r a n i a n
a i r a t t a c h e t h a t t h e y w o u l d t a k e a few e s s e n t i a l p a r t s o r d e r s a n d make q u o t e s
on them on an ad hoc b a s i s o r emergency b a s i s j u s t t o keep them i n o p e r a t i o n
u n t i l t h e i r r e p r e s e n t a t i v e , meaning you, knew e x a c t l y what h i s s t a t u s w a s .
The q u o t e s have not y e t been made and t h e y a r e i n W i c h i t a and w i l l n o t be
ready u n t i l l a t e r n e x t week a t t h e e a r l i e s t and i n t h e meantime, o f c o u r s e ,
I wi11 be a b l e t o t a l k t o Zook and see i f we c a n n o t r e s o l v e t h e m a t t e r i n a
different fashion.
So d o n ' t jump t o any p r e m a t u r e c o n c l u s i o n s .
Cessna has
n o t y e t made any d i r e c t s a l e s t o the I r a n i a n army and I t h i n k I w i l l be a b l e
t o keep them from d o i n g s o .
I wi11 keep you p o s t e d on a l l t h e d e v e l o p m e n t s .
Very
truly
yours,
127:
128:
i s
Ccgsf?3»
c
J A C K L. ZOOK
EX^OKT DI»TWI»UTO
l N MANAS
November 2 8 , 1966
Ai / !! *•:'.':
„
co::: I r - v - V , <>;hv;-~.
M r . jack Z o o k
C e s s n a A i r c r a f t Company >
5800 East P a w n e e , .: yc ; r
^JTichita, Kansas^ v^--.',-;
};.•
Dear
Mr.
r
• -V
U
r.iir.
-v
<-.,r> tro c:vtl."v
Zook:'
T h e p u r p o s e of this letter Is to summarize the Information I reported',
to you w i t h respect to M r . W i l l i a m H . French and his corporation A v i a t i o n
D e v e l o p m e n t C o n s u l t a n t s , I n c . and the present situation in Iran.-
r ' • Ui^M
ids u.; t-i Unr:v?i t.•••..'. -.
;
i:j: •
• .
:i» Air T e x I th^r* In
:-T . r'-v\-S vv f*s 7.
b*
* *
t .
M r , French; first w e n t to Iran approximately 15 years ago as an e m p l o y e e
of the U n i t e d S t a t e s G o v e r n m e n t . H e flew a i r c r a f t , spraying Insecticides
for Jocust control In the b e g i n n i n g , and then p e r f o r m e d several other
c o n t r a c t s for the United States Government under the various A . 1 . 0 . ' rr-v
p r o g r a m s . A s long as the United States A . I . D . funds w e r e going Into
Iran In large q u a n t i t i e s , the Iranian authorities w e r e most c o o p e r a t i v e
w i t h M r . F r e n c h and never did raise any difficulties about.his o p e r a t i o n s .
H o w e v e r , a s y o u k n o w , these funds have dwindled considerably in the last
two or three y e a r s , and are now down to the point w h e r e the end is almost
In s i g h t . In a d d i t i o n , as you n o doubt k n o w , b e c a u s e of a variety of e c o n o m i c and political d e v e l o p m e n t s , the Iranians have become m u c h m o r e
Independent In recent years and have a great spirit of notionalism In ell
areas j;-.-; /.
r. ; •,;...
Prior to the w r i t e r m a k i n g his trip to I r a n , he investigated all of the
m a t t e r s w h i c h follow as thoroughly as p o s s i b l e , including conferences
w i t h the U n i t e d States State D e p a r t m e n t , and m o r e specifically w i t h M r .
Elliott w h o is in charge of the Iran desk at the State Department at
W a s h i n g t o n , and his assistant M r . M u l l i g a n .
129:
A v i a t i o n in I r a n is and h a s b e e n for s o n e tima e n t i r e l y c o n t r o l l e d •
b y G e n e r a l /Vnir fthatami, w h o is the Corrmanding General of the I m p e r i a l
I r a n i a n A i r F o r c e , or rather the C h i S f o f Staff of the Imperial I r a n i a n
A i r F o r c e , C h a i r m a n of the B o a r d of D i r e c t o r s of tha N a t i o n a l I r a n i a n
A i r l i n e s / t h e P r e s i d e n t of. the H i g h C o u n c i l of Civil A v i a t i o n in I r o n
a n d In a d d i t i o n ia the b r o t h e r - I n - l a w of the S h a h . It w a s the o b s e r v a t i o n o f t h e w r i t e r , and c o n f i r m e d by o t h e r s , that all a v i a t i o n m i 1Itary
regardless., o f w h i c h s e r v i c e , i n c l u d i n g the A i r F o r c e , the A r m y tho G e n d a r m e r y
or. c i v i l i a n is c o n t r o l l e d b y the d i c t a t e s of G e n e r a l K h a t a m i , As o n e
i n d i v i d u a l r e m a r k e d to the w r i t e r w h i l e h e w a s in I r a n , e v e n though the
b o o k s s a y that I r a n is a c o n s t i t u t i o n a l m o n a r c h y , it is n o t , it is a n
a b s o l u t e m o n a r c h y , a n d in p o i n t of fact the royal f a m i l y run the c o u n t r y
p r e t t y m u c h like a c l o s e l y h e l d f a m i l y c o r p o r a t i o n .
A p p r o x i m a t e l y t w o y e a r s a g o a r e p r e s e n t a t i v e of G e n e r a l K h a t a m i c o n t a c t e d
M r . FrencK" a n d . i n f o r m e d h i m that there w e r e o n l y t w o c o m p a n i e s w h i c h w o u l d
b e a u t h o r i z e d t o c o n d u q t c i v i l a v i a t i o n b u s i n e s s in I r a n , and t h o s e w e r e
A i r T a x i a n d H e l i t a x i , " t h e f o r m e r is a fixed w i n g a i r c r a f t c h a r t e r s e r v i c e
a n d t h e latter is a h e H c o p t e r c o m p a n y . G e n e r a l K a h a t a m i a n d / o r h i s r e p r e s e n t a tives h o l d s u b s t a n t i a l a m o u n t s o f s t o c k in each of these c o m p a n i e s . Our inf o r m a t i o n leads us t o b e l i e v e that h e h o l d s a larger p e r c e n t a g e of s t o c k
in A i r T a x i t h a n in H e l i t a x i . . M r . F r e n c h w a s * i n f o r m e d by this r e p r e s e n t a t i v e
that h e c o u l d o p e r a t e in Iran p r o v i d e d h e d i d s o as a s u b - c o n t r a c t o r of A i r
T a x i and H e l i t a x i , for w h i c h h e w o u l d p a y them 10 p e r c e n t of the g r o s s of
h i s o p e r a t i o n s . A t this t i m e , M r . F r e n c h turned this p r o p o s a l d o w n , a n d
h e w a s t h e n i n f o r m e d that G e n e r a l K h a t a m i w o u l d " r u n h i m out of the C o u n t r y " .
In M a r c h of- t h i s y e a r M r . F r e n c h w e n t out of I r a n on b u s i n e s s a n d w h e n he_
r e t u r n e d w a s i n f o r m e d that h e w o u l d not b e r e a d m i t t e d . T h e U . S . E m b a s s y
in T e h e r a n s p e n t a p p r o x i m a t e l y t w o m o n t h s a t t e m p t i n g to find o u t w h y M r .
F r e n c h w o u l d n o t b e r e a d m i t t e d w i t h v e r y little s u c c e s s until the e x p i r a tion o f the t w o m o n t h s p e r i o d , at w h i c h time they w e r e informed that M r .
F r e n c h p e r s o n a l l y w a s b e i n g c h a r g e d w i t h n u m e r o u s v i o l a t i o n s of the C i v i l
A v i a t i o n A c t of I r a n .
I r a n ' s C i v i l A v i a t i o n Act w a s d r a f t e d by Dr. H a s s a n Saffivi, and e n a c t e d in
19^9I o m s u r e its c o n t e n t s a r e a v a i l a b l e to y o u . H o w e v e r , it w a s netz-er
i m p l e m e n t e d in d e t a i 1 and the g e n e r a l P e r s i a n a t t i t u d e t o w a r d their laws
is fully r e p r e s e n t e d in M r . F r e n c h ' s c a s e . T h e y h a v e a good m a n y v e r y
c c w p l e x c o d e s on the b o o k s w h i c h a r e not e n f o r c e d in p r a c t i c e and In fact
w h e n o n e a t t e m p t s to c o m p l y w i t h them he is told by the local o f f i c i a l s ,
o h , Its not n e c e s s a r y to a p p l y for these p e r m i s s i o n s , w e k n o w y o u . J u s t
g o a h e a d and d o t h e s e t h i n g s , and It w i 1 1 be all r i g h t . H o w e v e r , if y o u
130:
incur t h e i r d i s f a v o r they then g o b a c k to the law and i n s i s t that t h e r e
h a s b e e n a long line of, violations.- T h e s a m e thing h a p p e n e d to tho U . S .
C o n s u l a t e 'while t h e w r i t e r w a s i n ' I r a n . For q u i t o s e m e t i m e ' i t h a s b e e n '
a r e q u i r e m e n t of I r a n i a n lew that f o r e i g n r e s i d e n t s w h o a r e g o i n g t o b e
t h e r e for e x t e n d e d s t a y s a p p l y for.and, o b t a i n r e s i d e n c e p e r m i t s . T h e r e
is a P r e s b y t e r i a n s p o n s o r e d c o l l e g e in T e h e r a n , and t e a c h e r s o r e b r o u g h t
in f r o m the" U n i t e d , S t a t e s for. v a r y i n g p e r i o d s up. to'four or f i v e y e a r s ,
a t a t i m e . W h e n e v e r i t h e U . S . C o n s u l s e n t them to the I r a n i a n F o r e i g n
S e r v i c e t o * a p p l y for. r e s i d e n c e p e r m i t s , they w e r e a l w a y s t o l d , o h , that
w o n ' t b e ' n e c e s s a r y , w e k n o w y o u people", e n d this is n o t n a c e s s a r y , a n d .
they would n o t take applications for,residence permits. H o w e v e r , w h i l e .
t h e w r i t e r w a s in I r a n a p p a r e n t l y o n e * o f the teachers g o t i n t o s o m e k i n d
o f a flap w i t h * t h e I r a n i a n C i v i l A u t h o r i t i e s , the. e x a c t n a t u r e of w h i c h . ,
w a s not disclosed to the writer,, but t h e Iranian Foreign Service had Just
c a l l e d u p o n the A m e r i c a n C o n s u l a t e and h a d informed them that t h e r e w e r e •
a p p r o x i m a t e l y 5 0 t e a c h e r s in the v C o u n t r y w h o h a d b e e n v i o l a t i n g the law
for a long p e r i o d o f t i m e b y n o t h a v i n g these r e s i d e n c e p e r m i t s , a n d it
w o u l d b e n e c e s s a r y t 6 g e t . t h e m o u t of t h e C o u n t r y by t h e e n d o f the w e e k .
T h i s w a s t a c c o m p a n i e d b y a v o l u m i n o u s c i t a t i o n to the law o f I r a n . M u c h
t h e s a m e t h i n g h a s happened t o M r . F r e n c h .
T h e w r i t e r b e f o r e g o i n g t o I r a n c a u s e d a n inquiry, to b e i n i t i a t e d f r o m
t h e U . , S . E m b a s s y in I r a n t o G e n e r a l K h a t a m i , s o that h e c o u l d b e a s s u r e d
t h a t w h a t e v e r c h a r g e s w e r e p e n d i n g w o u l d not b e used in a n y w a y a g a i n s t
t h e w r i t e r , m e r e l y b e c a u s e h e w a s M r . F r e n c h * s lawyer. I n r e p l y , G e n e r a l
K h a t a m i r e q u e s t e d t h a t t h e E m b a s s y Inform m e that they w o u l d be m o s t h a p p y
t o s e e m e w h e n I a r r i v e d in T e h e r a n and h e a l s o s u g g e s t e d that I s e e O r .
H a s s a n S a f a v i , t h e V i c e - P r e s i d e n t of the H l a h * C o u n c i l , of' C i v i l A v i a t i o n .
W h e n t h e w r i t e r a r r i v e d in T e h e r a n , h e first, s p e n t s o m e t i m e with, o f f i c i a l s .
In t h e U . S . E m b a s s y , b r i e f i n g t h e m o n t h e i n f o r m a t i o n in h i s p o s s e s s i o n
a n d in turn r e c e i v i n g a b r i e f i n g from the i n f o r m a t i o n they p o s s e s s e d , b o t h
o f w h i c h s e e m e d t o fit w h a t h a s b e e n r e c i t e d s o f a r . .
T h r o u g h o u t h i s s t a y in I r a n , t h e w r i t e r k e p t In touch w i t h t h a U . S . E m b a s s y
a n d k e p t t h e m f u l l y i n f o r m e d o n a l l the d e v e l o p m e n t s . T h e p r i n c i p a l c o n t a c t
o f t h e w r i t e r in th6 U . S . E m b a s s y w a s t h e C o m m e r c i a l A t t a c h e , M r . R a y m o n d
H a r t l a n d , and his a s s i s t a n t , M r . Herbert Ferguson. T h e r e o f t e r # the w r i t o r
h a d a c o n f e r e n c e w i t h D r . S a f a v i , w h o e x p l a i n e d that h e h a d b e e n tha a u t h o r
o f t h e o r i g i n a l C i v i l A v i a t i o n A c t of I r a n , and had a l s o b e e n tha a u t h o r
of a n A c t o f J u l y 5» w h e r e i n all a v i a t i o n , civil and o t h e r w i s e , i n c l u d i n g
s a l e s of a i r c r a f t a n d p a r t s t h e r e f o r , w a s d e c l a r e d to b e a n a t i o n a l m o n o p o l y .
131:
T h i s Act h a d a g r a n d f a t h e r c l a u s e In It w h i c h p r o v i d e d t h a t , In e s s e n c e .
A i r Taxi and H e l i t a x i c o u l d c o n t i n u e In o p e r a t i o n , and It f u r t h e r p r o v i d e d
t h a t any o t h e r c o m p a n y , s e c u r i n g the p e r m i s s i o n o f the H i g h C o u n c i l of
C i v i l A v i a t i o n c o u l d d o b u s i n e s s I n . I r a n , In a d d i t i o n to the n a t i o n a l
m o n o p o l i s t i c ' c o m p a n y . D r . S a f a v i then m a d e It q u i t e c l e a r that the c h a r g e s
o n the p a r t o f t h e I r a n i a n g o v e r n m e n t w e r e n o t d i r e c t e d toward M r . F r e n c h ' s
c o m p a n i e s , but s o l e l y t o M r . French p e r s o n a l l y / and that Iron w o u l d w e l c o m e
t h e c o n t i n u a n c e d n b u s i n e s s o f M r . F r e n c h ' s c o m p a n l o s , h o w e v e r , it Is a
r e q u i r e m e n t of I r a n i a n Law that they c a n o n l y d o b u s i n e s s through a P e r s i a n
C o r p o r a t i o n , w i t h a 51 per cent Persian partner. Dr. Safavi volunteered
h i s s e r v i c e s t o f o r m t h e P e r s i a n c o r p o r a t i o n a n d to act a s the 51 p e r c e n t
s h a r e h o l d e r , s t r i c t l y In a c c o r d a n c e w i t h t h e w r i t e r ' s d i r e c t i o n , h a s t a t e d .
T h e w r i t e r m a d e n o r e p l y t o this p r o p o s a l a t that t i m e , s l n c c h e w i s h e d t o
b e e s s u r e d ' t h a t D r . S a f a v i w a s s p e a k i n g on b e h a l f of G e n e r a l K h a t a m i a n d
n o t as a m e r e v o l u n t e e r . ""Consequent ly, a s u b s e q u e n t a p p o i n t m e n t w a s a r r a n g e d
b e t w e e n t h e w r i t e r a n d G e n e r a l K h a t a m i d u r i n g w h i c h t h e G e n e r a l m a d e it
q u i t e c l e a r that D r . S a f a v i s p o k e on his b e h a l f and that this w a s t h a
-transaction w h i c h t h e G e n e r a l w o u l d a u t h o r i z e .
G e n e r a ) K h a t a m i a l s o s t a t e d that b e c a u s e o f M r . F r e n c h ' s a c t i v i t i e s h e
w o u l d n o t a g r e e t o p e r m i t M r , F r e n c h p e r s o n a l l y to r e t u r n to I r a n , h o w e v e r ,
h e w o u l d p e r m i t r e p r e s e n t a t i v e s a n d e m p l o y e e s of his c o m p a n i e s to r e t u r n ,
a n d t o d o b u s i n e s s a s o u t l i n e d a b o v e . In a s u b s e q u e n t c o n f e r e n c e w i t h D r .
S a f a v i , h e I n d i c a t e d that M r . F r e n c h h a d m a d e the G e n e r a l m o s t u n h a p p y a n d
t h e w r i t e r g a t h e r e d that it w a s a l m o s t a m a t t e r o f " f a c e " w i t h the G e n e r a l ,
a t t h i s t i m e a s r e g a r d s M r , F r e n c h p e r s o n a l l y . H o w e v e r , h e w a s of the
o p i n i o n t h a t in t h e m a t t e r o f a c o u p l e of y e a r s , if t h e n e w a r r a n g e m e n t
p r o c e e d e d s m o o t h l y , M r . F r e n c h w o u l d b e p e r m i t t e d to r e t u r n to the C o u n t r y
personally.
T h e w r i t e r r e c e i v e d the i m p r e s s i o n f r o m w h a t h e s a i d , a n d
f r o m c o m m e n t s b y v a r i o u s A m e r i c a n E m b a s s y p e r s o n n e l that if the n e w a r r a n g e m e n t f u n c t i o n s s m o o t h l y , a n d b r o u g h t in s u b s t a n t i a l s a l e s to the C o u n t r y ,
it w a s q u i t e likely that the p e r i o d of time w o u l d be far s h o r t e r than e v o n
t w o y e a r s . H o w e v e r , t h e r e is n o w a y o f f i x i n g an e x a c t d a t e on t h i s .
M r . F r e n c h c u r r e n t l y h a s t w o e m p l o y e e s in I r a n , b o t h l o c a t e d In T e h e r a n .
O n e is M r . E u g e n e L l o y d , and t h e o t h e r Is M r . J o h n D o l t o n . B o t h of t h e s e
m e n ore experienced pilots and appear to be quite competent and capable
as r e g a r d s to tha t e c h n i c a l a s p e c t s of the b u s i n e s s and m o s t likely as
r e g a r d s t o a d m i n i s t r a t i v e a s p e c t s of the b u s i n e s s in a d d i t i o n .
Consequently,
t h e w r i t e r a u t h o r i z e d D r . Safavi t o form a P e r s i a n c o r p o r a t i o n to b e c a l l e d
S h o r k a t * T a y a r e P a r s , in w h i c h D r . S a f a v i w o u l d b o the o w n e r o f 51 p e r c c n t
o f t h e s t o c k , w i t h t h e right t o t r a n s f e r e i t h e r o n or o f f tho r e c o r d , all or
a n y p o r t i o n o f that 51 p e r c e n t . D r . S a f a v i m a d e it v e r y c l c a r t o tho w r i t e r
132:
t h a t h e w o u l d not r e t a i n a n y w h e r e n e a r all o f the 51 p e r c e n t , a n d t h a t
o t h e r m e m b e r s of thfi H i g h C o u n c i l of Civil A v i a t i o n w o u l d u n d o u b t e d l y o w n
p o r t i o n s o f i t , i n c l u d i n g b y i m p l i c a t i o n . G e n e r a l K h a t a m i , a s t h e largest
o w n e r . T h e other h 3 per cent will be owned by Aviation Development Consultants,
I n c . a n d I n t e r n a t i o n a l H e l i c o p t e r C o n s u l t a n t s , I n c . b o t h of w h i c h a r e M r .
F r e n c h ' s c o r p o r a t i o n s . Dr.; S a f a v i w i l l b e t h e m a n a g i n g D i r e c t o r o f this
C o r p o r a t i o n , and t h r o u g h G e n e r a l K h a t a m i w i l l n o d o u b t b e the p r i m a r y
s a l e s a g e n t . E i t h e r M r , B o l t o n or M r . L l o y d will then be t h e o p e r a t i n g
e x e c u t i v e o f the c o m p a n y a n d w i l l t a k e c a r e of all t e c h n i c a l m a t t e r s .
T h e writer Is'confident that this arrangement wi11 be highly beneficial
t o M r . French's companies and to the companies which he represents. Including
C e s s n a A i r c r a f t Company.: T h e w r i t e r w o u l d like to s u g g e s t that the C e s s n a
f r a n c h i s e for I r a n s h o u l d r e m a i n in t h e n a m e o f A v i a t i o n D e v e l o p m e n t
C o n s u l t a n t s , a n d t h a t all s a l e s s h o u l d b e m o d e t> A v i a t i o n D e v e l o p m e n t
Consultants, with resale from them to Sherkate Tayare Pars. This will
p r o v i d e t h e n e c e s s a r y l e v e r a g e f o r u l t i m a t e control o f the a c t i o n s o f
t h e P e r s i a n s w i t h r e s p e c t t o t h e p r o d u c t s b e i n g s o l d . M r . F r e n c h w i l l then
m a k e h i s h e a d q u a r t e r s in B e i r u t a n d r e c e i v e f r e q u e n t r e p o r t s f r o m t h e T e h e r a n
e m p l o y e e s w h o w i l l , in a d d i t i o n t o w r i t t e n r e p o r t s , c o m e to B e i r u t a p p r o x i m a t e l y
o n c e a m o n t h f o r a full r e v i e w o f all a c t i o n s and I n s t r u c t i o n s .
T h e a b o v e Is q u i t e s u m m a r y in f o r m and t h e w r i t e r w o u l d b e g l a d to a m p l i f y
It u p o n request.'
Very truly y o u r s .
C . Robert Bell, of
M O R R I S , L A I N G , EVANS & B R O C K
C RB/cs
cc: 1/illiamH. French
133:
Dc'ccmber 5,
M r s , W i l l i a m H.
Teheran, I r a n
1966
French
Dear Bev:
As you c a n s e e , I d e c i d e d t o have t h i s l e t t e r h a n d - c a r r i e d i n
from B e i r u t s o as n o t t o t a k e any chance on o u t s i d e r s r e a d i n g o u r c o r r e s pondence, a l t h o u g h I know t h a t APOs s h o u l d be immune from such t h i n g s .
I
c a n a p p r e c i a t e t h a t you a r e uneasy about t h e t o t a l s i t u a t i o n and t h e r e i s
no q u e s t i o n b u t what we a r e t a k i n g a s u b s t a n t i a ] r i s k depending upon t h e
p r o s p e c t o f r e a s o n a b l y f a i r t r e a t m e n t from Dr. S a f a v i e t a l .
I know they
have i n s i s t e d upon g e t t i n g B i l l ' s f r a n c h i s e s but they a r e n o t g o i n g t o g e t
them, as we a r e d e a l i n g d i r e c t l y w i t h Cessna, B e l l e t c .
I am s t i l l i n t h e
p r o c e s s o f t r y i n g t o e s t a b l i s h wi.th t h e s e companies t h a t i t w i l l be a l l
r i g h t f o r t h e P e r s i a n company t o c o n t a c t them d i r e c t l y but they a r e t o t r e a t
i t as though i t were coming from us and t o c o n t i n u e t o i n s i s t upon making
t h e o r i g i n a l s a l e t o A v i a t i o n Development and I n t e r n a t i o n a l H e l i c o p t e r w i t h
a r i g h t o f r e s a l e from them t o STP.
T h a t i s the p o i n t a t w h i c h we can
p r o t e c t o u r s e l v e s a g a i n s t t h e c o n v e r s i o n o f r i a l s i n t o d o l l a r s arid o u r
p r o f i t margin.
Our t r i p home was j u s t f i n e .
V/e had about t h r e e days i n Rome
and t h r e e days i n P a r i s and e n j o y e d a l l o f I t immensely.
Jan s p e n t t h e
l a s t week I was i n T e h e r a n , as you know, i n J o r d a n and t h e H o l y Land w i t h
Anne McCaJlum.and had a w o n d e r f u l t i m e .
She.came back t h i n k i n g . s h e was
Lawrence o f A r a b i a .
I d o n ' t know what she s a i d t o them down t h e r e o r d i d ,
but as you c a n see s h o r t l y a f t e r she l e f t they a l l s t a r t e d f i g h t i n g .
I'm
g l a d she i s n o t t h e r e now.
J a n asked me t o g i v e h e r r e g a r d s as w e l l as mine t o you and t h e
g i r l s and M a r g a r e t and everybody and t o thank you f o r t h e h o s p i t a l i t y you
extended so g r a c i o u s l y w h i l e we were t h e r e .
P l e a s e f e e l f r e e a t any time t o drop me a n o t e and a s k a n y t h i n g
t h a t i s on y o u r mind.
I hope I have answered your q u e s t i o n s .
I t r i e d my
b e s t anyway.
But i f you have f u r t h e r q u e s t i o n s , p l e a s e d o n ' t h e s i t a t e t o
wri te.
Very t r u l y
yours,
C. R o b e r t B e l l o f
MORRIS, LAING, EVANS
CRB/pf
BROCK
134:
December 7» 1966
Dr. Hassan S o f a v l
Avenue A m i r - a b a d
Avenue E n t e s s a r l e h
Avenue S a f a v i eh " N a v a h M
Teheran, I r a n
Dear Dr.
Safavi:
E n c l o s e d h e r e w i t h a r e c o p i e s o f a c a b l e w h i c h we w i l l send t o t h e
M i n i s t e r o f A g r i c u l t u r e f i v e days from t h i s d a t e .
A l s o enclosed
h e r e w i t h a r e c o p i e s o f c a b l e s we w i l l send t o the M i n i s t r y o f War
and t o G e n e r a l G a n d a h a r i , a l s o f i v e days from t h i s d a t e w h i c h w i l l
be December 12.
The r e a s o n we a r e n o t s e n d i n g them now i s t h a t we
c a n n o t c a b l e Eroami s i n c e we do not have an adequate a d d r e s s f o r him.
Would you p l e a s e p r o v i d e us w i t h one.
You w i l l n o t e t h a t t h e c a b l e s come f r o m A v i a t i o n Development
C o n s u l t a n t s , I n c . r a t h e r than Cessna.
T h i s Is b e c a u s e Cessna
t a k e s t h e p o s i t i o n t h a t A v i a t i o n Development C o n s u l t a n t s , I n c .
I s t h e i r s o l e f r a n c h i s e d d e a l e r f o r I r a n and S h e r k a t e T a y a r e P a r s
I s t h a r e p r e s e n t a t i v e o f A v i a t i o n Development C o n s u l t a n t s , I n c .
T h i s Is a p o s i t i o n which they are u n w i l l i n g t o a l t e r .
As you can
s e e our communications have been q u i t e s l o w and I w o u l d l i k e t o
suggest t h a t t h e r e w o u l d be l e s s d e l a y and more a c c u r a c y i f y o u ,
when p o s s i b l e o f c o u r s e , w o u l d send i n s t r u c t i o n s d i r e c t l y t o me.
You w i l l n o t e t h a t on t h e s p e c i a l powers o f a t t o r n e y w h i c h come t o
you t h e r e a r e n o - I . D . c a r d numbers.
T h i s Is b e c a u s e my p r e v i o u s
I n s t r u c t i o n s ware s o s k e t c h y t h a t I was not aware t h a t they were t o
be i n c l u d e d i n t h e powers o f a t t o r n e y .
I hope they can be used as
they a r e b u t , i f n o t , l e t me know and I wl11 s t a r t p r o c e s s i n g a n o t h e r
s e t o f powers o f a t t o r n e y .
With kindest personal
regards.
C. R o b e r t B e l l , o f
MORRIS, LAING, EVANS S- BROCK
CRB/cs
End.
135:
CABLE
GENERAL GANOAHARI
COMMANDER
IMPERIAL IRANIAN AVIATION BATTALION
T E H E R A N , IRAN
ROLLS ROYCE AIRCRAFT ENGINE DIVISION INFORMS US YOU HAVE PLACED AN
ORDER FOR PARTS WITH TOE IRANIAN AIR ATTACHE IN WASHINGTON, D.C.
U.S.A.
PLEASE BE ADVISED W E ARE ROLLS ROYCE'S EXCLUSIVE DEALER
FOR IRAN, AND OUR REPRESENTATIVE IN IRAN IS SHERKATE TAYARE PARS.
PLEASE CONTACT M R . TAGHI EMAMI, MANAGING DIRECTOR OF SHERKATE TAYARE
PARS, W H O W I L L DO EVERYTHING NECESSARY TO SELL YOU A L L ROLLS ROYCE
PARTS NEEDED.
AVIATION DEVELOPMENT CONSULTANTS, INC.
136:
January 5 , I367
M r . Jamas Feliton
Bell Helicopter Company
P . 0 , Box 4 3 Z
Fort W o r t h , T e x a s
RE
International Helicopter Consultants* I n c .
Operations in Iran
Dear Jim:
In connection w i t h the above referenced matter I am now i n f o r m e d
b y D r . Safavi that our Persian corporation is duly authorized;to
s e l l , s e r v i c e and m a i n t a i n all types of light aircraft a n d parts
therefor in I r a n . 5 am also informed by him that it is the only
C o m p a n y authorized to d o so apart f r a a Gerseral Kahalami *s two corporations w h i c h apparently intend to concentrate primarily on the charter
and flying end of^ things and leave the selling to our c o m p a n y .
W e h a v e J u s t received a large order for Cessna spare p a r t s from the
Imperial Iranian A r m y which o r d e r was obtained by the principals of
o u r P e r s i a n company and Cessna has thoroughly reviewed the situation
a n d h a s agreed to a p p r o v e it on a trial basis for a o n e year p e r i o d .
T h e m a n n e r in which they w i s h e d to carry on business w a s that w e
w o u l d continue to ba their only authorized dealer for I r a n , and v/e
h a v e designated our Persian c o m p a n y , which is c a l l e d , Persian Tayar C o .
in E n g l i s h , and Sherkat Sahami Tayar Pars in P e r s i a n , as our exclusive
agent for Iran. T h e offices or the Persian company are located at
10 A v e n u e B a h a r / S h a h r e z a , T e h e r a n , Iran and the Managing Director is
E n g . Taghi Emarni. Ccmmuni cat ions m a y a l s o be addressed to Eugene Lloyd
at Box 1702, T e h e r a n , Iran.
We a r e hopeful t h a t you w i 1 ? e l e c t t o proceed in t h e same manner as
C-ssna has.
If 1 can provide any further information o i e a s e do not
h s s i t a t e t o c o n t a c t me.
Yours very
truly,
C. Robert B e l l , of
MORRIS, LAING, EVANS & BROCK
137:
January 5 , 1367
M r . James Felitem
Bell Helicopter Company
0 , Box
Fort W o r t h , Texas
RE
International Helicopter Consultants, Inc.
Operations in Iran
Dear Jim;
In connection with the above referenced matter I am now informed
by Dr. Safavi that our Persian corporation is duly authorized to
s e l l , service and maintain all types of light aircraft and parts
therefor in Iran. I am also informed by him that it is the only
Company authorized to do so apart from General K^hatami's two corporations which apparently intend to concentrate primarily on the charter
and flying end of things and leave the selling to our company.
W e have just received a large order for Cessna spare parts from the
Imperial Iranian Army which order was obtained by the principals of
our Persian company and Cessna has thoroughly reviewed the situation
and has agreed to approve i t on a trial basis for a one year period.
T h e manner in which they wished to carry on business was that we
would continue to be their only authorized dealer for Iran, and w e
have designated our Persian company, which is called, Persian Tayar Co.
in English, and Sherkat Sahami Tayar Pars in Persian, as our exclusive
agent for Iran. The offices or the Persian company are located at
10 Avenue Bahar/Shahreza, T e h e r a n , Iran and the Managing Director is
Eng. Taghi Emami. Communications may also be addressed to Eugena Lloyd
at Box 1702, Teheran, Iran.
138:
W e are hopeful that you^wITT elect to proceed in the same manner as
Cessna has. If I can provide any further information please do not
hesitate to contact me*
Yours very truly.
C» Robert B e l U or
MORRIS, LAINGj EVANS i BROCK.
CRB/cs
I R T ^ O N 3 1
"
V u RCIV
r e * * * * ' "
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ROBERT BELL 21
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140:
.14- January 1967
Hr James B e l i t o n
Export Area Manager :
B e l l ' PI-11 copter Company
,PO Box 4-82
P o r t Worth, Texas
Cnbler OLBISI^-Beirut
Ma5,1: O f f i c e 73 Saroulla Bid
Hamra S t , B e i r u t
.POB 1969
Dear Ji»r
,
.
Johii Bolton j u s t l e f t B e i r u t l a s t night aj^ter coining into t e l l - w e
/ we --have--d^in^lly go t t e i i the new 'company .completed'and r e g i s t e r e d , and with
t h e new s e t up 3/t should open many [doors nov<. that v{e have Gener£$- Khatam
a s p a r t n e r . s i l e n t l y - a l o n g v/ith pDr S a f a v i the head of the l e g a l departmen
b f - c i v i l ; a v i a t i o n , and--others,%-|we 'own 4-37° of the new company and i t i s
51Iranian.
,
*
.
.
V/e a r e .submitting a proposal f o r f i v e or 10 ,G~5 f o r the Ministry of
A g r i c u l t u r e . The M i n i s t r y o^ A g r i c u l t u r e wanted .20 Cessna .Agv/agons and
John was t o h^ i n a meeting i^oday. ,' He i s going-to push i t or .try to pus
i t t o G—39 although they have no h e l i c o p t e r p i l o t s .period. , We q l s o a r e
Submitting a proposal whereby the Ministry tfould 'buy the G~5r.s, w e . w i l l
c o n t r a c t to-operate'them f o r the Ministry ,and a l s o l e a s e them from the
M i n i s t r y f o r use""ir£ o t h e r countries in the o f f season. V/hat d,s the d e l i v e r y time now on G - y s ? , Please send xqe t h i s "back ri^htaway. .
The new companies name t i s Skerkat Saham:^ Tayar Pars, and we intend
t o make- them [our agents 'under our franchise,, or ,our f d e a l e r . This way w e
.can c o n t r o l them i f t h e y ever . s t a r t ."bleeding the company blind* John i s
now f o l l o w i n g along ilhe UI0(2 h e l i c o p t e r % sale, the 3,'raf^ic Police,, 'and
Ministry
A g r i c u l t u r e . l\e v/^13, f ollow .the .con^or^ium. as Veil* We hav
a l s o a p n l i e d f o r 20,00Q meter^ of ^and'at'^Jerh^ha^'where .the new .maintenance .set l i p - w i l l "be "built.
I Relieve
s i n c e r e l y t h a t wi&h t h i s monopoly', v/e w i l l he a b l e t o
R e a l l y do %sometlp.n^ V<e . s t a r t e d to, befqre^ 'and slov^Ly s t a r t e d t o Bucceeed,
But 'in t h i s .qet up we. have a l l the 'blessings 'of .everybody,.
John a l s o asked me tQ have .£ou njake up proform .invoices f o r . ( 2 ) . 4-.7CT
and (2) ;G-5 with ,1rwq tanks .or equiped. [Tfrisis .for the .Gendarmerie. ' As
t h e y a r e g e t t i n g themselves i n t o a ^corner .oh Cesqna'.Sjtyhoo^ spares. I •
wrote a . l e t t e r l a s t week t o the Commanding General t o l l i n g him thai; the
Cessna h e l i c o p t e r .spares a r e t e r m i n a t i n g , aq w e l l as .-the verigined,'> and
t h a t t h e Gendarmerie should . s t a r t planning another .small h e l i c o p t e r . . Jo>
t o l d me they were pleased with .the l e t t e r , and 'aqked f o r .quotations agair
Can .you p l e a s e send these through a s qoon £\ sponsible. Also what io d e l i \
ery now on 'the ITH1D and 20-1B? . [Do '.yoi} . s t i l l have "qillD .inimelia^ely a v a i l
able?
'
'
' .Si.ncerqly .yours• V/ill^am jl.' French
T I ^ v,
fiF- I frOPTfRFTW
'
141:
January
16, 15)67
AIR MAIL
Mr. Wm. H. French
A p t . 73, Sour H a B u i l d i n g
Harma S t r e e t
B e i r u t , Lebanon
Dear
Bill:
E n c l o s e d h e r e w i t h i s a copy o f a telegram I sent F e l i t o n and c a b l e I
s e n t B o l t o n , as w a l l as copy o f B o l t o n ' s c a b l e t o me.
I d o n ' t know
whether Cessna w i l l c a b l e M i n i s t e r or A g r i c u l t u r e but 3 a l l w i l l .
Cessna
i s goosey on t h i s because o f soma o l d problems they had w i t h the Department
o f J u s t i c e about e x c l u s i v e d e a l e r s h i p s so they w i l l not do a n y t h i n g .
However,
as you c a n see I suggested t h a t our man i n Teheran t e l l the M i n i s t e r t o g i v e
us a t e s t by p l a c i n g an o r d e r and see i f we can d e l i v e r .
I n c u r t e l e p h o n e c o n v e r s a t i o n r e I i t o n a s s u r e d me he wi11 send h i s c a b l e and says ha seas no reason B e l l w i l l not go a l o n g w i t h our arrangement.
F e l i t o n c o n f i r m s . G e o t r o n i c has h e l i c o p t e r j o b c o o k i n g somewhere i n A s i a .
He says he knows where but ha cannot v i o l a t e customer c o n f i d e n c e by t e l l i n g
me w h i c h i s a l l r i g h t w i t h me, b u t i f you s t a r t t o quote a j o b f o r a l e a s e
o f h e l i c o p t e r s t o G e o t r o n i c s l e t meknow s o t h a t we canchack out l o c a l law
and get l o c a l r e p r e s e n t a t i o n .
T h i s i s on a b s o l u t e e s s e n t i a l as hard
e x p e r i e n c e has demonstrated.
I would say t h a t a g a i n i f I thought i t would
impress i t upon you any more.
Regard the l e t t e r s you send me datod 11, January, s i g n a d O l d i s h , I f e e l t h i s
i s a dangerous p r o c e d u r e .
Why d o n ' t ycu make Mike McCollum a V i c e - P r e s i d e n t
(at no pay) and have him s i g n them. At l e a s t then i t i s a d e f i n i t e p e r s o n .
Yours very
truly,
C. Robert B e l l , of
MORRIS, LAINO, EVANS & BROCK
CR3/C3
23-586 O - 78 - 10
142:
B E E L L
HELICOPTER
POST OFFICE BOX 482
• FORT WORTH, TEXAS
COMPANY
76101
In r e p l y r e f e r t o :
03 r JHO:su:1543
17 January 1967
Mr. C . Robert B e l l
M o r r i s , Laing, Evans & Brock
214 F i r s t F e d e r a l Savings Building
123 South Market S t r e e t
W i c h i t a , Kansas 67202
Dear Mr* B e l l r
Thank you f o r your l e t t e r to Mr* F e l i t o n informing of the
c u r r e n t s t a t u s of the I n t e r n a t i o n a l H e l i c o p t e r C o n s u l t a n t s ,
I n c . o p e r a t i o n i n I r a n . Mr* F e l i t o n i s l e a v i n g B e l l a t the
end of t h i s month, and i s being r e p l a c e d by Mr. George K l i n g .
I t i s our f e e l i n g t h a t the arrangements f o r handling s a l e s ^
through P e r s i a n Tayar Company are not s a t i s f a c t o r y to B e l l as
l o n g - a s B i l l French i s unable to p e r s o n a l l y f o l l o w through
with Iranian contacts.
However, a temporary a u t h o r i z a t i o n i s herewith g i v e n f o r cont i n u i n g B e l l * s business i n t e r e s t s i n Iran as you have o u t l i n e d i n your l e t t e r of 5 January 1967, u n t i l such time as
we have had an o p p o r t u n i t y to p e r s o n a l l y a s s e s s the s i t u a t i o n
by a v i s i t to I r a n . This w i l l most l i k e l y take p l a c e sometime
t h i s s p r i n g s We w i l l keep B i l l informed on t h i s .
Sincerely yours,
BELL HELICOPTER COMPANY
J
Export Sales Manager
143:
B E L L
H E L I C O P T E R
POST OFFICE BOX 482
jn reply refer
03:GMK:surl587
• FORT WORTH. TEXAS
76101
co/vip-/\rsiv
A
fextronj
COMPANY
to:
30 January
1957,
H r ^ William HV French ?
Managing Director
International Helicopter Consultants, Inc.
73 S a r o u l l a B l d g .
Hambra Street
Beirut, Lebanon
Dear£Bill:*
JimsrFeliton^is i n t h e - p r o c e s s o f - l e a v i n g B e l l H e l i c o p t e r C o m p a n y » a n d I h a v e b e e n a s s i g n e d as h i s r e p l a c e m e n t . * I l o o k
forward to w o r k i n g w i t h y o u , a n d suggest that your c o m m u n i c a t i o n s b e a d d r e s s e d t o m e - as of now - so t h a t w e w i l l n o t
waste time.
Jim;;,has p a s s e d t o m e y o u r l e t t e r o f 1 4 January;, a n d the r e quested proformas are enclosed. Per a telephone conversation
w i t h Mr- B e l l i n W i c h i t a I h a v e r e d u c e d the q u a n t i t y o f G - 3 B - l * s
f r o m t w o to o n e .
Your letter did not stipulate what accessories were required,
s o I h a v e t a k e n t h e l i b e r t y of i n c l u d i n g a c c e s s o r i e s a n d r e commended spares and tools. If my recommendations are not
c o r r e c t p l e a s e a d v i s e , a n d w e w i l l r e w o r k the p r o f o r m a s p e r
your d e s i r e s .
W e h o p e y o u r n e w a s s o c i a t i o n w i l l p e r m i t you t o r e s u m e r e s i d e n c e
a n d b u s i n e s s i n T e h r a n , a n d w a n t y o u to k e e p u s a d v i s e d .
Best regards.
Very truly yours,
BELL HELICOPTER COMPANY
Export Area
Enclr Proforma N o . 67-6 and
N o . 67-6A
Manager
144:
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CO/VIFV\M>
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tor
13 A p r i l 1 9 6 7
M r . William H . French
B o x 73 S a r o u l l a B l d g i
Hamra Street
Beirut^ Lebanon
D e a r Billjf
I h a v e r e c e n t l y r e t u r n e d f r o m a t r i p to L a t i n A m e r i c a and
f o u n d y o u r 1 7 M a r c h l e t t e r t o B u d Orperw
T h e d e m a n d f o r J e t R a n g e r s c o n t i n u e s a n d w e h a v e h a d to def*r
y o u r d e l i v e r y u n t i l A u g u s t , i n t h a t y o u h a v e n o t m a d e the
r e q u i r e d $ 1 0 , 0 0 0 , 0 0 d e p o s i t o n e i t h e r y o u r o r i g i n a l delivery
p o s i t i o n o r t h e J u l y p o s i t i o n as c a b l e d to you'-by Bud Orpen
on 23 February and 1 March*
If y o u w i s h t o m a i n t a i n t h e A u g u s t position" p l e a s e complet®
t h e $ 1 0 , 0 0 0 . 0 0 d e p o s i t p r i o r to 3 0 A p r i l - t h i s month*.
I a l s o n o t e y o u r r e m a r k s o n t h e r e q u e s t e d o f f e r o f ten. J a t R a n g e r s tro t h e I r a n i a n A r m y - i n a d d i t i o n t o t h e o f f e r for
s i x U H - l D s . . W e c a n m a k e t h e J e t R a n g e r q u o t e , b u t I recall
y o u r 3 F e b r u a r y l e t t e r i n w h i c h y o u s t a t e , " i f t h e Iranian
A r m y i s s h o p p i n g , t h e y a s P e r s i a n s w i l l b e P e r s i a n s vould buf
t h e JetRariger v e r s u s the U H ~ 1 D to s a v e a b u c k ! "
P l e a s e c l a r i f y this s i t u a t i o n a n d a d v i s e w h e t h e r or not th*
J e t R a n g e r q u o t e s h o u l d b e m a d e ~ a l s o c o n s i d e r i n g tho.
the UH-1D offer has been already submitted.
Agusta shares most of the North African and Middle
c o u n t r i e s w i t h B e l l o n a n o n - e x c l u s i v e b a s i s f o r the
s i n c e t h i s i n c l u d e s I r a n , y o u w i l l p r o b a b l y h e a r of
there.
A l l t h e m o r e r e a s o n w h y y o u s h o u l d be m
are you making regarding your return 7
Tehran.
Vb**
t
1
a
**
145:
W e a r e n o t now r e p r e s e n t e d i n Lebanon, and i n t h e n e a r f u t u r e
v e w i l l v i s i t L e b a n o n a n d a t t e m p t to l o c a t e a r e p r e s e n t a t i v e
t h e r e . W e w i l l c o n s i d e r u s i n g y o u r firm i n t h a t c o u n t r y , b u t ,
f r a n k l y , w i l l p r e f e r a r e s i d e n t f i r m (with h o m e o f f i c e i n
Beirut)*
M y i n i t i a l o p i n i o n of y o u r o p e r a t i o n s - b o t h s a l e s
a n d l e a s e / c h a r t e r - is that you are a l r e a d y s p r e a d o u t too
f a r f o r the s i z e of y o u r l o c a l o r g a n i z a t i o n .
Prior to a p p o i n t i n g a permanent representative in L e b a n o n , w e
w i l l p r o t e c t y o u o n a c a s e by c a s e b a s i s for any s a l e s y o u
m a y c o n c l u d e i n L e b a n o n for h e l i c o p t e r s to be r e g i s t e r e d i n
Lebanon.
W e l o o k f o r w a r d to s e e i n g you i n P a r i s , and h o p e f u l l y o n e o r
m o r e o f y o u r I r a n i a n s a l e s w i l l be c o n c l u d e d p r i o r t o t h a t
time .
Very truly yours,
BELL HELICOPTER COMPANY
M. K l i n g ^
Export Area M a n a g e r
146:
Juiy- 7 , -1SS7
M r . D w a y n e Jost - ,
..
Cell- H e l i c o p t e r . C o m p a n y r.. ....
P,. 0 . Box k S 2
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Fort W o r t h , T e x a s , 7S10?
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Dear-. Dwayne:- -r , - -- > . ^^ - --
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This letter is in c o n f i r m a t i o n of.our telephone c o n v e r s a t i o n .of
.
y e s t e r d a y , July 6.. 136/. A s you are aware International H e l i c o p t e r
„"V'V
C o n s u l t a n t s , I n c . has for ,sotne .time had the franchise as your.,dealer
in, Iran and other p a r t s o f - t h e K u d o l e - E a s t . .. You are also familiar .
w i t h the n a t u r e o f , the p r o b l e m s it has been .encountering in I r a n so
I w i l l not detai 1 -that. ,
L-.
•; . . , ,\
International H e l i c o p t e r . C o n s u l t a n t s , I n c . , is cv/ned 50% by V/{ 11 iam ••
H . French and 5 0 ^ - b y - h i s . w i f e , Beverly \L F r e n c h . A s I reported to you'"*
last November I m a d e a trip to Iran on behalf of h r . French and his
c o m p a n y and m a d e a r r a n a e m e n t s at that t i m e , w i t h a r e p r e s e n t a t i v e of
G e n e r a 1, Khatami ^- whose- n a m e is Dr. Hassan S a f a v i , and w h o is the V i c e
^
P r e s i d e n t , of;-, t h e H i g h Council of Civil A v i a t i o n of ; I r a n , Ifo'r the f o r m a - " ^ ,
tion of a Persian c o r p o r a t i o n to .act., as .the r e p r e s e n t a t i v e of " I n t e r n a t i o n a l
H e l i c o p t e r - C o n s u l t a n t s in I r a n . : T h i s . company v-'as formed and its name is
Sherkat. Sahami Tayar P a r s , w h i c h roughly translates as P e r s i a n , F l y i n g ' /
Society A n o n y m o u s . A f t e r m y return and the. n o t i f i c a t i o n .that this .company.,
was f o r m e d . w e w e r e d i s a p p o i n t e d to,find that n o c o m m e r c i a l , a c t i v i t y ' w a s , '
resulting from the formation of this, c o m p a n y . ' T h i s e s p e c i a l l y d i s t u r b e d ' "
!-'r. French b e c a u s e in addition to all. of the m o n e y h e h a s ' i n v e s t e d in'Iran
over the past years h e has invested c o n s i d e r a b l e sums in s e n d i n g m e . to
n e g o t i a t e for h i m and in c o n n e c t i o n w i t h ' t he' forme t i on of STP lie W a s '
required to put u p all of the c a p i t a l , which w a s 1 m i l l i o n r i a l s , or
slightly in excess of $ 1 3 , 0 0 0 , plus formation fees to Dr. Safavi of
500 p d . s t e r l i n g , p l u s $1,000 expense m o n e y to Dr. Safavi for the n e c c s s a r y
b a k s h e e s h involved in getting a corporation r e g i s t e r e d . Dr. Safavi had
147:
told us that STP s t o c k , other then the h-$!% owned by Internationa?
H e l i c o p t e r C o n s u l t a n t s and Aviation Development Consul tants," Inc..;
the latter of w h i c h is a Kansas corporation owned 5OX by W i l l i a m H .
French and 50/. by his w i f e Beverly V . F r e n c h , w o u l d be o w n e d . b y other
m e m b e r s of the High Council of Civi 1. A v i e t i o n , including G e n e r a l
K h a t a m i , although it w o u l d be held in the name of other p e r s o n s and
not d i r e c t l y in their n a m e s .
<
.
'
..*. .
A s you know I w e n t to Iran'again recently t o . a s c e r t a i n , if p o s s i b l e ,
w h a t the p r o b l e m w a s in the failure of STP to p4r o d u c e any results s o
far.
' '
*
Upon m y arrival I d i s c o v e r e d that during the interim p e r i o d w h i l e S T P
was being formed and b e f o r e it w a s o p e r a t i v e , M r . F r e n c h ' s representativein T e h e r a n , h r . J o h n B o l t o n , h a d , in an atteir.pt to keep o r g a n i z a t i o n s , s u c h
.as"the G e n d a r m e r i e supplied w i t h necessary p a r t s to keep their a i r c r a f t
o p e r a t i v e , b e e n c o n t i n u i n g to deal w i t h them d i r e c t l y unti T S T P . b e c a m e '
o p e r a t i v e . . Dr. S a f a v i . a n d the other Persians' involved, thought he w a s
trying to do this behind their b a c k a n d that w e w e r e going to'cheat ..
t h e m . A c c o r d i n g l y , they called everything to a halt until the s i t u a t i o n
c l a r i f i e d . T h e r e was also a failure of c o m m u n i c a t i o n between D r . Safavi
and the w r i t e r w h i c h occurred w h e n Dr. Safavi started s e n d i n g p a r t s
o r d e r s to the v;ri ter 's o f f i c e . I told him not to c o m m u n i c a t e , direct ly
with this o f f i c e on technical m a t t e r s ' a s ' t h a t , o n l y caused d e l a y , b e c a u s e
I then had to s e n d it back to' Beirut f o r . p r o c e s s i n g . D r . Safavi .'s E n g l i s h
is.not oil it m i g h t ; b e and h e thought I w a s telling hirn not 1 t o j c o n w u n i c a t e
w i t h m e d i r e c t l y o n a n y t h i n g ^ A c c o r d i n g l y , when.STP c .wished.'' to,,have its
a g r e e m e n t w i t h Bil 1 F r e n c h ' s ^company'* reduced ' fo a. w r i t t e n . c o n t r a c t , .this
•: i n f o r m a t i o n . w a s not corununicated.
iV
_t
-
I assured D r . Safavi that
the m a t t e r of the interim .sales w a s .no^problem :;.-...
:
a n d . M r . 'French's'"company w o u l d account to S T P cn those sales and I a s s u r e d _
h i m , as a V i c e P r e s i d e n t of the two companies i n v o l v e d , if h e w o u l d d r a w
the c o n t r a c t he w i s h e d to h a v e .I w o u l d , sign them, w h i l e t h e r e . , H e d r e w
them and I signed them and a c o p y of t h e . I n t e r n a t i o n a l H e l i c o p t e r C o n s u l t a n t s
£ acregfrient is e n c l o s e d h e r e w i t h . He'.informed m e that the Persian 5 1 % of S T P
w a s c w n e d 26% by his own f a t h e r - i n - l a w and 25% by M r , Tsghi E m e m i , 'who is the
cousin of G e n e r a ' K h a t a m i ; T h e M a n a g i n g D i r e c t o r of S T P is a . M r . G o l s h o y a n
w h o is a former M i n i s t e r of many departments and a p e r s o n of c o n s i d e r a b l e
s t a n d i n g in Ir&n according to Dr. S a f a v i , S s f $ v L a!_so, Lnfo_rmgd. ju£_that
the " g r e a t .gener-^U-'~by-who.,v-J>e-»rffc6F.s-Genar.s 1 Khatami.., _ had deci^Leii_jLO_Jiandle
trrisactions witiiJLTE-ia.-uuch__the...fjishion he hgJ set up_ for A i r - t a x i and_
-Me 1 i - t a x i , that is .one company Jicx.£ixo.d,>'ing_olrc.raft_ e n d ^ t h e other for
helicopters.
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148:
, A c c o r d i n g l y , • a company, c a l l e d H e l i c o p t e r Services had b e e n formed in
• w h i c h M r . B r i s t o w had no interest and w i t h w h i c h M r . B r i s t o w had n o
c o n n e c t i o n , j e i t h e r d i r e c t l y or i n d i r e c t l y . - T h i s c o m p a n y ' w a s t o b e
;
.the helicopter,, s a l e s , c o m p a n y and a l s o is to h a v e o p e r a t i n g rights V
• and o n e of its d i r e c t o r s is General R a f a a t , w h o h a s ' b e e n General
^ K h a t a m i ' s front ( -man in Heli-taxi. f o r - q u i t e some- time; - I had several
* m e e t i n g s ; w i th G e n e r a l Rafaat-. and at first General R a f a a t w a s i n s %ii s t i n g
t h a r . H e i i c o p t e r S e r v i c e s m u s t .have-the Bell^
H e l i c o p t e r franchise.
I
;
assured;-him that i t: was- beyond the p o w e r <>f'Internationa l;Hel icopte'r~ ,:
C0nsultantsr,t0;tgive;.himr that-.franchise^even if • they-wishecf
'to and that
t
:
h i s ; wa s -a m a tt e r: ^s o 1 e 1 y.;w i t h i n -1 h e con t r o 1' of ' t h e B e I f; He t i cop t er \
r
Dr ." Safavi s t r o n g l y .recommended that' w e ,try and a r r i v e a t s o m e * a r r a n g e m e n t w i t h H e l i c o p t e r S e r v i c e s and both he and Genera 1 R a f a a t ' a s s u r e d m e
it hat .Helicopter S e r v i c e s wi 11 b e in a p o s i t i o n to both p u r c h a s e for its
,own, o p e r a t i o n s a n d sel1 m a n y h e l i c o p t e r s . T h e y a l s o a s s u r e d m e that it
has secured the h e l i c o p t e r o p e r a t i n g c o n t r a c t s w i t h all of the oil
c o m p a n i e s in I r a n , including the c o n s o r t i u m . General R a f a a t further
^stated v that, he wi 11. need four Bell Jet R a n g e r s q u i t e "soon f o r H e l i c o p t e r
Services.
.. 3 l V
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:
W e w o r k e d out : an? o r a 1 a g r e e m e n t between" G e n e r a l Rafaat',' Dr. Safavi"'and
m y s e l f w h e r e b y a t h r e e - p a r t y agreement would^ b e ' e n t e r e d i n t o b e t w e e n
Inter nationals Helicopter- Consul tants,-STP and H e l i c o p t e r Service's;'
in
;
w h i c h H e l i c o p t e r S e r v i c e s w o u l d /.have the same functions- in Iran on"! /
behalf; of ..International H e l l c o p t e r r C o n s u l tants as S T P had and t h e result-^4
ing net p r o f i t s t o - H e l i c o p t e r Serviced w o u l d be d i v i d e d 2 / 3 r d s to H e >l cc o p t e r S e r v i c e s and l/3rd to S T P . ' This agreement" is i d e n t i c a l ' w i t h ' ' ' "
the o t h e r .one w h i c h I h a v e enclosed except that it adds a p r o v i s i o! n C .
that H e l i c o p t e r S e r v i c e s ' a n d STP w i 1 1 s h a r e the p r o c e e d s ' o f their V
end o f the.contract as a f o r e s a i d . I t • t o o is b e i n g d r a w n by Dr?'Safavi
I. w a s then taken to a c o n f e r e n c e w i t h the M a n a g i n g Director of H e l i c o p t e r
S e r v i c e s , a gentleman n a m e d . M a h v i , w h o was introduced to m e as also b e i n g
the M a n a g i n g Director of Pan A m e r i c a n Iranian Oil C o m p a n y . M r . M a h v i
stated that he could not take the p r o p o s e d agreement to his Doard or
Directors until he had a copy .of our franchise w i t h Bell H e l i c o p t e r and
X agreed to p r o v i d e him w i t h such a copy upon m y r e t u r n . M r . French's
copy w a s u n a v a i l a b l e at that time since it was in Beirut and he h a d not
been a b l e to carry all of his files w i t h him w h e n he w a s e v a c u a t e d from
Beirut (incidentally M r . French is now p e r m a n e n t l y back in B e i r u t ) .
Nevert h e l e s s , to s a v e t i m e , as I told you on the p h o n e , I w o u l d a p p r e c i a t e it
if you w o u l d s e n d m e a copy of his f r a n c h i s e .
149:
W h i l e in Iran I also conferred w i t h General J a b l o n s k i . the C o m m a n d i n g
G e n e r a l of all of the U . S . A r m e d Forces A d v i s o r s in I r a n . At this
c o n f e r e n c e I inquired about the proposed Iranian A r m y Air Cavalry U n i t
f o r m a t i o n and he informed m e at that time that this is m e r e l y in the
p l a n n i n g stage and w i l l not be ready to'commence n e g o t i a t i o n s for the
p u r c h a s e of helicopters for a c o n s i d e r a b l e time yet - p e r h a p s as m u c h
as f i v e y e a r s . He d i d , h o w e v e r , state that if Bell H e l i c o p t e r w i s h e d
to m a i n t a i n - i t s position it w o u l d b e " n e c e s s a r y in the not too d i s t a n t
f u t u r e t o " c o m m e n c e the p r e p a r a t i o n of proposals for the formation o f
such a u n i t , w h i c h p r o p o s a l s - s h o u I d be c o m p l e t e w i t h respect to recomm e n d a t i o n s and suggestions and p r o p o s a l s for training of p i l o t p e r s o n n e l ,
a c q u i s i t i o n and type o f - e q u i p m e n t , training of m a i n t e n a n c e p e r s o n n e l
and m e t h o d s of s u p p l y . T h e s e p r o p o s a l s w i 1 1 be studied b y C o m m i s s i o n s
o f > t h e Iranian A r m y ' a n d the M i n i s t r y of W a r , together w i t h the A r m y
A d v i s o r y g r o u p , and from p a s t e x p e r i e n c e in Iran this w i l l u n d o u b t e d l y
c o n s u m e a large a m o u n t of t i m e . Their Commission there is the e q u i v a l e n t
of our C o m m i t t e e s and p a r e n t h e t i c a l } y I m i g h t • a d d that if a camel isT
a h o r s e that w a s put together•by a C o m m i t t e e you should see
theresults
0 :
- '
•
' '
' '
of a P e r s i a n c o m m i t t e e .
W h i l e in Iran D r . S a f a v i , Mr;' B o l t o n and I a l s o c o n f e r r e d w i t h n u m e r o u s
other g o v e r n m e n t off i c i a l s i n c l u d i n g Genera 1 Ovesi the C o m m a n d i n g ,
General of the Iranian G e n d a r m e r i e and Lt. C c l : B a ] l a n t y n e w h o . i s ~
the A m e r i c a n A r m y A d v i s o r to the g e n d a r m e r i e . T h e gendarmerie', as
you k n o w , is'actively c o n s i d e r i n g a p r o p o s a l for the f o r m a t i o n o f; a
h e l i c o p t e r s t r i k e force and
C o l . B a l l a n t y n e informed.us that the ~v
:
various C o m m i s s i o n s w h i c h h a v e b e e n m e e t i n g for about two y e a r s o n '
this m a t t e r have d e c i d e d that the'equipment w h i c h should be u s e d for
this force w i l l b e Bell UHID's.' C o l . B a l l a: n t y n e a l s o s t a t e d that this ,
decii si on had been m a d e s e m e m o n t h s a g o a n d fol lowing this d e c i s i o n G e n e r a l
Ovesi had c o m e i n t o h i s ' o f f i c e o n e day w i t h ' a picture" of a K a m a n and h a d
stated that this w a s the h e ! i c o p t e r ' t h a t they had d e c i d e d on and h e
didn't
w a n t it b e c a u s e the Iranian Air Force and A r m y h a d K a m a n s a n d
r
they h a d had very bad operating experience" v/i th them.'' J h e i r actua 1' .
o p e r a t i n g costs to date had run in the vicinity of $ 1 , 5 0 0 per hour
and their range w a s s o little that they could t r a v e l n o faster than a
g a s o l i n e transport truck could accompany t h e m . C o l . B a l l a n t y n a e x p l a i n e d
to h i m that that was not w h a t they decided on and got out a p i c t u r e of
a H u e y and put it next to a p i c t u r e of a R o m a n and labeled them for
General Ovesi's information. I should add at this p o i n t ' t h a t General
Ovesi is highly regarded and appears to be an excellent g e n e r a l , e s p e c i a l l y
by Persian s t a n d a r d s , but even the best of them h a v e some curious gaps
in their c o m p r e h e n s i o n .
150:
D u r i n g m y c o n f e r e n c e w i t h G e n e r a l O v e s i ive a g a i n di s c u s s e d . t h e H u e y s .
and d u r i n g the d i s c u s s i o n he turned a n d ^ p o i n t e d to a m o d e l of a K a m a n
w h i c h w a s o n t h e s h e l f b e h i n d h i s d e s k » - a n d s a i d " t h a t * s . t h e k i n d of,.,
h e l i c o p t e r w e are..going t o b u y . "
I t o l d hirn " n o , n o G e n e r a l , t h a t ' s . ,
a K a m a n - y o u ; a r e g o i n g t o b u y a B e l 1."-' H e s a i d "ch" y e s t h a t ' s r i g h t ,
isn't that a Bell?"
I strongly recommend that you send a - m o d e l of ; r r r
a H u e y . t o J o h n B o l t o n f o r p r e s e n t a t i o n t o G e n e r a l O v e s i . "I t h i n k it
w o u l d „ a l s o b e a.-good i d e a t o p r e s e n t a m o d e l o f t h e H u e y t o G e n e r a l
K h a t a m i a n d t o G e n e r a l G h a n d a h a r i , w h o is t h e C o m m a n d i n g G e n e r a l o f
t h e I r a n i a n A r m y A v i a t i o n B a t t a l i o n . T h i n g s like h a v i n g t h e s e m o d e l s
on their d e s k s s e e m t o b e m u c h m o r e important to the P e r s i a n s than
t h e y w o u l d b e to. t h e i r A m e r i c a n e q u i v a l e n t s . A l s o , p e r h a p s it w i 1 1
help keep them, s t r a i g h t e n e d o u t .
,• ~
,
A l s o , as I . t o l d y o u - w h i l e X- w a s in I r a n I s e c u r e d t h e r e l e a s e o f Bi 11 "
F r e n c h ' s C e s s n a 180 a n d t h e log b o o k s t h a t g o w i t h i t , a n d D r . S a f a v i
i n f o r m e d m e t h a t t h e P e r s i a n s n o w f e e l t h a t t h e y n o longer h a v e a n y
c a s e a g a i n s t B i l l F r e n c h . B i l l is g o i n g to a p p l y for a v i s a t o s e e
w h a t results h e can get a l o n g that line, and I feel that w i t h i n a
m a t t e r o f n i n e m o n t h s o r s o t h e r e is a p o s s i b i l i t y t h a t h e w i 1 1 b e
a b l e to travel f r e e l y to and from I r a n . He h a s , h o w e v e r , d e c i d e d
in v i e w o f t h e a c t i v i t y in t h e r e s t of t h e M i d d l e - E a s t t h a t it w o u l d
b e m o r e a p p r o p r i a t e for h i m t o m a i n t a i n h i s h e a d q u a r t e r s in B e i r u t
a n d h e w i l l b e m o v i n g h i s f a m i l y to B e i r u t s o m e t i m e in the n o t t o o
d i s t a n t f u t u r e . H e w i l l c o n t i n u e to m a i n t a i n a r e s i d e n t respresentati'.v,
in I r a n , b u t w e a r e c u r r e n t l y in t h e p r o c e s s of l o o k i n g f o r a m a n w i t h
t h e r i g h t q u a l i f i c a t i o n s to s e n d t h e r e t o r e p l a c e Bolton." B o l t o n is
t h o r o u g h l y f a m i l i a r w i t h h e l i c o p t e r s a n d is an e x p e r i e n c e d h e l i c o p t e r
p i l o t a s w e l l a s h a v i n g s e m e b u s i n e s s e x p e r i e n c e b u t it w o u l d b e b e t t e r
f r o m o u r p o i n t o f v i e w n o t to h a v e t o m a i n t a i n an e x p e n s i v e p i l o t t h e r e
b u t r a t h e r t o h a v e s o m e o n e w h o is f a m i l i a r w i t h t h e t y p e s o f a i r c r a f t
t h a t w e h a n d l e , a n d w h o m a y i n c i d e n t a l l y b e a p i l o t , b u t n o t s u c h an
e x p e r i e n c e d o n e a s t h e o n e s w e u s u a l l y h i r e , e n d w h o s e b a c k g r o u n d is
m o r e in b u s i n e s s . a d m i n i s t r a t i o n w i t h p e r h a p s a touch o f d i p l o m a c y .
As
s o o n as w e find t h e r i g h t m a n w e w i l l r e p l a c e B o l t o n .
I a m , o f c o u r s e , n o t in a n y p o s i t i o n t o g u a r a n t e e y o u t h a t the n e w
p r o p o s a l is g o i n g t o w o r k .
In f a c t , I t h i n k all o f o u r p a s t e x p e r i e n c e
i n d i c a t e s that t h e o n l y w a y w e w i l l k n o w w h e t h e r s o m e t h i n g is w o r k i n g
or n o t is w h e n t h e o r d e r s s t a r t c o a m i n g t h r o u g h .
151:
I d o not think it is quite a c c u r a t e to say that E i U French has d o n e
n o t h i n g fcr you in this area since he has s u c c e e d e d inspite of t r e m e n d o u s
o b s t a c l e s in keeping your Company's name in the forefront of d i s c u s s i o n
in all of the g o v e r n m e n t agencies in I r a n . F u r t h e r m o r e , the Iranian
g o v e r n m e n t has p u r c h a s e d n o h e l i c o p t e r s in recent y e a r s from a n y o n e
e l s e . B e s i d e s , Bill has p e r s o n a l l y bought two G - 5 ' s and sold a n o t h e r
o n e on your b e h a l f in the last two y e a r s . A l s o , I u n d e r s t a n d that
there is a good c h a n c e if e v e r y o n e " h o l d s their m o u t h r i g h t " s e l l i n g
8 H u e y s to K u w a i t .
I am e n c l o s i n g for y o u r i n f o r m a t i o n a r e s u m e w h i c h w a s f u r n i s h e d t o
m e by D r . S a f a v i , w h i c h he is a l s o giving the U . S . S t a t e D e p a r t m e n t
in c o n n e c t i o n w i t h his request that they e n d o r s e his e f f o r t s t o bec o m e the next P r i m e M i n i s t e r o f I r a n . I a l s o w a s informed that D r .
Safavi h a s c u r r e n t l y been n o m i n a t e d for a Nobel P r i z e , s o this w i l l
g i v e you s o m e idea of the caliber of p e o p l e w i t h w h o m w e a r e d e a l i n g
in I r a n . In the e v e n t I can p r o v i d e further i n f o r m a t i o n or if you
h a v e any q u e s t i o n s p l e a s e d o not h e s i t a t e t o c o n t a c t m e .
Y o u r s very t r u l y ,
C . R o b e r t B e i i , or
M O R R I S , L A I N G , EVANS & BROCK
CRB/cs
cc: W i l l i a m H . F r e n c h
152:
July
f
AIR HAIL
1 1 , 19S7
*
Mr. Wi 1 Ham H. French
Apt.. 73, S o u r l l a B u i l d i n g
Harma S t r e e t
\
' ...
B e i r u t , .Lebanon
Dear Bill:
"
-
..
„
•
.
.
.
.. ,
't
R e c e i v e d your letters of 5 snd 7 , d u l y , together w i t h
E n c l o s e d h e r e w i t h is c o p y o f m y t e l e x t o y o u .
the e n c l o s u r e s
i w a s n o t a b l e t o r e a c h D w a y n e J o s t u n t i l t o d a y a n d h e a p o l o g i z e d for
If t h e r e
g e t t i n g n o answer out to you but says h e w a s " c o v e r e d u p " .
is n o o t h e r w a y t o m a k e t h e S a u d i d e a l a n d t h e y a r e u n a l t e r a b l y o p p o s e d
to buying from an American company, maybe you could give Helicopter
S e r v i c e s a small cut a n d sell through the Persian company.T. .
.. ..,
O n m y w a y b a c k I s t o p p e d in W a s h i n g t o n a n d d e l i v e r e d o u r m e s s a g e loud
and clear to the S t a t e D e p a r t m e n t . T h e m e s s a g e was w e h a v e done everything they wanted us to d o and they have done nothing to help us.
We
a r e n o w in g r a v e d a n g e r o f b e i n g t e r m i n a t e d b y B e l l H e l i c o p t e r a n d if
w e are that will be the b a l l g a m e . so please use any influence they can
to k e e p B e l l H e l i c o p t e r w i t h u s a n d a l s o o n t h e o t h e r e n d , t o b e s u r e
t h e P e r s i a n s r e a l l y c o o p e r a t e a n d a r e n o t j'ust b l o w i n g s m o k e in o u r
e a r . T h e y t r i e d t o t e l l m e t h a t ,they h a d d o n e e v e r y t h i n g p o s s i b l e a n d
I told them
d i d n ' t b e l i e v e it b e c a u s e as a ' m i n o r e x a m p l e , t h e y h a d
b e e n u n a b l e in '6 m o n t h s t o g e t t h e 180 r e l e a s e d a n d I d i d it in 2 d a y s .
I. a l s o extrscted
a p r o m i s e f r o m t h e m t h a t t h e y w o u l d s e n d c o p i e s o f al l.
t r e a t i e s . H a v e not received them yet..
. '. :
153:
I c a l l e d on G a r n e r 1 S h r i v e r w h o t u r n s o u t to b e C h a i r m a n ' o f t h e H o u s e
of R e p r e s e n t a t i v e s C o m m i t t e e o n F o r e i g n , M i l i t a r y A i d A p p r o p r i a t i o n s ;
g a v e h i m t h e w h o l e s t o r y in s u m m a r y f a s h i p n a n d t o l d H i m j u s t w a n t e d
h i m to b e i n f o r m e d in c a s e w e h a v e t o b l o w t h e w h i s t l e , H e i n d i c a t e d
i n t e r e s t a n d d i d n o t c o m m e n t as t o w h a t a c t i o n h e w o u l d t a k e if w e
s a y .the w o r d , b u t I t h i n k w o u l d b e f a v o r a b l e t o u s . H e a l s o p r o m i s e d
to o e t c o p i e s .of. t h e t r e a t i e s f o r tne. H a v e n ' t . ^ r e c e i v e d ' t h e m e i t h e r "as
yet.,
f.-^r & r e r t r r
,
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D o n 1 b e I i eve- t h e r e i s, a n y p o i n t in c o n t a c t ing H a r e ;or,ranyone " e l s e in
S t a t e D e p a r t m e n t . , ,I a m c o n f i d e n t t h a t a l 1 o f S t a t e D e p a r t m e n t p e r s o n n e l
k n o w s t h e . r e s u I t s o f .my,, r e c e n t ...conference. ' ."" -.
"'"1
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Enclosed herewith are m y u n u s e d airline tickets so you can.get refunds.
A l s o e n c l o s e d is statement on the m o s t recent trip.""I got soft h e a r t e d
and d e c i d e d not t o charge you at all for the w a r ,
r
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:
' '•••'••••• '."••••-. -<v" h-c h ' C
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Z c o k s e e m e d p l e a s e d w i t h m y r e p o r t a l t h o u g h I t o l d h i m w e ..couldn't t e l l
if.the P e r s i a n s a r e going.to,do w h a t they say unless;and, u n t i K they b e g i n
t o p r o d u c e o r d e r s / H o w e v e r , Z o o k s t a y i n g in t h e b u g g y w i t h u s h e l p s '
c o n s i d e r a b l y w i t h B e l l Helicopter.,., Z o o k s a i d , t h e y h a v e r e m a i n e d ' i n c l o s e
c o n t a c t w i t h C e s s n a a b o u t y o u . Z o o k is g o i n g t o N e w D e l h i a n d K a r a c h i
in t h e n e x t c o u p l e o f m o n t h s a l o n g w i t h a t e a m t o m a k e p r e s e n t a t i o n o n
£ h e A g w a g o n s . H e w i 11.--let m e k n o w his ; . t i m e t a b l e a n d I. w i 11 g e t S a f a v i
t o s e t u p a p r e s e n t a t i o n for h i m w i t h t h e M i n i s t e r o f " A g r i c u l t u r e in
T e h e r a n . T h e t h o u g h t o f t h i s s e e m e d to p l e a s e h i m g r e a t l y .
D i d B a r r y g e t t o S a u d i all r i g h t . P l e a s e k e e p . m e i n f o r m e d o n s t a t u s o f
the other jobs and equipment;
a l s o , w h e t h e r h e g o t t h e 180 a n d log b o o k s
out of I r a n .
If y o u s e e M i k e p l e a s e a s k h i m to m a i }• m y w h i t e s h i r t s t o me..,,..
P l e a s e c o n t a c t D a v i d P . F o r t i n t o g e t m o r e i n f o r m a t i o n on h i s s i t u a t i o n .
I a m s u r e w e c o u l d n o t o b t a i n a d i s c h a r g e f r o m t h e r e s e r v e to w o r k o n
t h i s c o n t r a c t b u t I a m a l s o s u r e that u n l e s s h i s r e s e r v e p o s i t i o n is v e r y
u n u s u a l w e c o u l d g e t an e x e m p t i o n f r o m c a l l - u p t o a c t i v i t y d u t y d u r i n g t h e
t i m e h e is o n t h e j o b . M y s u s p i c i o n is h i s r e p l y w a s j u s t a s t a l l .
154:
Pat Patterson i s looking for a possible new man for Teheran. Says
he knows of one he i s checking out who has a degree in Business
Administration as w e l l as an A & I mechanic's rating and thinks would
be ideal for the Persian s i t u a t i o n .
Zook says i t i s most important you work out d e t a i l s of ordering procedure
for Persian company so that orders to Cessna come from you. The Persians
want t o order d i r e c t l y from our o f f i c e here and I would s uggest that you
provide us with the necessary order forms with instructions as to how to
f i l l them out so that I f the order comes i n to our o f f i c e we can f i l l out
an order on ADC stationery or form and I can sign as Vice-President of
ADC. Then, we attach a presigned general l e t t e r signed by you in which
we can i n s e r t the date saying please honor the enclosed order. I have
a l s o t o l d them at Cessna to stop sending your dealer invoices along with
the items they ship since they go f i r s t into the hands of the Persians
and t h i s causes us problems. He promised to take care of t h i s . .
Jost a l s o promised t o send me copy of the B e l l Helicopter franchise
but so f a r neither you nor he has sent me one, and I f e e l the delay
might be harmful to us i f the Persians are r e a l l y going to do anything.
Jost promised me again t h i s morning to get i t r i g h t out to me but j u s t
i n case you should a l s o send me a copy. I am waiting to w r i t e to Dr.
Safavi u n t i l I have i t .
I wiII keep you copied.
I guess t h a t ' s a l l f o r now.
Don't s t a r t any more wars for awhile.
Yours very t r u l y ,
C. Robert Bel 1, of
tfORRIS, LAING, E V A N S 6 BROCK
CRB/cs
End.
155:
B e i r u t Lebanon
21 J u l y 1967
Dear B o b :
Attached is a copy of m y telex to youo
Bob, I n d i s c u s s i o n w i t h John B o l t o n when he has here, g o i n g t o Jeddah,
I gave Bev a l e t t e r a h o t one t o him John when she l e f t Athens asking
him why i n h e l l he w a s n ' t answering ^e on what I wanted done*
I a l s o t o l d him t o ask S a f a v i what i n h e l l Mr Arbabi and Zanagahni fi
A i r t a x i was doing i n P a r i s s a y i n g Gen K wanted the B e l l F r a n c h i s e bac
under A i r t a x i .
T h i s I a d v i s e d you on when you went t o T e h e r a n .
John Ho.ped S a f a v i and s a i d c a n ' t you s e a i f A i r t a x i or H e l i t a x i g e t t
F r a n c h i s e Dr were out c o m p l e t e l y you'd, b e t t e r s t a r t doing something,
why h a s n ' t t h e 10,000, meters of l a n d been o b t a i n e d , and why h a s n ' t th
p r i c e s t a b l i z a t i o n board been completed f o r our p r o t e c t i o n , ,
Hell a i r
t a x i i s s t i l l approaching a l l companies Mr F r e n c h ' s companys. s t p a r e
f i n i s h e d * Whats g o i n g on. John Said, i t took S a f a v i a minute and John
s a y s he thinks-, he caught him o f f guard f o r S a f a v i s a i d , I ' v e been ord:
to s t a l l .
^hen John s a i d he b e l i e v e s S a f a v i caught him s e l f f o r t h e
p r e s s i o n on S a f a v i ' s f a c e ; changed from day to n i t e and back a g a i n , .
John a l s o s a y s he might have s a i d t h i s t o defend h i m s e l f but he donsn
t h i n k so f o r t h e y a r e n ' t doing a n y t h i n g . A l s o John Said S a f a v i has e'
ordered by the genera,l t o go t o Europe t o have the Hemroid o p e r a t i o n
w h i c h case- h e ' l l be gone f o r 4-5 months and hes t o l e a v e i n a few day
So t h i s s u r e l y w i l l put S a f a v i out from doing anything,,
A n y t o t h e r t h i n g John s a i d S a f a v i s a i d b e f o r e h e causght h i m s e l f , a s hoi
d i d you know t h i s , and John Sa&& H e l l the company's a l l t o l d Mr Fren<
when he was i n P a r i s , S a f a v i s a i d General K d o e s n ' t r e a l l y want A i r t a :
t o have B e l l f r a n c h i s e , bu H e l i c o p t e r S e r v i c e s .
So y o u can see w h y in H e l l they dojj't w a n t J o h n there h e s catching on
also the same as Lloyd w a s d o i n g , of course Lloyd had other p r o b l e m s 1
n r v e r t h e l e s s it is facto
It also m a k e s sense in K h a t a m i telling yoii Safavi w a s his m a n to stal]
so h e could rnanuever the B a m U S Airforfie into selling Iranian Airforcc
spares so Iranian A r m y had to buy them that v/ay« In fact I believe tl
SOB w e talked to in Washington w a s g o i n g to Iran just for that p u r p o s €
So. its r e a l l y our own dam government forcing private, foreign investmer
o u t . H e l l Cessna sold spares from M i l i t a r y division t o US Airforcel
tary at C e s s n a cannot say they didn't know where the spares w e r e goin^
th-:.t list only fitted the requirements for Iran, and n u m b e r of engines
A l s o its the fact U S airforce built K h a t a m i over the y e a r s , now they a
h a n d l i n g funding for Iran for five y e a r s , so they'll cut anybody's thr
to h e l o K h a t a m i 0
Theyre all laughing at us a "big joke I I ' m not start
a Mar y e t , but I'm n o t very dam far from it« Your and m y government s
I t appears its a socialistic organizations for parasites'* Telephone S
g i v e him m y regards and ask what goes on? Best regards w i l l keep y o u r>
but Boh its proving itself all the time USA sold out Private Bnterpris
156:
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November 20,
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Mr. W i l I iam"jt\.* French '
Sorou 11 a ".Bui l d i n g 37..,
Hamra S t r e e t
B e i r u t , Lebanon
^ W W ^ n *
Dear i T l U ^
IS67
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T h i s w l I I acknowledge your, l e t t e r o f November 1 2 , w i t h - e n c l o s u r e s a n d
a l s o the copy o f the l e t t e r s t o Johnston Insurance, I n c ; j and BSW L e a s i n g
Corporation.
Thank you very much f o r the check. T h i s keeps me in g o o d
s t a n d i n g w i t h my p a r t n e r s and I hope i t doesn't press you too h a r d .
... t , ,
.
5, \%i
tr*
fir-i'
I callecf Cessna and Rudy Heidebrecht s a i d your p a r t s were shipped " F r i d a y ,
November 17 via.TWA to New York and then as i n s t r u c t e d . I a l s o t a l k e d
to Dick W o l l e r and he s t a t e d your proformas ere i n process r i g h t ' n o w
and are going out ; today. He i s n o t , however, q u o t i n g you a 172 as Cessna
i s out o f I72*s and i s not c u r r e n t l y making any. He d i d quote you a 177
in i t s place.
They w i l l e v e n t u a l l y be making 172's again but he doesnft
know when.
Enclosed Is the t e x t of a t e l e x I have sent you today which i s p r e t t y
much s e l f - e x p l a n a t o r y .
J a b l o n s k i has been r o u s t i n g B e l l H e l i c o p t e r
and they are very nervous about the a i r cava Iry program.' J a b l o n s k i
t e l l s them that the a i r f o r c e w i l l not deal w i t h STP even though' the
gendarmarie wants t o .
Orpen s a i d B e l l i s not too much i n t e r e s t e d i n
the gendarinarie but i s q u i t e concerned w i t h the a i r c a v a l r y p r o j e c t .
Between you and me I t h i n k the reason i s that anything the gendarmarie
wants i n the way o f Hueys w i l l be i n the very near f u t u r e and B e l l
probably c a n ' t d e l i v e r them because o f i t s V i e t Nam commitments t o the
U. S. Army, but they f i g u r e i f they can get i n on the IIAF program i t
w i l l be f a r enough down the road that they might be unhitched i n V i e t
Nam,
23-586
0-78-11
158:
Orpen and P i e r o t w i l l s t o p i n B e i r u t to see you.
Be sure and swab
them out good as they a r e s t o p p i n g on t h e i r way back.
Orpen promised
t o c a l l me when he gets back and t o l l me what ho t h i n k s .
There has been a l o t o f pro-Shah propaganda i n our n a t i o n a l magazines
l a t e l y i n c o n n e c t i o n w i t h the c o r o n a t i o n and e n c l o s e d h e r e w i t h i s a
xerox copy o f a l e t t e r w h i c h appeared i n our l o c a l newspaper w h i c h
I found t o be i n t e r e s t i n g .
D i c k W o l l e r and I d i s c u s s e d i t a l i t t l e
b i t and he s a i d he had j u s t r e c e n t l y read something a l o n g the l i n e s
o f t h i s l e t t e r i n a German magazine he t a k e s .
E n c l o s e d h e r e w i t h i s a copy o f a l e t t e r I have t h i s d a t e w r i t t e n
J a c k Zook j u s t t o get t h e i r b o b b l e on the Ag Wagon d e m o n s t r a t i o n
the f i l e .
I hope you approve o f i t .
to
into
I w i l l commence c h e c k i n g on the wine and l e t .you know as soon as
p o s s i b l e what I f i n d o u t .
Glad t o see you got an o f f i c e , e l e c t r i c
typewriter, etc.
Who runs i t f o r you?
The copy o f G o l s h o y a n ' s l e t t e r t o you dated November 5» 1967 i s t h e f i r s t
one I have seen.
I do not p l a n to make any response t o t h e i r i d i o t i c
demands u n l e s s you want me t o .
I t j u s t looks t o me l i k e those c r o o k s
a r e t r y i n g t o get t h e i r hands on a l i t t l e more cash b e f o r e we p u l l
the s t r i n g on them.
D o n ' t you agree?
Yours very
truly,
C. Robert Bel 1, o f
MORRIS, LAING, EVANS & BROCK
CRB/cs
Encls.
159:
DR. H.
SAFAVI
114 AVENUt FfSDOWSI
i f H£RAM . I«AN
iflfPHOH
30495J
D o c t o r H a s s a n S a f a v i , "born 1 9 0 9 in T e h e r a n , I r a n , D o c t o r a t L a w
E c o n o m i-Li^ciJ.
c a l S c i c n c e , . hiitLa
a s hiie.iu
e l d the
o l l o w i n g iiuaj.
p o s i tuxuiui
ion
oiiu fiuiiuiiii;,^
A t t o r n e y G e n e r a l , M i n i s t r y of
Justice.
C h i e f of C a b i n e t , M i n i s t r y of F i n a n c e
1321.
D i r e c t o r G e n e r a l P r o p a g a n d a & P u b l i c i t y d u r i n g the w a r
M e m b e r o f t h e H i g h C o u n c i l of t h e
1942-1945
^Seven Year PI
P r o f e s s o r of P o l i t i c a l Economy,, in thef^School of F i n a n c e
UTTvirtQ-r
n d e r S! oeoc1 Vr>eo +t. a3 ir« iyr , M i n i se tt rrwy no ff" PEncnot inr ior nmiyr , ^ 1 9O/4 77 .
1
and
.
c
1947.
/ 7 7 f-
1
M a n a g i n g D i r e c t o r , I r a n I n s u r a n c e C o m p a n y , 1949*
M e m b e r o f the 3 o a r d o f D i r e c t o r s of P o r t s & n a v i g a t i o n
O r g a n i z a t i o n of I r a n , 1951 •
V i c e P r e s i d e n t , H i g h C o u n c i l of C i v i l A v i a t i o n ,
1952.19601
D e l e g a t e o f I r a n to I . C . A . O .
/
M e m b e r of the International Astronautical
Federation.
E x V i c e - P r e s i d e n t of the I n s t i t u t e of G p a c e Lav/ of
I.A.F.
• ox P e r s i a n S h i p p i n g
Fenbpr h ^ t
Services.
of I r a n i a n L l o y d s .
H a s s a n S a f a v i is a l s o t h e A u t h o r o f the follv/oir.g b o o k s
"The E c o n o m y of I r a n a n d the p o s s i b i l i t y of i t s
( F r e n c h ).
development"
"The H o m e I n d u s t r y of C a r p e t in I r a n "
(Persian
French )
" D e c l a r a t i o n of F r e e d o m , i t s
(Persian )
"The
Civil
Aviation
Lav/ o f
progress.
Iran
and
its
Regulations"
- ,
160:
la reply r e f e r to:
03: JHG:tw:*f57^
11 D e c e m b e r 1967
M r . William H . French
S a r o u l l a B u i l d i n g 37
Hamra Street
Beirut, Lebanon
Dear-Bill:
T h i s l e t t e r w i l l o u t l i n e g e n e r a l l y t h e f i n d i n g s of D i c k
P i e r r o t , G e o r g e K l i n g a n d m y s e l f o n o u r r e c e n t t r i p to'
T e h e r a n d u r i n g t h e w e e k cf ^20 N o v e m b e r 1 9 6 7 ,
A l t h o u g h w e h a d d i f f i c u l t i e s in l o c a t i n g J o h n B o l t o n a n d
D r . S a f a v i , t h r o u g h a c c i d e n t a l c o n t a c t , a v i s i t w i t h them
w a s f i n a l l y a r r a n g e d . U h f o r t u n a t e l y * w e w e r e n o t a b l e to
w a k e c o n t a c t w i t h y o u in B e i r u t , either, o n the w a y o v e r
n o r on t h e r e t u r n , a l t h o u g h w e h a d b e e n a s s u r e d b y J o h n
Bolton that you would be meeting u s .
B i l l , w e m i s s e d t h e f a c e to f a c e c o n t a c t that w o u l d h a v e ^
p e r m i t t e d t h e d i s c u s s i o n of t h e r e s u l t s of. o u r .visit to''"'
I r a n a n d t h e e f f e c t o n t h e B e l l r e p r e s e n t a t i o n w h i c h is,
of v i t a l c o n c e r n to u s . .
T h e p u r p o s e of o u r v i s i t w a s t w o - f o l d . F i r s t , w e h a v e b e e n
a w a r e f o r s o m e - t i m e of t h e p o t e n t i a l . U K - I D i n t e r e s t b y the
I r a n i a n A r m y that h a s b e e n b r o u g h t - t o o u r a t t e n t i o n m a i n l y
through U . S . military sources and direct contact with the
A R > U S H / H A A G M i s s i o n in T e h e r a n . I n t h i s r e g a r d w e w e r e
h e a r i n g r u m o r s of a n a c t i v e i n t e r e s t b y c o m p e t i t i v e s o u r c e s
i n p r o m o t i n g h e l i c o p t e r s o t h e r tlian B e l l . , T h e s e w e r e prim a r i l y Kar.an a n d S u d A v i a t i o n . W e w e r e n a t u r a l l y d i s t u r b e d ,
p a r t i c u l a r l y s i n c e t h e r e w a s n o a p p a r e n t i n t e l l i g e n c e or
a c t i v i t y r e p o r t e d t h r o u g h I n t e r n a t i o n a l lleliccptcr C o n s u l t a n t s t . o u r r e p r e s e n t a t i v e f o r I r a n , th^t w o u l d p r o v i d e a
clear picture on what was transpiring.
161:
W h e n I called your a t t o r n e y , M r . Robert Bell, prior to m y
d e p a r t u r e , he had no n e w intelligence to report s i n c e his
last visit to Teheran several m o n t h s a g o .
T h i s , of c o u r s e , led us to the second purpose of our v i s i t to investigate the effectiveness of this representation particularly in relation to its proposed reorganization a n d
d e c i d e upon its r e t e n t i o n . This w e h a d promised to do in
granting a temporary authorization for continuation of y o u r
representation as stated in m y l e t t e r N o . 1543 dated
17 January 1967,' a copy of w h i c h is enclosed.
Following.this l e t t e r , in personal discussions w i t h y o u a n d
Mr.^ Bell^-llz^Jose--recognized that during y o u r period of
ex-communication from.Iran,.this effectiveness-would b e '
d i f f i c u l t . It w a s a g r e e d , h o w e v e r , that provisional a p p r o v a l
for continuance of your representation w o u l d be given f o r
the balance of the year during w h i c h time you w o u l d m a k e
every effort to obtain government sanction for your r e t u r n
to Iran, and pending our own personal investigations in that
country.
Our recent v i s i t to Teheran and discussions w i t h D r . S a f a v i ,
John B o l t o n , L / G e n . K h a t a m i , I I A F , a n d H / G e n . J a b l o n s k y ,
Chief U . S . A R M X S H / M A A G , produced n o indication that y o u r
position has i m p r o v e d , either through intervention of the
U . S. G o v e r n m e n t , legal or other efforts of your own organiz a t i o n . On the contrary, it appears that it w i l l b e several
months before y o u could b e permitted to re-enter d u e to the
actions-still pending against y o u . Then there is a serious
question as to w h e t h e r you w o u l d b e able to re-establish
effective representation in Government c i r c l e s .
Our v i s i t determined f u r t h e r , that your present organization
is n o t considered one to b e serving our best i n t e r e s t s , particularly since your key personnel w e r e relatively u n k n o w n
in their capacity as Bell helicopter representatives to
persons salient to the m a j o r helicopter program being considered by the Government of I r a n .
A c c o r d i n g l y , it is w i t h regret that w e inform you of the
termination
of
our R e p r e s e n t a t i v e
the country of Iran is concerned.
Agreement
in
so f a r
as
162:
We are enclosing a revised Agreement and Schedule "A" that
will continue your representation of Bell Helicopter C o m p a n y
for 1963 for the country of K u w a i t . It is our belief that
you should b e able to devote sufficient influence in that
country to promote the anticipated Government procurement of
Bell helicopters that w e investigated together over four
years ago*
P l e a s e sign and return all copies of our n e w revised agreem e n t and a copy duly signed by Bell Helicopter C o m p a n y w i l l
b e returned to y o u .
W e are looking forward to continuing our working relationship
f o r your r e v i s e d territory, and for a m u t u a l l y profitable
y e a r in 1 9 6 8 .
Sincerely,
BELL HELICOPTER C O M P A N Y
Endorsed b y :
Dwayne K . Jose
Director of Commercial Sales
cc to:
C . Robert Bell
J . H . Orpen
Export Sales M a n a g e r
MATERIAL
RECEIVED
FROM THE
O F F I C E OF L E G I S L A T I V E
CENTRAL
INTELLIGENCE
(163)
COUNSEL,
AGENCY
165:
THE DIRECTOR OF CENTRAL INTELLIGENCE
WASHINGTON, D. C. 20505
O f f i c e of
Legislative
Counsel
17 February 1978
Honorable William P r o x m i r e , Chairman
C o m m i t t e e on Banking, Housing and Urban A f f a i r s
United States Senate
Washington, D. C.
20510
D e a r M r . Chairman:
At the r e q u e s t of Ken M c L e a n , Staff D i r e c t o r , we have
r e v i e w e d the e n c l o s u r e t o m y l e t t e r t o you of 7 F e b r u a r y 1978
to d e t e r m i n e whether the e n c l o s u r e could be d e c l a s s i f i e d . A s
a r e s u l t of the r e v i e w , the entire e n c l o s u r e , e x c e p t for paragraph 1
on page 6 of the e n c l o s u r e , has b e e n d e c l a s s i f i e d . The above
mentioned paragraph r e m a i n s c l a s s i f i e d s i n c e i t ' s r e v e l a t i o n
could j e o p a r d i z e i n t e l l i g e n c e s o u r c e s . E n c l o s e d h e r e w i t h i s an
u n c l a s s i f i e d copy of the e n c l o s u r e with the above mentioned
paragraph r e m o v e d .
It i s m y understanding that this s a t i s f i e s all current
r e q u e s t s of the C o m m i t t e e in this m a t t e r .
/ L y l e L. Miller
Acting L e g i s l a t i v e Counsel
Enclosure
166:
Q u e s t i o n s r e f e r r e d t o CIA o r a l l y o n 19 J a n u a r y 1978 b y a m e m b e r of
S e n a t o r P r o x m i r e ' s s t a f f ; q u e s t i o n s p o s e d i n the, l e t t e r f r o m S e n a t o r
P r o x m i r e t o A d m i r a l T u r n e r , d a t e d 2 o J a n u a r y 1978; and q u e s t i o n s
r e f e r r e d b y S e n a t o r H e i n z , of t h e C o m m i t t e e ( a s u n d e r s t o o d f r o m
c o n v e r s a t i o n s w i t h S e n a t o r H e i n z and K e n M c L e a n , Staff D i r e c t o r )
O r a l q u e s t i o n s b y S e n a t o r P r o x m i r e ' s sfcaff:
1.
2.
B a c k g r o u n d o n H o s s e i n Z a n g a n e h of A i r T a x i C o m p a n y , T e h r a n ,
a.
R e l a t i o n s h i p with B e l l H e l i c o p t e r , Inc. or a f f i l i a t e s .
b.
Information concerning a $2. 9 m i l l i o n payment f r o m
B e l l H e l i c o p t e r , I n c . t o M r . Z a n g a n e h i n 1972 o r 1973.
c.
A n y o t h e r p a y m e n t s r e c e i v e d by M r . Z a n g a n e h f r o m
U . S . or foreign corporations.
d.
M r . Zanganeh1 s relationship with General Khatami,
l a t e C h i e f of t h e I r a n i a n A i r F o r c e .
e.
C o n t i n u i n g r e l a t i o n s h i p of M r . Z a n g a n e h t o T e x t r o n
Corporation, B e l l H e l i c o p t e r International, or a f f i l i a t e s .
Iran,
A n y i n f o r m a t i o n o n t h e 1975 c o - p r o d u c t i o n a g r e e m e n t s b e t w e e n
B e l l H e l i c o p t e r I n t e r n a t i o n a l and t h e I r a n i a n G o v e r n m e n t .
a.
I n f o r m a t i o n w i t h r e g a r d s t o the p i l o t s t r i k e i n v o l v i n g
d e f i c i e n c i e s i n s a f e t y p r o g r a m c o m p l e t i o n arid t r a i n i n g
atIsfanen.
b.
I r a n i a n G o v e r n m e n t d i s s a t i s f a c t i o n with B e l l ' s p e r f o r m a n c e
of t h e c o n t r a c t .
167:
3.
A n y i n f o r m a t i o n , on i m p r o p e r or i l l e g a l p a y m e n t s r e c e i v e d b y
G h a n a n o f f i c i a l s in c o n n e c t i o n with a s a l e of t w o h e l i c o p t e r s b y
B e l l to the G o v e r n m e n t of Ghana in 1971*
4.
I n f o r m a t i o n o n A g u s t a B e l l of I t a l y .
a.
Is the f i r m A g u s t a B e l l being u s e d to s e l l h e l i c o p t e r s
to f o r e i g n n a t i o n s , w h i c h s a l e s w o u l d not b e p e r m i t t e d
d i r e c t l y b y U . S. c o r p o r a t i o n s ?
b.
B a c k g r o u n d i n f o r m a t i o n o n Count A g u s t a w i t h e m p h a s i s
on h i s r e l a t i o n s h i p w i t h B e l l H e l i c o p t e r I n t e r n a t i o n a l *
5.
I l l e g a l p a y m e n t s r e c e i v e d by any one Iranian with r e g a r d to B e l l
H e l i c o p t e r s a l e s or t r a i n i n g and l o g i s t i c s c o n t r a c t s i n 1 9 7 2 , 1973,
1975, and 1977.
6.
A n y i n f o r m a t i o n of c o o p e r a t i o n by B e l l H e l i c o p t e r I n t e r n a t i o n a l
with the U . S . Intelligence Community.
Q u e s t i o n s f r o m S e n a t o r P r o x m i r e ' s l e t t e r of 2 6 J a n u a r y 197S:
1.
D o e s your a g e n c y h a v e information about any r e l a t i o n s h i p
b e t w e e n A i r T a x i a n d o f f i c i a l s of t h e G o v e r n m e n t of I r a n
d u r i n g 1973, a n d i n p a r t i c u l a r a b o u t a n y o w n e r s h i p i n t e r e s t
i n s u c h f i r m , d i r e c t o r i n d i r e c t , o n t h e p a r t of G e n e r a l
M o h a m m e d K h a t e m i , C o m m a n d e r - i n - C h i e f of t h e I m p e r i a l
I r a n i a n A i r F o r c e i n 1973? ( G e n e r a l K h a t e m i d i e d i n 1975)
2.
If t h e a n s w e r t o t h e f i r s t q u e s t i o n i s y e s , p l e a s e p r o v i d e t h e
c o m p l e t e details concerning such relationship including such
d o c u m e n t a t i o n of a n y o w n e r s h i p i n t e r e s t b y I r a n i a n o f f i c i a l s .
3.
D o e s y o u r a g e n c y h a v e any i n f o r m a t i o n indicating that p a r t
o r a l l of t h e B e l l p a y m e n t of $ 2 , 9 5 0 , 0 0 0 t o A i r T a x i a c c r u e d
t o t h e b e n e f i t of a n y o f f i c i a l of t h e I r a n i a n g o v e r n m e n t ? If s o ,
p l e a s e . p r o v i d e t h e d e t a i l s of. s u c h i n f o r m a t i o n i n c l u d i n g a n y -,
i n f o r m a t i o n y o u h a v e r e g a r d i n g k n o w l e d g e of s u c h b e n e f i t o n
t h e p a r t of T e x t r o n - 3 e l l o f f i c i a l s .
168:
D o e s y o u r a g e n c y h a v o any i n f o r m a t i o n c o r . c o r n i n g any c o n t a c t s
b e t w e e n T e x t r c n - l i o l i o f f i c i a l s a:u! G e n e r a l M o h a m m e d K h a t e m i
c u r i n g tho y e a r s 1972 t h r o u g h 1?73 i n c l u s i v e? If s o , p l e a s e p r o v i c e t h e d e t a i l s of a n y such, c o n t a c t s .
Q u e s t i o n s f r o m S e n a t o r Hein_- :
1.
H a v e y o u a s k e d C I A ' s r e p r e s e n t a t i v e in I r a n luring the t i m e
f r a m e in q u e s t i o n f o r h i s r e c o l l e c t i o n a s to the o w n e r s h i p of
A i r T a x i a n d the r e l a t i o n s h i p of G e n e r a l K h a t a m i t h e r e t o ?
2.
D o y o u h a v e a n y i n f o r m a t i o n c o n c e r n i n g the s h o w i n g of a f i l m
b y B e l l H e l i c o p t e r a t w h i c h the Shah of I r a n and G e n e r a l K h a t a m i
were present?
A n s w e r s to q u e s t i o n s r e Iran
S e t f o r t h b e l o w i s a l l r e l e v a n t i n f o r m a t i o n c o n t a i n e d i n CIA. f i l e s
w i t h r e s p e c t to t h e q u e s t i o n s a s k v d c o n c e r n i n g I r a n , A i r T a x i , e t c .
1.
A CIA r e p o r t d a t e d 5 F e b r u a r y I9o0 w h i c h s t a t e s , with r e f e r e n c e
t o A i r T a x i C o m p a n y , ''The c o m p a n y i s b e i n g s u p p o r t e d by p r o m i n e n t
g o v e r n m e n t p e r s o n a l i t i e s such as Major General Mohammad A m i r rChatami, c o m m a n d e r of the I r a n i a n A i r F o r c e ; A h m a d S h a f i q ,
h u s b a n d of P r i n c e s s A s h r a f and p r e s i d e n t of P a r s A i r l i n e s ; C y r u s
F a r . - a r . e h , m a n a g e r of M e h r a b a d ( T e h r a n ) a i r p o r t ; and G e n e r a l
A m a n o l l a h Jahar.ba n.i. '1
2.
A D e p a r t m e n t of D e f e n s e , i n t e l l i g e n c e r e p o r t d a t e d 1 M a r c h 1??0
w h i c h s t a t e s 5 'that M r . S h a f t e g ; G e n e r a l K h a t a m i (HIM'? b r o t h e r - i n l a w ) , C e m - m a n d e r I I A F ; M-.jor J a h a n b a n l , C o m m a n d e r F i g h t e r D o m b e r
G r o u p ; and M r . F r e d F s h o o o w n t h e A i r T a x i S e r v i c e . "
" T h e A i r T a x i S e r v i c e i s the d i s t r i b u t o r f o r B e l l H e l i c o p t e r s
in Iran. . . . "
"that the A i r T a x i S e r v i c e i s run by H A P o f f i c e r s and u s e s
I I A F jet p i l o t s to f l y the a i r c r a f t w h i l e t h e y s t i l l r e c e i v e I I A F
p a y , p l u s e x t r a m o n e y to fly A i r T a x i S e r v i c e a i r c r a f t . "
169:
3.
A D e p a r t m e n t of D e f e n s e i n t e l l i g e n c e r e p o r t da toil
July ly;0
w h i c h s t a t e s *'air t a x i s e r v i c e o w n e d by G e n e r a l K h a t a m i ,
C o m m a n d e r of t h e I m p e . i a l I r a n i a n Ai r F o r c e ; M a j o r
I I A F ; a n d M r . A h m a d S h a f i g , o w n e r of P e r s i a n A i r S e r v i c e . . . . "
4.
A C I A b i o g r a p h i c a l d a t a s h e e t d a t e d ?.o M a r c h 19^$ v h l c h s t a t e s
" H e o w n s A i r T a x i , t h e o n l y c h a r t e r e d a i r s e r v i c e i n 1 ran p e r m i t t e d
to operate*"
5.
A D e p a r t m e n t of D e f e n s e i n t e l l i g e n c e r e p o r t d a t e d i t M a r c h 1970
w h i c h s t a t e s " A i r T a x i C o m p m y i s o w n e d by a g r o u p of p r i v a r e
i n d i v i d u a l s (with G e n e r a l M o h a m m e d KHATEMI, Com:na:.c.er IIAF
c o n t r o l l i n g t h e m a j o r i t y of s t o c k ) . T h e m a n a g i n g d i r e c t o r i s
M r . A . H„ Y A N G A N E H . "
11
( H o w e v e r , it m u s t be noted that a l l a v i a t i o n d e v e l o p m e n t s
i n Iran a r e c o n t r o l l e d by G e n e r a l M o h a m m e d K H A T E M I ,
C o m m a n d e r of t h e I I A F , P r e s i d e n t of B o a r d of I r a n A i r ,
a n d b r o t h e r - i n - l a w of t h e S h a h ; G e n e r a l A l i K U A O E M 1 ( R e t ) ,
M a n a g i n g D i r e c t o r of I r ^ n A i r ; a n d M r . A . H . Y A N G A X F K ,
M a n a g i n g D i r e c t o r of A i r T a x i C o m p a n y ) . " 5
6.
A D e p a r t m e n t of D e f e n s e b i o g r a p h i c d a t a s h e e t d a t e d M a r c h 1971
w h i c h s t a t e s t h a t G e n e r a l M o h a m m e d K h a t a m i i s t h e 5 5 o w n e r of
A i r T a x i ( o n l y a i r c h a r t e r s e r v i c e in I r a n ) . „. .
7.
A C I A d o c u m e n t d a t e d 2 5 J a n u a r y 1 9 7 $ s o u r e e d t o V.*or:d T r a d e
D i r e c t o r i e s and other public i n f o r m a t i o n and p u M i c s o u r c e s r e v e a l s
the following:
" A i r T a x i C o m p a n y w a s f o u n d e d i n 195$ b y A m i r - H o s s e i n
A z a m Z a n g a n e h , A h m a d Chafik, and F r e d e r i c k F s h o o .
As
of 1 9 7 0 , Z a n g a n e h w a s m a n a g i n g d i r e c t o r a n d p r i n c i p a l
shareholder.
C h a f i k w a s C h a i r m a n of B o a r d of A i r T a x i
a n d m a n a g i n g d i r e c t o r of B a n k F r e b a r a t e . l o c a l c o - n x m e r c i a 1
b a n k . JEshoo d e s c r i b e d a r ' s i l p a r t n e r . '
" A i r T a x i a l s o r e p r e s e n t e d B e l l H e l i c o p t e r .1 nt e r n a t i e n a 1 of
F o r t h W o r t h , T e x a s , f r o m 1 9 - 3 u n t i l arour.ci 1 9 7 3 . "
' - ' Z a n g a n e h s o l d m u c h of h i s s t o c k i n A i r T a x i in kit e 1 9 7 5 . "
170:
" D A O b i o s h e e t , u n s o u r c e d , d a t e d 5 A u g u s t 1974, d e s c r i b e d
G e n e r a l M o h a m m e d A m i r K h a t a m i a s ' o w n e r of A i r T a x i . ' "
" S h a r e s i n A i r T a x i w e r e a l s o o w n e d by v a r i o u s m e m b e r s
of t h e R o y a l F a m i l y a n d p o s s i b l y ' G e n e r a l K h a t e m i ' . . . w h e n
Z a n g a n e h s o l d h i s s t o c k in l a t e 1975, it w a s s o l d to t h i s s a m e
group.11
. s p e c i f i c a l l y m e n t i o n e d r u m o r e d K h a t a m i c o n n e c t i o n with
Air Taxi Company. "
N o t e N o . 1:
T h e s o u r c e s of i t e m s 1, 2, a n d 3 a p p e a r to b e d i f f e r e n t s o u r c e s .
T h e d o c u m e n t s m e n t i o n e d i n 4 - 6 m a y b e b a s e d a t l e a s t i n p a r t on t h e
d o c u m e n t s m e n t i o n e d in 1 - 3 above. The i n f o r m a t i o n in 7 has a s o u r c e
d i f f e r e n t f r o m a n y of i t e m s 1 - 6 .
Note No.
2:
In r e s e a r c h i n g the q u e s t i o n s w i t h r e s p e c t to I r a n s e t f o r t h a b o v e ,
i n a d d i t i o n t o f i l e s e a r c h e s , A-gency o f f i c i a l s k n o w l e d g e a b l e on m a t t e r s
w i t h r e s p e c t to I r a n w e r e q u e r i e d f o r t h e i r p e r s o n a l r e c o l l e c t i o n of
m a t t e r s during the t i m e p e r i o d 1970-75. Only one individual r e c a l l e d
a n y t h i n g r e l e v a n t a n d that r e c o l l e c t i o n s u b s t a n t i a t e s t h e r e p o r t s w h i c h
i n d i c a t e that G e n e r a l K h a t a m i a l l e g e d l y had a c o n t r o l l i n g i n t e r e s t i n
Air Taxi Company.
Note No.
3:
W i t h r e s p e c t t o q u e s t i o n 6 a b o v e , t h e s e a r c h of f i l e s d i s c u s s e d
h e r e i n r e v e a l e d no i n f o r m a t i o n which indicated i l l e g a l , i r r e g u l a r or
i n a p p r o p r i a t e a c t i v i t i e s with r e s p e c t to B e l l H e l i c o p t e r International
o r by B e l l H e l i c o p t e r I n t e r n a t i o n a l .
171:
A n s w e r s to q u e s t i o n s r e Italy
T h e CIA h a s r e p o r t s of r u m o r s i n d i c a t i n g that A g u s t a B e l l
h a s b e e n s e l l i n g h e l i c o p t e r s t o f o r e i g n n a t i o n s not p e r m i t t e d s a l e s
b y U . S . c o r p o r a t i o n s , but n o e v i d e n c e e x i s t s t o s u b s t a n t i a t e t h e s e
r u m o r s . CIA a l s o h a s i n f o r m a t i o n i n d i c a t i n g that Count A g u s t a i s
t h e h e a d of A g u s t a B e l l , w h i c h p r o d u c e s h e l i c o p t e r s under l i c e n s e s
f r o m B e l l H e l i c o p t e r I n t e r n a t i o n a l a s w e l l a s the S i k o r s k y and B o e i n g
corporations.
A n s w e r s t o q u e s t i o n s r e Ghana
CIA h a s n o i n f o r m a t i o n r e q u e s t i o n s on G h a n a .
173:
RESPONSES TO
REQUEST
U.S.
COMMITTEE
FOR A F F I D A V I T S
FROM
STATE DEPARTMENT AND U . S .
PERSONNEL STATIONED
DEFENSE DEPARTMENT
IN
MILITARY
IRAN
AUDITORS
T E X T R O N ' S ACCOUNTANTS AND
T E X T R O N ' S BOARD OF
DIRECTORS
ON KNOWLEDGE OF GENERAL
OWNERSHIP OF AIR
23-586 O - 78 - 12
KHATAMI'S
TAXI
H i f m i e b -Sicvies. ,~2>euale
C O M M I T T E E ON BANKING. HOUSING AND URBAN
WASHINGTON. D.C.
AFFAIRS
20510
On January 24 the Senate Committee on Banking, Housing
and Urban Affairs held hearings on the nomination of M r .
G . William Miller to the Board of Governors of the Federal
Reserve System. During the course of these h e a r i n g s ,
members of the Committee questioned M r . Miller about a payment of $2,950,000 which the Bell division of Textron
agreed to make to the Air Taxi Company of Iran in June of
1973 in connection with the termination of that company's
services to Bell as its sales agent for military sales to
the Government of Iran. During the same period of t i m e ,
Bell was awarded a contract valued at approximately $500
million for the sale of helicopters to the Government of
Iran.
Following these discussions, a member of the C o m m i t t e e ,
Senator John H e i n x , asked for an investigation of this payment by the Committee's staff. As Chairman of the C o m m i t t e e ,
Senator Proxmire agreed to the investigation. As p a r t of
this investigation, a series of questions have been prepared,
as,set forth in Schedule A . We request that you respond to
these questions separately in affidavit form.
Please feel free to add any other additional information^ you. may have that w i l l help the Committee in its
investigation of the $2.9 million payment to Air Taxi and
General Khatami's relationships, if a n y , with companies with
which Textron or Bell Helicopter had dealings.
In o r d e r to expedite this important m a t t e r , the Committee
would appreciate your response forthwith. If you have any
questions on this r e q u e s t , please contact me at 202-224-7391.
Sincerely,
Kenneth A . McLean
Staff Director
EDITOR'S NOTE: The above letter was sent to the list
of individuals following Schedule A.
(175)
176:
SCHEDULE
A
1. D i d y o u k n o w or h a v e you ever h e a r d that G e n e r a l
Mohammed K h a t a m i , C o m m a n d e r - i n - C h i e f of the I m p e r i a l
I r a n i a n A i r F o r c e , h a d an o w n e r s h i p i n t e r e s t of a n y nature in S T P ( S k e r k a t S h a h a m i T a y a r P a r s ) or A i r T a x i ,
I r a n i a n c o m p a n i e s , b e t w e e n 1960 and 1975?
2 . W h i c h c o m p a n y d i d y o u k n o w or h e a r t h a t G e n e r a l
K h a t a m i h a d an o w n e r s h i p i n t e r e s t in -- STP or A i r T a x i ?
W h e n d i d y o u l e a r n of G e n e r a l K h a t a m i ' s i n t e r e s t and w h o
d i d y o u l e a r n of it from?
3 . W e r e G e n e r a l K h a t a m i s i n t e r e s t s in STP a n d A i r
T a x i c o m m o n k n o w l e d g e in T e h r a n ?
When was that information common knowledge?
Who knew?
H o w d i d y o u l e a r n of
that information?
4 . D i d y o u s p e a k to or d i d B e l l H e l i c o p t e r o r
T e x t r o n o f f i c i a l s s p e a k to y o u a b o u t G e n e r a l K h a t a m i ' s
i n t e r e s t in STP or A i r T a x i ?
5. W h i c h B e l l or T e x t r o n o f f i c i a l s d i d y o u
w i t h and w h e n ?
speak
6. What were your conversations with Bell or Textron
officials about those matters?
7 . D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t a n y
B e l l or T e x t r o n o f f i c i a l s k n e w t h a t G e n e r a l K h a t a m i h a d
an o w n e r s h i p i n t e r e s t of any n a t u r e in STP or A i r T a x i
at any t i m e b e t w e e n 1960 and 1975?
177:
SCHEDULE A
(continued)
8.
gifts or
directly
generate
D i d y o u k n o w or h a v e y o u h e a r d of a n y
o t h e r i t e m s of v a l u e m a d e b y or g i v e n
or i n d i r e c t l y to I r a n i a n o f f i c i a l s to
h e l i c o p t e r s a l e s in Iran b e t w e e n 1960
payments,
by Bell
t r y to
and 1975?
9 . D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t a n y of
t h e $ 2 , 9 5 0 , 0 0 0 p a y m e n t to A i r T a x i m i g h t h a v e b e e n p a s s e d
o n d i r e c t l y or i n d i r e c t l y to I r a n i a n g o v e r n m e n t o f f i c i a l s ,
i n c l u d i n g G e n e r a l K h a t a m i , in c o n n e c t i o n w i t h B e l l ' s
1972 h e l i c o p t e r d e a l w i t h t h e I r a n i a n g o v e r n m e n t .
1 0 . W h e n d i d y o u learn o r h e a r t h a t my of t h e p a y m e n t w a s p a s s e d on and from w h o m did y o u l e a r n o r h e a r
of it?
1 1 . D i d y o u k n o w or h a v e you e v e r h e a r d t h a t B e l l or
T e x t r o n m a y h a v e m a i n t a i n e d at a n y t i m e a n y f u n d of m o n i e s
or o t h e r a s s e t s w h i c h w e r e n o t r e c o r d e d on the c o r p o r a t e
books and-records?
12. Do you have any information
M i l l e r , President and later Chairman
T e x t r o n , I n c . b e t w e e n 1960 a n d 1 9 7 5 ,
o f a n y of t h e m a t t e r s r e f e r r e d to in
that G. William
of the B o a r d o f
had any knowledge
the a b o v e q u e s t i o n s ?
Listing of individuals and their responses
follow:
178:
Major General Walter D . D r u e n , J r .
Commanding General
17th Air Force
APO New York
09130
Major General Harold L . Price
USAF Retired
Box R6
APO New York
09202
M a j o r General Edward R . Partain
Director
Logistics and Security Assistance
Headquarters European Command
APO New York
09128
Brigadier General Leo K . Souck
USA Retired
Box R 426
APO New York
09205
M a j o r General Harvey J . Jablonsky
USA Retired
Box 1177
K i l l e e n , Texas
76541
M a j o r General Hamilton A . Twitchell
USA Retired
4415 Boxwell Road
W a s h i n g t o n , D . C . 20016
M a j o r General Ellis W . Williamson
USA Retired
3616 North 36th Road
A r l i n g t o n , V a . 22207
L t . General Dedol Brett
USAF
Commander Air South
Box 101
FPO New York
09524
M a j o r General Hoyt S . Vandenberg
Director
Operations and Readiness
DCS Plans and Operations
Headquarters USAF
W a s h i n g t o n , D . C . .20330
B r i g . General T . C . M a t a z i s
USA Retired
Commandant of Cadets
V a l l e y Forge M i l i t a r y A c a d e m y
W a y n e , Pennsylvania
19087
179:
Brigadier General Oliver B . Patton
USA Retired
U . S . Capitol Historical Society
200 M a r y l a n d A v e n u e , N . E .
W a s h i n g t o n , D . C . 20515
Colonel William C . Rudd
811 Lipton Drive
Newport N e w s , Virginia
23602
Colonel Homer E . Schott
External Affairs Division
Defense Intelligence A g e n c y
W a s h i n g t o n , D . C . 20301
M r . William J . Froning
Resident Office
Defense Contract Audit Agency
c/o Bell Helicopter
Box 482
Fort W o r t h , Texas
76101
M r . Kenneth W . Fuller
Resident Office
Defense Contract Audit Agency
c/o LTV Corporation
9314 West Jefferson Street
Box 5907
D a l l a s , Texas
75222
M r . Cecli Smith
Arthur Young § C o .
2200 Fort Worth National Bank
Building
Fort W o r t h , Texas
76102
M r . W . F . Slattery
Arthur Young § C o .
2 77 Park A v e n u e
New Y o r k , N . Y . 10017
B t i g . General Francis A . Humphreys
Commander
20 NORAD Region
Fort L e e , AFS V A
23801
M r . Joseph A . M u r r a y
15724 Cotting Court
C h e s t e r f i e l d , M i s s o u r i 63017
D r . Thomas J . Keenan
343 Nantucket Drive
Ballwin, Missouri
63011
180:
M r . John R . Kurtz
56 Rugby Drive
B e l l e v i l l e , Illinois
62223
Colonel Edwin M . Aguanno
Quarters N o . 25-1
S t . Louis Area Support Center
Granite City A r m y Depot
Granite C i t y , Illinois
62040
M s . Joyce I. A l l e n
15620 Highcroft Drive
Chesterfield, Missouri
Colonel John E . W i l s o n
9 White Faun Lake
P i t t s b u r g h , P a . 15238
63017
(Retired)
Colonel John B . Boynton
Retired
Box 1315
Garden R i d g e , Texas
78215
Colonel Duncan E . Duvall
Retired
1635 M a d i s o n Street
Port T o w n s e n d , W a s h i n g t o n 98368
M r . John A . A r m i t a h e
Hotel D , East Range
University of V i r g i n i a
Charlottesville, Virginia
22903
M r . Joseph S . Farland
Watergate South 1504
700 New H a m p s h i r e A v e n u e , N . W .
W a s h i n g t o n , D . C . 20037
M r . Richard M . Helms
Saseer Company
Suite 402
1627 K S t r e e t , N . W .
W a s h i n g t o n , D . C . 20006
M r . Robert H . Harlan
Inspector General of the Foreign Service
Room 2 3 1 8 , Department of State
W a s h i n g t o n , D . C . 20520
M r . M a r t i n F . Herz
Georgetown University
Diplomat and Residence
W a s h i n g t o n , D . C . 20016
181:
M r . W i l l i a m W . Lehfelbt
824 Fifth Street
L i v i n g s t o n , California
95334
M r . Douglas McArthur II
Rue Langeveld
65 Capitol B-1180
B r u s s e l s , Belguim
M r . Armin H . M e y e r
4610 Reno R o a d , N . W .
W a s h i n g t o n , D . C . 20008
Mr. Michael A.G. Michaud
Deputy D i r e c t o r , Bureau of
Politico-Military Affairs
Office of International Security Policy
Room 7323 Department of State
W a s h i n g t o n , D . C . 20520
M r . Henry Precht
Bureau of Near Eastern and South
Asian A f f a i r s - - R e g i o n a l Affairs
Room 4 2 2 4 , Department of State
Washington, D.C.
20520
M r . John Hall R a l p h , J r .
R O U S C , Bureau of European Affairs Director
Office of Canadian Affairs
Room 5227 Department of State
W a s h i n g t o n , D . C . 20520
M r . Nicholas G . Thacher
3919 W a s h i n g t o n Street
San F r a n c i s c o , California
94118
M r . Donald R . Toussainc
Under Secretary for Security A s s i s t a n c e ,
Science and T e c h n o l o g y C o o r d i n a t o r ,
United Nations Conference on Science and
Technology for Development
Department of State
Room 1113
Washington, D.C.
20520
M r . A l l i s t a i r M . Campbell
Member
Board of Director
T e x t r o n , Inc.
D r . Carlo B o m b i e r i , Member
Board of Directors
T e x t r o n , Inc.
182:
M r . Joseph B . Collinson
M e m b e r , Board of Directors
T e x t r o n , Inc.
M r . Clarence H . G i f f o r d , J r .
M e m b e r , Board of Directors
T e x t r o n , Inc.
M r . E . Clayton G e n g r a s , Member
Board of Directors
T e x t r o n , Inc.
M r . Paul M . F y e , Member
Board of Directors
T e x t r o n , Inc.
M r . Harvey Gaylord
M e m b e r , Board of Directors
T e x t r o n , Inc.
M r . Edwin J . Ducayet
M e m b e r , Board of Directors
T e x t r o n , Inc.
M s . Barbara Scott Preiskel
M e m b e r , Board of Directors
T e x t r o n , Inc.
M r . R . Heath Larry
M e m b e r , Board of Directors
T e x t r o n , Inc.
M s . Jean Head Sisco
Former Member
Board of Directors
T e x t r o n , Inc.
M r . Webb C . H a y e s , III, Member
Board of Directors
T e x t r o n , Inc.
M r . Arthur T . Roth
Former M e m b e r
Board of Directors
T e x t r o n , Inc.
M r . Herman E . G o o d m a n , Member
Board of Directors
T e x t r o n , Inc.
M r . Charles C . T i l l i n g h a s t , J r .
M e m b e r , Board of Directors
T e x t r o n , Inc.
183:
DEPARTMENT OF
W a s h i n g t o n , O.C.
STATE
20520
February 16, 1978
M r . Kenneth A . McLean
Staff Director
Committee on Banking, Housing
and Urban Affairs
United States Senate
Washington, D . C . , 20510
Dear M r . McLean:
I am enclosing the answers we received by cable
from the various State Department personnel overseas
who were asked to respond to the Senate Banking
Committee's questionnaire in connection with its
hearings on the nomination of M r . G . William Miller to
the Board of Governors of the Federal Reserve S y s t e m .
The signed replies will be sent to you as soon as we
have received them. You w i l l notice that we have no
answers from Ambassador H e c k . Ambassador Heck is
travelling to his post in Nepal and upon his arrival
will cable his reply. We will provide you with his
answers upon receiving them. State Department personnel
presently assigned to the United States will be
responding directly.
In addition, M r . Freed of your staff asked the
Department to ask our Embassy in Tehran for certain
information concerning Air Taxi's ownership and operations.
We have done so, and attached are the questions with the
answers we received.
The Department is glad to have been able to
respond to the Committer '
184:
Q:
Do any public and readily available official or
unofficial records (e.g., Chamber of Commerce)
in Iran show that General Khatami was listed
as owner or part-owner of Skerkat Shahami Tayar
Pars (STP) or A i r Taxi between 1959 and 1965?
A:
General Mohammad Khatami was Chairman of Air Taxi
between 1957 and 1965, according to oral statement
to Embassy by Registration Office of Minister of
Justice.
Q:
Do any Iranian public and readily available records
show that General Khatami became a silent partner
in STP or Air Taxi in 1965?
A:
Embassy knows of no Iranian public records that
would show that General Khatami became a silent
partner in STP or Air Taxi in 1967.
Q:
Do any records available to the Embassy show that
Bell Helicopter was represented by M r . William H .
French in Iran between 1964 and 1968?
A:
Some time in 1959, Bell Helicopter representation
went to firm known as Aviation Development Company
(ADC), acting as commercial agents for sale of
military and civilian aircraft on behalf of several
American manufacturers® William H . French was
Managing Director of ADC in 1959. Embassy unable
to determine from our records how long association
between ADC and Bell continued; B e l l opened its own
office in Iran in 1973.
Q:
Do any records show that Bell concluded an agency
or distributor-type agreement with STP or Air T a x i
in 1968?
A:
Embassy has no information that Bell concluded
agency or distributor-type agreement with STP or
Air Taxi in 1968.
185:
Reply of C h a r l e s W . M c C a s k i l l
Madras
Q:
D i d y o u k n o w or h a v e y o u ever h e a r d t h a t G e n e r a l
M o h a m m e d K h a t a m i , C o m m a n d e r - i n - C h i e f of the
I m p e r i a l I r a n i a n A i r F o r c e , h a d an o w n e r s h i p
i n t e r e s t of a n y n a t u r e in STP (Skerkat S h a h a m i
T a y a r P a r s ) or A i r T a x i , I r a n i a n c o m p a n i e s , b e t w e e n
1960 a n d 1975?
A:
I d o n o t r e c a l l k n o w i n g or ever having heard t h a t
G e n e r a l M o h a m m e d K h a t a m i , C o m m a n d e r - i n - C h i e f of the
I m p e r i a l Iranian A i r F o r c e , had an o w n e r s h i p i n t e r e s t
of any n a t u r e in STP (Skerkat S h a h a m i T a y a r Pars) or
A i r T a x i , Iranian c o m p a n i e s , b e t w e e n 1960 and 1 9 7 5 .
Q:
W h i c h c o m p a n y d i d you k n o w or h e a r t h a t G e n e r a l
K h a t a m i h a d an o w n e r s h i p i n t e r e s t in — STP or
A i r T a x i ? W h e n d i d y o u l e a r n of G e n e r a l K h a t a m i ' s
i n t e r e s t a n d w h o d i d y o u learn of it from?
A:
A n s w e r e d in Q u e s t i o n N o . 1 .
Q:
W e r e G e n e r a l K h a t a m i ' s i n t e r e s t in STP and A i r
T a x i c o m m o n k n o w l e d g e in T e h r a n ? W h e n w a s t h a t
information common knowledge? Who knew? How did
y o u learn of t h a t i n f o r m a t i o n ?
A:
I do n o t k n o w w h e t h e r G e n e r a l K h a t a m i ' s i n t e r e s t s in
STP and A i r T a x i w e r e common k n o w l e d g e in T e h r a n , as
i n d i c a t e d a b o v e , I do n o t recall e v e r h a v i n g h e a r d
of this s u b j e c t in T e h r a n .
186
Q:
D i d y o u speak to or did B e l l H e l i c o p t e r or T e x t r o n
o f f i c i a l s speak to you a b o u t G e n e r a l K h a t a m i ' s
i n t e r e s t in STP or A i r Taxi?
A:
I c a n n o t r e c a l l ever having d i s c u s s e d this m a t t e r
w i t h a n y b o d y in Iran or h a v i n g spoken to or w i t h
anybody about it.
Q:
W h i c h B e l l or T e x t r o n o f f i c i a l s d i d y o u s p e a k
with and when?
A:
A n s w e r e d in q u e s t i o n n o . 4 .
Q:
W h a t w e r e y o u r c o n v e r s a t i o n s w i t h B e l l or T e x t r o n
o f f i c i a l s a b o u t those m a t t e r s ?
A n s w e r e d in q u e s t i o n n o . 4 .
Q:
D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t a n y B e l l
or Textron officials knew that General Khatami had
a n o w n e r s h i p i n t e r e s t of any n a t u r e in STP or A i r
T a x i a t any time b e t w e e n 1960 a n d 1975?
A:
No.
187:
Q:
Did you know or have you heard of any payments,
gifts or other items of value made by or given by
B e l l directly or indirectly to Iranian officials
to try to generate helicopter sales to Iran
between 19 60 and 19 75?
A:
No.
Q:
Did you know or have you ever heard that any of
the $2,950,000 payment to Air Taxi might have been
passed on directly or indirectly to Iranian government
o f f i c i a l s , including General K h a t a m i , in connection
with Bell's 1972 helicopter deal with the Iranian
government.
Q:
When did you learn or hear that any of the payment
was passed on and from whom did you learn or hear
of it?
A:
No.
188:
Q:
Did you know or have you ever heard that Boll or
Textron may have maintained at any time any funds
of monies or other assets which were not recorded
on the corporate books and records?
A:
Answered in question n o . 9.
Q:
Do you have any information that G . W i l l i a n M i l l e r ,
President and later Chairman of the Board of
T e x t r o n , Inc. between 1960 and 1975, had any
knowledge of any of the matters referred to in the
above questions?
189
R e p l y of A m b a s s a d o r A n d r e w K i l l g o r e
Doha
Q:
D i d y o u k n o w or have y o u ever h e a r d t h a t G e n e r a l
M o h a m m e d K h a t a m i , C o m m a n d e r - i n - C h i e f of the
..Imperial I r a n i a n A i r F o r c e , h a d an o w n e r s h i p
i n t e r e s t of a n y n a t u r e in STP (Skerkat S h a h a m i
T a y a r P a r s ) or A i r T a x i , I r a n i a n c o m p a n i e s , b e t w e e n
1960 and 1975?
A:
No.
Q:
W h i c h c o m p a n y d i d you k n o w or h e a r t h a t G e n e r a l
K h a t a m i h a d an o w n e r s h i p i n t e r e s t in — STP or
A i r T a x i ? W h e n d i d y o u l e a r n of G e n e r a l K h a t a m i ' s
i n t e r e s t a n d w h o d i d y o u learn of it from?
A:
Not applicable.
Q:
W e r e G e n e r a l K h a t a m i ' s i n t e r e s t in STP and A i r
T a x i c o m m o n k n o w l e d g e in T e h r a n ? W h e n w a s t h a t
information common knowledge? Who knew? How did
y o u learn of that i n f o r m a t i o n ?
A:
W h i l e G e n e r a l K h a t a m i ' s f i n a n c i a l interests m a y
have been common k n o w l e d g e among certain c a t e g o r i e s
of p e o p l e such as h i g h - r a n k i n g Iranian A i r F o r c e
o f f i c e r s , it is d o u b t f u l that such i n f o r m a t i o n w a s
common k n o w l e d g e among the g e n e r a l p u b l i c in T e h r a n .
23-586 O - 78 - 13
190
Q:
D i d y o u speak to or d i d B e l l H e l i c o p t e r or T e x t r o n
o f f i c i a l s speak to y o u a b o u t G e n e r a l K h a t a m i ' s
i n t e r e s t in STP or A i r Taxi?
A:
No.
Q:
W h i c h B e l l or T e x t r o n o f f i c i a l s did y o u speak
w i t h and w h e n ?
A:
Q:
A:
Q:
A:
Not applicable
W h a t w e r e y o u r c o n v e r s a t i o n s w i t h B e l l or T e x t r o n
o f f i c i a l s a b o u t those m a t t e r s ?
Not applicable.
D i d y o u k n o w or h a v e you e v e r h e a r d t h a t any B e l l
or T e x t r o n o f f i c i a l s knew that G e n e r a l K h a t a m i h a d
an o w n e r s h i p i n t e r e s t of any n a t u r e in STP or A i r
T a x i at any time b e t w e e n 196 0 and 1975?
No.
191:
Q:
A:
Q:
A:
Did you know or have you heard of any p a y m e n t s ,
gifts or other items of value made by or given by
B e l l directly or indirectly to Iranian officials
to try to generate helicopter sales to Iran
between 1960 and 1975?
No.
Did you know or have you ever heard that any of
the $2,950,000 p a y m e n t to A i r Taxi m i g h t have been
passed on directly or indirectly to Iranian government
o f f i c i a l s , including General K h a t a m i , in connection
w i t h Bell's 1972 helicopter deal with the Iranian
government.
No.
Q:
When did you learn or hear that any of the p a y m e n t
w a s passed on and from whom did you learn or hear
of it?
A:
Not applicable.
192:
Q:
Did you know or have you ever heard that B e l l or
Textron may have maintained at any time any funds
of monies or other assets which were not recorded
on the corporate books and records?
Q:
Do you have any information that G . William M i l l e r ,
President and later Chairman of the Board of
T e x t r o n , Inc. between 1960 and 1975, had any
knowledge of any of the matters referred to in the
above questions?
A:
No.
193
Reply of H a w t h o r n e M i l l s
Athens
Q:
D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t G e n e r a l
M o h a m m e d K h a t a m i , C o m m a n d e r - i n - C h i e f of the
I m p e r i a l I r a n i a n A i r F o r c e , h a d an o w n e r s h i p
i n t e r e s t of a n y n a t u r e in STP (Skerkat S h a h a m i
Tayar Pars) or Air Taxi, Iranian companies, between
1960 a n d 1975?
A:
No.
Q:
W h i c h c o m p a n y d i d you k n o w or h e a r t h a t G e n e r a l
K h a t a m i h a d an o w n e r s h i p i n t e r e s t in — STP or
A i r T a x i ? W h e n d i d y o u l e a r n of G e n e r a l K h a t a m i ' s
i n t e r e s t a n d w h o d i d y o u l e a r n of it from?
A:
Not applicable.
Q:
W e r e G e n e r a l K h a t a m i ' s i n t e r e s t in STP a n d A i r
T a x i c o m m o n k n o w l e d g e in T e h r a n ? W h e n w a s t h a t
information common knowledge? Who knew? How did
y o u learn of that i n f o r m a t i o n ?
A:
Such i n f o r m a t i o n w a s n o t c o m m o n k n o w l e d g e a m o n g
my contacts.
194
Q:
D i d y o u s p e a k t o o r d i d B e l l H e l i c o p t e r or T e x t r o n
o f f i c i a l s speak to y o u a b o u t G e n e r a l K h a t a m i ' s
i n t e r e s t in STP or A i r Taxi?
A:
No.
Q:
W h i c h B e l l or T e x t r o n o f f i c i a l s d i d y o u speak
with and when?
A:
Not applicable.
Q:
W h a t w e r e y o u r c o n v e r s a t i o n s w i t h B e l l or T e x t r o n
o f f i c i a l s a b o u t those m a t t e r s ?
Not applicable.
Q:
D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t a n y B e l l
or Textron officials knew that General Khatami had
an o w n e r s h i p i n t e r e s t of any n a t u r e in STP or A i r
T a x i a t any t i m e b e t w e e n 1960 and 1975?
195:
Did you know or have you heard of any p a y m e n t s ,
gifts or other items of value made by or given by
B e l l directly or indirectly to Iranian officials
to try to generate helicopter sales to Iran
between 1960 and 1975?
No.
Did you know or have you ever heard that any of
the $2,950,000 payment to Air Taxi m i g h t have been
passed on directly or indirectly to Iranian government
o f f i c i a l s , including General K h a t a m i , in connection
with Bell's 1972 helicopter deal with the Iranian
government.
No.
When did you learn or hear that any of the p a y m e n t
was passed on and from whom did you learn or h e a r
of it?
Not applicable.
196:
Q:
Did you know or have you ever heard that Bell or
Textron may have maintained at any time any funds
of monies or other assets which were not recorded
on the corporate books and records?
A:
No.
Q:
Do you have any information that G . William M i l l e r ,
President and later Chairman of the Board of
T e x t r o n , Inc. between 1960 and 1975, had any
knowledge of any of the matters referred to in the
above questions?
Statement by Roger C. Browin
Counselor of Embassy for
Economic and Commercial Affairs
American Embassy
Tehran, Iran
Did you know or have you ever heard that General
Mohammed Khatami, Commander-in-Chief of the
Imperial Iranian Air F o r c e , had an ownership
interest of any nature in STP (Skerkat Shahami
Tayar Pars) or Air T a x i , Iranian companies, between
1960 and 1975?
Subsequent to my arrival at this post in August 1°~4 I
heard from various individuals in the Tehran business
community, whose names I am unable to recall, that
General Mohammed Khatami, Commander-in-Chief of the
Imperial Iranian Air Force, had a financial interest i
both STP (Skerkat Shahami Tayar Pars) and Air Taxi,
Iranian companies. This financial interest was
variously described as silent partnership, minority
interest, and part ownership. I was also told that
General Khatami may have sold his interest in either
of these companies sometime in the early 19"\Vs.
Which company did you know or hear that General
Khatami had an ownership interest in -- ST? or
A i r Taxi? When did you learn of General Khatami's
interest and w h o did you learn of it from?
As stated above, I had heard that General Khatami had
an ownership interest in both STP and Air Taxi. I was
told this sometime in 1974 or 1975 but can no longer
remember who first told me of this.
Were General Khatami's interest in ST? and Air
Taxi common knowledge in Tehran? When was that
information common knowledge? Who knew? How did
you learn of that information?
General Khatami's interest in STP and Air Taxi were
fairly common knowledge in U.S. and Iranian aviation
circles and to some degree known in the general
business community. That information became common
knowledge probably in the late 196 0 ' s and e a r l y 1^7 0*5
198
Q:
D i d you speak t o or did B e l l H e l i c o p t e r or T e x t r o n
o f f i c i a l s speak to y o u a b o u t G e n e r a l K h a t a m i ' s
i n t e r e s t in STP or A i r T a x i ?
A:
On no o c c a s i o n did I speak to B e l l Helicopter or
Textron o f f i c i a l s a b o u t G e n e r a l K h a t a m i ' s i n t e r e s t
in STP or A i r T a x i , nor did B e l l H e l i c o p t e r or
Textron o f f i c i a l s speak to me a b o u t G e n e r a l K h a t a m i ' s
i n t e r e s t in these c o m p a n i e s .
Q:
W h i c h B e l l or T e x t r o n o f f i c i a l s did y o u s p e a k
with and when?
As I stated a b o v e , I had no c o n v e r s a t i o n s with B e l l
or Textron o f f i c i a l s on this s u b j e c t .
Q:
W h a t w e r e y o u r c o n v e r s a t i o n s w i t h B e l l or T e x t r o n
o f f i c i a l s a b o u t those m a t t e r s ?
A s noted a b o v e , No such o c c a s i o n s o c c u r e d .
Q:
D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t any B e l l
or T e x t r o n o f f i c i a l s k n e w t h a t G e n e r a l K h a t a m i h a d
an o w n e r s h i p i n t e r e s t of any n a t u r e in STP or A i r
T a x i a t any time b e t w e e n 1960 and 1975?
A:
I have no s p e c i f i c k n o w l e d g e that B e l l or Textron
o f f i c i a l s knew of any o w n e r s h i p i n t e r e s t by G e n e r a l
Khatami in STP or Air T a x i .
199:
Q:
Did you know or have you heard of any p a y m e n t s ,
gifts or other items of value made by or given by
B e l l directly or indirectly to Iranian officials
to try to generate helicopter sales to Iran
between 1960 and 1975?
A:
I have no personal knowledge of any payments, gifts or
other items of value made or given by Bell directly or
'indirectly to Iranian officials to try to general
helicopter sales in Iran between 1960 and 1975.
Q:
Did you know or have you ever heard that any of
the $2,950,000 payment to A i r Taxi m i g h t have been
passed on directly or indirectly to Iranian government
o f f i c i a l s , including General K h a t a m i , in connection
with Bell's 1972 helicopter deal with the Iranian
government.
A:
I did not know nor have I ever heard that any of the
$2,950,000 payment to Air Taxi was passed to Iranian
Government officials including General Khatami.
Q:
When did you learn or hear that any of the p a y m e n t
w a s passed on and from whom did you learn or hear
of it?
Not applicable; I had no knowledge of such a payment.
200:
Q:
Did you know or have you ever heard that Bell or
Textron may have maintained at any time any funds
of monies or other assets which were not recorded
on the corporate books and records?
A:
I did not know nor have I ever heard that Bell or
Textron may have maintained a fund of monies or other
assets which were not recorded on the corporate books
and records.
Q:
Do you have any information that G . William M i l l e r ,
President and later Chairman of the Board of
T e x t r o n , Inc. between 1960 and 1975, had any
knowledge of any of the matters referred to in the
above questions?
A:
I have no .
. information that G . Vvilliam Miller,
President and later Chairman of the Board of Textron,
Inc. between 1960 and 1975> had any knowledge of any of
the matters referred to in the agove questions.
201:
STATEMENT OF DAVID E . WESTLEY
COMMERCIAL ATTACHE
AMERICAN EMBASSY
TEHRAN
Q:
Did you know or have you ever heard that General
Mohammed K h a t a m i , Commander-in-Chief of the
,Imperial Iranian Air F o r c e , had an ownership
interest of any nature in STP (Skerkat Shahami
Tayar Pars) or Air T a x i , Iranian c o m p a n i e s , between
1960 and 1975?
A:
A few months after arriving at this post in November
1974, I heard that General Khatami had a financial
interest in air taxi, the extent of which was not
clear.
Q:
Which company did you know or hear that G e n e r a l
Khatami had an ownership interest in — STP or
Air Taxi? When did you learn of General Khatami's
interest and w h o did you learn of it from?
A:
I do not recall ever being informed that General Khatami
had an interest in STP (I assume this is Air Pars which
locally is known only by this name, not Sherkate Saharai
Tayareh P a r s ) . I believe that the information regarding
Air Taxi and General Khatami came from one of the Iranian
commercial assistants employed in the commercial section
in the course of my work as Commercial A t t a c h e .
Q:
W e r e G e n e r a l Khatami's interest in STP and A i r
Taxi common knowledge in Tehran?
When was
that
information common knowledge?
Who knew?
How did
you learn of that
information?
I was not aware of any financial interest of General
Khatami
in P a r s a i r .
His connection with Air Taxi was not common
knowledge but appeared to be taken as an accepted fact by
t h o s e in the a e r o s p a c e b u s i n e s s , e s p e c i a l l y by
those
i n t e r e s t e d in d o i n g b u s i n e s s w i t h A i r T a x i .
202
Q:
D i d you speak to o r d i d B e l l H e l i c o p t e r or T e x t r o n
o f f i c i a l s speak to y o u a b o u t G e n e r a l K h a t a m i ' s
i n t e r e s t in STP or A i r Taxi?
A:
No.
Q:
Which Bell or Textron officials did you speak
with and when?
A:
Not applicable.
Q:
W h a t w e r e y o u r c o n v e r s a t i o n s w i t h B e l l or T e x t r o n
o f f i c i a l s a b o u t those m a t t e r s ?
A:
Not applicable.
Q:
D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t any B e l l
or T e x t r o n o f f i c i a l s k n e w t h a t G e n e r a l K h a t a m i h a d
an o w n e r s h i p i n t e r e s t of any n a t u r e in STP or A i r
T a x i a t any time b e t w e e n 1960 and 1975?
A:
No.
203:
Q:
Did you know or have you heard of any p a y m e n t s ,
gifts or other items of value made by or given by
B e l l directly or indirectly to Iranian officials
to try to generate helicopter sales to Iran
between 1960 and 1975?
A:
No.
Q:
Did you know or have you ever heard that any of
the $2,950,000 payment to A i r Taxi m i g h t have been
passed on directly or indirectly to Iranian government
o f f i c i a l s , including General K h a t a m i , in connection
w i t h Bell's 1972 helicopter deal with the Iranian
government.
A:
No.
Q:
W h e n did you learn or hear that any of the payment
w a s passed on and from whom did you learn or hear
of it?
A:
Not applicable.
204:
Q:
Did you know or have you ever heard that Bell or
Textron may have maintained at any time any funds
of monies or other assets which were not recorded
on the corporate books and records?
A:
No.
Q:
Do you have any information that G . William M i l l e r ,
President and later Chairman of the Board of
T e x t r o n , Inc. between 1960 and 1975, had any
knowledge of any of the matters referred to in the
above questions?
A:
No.
205
Reply of Jack C . M i k l o s
Deputy Chief of M i s s i o n , Tehran
F r o m time to time since r o u g h l y 1960 I have heard
second or third-hand stories that the late G e n e r a l
M o h a m m e d K h a t a m i had a f i n a n c i a l interest in
A i r T a x i and Pars A i r (Skerkat S h a h a m i Tayar P a r s ) .
T h e p r e c i s e n a t u r e of this i n t e r e s t w a s n o t d e f i n e d
nor w a s d o c u m e n t a t i o n o f f e r e d to s u p p o r t these
a l l e g a t i o n s . A s I r e c a l l , these stories g e n e r a l l y
c a m e f r o m p e o p l e a s s o c i a t e d in one way or a n o t h e r
w i t h I r a n i a n c i v i l a v i a t i o n a f f a i r s , including U . S .
G o v e r n m e n t o f f i c i a l s r e s p o n s i b l e for reporting on
Iranian c i v i l a v i a t i o n d e v e l o p m e n t s . I do n o t r e m e m b e r the n a m e of any p a r t i c u l a r i n d i v i d u a l . H o w e v e r ,
it is m y g e n e r a l i m p r e s s i o n that these stories
c i r c u l a t e d rather w i d e l y among the u p p e r levels of
T e h r a n b u s i n e s s and social c i r c l e s . I n e v e r h e a r d
of any B e l l H e l i c o p t e r or T e x t r o n p a y m e n t to A i r
T a x i u n t i l the m a t t e r w a s raised d u r i n g the h e a r i n g s
o n the n o m i n a t i o n of G . W i l l i a m M i l l e r . I k n o w
n o t h i n g e l s e r e l e v a n t to the q u e s t i o n s asked b y
the S e n a t e C o m m i t t e e .
23-586 O - 78 - 14
206
4415 Boxwood Road
W a s h i n g t o n , D . C . 20016
February 14, 1978
Mr. Kenneth A. McLean
Staff Director, Committee on Banking,
Housing and Urban Affairs
United States Senate
Washington, D. C.
20510
Dear Mr. McLean:
In furtherance of your letter of February 8, 1978, I am
enclosing my answers to Schedule A in affidavit form.
The
paragraph numbers correspond to those of Schedule A.
Sincerely,
Hamilton A. Twitchell
207:
I, Hamilton A . T w i t c h e l l , being duly sworn certify that the following
answers to the questions listed in Schedule A (Enclosure to
Kenneth A . M c L e a n ' s letter dated February 8 , 1978) are true to the
best of m y k n o w l e d g e .
1.
R e f e r e n c e Question N o , 1;
I do not know whether G e n e r a l K h a t a m i had an ownership interest
in either STP of Air T a x i . Nor had I heard of the a l l e g a t i o n
u n t i l it w a s reported.in the press subsequent to M r . M i l l e r ' s
a p p e a r a n c e before the Senate Banking Committee on 24 January
1978.
Sometime during m y stay in Teheran from June 1968 u n t i l October
1 9 7 1 , probably in 1969 or 1 9 7 0 , I heard informally that
General K h a t a m i w a s associated in some m a n n e r w i t h Air T a x i .
I do not recall the circumstances u n d e r which I heard the
a l l e g a t i o n , nor do I remember who told m e .
2.
R e f e r e n c e Question N o . 2:
Neither.
3.
R e f e r e n c e Question N o . 3:
Insofar as I w a s aware it w a s not common k n o w l e d g e d u r i n g m y
stay in T e h e r a n .
4.
R e f e r e n c e Question N o . 4 :
No.
5.
R e f e r e n c e Question N o . 5:
Other than m y one or two conversations with G e n e r a l H a m i l t o n H o w z e
(USA, R e t ) who visited Teheran w h i l e I was t h e r e , I do n o t recall
the names of other Bell r e p r e s e n t a t i v e s . Subsequent to m y return
to W a s h i n g t o n I talked w i t h M a j o r General Delk Oden in the spring
of 1973 prior to his departure to T e h e r a n . I also talked w i t h
him two or three times after he assumed his duties w i t h B e l l .
208:
6.
Reference Question No, 6:
My discussions with Bell representatives while I was in Teheran
dealt primarily with programming, organizational, training, and
technical matters relating to the then on-going program. I also
discussed such matters in more general terms with respect to the
contemplated follow-on program.
My talks with General Oden related to organization, training and
personnel matters that I observed during my stay in Teheran.
7.
Reference Question N o . 7:
Not until the allegations were reported in the press subsequent
to 24 January 1978.
8.
Reference Question N o . 8:
No.
9.
Reference Question N o . 9:
No.
10.
Reference Question N o . 10:
11.
Reference Question N o . 11:
Not applicable in view of answer to Question 9.
No.
12.
Reference Question N o . 12:
No.
HAMILTON A . TWITCHELL
State of Virginia
County (of Arlington
Stjbscribf^ a n c ) s w o r n t o before m e , a Notary Public in and for the State above w r i t t e n ,
14th day of February 1978.
K/ tttniision expires June 1 7, 1978.
Doris K. Carlson
Notary Public
209
A F F I D A V I T
I, M a j o r G e n e r a l K o y t S . V a n d e n b e r g , J r . , h a v i n g
b e e n duly s w o r n , do d e p o s e and say in response to the
following q u e s t i o n s s u b m i t t e d to m e by the S e n a t e
C o m m i t t e e on B a n k i n g , H o u s i n g , and Urban A f f a i r s :
1. "Did y o u k n o w or have you ever heard that
G e n e r a l M o h a m m e d K h a t a m i , C o m m a n d e r - i n - C h i e f of the
I m p e r i a l Iranian Air F o r c e , had an o w n e r s h i p i n t e r e s t of
any n a t u r e in STP (Skerkat S h a h a m i Tayar Pars) or A i r
T a x i , Iranian c o m p a n i e s , b e t w e e n 1960 and 1975?'*
ANSWER:
"No"
2 . "Which c o m p a n y d i d y o u know or hear that
G e n e r a l K h a t a m i had an o w n e r s h i p i n t e r e s t in — STP or
A i r T a x i ? W h e n did y o u learn of G e n e r a l K h a t a m i ' s
i n t e r e s t and w h o did y o u learn of it from?"
ANSWER:
Not applicable
3. "Were G e n e r a l K h a t a m i ' s interests in SPT and
A i r T a x i common k n o w l e d g e in T e h r a n ? When w a s that
i n f o r m a t i o n c o m m o n k n o w l e d g e ? W h o k n e w ? How did y o u
learn of t h a t information?"
ANSWER:
Not
applicable
4 . "Did y o u speak to or did B e l l H e l i c o p t e r or
T e x t r o n o f f i c i a l s speak to y o u a b o u t G e n e r a l K h a t a m i ' s
i n t e r e s t in STP or A i r Taxi?"
ANSWER:
"NO*
5 . "Which B e l l or T e x t r o n o f f i c i a l s did y o u speak
w i t h and w h e n ? "
ANSWER:
6.
Textron
W h a t w e r e your c o n v e r s a t i o n s w i t h B e l l or
officials
Not applicable
about
ANSWER:
those
natters?"
Not applicable
210:
7. "Did you know or have you ever heard that any
Bell or Textron officials knew that General Khatami had
an ownership interest of any nature in STP or Air Taxi
at any time between 1960 and 19 75?"
ANSWER:
"No"
8. "Did you know or have you heard of
gifts or other items of value made by or given
directly or indirectly to Iranian officials to
generate helicopter sales in Iran between 1960
ANSWER:
any payments,
by Bell
try to
and 19 75?"
"No"
9. "Did you know or have you ever heard that any
of the $2,950,000 payment to Air Taxi might have been passed
on directly or indirectly to Iranian government officials,
including General Khatami, in connection with Bell's
1972 helicopter deal with the Iranian government?"
ANSWER:
"No"
10. "When did you learn or hear that any of the
payment was passed on and from whom did you learn or hear
of it?"
ANSWER:
Not Applicable
11. "Did you know or have you ever heard that
Bell or Textron may have maintained at any time any fund
of monies or other assets which were not recorded on the
corporate books and records?"
ANSWER:
"No"
12. "Do you have any information that G. William
M i l l e r , President and later Chairman of the Board of
Textron, Inc., between 1960 and 1975, had any knowledge
of any of the matters referred to in the above questions?"
ANSWER:
"No"
S T A T E M E N T
I was assigned as Chief Armish-MAAG, Iran, from 17 Aug
19 75 to 15 Jan 19 76. In this capacity, I had the responsibility to oversee, in an advisory role, all Imperian Iranian
Military Programs, one of which was the Army Helicopter
program. I did have occasion to meet with Bell Textron
211:
representatives regarding the program and difficulties
associated with it; however, the context of these discussions
was limited to strictly the ongoing program itself and at no
time was the subject matter described in your letter b r o a c h e d .
General Mohammed Khatami, Commander, Imperial Iranian
Air Force, was killed one month after my arrival in Iran. I
therefore had only a very brief association with him. I was
never made aware of any of his ownership interests in STP
or Air Taxi nor did I hear anything regarding these interests
after his passing.
Subscribed and sworn to before me this
February 1978.
day of
Se-4. 6. 1980
-3-
212
HJnited
States
Capitol
/ J f i s t o l i c a l Society
k
'1
200 MARYLAND AVENUE, N.E.
WASHINGTON, D.C. 20515
(202) 543-8919
February 13, 1978
M r . Kenneth A . M c L e a n
Staff Director
United States Senate Committee
on Banking, Housing and Urban Affairs
Washington, D . C . 20510
Dear M r . McLean:
Enclosed is m y response to the questions posed by Schedule A
of your letter to m e of February 8 , 1978.
In summary, I h a v e no knowledge of any connections between
General Mohammed Khatami and the two Iranian firms cited nor of
any payments by Bell or Textron to either of them.
1 served in Iran as Chief, Army Section, ARMISH-MAAG from
August 1970 to September 3 972. During that period I worked
closely with General M i n b a s h i a n , then Commander-in-Chief, Imperial Iranian Ground Forces, to improve the limited capabilities o f the Ground Forces Aviation arm which consisted o f about
thirty each light fixed-wing aircraft, Augusta Bell utility helicopters (UHlD-H) and Augusta Bell scout helicopters (Bell Jet
R a n g e r ) . During the last seven or eight months of my tour of
duty there I believe the Ground Forces also had one CH47 h e l i c o p t e r .
M y principal concern was armament, maintenance, organization,
and training o f the existing force which was equipped with Italian
m a d e h e l i c o p t e r s , German machine guns, American rockets and French
mounts for the guns and rockets. I had occasional contact with
representatives of Augusta Bell from Italy, which provided some
pilot and mechanic training as well as the helicopters but little
with representatives o f Bell or Textron of America.
1 encl
Oliver B. Patton
Brig Gen, U . S . A . Ret
213
R E S P O N S E TO Q U E S T I O N S IK S C H E D U L E A
1 . I do not k n o w n o r do I r e c o l l e c t ever h a v i n g h e a r d t h a t
G e n e r a l M o h a m m e d K h a t a m i , C I N C , I I A F , h a d an o w n e r s h i p i n t e r e s t
of any n a t u r e in the two Iranian c o m p a n i e s c i t e d .
2. See 1, above.
3. See 1, above.
4 . 1 do n o t r e c o l l e c t e v e r d i s c u s s i n g this s u b j e c t w i t h a n y
r e p r e s e n t a t i v e o r of i c i a l of B e l l o r T e x t r o n .
5. See 4, above.
6. See 4, above,
7 . I d o n o t k n o w n o r do 1 r e c o l l e c t e v e r h e a r i n g that any B e l l
o r T e x t r o n o f f i c i a l k n e w that G e n e r a l K h a t a m i h a d a n o w n e r s h i p interest in e i t h e r of the c o m p a n i e s c i t e d .
8 . I h a v e no k n o w l e d g e n o r r e c o l l e c t i o n of e v e r h e a r i n g that
B e l l m a d e any p a y m e n t s o r gifts to Iranian o f f i c i a l s to try to
g e n e r a t e h e l i c o p t e r sales in Iran b e t w e e n I960 and 1 9 7 5 .
9 . I h a v e no k n o w l e d g e of any p a y m e n t by B e l l to A i r T a x i in
Iran for any p u r p o s e .
10. See 9, above.
1 1 . I do not k n o w n o r h a v e I h e a r d it said that B e l l o r T e x t r o n
m a y h a v e m a i n t a i n e d at any time a fund of m o n i e s o r o t h e r assets
not r e c o r d e d on their c o r p o r a t e b o o k s o r r e c o r d s .
1 2 . I h a v e no i n f o r m a t i o n that G . W i l l i a m M i l l e r h a s any k n o w ledge of the m a t t e r s referred to in the q u e s t i o n s on Scl
Schedule A,
W G J U ^
13 F e b r u a r y 1978
Oliver B. Patton
Brig Gen, U.S.A., Ret.
214
A F F I D A V I T
COMMONWEALTH OF VIRGINIA
)
) SS:
COUNTY OF ARLINGTON
)
In answer to questions posed by Senate Committee on Banking, Housing and
Urban Affairs, Re: Nomination of Mr. G. William Miller.
1.
I, Colonel Homer E. Schott, USA, in my capacity as former Army Attache
to American Embassy, Tehran, Iran, after having been duly sworn according to
the law, depose and say as follows as to the questions presented to me for
answer for the Committee:
a.
Did you know or have you ever heard that General Mohammed
Khatami, Commander-in-Chief of the Imperial Iranian Air Force, had an ownership
interest of any nature in STP (Skerkat Shahami Tayar Pars) or Air Taxi,
Iranian companies, between 1960 and 1975?
I do not know nor can I recall having heard that General Mohammed
Khatami had an ownership interest of any nature in STP or in Air Taxi Iran.
b.
Which company did you know or hear that General Khatami had an
ownership interest in —
STP or Air Taxi?
When did you learn of General
Khatami's interest and who did you learn of it from?
I do not know of any interest General Khatami had in either STP or
Air Taxi Iran.
c.
Were General Khatami's interests in STP and Air Taxi common
knowledge in Tehran?
When was that information common knowledge?
Who knew?
How did you learn of that information?
To the best of my knowledge, any interests which General Khatami
may have had in STP or Air Taxi Iran were not common knowledge.
d.
Did you speak to or did Bell Helicopter or Textron officials
speak to you about General Khatami's interest in STP or Air Taxi?
I had no conversations with any officials of Bell Helicopter or
Textron concerning any interest by General Khatami in STP or Air Taxi Iran.
215:
e.
Which Bell or Textron officials did you speak with and when?
I did not speak with any officials of Bell Helicopter or Textron.
f.
What were your conversations with Bell or Textron officials
about these matters?
I did not hold any conversations with officials of Bell Helicopter
or Textron.
g.
Did you know or have you ever heard that any Bell or Textron
officials knew that General Khatami had an ownership interest of any nature
in STP or Air Taxi at any time between 1960 and 1975?
I do not know nor have I heard that any Bell or Textron officials
knew of any ownership interest held by General Khatami in either STP or Air
Taxi Iran.
h.
Did you know or have you heard of any payments, gifts or other
items of value made by or given by Bell directly or indirectly to Iranian
officials to try to generate helicopter sales in Iran between 1960 and 1975?
I am unaware of any direct or indirect payments or gifts by Bell to
Iranian officials.
i.
Did you know or have you ever heard that any of the $2,950,000
payment to Air Taxi might have been passed on directly or indirectly to
Iranian government officials, including General Khatami, in connection with
Bell's 1972 helicopter deal with the Iranian government.
I am unaware that any portion of a $2.9 million payment to Air Taxi
Iran might have been passed, directly or indirectly to Iranian government
officials.
j.
When did you learn or hear that any of the payment was passed on
and from whom did you learn or hear of it?
I am unaware that any portion of a $2.9 million payment to Air Taxi
Iran might have been passed directly or indirectly to Iranian government
officials.
216
k.
Did you know or have you ever heard that Bell or Textron may
have maintained at any time any fund of monies or other assets which were
not recorded on the corporate books and records?
I have no knowledge of, nor have I ever heard that Bell or Textron
maintained a fund of monies or other assets not included in corporate books
or records.
1.
Do you have any information that G. William Miller, President
and later Chairman of the Board of Textron, Inc. between 1960 and 1975,
had any knowledge of any of the matters referred to in the above questions?
I have no knowledge that G. William Miller had any knowledge of any
of the matters referred to in any of the preceding statements.
2.
Subscribed and sworn to before me, a Notary Public in and for
the County and Commonwealth aforesaid this
/
/
/5 ' ~
/
day of
b-'utg/Lt^
a , M i).i
My Commission Expires:
; •/ v i
1978.
217
DEFENSE CONTRACT AUDIT AGENCY
ATLANTA
REGION
THE LTV CORPORATION
RESIDENT OFFICE
P. 0. BOX 5907
DALLAS, TEXAS 75222
REFER TO
1.391/KWF
14 F e b r u a r y
United States Senate
C o m m i t t e e on B a n k i n g , Housing and Urban Affairs
Washington, D. C.
20510
Attention:
Subject:
M r . Kenneth A . McLean
Staff Director
I n v e s t i g a t i o n b y C o m m i t t e e S t a f f of
$2.9 Million Payment b y Bell Helicopter
Textron
Gentlemen:
A t t a c h e d f i n d r e s p o n s e s in A f f i d a v i t f o r m of the two
R e s i d e n t A u d i t o r s of D C A A , K e n n e t h W . F u l l e r and W . J . F r o n i n g ,
q u e r i e d by y o u c o n c e r n i n g t h e a b o v e s u b j e c t .
Resident Auditor
C o p i e s f u r n i s h e d (w/o a t t a c h m e n t )
M r . Paul Evans, DCAA, Atlanta Regional Manager
M r . W m . Crouch, DCAA, Headquarters, Executive Officer
1978
218
AFFIDAVIT
Introductory Comment:, i did not become aware of any interest of General Mohammed
K h a t a m i in A i r T a x i prior to reading it i n the recent news media coverage of the
Miller hearings. The conduct of audits since my transfer to Bell Helicopter in
October 1977 did not disclose any such interest.
SCHEDULE
1 . Did you
Command-in-Chief
of any n a t u r e in
between 1960 and
1.
A
know or have you ever heard that General Mohammed K h a t a m i ,
of the Imperial Iranian Air F o r c e , had an ownership interest
STP (Skerkat Shahami Tayar Pars) or Air T a x i , Iranian c o m p a n i e s ,
1975?
No.
2 . W h i c h company did y o u know or hear that General Khatami had an ownership
interest in - - STP or A i r Taxi? W h e n did you learn of General Khatami's interest
and w h o did you learn of it from?
2a.
N/A
2b.
N/A (See opening comments)
3 . W e r e G e n e r a l Khatami's interests in STP and Air T a x i common knowledge
in Tehran? W h e n w a s that information common knowledge? Who knew? H o w did you
learn of that information?
3a.
b.
c.
d.
N/A
N/A
N/A
N/A
A . D i d you speak to or did Bell Helicopter or Textron officials speak to you
a b o u t G e n e r a l Khatami's interest in STP or Air Taxi?
A.
5.
No.
W h i c h Bell or Textron officials did you speak with and when?
5.
N/A
6. What were your conversations with Bell or Textron officials about those
matters?
6.
N/A
7 . Did you know or have you ever heard that any Bell or Textron officials
knew that General Khatami had an ownership interest of any nature in STP or Air
T a x i at any time between 1960 and 1975?
7,
N/A (See opening comments)
219:
SCHEDULE A
(continued)
8 . Did y o u know or h a v e you heard of any p a y m e n t s , gifts or o t h e r items
of v a l u e m a d e by or given by B e l l directly or indirectly to I r a n i a n o f f i c i a l s
to try to g e n e r a t e helicopter sales in Iran b e t w e e n 1960 and 1975?
8
-
No.
9 . D i d y o u know o r h a v e you ever heard that any of the $ 2 , 9 5 0 , 0 0 0 p a y m e n t
to A i r T a x i m i g h t h a v e b e e n passed on d i r e c t l y or i n d i r e c t l y to I r a n i a n g o v e r n m e n t o f f i c i a l s , including G e n e r a l K h a t a m i , in c o n n e c t i o n w i t h B e l l ' s 1972
h e l i c o p t e r d e a l w i t h the Iranian g o v e r n m e n t .
9.
N o . (See opening comments)
1 0 . W h e n d i d y o u learn or h e a r that any of the p a y m e n t w a s p a s s e d o n and
from w h o m d i d y o u l e a r n or hear of it?
10.
N / A (See opening comments)
1 1 . Did y o u know or h a v e you ever heard that B e l l o r T e x t r o n m a y h a v e m a i n tained a t a n y time any fund of m o n i e s or other a s s e t s w h i c h w e r e n o t recorded o n
the c o r p o r a t e b o o k s and records?
11.
No.
1 2 . D o y o u h a v e a n y information that G . W i l l i a m M i l l e r , P r e s i d e n t and later
C h a i r m a n of the B o a r d of T e x t r o n , I n c . b e t w e e n 1960 and 1 9 7 5 , had a n y k n o w l e d g e
of any of the m a t t e r s referred to in the above questions?
12.
No.
Resident Auditor
14 F e b r u a r y 1978
220
AFFIDAVIT
Introductory Comment. General Mohammed Khatami, Commander-in-Chief of the Imperial
Iranian Air Force, has become known to me only recently in CY 1978 through Media
coverage of Senate Committee hearings concerning the nomination of M r . G . William
M i l l e r . Therefore my answers to questions posed in Schedule A are directed only to that
information or knowledge obtained by me as a result of my directing Audit Activities
for DCAA at Bell Helicopter Textron as Resident Auditor.
SCHEDULE
1 . Did you
Command-in-Chief
of any nature in
between 1960 and
1.
A
know or have you ever heard that General Mohammed Khatami,
of the Imperial Iranian Air Force, had an ownership interest
STP (Skerkat Shahami Tayar Pars) or Air T a x i , Iranian companies,
1975?
No.
2 . Which company did you know or hear that General K h a t a m i had an ownership
interest in
STP or Air Taxi? W h e n did you learn of General Khatami's interest
and w h o did you learn of it from?
2a.
Did not know of Gen'l Khatami's ownership interest inSTP or Air T a x i .
2b.
Not applicable (See opening comment)
3 . W e r e General Khatami's interests in STP and Air T a x i common knowledge
in Tehran? When was that information common knowledge? Who knew? How did you
learn of that information?
3a.
b.
c.
d.
Not applicable.
"
"
4 . Did you speak to or did Bell Helicopter or Textron officials speak to you
about General Khatami's interest in STP or Air Taxi?
4.
5.
No.
W h i c h Bell or Textron officials did you speak with and when?
5.
Not applicable.
6. What were your conversations with Bell or Textron officials about those
matters?
6.
Not applicable
7. Did you know or have you ever heard that any Bell or Textron officials
knew that General Khatami had an ownership interest of any nature in STP or Air
T a x i at any time between 1960 and 1975?
N/A (See opening comments)
221:
SCHEDULE
A
(continued)
8 . D i d y o u k n o w or h a v e y o u h e a r d of any p a y m e n t s , g i f t s or o t h e r i t e m s
of v a l u e m a d e b y or g i v e n b y B e l l d i r e c t l y or i n d i r e c t l y to I r a n i a n o f f i c i a l s
to try to g e n e r a t e h e l i c o p t e r s a l e s in Iran b e t w e e n 1960 and 1975?
8.
No.
9 . D i d y o u k n o w o r h a v e y o u e v e r h e a r d that a n y of the $ 2 , 9 5 0 , 0 0 0 p a y m e n t
to A i r T a x i m i g h t h a v e b e e n p a s s e d o n d i r e c t l y or i n d i r e c t l y to I r a n i a n g o v e r n m e n t o f f i c i a l s , i n c l u d i n g G e n e r a l K h a t a m i , in c o n n e c t i o n w i t h B e l l ' s 1 9 7 2
h e l i c o p t e r d e a l w i t h the I r a n i a n g o v e r n m e n t .
9.
No.
1 0 . W h e n d i d y o u l e a r n or h e a r t h a t any of the p a y m e n t w a s p a s s e d o n a n d
f r o m w h o m d i d y o u l e a r n or h e a r of it?
10.
N o t a p p l i c a b l e (See o p e n i n g
comment)
1 1 . Did you know o r have you ever heard that Bell or Textron m a y h a v e m a i n t a i n e d a t a n y t i m e a n y fund of m o n i e s or o t h e r a s s e t s w h i c h w e r e n o t r e c o r d e d o n
t h e c o r p o r a t e b o o k s and r e c o r d s ?
11.
No.
1 2 . D o y o u h a v e a n y i n f o r m a t i o n that G . W i l l i a m M i l l e r , P r e s i d e n t and l a t e r
C h a i r m a n of t h e B o a r d of T e x t r o n , I n c . b e t w e e n 1 9 6 0 and 1 9 7 5 , had a n y k n o w l e d g e
of a n y of t h e m a t t e r s r e f e r r e d to in t h e a b o v e q u e s t i o n s ?
12.
No.
Resident Auditor
14 F e b r u a r y 1978
23-586 O - 78 - 15
222
S t a t e of T e x a s
C o u n t y of T a r r a n t
Cecil
1.
E. Smith
QUESTION
ANSWER
2.
QUESTION
ANSWER
3.
-
QUESTION
ANSWER
4.
-
-
QUESTION
ANSWER
-
being
duly
sworn
says:
- Did you know or have you ever heard that General
M o h a m m e d K h a t a m i , C o m m a n d e r - i n - C h i e f of t h e
I m p e r i a l I r a n i a n A i r F o r c e , h a d an o w n e r s h i p i n t e r e s t
of a n y n a t u r e in S T P ( S k e r k a t S h a h a m i T a y a r P a r s ) o r
Air Taxi, Iranian companies, between 1960 and 1975?
No, I did not know nor had I heard that General
M o h a m m e d K h a t a m i h a d an o w n e r s h i p i n t e r e s t of any
n a t u r e in S T P or Air T a x i u n t i l t h e n a m e a r o s e in
connection with the hearings held by the Senate
C o m m i t t e e on B a n k i n g , H o u s i n g and Urban A f f a i r s .
- W h i c h company did you know or hear that G e n e r a l
K h a t a m i h a d an o w n e r s h i p i n t e r e s t in - - S T P or A i r
Taxi?
W h e n d i d y o u l e a r n of G e n e r a l K h a t a m i ' s i n t e r e s t
a n d w h o d i d y o u l e a r n of it f r o m ?
Not
applicable,
see
1.
above.
- W e r e G e n e r a l K h a t a m i ' s i n t e r e s t s in S T P a n d A i r
T a x i c o m m o n k n o w l e d g e in T e h r a n ?
When was that
Who knew?
How did
information common knowledge?
you learn of that i n f o r m a t i o n ?
Not
applicable,
see
1.
above.
- Did you speak to or did Bell Helicopter or Textron
officials speak to you about General Khatami's
i n t e r e s t in S T P or A i r T a x i ?
No.
223
5.
Q U E S T I O N - W h i c h B e l l or T e x t r o n o f f i c i a l s did you s p e a k w i t h
and w h e n ?
ANSWER
6.
QUESTION
ANSWER
7.
-
QUESTION
ANSWER
9.
-
QUESTION
ANSWER
3.
-
-
QUESTION
ANSWER
-
10. QUESTION
ANSWER
-
Not
applicable,
- What were
officials
Not
see 4.
above.
your conversations with
about those matters?
applicable,
see 4.
Bell
or
Textron
above.
- Did you know or have you ever heard that any Bell
or Textron officials knew that General Khatami had
an o w n e r s h i p i n t e r e s t of a n y n a t u r e in S T P o r A i r
T a x i at any t i m e b e t w e e n 1960 and 1975?
No.
- D i d you k n o w or h a v e you h e a r d of any p a y m e n t s ,
g i f t s or other items of v a l u e m a d e by or given by
Bell directly or indirectly to Iranian officials
t o t r y t o g e n e r a t e h e l i c o p t e r s a l e s in I r a n b e t w e e n
1960 and 1975?
No.
- Did you know or have you ever heard that any of the
$ 2 , 9 5 0 , 0 0 0 payment to Air T a x i might have been
passed on directly or indirectly to Iranian gove r n m e n t o f f i c i a l s , i n c l u d i n g G e n e r a l K h a t a m i , in
connection with Bell's 1972 helicopter deal with
the Iranian government.
No.
- When did you learn or hear that
was passed on and from whom did
of it?
Not
applicable,
see
9.
above
any
you
of t h e p a y m e n t
learn or hear
224:
11.
QUESTION
ANSWER
12.
have you ever heard that Bell or
m a i n t a i n e d at any time any f u n d of
assets which were not recorded on the
and records?
No.
QUESTION
ANSWER
- Did you know or
Textron may have
monies or other
corporate books
-
- Do you have any information that G. William Miller,
P r e s i d e n t a n d l a t e r C h a i r m a n of t h e B o a r d of T e x t r o n ,
I n c . b e t w e e n 1960 and 1 9 7 5 , had any k n o w l e d g e of any
of t h e m a t t e r s r e f e r r e d t o in t h e a b o v e q u e s t i o n s ?
No.
I have no additional information to offer the Committee
t h a t w o u l d h e l p in i t s i n v e s t i g a t i o n of t h e $ 2 . 9 m i l l i o n p a y m e n t
t o A i r T a x i a n d G e n e r a l K h a t a m i ' s r e l a t i o n s h i p s , if a n y , w i t h
companies with which Textron or Bell Helicopter had dealings.
Sworn
to this
14th
day
of F e b r u a r y ,
1978.
Signed
Before m e , a Notary Public, on this day personally
appeared Cecil E . S m i t h , known to me to be the person whose name
is subscribed to the foregoing instrument and acknowledged to me
that he executed the same for the purposes and consideration
therein expressed.
day
of
Given
February,
under my
1978.
hand
and
seal
of
office
this
the
&7
N o t a r y P u b l i c in a n d / f o r
Tarrant County, Texas
14th
225
A R T H U R
YOUNG
X
COMPANY
277
PARK
AVENUE
N E W Y O R K , N. Y. I O O I 7
ST4T4
cou^ry
>
AJeuJ
^
AJeu> W
AJUAW??
)
r.
February
y
S/strr**
ctuUj
14,
1978
<sojorof
Mr. Kenneth A. McLean
Staff Director
United States Senate
Committee on Banking, Housing
and Urban Affairs
Washington, D. C. 20510
Dear Mr.
McLean:
In r e s p o n s e to y o u r l e t t e r of F e b r u a r y 8 , 1 9 7 8 , I s u b m i t
b e l o w m y a n s w e r s to the t w e l v e q u e s t i o n s p o s e d in S c h e d u l e A of
your letter.
1.
Did y o u know or have you ever heard that G e n e r a l
M o h a m m e d K h a t a m i , C o m m a n d e r - i n - C h i e f of the Imperial Iranian A i r
F o r c e , h a d a n o w n e r s h i p i n t e r e s t of any nature in S T P (Skerkat
Shahami T a y a r Pars) or Air T a x i , Iranian c o m p a n i e s , b e t w e e n 1960
and 1975?
Answer:
No.
I never heard of G e n e r a l Khatami u n t i l his name and
r e l a t i o n s h i p with A i r Taxi w a s disclosed in newspaper
a c c o u n t s of the B a n k i n g C o m m i t t e e ' s h e a r i n g s of January 24, 1978.
2.
Which company did you know or hear that General Khatami
had an o w n e r s h i p interest in —
STP or Air Taxi?
When did you
l e a r n of G e n e r a l K h a t a m i ' s i n t e r e s t a n d w h o d i d y o u l e a r n of it
from?
Answer:
Not applicable.
See
1
above.
3.
W e r e G e n e r a l K h a t a m i ' s interest in S T P and A i r Taxi
common k n o w l e d g e in Tehran?
When was that information common
knowledge?
Who knew?
H o w d i d y o u l e a r n of t h a t i n f o r m a t i o n ?
Answer:
Not applicable.
See
1
above.
4.
D i d y o u s p e a k to or did B e l l H e l i c o p t e r or T e x t r o n
o f f i c i a l s s p e a k to y o u a b o u t G e n e r a l K h a t a m i ' s i n t e r e s t in S T P
or A i r Taxi?
Answer:
No.
226
when?
5.
Answer:
cials
Which Bell or Textron officials did you speak with and
Not
applicable.
See 4
above.
6.
What were your conversations
about those matters?
Answer:
Not
applicable.
See
4
with
Bell
or
Textron
offi-
above.
7.
Did you know or have you ever heard that any Bell or
Textron officials knew that General Khatami had an ownership interest
of any n a t u r e in STP or A i r T a x i at any time b e t w e e n 1960 and 1975?
Answer:
No.
8.
Did y o u know or have you heard of any p a y m e n t s , gifts or
o t h e r items of v a l u e m a d e by or g i v e n by B e l l d i r e c t l y or i n d i r e c t l y
to I r a n i a n o f f i c i a l s to try to g e n e r a t e h e l i c o p t e r s a l e s in Iran
between 1960 and 1975?
Answer:
No.
9.
D i d y o u k n o w or h a v e y o u e v e r h e a r d that any of the
$2,950,000 payment to Air Taxi might have been passed on directly
or indirectly to Iranian government officials, including General
K h a t a m i , in connection with Bell's 1972 helicopter deal with the
Iranian government?
Answer:
No.
10.
When did you learn or
passed on and from whom did you
hear that any
learn or hear
Answer:
above.
Not applicable.
See
9
of
of
the payment
it?
11.
Did you k n o w or have y o u ever heard that
m a y have m a i n t a i n e d at any time any fund of m o n i e s
w h i c h w e r e not r e c o r d e d on the corporate books and
Answer:
was
Bell or Textron
or other assets
records?
No.
12.
Do you have any information that G. William Miller,
P r e s i d e n t a n d later C h a i r m a n of the B o a r d of T e x t r o n , Inc. b e t w e e n
1960 a n d 1 9 7 5 , h a d any k n o w l e d g e of any of the m a t t e r s r e f e r r e d to
in the a b o v e q u e s t i o n s ?
Answer:
No.
227
I have no additional information to offer the Committee
in c o n n e c t i o n w i t h its i n v e s t i g a t i o n of the $2,950,000 p a y m e n t to
Air Taxi or General Khatami's relationships.
As you are aware, I
have previously responded to your request of January 25, 1978 for
a l l d o c u m e n t s in the p o s s e s s i o n of A r t h u r Y o u n g & C o m p a n y r e l a t i n g
t o the p a y m e n t of $ 2 , 9 5 0 , 0 0 0 by t h e B e l l H e l i c o p t e r D i v i s i o n of
T e x t r o n to A i r Taxi Company.
Yours very
SuJOtAj
February
TO
j
TH/S
/ t W
CARL D. l I G i u
N01AKY PUBLiC, STATfc Of wE». 10 .
No. 31-9820064
Qualified in New York County
Commission Expires March 3 0 , 1 9 7 f
datf
of
truly,
228:
D E P A R T M E N T OF THE AIR
WASHINGTON
OFFICE OF THE SECRETARY
February
Mr. Kenneth A. McLean
Staff Director
Committee on Banking, Housing
Urban Affairs
United States Senate
Dear Mr.
FORCE
20330
16,
1978
and
McLean:
R e f e r e n c e our c o n v e r s a t i o n of this d a t e , e n c l o s e d
f o r y o u r i n f o r m a t i o n a n d u s e is t h e a f f i d a v i t r e c e i v e d
this date from Brigadier General F . A . H u m p h r e y s ,
C o m m a n d e r , 2 0 t h N O R A D R e g i o n / A i r D i v i s i o n , in r e s p o n s e
to q u e r i e s s u b m i t t e d to h i m by the C o m m i t t e e .
Sincerely
Attachment
229
AFFIDAVIT
F. A . H u m p h r e y s , Brigadier G e n e r a l , Commander, 20th NORAD
Division, United States Air Force, after being duly sworn
to l a w , d e p o s e s a n d s a y s :
Region/Air
according
I n r e s p o n s e to a s e r i e s of t w e l v e q u e s t i o n s a s k e d of m e b y l e t t e r d a t e d
February 8, 1978 from Kenneth A . M c L e a n , Staff Director, United States
S e n a t e C o m m i t t e e on B a n k i n g , H o u s i n g a n d U r b a n A f f a i r s a n d s p e c i f i c a l l y
i n r e s p o n s e to Q u e s t i o n 1 t h a t a s k e s , " D i d y o u k n o w or h a v e y o u e v e r
h e a r d t h a t G e n e r a l M o h a m m e d K h a t a m i , C o m m a n d e r - i n - C h i e f of t h e I m p e r i a l
I r a n i a n A i r F o r c e , h a d an o w n e r s h i p i n t e r e s t of a n y n a t u r e in S T P ( S k e r k a t ~
S h a h a m i T a y a r P a r s ) or A i r T a x i , I r a n i a n c o m p a n i e s , b e t w e e n 1 9 6 0 a n d 1 9 7 5 ? "
that 1 have no k n o w l e d g e , nor did I ever h e a r that General K h a t a m i had
a n y o w n e r s h i p i n t e r e s t s in t h e c o m p a n i e s o f S k e r k a t S h a h a m i T a y a r P a r s
(STP) or Air T a x i .
I do n o t r e m e m b e r e v e r h a v i n g h e a r d of a n I r a n i a n
c o m p a n y c a l l e d STP or S k e r k a t S h a h a m i T a y a r P a r s .
It s e e m e d to m e to
b e common k n o w l e d g e that during the time I was in Iran from June 1974
u n t i l O c t o b e r 1 9 7 5 t h a t , a s t h e C o m m a n d e r - i n - C h i e f of t h e I m p e r i a l
Iranian Air F o r c e , General K h a t a m i was a very respected individual and was
c o n s u l t e d o n m o s t m a t t e r s of a n y a e r o n a u t i c a l i n t e r e s t in I r a n ; a n d
In r e s p o n s e to Q u e s t i o n 2 t h a t a s k s , " W h i c h c o m p a n y d i d y o u k n o w o r h e a r
t h a t G e n e r a l K h a t a m i h a d an o w n e r s h i p i n t e r e s t i n — S T P or A i r T a x i ?
W h e n d i d y o u l e a r n of G e n e r a l K h a t a m i ' s i n t e r e s t a n d w h o d i d y o u l e a r n
i t f r o m ? " , t h a t I n e v e r l e a r n e d n o r do I h a v e a n y k n o w l e d g e o f a n y o w n e r s h i p i n t e r e s t in e i t h e r of t h e s e c o m p a n i e s w h i c h m a y h a v e b e e n h e l d b y
General Khatami; and,
I n r e s p o n s e to Q u e s t i o n 3 t h a t a s k s , " W e r e G e n e r a l K h a t a m i ' s i n t e r e s t s
i n STP a n d A i r T a x i c o m m o n k n o w l e d g e i n T e h r a n ?
When was that information
common knowledge?
Who knew?
How did y o u learn of that i n f o r m a t i o n ? " , that
to t h e b e s t o f m y k n o w l e d g e i t w a s n o t c o m m o n k n o w l e d g e i n T e h r a n t h a t
G e n e r a l K h a t a m i m i g h t h a v e h a d a n y i n t e r e s t s in STP or A i r T a x i , a n d I
personally have no such knowledge; a n d ,
In r e s p o n s e to Q u e s t i o n 4 t h a t a s k s , " D i d y o u s p e a k to or d i d B e l l H e l i c o p t e r o r T e x t r o n o f f i c i a l s s p e a k to y o u a b o u t G e n e r a l K h a t a m i ' s i n t e r e s t
i n S T P o r A i r T a x i ? " , t h a t I n e v e r s p o k e t o , n o r w a s I s p o k e n to b y
o f f i c i a l s of e i t h e r B e l l H e l i c o p t e r or T e x t r o n a b o u t a n y o w n e r s h i p i n t e r e s t s w h i c h m a y h a v e b e e n h e l d b y G e n e r a l K h a t a m i in e i t h e r STP o r A i r
Taxi; and,
In r e s p o n s e to Q u e s t i o n 5 t h a t a s k s , " W h i c h B e l l or T e x t r o n o f f i c i a l s
d i d y o u s p e a k w i t h a n d w h e n ? " , t h a t I s p o k e to n o B e l l or T e x t r o n o f f i c i a l s
about any ownership i n t e r e s t s w h i c h m a y h a v e been held by G e n e r a l K h a t a m i
i n e i t h e r STP or A i r T a x i ; a n d ,
230:
In r e s p o n s e to Q u e s t i o n 6 t h a t a s k s , " W h a t w e r e y o u r c o n v e r s a t i o n s w i t h
B e l l or T e x t r o n o f f i c i a l s a b o u t those m a t t e r s ? " , that I had no c o n v e r s a tions w i t h o f f i c i a l s of e i t h e r B e l l or T e x t r o n c o n c e r n i n g any o w n e r s h i p
i n t e r e s t s w h i c h m a y h a v e b e e n h e l d by G e n e r a l K h a t a m i in e i t h e r STP or
Air Taxi; and,
In r e s p o n s e to Q u e s t i o n 7 t h a t a s k s , " D i d y o u k n o w or h a v e y o u h e a r d t h a t
any B e l l or T e x t r o n o f f i c i a l s knew that G e n e r a l K h a t a m i h a d an o w n e r s h i p
i n t e r e s t o f a n y n a t u r e i n STP o r A i r T a x i a t a n y t i m e b e t w e e n 1 9 6 0 a n d
1 9 7 5 ? " , t h a t I do n o t k n o w n o r d i d I e v e r h e a r t h a t a n y B e l l or T e x t r o n
officials k n e w that G e n e r a l K h a t a m i may h a v e had an o w n e r s h i p i n t e r e s t
of a n y n a t u r e in S T P o r A i r T a x i a t a n y t i m e b e t w e e n 1 9 6 0 a n d 1 9 7 5 ; a n d ,
In r e s p o n s e to Q u e s t i o n 8 t h a t a s k s , " D i d y o u k n o w or h a v e y o u h e a r d o f
a n y p a y m e n t s , g i f t s o r o t h e r i t e m s of v a l u e m a d e b y o r g i v e n b y B e l l
d i r e c t l y or i n d i r e c t l y to I r a n i a n o f f i c i a l s to t r y to g e n e r a t e h e l i c o p t e r
sales in Iran b e t w e e n 1960 and 1 9 7 5 ? " , that I do n o t k n o w nor did I ever
h e a r o f a n y p a y m e n t s , g i f t s , or o t h e r i t e m s of v a l u e b e i n g m a d e or g i v e n
b y B e l l d i r e c t l y o r i n d i r e c t l y to a n y I r a n i a n o f f i c i a l s i n a n a t t e m p t to
generate helicopter sales in Iran between 1960 and 1975; and,
I n r e s p o n s e to Q u e s t i o n 9 t h a t a s k s , " D i d y o u k n o w or h a v e y o u e v e r h e a r d
t h a t a n y of t h e $ 2 , 9 5 0 , 0 0 0 p a y m e n t to A i r T a x i m i g h t h a v e b e e n p a s s e d
d i r e c t l y o r i n d i r e c t l y to I r a n i a n g o v e r n m e n t o f f i c i a l s , i n c l u d i n g G e n e r a l
K h a t a m i , in c o n n e c t i o n w i t h B e l l ' s 1972 h e l i c o p t e r d e a l w i t h the I r a n i a n
g o v e r n m e n t ? " , t h a t I w a s n o t a w a r e of n o r h a d I e v e r b e f o r e h e a r d o f a n y
p a y m e n t of $ 2 , 9 5 0 , 0 0 0 b y B e l l to A i r T a x i ; t h e r e f o r e , I do n o t k n o w , n o r
h a v e I e v e r h e a r d t h a t a n y of a $ 2 , 9 5 0 , 0 0 0 p a y m e n t f r o m B e l l to A i r T a x i
m i g h t h a v e b e e n p a s s e d o n to I r a n i a n g o v e r n m e n t o f f i c i a l s , i n c l u d i n g
General Khatami; and,
In r e s p o n s e to Q u e s t i o n 10 t h a t a s k s , " W h e n d i d y o u l e a r n o r h e a r t h a t a n y
o f t h e p a y m e n t w a s p a s s e d on a n d f r o m w h o m d i d y o u l e a r n o r h e a r of i t ? " ,
that I n e v e r learned or h e a r d from any source that any of a $ 2 , 9 5 0 , 0 0 0
p a y m e n t f r o m B e l l to A i r T a x i w a s p a s s e d o n to a n y I r a n i a n g o v e r n m e n t
official; and,
In r e s p o n s e to Q u e s t i o n 1 1 t h a t a s k s , " D i d y o u k n o w o r h a v e y o u e v e r h e a r d
t h a t B e l l o r T e x t r o n m a y h a v e m a i n t a i n e d at a n y t i m e a n y f u n d of m o n i e s o r
other assets w h i c h w e r e not r e c o r d e d on the c o r p o r a t e b o o k s and r e c o r d s ? " ,
that I do not know nor did I ever hear that either Bell or T e x t r o n m a y h a v e
m a i n t a i n e d a t a n y t i m e a n y f u n d o f m o n i e s or o t h e r a s s e t s w h i c h w e r e n o t
r e c o r d e d on the c o r p o r a t e b o o k s or records; a n d ,
In r e s p o n s e to Q u e s t i o n 12 t h a t a s k s , " D o y o u h a v e a n y i n f o r m a t i o n t h a t
G . W i l l i a m M i l l e r , P r e s i d e n t a n d l a t e r C h a i r m a n of t h e B o a r d of T e x t r o n ,
I n c . , b e t w e e n 1 9 6 0 a n d 1 9 7 5 , h a d a n y k n o w l e d g e of any of t h e m a t t e r s
231:
r e f e r r e d to in t h e a b o v e q u e s t i o n s ? " , t h a t I h a v e n o i n f o r m a t i o n t h a t
G . W i l l i a m M i l l e r h a d a n y k n o w l e d g e of t h e m a t t e r s r e f e r r e d to in Q u e s tions 1 through 11 a b o v e .
F . A . H U M P H R E Y S , ^Brig G e n , tiSAF
Commander, 20th NORAD R e g i o n
S u b s c r i b e d a n d s w o r n to b e f o r e m e t h i s 1 4 t h d a y o f F e b r u a r y
Fort Lee A i r Force Station, V i r g i n i a .
^tsz^^r^,
A O
advo^X
1978
at
/
,
••PATRICK A'. " T U C K E R , C a p t , U S A F
• Judge Advocate ?
; (Authorized to.'administer o a t h s
u n d e r 10 U S C 9 3 6 )
232
DEPARTMENT OF THE ARMY
HQ, US A R M Y T R O O P S U P P O R T & A V I A T I O N M A T E R I E L R E A D I N E S S C O M M A N D
4300 G O O D F E L L O W B O U L E V A R D , ST. LOUIS, MO 63120
DRSTS-J(2)
M r . Kenneth A . McLean
Staff Director
United States Senate
Committee on B a n k i n g , Housing
Urban Affairs
Washington, D.C.
20510
14 F e b r u a r y
1978
and
Dear M r . McLean:
R e f e r e n c e i s m a d e to y o u r l e t t e r s d a t e d F e b r u a r y 8 , 1 9 7 8 to
D r . T h o m a s J . K e e n a n , J o s e p h A . Murraiy, J o h n R . K u r t z a n d
Joyce I. Allen, respectively.
Inclosed are affidavits signed b y each of the above n a m e d pers o n s a n s w e r i n g t h e q u e s t i o n s a t t a c h e d to y o u r r e f e r e n c e d l e t t e r s .
Sincerely yours,
4 Incl
As stated
233
State of Missouri
)
)
City of St. Louis
ss.
)
A F F I D A V I T
I , T h o m a s J . K e e n a n , a r e s i d e n t of t h e C o u n t y of S t . L o u i s , S t a t e o f
M i s s o u r i , p r e s e n t l y e m p l o y e d b y the U . S . A r m y T r o o p S u p p o r t a n d A v i a t i o n
M a t e r i e l R e a d i n e s s C o m m a n d in the C i t y o f S t . L o u i s , M i s s o u r i , b e i n g f i r s t
d u l y s w o r n h e r e b y d e p o s e a n d s a y t h a t the f o l l o w i n g a n s w e r s to q u e s t i o n s
a s k e d b y the S e n a t e C o m m i t t e e on B a n k i n g , H o u s i n g a n d U r b a n A f f a i r s a r e t r u e
a n d c o r r e c t to t h e b e s t of m y k n o w l e d g e a n d b e l i e f :
1 . Q - Did y o u know or have you ever heard that General M o h a m m e d K h a t a m i ,
C o m m a n d e r - i n - C h i e f o f t h e I m p e r i a l I r a n i a n A i r F o r c e , h a d an o w n e r s h i p i n t e r e s t
o f a n y n a t u r e in S T P ( S k e r k a t S h a h a m i T a y a r P a r s ) o r A i r T a x i , I r a n i a n c o m p a n i e s ,
between 1960 and 1975?
A - I did not know n o r have I h e a r d .
2 . Q - W h i c h c o m p a n y d i d y o u k n o w o r h e a r t h a t G e n e r a l K h a t a m i h a d a n o1 w n e r s h i p i n t e r e s t in — S T P o r A i r T a x i ? W h e n d i d y o u l e a r n o f G e n e r a l K h a t a m i s
i n t e r e s t a n d w h o d i d y o u l e a r n o f i t from?
either
A - See above.
company.
I h a v e n o k n o w l e d g e o f G e n e r a l K h a t a m i ' s i n t e r e s t in
3 . Q - W e r e G e n e r a l K h a t a m i ' s i n t e r e s t s in STP a n d A i r T a x i c o m m o n k n o w l e d g e
in T e h r a n ? W h e n w a s t h a t i n f o r m a t i o n c o m m o n k n o w l e d g e ?
Who knew?
How did you
learn of that information?
A - No knowledge.
4 . Q - D i d y o u s p e a k to o r d i d B e l l H e l i c o p t e r o r T e x t r o n o f f i c i a l s
to y o u a b o u t G e n e r a l K h a t a m i ' s i n t e r e s t i n S T P o r A i r T a x i ?
speak
A - No.
5.
Q - Which Bell or Textron officials did you speak w i t h and when?
A - None.
6. Q - What were your conversations with Bell or Textron officials
those matters?
about
A - None.
7 . Q - D i d y o u k n o w or h a v e y o u e v e r h e a r d that any B e l l or T e x t r o n o f f i c i a l s
k n e w t h a t G e n e r a l K h a t a m i h a d an o w n e r s h i p i n t e r e s t o f a n y n a t u r e in S T P o r A i r
T a x i at any time between 1960 and 1975?
A - No.
8. Q - Did you know or have you heard of any payments, gifts or other items
o f v a l u e m a d e b y o r g i v e n b y B e l l d i r e c t l y o r i n d i r e c t l y to I r a n i a n o f f i c i a l s
to t r y to g e n e r a t e h e l i c o p t e r s a l e s in I r a n b e t w e e n 1 9 6 0 a n d 1 9 7 5 ?
A - No.
9. Q - Did you know or have you ever heard that any of the $2,950,000 p a y m e n t
to A i r T a x i m i g h t h a v e b e e n p a s s e d on d i r e c t l y o r i n d i r e c t l y to I r a n i a n g o v e r n m e n t
o f f i c i a l s , i n c l u d i n g G e n e r a l K h a t a m i , in c o n n e c t i o n w i t h B e l l ' s 1 9 7 2 h e l i c o p t e r
d e a l w i t h the I r a n i a n g o v e r n m e n t .
A - No.
234
10. Q - When did you learn or hear that any of the payment was passed on
and from whom did you learn or hear of it?
A - No
knowledge.
1 1 . Q - D i d y o u k n o w o r h a v e y o u e v e r h e a r d that B e l l o r T e x t r o n m a y h a v e
m a i n t a i n e d a t a n y t i m e a n y f u n d of m o n i e s o r o t h e r a s s e t s w h i c h w e r e n o t
r e c o r d e d on the c o r p o r a t e b o o k s a n d r e c o r d s ?
A - No.
12. Q - Do you have any information that G . William M i l l e r , President and
l a t e r C h a i r m a n o f t h e B o a r d of T e x t r o n , I n c . b e t w e e n 1 9 6 0 a n d 1 9 7 5 , h a d a n y
k n o w l e d g e of a n y o f the m a t t e r s r e f e r r e d to in the a b o v e q u e s t i o n s ?
A - No.
NOTE:
T h e t o t a l e x t e n t o f m y k n o w l e d g e a n d i n v o l v e m e n t in t h i s a r e a h a s b e e n t h e
c o o r d i n a t i o n o f a n e f f o r t to s u p p l y a l l d o c u m e n t a t i o n to M r . K e n n e t h A . M c L e a n
in r e s p o n s e to his. l e t t e r o f 2 5 J a n u a r y 1 9 7 8 .
The package requested was mailed 31 January 1978 via Dept of Army and
of Defense.
Dept
On t h i s / ^ ^ a y of February 1978 before m e personally appeared Thomas J . Keenan
to m e known' to b e the p e r s o n d e s c r i b e d in a n d w h o e x e c u t e d t h e f o r e g o i n g a f f i d a v i t
consisting of two pages and acknowledged that h e executed the same as h i s free act
and deed.
IN T E S T I M O N Y W H E R E O F , I h a v e h e r e u n t o s e t m y h a n d a n d a f f i x e d m y o f f i c i a l
s e a l a t m y o f f i c e in S t . L o u i s , M i s s o u r i , the d a y a n d y e a r f i r s t a b o v e w r i t t e n .
-My-Tenui
w
*
!
-
-7
:
- J T
NOTARY PUBLIC
My Commission Expires January 14, 1979
235
State of Missouri
)
)
City of St. Louis
ss.
)
A F F I D A V I T
I , J o h n R . K u r t z , a r e s i d e n t of the C i t y o f B e l l e v i l l e , S t a t e o f I l l i n o i s ,
p r e s e n t l y e m p l o y e d b y t h e U . S . A r m y T r o o p S u p p o r t and A v i a t i o n M a t e r i e l R e a d i n e s s C o m m a n d in t h e C i t y o f S t . L o u i s , M i s s o u r i * b e i n g f i r s t d u l y s w o r n h e r e b y d e p o s e a n d s a y t h a t the f o l l o w i n g a n s w e r s to q u e s t i o n s a s k e d b y the S e n a t e
C o m m i t t e e o n B a n k i n g , H o u s i n g a n d U r b a n A f f a i r s a r e t r u e a n d c o r r e c t to t h e
best of my knowledge and belief:
1 . Q - Did you know or have you ever heard that General Mohammed K h a t a m i ,
C o m m a n d e r - i n - C h i e f o f the I m p e r i a l I r a n i a n A i r F o r c e , h a d an o w n e r s h i p i n t e r e s t
o f a n y n a t u r e i n STP ( S k e r k a t S h a h a m i T a y a r P a r s ) o r A i r T a x i , I r a n i a n c o m p a n i e s ,
between 1960 and 1975?
A - No.
2 . Q - W h i c h c o m p a n y d i d y o u k n o w o r h e a r t h a t G e n e r a l K h a t a m i h a d an o w n e r s h i p i n t e r e s t in — STP o r A i r T a x i ? W h e n d i d y o u l e a r n o f G e n e r a l K h a t a m i ' s
i n t e r e s t a n d w h o d i d y o u l e a r n o f i t from?
A - Have n o knowledge of such
information
3 . Q - W e r e G e n e r a l K h a t a m i ' s i n t e r e s t s in STP a n d A i r T a x i c o m m o n k n o w l e d g e
in Tehran? When w a s that information common knowledge?
Who knew?
How did you
learn of that information?
A - No knowledge of such
information.
4 . Q - D i d y o u s p e a k to o r d i d B e l l H e l i c o p t e r o r T e x t r o n o f f i c i a l s
to y o u a b o u t G e n e r a l K h a t a m i ' s i n t e r e s t in S T P o r A i r T a x i ?
speak
A - Never.
5.
Q - Which B e l l or Textron officials did y o u speak with and when?
A - None.
6. Q - What were your conversations with Bell or Textron officials
those matters?
A - No
about
conversations.
7. Q - Did you know or have you ever heard that any Bell or Textron officials
k n e w t h a t G e n e r a l K h a t a m i h a d an o w n e r s h i p i n t e r e s t o f a n y n a t u r e in S T P o r A i r
T a x i at a n y t i m e b e t w e e n 1 9 6 0 a n d 1 9 7 5 ?
A - No knowledge of such
information.
8 . Q - Did you know or have you heard of any payments, gifts or other items
o f v a l u e m a d e b y o r g i v e n b y B e l l d i r e c t l y o r i n d i r e c t l y to I r a n i a n o f f i c i a l s
t o t r y to g e n e r a t e h e l i c o p t e r s a l e s in Iran b e t w e e n 1 9 6 0 a n d 1 9 7 5 ?
A - None.
9 . Q - Did you know or have you ever heard that any of the $2,950,000 payment
t o A i r T a x i m i g h t h a v e b e e n p a s s e d on d i r e c t l y o r i n d i r e c t l y to I r a n i a n g o v e r n m e n t
o f f i c i a l s , i n c l u d i n g G e n e r a l K h a t a m i , in c o n n e c t i o n w i t h B e l l ' s 1 9 7 2 h e l i c o p t e r
d e a l w i t h the Iranian government.
A - None.
236
10. Q - When did you learn or hear that any of the payment was passed on
and from whom did you learn or hear of it?
A - Never.
1 1 . Q - Did y o u k n o w or h a v e y o u e v e r h e a r d that B e l l or Textron m a y h a v e
m a i n t a i n e d at any time any fund of m o n i e s or o t h e r assets w h i c h w e r e n o t record e d o n the c o r p o r a t e b o o k s a n d r e c o r d s ?
A - No
knowledge.
12. Q - Do you have any information that G . William M i l l e r , President and
l a t e r Chairman of the Board of T e x t r o n , I n c . b e t w e e n 1960 and 1 9 7 5 , h a d any
k n o w l e d g e o f a n y of t h e m a t t e r s r e f e r r e d to in t h e a b o v e ' q u e s t i o n s ?
A - No.
On this
day of February 1978 before me personally appeared John R . Kurtz
t o m e k n o w n to b e t h e p e r s o n d e s c r i b e d i n a n d w h o e x e c u t e d t h e f o r e g o i n g a f f i d a v i t consisting of two pages and a c k n o w l e d g e d that h e e x e c u t e d the same as
h i s free act and d e e d .
IN T E S T I M O N Y W H E R E O F , I h a v e h e r e u n t o s e t m y h a n d a n d a f f i x e d m y o f f i c i a l
s e a l at m y o f f i c e in S t . L o u i s , M i s s o u r i , the d a y and y e a r f i r s t a b o v e w r i t t e n .
^
^
;
:
/
A
#
''
V. S
j
:
'
19
•' • •
'
-
NOTARY
PUBLIC
commission Expires January 14,1973
237
S t a t e of M i s s o u r i
)
)
C i t y of S t . L o u i s
ss.
)
A F F I D A V I T
I , J o y c e I . A l l e n , a r e s i d e n t o f the C o u n t y o f S t . L o u i s , S t a t e o f
M i s s o u r i , p r e s e n t l y e m p l o y e d b y the U . S . A r m y T r o o p S u p p o r t a n d A v i a t i o n
M a t e r i e l R e a d i n e s s C o m m a n d in the C i t y o f S t . L o u i s , M i s s o u r i , b e i n g f i r s t
d u l y s w o r n h e r e b y d e p o s e a n d s a y t h a t the f o l l o w i n g a n s w e r s to q u e s t i o n s
a s k e d b y the S e n a t e C o m m i t t e e on B a n k i n g , H o u s i n g a n d U r b a n A f f a i r s a r e
t r u e a n d c o r r e c t to the b e s t o f m y k n o w l e d g e a n d b e l i e f :
1 . Q - Did you know or have you ever heard that General Mohammed Khatami,
C o m m a n d e r - i n - C h i e f o f the I m p e r i a l I r a n i a n A i r F o r c e , h a d an o w n e r s h i p
i n t e r e s t o f a n y n a t u r e in S T P ( S k e r k a t S h a h a m i T a y a r P a r s ) o r A i r T a x i , I r a nian companies, between 1960 and 1975?
A - No.
2 . Q - W h i c h c o m p a n y d i d y o u k n o w o r h e a r t h a t G e n e r a l K h a t a m i h a d an
ownership interest i n — STP or A i r Taxi? When did you learn of G e n e r a l
K h a t a m i ' s i n t e r e s t a n d w h o d i d y o u l e a r n o f it from?'
A - I did n o t know o r hear that G e n e r a l Khatami had an ownership interest
in STP o r A i r T a x i . O t h e r than f r o m the q u e s t i o n s o f t h e S e n a t e C o m m i t t e e o n
Banking, Housing and Urban A f f a i r s , I have n o t learned or been informed of any
o w n e r s h i p i n t e r e s t w h i c h G e n e r a l K h a t a m i h a d in STP o r A i r T a x i .
3 . Q - W e r e G e n e r a l K h a t a m i ' s i n t e r e s t s in S T P a n d A i r T a x i c o m m o n k n o w l e d g e in T e h r a n ? W h e n w a s t h a t i n f o r m a t i o n c o m m o n k n o w l e d g e ?
Who knew?
How
did you learn of that information?
A - I do n o t k n o w . I had n o knowledge concerning any i n t e r e s t of
G e n e r a l K h a t a m i in S T P o r A i r T a x i .
4 . Q - D i d . y o u s p e a k to o r d i d B e l l H e l i c o p t e r o r T e x t r o n o f f i c i a l s
t o y o u a b o u t G e n e r a l K h a t a m i ' s i n t e r e s t in STP o r A i r T a x i ?
speak
A - No.
5.
Q - Which Bell or Textron officials did you speak with and when?
A - None.
6. Q - What were your conversations with Bell or Textron officials
those matters?
about
A — None.
7 . Q - D i d y o u k n o w o r h a v e y o u e v e r h e a r d that a n y B e l l o r T e x t r o n
o f f i c i a l s k n e w t h a t G e n e r a l K h a t a m i h a d an o w n e r s h i p i n t e r e s t o f a n y n a t u r e in STP
o r A i r T a x i a t a n y time b e t w e e n 1 9 6 0 a n d 1 9 7 5 ?
A - No.
8 . Q - D i d y o u k n o w o r h a v e y o u h e a r d of a n y p a y m e n t s , g i f t s o r o t h e r i t e m s
o f v a l u e m a d e b y o r g i v e n b y B e l l d i r e c t l y o r i n d i r e c t l y to I r a n i a n o f f i c i a l s to
t r y to g e n e r a t e h e l i c o p t e r s a l e s in Iran b e t w e e n 1 9 6 0 a n d 1 9 7 5 ?
A - No.
PAGE 1 of 2 PAGES
23-586 O - 78 - 16
ys'/A
TT~
238:
9 . Q - D i d y o u k n o w or h a v e y o u e v e r h e a r d that a n y o f the $ 2 , 9 5 0 , 0 0 0
p a y m e n t to A i r T a x i m i g h t h a v e b e e n p a s s e d on d i r e c t l y o r i n d i r e c t l y to
I r a n i a n g o v e r n m e n t o f f i c i a l s , i n c l u d i n g G e n e r a l K h a t a m i , in c o n n e c t i o n w i t h
B e l l ' s 1972 h e l i c o p t e r d e a l w i t h the I r a n i a n g o v e r n m e n t .
A - No.
1 0 . Q - W h e n did y o u l e a r n o r h e a r t h a t a n y of the p a y m e n t w a s p a s s e d on
a n d f r o m w h o m d i d y o u l e a r n o r h e a r o f it?
A - I have n o t learned of n o r heard that any p a y m e n t w a s passed on from
A i r T a x i to I r a n i a n g o v e r n m e n t o f f i c i a l s in c o n n e c t i o n w i t h t h e s a l e o f B e l l
h e l i c o p t e r s to the I r a n i a n g o v e r n m e n t .
11. Q - Did you know or have you e v e r heard that Bell or Textron m a y h a v e
m a i n t a i n e d a t a n y time a n y f u n d o f m o n i e s o r o t h e r a s s e t s w h i c h w e r e n o t r e c o r d e d
on the c o r p o r a t e b o o k s a n d r e c o r d s ?
A - No.
1 2 . Q - Do you have any information that G . William M i l l e r , President and
later Chairman of the Board of T e x t r o n , I n c . between 1960 and 1 9 7 5 , had any
k n o w l e d g e o f a n y o f t h e m a t t e r s r e f e r r e d to in the a b o v e q u e s t i o n s ?
A - No.
On t h i s / y ^ day of February 1978 before m e personally appeared Joyce I . Allen
to m e k n o w n to b e the p e r s o n d e s c r i b e d in a n d w h o e x e c u t e d the f o r e g o i n g a f f i d a v i t
and acknowledged that she executed the same as h e r free act and d e e d .
IN T E S T I M O N Y W H E R E O F , I have h e r e u n t o set m y hand and affixed m y o f f i c i a l
a t m y o f f i c e in S t . L o u i s , M i s s o u r i , t h e d a y a n d y e a r f i r s t a b o v e w r i t t e n .
seal
My—Teiui e x p i r e s
^
'•. ;'(11
\ ^
/
PAGE 2 of 2 PAGES
/J*-
19/<jT
% Commission Expires January 14f 1979
239
State of Missouri
)
)
City of St. Louis
)
ss.
A F F I D A V I T
I , Joseph A . M u r r a y , a resident of the County of S t . L o u i s , State of
M i s s o u r i , p r e s e n t l y e m p l o y e d b y the U . S . A r m y T r o o p S u p p o r t a n d A v i a t i o n
M a t e r i e l R e a d i n e s s C o m m a n d in t h e C i t y of S t . L o u i s , M i s s o u r i , b e i n g f i r s t
d u l y s w o r n h e r e b y d e p o s e a n d s a y t h a t t h e f o l l o w i n g a n s w e r s to q u e s t i o n s
a s k e d b y the S e n a t e C o m m i t t e e on B a n k i n g , H o u s i n g a n d U r b a n A f f a i r s a r e
true and correct to the b e s t of m y k n o w l e d g e and b e l i e f :
1. Q - Did you know or have you ever heard that General Mohammed Khatami,
C o m m a n d e r - i n - C h i e f o f t h e I m p e r i a l I r a n i a n A i r F o r c e , h a d an o w n e r s h i p i n t e r e s t
o f a n y n a t u r e in S T P ( S k e r k a t S h a h a m i T a y a r P a r s ) o r A i r T a x i , I r a n i a n c o m p a n i e s ,
between.1960 and 1975?
A - No.
2 . Q - Which company did y o u know or h e a r that G e n e r a l K h a t a m i had an
o w n e r s h i p i n t e r e s t in — STP o r A i r T a x i ? W h e n d i d y o u l e a r n o f G e n e r a l K h a t a m i ' s
interest and w h o did you learn of it from?
A - Based upon conversation with the Senate Committee on B a n k i n g , Housing
and Urban Affairs staff members I understand that
General Khatami had an
i n t e r e s t in A i r T a x i .
3 . Q - W e r e G e n e r a l K h a t a m i ' s i n t e r e s t s in S T P a n d A i r T a x i c o m m o n k n o w l e d g e in T e h r a n ?
When was that information common knowledge?
Who knew?
How
did you learn of that information?
A - Based upon conversation with the Senate Committee on B a n k i n g , Housing
and Urban A f f a i r s staff m e m b e r s I understand that
General"Khatami had an
i n t e r e s t in A i r T a x i .
Q - D i d y o u s p e a k to o r d i d B e l l H e l i c o p t e r o r T e x t r o n o f f i c i a l s
to y o u a b o u t G e n e r a l K h a t a m i ' s i n t e r e s t in S T P o r A i r T a x i ?
speak
A- - N o .
'5.
Q - Which Bell or Textron officials did you speak with and when?
A - Not
applicable.
6 . Q - What w e r e you conversations w i t h Bell or Textron officials
those matters?
about
A - Not a p p l i c a b l e .
7. Q - Did you know or have you ever heard that any Bell or Textron officials
k n e w t h a t G e n e r a l K h a t a m i h a d a n o w n e r s h i p i n t e r e s t o f a n y n a t u r e in S T P o r A i r
T a x i at any time between 1960 and 1975?
A - No.
8 . Q - Did you know or have you heard of any payments, gifts or other items
o f v a l u e m a d e b y o r g i v e n b y B e l l d i r e c t l y o r i n d i r e c t l y to I r a n i a n o f f i c i a l s to
t r y to g e n e r a t e h e l i c o p t e r s a l e s in I r a n b e t w e e n 1 9 6 0 a n d 1 9 7 5 ?
A - No.
240:
9 . Q - D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t a n y of the $ 2 , 9 5 0 , 0 0 0
p a y m e n t to A i r T a x i m i g h t h a v e b e e n p a s s e d on d i r e c t l y o r i n d i r e c t l y to
Iranian g o v e r n m e n t o f f i c i a l s , i n c l u d i n g G e n e r a l K h a t a m i , in c o n n e c t i o n w i t h
B e l l ' s 1972 h e l i c o p t e r d e a l w i t h the I r a n i a n g o v e r n m e n t .
A - No.
1 0 . Q - W h e n d i d y o u l e a r n o r h e a r t h a t a n y of t h e p a y m e n t w a s p a s s e d o n
a n d from w h o m did y o u l e a r n o r h e a r o f it?
A - I h a v e n o k n o w l e d g e of p a y m e n t s b e i n g p a s s e d
on.
11. Q - Did you know or have y o u ever heard that Bell or Textron m a y h a v e
maintained at any time any fund of monies or other assets w h i c h w e r e n o t recorded
on the c o r p o r a t e b o o k s a n d r e c o r d s ?
A - I have n o k n o w l e d g e of any such fund of m o n i e s or o t h e r
assets.
1 2 . Q - Do you have any information that G . W i l l i a m M i l l e r , P r e s i d e n t and
later Chairman of the Board of T e x t r o n , I n c . between 1960 and 1 9 7 5 , h a d any
k n o w l e d g e o f a n y o f t h e m a t t e r s r e f e r r e d to in t h e a b o v e q u e s t i o n s ?
A - No.
O n this/y/'^May o f F e b r u a r y 1 9 7 8 b e f o r e m e p e r s o n a l l y a p p e a r e d J o s e p h A . M u r r a y
t o m e k n o w n to b e the p e r s o n d e s c r i b e d in a n d w h o e x e c u t e d t h e f o r e g o i n g a f f i d a v i t
c o n s i s t i n g o f t w o p a g e s , a n d a c k n o w l e d g e d t h a t h e e x e c u t e d t h e s a m e as h i s f r e e
act and deed.
IN T E S T I M O N Y W H E R E O F , I h a v e h e r e u n t o s e t m y h a n d a n d a f f i x e d m y o f f i c i a l
a t m y o f f i c e in S t . L o u i s , M i s s o u r i , t h e d a y a n d y e a r f i r s t a b o v e w r i t t e n .
19
^
^ e ^ n ^ r ^ ,
NOTARY PUBLIC
My Gatnmissioa Expires January 14, 1979
seal
241
-AFFIDAVITI, COLONEL EDWIN M. AGUANNO, US Army, 122-20-5324, after being duely sworn
and under the penalties of perjury, wish to make the following statement:
Statements made herein are in response to questions outlined in Schedule A
of letter, Committee on Banking, Housing and Urban Affairs, US Senate, dated
8 Feb 78, concerning the appointment of Mr. G. William Miller to Board of
Governors of the Federal Reserve System. Each response is keyed numerically
to stated questions.
1. I was not aware that General Khatami had an ownership interest in Air Taxi
or Pars until three weeks ago.
2. I heard that General Khatami had ownership interest in Air Taxi during an
informal conversation with a staff member of the Senate Committee on Banking,
Housing, and Urban Affairs.
3. I am not aware that anyone in my sphere of association in Iran or elsewhere
knew of any ownership interest of Air Taxi by General Khatami.
4.
No.
5.
On the issue in question, none.
6.
There were no conversations.
7.
No.
8.
No.
9. No, I do not know of any payment that might have been passed directly
or indirectly to Iranian Government Officials.
10. In August 1975, I first assumed responsibilities as Project Manager,
Iran Helicopter Program for the US Army. At that time, I studied the
provisions of existing pertinent FMS cases with Iran and corresponding US
contracts with Bell for helicopters. I noted that agents' fees were not
considered allowable costs to our specific contracts.
11.
No.
WITNESS MY HAND AND SEAL this 15th day of February 1978.
- W ,
"C0L0NELTDW!inr"AfiiiANN0
US Army, 122-20-5324
Troop. Support and Aviation Readiness Command
St. Louis, Missouri
STATE OF KENTUCKY, COUNTY OF HARDIN
SUBSCRIBED AND SWORN TO BEFORE ME THIS 15TH DAY OF FEBRUARY 1978 BY
COLONEL EDWIN M. AGUANNO, US Army, 122-20-5324.
MY COMMISSION EXPIRES:
242:
9 White Fawn Lane
Pittsburgh, Pa. 15238
February 14, 1978
Mr. Kenneth A. McLean
Staff Director
United States Senate
Committee on Banking, Housing and
Urban Affairs
Washington, D. C. 20510
Dear Mr. McLean:
Reference is made to your letter of February 8, 1978 and to
the listing of questions that was attached thereto.
I have completed my answers to these questions, and they are
attached in affidavit form. I hope that the format used is
satisfactory and that the material will be of some value to
you.
Sincerely,
Lei, USAF (retired)
243
AFFIDAVIT
1.
Question:
Did you know or have you ever heard that General Mohammed Khatami,
Commander-in-Chief of the Imperial Iranian Air Force, had an ownership
interest of any nature in STP (Skerkat Shahami Tayar Pars) or Air Taxi,
Iranian companies, between 1960 and 1975?
Answer:
I do not now and never have had any knowledge as to whether or not General
Khatami had ownership interests, in the STP or Air Taxi companies between
1960 and 1975. I did, however, hear rumors to that effect while assigned
as the Defense and Air Attache in Iran during the period June 1968 to
July 1971.
2. Question:
Which company did you know or hear that General Khatami had an ownership
° interest in -- STP or Air Taxi?
Answer:
The rumors I heard were that General Khatami had ownership interest in the
Air Taxi Company.
Question:
When did you learn of General Khatami's interest and who did you learn of
it from?
Answer:
I cannot recall the date on which I first heard rumors of General Khatami's
involvement with Air Taxi, but it was sometime early in the period of my
assignment to Iran, i.e., early in the period June 1968 to July 1971. I
don't recall from whom I heard the rumors.
3. Question:
Were General Khatami's interests in STP and Air Taxi common knowledge in
Tehran?
Answer:
As stated above, I do not know if General Khatami has or had any interests in
Air Taxi. The rumors that he was involved in Air Taxi were relatively widespread in Tehran when I was there.
244
AFFIDAVIT
1. Question:
When was that information common knowledge?
Answer:
As stated above, I do not know if General Khatami has or had any interest in
Air Taxi. The rumors that I heard to the effect that he did occurred during
the period of June 1968 through July 1971.
Question:
Who knew?
Answer:
I do not know.
Question:
How did you learn of that information?
Answer:
I do not recall where, when, or from whom I first heard the rumors regarding
General Khatami's involvement with Air Taxi.
Question:
Did you speak to or did Bell Helicopter or Textron officials speak to you
about General Khatami's interest in STP or Air Taxi?
Answer:
No.
Question:
Which Bell or Textron officials did you speak with and when?
Answer:
Not applicable in view of answer to number 4.
Question:
What were your conversations with Bell or Textron officials about those matters?
Answer:
Not applicable in view of answer to number 4.
245
AFFIDAVIT
1. Question:
' Did you know or have you ever heard that any Bell or Textron officials knew
that General Khatami had an ownership interest of any nature in STP or
Air Taxi at any time between 1960 and 1975?
Answer:
No.
8.
Question:
Did you know or have you heard of any payments, gifts or other items of value
made or given by Bell directly or indirectly to Iranian officials to try to
generate helicopter sales in Iran between 1960 and 1975?
Answer:
No.
9.
Question:
Did you know or have you ever heard that any of the $2,950,000 payment to
Air Taxi might have been passed on directly or indirectly to Iranian government
officials, including General Khatami, in connection with Bell's 1972 helicopter
deal with the Iranian government.
Answer:
No.
10.
Question:
When did you learn or hear that any of the payment was passed on and from whom
did you learn or hear of it?
Answer:
Not applicable in view of answer to number 9.
11.
Question:
Did you know or have you ever heard that Bell or Textron may have maintained at
any time any fund of .monies or other assets which were not recorded on the
corporate books and records?
Answer:
No.
246
AFFIDAVIT
12. Question:
Do you have any infoimation that G. William Miller, President and later
Chairman of the Board of Textron, Inc. between 1960 and 1975, had any
knowledge of any of the matters referred to in the above questions?
Answer:
No.
I, John E. Wilson, hereby state that the foregoing twelve answers to the foregoing
twelve questions are true and correct to the best of my present knowledge, information
and belief.
Signed and sworn to before me on this
/"yfed day of February, 1978.
k
. Notary Public
r
PATRICIA ANN POWER, Notary Pubfic
Pittsburgh, A l l e g h e n y C o u n t y , Paj
M y Commission Expires D e c
xj'iii^y
6,1980
J.dhn E. Wilson
247:
Umteb States Senate
MEMORANDUM
F e b . 1 4 , 1978
Ken
Former Ambassador Joseph Farland telephoned
in r e s p o n s e to y o u r l e t t e r . He said t h a t
the l e t t e r w a s s e n t to an old a d d r e s s ,
and t h a t he n o w l i v e s in W i n c h e s t e r , V a .
He r e c e i v e d the l e t t e r o n l y y e s t e r d a y
afternoon.
H e is c u r r e n t l y s t a y i n g at the C h e v y
C h a s e C l u b h e r e in W a s h i n g t o n , p r o b a b l y
t h r o u g h t o m o r r o w . The p h o n e n u m b e r is 6524 1 0 0 , Room 226.
S a i d he h a s v e r y l i t t l e k n o w l e d g e of the
m a t t e r . He n e v e r m e t w i t h B e l l H e l i c o p t e r
p e o p l e , e x c e p t o n e m a n w h o m he ran into
in an a i r p o r t at one p o i n t . K n e w M r .
S i k o r s k i , b u t s a i d B e l l H e l i c o p t e r saw
fit to s t a y a w a y from h i m . K n o w s K h a t o m i
w e l l , b u t d i d n o t k n o w that he h a d a n y
c o n n e c t i o n w i t h STP or A i r T a x i .
Thought
he k n e w e v e r y t h i n g t h a t w a s g o i n g o n ,
" b u t a p p a r e n t l y so m u c h w a s g o i n g on t h a t
he d i d n ' t k n o w a b o u t . "
T o l d h i m y o u w o u l d be b a c k in t o u c h w i t h
h i m if y o u n e e d e d a d d i t i o n a l i n f o r m a t i o n .
Kathy
10:00
a.m.
248:
SAFEER
COMPANY
INTERNATIONAL
RICHARD
HELMS
PRESIDENT
?ffl»S » «
CONSULTING
, h S
TELEXI440242 SAFR Ul
c a b l e : s a f e e r washdc
l8
February 13,
1978
H o n o r a b l e W i l l i a m P r o x m i r e , Chairman
C o m m i t t e e o n B a n k i n g , H o u s i n g & Urban A f f a i r s
W a s h i n g t o n , D . C. 2 0 5 1 0
D e a r Mr.
Chairman:
I am i n r e c e i p t o f a l e t t e r
f r o m Mr. K e n n e t h A . McLean,
Committee.
d a t e d February 10, 1978
S t a f f D i r e c t o r o f your
I have c a r e f u l l y reviewed the questions submitted
w i t h t h i s l e t t e r and f i n d t h a t I h a v e n o u s e f u l i n f o r mation t o contribute.
A l t h o u g h I w a s A m e r i c a n Ambass a d o r i n I r a n from e a r l y A p r i l 1973 t o l a t e December
1 9 7 6 , I do n o t r e c a l l e v e r h a v i n g h e a r d t h e a l l e g a t i o n
t h a t G e n e r a l Mohammed Khatami h a d a n o w n e r s h i p i n t e r e s t
i n e i t h e r STP o r A i r T a x i .
I n a d d i t i o n , I do n o t
remember e v e r h a v i n g h e a r d t h a t T e x t r o n o r B e l l w e r e
a l l e g e d t o h a v e made p a y m e n t s t o A i r T a x i o r a n y
I r a n i a n Government o f f i c i a l s .
The f i r s t i n d i c a t i o n
I h a v e h a d o n a n y o f t h e s e m a t t e r s w a s when t h e a l l e g a t i o n s appeared i n press s t o r i e s covering the confirmat i o n h e a r i n g s o f Mr. G. W i l l i a m M i l l e r , C h a i r m a n o f t h e
Board o f T e x t r o n , I n c .
Sincerely
yours,
R i c h a r d Helms
RH/mjv
^
SUITE 4 0 2 -
1627 " K " STREET
N. W., WASHINGTON, D. C. 2 0 0 0 6 — ( 2 0 2 )
I5 *
-466-4226
249:
G E O R G E T O W N
WASHINGTON,
U N I V E R S I T Y
D.C.
20037
EDMUND A. WALSH
SCHOOL OF FOREIGN SERVICE
February 13, 1978.
M r . Kenneth A . M c L e a n , Staff Director
Committee on B a n k i n g , H o u s i n g and U r b a n A f f a i r s
United S t a t e s S e n a t e
W a s h i n g t o n , D . C . 20510
Dear M r . M c L e a n :
I have your letter of F e b r u a r y 10 w i t h the enclosed q u e s t i o n n a i r e ,
"Schedule A . " A t first I thought it m u s t be a case of m i s t a k e n identity since I haven't b e e n in Iran since 1 9 6 7 . T h e n , h o w e v e r , I realized
that the questions ( e . g . , N o . 7) a p p l y to "any time b e t w e e n 1960 and
1975."
I have no k n o w l e d g e w h a t s o e v e r of a n y of the m a t t e r s a b o u t w h i c h
S c h e d u l e A asks q u e s t i o n s , for the following r e a s o n s :
1 . I served in I r a n , at the A m e r i c a n E m b a s s y , in the c a p a c i t y
of P o l i t i c a l C o u n s e l o r , from 1963 to 1 9 6 7 . In that .capacity I d e a l t
w i t h internal Iranian politics and Iranian foreign p o l i c y , a n d of
course e s p e c i a l l y A m e r i c a n - I r a n i a n relations (but a l s o R u s s i a n - I r a n i a n
and E g y p t i a n - I r a n i a n relations)* leaving m i l i t a r y m a t t e r s to one s i d e .
2 . M i l i t a r y matters involving p r o c u r e m e n t , r e l a t i o n s w i t h the
Iranian m i l i t a r y , relations w i t h the A m e r i c a n m i l i t a r y , and r e l a t i o n s
between the A m e r i c a n and Iranian m i l i t a r y , w e r e m a t t e r s left for the
a t t e n t i o n of one officer w h o specialized e n t i r e l y in s u c h things and
w h o r e p o r t e d d i r e c t l y to the A m b a s s a d o r .
3 . E c o n o m i c m a t t e r s , i . e . contracts and the l i k e , w e r e a l s o to
a c e r t a i n e x t e n t in the purview o f the E c o n o m i c S e c t i o n . B u t a y o w n
s e c t i o n , the political s e c t i o n , did not d e a l w i t h polittico-military
or e c o n o m i c - m i l i t a r y m a t t e r s . W e did_follow the career of G e n e r a l
K h a t a m i , b u t largely from the point of view of the role he m i g h t play
in the event something might h a p p e n to the S h a h .
A b o u t none of the questions in Schedule A can I give a n y information because such information w o u l d not have come to m y a t t e n t i o n ; nor
did a n y such information come to m y a t t e n t i o n .
250
SCHEDULE
A
1 . D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t G e n e r a l
M o h a m m e d K h a t a m i , C o m m a n d e r - i n - C h i e f of t h e I m p e r i a l
I r a n i a n A i r F o r c e , h a d an o w n e r s h i p i n t e r e s t of a n y nat u r e in S T P ( S k e r k a t S h a h a m i T a y a r P a r s ) or A i r T a x i ,
I r a n i a n c o m p a n i e s , b e t w e e n 1 9 6 0 and 1975?
No
2 . W h i c h c o m p a n y d i d y o u k n o w or h e a r t h a t G e n e r a l
K h a t a m i h a d an o w n e r s h i p i n t e r e s t in -- S T P or A i r T a x i ?
W h e n d i d y o u l e a r n of G e n e r a l K h a t a m i ' s i n t e r e s t a n d w h o
d i d y o u l e a r n of it f r o m ?
I was n o t aware of such an i n t e r e s t o r o w n e r s h i p
3. W e r e G e n e r a l K h a t a m i ' s i n t e r e s t s in STP a n d A i r
T a x i c o m m o n k n o w l e d g e in T e h r a n ?
W h e n w a s that i n f o r m a tion common knowledge?
Who knew?
H o w d i d y o u l e a r n of
that information?
I knew of none of
this
4 . D i d y o u s p e a k to or d i d B e l l H e l i c o p t e r or
T e x t r o n o f f i c i a l s s p e a k to y o u a b o u t G e n e r a l K h a t a m i ' s
i n t e r e s t in S T P or A i r T a x i ?
No
5. W h i c h B e l l or T e x t r o n o f f i c i a l s d i d y o u
w i t h and when?
speak
None d i d
6 . W h a t w e r e y o u r c o n v e r s a t i o n s w i t h B e l l or
officials about those matters?
Textron
There were no such c o n v e r s a t i o n s
7. D i d y o u k n o w or
B e l l or T e x t r o n o f f i c i a l s
an o w n e r s h i p i n t e r e s t of
at a n y t i m e b e t w e e n 1960
No
have you ever heard that any
knew that General Khatami had
any n a t u r e in STP or A i r T a x i
and 1975?
251
SCHEDULE
A
(continued)
8.
g i f t s or
directly
generate
D i d y o u k n o w or h a v e y o u h e a r d of a n y p a y m e n t s ,
o t h e r i t e m s of v a l u e m a d e b y or g i v e n b y B e l l
or i n d i r e c t l y to I r a n i a n o f f i c i a l s to t r y to
h e l i c o p t e r s a l e s in Iran b e t w e e n 1960 and 1 9 7 5 ?
No
9 . D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t a n y of
the $ 2 , 9 5 0 , 0 0 0 p a y m e n t to A i r T a x i m i g h t h a v e b e e n p a s s e d
on d i r e c t l y or i n d i r e c t l y to I r a n i a n g o v e r n m e n t o f f i c i a l s ,
i n c l u d i n g G e n e r a l K h a t a m i , in c o n n e c t i o n w i t h B e l l ' s
1972 h e l i c o p t e r d e a l w i t h the I r a n i a n g o v e r n m e n t .
I did not know nor did I hear of any such payments
1 0 . W h e n d i d y o u l e a r n or h e a r t h a t aay of the p a y m e n t w a s p a s s e d on and f r o m w h o m d i d y o u l e a r n or h e a r
o f
l t ?
At no time
1 1 . D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t B e l l or
T e x t r o n m a y h a v e m a i n t a i n e d at a n y t i m e a n y f u n d of m o n i e s
or o t h e r a s s e t s w h i c h w e r e n o t r e c o r d e d on the c o r p o r a t e
books and records?
Ho, I did not
12. Do you have any information that G. W i l l i a m
M i l l e r , P r e s i d e n t and l a t e r C h a i r m a n of the B o a r d of
T e x t r o n , I n c . b e t w e e n 1960 a n d 1 9 7 5 , h a d a n y k n o w l e d g e
of a n y of t h e m a t t e r s r e f e r r e d to in the a b o v e q u e s t i o n s ?
Absolutely not
The letter sent to me by the staff of the Senate Banking Committee
was in error, I am presently a director of Textron
252
A F F I D A V I T
The undersigned, being duly
d e p o s e s and says that the answers to
sworn,
the
questions posed on the attached Schedule
a r e t r u e a n d c o r r e c t to the b e s t of
knowledge and
A
my
belief.
Dated
^ Subscribed
^
' ^ thi's
<
7
1
((\ v ^ > • "
a n d s w o r n t o b e f o r e ^me
day of F e b r u a r y ,
1978.
/
P ^ a ^ Q ^ L ^ J U .
Notary Public/or
p e r s o n an£hoxi=-z-ed
t e — € t d m i n l b " t e roatiiB
/
My Commission Expires WarcE 'ff, 1979'
253:
D E P A R T M E N T O F STATE
Washington, D.C.
20520
February
16,
1978
Mr. Kenneth A. McLean
Staff Director
Committee on Banking, Housing,
and Urban Affairs
United States Senate
Washington, D.C.
20510
Dear Mr.
McLean:
This is in response to your letter of February 10,
1978 concerning the Bell Division of Textron and the
Air Taxi Company.
I regret not meeting your deadline,
but I just returned from leave.
I h a v e studied the q u e s t i o n s in S c h e d u l e A and
h a v e concluded that I have no knowledge of the m a t t e r s
referred to in those questions.
My specific answers
to these questions are listed below:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
No.
Neither.
Not Applicable.
Don't, k n o w .
Not Applicable.
Not Applicable.
Not Applicable.
No.
Don't recall any.
Generally, my contacts
with American business executives involved
bankers only.
None held.
No.
No.
No.
Not Applicable.
No.
No.
Sincerely
Subscribed and sworn to
before me this 16th day
of F e b r u a r y 1978 at
Washington, D. C.
0
\y Coirimiscion Expires 'June 14, 1979'
1-586 O - 78 - 17
Michael A. G. Michaud
Deputy Director
Bureau of P o l i t i c o - M i l i t a r y
Affairs
Office of International
Security Policy
254:
D E P A R T M E N T O F STATE
Washington, D.C.
20520
February
Mr. Kenneth A. McLean
Staff Director
Committee on Banking,
and Urban Affairs
United States Senate
Dear Mr.
16,
1978
Housing
McLean:
In r e s p o n s e to y o u r l e t t e r of F e b r u a r y 1 0 ,
I am p r o v i d i n g in the e n c l o s u r e the a n s w e r s to
the twelve questions of your Schedule A .
The
information which I have set forth relates to
the period August 1972 through August 1976 when
I served as P o l i t i c a l - M i l i t a r y O f f i c e r in the
American Embassy Tehran, Iran.
Sincerely,
/
He
Deputy Director for
Near Eastern and
South Asian Regional
7
\
Enclosure:
As
stated.
Subscribed
before me
of
and
this
February
Washington,
\
sworn
16th
1978
D.
to
day
at
C.
•
/.{
.
My Commission Expires June 14, 1979!
Affairs
255:
Schedule A
1 and 2.
Answers
I h a d n o f i r m k n o w l e d g e of any a s s o c i -
a t i o n of G e n e r a l K h a t a m i w i t h S T P
Tayar Pars) or Air T a x i .
(Skerkat S h a h a m i
On several
occasions,
p r o b a b l y in 1975 and '76 a n d p o s s i b l y as e a r l y
as
1974, I heard "cocktail party gossip" that General
K h a t a m i h a d h a d s o m e s o r t of f i n a n c i a l
with Air Taxi.
I also heard that the
connection
connection
h a d b e e n t e r m i n a t e d on an u n s p e c i f i e d d a t e .
n e v e r h e a r d of a n y c o n n e c t i o n b e t w e e n G e n e r a l
and
STP.
3.
In m y o p i n i o n , G e n e r a l K h a t a m i ' s
recall, my sources were resident American
4, 5, and 6.
Bell
or
To my recollection no
Textron
ever
spoke
K h a t a m i , STP o r A i r T a x i .
7, 8, 9.
10.
not
no
applicable
11 and 1 2 .
knowledge"
It w a s r a t h e r a r u m o r t h a t w a s o n l y
rarely and rather discreetly mentioned.
of
Khatami
possible
connection with A i r Taxi was not "common
in T e h r a n .
I
no
to
As I
businessmen.
representative
me a b o u t
General
256
D E P A R T M E N T O F STATE
Washington, D.C.
20520
February 16, 1978
Mr. Kenneth A . McLean
Staff Director
Committee on Banking, Housing
and Urban Affairs
United States Senate
Washington, D.C.
Dear Mr. McLean:
As requested, set forth below are my answers
t o t h e q u e s t i o n s p o s e d in S c h e d u l e A o f y o u r
l e t t e r t o m e of F e b r u a r y 1 0 , 1 9 7 8 , r e g a r d i n g
a c t i v i t i e s o f B e l l H e l i c o p t e r in I r a n .
The
a n s w e r s a r e n u m b e r e d to c o r r e s p o n d t o the q u e s t i o n s .
P l e a s e n o t e t h a t m y c o r r e c t f a m i l y n a m e is R o u s e ,
a n d n o t R a l p h , as w r i t t e n in y o u r l e t t e r .
Schedule A Answers
1.
Yes.
2.
Air Taxi; General Khatami's interest was
m e n t i o n e d b y I r a n i a n s and A m e r i c a n s in T e h r a n ,
I r a n , d u r i n g m y t o u r o f d u t y at t h e A m e r i c a n
E m b a s s y , T e h r a n , f r o m 19 6 8 - 7 2 .
3.
In conversations with personal and professional
contacts, mention was made that General Khatami
w a s a p a r t - o w n e r of A i r T a x i . I h a v e n o
p e r s o n a l k n o w l e d g e of t h e a c c u r a c y of t h e s e
reports. I believe that it was widely assumed
a m o n g p r o m i n e n t I r a n i a n s a n d US b u s i n e s s m e n
with defense interests, that General Khatami
d i d h a v e an o w n e r s h i p i n t e r e s t in A i r T a x i .
257
4.
No, not that I
recall.
5.
Not applicable.
6.
Not applicable.
7.
No, not that I
8.
No.
9.
No.
recall.
10.
Not applicable.
11.
No.
12.
No.
Sincerely,
v /
^ f T A A ^ t
fAt,y\'\
->
•
(
ij \.\ y
v y
,
Subscribed
and sworn
before m e this 16th
of F e b r u a r y
John H. Rou
r.
Director
Office of Canadian Affairs
to
day
1978 at W a s h i n g t o n , D . C .
J a
My Commission Expires, June 14. 1979
258:
D E P A R T M E N T O F STATE
Washington, D.C.
UN
OFFICE
CONFERENCE
FOR
FOR
THE
DEVELOPMENT
February
14,
1978
Mr. Kenneth A. McLean
Staff Director
Committee on Banking,
and Urban Affairs
United States Senate
Dear Mr.
20520
OF THE U . S . COORDINATOR
ON SCIENCE & TECHNOLOGY
Housing
McLean:
I h a v e r e c e i v e d y o u r l e t t e r o f F e b r u a r y 10
enclosing a series of q u e s t i o n s , set forth in
Schedule A , stemming from hearings by the Senate
Committee on Banking, Housing and Urban Affairs on
the nomination of M r . G . W i l l i a m M i l l e r to the Board
of Governors of the Federal Reserve System.
I do not have now, nor can I recall ever having
h e a r d , any information which would enable m e to reply
t o any of t h e q u e s t i o n s set forth in Schedule A .
Subscribed
Enclosure:
Copy of
Schedule
A
and
b e f o r e me t h i s
sworn
14th
of February
1978,
Washington,
D.
to
day
at
C.
My Commission Expires 'June 14. 1979
259
SCHEDULE
A
1 . Did you know or have you ever heard that General
Mohammed Khatami, Commander-in-Chief of the Imperial
Iranian Air Force, had an ownership interest of any nature in STP (Skerkat Shahami Tayar Pars) or Air Taxi,
Iranian companies, between 1960 and 1975?
2 . Which company did you know or hear that General
#
Khatami had an ownership interest in -- STP or Air Taxi?
When did you learn of General Khatami's interest and who
did you learn of it from?
3 . Were General Khatami's interests' in STP and A i r
Taxi common knowledge in Tehran? .WherT was that "Information common knowledge? Who knew? -Mow did-you learn-of
that information?
4 . Did you speak to or did Bell Helicopter"or
Textron officials speak to you about General Khatami's
interest in STP or A i r Taxi?
5. Which Bell or Textron officials did you speak
with and when?
6. What were your conversations with Bell or Textron
officials about those matters?
7. Did you know or have you ever heard that any
Bell or Textron officials knew that General Khatami had
an ownership interest of any nature in STP or Air Taxi
at any time between 1960 and 1975?
260
SCHEDULE A
..(r.on
8.
gifts or
directly
generate
D i d y o u k n o w or h a v e y o u h e a r d of any
o t h e r items of v a l u e m a d e by or given
or i n d i r e c t l y to Iranian o f f i c i a l s to
h e l i c o p t e r s a l e s in Iran b e t w e e n 1960
payments,
by Bell
try to
and 1975?
9 . D i d y o u k n o w or h a v e y o u e v e r heard that any of
t h e 5.2,950,000 p a y m e n t to A i r T a x i m i g h t h a v e b e e n passed
o n d i r e c t l y or i n d i r e c t l y to Iranian g o v e r n m e n t o f f i c i a l s ,
i n c l u d i n g G e n e r a l K h a t a m i , in c o n n e c t i o n w i t h B e l l ' s
1 9 7 2 h e l i c o p t e r d e a l w i t h the Iranian g o v e r n m e n t .
1 0 . W h e n d i d you learn or h e a r that aiy of the payj
m e n t w a s p a s s e d on and from w h o m did you learn or h ^ E ofit?
1 1 . D i d y o u k n o w Or h a v e you ever h e a r d that B e l l or_ r
T e x t r o n m a y h a v e m a i n t a i n e d at a n y time a n y fund-of_jBonfesI
o r o t h e r a s s e t s w h i c h w e r e n o t r e c o r d e d on the__corporatc
b o o k s and r e c o r d s ?
1 2 . D o you h a v e a n y i n f o r m a t i o n
M i l l e r , P r e s i d e n t and later C h a i r m a n
T e x t r o n , I n c . b e t w e e n 1960 and 1 9 7 5 ,
o f a n y of the m a t t e r s r e f e r r e d to in
that G . W i l l i a m
of the Board of
had any k n o w l e d g e
the a b o v e q u e s t i o n s ?
261
A F F I D A V I T
The undersigned, being duly
sworn,
d e p o s e s a n d s a y s t h a t t h e a n s w e r s to t h e
q u e s t i o n s posed on the attached Schedule
A
a r e t r u e a n d c o r r e c t to t h e b e s t of m y
knowledge and belief.
S u b s c r i b e d and s w o r n t o b e f o r e m e
d a y of F e b r u a r y , 1 9 7 8 .
Notary Public/or
person authorized
to administer o a t h s
Advocate of the
Bar of the Province of Quebec).
262
SCHEDULE
A
1. Did. you know or have you ever heard that General
Mohammed Khatami, Commander-in-Chief of the Imperial
Iranian Air F o r c e , had an ownership interest of any nature in STP (Skerkat Shahami Tayar Pars) or Air Taxi,
Iranian c o m p a n i e s , between 1960 and 1975?
2. Which company did you know or hear that General
Khatami had an ownership interest in -- STP or Air Taxi?
When did you learn of General Khatami's interest and who
did you learn of it from?
3. Were General Khatami's interests in STP and Air
Taxi common knowledge in Tehran? When was that information common knowledge? Who knew? How did you learn of
that information?
_
%
4. Did you speak to or did Bell Helicopter or
Textron officials speak to you about General Khatami's
interest in STP or Air Taxi?
ko.
5. Which Bell or Textron officials did you speak
with and when?
-
6. What were your conversations with Bell or Textron
officials about those matters?
7. Did you know or have you ever heard that any
Bell or Textron officials knew that General Khatami had
an ownership interest of any nature in STP or Air Taxi
at any time between 1960 and 1975?
263
SCHEDULE A
(continued)
8.
gifts or
directly
generate
Did you know or have you heard of any
other items of value made by or given
or indirectly to Iranian officials to
helicopter sales in Iran between 1960
payments,
by Bell
try to
and 1975?
9. Did you know or have you ever heard that any of
the $2,950,000 payment to Air Taxi might have been passed
on directly or indirectly to Iranian government officials,
including General Khatami, in connection with Bell's
1972 helicopter deal with the Iranian government.
Uo
-
10. When did you learn or hear that any of the payment was passed on and from whom did you learn or hear
11. Did you know or have you ever heard that Bell or
Textron m a y have maintained at any time any fund of monies
or other assets which were not recorded on the corporate
M i l l e r , President and later Chairman of the Board of
T e x t r o n , Inc. between 1960 and 1975, had any knowledge
of any of the matters referred to in the above questions?
264:
40 Westminster Street
Providence, R.I. 02903
401/421-2800
J. B. Collinson
President
Textron Inc.
F e b r u a r y 14,
1978
Mr. Kenneth A. M c L e a n
Staff D i r e c t o r
S e n a t e C o m m i t t e e on B a n k i n g ,
Housing and Urban A f f a i r s
Washington, D. C.
20510
Dear Mr.
McLean:
E n c l o s e d a r e m y a n s w e r s to the questions i n c l u d e d w i t h y o u r l e t t e r d a t e d F e b r u a r y 8, 1 9 7 8 , t o g e t h e r with the affidavit a s requested.
Sincerely
JBC/eg
Enclosures
265
A F F I D A V I T
The u n d e r s i g n e d ,
being duly
d e p o s e s and s a y s t h a t t h e a n s w e r s t o
sworn,
the
q u e s t i o n s p o s e d on t h e a t t a c h e d S c h e d u l e A
a r e t r u e and c o r r e c t
k n o w l e d g e and
Dated
t o t h e b e s t o f my
belief.
ftf/ftX
S u b s c r i b e d and s w o r n t o b e f o r e me
this
-
day o f February,
1978.
Notary P u b l i c / o f ^
person authorized
to administer oaths
266
SCHEDULE
A
1 . D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t G e n e r a l
M o h a m m e d K h a t a m i , C o m m a n d e r - i n - C h i e f of t h e I m p e r i a l
I r a n i a n A i r F o r c e , h a d an o w n e r s h i p i n t e r e s t of a n y nat u r e in S T P ( S k e r k a t S h a h a m i T a y a r P a r s ) or A i r T a x i ,
I r a n i a n c o m p a n i e s , b e t w e e n 1 9 6 0 and 1 9 7 5 ?
No.
2 . W h i c h c o m p a n y d i d y o u k n o w or h e a r t h a t G e n e r a l
K h a t a m i h a d an o w n e r s h i p i n t e r e s t in -- S T P or A i r T a x i ?
When did you learn of General Khatami's interest and who
d i d y o u l e a r n o f it f r o m ?
Neither.
3 . W e r e G e n e r a l K h a t a m i ' s i n t e r e s t s in S T P a n d A i r
T a x i c o m m o n k n o w l e d g e in T e h r a n ?
When was that information common knowledge?
Who knew?
H o w d i d y o u l e a r n of
that information?
I have n o knowledge of this.
4 . D i d y o u s p e a k to or d i d B e l l H e l i c o p t e r or
T e x t r o n o f f i c i a l s s p e a k to y o u a b o u t G e n e r a l K h a t a m i ' s
i n t e r e s t in S T P o r A i r T a x i ?
No.
5. W h i c h B e l l o r T e x t r o n o f f i c i a l s d i d y o u
w i t h and when?
speak
None.
6 . W h a t w e r e y o u r c o n v e r s a t i o n s w i t h B e l l or
officials about those matters?
Textron
None.
7 . D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t a n y
Bell or Textron officials knew that General Khatami had
an o w n e r s h i p i n t e r e s t of a n y n a t u r e in S T P or A i r T a x i
a t a n y t i m e b e t w e e n 1 9 6 0 and 1 9 7 5 ?
No.
267
SCHEDULE
A
(continued)
8.
gifts or
directly
generate
D i d y o u k n o w or h a v e you h e a r d of any p a y m e n t s ,
o t h e r items of v a l u e m a d e by or g i v e n b y B e l l
or i n d i r e c t l y to Iranian o f f i c i a l s to t r y to
h e l i c o p t e r s a l e s in I r a n b e t w e e n 1 9 6 0 a n d 1 9 7 5 ?
9. Did you know or have
the $ 2 , 9 5 0 , 0 0 0 p a y m e n t to A i r
on d i r e c t l y or i n d i r e c t l y to
i n c l u d i n g G e n e r a l K h a t a m i , in
1972 h e l i c o p t e r deal w i t h the
you ever heard that any of
Taxi might have been passed
I r a n i a n g o v e r n m e n t o f fT i c i a l s ,
connection with Bell s
Iranian government.
No.
1 0 . W h e n d i d y o u l e a r n o r h e a r t h a t aiy o f t h e p a y m e n t w a s p a s s e d on and from w h o m did you learn or h e a r
of
it?
No
knowledge.
11.
D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t B e l l o r
T e x t r o n m a y h a v e m a i n t a i n e d at any time any fund of m o n i e s
or o t h e r a s s e t s w h i c h w e r e n o t r e c o r d e d on the c o r p o r a t e
books and records?
See attached.
12.
Do y o u have any information
M i l l e r , President and later Chairman
T e x t r o n , Inc. between 1960 and 1975,
o f a n y o f t h e m a t t e r s r e f e r r e d t o in
No.
No.
that G. William
of the B o a r d of
had any knowledge
the above q u e s t i o n s ?
268:
11.
I k n o w of n o f u n d of m o n i e s w h i c h a r e n o t r e c o r d e d o n t h e
T e x t r o n books and r e c o r d s . All c o r p o r a t i o n s h a v e c e r t a i n
a s s e t s , not m a t e r i a l in amount, which a r e not r e c o r d e d on
their books. T e x t r o n and B e l l a l s o have t h e s e i t e m s ; such
a s , m i n o r a m o u n t s of o f f i c e f u r n i t u r e a n d f i x t u r e s , a n d c e r tain t o o l s and d i e s which a r e c h a r g e d to e x p e n s e a s p u r c h a s e d
b u t t o t h e b e s t of m y k n o w l e d g e n o n e a r e u s e d f o r o t h e r t h a n a
legal and appropriate c o r p o r a t e p u r p o s e .
269
A F F I D A V I T
The undersigned, being duly
sworn,
d e p o s e s and says t h a t the a n s w e r s to t h e
q u e s t i o n s p o s e d o n the a t t a c h e d S c h e d u l e A
a r e t r u e a n d c o r r e c t to the b e s t o f m y
k n o w l e d g e and b e l i e f .
Dated:
7 g
S u b s c r i b e d and sworn to b e f o r e m e
t h i s
d a y of F e b r u a r y , 1 9 7 8 .
Notary Public/or
person authorized
to a d m i n i s t e r o a t h s
'>!
*' ) \ ', '
"> > •>
•A''/
2 3 - 5 8 6 O - 78 - 18
NOTARY PUBLIC STATE OF FLORIDA AT lAXGt
MT COMMISSION EXPIX8 JAN. 16 1982
IONDOTH«UG&€RAlll«. itCaWUTBB
270
SCHEDULE
A
1. Did you know or have you ever heard that General
Mohammed Khatami, Commander-in-Chief of the Imperial
Iranian Air F o r c e , had an ownership interest of any nature in STP (Skerkat Shahami Tayar Pars) or A i r Taxi,
Iranian c o m p a n i e s , between 1960 and 197 5?
Mo
2. Which company did you know or hear that General
Khatami had an ownership interest in - - STP or Air Taxi?
When did you learn of General Khatami's interest and Tsrho
did you learn of it from?
/O
3. Were General Khatami's interests in STP and Air
Taxi common knowledge in Tehran? When was that information common knowledge? Who knew? How did you learn of
that information?
M o
i h c k
~
w n o s
^o
^
4. Did you speak to or did Bell Helicopter or
Textron officials speak to you about General Khatami's
interest in STP or Air Taxi?
AJo
5. Which Bell or Textron officials did you speak
with and when?
,
_
6.
What were your conversations with Bell or Textron
officials about those matters?
M
C
Srd
C
(-{
7. Did you know or have you ever heard that any
Bell or Textron officials knew that General Khatami had
an ownership interest of any nature in STP or Air Taxi
at any time between 1960 and 1975?
/vJeJcA^
£ r / c W t
i-brAr&b
6 r
Tthx^T
/
/ / v j
"TTf-r
/ ^ e S S .
271
SCHEDULE A
(continued)
8.
gifts or
directly
generate
Did you know or have you heard of any
other items of value made by or given
or indirectly to Iranian
officials to
r a n
helicopter
*
between 1960
payments,
by Bell
try to
and 1975?
9. Did you know or have you ever heard that any of
the $2,950,000 payment to Air Taxi might have been passed
on directly or indirectly to Iranian government o f f i c i a l s ,
including General Khatami, in connection with Bell's
1972 helicopter deal with the Iranian government.
10. When did you learn or hear that any of the payment was passed on and from whom did you learn or hear
of it?
AJe\f£&
(T
11. Did you know or have you ever heard that Bell or
Textron m a y have maintained at any time any fund of monies
or other assets which w e r e f n o t recorded on the corporate
books and records?
Aje\|e£L — k%Sb -&0<J&T IT
12. Do you have any information
M i l l e r , President and later Chairman
T e x t r o n , Inc. between 1960 and 1975,
of any of the matters referred to in
A J O
^
that G. William
of the Board of
had any knowledge
the above questions?
f^^MATT7fc,\J
272
13 February
Mr. Kenneth
A.
McLean
Staff
Director
Committee
on Banking >
and Urban
Affairs
5300 Dirkson
Building
Washington,
D.C.
20510
Dear
Mr.
1978
Housing
McLean:
As requested
by you3
an Affidavit
and my answers
shown on your Schedule
A.
attached
to your
herewith
questions
is
as
Sincerely
Fort
EJD:jt
Attachment
(2)
Worth>
Texas
76109
273
A F F I D A V I T
The undersigned, being duly
d e p o s e s and says that the answers to
sworn,
the
questions posed on the attached Schedule
A
are true and correct to the b e s t of my
knowledge and
D a t e d : Feb.
belief.
13,1978
Edwin
jtf.
Ducayet
Subscribed and sworn to before' me
t h i s
day of F e b r u a r y ,
1978.
person authorized
' ^ /,)""V'N^
to administer oaths '
I ^
JAMIE ITTFKIN"
Kotary Public, Mrr^nt County, Texas
**2f Commission
tiz^ires
/<?-?g
274
SCHEDULE
A
1 . D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t G e n e r a l
M o h a m m e d K h a t a m i , C o m m a n d e r - i n - C h i e f of t h e I m p e r i a l
I r a n i a n A i r F o r c e , h a d an o w n e r s h i p i n t e r e s t of a n y nat u r e i n S T P ( S k e r k a t S h a h a m i T a y a r P a r s ) or A i r T a x i ,
I r a n i a n c o m p a n i e s , b e t w e e n 1 9 6 0 and 1 9 7 5 ?
Neither knew nor ever heard of any connection. See "Note"
after Question 12.
2 . W h i c h c o m p a n y d i d y o u k n o w or h e a r t h a t G e n e r a l
K h a t a m i h a d an o w n e r s h i p i n t e r e s t in -- S T P or A i r T a x i ?
W h e n d i d y o u l e a r n of G e n e r a l K h a t a m i ' s i n t e r e s t a n d w h o
d i d y o u l e a r n o f it f r o m ?
See Note After Question 12.
3 . W e r e G e n e r a l K h a t a m i ' s i n t e r e s t s in S T P a n d A i r
T a x i c o m m o n k n o w l e d g e in T e h r a n ? , W h e n w a s t h a t i n f o r m a tion common knowledge?
Who knew?
H o w d i d y o u l e a r n of
that information?
Not to my knowledge
4 . D i d y o u s p e a k to or d i d B e l l H e l i c o p t e r or
T e x t r o n o f f i c i a l s s p e a k to y o u a b o u t G e n e r a l K h a t a m i ' s
i n t e r e s t in S T P or A i r T a x i ?
No
5. Which Bell or Textron officials did you
w i t h and when?
speak
Not qppliaahle
6 . W h a t w e r e y o u r c o n v e r s a t i o n s w i t h B e l l or
officials about those matters?
Textron
Not applicable
7 . D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t a n y
Bell or T e x t r o n officials knew that General Khatami had
an o w n e r s h i p i n t e r e s t of a n y n a t u r e in S T P or A i r T a x i
at a n y t i m e b e t w e e n 1 9 6 0 and 1975?
No
275
SCHEDULE A
(continued)
8.
gifts or
directly
generate
D i d y o u k n o w or h a v e y o u h e a r d of a n y p a y m e n t s ,
o t h e r i t e m s of v a l u e m a d e by or g i v e n b y B e l l
or i n d i r e c t l y to I r a n i a n o f f i c i a l s to t r y to
h e l i c o p t e r s a l e s in Iran b e t w e e n 1960 a n d 1975?
No
9 . D i d ~ y o u k n o w or h a v e y o u e v e r h e a r d t h a t a n y of
t h e $ 2 , 9 5 0 , 0 0 0 p a y m e n t to A i r T a x i m i g h t h a v e b e e n p a s s e d
on d i r e c t l y or i n d i r e c t l y to I r a n i a n g o v e r n m e n t o f f i c i a l s ,
i n c l u d i n g G e n e r a l K h a t a m i , in c o n n e c t i o n w i t h B e l l ' s
1972 h e l i c o p t e r d e a l w i t h the I r a n i a n g o v e r n m e n t .
No_
1 0 . W h e n d i d y o u l e a r n or h e a r that any of t h e p a y m e n t w a s p a s s e d on and f r o m w h o m d i d y o u l e a r n or h e a r
of it?
Not applicable
1 1 . D i d y o u k n o w or h a v e y o u e v e r h e a r d t h a t B e l l or
T e x t r o n m a y h a v e m a i n t a i n e d at a n y t i m e a n y f u n d of m o n i e s
o r o t h e r a s s e t s w h i c h w e r e n o t r e c o r d e d on the c o r p o r a t e
b o o k s a n d - r e c o r d s ? No%
fund ever existed to my knowledge as it
would have been strioly against Bell and Textron policy.
12. Do you have any information that G. William
M i l l e r , P r e s i d e n t a n d l a t e r C h a i r m a n of the B o a r d of
T e x t r o n , I n c . b e t w e e n 1960 and 1 9 7 5 , had a n y k n o w l e d g e
of a n y of t h e m a t t e r s r e f e r r e d to in the a b o v e q u e s t i o n s ?
No
NOTE: I was contacted by a Wall Street Journal reporter on February 8, 1978
and later read an article published by this same reporter m
the Wall Street Journal dated February 10, 1978. This %s the
first I ever heard of any connections of General Khatami, or of
the STP Corporation.
Edwin
J.
Ducayet
276:
BARBARA SCOTT PREISKEL
522 FIFTH AVENUE
NEW YORK. N . Y. 10036
February
Mr. Kenneth A. McLean
Staff Director
Committee on Banking, Housing
13,
1978
and
Urban A f f a i r s
5300 Dirkson
Building
W a s h i n g t o n , D. C.
20510
Dear
Mr.
McLean:
Enclosed
questions
February
contained
8,
Enclosures
1978.
are
in
an
affidavit
Schedule
A of
and
answers
your
letter
to
of
the
277:
Barbara Scott Preiskel
February 13, 1978
ANSWERS TO SCHEDULE A
1.
T h e f i r s t and o n l y r e f e r e n c e to G e n e r a l K h a t a m i ' s a l l e g e d
o w n e r s h i p in A i r T a x i w a s o n J a n u a r y 2 5, 1 9 7 8 , a t a
S p e c i a l M e e t i n g of t h e B o a r d of D i r e c t o r s o f T e x t r o n I n c . ,
w h e n G . W i l l i a m M i l l e r i n f o r m e d the B o a r d t h a t a t h e a r i n g s
before the Senate Committee on Banking on January 2 4 , 1978,
it had been stated that General Mohammed Khatami m a y have
h a d a n o w n e r s h i p i n t e r e s t in A i r T a x i . T h e o n l y o t h e r
information which I have had on General Khatami's ownership has been obtained from newspaper reports of the Miller
confirmation hearings.
2.
See answer to Question 1. I have not heard any mention of
STP until receipt of these questions.
3.
I h a v e n o k n o w l e d g e or i n f o r m a t i o n w i t h w h i c h t o a n s w e r this
question.
4.
See answer to Question
1.
5.
See answer to Question
1.
6.
A t t h e m e e t i n g r e f e r r e d t o in a n s w e r to Q u e s t i o n 1, M r . M i l l e r
i n f o r m e d t h e B o a r d t h a t the f i r s t i n d i c a t i o n h e h a d h a d t h a t
General Khatami m a y have had an ownership interest was at
the h e a r i n g o n J a n u a r y 2 4 , a n d t h a t h e p l a n n e d t o c o o p e r a t e
w i t h t h e C o m m i t t e e in d e v e l o p i n g t h e t r u e f a c t s .
7.
See answer to Question
8.
N o , a n d to m y k n o w l e d g e B e l l h a s n e v e r m a d e a n y s u c h
9.
No.
10.
I h a v e n e v e r l e a r n e d or h e a r d t h a t a n y p a y m e n t w a s " p a s s e d on."
11.
T o m y k n o w l e d g e , B e l l and Textron have never maintained at any
t i m e a n y fund or o t h e r a s s e t s w h i c h w e r e n o t r e c o r d e d o n t h e
c o r p o r a t e b o o k s and r e c o r d s .
12.
N o , e x c e p t as r e p o r t e d in the a n s w e r s to Q u e s t i o n s
1.
payments.
1 and 6 a b o v e .
278
A F F I D A V I T
The undersigned, being duly
d e p o s e s and says that the answers to
sworn,
the
questions posed on the attached Schedule
A
are true and correct to the best of my
knowledge and
Dated:
belief.
2/13/7,8
Barbara Scott
Preiskel
Subscribed and sworn to before
this
13th
day of February,
ANTONIA L. FRIEDMAN
Notary Public, State of New York
No. 1324137
Qualified in Westchester County
Commission Expires March 30, 1979
me
1978.
Notary Public/or
person authorized
to a d m i n i s t e r o a t h s
279:
FROM
A F F I D A V I T
The u n d e r s i g n e d , being duly s w o r n ,
d e p o s e s and says that the answers to the
q u e s t i o n s posed on the attached Schedule A
are true and correct to the b e s t of my
k n o w l e d g e and b e l i e f .
Dated
Subscribed and sworn to before'; m e
this
/o-fL
day of F e b r u a r y , 1 9 7 8 .
Notary Public
person a u t h o r i z e d
to administer o a t h s
i )M1
280
SCHEDULE
A
1.
Did y o u know or h a v e y o u e v e r h e a r d t h a t G e n e r a l
Mohammed Khatami, C o m m a n d e r - i n - C h i e f o f t h e I m p e r i a l
I r a n i a n A i r F o r c e , had an o w n e r s h i p i n t e r e s t o f any n a t u r e i n STP ( S k e r k a t Shahami Tayar P a r s ) or A i r T a x i ,
I r a n i a n c o m p a n i e s , b e t w e e n 1960 and 1975?
V
2.
Which company d i d y o u know o r h e a r t h a t G e n e r a l
Khatami had an o w n e r s h i p i n t e r e s t i n - - STP o r A i r T a x i ?
When d i d y o u l e a r n o f G e n e r a l K h a t a m i ' s i n t e r e s t and who
did
you
learn
of
it
from?
-
~
3.
Were G e n e r a l K h a t a m i ' s i n t e r e s t s i n STP and A i r
T a x i common k n o w l e d g e i n Tehran? When was t h a t i n f o r m a t i o n common k n o w l e d g e ? Who knew? How d i d you l e a r n
that information?
4.
Did y or\n
u ^ s p e aok1' t+-o r\o r\-rr dA
i dt AB "Roll
e l l HHAI
e l i ci orr\r\tov
p t e r o rry -v
T e x t r o n o f f i c i a l s s p e a k t o you a b o u t G e n e r a l K h a t a m i ' s
i n t e r e s t i n STP o r A i r T a x i ? ^
5.
Which B e l l o r T e x t r o n o f f i c i a l s d i d you s p e a k
w i t h and when?
6.
What were y o u r c o n v ej r s a t i o n s w i t h B e l l
o f f i c i a l s about t h o s e m a t t e r s ?
7.
Did you know o r
B e l l or Textron o f f i c i a l s
an o w n e r s h i p i n t e r e s t o f
a t any t i m e b e t w e e n 1960
or TTeexxttrroonn
h a v e you e v e r h e a r d t h a t any
knew t h a t G e n e r a l Khatami had
any n a t u r e i n STP o r A i r T a x i
and 1975?
\r
v
V
281
SCHEDULE A
(continued)
8.
g i f t s or
directly
generate
D i d y o u know o r have you h e a r d o f any
o t h e r i t e m s o f v a l u e made by o r g i v e n
or i n d i r e c t l y t o I r a n i a n o f f i c i a l s t o
h e l i c o p t e r s a l e s i n I r a n b e t w e e n 1960
payments,
by B e l l
try to
and 1975?
9.
Did you know o r h a v e you e v e r h e a r d t h a t any o f
t h e $ 2 , 9 5 0 , 0 0 0 payment t o A i r T a x i m i g h t h a v e b e e n p a s s e d
on d i r e c t l y o r i n d i r e c t l y t o I r a n i a n g o v e r n m e n t o f f i c i a l s ,
i n c l u d i n g G e n e r a l Khatami, i n c o n n e c t i o n w i t h B e l l ' s
v
1972 h e l i c o p t e r d e a l w i t h t h e I r a n i a n g o v e r n m e n t .
10.
When d i d you l e a r n o r h e a r t h a t any o f t h e p a y ment was p a s s e d on and from whom d i d you l e a r n o r h e a r
o f it?11.
Did y o u know or h a v e you e v e r h e a r d t h a t B e l l or
T e x t r o n may h a v e m a i n t a i n e d a t any t i m e any f u n d o f m o n i e s
o r o t h e r a s s e t s w h i c h w e r e n o t r e c o r d e d on t h e c o r p o r a t e
b o o k s and r e c o r d s ?
^vr—
12.
Do you h a v e any i n f o r m a t i o n
M i l l e r , P r e s i d e n t and l a t e r Chairman
T e x t r o n , I n c . b e t w e e n 1960 and 1 9 7 5 ,
o f any o f t h e m a t t e r s r e f e r r e d t o i n
t h a t G. W i l l i a m
o f t h e Board o f
had any k n o w l e d g e
t h e above q u e s t i o n s ?
j
fa—
282
AFFIDAVIT
I, WEBB
and
say
that
knowledge
referred
dule A,
Banking,
the
or
to
C. HAYES,
I have
ever
Housing
OF
12
by
and
confirmation
DISTRICT
no present
having
in the
submitted
COLUMBIA,
,
duly
sworn,
recollection
heard of any of
interrogatories
the Staff
the
depose
of
any
matters
designated
of The
Urban Affairs
proceeding
and
_
III, being
Committee
Scheon
in the m a t t e r
on G. William
of
Miller.
SS:
Sworn
to before m e
this
y
of
1978.
N
NMOATTAIRDYV PI
My Commission Expires December 14, 1979
283
A F F I D A V I T
The undersigned, being duly
d e p o s e s and says t h a t the a n s w e r s to
sworn,
the
q u e s t i o n s posed on the attached Schedule
A
are true and c o r r e c t to the b e s t of my
knowledge and
Dated:
belief.
...
H U f e r -
Subscribed and sworn to before
t h i s
/ 4-
day of F e b r u a r y ,
me
1978.
Notary^iiblic/or
person authorized
to administer oaths
$ 0 ( L l i f u L < P
284
SCHEDULE
A
1. Did you know or have you ever heard that General
Mohammed K h a t a m i , Commander-in-Chief of the Imperial
Iranian Air F o r c e , had an ownership interest of any nature in STP (Skerkat Shahami Tayar Pars) or Air Taxi,
Iranian c o m p a n i e s , between 1960 and 1975?
/ V *
2. Which c o m p a n y did y o u know or hear that General
Khatami had an ownership interest in - - STP or Air Taxi?
When did you learn of General Khatami's interest and who
did you learn of it from?
titer
^
Q
o f
£
VJ r i ^ t f y i
w + T " * ^
3. Were General Khatami's interests in STP and Air
Taxi common knowledge in Tehran? When was that information common knowledge? Who knew? How did you learn of
that information?
4. Did you speak to or did Bell Helicopter or
Textron officials speak to you about General Khatami's
interest in STP or Air Taxi?
ft
o
5. Which Bell or Textron officials did you speak
w i t h and when?
6. What were your conversations with Bell or Textron
officials about those matters?
7. Did you know or have you ever heard that any
Bell or Textron officials knew that General Khatami had
an ownership interest of any nature in STP or Air Taxi
at any time between 1960 and 1975?
A>*
285
SCHEDULE A
(continued)
8.
gifts or
directly
generate
Did you know or have you heard of any
other items of value made by or given
or indirectly to Iranian officials to
helicopter sales in Iran between 1960
payments,
by Bell
if
try to
' °
and 1975?
9. Did you know or have you ever heard that any of
the $2,950,000 payment to Air Taxi might have been passed
on directly or indirectly to Iranian government o f f i c i a l s , J(j
including General Khatami, in connection with Bell's
1972 helicopter deal with the Iranian government.
10. When did you learn or hear that aiy of the paym e n t was passed on and from whom did you learn or hear
of it?
11. Did you know or have you ever heard that Bell or
t
Textron m a y have maintained at any time any fund of monies J U O
or other assets which were not recorded on the corporate
books and records?
12. Do you have any information
M i l l e r , President and later Chairman
T e x t r o n , Inc. between 1960 and 1975,
of any of the matters referred to in
2 3 - 5 8 6 O - 78 - 19
that G. William
of the Board of
had any knowledge
/V
the above questions?
o
286:
11iz l< >t A
^V
IS.
O o O I J M -A. .N-
CXNE
' ROCKEFELLER PLAZA
NEW YORK, N. Y. 10020
February 14, 1978
Mr. Kenneth A. McLean, Staff Director
Committee on Banking, Housing and Urban Affairs
5300 Dirk son Building
Washington, D. C . 20510
Dear Mr. McLean:
In re: your letter of February 8, 1978 to Directors of Textron
I n c . , I have completed the "Schedule A" questionnaire and
it is herewith enclosed together with a notarized affidavit.
If I can be of any further assistance, please do not hesitate
to call on me.
HEG:rfs
ends.
287
A F F I D A V I T
The undersigned, being duly
sworn,
d e p o s e s a n d s a y s t h a t t h e a n s w e r s to t h e
questions posed on the attached Schedule A
a r e t r u e a n d c o r r e c t to t h e b e s t o f m y
knowledge and
belief.
Dated:
JH±
Subscribed and sworn to b e f o r e m e
this
day of F e b r u a r y , 1 9 7 8 .
Notary Public/or *
person authorized
to administer o a t h s
. ELSIE D. WEINFUSS
Notary Public, State of New York
No. 41-4621331
Qualified in Queens County
Commission Expires March 30, 1978
288
SCHEDULE
A
1.
Did you know or have you ever heard that General
Mohammed Khatami, Commander-in-Chief of the Imperial
Iranian Air F o r c e , had an ownership interest of any nature in STP (Skerkat S h a h a m i T a y a r P a r s ) or A i r T a x i ,
I r a n i a n c o m p a n i e s , b e t w e e n 1 9 6 0 a n d 1 9 7 5?
2.
Which company did you know or hear that General
K h a t a m i h a d a n o w n e r s h i p i n t e r e s t in - - S T P o r A i r T a x i ?
When did you learn of General Khatami's interest and who
did you learn u
oi
f -LL
it i
from:
?
3.
W e r e G e n e r a l K h a t a m i ' s i n t e r e s t s in STP and A i r
T a x i c o m m o n k n o w l e d g e in T e h r a n ?
When was that information common knowledge?
Who knew?
How did you lear^!^f>
y^tftssstpa
" 4.
Did y o u speak to or did Bell H e l i c o p t e r or
Textron officials speak to you about General Khatami's
i n t e r e s t in STP or A i r Taxi?
with
5.
Which
and when?
Bell
or Textron
^
officials
did you
speak
V I & k j Z 6.
What were your conversations
officials about those matters?
with
Bell
or
Textron
7.
Did you know or have y o u ever heard that any
Bell or Textron officials knew that General Khatami had
an o w n e r s h i p i n t e r e s t o f a n y n a t u r e in S T P o r A i r T a x i
at a n y t i m e b e t w e e n I960, and 1975?
289
SCHEDULE A
(continued)
8.
g i f t s or
directly
generate
Did you know or h a v e you h e a r d o f any
o t h e r i t e m s o f v a l u e made by o r g i v e n
or i n d i r e c t l y t o I r a n i a n o f f i c i a l s t o
h e l i c o p t e r s a L p ^ ^ t i ^ r a n b e t w e e n 1960
payments,
by B e l l
try to
and 1975?
9.
Did y o u know o r h a v e y o u e v e r h e a r d t h a t any o f
t h e $ 2 , 9 5 0 , 0 0 0 payment t o A i r T a x i m i g h t h a v e b e e n p a s s e d
pn d i r e c t l y o r i n d i r e c t l y t o I r a n i a n g o v e r n m e n t o f f i c i a l s ,
i n c l u d i n g G e n e r a l Khatami, i n c o n n e c t i o n w i t h B e l l ' s
1972 h e l i c o p t e r d e a l w i t h ^ h ^ I r a n i a n g o v e r n m e n t .
10.
When d i d y o u l e a r n o r h e a r t h a t any o f t h e p a y
ment was p a s s e d on^and from whom d i d you leai^r o r ,hear
of
. . ___
. . .
T
11.
Did you know or n a v e you e v e r h e a r d t h a t B e l l
T e x t r o n may h a v e m a i n t a i n e d a t any t i m e any f u n d o f m o n i e s
o r o t h e r a s s e t s w h i c h were n o t r e c o r d e d on t h e c o r p o r a t e
books a n d - r e c o r d s ?
12.
Do you h a v e any i n f o r m a t i o n
M i l l e r , P r e s i d e n t and l a t e r Chairman
T e x t r o n , I n c . b e t w e e n 1960 and 1 9 7 5 ,
o f any o f t h e m a t t e r s r e f e r r e d t o i n
%
r
t h a t G. W i l l i a m
o f t h e Board o f
had any k n o w l e d g e
t h e above q u e s t i o n s ?
290
SCHEDULE
A
1. Did you know or have you ever heard that General
Mohammed K h a t a m i , Commander-in-Chief of the Imperial.
Iranian Air F o r c e , had an ownership interest of any nature in STP (Skerkat Shahami Tayar Pars) or Air T a x i ,
Iranian c o m p a n i e s , between 1960 and 1975?
2. Which company did you know or hear that General
Khatami had an ownership interest in - - STP or Air Taxi?
When did you learn of General Khatami's interest and who
did you learn of it from?
TtzlcZZ^
3. Were General Khatami's interests in STP and Air
Taxi common knowledge in Tehran? When was that information common knowledge? Who knew? How did you learn of
that information?
,
j
n
^
4. Did you speak to or did Bell Helicopter or
Textron officials speak to you about General Khatami's
interest in STP or Air Taxi?
5. Which Bell or Textron officials did you speak
w i t h and when?
6. What were your conversations with Bell or Textron
officials about those matters?
7. Did you know or have you ever heard that any
Bell or Textron officials knew that General Khatami had
an ownership interest of any nature in STP or Air Taxi
at any time between 1960 and 1975?
7 u
291
SCHEDULE A
(continued)
8.
gifts or
directly
generate
Did you know or have you heard of any
other items of value made by or given
or indirectly to Iranian officials to
helicopter sales in Iran between 1960
payments,
by Bell
try to
and 1975?
9. Did you know or have you ever heard that any of
the $2,950,000 payment to Air Taxi might have been passed
^ .
on directly or indirectly to Iranian government o f f i c i a l s , Jjj^t^C^
including General Khatami, in connection with Bell's
.
/
1972 helicopter deal with the Iranian government.
fr^
10. When did you learn or hear that my of the pay- /Up****.
m e n t was passed on and from whom did you learn or hear
^
of it?
—
11. Did you know or have you ever heard that Bell or
Textron m a y have maintained at any time any fund of m o n i e s ^ ^ ^
or other assets which were not recorded on the corporate
i
'
books and records?
Cr^ p ^ v
12. Do you have any information
M i l l e r , President and later Chairman
T e x t r o n , Inc. between 1960 and 1975,
of any of the matters referred to in
Notary Public: .-V.QL:
My commission expires
Sfc ^ Y ^ V
that G. William
of the Board of
had any knowledge
flo
the above questions?
RESPONSE FROM DEFENSE CONTRACT
AUDIT AGENCY AND U . S .
SYSTEMS
ARMY AVIATION
DIVISION
(293)
DEFENSE CONTRACT AUDIT AGENCY
CAMERON STATION
ALEXANDRIA.VIRGINIA 22314
u
DX
FtB
m
M r . Kenneth A . McLean
Staff Director
Committee on Banking, Housing and
Urban Affairs
U . S . Senate
Washington, DC 20510
Dear M r . McLean:
This responds further to your letter of January 25th regarding
Textron-Bell, and M r . Freed's telephone call of February 7th. M r . Freed
advised he was unable to visit the DCAA field office at the Bell plant in
Fort Worth during his time there last week, as we had previously arranged,
and asked that we forward documents pertinent to the five matters set forth
in your letter.
Four documents are enclosed; please note their classification FOR
OFFICAL USE ONLY.
Sincerely,
(
Deputy Director
Enclosures
1. Memorandum 7/20/76.
2 . Working paper for closing overheads, 6/18/76.
3- Pages 13 & 14, audit report #110-04-3-01354 . Pages 10 & 11, audit report #110-04-3-0154
(pages 4 & 5 of Exhibit A ) .
(295)
mr"-DEFENSE COmRA^T A'OOlT" AGENCY
ATLANTA
REGION
BELL HELICOPTER TEXTRON RESIDENT OFFICE
P. O. Box 4 0 2
FORT
WORTH.
TEXAS
7G101
20 J u l y 1976
MEMORANDUM FOR REGIONAL MANAGER, DCAA, ATLANTA
REGION
ATTENTION:
1 - S P / D a v i d Bryant
REFERENCE:
R e g i o n a l Memorandum No. 1 0 3 - 7 6 , d a t e d 8 January 1976
SUBJECT:
C o n s u l t a n t Costs
As r e q u e s t e d i n your memorandum o f 8 January 1 9 7 6 , we have
examined B e l l H e l i c o p t e r T e x t r o n 1 s a c c o u n t i n g r e c o r d s r e g a r d i n g
c o n s u l t a n t c o s t s f o r c a l e n d a r y e a r s 1973 through 1975. A summary
o f our f i n d i n g s i s a s f o l l o w s :
1.
I n o r d e r t o d e t e r m i n e t h a t we had g i v e n c o v e r a g e t o t h e
p o s s i b i l i t y o f c e r t a i n c o n t r a c t o r payments which may have o t h e r w i s e gone u n d e t e c t e d , a r e v i e w was made.of payments from s e l e c t e d
c o n t r a c t o r ' s check r e g i s t e r s .
As a r e s u l t , we i d e n t i f i e d s e v e r a l
names and amqunts which appeared t o be o u t o f t h e o r d i n a r y .
One
o f which was* I d e n t i f i e d t o t h e I r a n i a n D e a l e r p r e v i o u s l y a s s o c i a t e d
w i t h t h e p r o d u c t i o n c o n t r a c t p r o p o s a l s n e g o t i a t e d i n CY 1 9 7 3 . . We
were u n a b l e t o a s c e r t a i n the a c c o u n t d i s t r i b u t i o n from t h e c o n t r a c t o r ' s S p e c i a l Check R e g i s t e r .
S e v e r a l a t t e m p t s were made o v e r a
p e r i o d o f t h r e e o r f o u r months t o o b t a i n t h e n e c e s s a r y d a t a .
The
c o n t r a c t o r provided i n f o r m a t i o n on t h o s e names and amounts h e s t a t e d
were charged t o t h e Government, e i t h e r as d i r e c t c o s t s o r through
overheads.
The c o n t r a c t o r d e c l i n e d t o p r o v i d e i n f o r m a t i o n on t h e
o t h e r names and amounts on t h e b a s i s t h a t t h e y were commercial t r a n s a c t i o n s and t h e y did n o t f e e l an o b l i g a t i o n t o p r o v i d e t h i s d a t a f o r
audit.
The c o n t r a c t o r f i n a l l y s e l e c t e d c e r t a i n t r a n s a c t i o n s , a t our
r e q u e s t , i n o r d e r t h a t we c o u l d v e r i f y the method u t i l i z e d by BHT i n
r e c o r d i n g commissions c o s t .
These s e l e c t e d t r a n s a c t i o n s were r e v i e w e
t o a s c e r t a i n BHT's methodolpgy c o n c e r n i n g such c o s t s .
No. e x c e p t i o n s
were n o t e d ; however, t h e p o s s i b i l i t y f o r subsequent t r a n s f e r s d o e s
exist.
We approached t h e c o n t r a c t o r w i t h two names and asked where t h e s
amounts were charged.
The names and amounts were a s f o l l o w s :
Calendar Year
Name
Amount
Payment Made
A i r Taxi
A. H. Zenganeh
A. H. Zenganeh
Total
$1,000,000
1,000,000
950,000
1973
1974
1975 .
$2.950.000*
-These amounts may_qr_may. not_ be _the_ t o t a l amount i n v o l v e d .
297:
20 J u l y
1976
CoStS
•.r
v
j-ne c o n t r a c t o r v e r i f i e d t h a t A i r T a x i w a s an i-rartian
that A . H . Z e n g a n e h w a s the p r e s i d e n t of Air T a x i .
Dealer
The I r a n i a n p r o d u c t i o n c o n t r a c t s n e g o t i a t e d during c a l e n d a r y e a r
1973 did n o t p r o v i d e f o r any d e a l e r commissions and the above amounts
a r e n o t r e c o r d e d to t h e s e c o n t r a c t s .
BHT d e s c r i b e d to us the a c c o u n t s
t h e s e amounts were recorded a g a i n s t .
To the e x t e n t t h e s e amounts were
n o t s u b s e q u e n t l y t r a n s f e r r e d they a r e not charged a g a i n s t Government
c o n t r a c t s e i t h e r as a d i r e c t c o s t o r an i n d i r e c t c o s t .
We—do n o t know t h e purpose f o r which the payments were made. Howe v e r , we have no a u d i t e v i d e n c e t o i n d i c a t e t h a t t h e s e payments a r e
o t h e r than bona f i d e commissions paid t o the I r a n i a n D e a l e r .
Bell
c o n s i d e r s t h e payments to be proper commission payments as t h e T r e a s u r e r
indicated to u s .
However, B e l l ' s b u s i n e s s i n I r a n i s predominantly
under Government c o n t r a c t , e i t h e r as p r o d u c t i o n or t r a i n i n g and l o g i s t i c s s e r v i c e s , p r o v i d e d by B e l l H e l i c o p t e r Company I n t e r n a t i o n a l .
I t should be n o t e d t h a t on 1 August 1975, we responded t o an
i n q u i r y from DCAA Headquarters w h e r e i n c e r t a i n i n f o r m a t i o n on Air Taxi
was f u r n i s h e d r e g a r d i n g D e a l e r s Commission on B e l l ' s I r a n i a n p r o d u c t i o n
contracts.
S u b s e q u e n t l y , on 5 August 1975, Mr. G i l l e r s o f DCAA Headq u a r t e r s was informed by u s by t e l e c o n t h a t no commission c o s t s had
been p a i d t o A i r T a x i .
2. An a c c o u n t i d e n t i f i a b l e as " C o n s u l t a n t Costs" i s n o n e x i s t e n t .
Agreements which were i d e n t i f i e d by t h e c o n t r a c t o r as c o n s u l t a n t a g r e e ments a r e i n most c a s e s v e r y vague c o n c e r n i n g s e r v i c e s to be r e n d e r e d .
N e i t h e r c o u l d t h e c o n t r a c t o r , i n a l l c a s e s , show c o n s u l t a n t r e p o r t s
t o s u b s t a n t i a t e what s e r v i c e s were r e n d e r e d .
C o n s u l t a n t c o s t s f o r the p e r i o d a u d i t e d were booked t o an a c c o u n t
i d e n t i f i e d as "Other P r o f e s s i o n a l S e r v i c e s " w i t h i n the c o n t r a c t o r ' s
G&A overhead.
The amounts booked, by c a l e n d a r y e a r , were: 1 9 7 3 - $ 2 6 1 , 2 5 6 ;
1 9 7 4 - $ 2 1 7 , 8 3 8 ; and 1 9 7 5 - $ 3 0 9 , 4 5 2 .
These amounts were i d e n t i f i e d t o
s e v e r a l d i f f e r e n t c o n s u l t a n t s , some o f which were u t i l i z e d each y e a r .
The number o f s e p a r a t e c o n s u l t a n t s w i t h i d e n t i f i a b l e c h a r g e s were:
1 9 7 3 - 1 3 ; 1 9 7 4 - 1 8 ; and 1 9 7 5 - 2 2 . Only s e v e n ( 7 ) c o n s u l t a n t agreements
were shown t o the a u d i t o r s . Other p r o f e s s i o n a l services costs ranged
from a h i g h and low o f ( i ) 1973 ( $ 8 8 , 0 0 0 t o $ 6 4 1 ) ; 1974 ( $ 3 4 , 0 0 0 t o
$ 6 2 8 ) , and 1975 ( $ 7 5 , 0 0 0 t o $ 1 9 3 ) .
These c o s t s are b e i n g pursued t o
d e t e r m i n e t h a t t h e y meet th§ requirements o f ASPR XV, t h a t i s , t h a t t h e y
are a l l o w a b l e and a l l o c a b l e t o Government c o n t r a c t s .
1
In o u r o p i n i o n the p a y m e n t s m a d e to A i r T a x i and the P r e s i d e n t o f
Air Taxi are not charged against Government contracts and we do n o t
p l a n to e x t e n d a n y f u r t h e r a u d i t p r o c e d u r e s .
298:
J-. 1.0
SUBJECT:
20 July 1976
Consultant
Costs
B e l l h a s n o t p r o v i d e d a d e q u a t e s u p p o r t to d a t e f o r c e r t a i n c o n s u l t a n t c o s t s , b u t w e i n t e n d to f u r t h e r p u r s u e t h e s e m a t t e r s a s p a r t
of our overhead closing effort.
W e do n o t a n t i c i p a t e that Lhc r e s o l u tion of these c o n s u l t a n t costs will reveal payments of a suspicious
or illegal nature.
KENNETH W. FULLER
Resident Auditor
299:
WORKING PAPER FOR CLOSING OVERHEADS,
THROUGH ANALYSIS OF CONSULTANT COSTS
F O R T H E Y E A R S 19 7 3 , 1 9 7 4 A N D 1 9 7 5
18 J u n e
1976
General
A s a f o l l o w - u p t o p r i o r d i s c u s s i o n s w i t h BIIT's f i n a n c i a l a n d
accounting personnel, M r . Ted Treff, Treasurer of BHT, agreed to
further testing by DCAA of selected consultant costs.
Sampled items
consisted of cash transactions,of BHT.
Particular cash transactions
s e l e c t e d for r e v i e w for t h i s t e s t of 18 J u n e w e r e those o f A i r T a x i ,
a company originally scheduled to receive commissions on the Iranian
214 and A H - 1 J , and those of M r . A . - H . - Z a n g a n c h .
Mr. Treff advised
m e i n h i s o p e n i n g c o m m e n t s that'JMr. A . H . Z a n g a n c h A v a s P r e s i d e n t o f
Air Taxi.
Payments for commissions" w e r e m a d e either to t h e President
and/or the company - both were considered by BHT as proper recipients
of commissions.
I was also informed that Air Taxi had been a dealer,
in Iran since 1959 and BHT had been d o i n g business w i t h t h e m since
that date.
I w a s a l s o i n f o r m e d b y M r . T r e f f t h a t t o M r . .Treff*s k n o w l e d g e
n o n e of the officials at BHT believed or k n e w , of those t r a n s a c t i o n s
selected by u s , of charges to Government contracts, either directly
or indirectly.
In s h o r t , a l l c o s t s w e h a d s e l e c t e d in o u r s a m p l e
had either b e e n charged to commercial business and/or to p r o f i t of
B H T . N o n e had been charged or allocated to Government b u s i n e s s .
Selected Cash Transactions
for
Review
The following items were selected by us for tests against
vouchers for verifying that selected items initial costing w a s
charged to Government, contracts in the records of BHT.
Original
Name
Voucher No.
Acct.
to which Charged
Final Acct.
Air Taxi
0690474
1971
(1)
Air Taxi
Air Taxi
0790001
0690391
4501
2750
(2)
(3)
BIIT's
not
Charged
300:
•
(1) A c c o u n t 1 9 7 1 i s a s u s p e n s e a c c o u n t .
M r . Treff stated
a c c o u n t h a d been cleared o u t by B U T and that these costs
,*ere n o w c h a r g e d t o a s e l l i n g e x p e n s e a c c o u n t , a b e l o w t h e l i n e
cost n o t c h a r g e d t o G o v e r n m e n t c o n t r a c t s n o r t o c o m m e r c i a l b u s i n e s s .
iliS pense
(2) A c c o u n t 4 5 0 1 i s o t h e r e x p e n s e s , a b e l o w t h e l i n e c o s t a c count n o t charged'to Government contracts nor to commercial w o r k .
(3) A c c o u n t 2 7 5 0 i s a r e s e r v e a c c o u n t .
A c c o r d i n g to M r . T r e f f ,
an accrual entry w a s originally made debiting other expenses, below
„_fche—Line, a n d c r e d i t i n g t h e r e s e r v e a c c o u n t 2 7 5 0 .
Resident
Auditor
© J i t Report No.
/u-
110-04-3-0135
EXHIBIT B ©
Page 6 of-'7
b.
The c o n t r a c t o r proposed $62 per s h i p ' f o * - f u e l and o i l n e c e ^ a r y t o p r e p a r e the
s h i p s f o r d e l i v e r y t o the c u s t o m e r .
These s h i p s are t o b e ^ c r a t ^ ^ f o r o v e r s e a s ocean
s h i p m e n t ; t h e r e f o r e , t h e p r o p o s e d f u e l and o i l i s n o t r e q u i r e s
6 . Packaging and Crating;. The terms of t h e l e t t e r c o n t r ^ t p r o v i d e t h a t t h e 202 a i r c r a f t
s h a l l be c r a t e d f o r o v e r s e a s shipment p r i o r t o d e l i v e r y , / To a c c o m p l i s h t h i s t a s k the
c o n t r a c t o r proposed $ 4 , 4 0 4 per s h i p f o r p a c k a g i n g a n d ^ r a t i n g .
The $ 4 , 4 0 4 i n c l u d e s d i r e c t ,
and i n d i r e c t l a b o r s , m a t e r i a l and s u p p l i e s , a p p l i c a > * e b u i l d i n g p o o l , p a y r o l l appendages,
g e n e r a l and a d m i n i s t r a t i v e overhead (G&A), b i d d i n g ' a n d p r o p o s a l (B&P; and independent
r e s e a r c h and development (IR&D) c o s t s a s s o c i a t e ^ K w i t h p a c k a g i n g an AH-1J s h i p f o r o v e r s e a s
shipment.
Cost q u e s t i o n e d i s a r e s u l t of the>G&A, B&P and IR&D r a t e d i f f e r e n c e s e x p r e s s e d
on E x h i b i t D,
/
7. Foreign S e l l i n g Expense.
C o s t s q u e s t i o n e d were computed u s i n g amounts recommended f o r
a c c e p t a n c e , as shown on E x h i b i t D.
/
8 . Product Change A l l o w a n c e .
The >dontractor p r o p o s e d $ 2 0 , 0 0 0 per s h i p t o c o v e r ". . .
changes m h e l i c o p t e r c o n f i g u r a t i o n n e c e s s a r y t o meet s p e c i f i c a t i o n r e q u i r e m e n t s . . . " ( S e e
Page VI-10 of the p r o p o s a l ) .
A/more e x t e n s i v e e x p l a n a t i o n and a c o s t e l e m e n t breakdown
•were f u r n i s h e d t o the USABPA
t h e c o n t r a c t o r i n a l e t t e r d a t e d March 2 2 , 1 9 7 3 . The
USABPA reviewed t h i s p a r t i c u l a r c o s t and c o n c l u d e d t h a t I s was not a l l o w a b l e ( S e e Appendix 5 ) j
t h e r e f o r e , the t o t a l proposed amount of $ 2 0 , 0 0 0 per s h i p i s q u e s t i o n e d .
9 . D e a l e r ' s Commission.
The c o n t r a c t o r p r o p o s e d $ 1 , 3 9 7 , 5 2 7 f o r D e a l e r ' s Commission ( $ 6 , 7 9 3
p e r s h i p x 202 s h i p s = $ 1 , 3 7 2 , 1 8 6 p l u s n o n r e c u r r i n g of $ 2 5 , 3 4 2 = $ 1 , 3 9 7 , 5 2 7 ) .
In our l e t t e r
d a t e d A p r i l 17, 1 9 7 3 , we informed t h e USABPA t h a t t h e c o n t r a c t o r had n o t provided s u p p o r t i n g
documentation r e g a r d i n g t i e proposed D e a l e r ' s Commission.
T h e r e f o r e , t h r o u g h n e c e s s i t y , the
proposed amount i s c l a s s i f i e d a s u n s u p p o r t e d .
I t i s noted t h a t Page 1 - 5 of t h e p r o p o s a l c o n t a i n s a s t a t e m e n t t h a t BHC has employe4-<«.
r e t a i n e d a company or p e r s o n o t h e r than a ! f u l l time bona f i d e employee t o s o l i c i t or sfceure
this contract.
I n a d d i t i o n , BHC s t a t e s t h a t a Standard Form 1 1 9 , w h i c h i s r e q u i r e d by
ASPR 1 - 5 0 7 , w i l l be s u b m i t t e d d i r e c t l y t o t h e C o n t r a c t i n g O f f i c e r .
To a d e q u a t e l y
need t o r e v i e w - t h e
e v i d e n c e t h a t the
Agency Maintained
ASPR, 1 - 5 0 5 . 4 .
e v a l u a t e t h e p r o p r i e t y of t h e proposed D e a l e r ' s Commission, we would
agreement between BHC and t h e d e a l e r and o b t a i n s u f f i c i e n t documented
commission i s p a i d t o a "Bona F i d e E s t a b l i s h e d Commercial o r S e l l i n g
by the C o n t r a c t o r f o r the Purpose of S e c u r i n g B u s i n e s s " a s d e f i n e d i n
Audit Report 1 1 0 - ^ - 3 - 0 1 3 4 '
'
EXHIBIT
Page 4 i
•
. t h e r e f o r e , i n noncompliance with A S P R 1 5 - 2 0 1 . 4 ind 1 5 - 2 0 3 . Vpk impact of t h i s i n e q u i t y
was c o n s i d e r e d i n the r a t e s recommended f o r a c c e p t a n c e by t h i s o f f i c e , and we understand
t h a t c o n s i d e r a t i o n was g i v e n during the r a t e r e g o t i a t i o n s . /
This item of noncompliance has been d i s c l o s e d fccrthe c o n t r a c t o r by the ACO.
In a d d i t i o n to t h o s e a r e a s d i s c u s s e d above, o t h e r a r e a s o f noncompliance are
shown i n our Audit Report No. 1 1 0 - 1 8 - 3 - 0 1 5 6 , dated May 11, 1973, which i s a t t a c h e d a s
Appendix 8. This report i n c l u d e s a r e a s of nor compliance on which a d e t e r m i n a t i o n has
not y e t been made by the ACO. Shown below are t h o s e a r e a s :
( 1 ) Tooling L i a i s o n Labor i s c h a r g e d ^ i r e c t on the p r o d u c t i o n phase, whereas
d i s c l o s e d p r a c t i c e s p r o v i d e tljiat such c o s t s / w i l l be i n c l u d e d i n an expense p o o l f o r
allocation.
,
/
(2) Bidding and Proposal Cost a r e chaxgsd d i r e c t but the d i s c l o s e d p r a c t i c e s
show t h a t such c o s t w i l l be charged t o a p o o l f o r a l l o c a t i o n ,
(3) Labor for a d m i n i s t e r i n g the C/SCSC system i s proposed d i r e c t , whereas
a d m i n i s t r a t i v e c o s t s are i n c l u d e ^ i n the overhead expense p o o l s .
*
similar
Costs have not been q u e s t i o n e d i n t h i s p r o p o s a l r e l a t i v e t o the B&P and C/SCSC a r e a s
because the t o t a l impact i s / n o t knownj' however, the t o o l i n g l i a i s o n labor i s q u e s t i o n e d
on Schedule A - l , Note 7 . /
>
2. The c o n t r a c t o r proposed d e a l e r ' s commissicn a t $ 3 , 6 3 0 , 8 3 7 based on 1% o f . p r o p o s e d
t a r g e t p r i c e . Since s u p p o r t i n g documentation was r e q u e s t e d from the c o n t r a c t o r f o r the
proposed d e a l e r ' s commission, but ne.ver r e c e i v e d , - the m a j o r i t y of the proposed amount
was c l a s s i f i e d as unsupported a s s t a t e d i n oui l e t t e r May. 5, 1973. As d e a l e r ' s commission
i s based on a percentage o f ' p r i c e , c o s t q u e s t i o n e d r e l a t i v e t o d e a l e r ' s commissions
represents
of t o t a l c o s t q u e s t i o n e d i n c l u s i v e of a p p l i c a b l e p r o f i t .
A d d i t i o n a l l y , i t s h o u l d be noted t h a t Page 1 - 5 of the p r o p o s a l c o n t a i n s a s t a t e m e n t
t h a t BHC has employed or r e t a i n e d a company 02 person o t h e r than a f u l l - t i m e bona f i d e
Audit Report 1 1 0 - 0 4 - 3 - 0 1 5 4
EXHIBIT AI '
Page 5 o f | 5
employee t o s o l i c i t or s e c u r e t h i s c o n t r a c t .
A l s o ; BHC s t a t e s t h a t a Standard Form 119,
which i s r e q u i r e d by ASPR 1 - 5 0 7 , w i l l be submit t e d . d i r e c t l y t o t h e C o n t r a c t i n g O f f i c e r .
To a d e q u a t e l y e v a l u a t e the p r o p r i e t y o f the p r o p o s e d D e a l e r ' s Commissions,-we would
need to,-review the agreement between BHC and 1h2 d e a l e r and o b t a i n s u f f i c i e n t documented
e v i d e n c e t h a t the commission i s p a i d t o a "Bona F i d e E s t a b l i s h e d Commercial or S e l l i n g '
Agency Maintained by the C o n t r a c t o r f o r t h e Purpose of S e c u r i n g B u s i n e s s , " a s d e f i n e d inASPR 1 - 5 0 5 . 4 .
3 . The c o n t r a c t o r p r o p o s e d a p r o f i t r a t e of 16,0% on t a r g e t c o s t b e f o r e dealer's commissions.
Further comments c o n c e r n i n g t h e p r o p o s e d p r o f i t a r e c o n t a i n e d i n Appendix 5 . '
304:
D E P A R T M E N T OF THE ARMY
HQ, US ARMY TROOP SUPPORT & AVIATION MATERIEL READINESS COMMAND
4300 GOODFELLOW BOULEVARD, ST. LOUIS, MO 63120
DRSTS-G
3 FEB 1978
Mr. Kenneth A. McLean
Staff Director
Senate Banking and Urban
Housing Committee
Dirkson Senate Office Building
Room 5300
Washington, DC 20510
Dear Mr. McLean:
Reference is made to a telephone conversation between Staff Members
of the Senate Committee on Banking, Housing and Urban Affairs and
members of this Command on 30 Jan 78. At that time, the request was
made for information in the contract files for the procurement of 287
helicopters for the Government of Iran (GOI) regarding agents f e e s /
commissions paid by Bell Helicopter Textron to Air Taxi, Incorporated.
The course of events concerning agents fees/commissions for aircraft
procured for the Government of Iran (GOI) is as follows:
The GOI requirement was for 287 Model 214 Helicopters. The contractor, Bell Helicopter Company (BHC), initially proposed an amount
of $3,630,873 for agents fees/commissions. The Government and BHC
through negotiation later reached agreement for a total of $287,000 or
$1,000 per helicopter as the agents fees/commissions. After the
completion of the negotiations, the Shah of Iran made known that he
refused to pay any agents fees/commissions for procurements for GOI.
The Government and BHC reopened negotiations for the helicopters and
agreement was reached to remove agents fees/commissions from the
contract.
305:
Research of the contract files has produced the inclosed documents
which reference agents fees/commissions:
a . Class A Awards Board Minutes which made reference to
Briefing Charts.
— s —b. Briefing Chart, page 6, which indicates the contractor had
proposed $3.6M or 1% of the contract price as dealers commissions
and that through negotiations this proposed amount had been reduced
to $1,000 per aircraft, or $287,000.
c . Briefing Chart, page 7, which indicates that the $287,000,
which was negotiated, was to be a cost to the contract without the
application of a profit.
d . A memorandum from the Cost Analysis Office to the Contracting
Officer (DA Form 2496), dated 9 Aug 77, subject: Memorandum of
Negotiations to Definitize Letter Contract DAAJ01-73-C-0248, which
indicates that negotiations were completed on 16 Jun 73, and that the
contractor had proposed dealers fees/commissions of $3,630,837 and
that the dealers fees/commissions had been negotiated for a value of
$287,000.
e . Memorandum of Record, dated 22 Jun 73, from HQ, Army
Materiel Command, which indicates an inquiry concerning agents f e e s
by the Shah of Iran.
f . BHC Letter of 4 Jun 73, 22:AAH;nk-1009, which confirms the
negotiation of $287,000 total for agents fees/commissions without the
application of profit.
g . Message, P2222132 Jun 73, from ASD: ISA(SA)/DSS, subject:
Agents Fees in Iran FMS, which clearly indicates that the Shah of Iran
had refused to accept or pay any agents fees or commissions.
h . Page 57 of Contract DAAJ01-73-C-0248, Clause J.27 entitled
Other Costs, which indicates that the contractor and the Government,
after further negotiations, removed agents fees/commissions from the
contract.
306:
The contract f i l e s indicate that agents f e e s / c o m m i s s i o n s were not
included in the contract for the 287 helicopters for the Government
of Iran, either upon execution of the initial definitization of the letter
contract, or at any subsequent time. Also, the f i l e s do not show that
the US Government ever paid Bell Helicopter Textron any amount a s
agents f e e s / c o m m i s s i o n s under the above mentioned contract.
Sincerely
8 Incl
As stated
307:
CLASS "A" AtfAIlDS BCAUD MINUTZS
A Claoa "A" Awards Board l i f t i n g convened at 0900 h o u r s , 22 June 1973,
w i t h LTC David J . J o h n s t o n , E x e c u t i v e O f f i c e r , D i r e c t o r a t e f o r
Procurement & P r o d u c t i o n , p r e s i d i n g . The f o l l o w i n g were p r e s e n t :
OONcaiif-r^iCE
>
LTC David J . Johnston
. COL Elewick Newport
t
I-lAJ K i c h a o l R. K i r i l a
^ C h r i s t i n e E. i l i r s y
Dir f o r Proc & Prod
Ch-iiruvm
P r o c u r e ^ n t Div
P r o d u c t i o n Div
Cont P r i c c Ana* Ofc
E. J . llollr&sn
D i r f o r Prod Ascur
Joyce I . A l l e n
Legal Ofc
LTC George T. Keu
Dir f o r PJ
C l i f f o r d E. Siais
Dir f o r Malntenanua
Jatacs IT. iicjtthu^s
Elnrrr J . Danniek
Felix Gjiiisio
Kaltor J . S e i t h e l
Karl T. Gat H a
John A. HcLsughliti
Kenneth P. Lubar
I r a n i a n Ac f t Pro^ mO
John D. V.a t k i n s
R. II. ICimutis
W. E. l l a n s e l l '
CW4 Wta II, pfirker
Dir f o r PvDiS
Sys i>ngr Spt Div
Dir f o r proc U Prod
Prod A c f t Br
I n t e r n a t i o n a l Log
Dir f o r Proc & Prod
Prod A c t t Br
Cont P r i c e Anal Ofc
Cont P r i c e Anal Ofc
Prod A c f t Br
Prod A c f t Br
Joim Seba
J . R. Kurtz
. .
Roota Janes / t d f r
Me Ibn 11. N c u b s ^ c r
Prod Ac f t Br
Contracting O f f i c e r
P o l i< Coaplianco Div
Reporting Stenographer
Joseph A, Murray
y/»J E. M, Bshniuk
Seymour B. Gordon
J>r...
The Board c o n s i d e r e d proposed M c v i i f i c s t i o n
L e t t e r Contract D A A J 0 1 - 0 2 4 3 \-:.:.th B a l l
Texns, f o r 287 each Mo-l'-l 2I V. IfciJ lco;rt*ra
d a t a «nd support f o r thy I r a n i a n (.-ovcinr^nt
prict of $ 3 3 3 , 5 3 7 , 0 0 0 . 0 0 .
P20005 f o r d a £ i t I s a t i o n of
l l e l i c o p t o r Coiv..i.nys ; r o r t Uorth,
75
. n a i n - u , end re lated
e t <an e s t i m a t ^ l t o t a l contract,
The p r e s e n t a t i o n was made by Mr. J . R . Kurtz, Contracting O f f i c e r .
The P r e s e n t a t i o n i s incorporated as pagea 2 - 3 of the Minutes.
308:
- Proposed PZ00G3, Oatrficfc 8AAJ01~73-C-C248
Contracting O f f i c e r , Kr. J* R« Itets,. illustrated hits background briefing
with Viewgraph oiideo, ccpleo ot which ere attached go Xnc losurc 1.
Tho presentation Co the /Ls-rarxlo E-card vetJ written* Contracting Officer
stated, vhile several other ectioao earo taking piece; as a coaseqtience,
chan^ea had to bo laado to tho package that had been pointed out to uo
by ciaiabars of tha Coatirscti«3 O f f i c e r ' s Teanji find by the Iranian Aircraft
Program Product Ksasger'a Office (PHD).
Contracting O f f i c e r stgted ho has made changes in the package that the
Board w&q given to approve, 60 follows:
(1)
Pago l.a*
Block 1 reads* "KOD FZG005U instead of "MOD PZ0G03".
b. Statement following tho Table of Ccntento, wo have changed to
read, "This Supplemental Agreesxoat P20005 i s the definitive contract
contemplated by Latter Coatx&ct DAAJ01-72-C-0248 dated 72 Dec 22, as
Qvzz&ded by Kodo P0001 tfiru PQG04*
Hie seterisk (*) a f t e r "POO04"
indicate* 'fcod P0003 wse not issued."
(2) Tha PH O f f i c e jrecoasaeaded (ead while the change ha© not been made
oa the peg®), I t was agreed that paragraph E.3, Billing Procedure for
Item 0003 should bo utreugtheEed. I t was agreed that the Contracting
O f f i c e r would ircita a l e t t e r to the AGO, Army Bell Plant A c t i v i t y ,
requesting tlmt he s e t up control procedures, «nd that those control
procedures would ba approved through tho FH O f f i c e . Legal cseccber queried
w i l l we re&ave thio, ease he cubes!to the report, or does he s t i l l get paid
upon submission? AUG; tha actual negotiation cotes reveal that It was
agreed that it a f t e r 60 days epproval or disapproval had not been gives,
B e l l Helicopter Company *«mld ha paid. However, i f the plea ultimately
was not approved or accepted, paycrant of tho f i r s t voucher thereafter
would he withheld u n t i l approval of that particular test plan. The santo
procedure would bo followed throughout tho contract.
(3) Page 16. SECTXQE E. 6 PHXCIKQ CONDITIONS (CONTINUED) Paragraph t .
I t ciow reeds, 'The contract t&tfgefco
schedules include -en amount for
Revision E.-3 t s t h e AQS 214-974*041 dated 30 KAR 73." Ia answer to
Chairra&n, Contracting Officer etui ted tho target cost does not encompass
any part of
(4) Page 17. •nr.S HELICOPTERS SERIAL 8U15BEES" has been deleted
because we were not able to establish with MAAG and the country, the S e r i a l
lumbers.
(5) Pags 18. The socond Ilea of Section F . l MODEL SPECIFICATIONS
w i l l read, "
ao aaseod«d by Rev is ion
dated 7 Har 73 —
309:
rr^OCS. C4W»cr»«t UAAjUl-73-C-024a
S 4 C t t c o 1.3 PRODUCT ASSUFANCE PROGRAM PLAN (1)
irch lina, -after "Englnaerini; Draviags,,> insert
(7)
Page 33.
The established c c i l i n g to $344,037,000.00.
(6)
pege :4.
Section J . 3 .
IKCTKTIVE PRICE REVISION (FIRM TARGET)
(1972 JUN) (COSiT'd) (2). Ioseet:ioa3 should be made in the blsnka In
lines 6 and
to read as follows: 'Greater thaa the total target coat
-^•Xotal target profit lees tvaaty percent (20%)
. and "Leca than
the total target c o s t - — - T o t a l target profit plus sixty percent
(60%)
(9) Page 46. Section J . SPECIAL PROVISIONS, J . 11 SIKGLS SOURCE
FOR EQUIPMENT, b. The w w l "Reparable" has been corrected in the
updated varsion.
(10) Pago 60. la Section J.30 C ® V & m ® m FURNISHED PETROLEUM,
OILS AKD LUBRICANTS. (b), th© first £ad second lines will reed, "In
the evesfc a situation or condition crises whereby the Governaeat is
urtabla to furnish the fual cu*i oil lCeo& set forth in Paragraph (a)
afeove asd the ;;chedule in « timely osrwer
(11) Pago 62. K.3 ACCOUNTING AKD APPROPRIATION DATA. Under the
final U n a , "(12B3)", add "A58AXK".
(12) Psgae 65 aad 66. Section L.2. Second line should read
"REVISION N O . 11 AKD BBC'S TSROUOl K Q . 108."
(13) Pages 70 fckru ?S. Sectioa L.5 GWUND AMD FLIGHT RISK (1968
APR). Worda that read "Govemraeat Representation" or "Contracting
Officer" should rs&d "Govermaant Plight Representative".
(14) Page 76. Sectioa M , LIST
OP DOCUMENTS, EXHIBITS, AND OTHER
M
ATTACHMENTS. C h a c ^ 1. to reed ^AED/C0NTKACT, STANDARD FORM 26".
(15) J . 10 PROCEDURES FOR SELECTION AND DELIVERS OF SPARS PARTS,
SPECIAL TOOLS, GRCiRsO SUPPORT AND TEST EQPIFMEHT, ITEMS 0004 and 0005.
Tha words, "thirty (30) days" ehould read "thirty days (30)".
Chairman. queried with reference to the following:
(1) Section B . 6 . PRICING CONDITIONS. There are several cases
where it is indicated that cmouata arc not in here against target
coats. Are thoea planned expanses that will eventually accrue against
the target cost? Thoro is a majsictum flexibility of 10% on the
sales case of $362,000,000.00, and two major line items which arc not
priced at this tiiaa on which you have put a ceiling - one of $15M and
310
^
BAJU01-73-C-0248
3
_
YavX
present cailinfi to the maximum FMS ccso
r f j ? ; . S T O O O . O O cushion. The ceiling «*ount of $15M
JT^
tho d a w will take $1711 of that. Are those
r«*llv\;o<>d ouab«x« which vo.ild oaly give a million dollars to p&sy with,
And C^uld the *=**mta not listed possibly boost uo over that FMS case?
Coattactlxss Officer replied that the dollero that tould possibly be
generated by tho changes that ere anticipated in the AQS, tho data
package ted Qiuility Assurance prosraessj would amount to about & half
aillion dollars in coat© over tfhat we havo reflected in tho contract.
-Be picas to write aa administrative obligation against tho contract but
not to shew it in tha contract, to fund theses contingencies that are in
Sections E and 1.6, with the goal of definitising within 120 days.
Hr. Joseph Murray, representative from Production Aircraft Breach,
interposed, for clarification, that there are funds available in the
P&S caso for spare parte end special too I a of ©luiost $6(^4 vhich were
not mentioned previously, so
fact the 107. flexibility ia not in danger.
Contracting Officer replied thfit he thought he answered that originally
vhea he said that tha contract oaly reflects the items which we have
negotiated: The air frame, which ia in the sales case at $295,000,000.00;
spare engines, $11,200,000.00; the military qual(ification), $29,000,000.00.
There ia a lino for concurrent: ©pare parts that are not provisioned, nor
have we negotiated, but we have ia reserve $56,165,900.00 for spares
which include air fracas eogine and avionics, and we have $3,099,100.00
for special tools, ground support and test equipment.
Because wa have obligated tha Government to a degree in the letter contract
the Contracting Officer feels ha haa to continue that obligation. However, he does not intend to put all of these dollars on this contract.
He only intends to obligate $15,000,000.00 for Ite» 4 , and $2,000,000.00
for Item 5 , on this contract.
M r . Murray directed attention to Page 4 5 . J.10 provide© for an interim
roleosa procedure for Spare Parts and Special Toole. On page 12, Contracting Officer haa "turned Bell on" for $15,000,000.00 worth of Spare©
and $2,000,000,00 worth of Special Tools. Those $17,000,000.00 are
included in the total contract amount on the face of the document; they
are not included in tha computations on .the charts (Incloeure I),
they are included ia tha m S Sales Case at approximately $60,000,000.00.
More aoaey will be funded
time progresses.
Procurement Division cumber, COL Elswick Newport, queried with reference
to Section B.l, SUPPLIES AKD SERVICES TO PS FURNISHED SCOPITEOF WORK,
Iteta 0001, which ©tateo that this covers R-2; has he gone through R-2
or R-3? Contracting Officer replied that R-3 is contemplated. He has
a DF from tho Product Manager giving the approval of R-2 to the spec,
214-A. They have indicated they contemplate some changes, and any
changes they might make in R-3 are subject to cost increase.
Production Division member, MAJ Michael R. Kirila, had no questions.
Contract Coat & Price Analysis w&raber, Miss Christine E . Hirsy, deferred
to Mr. John D . Watkins, who had no questions.
311:
AMSAV-PPPUU
ATTN: M r . Kurtz
Memo of Negotiations to Definitizc Letter Contract
M o . IMA.In] -73-C-0248
M T x
9 Aug 73
C
AMSAV-PO
J . D . Watkins/ds/510]
CAB 39-7-
1 . Negotiations with Bell Helicopter Company (BHC) for the design, development and
production of two-hundred and eighty-seven (287) Model 214A helicopters plus related
flight tests/evaluations and data were concludcd at AVSCOM, St. Louis, Missouri on
June 16, 1973. The subject helicopters and related data are being procured by the
U . S . Government for the Iranian Government. The contractor's initial proposal, as
- -adjuS'tgd for additional cost considered during negotiations, and the final agreement
are summarized as follows:
Proposed
Target Cost
Target Profit
Dealer's Commissions
Target Price
Contract Type:
$368,885,705
Negotiated
287,0<W~
$316,537,000
Fixed Price Incentive (Firm Target)
Ceiling Price
Ceiling Factor
$412,975,722*
$344,037,000**
130%
125%
75/25%
75/25%
80/20%
40/60%
Profit Rate
Sharing Agreement:
Over - Gov*t/Contractor
Under- Gov't/Contractor
^Includes dealer's commissions at 1 3 0 % .
**Includes dealer's commissions at 1 0 0 % .
2.
Personnel representing the parties at negotiation sessions were as follows:
Government:
*Mr.
Mr.
Mr.
Mr.
Mr.
**Mr.
J . R . K u r t z , Contracting O f f i c e r , A V S C O M
Bob W e i g e l , Contracts Specialist, AVSCOM
J . D . W a t k i n s , C h i e f , Price/Cost Analysis Branch, AVSCOM
Walt Seithel, Program Manager's O f f i c e , AVSCOM
Earl Gatlin, Program Manager's O f f i c e , AVSCOM
Elmer B a n n i c k , Program Manager's O f f i c e , AVSC0H
n A FORM
U F \ \ FC8 M
A
•REPLACES oo ronw K, EXISTING SUPPLIES OF WHICH
ez
ISSUED AMD USED UMT'.U I FEU 6S UHLESS SOOKER EXKXJTEC.
•6 croi 1972 7«»-«JO/lOOO
312
AMSAV-PO
SUBJECT:
9 August 1973
Memo of Negotiations to Definitive Letter Contract N o . DAAJ01-73-C--0248
**Mr. R . K i m u t i s , Price A n a l y s t , AVSCOM
M r . Allen K e e n e r , Price A n a l y s t , U S A Bell Plant Activity
* * M r . C . B . H a r t , Auditor-Supervisor, DCAA
M r . J . M . M i l a m , Auditor-Pricing Team Supervisor, DCAA
**Col. N e w p o r t , Deputy Director for Procurement, AVSCOM
U/0 P a r k e r , Contracts Specialist, AVSCOM
**Mr. Walt Burrows, A u d i t o r - P L A , DCAA
Contractor:
*Mr.
Mr.
Mr.
Mr.
Mr.
E . L . F a r m e r , Vice President Finance
G . J . L i n d s e y , Contracts A d m i n . M g r . „
R . G . H o d s o n , Contracts Administrator
C . P . G r a y , Contracts Administrator
A . A . H u b b a r d , Chief Estimator
*Principal Negotiators
**Limited participation - confined primarily to first week's s e s s i o n s .
3 . Audit Report N o . 110-04-3-0154 addressing the original proposal w a s issued on
M a y 15,1973. As time allowed, update information was furnished the Government team
informally b y update w o r k p a p e r s .
4 . Prior to negotiations w h i c h commenced a t A V S C O M , S t . L o u i s , M i s s o u r i , on June 8 ,
1 9 7 3 , the Government and Bell Helicopter Company (BHC) held Fact Finding sessions at
the contractor's facilities in F t . W o r t h , T e x a s , during the w e e k of M a y 2 1 - 2 4 , 1 9 7 3 .
Fact finding sessions resulted in the Government submitting a list of questions to the
contractor for w r i t t e n r e p l y . The contractor's answers to these questions w e r e received
on M a y 31 and June 1 . The Government team assembled at AVSCOM on June 4 and 5 and
reviewed the contractor's answers to the fact finding questions. O n the morning of
June 6 t h , the Government met w i t h BHC to discuss in more detail twenty-6ne of the
questions w h i c h w e r e considered to b e inadequately answered. A l s o , on this date the
contractor presented a negotiation update p r o p o s a l , which reflected m o v e m e n t of cost
for receiving and inspection test parts from contract line item three (3) to line item
one C D • The evening of June 6 and all of June 7 w e r e spent by the Government team in
analyzing the contractor's latest proposal and preparing the Government's update
position and go-in o f f e r . The Government's first offer was presented to the contractor
o n the morning of June 8 t h , and that afternoon the undersigned presented in detail
the basis for the Government's position and reasons for our differences w h i c h are
briefly summarized below:
a
R
*
a t e s : Since plant-wide forward pricing rates had previously b e e n n e g o t i a t e d ,
the only difference consisted of recognition by the Government of historical direct
labor rate variances betx^een FPI production contract average rates and plant-wide rates.
Variances recignized by the Government w e r e :
313
AMSAV-PO
SUBJECT:
9 August 1973
Memo of Negotiations to Definitive Letter Contract N o . DAAJ01-73-C--0248
Labor Category
(Over)/Under
Plant-Wide Rates
i
Manufacturing - P r o d . Phase
Manufacturing - Development Phase
Tool Make
Production Engineering
Engineering Test & Evaluation
Engineering Design
Pilots .
T e c h . Pubs
Spares & Photographic
$ .02
(-166)
.017
.053
.074
.274
.255
(.025)
(.046)
b . Direct Expense: Differences in direct expense costs of $365 per unit w e r e due
to (i) $50 for fuel and oil consumption per the technical review and (ii) $315 for
packing and crating cost due to impact of negotiated forward pricing r a t e s .
c . Recurring M f g . Direct Labor Hours per Unit: The contractor initially proposed
14,125 hours per u n i t . This valve was subsequently updated to 13,962 hours to recognize
a factual difference pointed out by audit in our exit conference. The Government's
first offer was based on 10,865 hours per u n i t . The difference of 3,097 hours per unit
was due to the following reasons:
Labor Hour
Reasons
Difference Per Unit
502
114
Recognition of Steeper Curves
Recognition of Common Parts
Recognition of Drive System Peculiar
Historical Curve Slope
Recognition of Nodal Beam Technical Evaluation
Nonrecognition of -25% M i s c . Unidentified Parts
and A l l of the 3% Bump Factor
Applicable Process Labor
TOTAL
947
743
411
• 380
3,097
d . Nonrecurring Engineering Hours: The following engineering direct labor hours
differences w e r e based on the results of the Government technical evaluation:
Nonrecurring Labor
Hour Difference
Tool Make
Production Engineering
Engineering Test & Evaluation
Engineering Design
Pilots
Tech Pubs
Spares Engineering
Photographic
26,478
36,168
16,152
54,727
1,362
10,195
7,822
678
314
AMSAV-PO
SUBJECT:
9 August 1973
M e m o of Negotiations to Definitive Letter Contract No. DAAJ01-73-C--0248
Additionally, there were 32,530 nonrecurring manufacturing hours for spare and test
parts which had been questioned by audit for non-recognition of these quantities in
the development program curve span.
e . Material and Subcontract Cost: The contractor's original versus negotiation
update proposal reflected numerous changes in the material and subcontract recurring
cost per helicopter ,as summarized below:
' Original
M a t '1 l - Engine (1)
M a t 1 - Raw (2)
M a t ' l - AN/Vendor (3)
Subcontract (4)
$157,008
24,363
98,917
161,402
Cost Per Unit
N e g . Update
$158,435
23,339
60,146
169,906
C l ) The engine estimate w a s increased to recognize results of BHC's negotiation
w i t h the v e n d o r .
(.2) Raw Material was reduced to recognize factual differences discussed in audit
exit conference.
(3) Hydraulic components valued at $13,428 w e r e reidentified as subcontract cost
in u p d a t e . The remaining reduction of $25,343 per unit was in recognition of factual
differences presented in the audit exit conference.
'(4) The net $8,504 cost per unit includes a reduction of $4,924 due to factual
differences discussed in audit exit conference offset by the hydraulic AN/Vendor
dollars of $13,423 which, w e r e reidentified as subcontract items. (See Note (3), a b o v e ) .
5 . The Government recommended material and subcontract cost per unit and resulting
differences per unit as presented below were due primarily to (i) difference in material/
subcontract factor w h e r e b y BHC proposed 26% versus the Government's recommended 12%
increase factor for escalation, vendor qualification and miscellaneous charges, (ii)
recognition of only 75% of unsupported miscellaneous unidentified p a r t s , and (iii)
recognition of a budgetary quote received from H R & M for hydraulic p a r t s . The H R & M
quote amounted to a difference in subcontract cost of $14,043 per u n i t . Total
difference per unit is as follows:
Difference Per Unit
Material - Raw
Material - AN/Vendor
Subcontract
$3,173
10,277
37,101
315
AMSAV-PO
SUBJECT:
9 August 1973
Memo of Negotiations to Definitive Letter Contract N o . DAAJ01-73-C--0248
Other minor differences existing in nonrecurring cost areas w e r e also explained in
d e t a i l . After this briefing, the contractor requested and received our detailed computations. Based on the contractor's request, negotiations were terminated until the
following Tuesday, June 12, so that they might have an opportunity to study the basis
for our differences. The contractor returned to F t . Worth and the Government team
remained in St. Louis to prepare a maximum Government position. Negotiations resumed
on Tuesday m o r n i n g , June 12, with BHC attacking the Government's position. The
initial implication by BHC was that our offer w a s too low and without foundation, thus
the Government should adjust their first offer to reflect a more reasonable p o s t i o n .
•After more than six hours of debate" as to the soundness and validity of each p o s i t i o n ,
the contractor stated that they had not had enough time to properly evaluate the Government's position and apologized for not having prepared a counter o f f e r . The Government
had successfully supported the basis for their position in all except two technical
areas, (Nodal beam labor hour and oil consumption reviews). The engineer who had performed the technical evaluation was not present; h o w e v e r , his supervisor called in
corrected positions on June 1 3 , 1 9 7 3 .
6 . The Government, while preparing their maximum offer on Wednesday m o r n i n g , found an
$8,900,444 m a t h error in their update and first offer positions which resulted in the
first offer being too high, b y that amount. Since our detailed computations had been
given to the contractor on the preceding Friday, the Government was astonished that the
contractor had not pointed out the error in their dissection of our position the previou
d a y . To test BHC's credibility, the contracting officer decided to w a i t until after
the contractor's next offer to see if they would make us aware of our m i s t a k e . The
contractor presented their second offer without pointing out the mistake in the Government's position. From discussion at the table, it appeared that at least one member
of their team was aware of the Government's mistake. The contracting officer advised
BHC that our next offer (No. 2) would reflect a correction of the math error. BEC in
subsequent offers found that armor seats from Norton C o . and other miscellaneous parts
had inadvertently been omitted from their proposal. The costs of these items amounting
to $4,482,940 w e r e verified as requirements and were recognized by the Government in
later offers, based on Norton's quote which BHC had furnished as a h a n d o u t .
7 . Also in a subsequent offer (No. 3 ) , the contractor recognized receipt of an updated
quote from their sister division, H R & M , and reduced their proposed cost by $2,110,035
or $5,607 per unit unburdened. The H R & M quote purportedly was based on FPN rates
approved by D C A A . The Government after analyzing.the updated HR & M quote and the contractor's adjustment, determined that BHC had not properly adjusted their proposal for
the HR & M quote. A handout reflecting the proper adjustment for the H R & M quote w a s
presented by the Government with our fourth offer. This handout showed that the contractor's reduction of $2,110,035 for HR & M should have been $5,323,287; i.e., they
owed the Government an additional move of $3,213,252 or $8,501 per unit unburdened.
The contractor at this point (late Friday night) expressed a desire to terminate negotiations until the following T u e s d a y , June 19. M r . K u r t z , the P C O , and C o l . Newport
stated that it was the Government's desire to continue negotiations. It w a s decided
316
• AMSAV-PO
9 August 1973
SUBJECT: Memo of Negotiations to Definitize Letter Contract N o . DAAJ01-73-C-Q248
to continue negotiations through Saturday. Final agreement was reached at a target
cost of $275,000,000, target profit of $41,250,000 (15%); 80/20 share cost o v e r r u n ,
40/60 share of cost underruns, ceiling price $34:3,750,000 (125%). This was within .5%
of - the Government's
objective. The difference is assumed to b e an increase of 180 hours
i n d e t a i l p a r t s and subassemblies specifically in the transmission area. The negotiated
price is considered to b e fair and reasonable since the Government's position recognizes
that judgmental differences may exist in the projected e f f o r t .
8.
Disposition of reported possible cost accounting standards (CAS) problems was as
follows:
a . Tooling Liaison Labor amounting to 5,000 hours and an undetermined number of
direct engineering labor hours for C/SCSC administration as of the date of agreement
had not been ruled on by the A C O . The aforementioned labor hours were included in the
negotiated target c o s t . Should the ACO rule that these hours or effort are in noncompliance, then the negotiated target cost should b e reduced accordingly.
b . The ACO ruled that the undetermined Bidding and Proposal cost w a s n o t in noncompliance. This decision w a s based on AVSCOM legal interpretation w h i c h stated in '
summary that the effort was not incurred under like circumstances.
Price Analysis Office
317
AMSAV-PO9August1973
SUBJECT:
Memo
of Negotiations to Definitive Letter Contract
Other Comments:
a . The contractor furnished a Certificate of Current Cost or Pricing
Data certifying that cost or pricing data furnished in support of his
proposal was accurate, complete and current as of 18 June 1973. Factual
data-furnished by the contractor was verified by the Government negotiating
team. There was no area where data was considered inaccurate, not complete
or not current. Differences between the recommendations set out in DCAA's
formal audit report of 15 May 1973 and the Government's negotiation
objective are considered to be the result of updating proposals by BHC
and the furnishing of additional supporting documentation. DCAA auditor
reviewed these updated proposals together with the additional supporting
d a t a . Informal audit comments and recommendations resulting from this
updated information was incorporated into the Government's negotiating
objective. There were no unresolved significant exceptions taken by D C A A ,
to amounts included in the negotiated c o s t .
b. In consideration of the fact set out in this m e m o r a n d u m , the
overall pricing arrangement on this procurement is considered reasonable.
23-586 O - 78 - 21
318
P O S T OFFICE B O X 4Q-A
•
FORT WORTH. TFXAS
GO/VtFyMNlV
A textrorH C O M P A N Y
76101
18 J u n e 1973
1M:RGH:jc-308
Subject:
C o n t r a c t D A A J 0 1 - 7 3 - C - 0 2 4 8 , C o n f i r m a t i o n of F i r m
Target Price Negotiations
To:
D e p a r t m e n t of the A r m y
U . S . A r m y A v i a t i o n Systems
P . 0 . Box 209
S t . L o u i s , M o . 63166
Attn:
A M S A V - P P P U U / J . R . Kurtz
Ref:
(a)
(b)
(c)
(d)
(e)
End:
(1)
Command
N e g o t i a t i o n s C o n d u c t e d 6 June 1 9 7 3 t h r o u g h
16 June 1 9 7 3
N e g o t i a t i o n B a s e l i n e for D e f i n i t i z a t i o n ,
B H C letter 1 M : R G H : h f - 3 9 8 dated 11 June 1 9 7 3
N e g o t i a t i o n U p d a t e P r o p o s a l , BHC letter
2 2 : A A H : n k ~ 1 0 0 9 , d a t e d k June 1 9 7 3
F a c t Finding U p d a t e P r o p o s a l , B H C l e t t e r
1 M : R G H : j c - 2 7 4 , dated L7 May 1 9 7 3
P r o p o s a l f o r D e f i n i t i z a t i o n of M o d e l 21kA
L e t t e r C o n t r a c t D A A J 0 1 - 7 3 - C - 0 2 ^ 8 , BHC
letter 1 M : R G H : j c - 1 8 6 , dated 30 March 1 9 7 3
C e r t i f i c a t e of C u r r e n t C o s t and P r i c i n g
Data
1 . Preference (a) n e g o t i a t i o n s w e r e c o n d u c t e d b e t w e e n r e p r e s e n t a tives of A V S C O M a n d B e l l H e l i c o p t e r Company to e s t a b l i s h the F i r m
Target amounts a n d Terms and C o n d i t i o n s as w e r e p r o p o s e d by
r e f e r e n c e s (b) t h r o u g h (e).
2 , The C o n t r a c t o r confirms t h e f o l l o w i n g t a r g e t c o s t , t a r g e t
p r o f i t , t a r g e t p r i c e , s h a r e f a c t o r s a n d ceiling a m o u n t t h a t w e r e
a g r e e d to:
A.
C o n t r a c t L i n e Items
Unit
Total
"945,516
* 2/1, 323, I W
Item 0001, 287 ea. Helicopters
T a r g e t Cost
Target Profit
Target Price
^Includes Dealer Commission @ $287,000.
319:
Item 0002,
Target
Target
Target
Item 0003,
75 ea S p a r e
Unit
Engines
Cost
Profit
Price
Tntfl 1
190,371
1 4 , 2 7 7 , 81ST
Qualification
Target Cost
Target P r o f i t
Target Price
_____
29,000,000
Items0004 & 0005, t o b e p r i c e d a t a l a t e r
Item 0006,
date
Data
Target Cost
Target P r o f i t
Target Price
6,745
1,935,-982
TOTAL TARGET COST
TOTAL TARGET PROFIT
TOTAL TARGET PRICE
$316,537,000
*T0TAL TARGET CEILING
$344,037,000
* C e i l i n g computation e q u a l s 125 % of t a r g e t cost-; l e s s
$287,000.00 D e a l e r Commission t h e n t h e add b a c k c f
$287,000.00 t o t h e C e i l i n g Amount.
B.
C o n t r a c t Type - F i x e d P r i c e I n c e n t i v e
C.
Share F a c t o r s
D.
P r o f i t Rate
- Over - 80/20
Under - 40/60
of T a r g e t
Cost
(Firm
Target).
320:
3 . The a b o v e t a r g e t a m o u n t s a r e b a s e d u p o n a g r e e m e n t
of the
s t a t e m e n t of w o r k and t e r m s a n d c o n d i t i o n s as r e f l e c t e d in
r e f e r e n c e s ( b ) t h r o u g h (e) e x c e p t as s t a t e d b e l o w :
A.
Term-
a n d C o n d i t i o n #9
A d d the following
(as s t a t e d in r e f .
(b))
sentences:
" T h e l a s t b i l l i n g w i l l be less $ 1 8 0 , 0 0 0 . T h i s f i n a l
a m o u n t w i l l b e b i l l e d u p o n a p p r o v a l of a l l A Q S t e s t
reports."
T e r m a n d C o n d i t i o n N o . 3 (as s t a t e d in r e f .
Add the following
(b))
paragraph:
" B H C a n d U . S . G o v e r n m e n t w i l l m e e t sixty (60)
d a y s p r i o r to d e l i v e r y of 1 s t h e l i c o p t e r to r e v i e w
s t a t u s of q u a l i f i c a t i o n of a i r c r a f t a n d / o r
components."
C.
T e r m a n d C o n d i t i o n N o . 1 U . (Ref
(b) )
A d d t h e f o l l o w i n g to P a r a 1 . 4 ( 1 ) ( d ) '
" . . • . . h o w e v e r , any p a r t w i t h a c r i t i c a l c h a r a c t e r i s t i c (s)
(by d e f i n i t i o n a c r i t i c a l p a r t ) w h i c h h a s b e e n r e j e c t e d
f o r non-conforming to other than a critical characteri s t i c (s) is s u b j e c t to MRB a c t i o n . "
D.
T e r m a n d C o n d i t i o n N o . 1 Z ( R e f . (b))
D e l e t e t h e l a s t s e n t e c e of paragraph, "c" as c o n t a i n e d i n
C o n t r a c t o r ' s r e f e r e n c e (e) p r o p o s a l , S e c t i o n J . 1 2 w h i c h
reads:
" T h e p a r t i e s f u r t h e r a g r e e t h a t i n the e v e n t the C o n t r a c t o r
must change sources for the reasons specified h e r e i n that
t h e p a r t i e s w i l l e n t e r into n e g o t i a t i o n s t o e q u i t a b l y
a d j u s t the c o n t r a c t s c h e d u l e , p r i c e or b o t h . "
E.
T e r m a n d C o n d i t i o n N o . l . G . G . ( R e f . (b))
It w a s a g r e e d t h a t t h e I t e m 0 0 0 6 , T o t a l T a r g e t P r i c e ,
of S e c t i o n E . 2 of t h e C o n t r a c t w o u l d r e f l e c t a u n i t
p r i c e a m o u n t (total d i v i d e d by 2 8 7 e a ) that c o u l d b e
b i l l e d o n t h e I t e m 1 D D 250 as a s e p a r a t e a m o u n t (if
n o t p r o h i b i t e d by A L P H A ) .
321:
As amended a b o v e , i t was a g r e e d t h a t t h e Terms and C o n d i t i o n s
as s t a t e d i n r e f e r e n c e (b) would be i n c o r p o r a t e d i n t o t h e D e f i n i tive Contract•
5.
S u b m i t t e d h e r e w i t h as e n c l o s u r e (I) 1 i s t h e C e r t i f i c a t e o f
C u r r e n t C o s t and P r i c i n g Data e x e c u t e d by., the C o n t r a c t o r . The
C o n t r a c t o r r e s e r v e s the r i g h t to review the r e s u l t i n g
Definitive
C o n t r a c t f o r concurrence p r i o r to e x e c u t i o n .
6.
E a r l y r e c e i p t o f a D e f i n i t i v e C o n t r a c t w i l l be
appreciated.
BELL HELICOPTER COMPANY
E. L . Farmer
Vice President
Finance
322:
BELL HELICOPTER COMPANY
C e r t i f i c a t i o n of Current C o s t and P r i c i n g Data
CERTIFICATE OF CURRENT COST AND PRICING DATA
T h i s i s to c e r t i f y t h a t , to the b e s t of my knowledge
and b e l i e f , c o s t o r p r i c i n g d a t a a s . d e f i n e d i n ASPR 3 - 8 0 7 . 3 ( h )
s u b m i t t e d , e i t h e r a c t u a l l y or by s p e c i f i c i d e n t i f i c a t i o n
w r i t i n g ( s e e ASPR 3 - 8 0 7 . 3 ( 1 ) ) ,
in
to the C o n t r a c t i n g O f f i c e r o r
h i s r e p r e s e n t a t i v e i n support of BHC D e f i n i t i v e Proposals f o r
Def i n i t i z a t i o n of Contract DAAJ01^73-C-02i48. L e t t e r s : 1M:RGH: j c - 1 8 6 ,
dated 30 Mar. 7 j ; 1M:RGH:jc-274, dated 17 May 1973; and 22:AAH:nk-I009
dated 4 June 1973.
a r e a c c u r a t e , complete, and c u r r e n t as of
18
June
day
month
1973
year
.
Firm
Name
Title
Date of E x e c u t i o n
18 June 1973
H e l i c o p t e r Company
^
E. L. Farmer
Vice President
Finance
323
22 J u n e 1 9 7 3
1450 Hours
AMSAV-PPPUU
MEMO FOR RECORD
SUBJECT:
FMS Cases -
Iran
-1. T o o k a c a l l f r o m M r . C h u c k P a o l e t t i , A M C C o n t r a c t P r i c i n g (AV 2 8 4 - 8 2 6 8 / 9 )
this d a t e . He was inquring a b o u t dealer's cost or agent's c o m m i s s i o n paid
by B e l l on sales resulting from FMS C a s e s . H e had p r e v i o u s l y s p o k e n w i t h
D C A A a t F o r t W o r t h . T h e a u d i t o r h a d told h i m t h a t t h i s c o s t h a d b e e n i n vestigated and approved by DCAA but that the audit report had been forwarded to the C o n t r a c t i n g O f f i c e . M r . P a o l e t t i w a s n o w a t t e m p t i n g to f i n d o u t
the p a r t i c u l a r s s u r r o u n d i n g t h i s c o s t e l e m e n t .
2 . T h e i n q u i r y r e s u l t s f r o m an a l l e g e d c o m p l a i n t b y the S h a h o f I r a n o n
F M S c a s e s . T h e S h a h is s a i d to b e u n h a p p y a b o u t t h e i n d e p e n d e n t a g e n t s
running around his country who are on commission even though the aircraft
b e i n g p u r c h a s e d go t h r o u g h the U S G o v e r n m e n t . T h i s c o m p l a i n t c a m e to h i m
through the b a c k door; nothing formal has b e e n f i l e d .
3 . M r . P a o l e t t i w a s t o l d t h a t n o n e of t h e p e r s o n n e l i n v o l v e d i n n e g o t i a t i o n s
w i t h BHC for Iranian purchase of helicopters were available at the p r e s e n t
timq. Since no one other than those d i r e c t l y involved w i t h the p r o c u r e m e n t w o u l d h a v e the e s s e n t i a l i n f o r m a t i o n n e e d e d , h e a g r e e d to c a l l a g a i n
Monday morning, 25 Jun 73.
DEAN STEWART
Contract Specialist
324
C O M P A N Y
POST OI-TICE 13OX Ai3?
• FORT W O R T H . TFXAS
70101
A
tCXtronH
COMPANY
/f .June 1973
22: AAH: nlc-1009
Subject:
L e t t e r Contract DAAJ01-73~C~02^8, Proposed
Update f o r Procurement of I r a n i a n Model
21kA H e l i c o p t e r s
To:
U. S. Army A v i a t i o n Systems Command.
P . 0. Box 209
S t . L o u i s , Missouri 63166
Attn:
AMSAV-PPPUU/J. R. Kurtz
Via:
U. S. Army B e l l P l a n t A c t i v i t y
P . 0. Box 1605, Fort Worth, Texas 76101
Ref:
(a)
BHC P r o p o s a l , 1M:RGH:jc-186 dated
30 March 1973
(b)
P r i c e Propos.;! Update, I r a n i a n 2U'A
-Procurement - F a c t Finding dated
17 May 1973
(1)
P r i c e Proposal Update, I r a n i a n 214A
Procurement
End:
1 . Submitted as e n c l o s u r e ( 1 ) i s an updated p r o p o s a l
f o r d e f i n i t i z a t i o n of the s u b j e c t l e t t e r c o n t r a c t .
2. This updated proposal r e f l e c t s the f o l l o w i n g clian
to our r e f e r e n c e (b) F a c t Finding proposal of 17 May,
1973:
C o n t r a c t Item No. 1 - Production- 287 - H e l i c o p t e r s
a.
C o r r e c t DIRECT EXPENSE to n e g o t i a t e d Foreign
S e l l i n g Expense.
b.
Add " R e c e i v i n g I n s p e c t i o n Test P a r t s " to NonRecurring from C o n t r a c t Item No. 3 "Spares
and Test P a r t s . "
c.
I n c o r p o r a t e "Negotiated" Engine p r i c e and
change " F r e i g h t - I n " to f o r e c a s t book c o s t
v e r s u s a p p l i c a t i o n method.
325:
C o n t r a c t Item No. 2 - 7 5
' a.
Spare Engines
Incorporate. " N e g o t i a t e d " Engine P r i c e and
change " F r e i g h t - I n " to f o r e c a s t book c o s t
v e r s u s a p p l i c a t i o n method.
C o n t r a c t Item No. 3 - Development and. T e s t
a . " Added 560 hours P r o d u c t i o n E n g i n e e r i n g to
ACBC Bench T e s t f o r a d d i t i o n a l e f f o r t i d e n t i fied.' iby P r o d u c t i o n E n g i n e e r i n g Department.
b.
Change ACAO V e h i c l e t e s t to i n c l u d e k i t s to
be i n s t a l l e d on a i r c r a f t 1 , 2 and 3 and c o r r e c t e d ACJ3D S t a t i c T e s t f o r e f f o r t i n a d v e r t e n t l y l e f t out o f F a c t F i n d i n g Computer r u n .
c.
Changed "Spares and T e s t P a r t e " ACCO t o remove
" r e c e i v i n g i n s p e c t i o n t e s t p a r t s " and a v i o n i c s
b l a c k boxes f o r pre-SLAE c o n f i g u r a t i o n .
3 , V7e l o o k forward to d i s c u s s i n g any a s p e c t of t h i s p r o posal
th the p r o c u r i n g agcncy i-c pr e s e n i u t l v e a* •
BELL HELICOPTER COMPANY
E„ L„ Farmer
Vice President,
Finance
326
ra:
r }•!>,<• i•:r\;
i
yc^JA.
« <"«•«• A'.ru .» •
KODKI, 21'iA Hi'.LTCOPTi'ilS
NF/10TI ATIOM UP DAT!'.
J&L.JI1
£o:Jl.7A'X..
p. o. rox •<
' s:>.
i G:;T v;o:Vi':!. TFXAS
SUMMARY
i ' ci t_v: m A; I
co*t ri.tucMis
$
Ou; j c, c Pro> >. -Tool
•. l.'DCO'41H«C ICO
—T6oi"M;rtT-vi7nr'
MAT,
__ K •
• t-C-J» i U1O) 11 A:.r.M ,o
}.
1) ,?. „..,.;
73,275,'i6S
"T b 77:^2 "
52,932,9'»G
?>G
7.160,
561-,-330h,20ht05l
HA1TMAL CVLUHV/.O'O
rrtANSfChs ^T CO:>T /j
7,'138.836
~S erv i-c G—Rc. p ,_L;il>o r-
6,.fiU
v~Con T r'o V" 'E i r
a-kc-Laoor
C.'HIf A^-Ti-i'.l.r,
4
^9,350,360
:r, COSTS'-*
i:airii ng Enffr. ft Tc oU
. 271.^00,780
•21,307, 7 59
It. nOYALYltS"
t^. reockal £
$ 292,60S,539
' 28 7,000"
$ 339,712,905
H. r>\OFIT 0 « Fi t
—Co.Tm-i-Gsion—
IS. TOTAL t'RtCt fAmo
•Xl^L
"IXEfJj
DGAA BELL KEI.lCOPT.-Z-t COMPANY
280-2011
«M.«t«r
r vex. ir>r\T!FY ox A sf.rArATC
C3*c»
:r rrs>5
* rtrAiKTt:
ptopos.i! is SL-LMSUCJ for u s e
J,cJL;te
on t r
WAIVED BY ACQ
s psj.o.t o:t o.v a
Jill
This
r/.or.
In
fvtcc.
y.'or.
connection with *n<t in tc
t best emirates ns of this
D;UJ Olr.7 3-r.C_-0 2I»jl
in a.-OHJ.nce v.if.H •«•<; ti.'.trjci/Vr.s- t'. o.'r'vfors .nnj lS„v
r
,
,
froir.t.U
K. L. Fnrmcr,
vfee! President;, Finnncc
J1KLL HKLICOPTIl'l COMPANY
DD,
l» June 1973
327:
H*STf<UCTIOiiS
0 01 f LROR
). T!.c purp^r.e of thin f.T. i l\ to provide • tl«nd.ir<l fommt by 3. Mien ctlerlvnent of v.'ppottlnf: cost ot pricing dtt« to this
».:.!< I. t*»c olf. r.vr ruWiuts »-> C'.cv.'innri.t a sv.M-.mry of In- fjim is l(rj:ntti«-i.Mr. tlie d.U;t will be M;>erificr 11 >• identified
CMii i! '>!*.•( estimated cvMS (on-I n:ta<!\cJ mrpo'l"'?. iufcrnAr.nd dcr.crtbrd (uilh *</-rc/n/r J ft crpto,*! ,+tc). »ni
li- i) :-.:»..•!.• f-.r d. t.«i'r1 »..,irw c,:J ,-..•.:.!>•,m. I'rlor Io theavailable to the con'tMCliiit; cfficrr or l-ir. r'(xe.>enta'.ive
if « cor.Uuct lej-.i'.'.iiv. tioi-i this
t!ie offeror
upon request.
„.,<!•?. tor tvii St^n i M i n AMK
' i COT.i. b*
«|ulicd to v jl-i.,it «. Cutifi. ,.:c of Current Co'.t Of Prlcinc {iota <. The forn*t» f<»r Hie "Cost Elements" and t!.c "Prepared
fire AS/'/t J-£ 07.3(c) *rd 3 S07.4).
Contract Etthnatc" ore not intended a-s «i(-.U! rctptii. mrr.t*.
llu'tc n.ny be j-rrr-eMt-d different f>;*-..t «•. jt'.i the p<iof rpf-roval ot the (vMtvctmc officer if rciiuied for more effective
As [-art of Hit- specific ir.fninMiou required by this (otuv
Hie offeror wo*: c»!.ri( v.itli tins form. *nd rlcarly i<Vi.tify as e:>d efficient pieseiuniian. In ell other ic:.pect* this form
wlH be collided rnd r.i<t-m!tled without eh»'n{;e.
tuih, co:l <-r } ilnuf. tl.i! .» (f.'i:.f j.*, dutti wl'ic!i is wtilifllo
end f u tn.lt en J f,|l„.;nr l. s cIf tit,, J „l ASi'lt 3;SQ7.3\c)). In
addiiio.i, be
submit v.-it!i this fi.-ir,\ enjr information reason- S. Dy submission of this propositi; offeror, if selected for nefotiMion, f.rnuts to the co:itr.irtin(; effictr, or liis «o;hir»/ed
stly ic-iuiirj to txpl,t:n the offeror's outimaUn^ procd.*:, in»e|>resenls:ive, the tif.M to examine, for the
of vtricluding:
fyinj: tlie cost cr feichii;
j.ol mUtrd, tho'.e
records.
' docuc-.cnts »nd etlii-r i»j|'i«-rtiri(; <JH
. » vhwh v.ill jer:ril cdet: The j»t<<cnn-filal factors <>»
ipUcd end the nihil.ci;i*ticol
qui>te rvr.luatic.il of such cost cr pricinK d.'to.
with the
Gt ether riethcds uifJ in the estimate including those.-c»r:j.'iit:)tic>n «nd j-.icjcction* ur.ed therein. Iliis ri^ht r;»ay be
"tisrd in projecting from I-no wit d.-.t*; rind *••••*
cxerclscd in connection with »ny necotiotiou* prior to contract £.w»rd.
l>. The contir.£incirs urcd by the offeror in his proposed
price. u
KOTII 1. Tntcr in this co!u-r,n those ncevssory nnd reasonrble cost? vliich in t!.e j;i<!k;rnrnt of the offeror will properly
i^ruuod in the <ffic»«*nt |.'.rfr>m.infe of the contract. V.h
' i-n
«ny of the costs In this column have already been incurred
(e.fi., oil a Ictlc.- r villi Act or cftfinf.e crrfwj, dcr.ctibc t!if tn ot
«n nttKched sup;<.-«T:ini sthedule. Vhen "pr«rptoduc*lion" or
•'Umtuy". costs arc si^rxitiC^ul or when }.pecif«cnl|y ic<j'.»erfd ir. dctcil by the c«ntrjctinK officer, provide a full
identification and explanation of same.
NOTE 2. The use of this rolv.ua in optional for multiple
Hr.e item proposals, except where the contracting officer
deteiMlnes that • separate DD form <V33 is required for
. NOTi; C. Includc itoadnid coirimcrcial lter.;r. noxmaly ObrSctU-J in y.hole ot in part by you which •»« r.cr.crtlly stocVed
in inventory. Provide cxpUnMion for incloiiion »t other'Oinn
the lower of cost cr cuncnt market price.
.NOT1C 9. Include »tl «r.«tcii»U »old ot transferred between
your plonts, divit-lons or i-tr.anizutions «rn'tct •» cjr»irr»on control ot other th*n coit to t!i« ori^inil tiHiiefcru-r provide
t»plt>no.'i©n of priclr.c method used.
N O T E 10. Indicate the rates used and provide on appropriate
explanation. Where *cr*e,A,t<,t h i t been tcacbcd with Cover,
went representatives on the use of forward f ricSne t*to», describe the notute of the uf.rcemer.t. provide the Method of
coi:ipul.i:ion rnd arrl'catiors cf yosr overhrril rxnense. in«
cludinp. cost breakdown ^nd t-howinp. Hcr.ds r.nd tHid^etary
data as nccessary to provide • basic for evnluation of the
reasonableness of proposed rctet.
li'OTI; 3. Attach separate pages as necessary and identify In
tl>is coluun thefetUi-hmcntin which the informMiuu supporting
the specific co»* cte.-Tu.-ul may be found. No itond^rvt forrant is N O T E 11. I n c l u d e s r p a t a t e b r e a k d o w n of c o c t » .
prescribed; however, the cost cr prior.,; d«ta ciuti be occurate,
coirpu-tc und cvurvnt. wiul the i'.ivl,;r:,ccu factors used in p.ojectInc f'oi.j the data to the estimates n-.ust be stated in sufficient N O T E 12. Provide * separate breakdown of Inbor by apptopriatc estec.oty and famish basis for cost estimate*.
detail to enable the conttJctirr. officer to evaluate th< proX
posal. l-"or example, provide the basis used for pricing the bill
of material* such »s by vcn.Jt>r <;uot«tions. shop c»iina!fv, or N O T E 13. Include all other estimated costs (*.(>., spoctai
invoicc prices; the reason for use of overhead-rates which de- tooU(acititics. rpecrof fesf equlfxnnenf, special pfanf
part significantly from experienced rates(rcducc-J volume, a
f,?arr»rtgement. pttsefvution p*ck.ifimj spo:iet
pl.-mtvd p-.fiior rcurramU niunt, etc.). or justification for an inend ttwotk. and w.Mianty) which rrc not otV-.crwi-o includes
crease in !«bor rjtts (o:Uicip»ted n-^^e *t,d tnl.uy incrctscs.
Identify separately each entej;oty of cost and provide supp
cfr.). ldcrffy ond expldin anv continf.uncins which ai« included ii»C detniJs. If the proposal is based on a K.O.H. deitinat
In tho pjoposcd price, tuch ui sr.(ici;>:>tcd cost of rcjcct* end price, indicate separately all outbound transportation co»:
defective wvrV. anticipated costs of cnt;in.'-rriiii; icd-.-sitn and
Included in total amount,
rttc-tin i, cr anticipated technical difficulties in designing
hif.n-ris c coinpoix-nt*.
N O T E H . If the total cost entered here is In excess cf S?
ptovidc on a sepi»rrfte pace for on DO i'ctni 783, Royalty
NOTE 4. Provide a list vf principal i»cn>s within envh i.itejjory licp<i!t) tht foItowniK inf.vm;a!ic>n on eoch Reparste it«-n cf
of material itidicalir.; kuown ot anticipated source, qnknlity.
fuyaliy or license f«»e: ncrre enj od.licifc of licensor. J J U
unit price, competition obtained, and bonis of establishing
llcenac aerecmcnt; patent nur.berj. patent application sei
Source end tcasonublcncss of cost.
numbers, or -ether bavis on v.hich the re>y» ty is poyi<bt«'; t
description, including any part of o>o»!el nu<ubcts of eacl%
I
NOTE J. Include mutvorl for the proposed contract other than ttacl item or coirpoiirnt on »hich the ro>nlty is payi»l.l«>; I
lantciial t'rscribtd in,the .ih«-r footnotes u.idcr the cost rlvmcnt Ci'Mage or dollar wtv cf royalty pj.-r ynit; tfr.it p.-ice of c "
«utitlcJ "Direct M.it'-rlnl."
item; nun-.brr of units; r»n>l total dollar .^n.oont of royjlticsdJition. If specifically rcqjsr.tr d by th.« vcMr^ctiri; off.
NOTE 6. Incl ide p.ul», cor^cnents, assemblies, and scrvtces a copy ol the cunrnt license Jv;u cm:nt <nd iJc«tifici>ti J
to be productd cr per farmed t>y «th«*r than you in coid-nce fcpplick'jle claims cf tpocific patents fch»ll U>: provided.
with yo'ir dcsi»?is. «pe< tfications, or dtrectlonn and »^;>lic«h|®
Only to the printr cbntrrft'l.
'
N O T E 1$. Selling price muM Include my a-pllcablc F'<i
NOTE 7. tncludc raw mi l processed material for the proposed f t c U e tux on fir.is.hcd amclc*.
contract 1a a form or »t«u* v-hich rettuttcs fuilhrr piocrs-.irij.
:
i.tu-.i t.vil'ri<*->"M« of »i>stI
rii 3 SU7..1) i-, „.,..„
KF.LL r.F.MCOPT-:rt COMPANY
X0UF.L 2i';A !H:LICOPTI:RS
NKGOTJ. A'i'j 0lipOAT!-:
P . 0 . P O X 43 2
l-'OIvT '-1^1:1, TP.XAS
OIVIIIOIIDI *»!< COCAIIOUII «.•«
1
TOi«t ton'
I'ly:A I PROircc-11 1?. ??..
' O L . Lyfti
1
T 1 0 X , ? S 7 il^T.I i"
tot-.c.T.T.o.. •-.->.
L G "'
J
DA A J 01. - 73 - C - 0.''•'' 5?
>,c. r t : :,m a r_
J
I'NlT COJ\'
ncrc-i'ici
- r t u rv; IT.--/51,444,392.
6, 806 * 1055
1,531,51.8
OtntCT EKCiNCEraNG l a c o « "
Iff, SO 6
._5cxTvicc_Jvcp .Labor.
1,304, 3-'; 6
S. CKGIMKCFITIC OVfiliCAO®
'
yr.o J J_ Aj^-km\g a r,
v Control 1*301'
D i rco
0.Qua
I»:i«»).i
.'r.T tHtd.irtciui.i'ij
^ t
—Too] Ma k c — i i .
—1454-^-411:7. KANUf ACTUKHG
i OVEKHCAOO
'
44,658,366
21,944,816
8.298.}66
e. oTMtn COSTS'*
5US.U*_ElI3 Mm fi_l!pol_LIL
$ 234,767,521
subtotals
17,081,14712. rCOtTRAL EXCISE TAX''
$
251,848,668
$
292,431,455
•2871000
IS. TOTAL r.'MCE f . ' ^ i j
I PtlT tr.tLVCuOMHi?
CCMTMACT Oft iOOCOVIHACT W
< CCNt4CClCN *4 AN* OIHCN COVCM-4MCNT
»r vis. mrNTirr net.c«r.
rcvicminc orricc (intM* r/P Cm:o
DCAA BELL HELICOPTER COMPANY
i.
win.
vou
ntrj'jphf. fnc u»i
yi *«:»
TH no
o*
am*
psopf HTr
covihimcst
If v«5. trrsTtfY o.v a thru-Air
CD
KJ no
irvr.s. sno*
280-2011
iihe
»'C.n*t»i<M«MCC
•—i-<o
ICC TIC* > « ( • »
This jxopos.i! is subi.ttilcJ for use conr.cction with s,ttd in rcr.pooso to
L<LtlCC_CQl\traC.t_DAAJl01;-_7-3.r^r.0.2.4
*
;
lof.ccts out best estimates AS of this <Me.
in arcoi«?..nce v:i!S ?S<! in-.tr.-cf it'*'; to cfl'o.-ors n-vI tV frv^'.r'.;» r. v.SicS
'-c's.•]}'•: )>n\f Tc.
[
""
T1
X t w r n l f'P '. . ' O.' * *•< A"
hhh»« i ri>5 mtmin tmc past Jh»
cusrovr.ra) AAO
coutiiact kvsu.e us ex low or O.V A .'E.^AKATS pace.
rou
" hp- ixPCA.-y o.v 4 si-i-Arirr r/.cr.
E. L. Farrier,
Vice President. Finnt'.cc
tm-
VJATVCD BY ACO
• OOO THl> COIT SUMU«|1> {ONFOI.U <.ltH IHi C O ' »-Wl'iC 11 U«.:. J« T
ft] nt
OF
>vcf.
i Prtlit-i. '.LS CCN T SAC II
y you scqvmiu. (Dvtr.NMiNi co-m.act rnnficmc i
. fp «•.•: 7
« * »n w»i
JSLs
vs vow ^Un AWAficca an* ten f>i»c r» on :ui>cchth«cm
PKWt
329:
STAFr COM.V.UNlCATiONS D.VISIO.N
V 7 . C Z C S C D 2 0 3 0 S / / G 7 1 5 REUP
343996
1732223
PATEZYUVJ R U E K J C S 1 7 4 0
1732222-EEEE—RUEADWD
ZNY FLE H GR.
P 2 2 2 2 1 . 3 7 . J UN 7 3
r-M S E C O F F WASH UC
TO R U F T N J A / C A R M I S H MAAG T E H R A N I R A N
J I U £ A L ) W F ) / C 5 A WASH DC
P U F N A A A / C N O WASH DC
RUEFHQA/CSAI'- VIASH DC
R U E B D S B / O S A WASH DC
I N F O RUESHR/AMEMB TEHRAN IRAN
R U E H C / S E C S T A T E WASH DC
R U S N A A A / U S C I N C E U R V A I H I N G E N GERMANY.
7 . E N / J C S WASH DC
f\T
UNCLAS E F T 0 FOUO
FROM:
6770
ASD:ISA(SA)/DSAA
REFS ;
A." " C A R M ' f s H M A A G I R A N T I V G , 23*1 3 3 1 Z A P R 7 3 < N G T A L ) .
CARM 1SH MAAG IRAN MSG 051333Z MAY 7 3 .
C. AMEMB TEHRAN MSG
363O/
D.
280605Z MAY 73.
.
1.
THE S U B J E C T OF A G E N T S FEES W I T H I N IMS WAS D I S C U S S E D W I T H
GENERAL
T O U F A N I A N , G O I V I C E M I N I S T E R O F W A R F O R P R O C U R E M E N T , O N 11 J U N E
73.
2.
IT H A 5 B E C O M E C L E A R T H A T W E M U S T A L T E R O U R C U R R E N T
PROCEDURES
SO AS TO A C C O M O D A T E THE S H A H ' S I N S T R U C T I O N S TO GEN T O U F A N I A N
THAT
THE GOI WILL MOT R E P E A T NOT PAY THE COST OF ANY R E P E A T ANY
AGENTS'
FEES REFLECTED
IN F M S
PRICING.
4
3AFTER GEN TOUFANIAN
INITIALLY STATED THE GOI O B J E C T I O N TO
AGENTS
F E E S , OUR F I R S T R E S P O N S E WAS TO AGREE THAT DOD C O N T R A C T
OFFICIALS
SHOULD NOT HONOR AND THE GOI S H O U L D NOT HAVE TO PAY E X C E S S I V E
OR
I M P R O P E R A G E N T S ' FEES/ T H A T IS, F E E S A R I S I N G OUT OF W H O THE
AGENT
IS A S O P P O S E D TO W H A T S E R V I C E S HE P E R F O R M S .
THIS RESPONSE WAS
NOT
SUFFICIENT.
GEN TOUFANIAN
I N S I S T D D THAT THE GOI WILL N O T PAY
ANY
AGENTS' FEES.
HE AGREED ONLY THAT THE GOI WILL NOT O B J E C T TO
P A ^ ™ F
F O R R E A S O N A B L E A N D J U S T I F I A B L E S E R V I C E S A C T U A L L Y P E R F O R M E D IN CO!
!
T H E G O 1 , H E E M P H A S I Z E D , IS W I L I N G T O
i
N E C T I O N WITH THE S A L E .
PAY FOR VALUE RECEIVED;
IT IS N O T W I L L I N G T O P A Y A N Y E L E M E N T
OF
C O S T A R I S I N G O U T OF " F I N D I N G " THE T R A N S A C T I O N OR THE
ASSUMPTION
THAT " I N F L U E N C E " CAN MAKE THE GOI ANY MORE LIKELY TO ENGACF OR
NOT
T O E N G A G E IN A C E R T A I N T R A N S A C T I O N .
GEN TOUFANIAN WAS
PARTICULARLY
330:
ADAMANT THAT THE GOI W O U L D NOT PAY C O S T S M E A S U R E D AS A P E R C E N T A G E
OF
SALES; EVEN
1/2 OF 1 P E R C E N T OF A $ 1 0 0 M I L L I O N T R A N S A C T I O N
IS
CLEARLY DISPROPORTIONATE
TO REAL SERVICES AND REAL VALUE TO THE
GOI,
GEN T O U F A N I A N DID NOT O B J E C T TO THE PRACTICE OF U . S . FIRMS
USING
AGENTS
IN I R A N F O R C I V I L S E C T O R M E R C H A N D I S E .
HE MAKES HIS
POINT
O N L Y IN R E G A R D T O T H E
IRANIAN P U R C H A S E OF M I L I T A R Y
EQUIPMENT.
BECAUSE OF THE
I N T E N T I O N S OF THE GOI TO USE THE FMS C H A N N E L
WHENEVER
- F W S L B L E , THE GOI S I M P L Y SEES NO V A L I D S E R V I C E TO BE P E R F O R M E D
BY
AN
AGENT.
OUR DIFFICULTY
IS T H A T T H E A S P R C U R R E N T L Y P E R M I T
REASONABLE,
V A L I D A N D A C T U A L A G E N T S ' F E E S AS A P A R T OF " C O S T OF S A L E S "
ASSOCIATED
WITH AN FMS T R A N S A C T I O N .
WE P O I N T E D O U T TO G E N T O U F A N I A N T H A T
IT
MAY
N O T BE S I M P L E TO E L I M I N A T E ALL S U C H F E E S .
THEY MAY, FOR
EXAMPLE,
BE INCLUDED
IN A G R E E D O V E R H E A D .
T H E Y M A Y NOT BE I S O L A T A B L E A N D
IT
IS P O S S I B L E T H A T T H E U . S . C O N T R A C T O F F I C I A L
DOES NOT KNOW OF
THEIR
EXISTENCE.
OUR DIFFICULTY
IS N O T
IN E L I M I N A T I N G U N R E A S O N A B L E
FEES;
I T I S T H A T W E M A Y N O T BE
ABLE TO ASSURE COMPLETE ELIMINATION
OF
ALL
FEES.
5.
AS A R E S U L T OF THE A B O V E D I S C U S S I O N S
THE F O L L O W I N G A C T I O N S
ARE
UNDERWAY.
A.
FOR CONTRACTS CURRENTLY BEING NEGOTIATED WHICH
ARISE
ASSOCIATED
FROM OR INCLUDE GOI FMS CASE R E Q U I R E M E N T S
WHICH ARE
WITH THE C O N T R A C T U A L O B L I G A T I O N S OF A U . S . FIRM E M P L O Y I N G A
REPRESENTATIVE
IN I R A N , T H E F E E W I L L B E
ISOLATED AND IDENTIFIED TO
GOI
FOR GOI APPROVAL PRIOR'TO CONTRACT A W A R D .
DETAILED
JUSTIFICATION
AND OR E X P L A N A T I O N OF THE FEE WILL A C C O M P A N Y THE N O T I F I C A T I O N
TO
THE GOI.
IT IS I N T E N D E D T H I S P R O C E D U R E JIE I N I T I A T E D U N L Y
AFTER
THIS PROCEDURE
IS
BEING
NEGOTIATION WITH THE FIRM INVOLVED.
Y
IMPLEMENTED
IMMEDIATELY.
B.
A . US/GOI M E M O R A N D U M OF
UNDERSTANDING
OR P O S S I B L Y A S I M P L E R E X C H A N G E OF L E T T E R S
IS B E I N G P R E P A R E D
TO
EXPRESS THE GOI REQUEST AND TO AUTHORIZE
ACTIONS BEING
CONTEMPLATEDBY DOD,
T H I S W O U L D BE R E G A R D E D BY DOD AS A N " I N T E R N A T I O N A L
AGREEMENT" WITHIN M E A N I N G OF A S P R .
P U R P O S E OF THIS MOU OR S U C H
LETTERS
IS TO G A I N A U T H O R I T Y F O R A C T I O N S U N D E R A S P R W H I C H A R E N O T
POSSIBLE
UNLESS NORMAL PROCEDURES ARE OVERRIDEN
IN A C C O R D A N C E W I T H
ASPR
6.705.3(D).
C.
N O T I C E TO U . S . I N D U S T R Y WILL BE P R O V I D E D
BY
O A S D C U L )
AFTER AGREEMENT
IS C O N S U M M A T E D .
IN T H E I N T E R I M ,
U.S.
INDUSTRY. MAY BE A D V I S E D OF THE GOI R E Q U I R E M E N T S R E G A R D I N G
AGENTS'
(SUPREMACY
F E E S A N D T H A T T H E D O D IS I N V O K I N G A S P R 6 . 7 0 5 . 3 ( D ) C L A U S E
OF I N T E R N A T I O N A L
AGREEM£NTS$,
IN O R D E R T O C A R R Y O U T G Q I
REQUIREMENTS
PLACED UPON THE DOD AS O U T L I N E D H E R E I N .
IT IS R E C O M M E N O E D
THAT
U.S. DEFENSE
INDUSTRY CONSIDER MAKING ALL FUTURE ARRANGEMENTS
FOR
REPRESENTATION
ON A S A L A R Y R A T H E R T H A N A C O M M I S S I O N B A S I S AND T H A T •
THEY S H O U L D A T T E M P T TO M O D I F Y ALL E X I S T I N G A R R A N G E M E N T S TO T H A T
END.
INFORMATION
I N P A R A 5-A..'. P A R T I C U L A R L Y
SHOULD
BE P R O V I D E D AS
APPROPRIATE TO U . S . D E F E N S E I N D U S T R Y .
AJUJU*
BT
331
^r.CfiT
I>AA.KI! -71-C-0?.A3 0*2 F,)_
^ ji»nj j.QTUrJT.Ll ^pMPANY_,_.n;iVISTON
SECTION J.
SPKCTAT. P R O V I S I O N S
J.27
COSTS
OTHER
OF T K X T K O X .
.57
70
INC
T h e C o n t r a c t o r ' s p r o p o s a l for d e f i n i t i z a t i o n of t h i s c o n t r a c t d o c s n o t i n c l u d e c o s t s
f o r s e r v i c e s of h i s a u t h o r i z e d r e p r e s e n t a t i v e s a s s o c i a t e d w i t h this c o n t r a c t .
The parties
h e r e b y a g r e e that in the e v e n t the C o n t r a c t o r e l e c t s to s u b m i t
p r o p o s a l f o r the c o s t s
of s u c h s e r v i c e s , the p r o p o s a l s h a l l b e n e g o t i a t e d in g o o d f a i t h a n d if a p p r o p r i a t e ,
i n c l u d e d as p a r t of t h i s c o n t r a c t .
AMSAV-P Form
?0 Jul 7)
1554
Edifio* of 15 Apr 69, may be
332:
DEPARTMENT OF THE ARMY
HQ US ARMY TROOP SUPPORT & AVIATION MATERIEL READINESS COMMAND
4300 GOODFELLOW BOULEVARD, ST. LOUIS, MO 63120
31 J a n u a r y 19 78
DRSTS-GC
Mr. K e n n e t h A. McLean, S t a f f D i r e c t o r
S e n a t e B a n k i n g , H o u s i n g , and
Urban A f f a i r s
Dirkson Senate O f f i c e Building
Room 5300
W a s h i n g t o n , DC 20510
Dear Mr.
McLean:
This i s in reply to your i n q u i r i e s concerning the s t a f f
i n v e s t i g a t i o n o f $ 2 . 9 m i l l i o n payment by B e l l D i v i s i o n o f
Textron, Inc.
A t t a c h e d a s an i n c l o s u r e t o t h i s l e t t e r a r e c o p i e s o f
c r i t i c a l correspondence d i s c l o s e d as a r e s u l t o f the
i n i t i a l s e a r c h o f t h e f i l e s a t t h e US Army T r o o p S u p p o r t
and A v i a t i o n M a t e r i e l Command (TSARCOM), S t . L o u i s , M i s s o u r i .
The f o l l o w i n g r e p l i e s a r e f u r n i s h e d t o q u e s t i o n s o f TSARCOM
b y t h e S t a f f Members o f t h e S e n a t e Committee on B a n k i n g , .
H o u s i n g and Urban A f f a i r s a t 1000 h o u r s , J a n u a r y 3 0 , 1 9 7 8 .
a.
in i t s '
QUESTION:
How much d i d B e l l i n c l u d e f o r a g e n t s
o r i g i n a l p r o p o s a l f o r Model 214 H e l i c o p t e r s ?
REPLY:
The C o n t r a c t o r ' s
f o r agent f e e s .
b.
price?
QUESTION:
p r o p o s a l was $ 3 . 6 3
What amount was i n c l u d e d i n t h e
million
contract
REPLY:
Zero.
S e e C l a u s e J.27 o f t h e C o n t r a c t ,
of which i s a t t a c h e d h e r e t o as I n c l o s u r e 2 .
fees
copy
333:
DRSTS-GC
Mr. Kenneth A. McLean
31 January 19 7 8
c.
QUESTION: What amount d i d t h e US Government pay
B e l l H e l i c o p t e r Company f o r a g e n t s f e e s ?
REPLY:
to
Zero
d.
The S t a f f r e i t e r a t e d i t s r e q u e s t f o r c o p i e s
d o c u m e n t a t i o n p e r t a i n i n g t o t h e above s u b j e c t .
of
REPLY: An i n - d e p t h s c r e e n i n g o f C o n t r a c t f i l e s i s
b e i n g c o n d u c t e d and c o p i e s o f any a d d i t i o n a l documents w i l l
be f o r w a r d e d t h i s week.
2 Incl
as
23-586 O - 78 - 22
334:
rj
KKT.T, UR.T.ICNITII;
SECTION
J.27
J.
OTHER
H SHtKT
IMMSTON
or
|)A,\.H)1 - 7 3-C-0248
TROM, INC
S I ' K O A T . l'ROVTS T O N S
COSTS
T h e C o n t r a c t o r ' s p r o p o s a l f o r c l e f i n i t i z a t i o n of thi;.: c o n t r a c t d o e s n o t i n c l u d c c o s t s
for. s e r v i c e s of h i s a u t h o r i z e d r e p r e s e n t a t i v e s a s s o c i a t o d -with t h i s c o n t r a c t .
The parties
h e r e b y a g z a e _ L h a t in t h e e v e n t the C o n t r a c t o r c l c c t s to s u b n i t a p r o p o s a l , f o r t h e c o s t s
o f s u c h s e r v i c e s , t h e p r o p o s a l s h a l l b e n e g o t i a t e d in g o o d f a i t h a n d if a p p r o p r i a t e ,
i n c l u d e d as part of this c o n t r a c t .
AMSAV-P
Fern
^^
Edition ell 5 Apr 69, ™ / «
335
PRSTS-G
5 ftB
M r K e n n e t h A, M c l e a n
Staff Director
Setuste gsrtksng end Uit^n
Housing Committae
Dixk&cm Sonata O f f i c e guikUng
Room 5300
Washington,, DC 2OS 10
Dssr Mr* McLean:
• Reference i s mads to a telephone conversation between Staff Members
of the Senate Committee on Banking, Housing etnd Urfesm Affair?, and
members of thin Command on 30 Jan
At that time, the request w a s
made for information in the contract f i l e s for the procurement of
helicopters for the Government ol Iran (GOQ regarding agents f o e s /
commissions jKsid by BqU Helicopter f^Ktron to Mr T a x i , Xncorporsted.
The courr-e o£ events
©gents fees/cominis
ns for aircraft
procured for the Government of Iran. (001) i s s s follow &s
The GOI requirement was for 28? Modsl 214 Helicopters $ Tha c o n tractor, Bell Helicopter Company {SKC) * initially proposed s a smouni
of $3,630*873 for agents lees/commisslons, Th§ Government and BUG
through negotiation later reached agreement for e total of $287,000 or
$1,000 par helicopter
tha assets Ccms/commisi^eris* After the
completion of the negotiatLaas, ths Shah of Iran made known that ha
refused t o pay any agents faes/camniissions for precuremgnts for GOI*
ihe Gov*?rnnf?orjt ^nd BKG reopened negotiations for the holicoptcrs ^nd
agreement w o s reached to remove agents
e s/ee rami § s ion s from, the
contract*
336:
DJtSTS-G
Mr* Kenneth A . McLean.
Rc^&rch oi \h& contract f i l e s Has produced the Inclosed dacumants
which reference a g s a t s f e e s/commis siqas ?
C l a s s A Awards Board Minutes which made refersace to
Briefing Charts•
fo*. Briefing Chart, eagǤ 6 . which Indicates tha contractor had
proposed $5,t»M or
of
contract prico as dealers commissions
end that through ft egotist i cms this proposed Amount hsd been reduced
to §1,0GQ per aircraft € or $267,000*
Brisling C h a n , page
which indicates
the $287,OG0«
v/hich v/e» negotiated, w a s to be a cost to the contract without th&
1 application of s profits
d„ A memorandum torn tha Cest Analysis Office t^ the Contracting
Officer (DA Form
dated 8 Aug 77, subject? Memorandum of
Negotiations t s Dofjnitlza l e t t e r Contract DMJ0I«73~<>Q24S, which
indiedtsfc that negotiations were completed on 1$ Jim 7 3 , and th&t the
contractor hsd proposed daalsrs f s / c o m rrt I s s ion g of $3,630,837 end
thst th# dealers feos/commisslons hod
negotiated for s vaiu6 of
$287,000.
<5, kfsmor&ftdam of Becord* dated 22 Jun
uom HQ f Anny
Matsrlol Command, which indlcstss an inquiry concerning agants'feeB
by the Shah ef'Iretn
BHC Letter of 4 Jun 7 3 , 22?AAfi;nk-lO09^ which c c n t l n m ths
neyouafclon of $287*000 total for sganis fe$s/commtsfiions without tho
application of profit,
g* M s s s a g a , K229X3Z Jun 73*
toss
XSM£A>/DSS/subject:
Agents
in fran P M S , which ctesrly indicates that thft'Sh^h of Iran
hsd refused to accept or pgy-ftisy agents f e e s or c o m i s s i o n s ,
h*
57 of Contract DMTQ1-73~G-G248,- Cla'ae* J.27 entitled
Other-Costs, v*hieh indicates that the contractor and the Government*
after furihsr negotiations;.-removed agents foss/commissions from the
contract*
337:
Dft6TS-G
Mr* Kenneth A , McLssn
The c o n t a c t f i l e s Indicate that a g e n t s fees/commit s£&ns were riot
included Sft th^ contract for the
helicopters for the Government
of Iron, either upon execution Of the initial deftnitis&tion of the letted
contract* or £t any subsequent time. A l s o , the f i l s s do not show that
Uie US Government ever p<3i<i Bell Koiieopter Tesctroa any amount a s
fcgsnts fees/commisslori^ under the above* mentioned contract*
Sinserely,
8 fiicl
As stated
W . B . CSOWELL
C o l o n e l * GS
Chief of Stuff
338:
CUSS "A" Av/i\&>3 &OAIQ jiSKUTSS
"A,s
A CX&&a
Soard >ie-5rin.,> eonvancul at
QO Uoo.ro, 22
1573,
with LiC Diiv>.d .5,
Kxecutivd OXHJlcei', directorate £0*
«
prueiuiu^., 'ilw ifollowing
pr<tG<tnt:
Cmcumm^
m m m .
VXC Itevid J. Johnston
t
€0k gia-wXck licvY^Tt
j
Ki\J Kictxsei
r
C^i^tifta
Production Div
JLteiU
Joyea t , Allien
^ 1TQ
T. Keq
&'Fred
Oiv
llirny
J* KoUcaaa
r
Dir fov
Chairs a
Cuar. Pzlta Aast a*e
S i r fov
Assux*
Legal Ofc
Dir for FD&S
pisr for Uslrttr.nfince
if *
tehees
Eiozstf J«,
FijltK
Walt** J. Sfttthcil
Esrl
CatUrt
John A. lIcLJUi-hi{q.
Kfcsasch P. Uitey
Ir«nlim A<tft
John D. XztkLm
H* H» Kix&itLs
B* H/ifUMfU
Cm
Hr Varbir
Sir for IX^S
Sy?i
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Dir for YKQ-z & Fro4
Frod i*.cf £ Br
Xnt^Tn.'Uiuoai i.og
Vroc & Prod
FrvxS Acft; Ht
Cont I'xteii Aiiel Ofc
Cont VxrtC*s A&ni Ofc
Ac'ft Sr
Tttod Ai£t Br
Jelm Suba
J* R* Rurtx
,
K<K=tQ JSQ08
ifcibs
ftcute^r
Prod Acic Er
CorifvcoMnp, O f f i c e r
Vol U CtfspiidActi DiV
Esyovting Otenagrfiphor
Jtfs^pa A*
t'AJ g . H. Bslmiuk
Saytaouv
Cotaoa
^hA B«mi connUtet'ftig p r o v e d v.odifieasisrt r^MTlOS for duJff.itis3fcIon Of
LsStcr Contract X*AAj 31-73-0-0?/: 3 *?Uh 5*3 U frsllcopter Cc^^my,,fort Sforth,
'Tvtxse, for 2,i7
r.feiel
/S Sy^o s*u;;Itv!<ffc r-ud related
d*K*
S'-H"-^ for tho grantac* Govern*^**
^ a ^ i J . v o f ^ contact
Pi-Xca bt $333,5^7^000,00,
vM
Ttiu Fr*#euUfcioa
by n t .
iBG«p<sjret«4
s*
Catitrfictias
2-3 of the Kiautc*.
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Co
Jobs
Vstktizz, ^
342:
AMSAV-m'li'U
22 ^urift 1973
Xfs50 Hours
MEMO
SU&JECT:
KECUKD
FJIS Ccisset; - It CLU
Took a c a l l £r<*= Mr. Chuck P&eietti, AHC Contract Pricing (AV 284-6266/V)
-t&kg dste. He wa* Iumutlay obuut dealer V. f.ohf or agc.ntV, ccicuntr.stnn tinid
hy Bell a a Kales resulting frotn HCS Cases. He had previously 8 poke a with
DCAA at Fort Worth. The auditor bed told hia that this cost had been investigated and approved by DCAA but thAfc rh* audit report hud f;»?«?i\
ed to the Contract In& O f f i c e ,
Paoletti was now a t t e s t i n g ta find out
fch* particulars surrounding t M s
etviuvut*
2- The Inquiry rcr.ultn f r o o m nllcgc.d romp I nlnr hy rhc ohrth of Tr*m on
FMS cases;. The Shah i s s a i d ' t o ue unhappy abuut the independent agents
running around ht8 country who art? Oil coroilssiou even though the a i r c r a f t
being purchased go through the US Gove?nrncnt, This coeiplaiat ease to hia
through the back door; nothing formal hss been f i l e d .
3. Kr* P a o l e t t i was told that none of the personnel involved i a hegatinttans
with EHC for Ir.mtau purchase of helicopters were available at the present
tjuoc. Since uo one other than those directly iuvulv&l with the pr«utir<!ssmt would have the essential information needed, he agreed to c a l l again
Monday morning, 25 Jun 73.
DF.AH STEWART
Contract Specialist
343:
P O S T CH-HCK O Q X 4 3 2
• FOftT W O ^ T H , TfcXAy
/»3tV«
«
tliiIZZi
k June 1973
22zAAHznk-1009
Subject:
L e t t e r C o n t r a c t DAAJ01-73-C~02'*B, P r o p o s e d
U p d a t e f e e P r o c u r e m e n t o f I r a n i a n Model
21hk H e l i c o p t e r s
To:
U . $«, Army A v i a t i o n S y s t e m s Ccrnntand
P , 0* Box 209
St* Louis, Missouri
63166
Attn:
AMSAV-PPPUU/J. R .
Via:
U* S* Army H e l l P l a n t A c t i v i t y
P , 0 . Box 1 6 0 5 , F o r t W o r t h , T e x a s
Ref;
(a)
BUG P r o p o s a l , 1 M : & G H : j c - 1 8 6
30 March 1 9 7 3
(b)
i C t rfcOpv'SCi UpMU vi. J IlWUiAn
Procurement - F a c t F i n d i n g dated
1 7 Hay 1 9 7 3
(1)
P r i c e P r o p o s a l U p d a t e , Ix^imisn 21^A
Procurement
Encl;
Kurtz
76101
dated
1*
Submitted a s e n c l o s u r e ( 1 ) i s an updated p r o p o s a l
f o r d s £ i n i t i z a t i o n o£ t h e s u b j e c t l e t t e r c o n t r a c t *
2.
This updated proposal r e f l e c t s the f o l l o w i n g changes
to o u r r e f e r e n c e ( b ) F a c t F i n d i n g p r o p o s a l o f 1 7 May,
1973:
C o n t r a c t Ifccia No* 1 - P r o d u c t i o n - 2S7 H e l i c o p t e r s
a*
C o r r e c t DT.RSCT EXPENSE t o n e g o t i a t e d
S e l l i n g Expense.
b*
Add " R e c e i v i n g I n s p e c t i o n T e s t P a r t s " t o NouR e c u r r i n g : frout C o n t r a c t I t e m Ho. 3 " S p a r e s
and T e s t P a r t s , "
c*
I n c o r p o r a t e " N e g o t i a t e d " Engine p r i c e
c h a n g e " F r e i g h t - I n " t o t o r e c a s t hook
v e r s u s a p p l i c a t i o n method.
Foreign
and
344:
C o n t r a c t I t e m N o . ' 2 - 75 Spar* Engines
' a.
I n c o r p o r a t e " N e g o t i a t e d " E n g i n e P r i c e and
c h a n g e " X * r e i g h t - l n M t o f o x * e c a s t book c o s t
v e r s u s a p p l i c a t i o n method*
C o n t r a c t Item N o , 3 - D e v e l o p m e n t and T e s t
4
a;-- A d d e d 560 hours P r o d u c t i o n E n g i n e e r i n g to
AC DO Bench T e s t for additional e f f o r t ldenti£ie<!«*by Production Engineering Department*
b.
Change ACAO V e h i c l e t e s t t o i n c l u d e k i t e t o
be i n s t a i l e d on a i r c r a f t 1 , 2 and 3 and c o r r e c t e d AC8D S t a t i c T e s t f o r e f f o r t i n a d v e r t e n t l y l e f t o u t o f F a c t F i n d i n g Computer r u n .
Changed "Spares and T e s t Parts" ACCO to r e m o v e
"receiving inspection test parts" and .avionics
black boxes for, pre-SLAE configuration,
3*
W e look forvzerd to discussing miy aspect of this pro-
p o s a l \;ith the p r e c o r i n g
cy
tc^^cnUuIvcs,.
BELL HELICOPTER COMPANY
L,
Father
Vice P r e s i d e n t , F i n a n c e
345
_ fX^-OTi AT; t?:; c*; ?.\i r, ^
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287,000
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„ • »*«
In trxcud^y
«&'«*»
cftfe • • -J t* ;
fc* L. Pnrecr,
Vicc President, Ff&iucc
P.ELL l&UCQPTE* COMPANY
DD.™„S33
l» Jimft IS73
346
1
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197$
347
ISni&^k
office' xo^bi
'
A^AV-f'O,
TO
ATTN:
M r . Kurtz
Memo oC y«=t»at let tuna to DerLnitize Letter Coutcact
TiAA JOl~72-€~G?.StS
B A Y e
AK.SAV-FO
9 Aug 73
tfatkius/da/5101
|
CAB 39-74
1 . Kcgotiatioas with'Sail Helicopter Company (BHC) for the d e s i g n , 'dsveloniaent and
production of two-Hundred end eighty-seven (287) Model 214A helicopters plus related
flight tests/evaluations and data w t c concluded AT A V S C O M , S t , Leu i s , M i s s o u r i QP,
June 1 6 , 1973- T h e subject helicopters and related data are being procured by the
U . S . Government for the Iranian C o v e e a s e n t . T h e contractor's initial p r o p o s a l , as
adjusted for a d d i t i o n a l cost considered during negotiations, and the final a g r e e s ^
arc sucswtrized a s follows:
Proposed
T a r g e t Coat
Target Profit
Dealer's CotaniiJiSiom
T a r g e t Price
Contract Type:
Kagotiated
3,630,837
287,nco
$368,885.705
$316f537,000
Fixed P r i c e Incentive (Pina T a r g e t )
Ceiling P r i c e
Ceiling Factor
-44121975,722*
$344.037,nop**
130X
125%
75/25%
75/252
80/202
40/60%
Profit R a t e
Sharing Agreement:
O v e r - Gov't/Contractor
Under- Gov*t/Contractor
^Includes dealer1 a cocaaissions at 1302.
**Incl«dcs dealer's ccetssissioris a t 1 0 0 % .
Personnel representing the parties a t negotiation sessions w e r e AS foliovs:
Coveroaient:
*Mr.
Mr.
Mr.
Mr.
Mr.
**Mr.
J . R . K u r t s , Contracting O f f i c e r , A V S C O M
Rob W c l g e l , Contracts S p e c i a l i s t , &VSC0K
J . D . Katfcins, C h i e f , Price/Cost Analysis B r a n c h , AVSCOM
W a l t S e i t h e l , Program Manager'*? O f f i c e , AVSCOM
Earl C a t l i n , Prograta Manager's O f f i c e , A V S C O M
Either B a n n i c k , Program Manager's O f f i c e , A V S C O M
I
348
AMSAV-PG
SUBJECTi
9 A u g u s t 1973
H e a o of X e g o t i a t i o n s to Dftfinttiste L e t t e r Contract; N'o. D A A J 0 1 - 7 3 - C - 0 2 4 3
* * M t . R . Kicyjtis, P r i c e A n a l y s t , AVSCOtt
M r . Allen Keener, Price Analyst, U S A Bell Plant Activity
* * M r . C« 6 . Itart, A u d i t o r - S u p e r v i s o r , D C A A
M r . J . H. M i l a n , A u d i t o r - P r i c i n g Testa S u p e r v i s o r , D C A A
* * C o l . K e w p o r t , D e o u t v D i r e c t o r for P r o c u r e m e n t , A V S G H M
W/0 Parker, Contracts Specialist, AVSCOM
Walt Burrows, Auditor-PLA, DCAA
Contractor:
*Mr.
Mr.
Mr.
Hr.
Mr.
E . L . Parsert Vice President Finance
G. J . L i n d s e y , C o n t r a c t s Adstin. H g r .
R . G . K o d s o n , C o n t r a c t s Adiainistrator
C . P . G r a y , Contracts Administrator
A . A . K u b b a r d , Chief Estimator
•Principal Kegotlators
**Lijaited p a r t i c i p a t i o n - c o n f i n e d p r i m a r i l y to first w e e k ' s s e s s i o n s .
3 . A u d i t R e p o r t N o . 1 1 0 - 0 4 - 3 - 0 1 3 4 a d d r e s s i n g the o r i g i n a l p r o p o s a l w a s i s s u e d o n
H a y 1 5 , 1 9 7 3 . A s ticte a l l o w e d , u p d a t e i n f o r m a t i o n w a s furnished t h e G o v e r n m e n t team
informally by update workpapers.
4 , P r i o r to n e g o t i a t i o n s w h i c h cossnenced a t A V S C O M , S t . L o u i s , M i s s o u r i , o n J u n e 8 ,
1 9 7 3 , the Covernssenc and B e l l U e l i c o p t c r C o m p a n y (BHC) h e l d F a c t F i u d i n g s e s s i o n s a t
the c o n t r a c t o r ' s f a c i l i t i e s i n F t , W o r t h , T e x a s , d u r i n g the w e e k of M a y 2 1 - 2 4 , 1 9 7 3 .
F a c t f i n d i n g s e s s i o n s resulted in the G o v e r n m e n t s u b a i t t i n g a l i s t of q u e s t i o n s to t h e
c o n t r a c t o r for w r i t t e n r e p l y , t h e c o n t r a c t o r ' s a n s w e r s to t h e s e q u e s t i o n s were, r e c e i v e d
o n M a y 3 1 a n d J u n e 1 . T h e G o v e r n m e n t team a s s e m b l e d a t A V S C O M o n J u n e 4 a n d 5 a n d
r e v i e w e d t h e c o n t r a c t o r ' s a n s w e r s to the f a c t finding q u e s t i o n s . O n t h e a o m i n g of
J u n e 6 t h , the G o v e r n m e n t iaet w i t h B K C to d i s c u s s i n m o r e d e t a i l t w e n t y - o n e o f the
q u e s t i o n s w h i c h w e r e c o n s i d e r e d to b e i n a d e q u a t e l y a n s w e r e d . A l s o , o n this d a t e the
c o n t r a c t o r p r e s e n t e d a n e g o t i a t i o n u p d a t e p r o p o s a l , w h i c h r e f l e c t e d wovusient o f c o s t
for r e c e i v i n g and i n s p e c t i o n test p a r t s froci c o n t r a c t line itest three (3) to l i n e iceta
o n e ( 1 ) . T h e e v e n i n g of J u n e 6 and a l l of J u n e 7 w e r e s p e n t b y the G o v e r n m e n t tt>atn i n
a n a l y z i n g the c o n t r a c t o r ' s l a t e s t p r o p o s a l a n d p r e p a r i n g the G o v e r n m e n t ' s u p d a t e
p o s i t i o n and g o - i n o f f e r . T h e G o v e r n m e n t ' s f i r s t offer w a s p r e s e n t e d to the c o n t r a c t o r
o n the scorning of Jutto 8 t h , a n d t h a t a f t e r n o o n the undersigned p r e s e n t e d i n d e t a i l
t h e b a s i s for the G o v e r n m e n t ' s p o s i t i o n and reasons for o u r differences w h i c h a r c
briefly sua&arized below:
a
*
S i n c e p l a n t - w i d e forward p r i c i n g rates had p r e v i o u s l y b e e n n e g o t i a t e d ,
t h e o n l y d i f f e r e n c e c o n s i s t e d of r e c o g n i t i o n by the Govarnne.at of h i s t o r i c a l d i r e c t
labor r a t e v a r i a n c e s b e t w e e n FPI p r o d u c t i o n c o n t r a c t a v e r a g e rates and p l a n t - w i d e r a t e s .
V a r i a n c e s r e c i g n i z e d by the G o v e r n m e n t w e r e :
349
j-iSAV-PO
iUBjECTj
Memo.of Negotiations to
Definittze
^ August 1973
Letter Contract « o . D A A J 0 1 - 7 3 - C - 0 2 4 8
Labor C a t e g o r y
tGver) /Un<te r
Plant-Wide K,v
$ .02
(.166)
.017
.053
•074
.274
.255
£.025}
(.046)
Manufacturing - P r o d . P h a s e
Manufacturing - D e v e l o p m e n t P h a s e
Tool Make
Production E n g i n e e r i n g
Engineering T e s t £ Evaluation
Engineering D e s i g n
Pilots
T e c h . Pubs
Spares & Photographic
b . D i r e c t Expense; Differences i n d i r e c t e x p e n s e costs of $365 p e r u n i t w e r e d u e
;o (i) $$0 for fuel and o i l c o n s u m p t i o n p e r t h e technical review a n d (ii) $315 for
>acking and crating c o s t d u e to iaipaet o f n e g o t i a t e d forward p r i c i n g r a t e s .
yftcurrin^ M f g . D i r e c t L a b o r Hours p e r U n i t : T o e contractor i n i t i a l l y proposed
14,125 h o u r s per u n i t . T h i s v a l v e was-subsequently updated to 13,962 hours to recognize
i factual d i f f e r e n c e p o i n t e d o u t by audit in oar exit c o n f e r e n c e . T h e G o v e r n m e n t ' s
"ir«t o f f e r
W s e d o n 10,865 h o u r s p e r u n i t . T h s difference of 3 , 0 9 7 h o u r s p e r u n i t
d u e to the following reasons:
Labor H o u r
Reasons
D i f f e r e n c e Per U n i t
502
114
R e c o g n i t i o n of S t e e p e r Curves
R e c o g n i t i o n of Cooaon. Parts
Recognition of D r i v e S y s t e m P e c u l i a r
Historical Curve Slope
R e c o g n i t i o n of M o d a l B e a m T e c h n i c a l E v a l u a t i o n
P r e c o g n i t i o n o f - 2 5 % M i s c . Unidentified Parts
and A l l of the 3 t B u m p F a c t o r
Applicable Process Labor
TOTAL
947
743
411
380
d . Wonrecurring E n g i n e e r i n g H o u r s : T h e following en&ineering d i r e c t l a b o r hours
differences w e r e based o n the results of the G o v e r n m e n t technical e v a l u a t i o n :
Honrecurring L a b o r
Hour Difference
Tool Make
P r o d u c t i o n Engineering
Engineering Test & Evaluation
Engineering Design
Pilots
T e c h Pubs
Spares E n g i n e e r i n g
Photographic
23-586 O - 78 - 23
26,478
-36,I6fi
16,152
54,727
1,362
10,195
7,822
678
350:
AMSAV-EQ
SUBJECT:
_
^ A u g u s t 1973
Kecio of .negotiations to D e f i n i t i v e Letter C o n t r a c t N o . D A A J Q 1 - 7 3 - C - 0 2 4 3
A d d i t i o n a l l y , t h e r e w e r e 3 2 , 5 3 0 n o n r e c u r r i n g csanuf acturin* h o u r s for s p a r e a n d test
p a r t s w h i c h had b e e n q u e s t i o n e d by a u d i t for n o n - r e c o g n i t i o n of these q u a n t i t i e s i n
the d e v e l o p m e n t p r o g r a m c u r v e s p a n .
e . M a t e r i a l a n d S u b c o n t r a c t C o s t ; T h e contractor's o r i g i n a l v e r s u s n e g o t i a t i o n
u p d a t e p r o p o s a l r e f l e c t e d numerous changes in the m a t e r i a l and s u b c o n t r a c t r e c u r r i n g
c o s t n e r h e l i c o p t e r a s s u e s a r i z e d belofc: -
Original
K a t ' l - E n g i n e (1)
M a trU - R a w (2)
M a t l - A N / V e n d o r (3)
S u b c o n t r a c t (4)
'
$157,008
24,363
98,91?
161,402
C o s t Per U n i t
K e g . Update
$158,435
23,339
60,146
169,906
(1) T h e e n g i n e e s t i m a t e ' w a s i n c r e a s e d to r e c o g n i z e r e s u l t s ftf EEC's n e g o t i a t i o n
w i t h the vendor.
(2) R a w K a t e r i a l w a s reduced to r e c o g n i s e factual d i f f e r e n c e s d i s c u s s e d t n a u d i t
exit conference.
(3) H y d r a u l i c c o m p o n e n t s v a l u e d a t $ 1 3 , 4 2 8 w e r e reIdentified as s u b c o n t r a c t c o s t
i n u p d a t e . T h e remaining r e d u c t i o n of $ 2 5 , 3 4 3 p e r unit w a s i n r e c o g n i t i o n o f f a c t u a l
d i f f e r e n c e s p r e s e n t e d i n the audit e x i t c o n f e r e n c e .
(4) T h e n e t $ 8 , 5 0 4 c o s t p e r u n i t i n c l u d e s a r e d u c t i o n of $ 4 , 9 2 4 d u e to f a c t u a l
d i f f e r e n c e s d i s c u s s e d in a u d i t e x i t c o n f e r e n c e o f f s e t b y the h y d r a u l i c A X / V e n d o r
d o l l a r s of $ 1 3 , 4 2 8 w h i c h w e r e r e i d e n t i f i e d a s s u b c o n t r a c t itccss. (See N a t e ( 3 ) , a b o v e ) .
5» T h e G o v e r n m e n t recoGsnanded a a t e r i a l and s u b c o n t r a c t c o s t p e r u n i t a n d r e s u l t i n g
d i f f e r e n c e s per u n i t a s p r e s e n t e d b e l o w w e r e d u e p r i m a r i l y to (i) d i f f e r e n c e in m a t e r i a l /
s u b c o n t r a c t factor w h e r e b y B H C p r o p o s e d
v e r s u s the G o v e r n m e n t ' s racocwiended 12a
i n c r e a s e factor f o r e s c a l a t i o n , v e n d o r q u a l i f i c a t i o n and ciiscellaneous c h a r g e s , (ii)
r e c o g n i t i o n of o n l y 7 5 2 of u n s u p p o r t e d rtiacelloneous u n i d e n t i f i e d p a r t s , a n d (iit)
r e c o g n i t i o n of a b u d g e t a r y q u o t e r e c e i v e d * ^ r o n H R 6 M for h y d r a u l i c p a r t s . T h e U R h Jl
q u o t e a m o u n t e d to a d i f f e r e n c e in s u b c o n t r a c t c o s t of $14,043 p a r u n i t . T o t a l
d i f f e r e n c e per u n i t is as f o l l o w s ;
D i f f e r e n c e Per U n i t
M a t e r i a l - Raw
Material - AN/Vendor
Subcontract
$ 3,173
10,277.
37,101
351
AMSAV-PO
SUBJECT;
9
A u g u s t 10/3
K e ® o of N e g o t i a t i o n s to D e f i n i t i v e L e t t e r C o n t r a c t K o . D A A J 0 1 - 7 3 - C - 0 2 4 8
O t h e r m i n o r d i f f e r e n c e s e x i s t i n g in n o n r e c u r r i n g c o s t areas w e r e a l s o e x p l a i n e d i n
d e t a i l . A f t e r this b r i e f i n g , the c o n t r a c t o r r e q u e s t e d and r * c * i v o d o u r d e t a i l e d c o m p u t a t i o n s . Based o n the c o n t r a c t o r ' s r e q u e s t , n e g o t i a t i o n s were, terminated u n t i l the
f o l l o w i n g T a e s d a y , J u n e 1 2 , s o that they slight h a v e a n o p p o r t u n i t y to s t u d y the b a s i s
for o u r d i f f e r e n c e s . T h e c o n t r a c t o r r e t u r n e d to F t . W o r t h and t h e Coveccusent tcaai
r e a a i n e d in S t . L o u i s to p r e p a r e a csaxiaua G o v e r n m e n t p o s i t i o n . Siegotiatfons r e s u m e d
on Tuesday m o r n i n g , June 1 2 , with 5KC attacking the Government's position. T h e
i n i t i a l i m p l i c a t i o n by BHC w a s that o u r o f f e r w a s too low and w i t h o u t f o u n d a t i o n , t h a s
the Governraent s h o u l d a d j u s t their first o f f e r to reflect 3 c o r e r e a s o n a b l e p o s t i o n .
A f t e r a o r e t h a n s i x h o u r s o f debate" a s to tha s o u n d n e s s and v a l i d i t y o f e a c h p o s i t i o n ,
the c o n t r a c t o r s t a t e d that they h a d n o t h a d e n o u g h tin*© to p r o p e r l y Cv&luatvi the G o v e r n —
c e n t ' s p o s i t i o n a n d a p o l o g i z e d for n o t h a v i n g p r e p a r e d a c o u n t e r o f f e r . T h e Governtnent
had s u c c e s s f u l l y s u p p o r t e d t h e b a s i s for t h e i r p o s i t i o n i n a l l e x c e p t cvo t e c h n i c a l
a r e a s , (Nodal beast l a b o r h o u r and o i l c o n s u m p t i o n r e v i e w s ) . T h e e n g i n e e r w h o h a d p e r formed the t e c h n i c a l e v a l u a t i o n w a s n o t present? h o w e v e r , h i s s u p e r v i s o r c a l l e d i n
corrected positions on June 1 3 , 1973.
6., T h e G o v e r n s e n t , w h i l e p r e p a r i n g their m a x i m u m o f f e r o n W e d n e s d a y iRaraing, found a n
5 8 , 9 0 0 , 4 4 4 ciath e r r o r i n their u p d a t e and f i r s t o f f e r p o s i t i o n s w h i c h r e s u l t e d ' i n the
first o f f e r b e i n g too h i g h b y that a m o u n t . S i n c e o u r d e t a i l e d c o m p u t a t i o n s h a d b e e n
g i v e n to the c o n t r a c t o r o n t h e p r e c e d i n g F r i d a y , the G o v e r n m e n t w a s a s t o n i s h e d t h a t the ;
c o n t r a c t o r h a d n o t p o i n t e d o u t the e r r o r in t h e i r d i s s e c t i o n o f o u r p o s i t i o n the p r e v i o u s
d a y . T o test K H C ' s c r e d i b i l i t y , the c o n t r a c t i n g o f f i c e r d e c i d e d to w a i t u n t i l a f t e r
the c o n t r a c t o r ' s n e x t o f f e r to s e e if they w o u l d m a k e us a w a r e o f o u r taistake. T h e
c o n t rf a c t o r p r e s e n t e d t h e i r s e c o n d o f f e r w i t h o u t p o i n t i n g o u t the w i s t a k e i n the G o v e r n D t m t 8 p o s i t i o n . Frosa d i s c u s s i o n a t the t a b l e , i t a p p e a r e d that a t l e a s t o n e m e m b e r
o f t h e i r teas* w a s a w a r e o f t h e G o v e r n m e n t ' s tiistake. T h e c o n t r a c t i n g o f f i c e r A d v i s e d
B U G t h a t o u r n e x t o f f e r (tfo. 2) w o u l d r e f l e c t a c o r r e c t i o n o f the ciath e r r o r . HKC i n
s u b s e q u e n t o f f e r s f o u n d that arcior s e a t s f r o m N o r t o n C o . and o t h e r m i s c e l l a n e o u s p a r t s "
had i n a d v e r t e n t l y b e e n ocaitted f r o a t h e i r p r o p o s a l . T h e c o s t s of these i t e a s a m o u n t i n g
t o $ 4 , 4 8 2 , 9 4 0 w e r e v e r i f i e d as requlrecventi* a n d w e r e r e c o g n i z e d b y the Governctent in
l a t e r o f f e r s , b a s e d o n N o r t o n ' s q u o t e w h i c h B H C h a d f u r n i s h e d as a h a n d o u t .
7 , A l s o in a s u b s e q u e n t o f f e r ( N o . 3 ) , t h a c o n t r a c t o r recognized r e c e i p t o f a n u p d a t e d
q u o t e frosi their s i s t e r d i v i s i o n , !IR & M , a n d r e d u c e d their p r o p o s e d c o s t b y $ 2 / 1 1 0 , 0 3 5
o r $ 5 , G 0 7 per u n i t u n b u r d e n e d . T h e HR. 4 H q u o t e p u r p o r t e d l y w a s b a s e d o n FEW r a t e s
a p p r o v e d b y D C A A . T h e G o v e r n m e n t a f t e r a n a l y z i n g the u p d a t e d H R & U q u o t e a n d t h e c o n t r a c t o r ' s a d j u s t m e n t , d e t e r m i n e d that B H C h a d u o t p r o p e r l y a d j u s t e d their p r o p o s a l for
t h e H R ft M q u o t e . A h a n d o u t r e f l e c t i n g the p r o p e r a d j u s t m e n t for the U R & H q u o t e w a s
p r e s e n t e d b y the G o v e r n m e n t w i t h o u r fourth o f f e r . T h i s h a n d o u t s h o w e d that the cont r a c t o r ' s r e d u c t i o n of $ 2 , 1 1 0 , 0 3 5 tor H R 6 M s h o u l d h a v e b e e n $ 5 , 3 2 3 , 2 8 7 ; i . e . , they
o w e d the G o v e r n m e n t a n a d d i t i o n a l stove of $ 3 , 2 1 3 , 2 5 2 o r $8,501 p e r u n i t u n b u r d e n e d .
T h e c o n t r a c t o r a t this p o i n t (late F r i d a y n i g u t ) e x p r e s s e d a d e s i r e to Urr.ina.fce n e g o tiations^ u n t i l the f o l l o w i n g T u e s d a y , J u n e 1 9 . K r . K u r t z , the P C O , a n d C o l . K e v p c r t
s t a t e d that it w a s the G o v e r n m e n t ' s d e s i r e to c o n t i n u e n e g o t i a t i o n s . £t w a s d e c i d e d
352
AKSAV-PO
SUBJECT:
9 August
M e n o o f N e g o t i a t i o n s to Do.fitiitize L e t t e r C o n t r a c t ilo. D A A J 0 1 - 7 3 - C - 0 2 4 8
1975
to continue negotiations through Saturday, Final agreement was reached a t a target
c o s t o f $ 2 7 5 , 8 0 0 , 0 0 0 , target p r o f i t of $41,250,000 (15%); 80/20 share coat o v e r r u n ,
4 0 / 6 0 s h a r e o f c o s t u n d e r r u u s , c e i l i n g p r i c e $ 3 4 3 , 7 5 0 , 0 0 0 (1257,). T h i s v a a w i t h i n \5Z
o f t h e G o v e r n m e n t ' s o b j e c t i v e , ^ h e d i f f e r e n c e is a s s u a e d to b e an i n c r e a s e of 180 U o u r s
in detail p « t s and subassemblies specifically in the transmission area. T h e negotiated
price is considered to b e fair and reasonable s i n c e the Government's p o s i t i o n rccognizes
t h a t j u d g m e n t a l d i f f e r e n c e s «aay e x i s t i n t h e p r o j e c t e d e f f o r t .
8 . Disposition of reported possible cost accounting standards (CAS) problems was
follows
as
a . T o o l i n g L i a i s o n L a b o r acasmutiug t o 5 , 0 0 0 h o u r s "and a n u n d e t e r m i n e d n u n b e r o f
d i r e c t engineering labor hours for C/SCSC administration as of the date of agreement
had not been ruled o n by the A C O . T h e aforementioned labor hours v e t e included in the
negotiated target c o s t . S h o u l d the A C O rule that these hours or e f f o r t a r e in nonc o m p l i a n c e , then the n e g o t i a t e d target cost should be reduced accordingly. b . T h e A Q 3 ruled that the undetermined Bidding and P r o p o s a l cost w a s n o t i n n o n compliance. This decision was based on.AVSCOM legal interpretation which stated In
sucssary t h a t t h e e f f o r t w a s n o t i n c u r r e d u n d e r l i k e c i r c u m s t a n c e s .
/Wffit D . W A T K J K S
£/Chief, Contract
Price Analysis Office
353:
AMSAV-PQ
SUBJECT: Addenducs to Keao of Negotiations to Definitive Letter Contract
Ho. DAAJ01-73-C-024S
O t h e r Coarsen ts:
a . T h e contractor furnished a Certificate of Current Cost o r P r i c i n g
D a t a c e r t i f y i n g that cost o r p r i c i n g d a t a furnished in support of h i s
p r o p o s a l w a s a c c u r a t e , complete and c u r r e n t -as of IB June 1 3 7 3 . F a c t u a l
d a t a furnished by the contractor w a s verified by the Government n e g o t i a t i n g
tesun. T h e r e w a s n o a r e a w h e r e data vras considered i n a c c u r a t e , n o t cosiplete
or n o t c u r r e n t . Differences between the recocincudations s e t o u t in D C A A ' s
formal-audit report of 15 M a y 1973 a n d the Government's n e g o t i a t i o n
o b j e c t i v e are considered to b e the r e s u l t of updating proposals b y R H C
a n d the furnishing of a d d i t i o n a l supporting d o c u m e n t a t i o n . D C A A a u d i t o r
reviewed these updated p r o p o s a l s together w i t h the additional s u p p o r t i n g
d a t a . I n f o r a a l audit c o m m e n t s and recoGsstendations resulting fro« this
updated i n f o r m a t i o n va« incorporated into the G o v e r n m e n t ' s n e g o t i a t i n g
o b j e c t i v e . T h e r e w e r e n o unresolved significant exceptions taken b y D C A A ,
to asiounts included in the negotiated c o s t .
b . I n consideration of the fact s e t o u t in this cicaoranduflt, the
o v e r a l l p r i c i n g arrangeaent o n this p r o c u r e m e n t Is considered r e a s o n a b l e .
354:
^ L J
H E U C O P T E R
POST O^PiCH BOX 432 * FORT WORTH, TEXAS /U:01
COMPANY
A t&xlfOftl COMPANY
18 June 1973
1M$RGH:jc-308
Subject*
C o n t r a c t D A A J 0 1 - 7 3 - C - 0 2 4 8 , C o n f i r m a t i o n of F i r m
Target Price Negotiations
To*
Department of the Army
U- S« Artay Aviation Systems Command
P . 0 . Box 209
S t . I/mis,
63166
Attn:
AMSAV-FPFJU/J, E , Kurt a;
Ref:
(a)
Negotiations Conducted 6 June 1973 through
16 June 1973
(b) Negotiation Baseline for Definitization,
BHC letter 1M :RCH :hf~S$a dated 11 June 1973
(c) Negotiation Update proposal, BHC letter
2 2 ; A A K m k - 1 0 0 9 , dated ^ June 1973
(d) Fact Finding Update proposal, BUG letter
lM:RGH:jc~274, dated 17 May 1973
(e) proposal for Def initization of Model 21**A
Letter Contract DAAJ01-73-C-02^8 f BHC
letter 1M:RGH: je-186, dated 30 March 1973
Encli
(1)
Certificate of Current Cost and Pricing Data
1 . Reference (a) negotiations were conducted between representatives of AVSCOM and Bell Helicopter Company to establish the Firm
Target amounts and Terms and Conditions as were proposed by
references (b) through (e),
2* The Contractor confirms the following target cost, target
profit, target price, share factors and ceiling amount that were
agreed to:
A*
Contract Line Items
Unit
Total
9^5,516
*"271,323^X99
Item 0001• 287 ea« Helicopters
Target Cost
Target Profit
Target Price
^Includes Dealer Commission @ $287,000.
355:
I t e m 0002,
Target
Target
Target
I t e m 0003,
Target
Target
Target
75 e a S p a r e
Cost
Profit
Price
Target
Target
Target
Total
190,371
14,277,819
Qualification
Cost
Profit
Price
Items0004 & 0005, t o b e
I t e m 0006,
Unit
Engines
priced at a later
date
Data
Cost
Profit
Price
6,745
1,935,-982
TOTAL TARGET COST
TOTAL TARGET PROFIT
TOTAL TARGET PRICE
$316,537,000
*T0TkL TARGET CEILING
$344,037,000
* C e i l i n g c o m p u t a t i o n e q u a l s 125 % of t a r g e t cost-; l e s s
$ 2 8 7 , 0 0 0 . 0 0 D e a l e r C o m m i s s i o n t h e n t h e add b a c k o f
$287,000.00 t o t h e C e i l i n g Amount.
B.
Contract
C.
Share F a c t o r s
D.
P r o f i t Rate
Type - F i x e d . P r i c e
Incentive
- Over - 80/20
Under - 40/60
of Target
Cost
(Firm
Target).
356:
3= The a b o v e target amounts are based upon agreement
of the
statement of work and terois and conditio us as reflected in
references (b) through, (e) except as stated below:
A*
Terra, and C o n d i t i o n ^ (as stated in ref* (b))
A d d the following sentences:
"The last billing will be less $180,000,, This final
acuount will, be billed upon approval of a l l AQS test
reports,"
B.
Term and Condition N o . 3 (as stated in r e f . (b)3
Add the following paragraphi
"BHC and U* S* Government will meet sixty (60)
days prior to delivery of 1st helicopter * to review
status of qualification of aircraft and/or
components • "
0.
Term and C o n d i t i o n No, ,1 V . ( R e f
(b))
A d d the following to Para 2 A CI )(d)
* h o w e v e r , any part with a critical characteristic(s)
(by definition a critical part) which has been rejected
for non-conforming to. other than a M critical characteristic (s) is subject to MR$ action,
D*
Term and Condition. Ko » .1 2 (Ref»(h))
M
Delete the last senteee of paragraph " c as'contatned in
C o n t r a c t o r ^ reference *(e) proposal, Section J.12 which
reads:
"The parties further aigree that in the event the Contractor
m u s t change sources for the reasons specified herein that
the parties w i l l enter into negotiations to equitably
1
adjust the contract schedule, price or both*'
Term and Condition N o v l » G . G . (Ref. (b)>
It was agreed that the J t e m 0006, Total Target P r i c e ,
of Section E.2 of the Contract would reflect a unit
price amount (total divided by 287 ea) that could be
billed on the Item 1 DO 250 as a separate amount (if
n o t prohibited by A L P H A ) .
357:
k m A s emended above, it was agreed that the Terras and Conditions
£6 stated in reference (b) would be incorporated into the Definitive Contract.
5* Submitted herewith as enclosure (1) is the Certificate of
Current Cost and Pricing Data executed by the Contractor, the
Contractor reserves the right to **eview the resulting Definitive
Contract for concurrence prior to execution*
Early receipt of a Definitive Contract will be appreciated.
BELL HELICOPTER COMPANY
E* L* Farmer
Vice President
Finance
358
Lrw/xftysg
STAffC
C A P. MY
O.NS 0.ViSlOfi
V;CZCSC0?.1V3 O S 0 G 7 1 5 R B » P
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1732222-GGCe—RUEAOWO.
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r-N SECOEP WASH OC
in UUFTNJA/CARHISH MAAG TEHRAN I RAM
R U E A D M O / C 5 A W A S H DC
P U f M A A A / C N U W A S H OC
IIUEFIIOA/CSAF- W A S H D C
R U E E O S B / O S A WASH OC
INFO RUESHR/ANEMB TEHRAN IRAN
R O E H C / S E C S T A T E "WASH D C
RUSNAAA/ySCINCEUR VAIHINGEN GERMANY.
ZEN/JCS WASH OC
m
UNCIAS
FROM J
E F T 0 FOUO
• 6770
A5D:ISA(SA)/DSAA
A . C A R M I S H M A A G I R A N M S G , 2313313! A P R 7 3 { N O T A . L ) .
REPS:
0.
CARM1SH HAAG IRAM MSG 051333Z HAY 7 3 .
C . AHE^O TEHRAN MSG 3630/
280605Z HAY 73,
1.
THE S U B J E C T Of AGENTS FEES WITHIN WIS WAS O l S C U S S E O W I T H G E N E R A L
T O U F A N I A N ' GOI V I C E M I N I S T E R OF WAR FOR PRnCUREM'EUT* G N 11 J U N E 7 3 .
2.
I T H A S 6eC0;-»E C L E A R T H A T V»c M U S T A L T E R O U R C U R R E N T
PROCEDURES
S O A S .TO A C C O M O D A T E T H E S H A H ' S I N S T R U C T I O N S T O C.EN T H U F A N I A N T H A T
T H E G O I W I L L N U T R E P E A T N O T P A Y T H E C O S T O F A N Y f*EPEAT A N Y A G E N T S '
F E E S R E F L E C T E D IN F H S P R I C I N G .
{
3.
A F T E R .GEN T O U F A M A N I N I T I A L L Y S T A T F D T H E G O I O C J E C T I O N T O A G E N T S
FEES, OUR FIRST RESPONSE WAS TO AGREE THAI OHO CONTRACT
OFFICIALS
S H O U L D NOT H O N O R ANO THE GOI S H O U L D NOT HAVE TO PAY E X C E S S I V E OR
I M P R O P E R A G E N T S * F E E S ; T H A T IS/ F E E S A R I S I N G O U T U F W H H T H E A G E N T
IS A S O P P O S E D T O W H A T S E R V I C E S H E P E R F O R M S .
THIS RESpOuSE WAS NOT
SUFFICIENT.
G E N T O U F A N I A M I N S i S T c O T H A T THE G O I W R L N O T P A Y A N Y
AGENTS* F E E S .
HE AGREED ONLY THAT THE GOI WtLL NOT O h J E C T : TO PAYING
FOR REASONABLE ANO JUSTIFIABLE SERVICES ACTUALLY PERFORMED IN CONN E C T I O N vil T H T H E S A l G »
T H E G O I * H t E M P H f t S I Z C 0/ I S W I L L I N G 'TO
P A Y F O R V A L U E R E C E I V G Q ; IT IS N O T W I L L I N G T O P A Y A N Y E L E M E N T O r
C O S T A R I S I N G O U T1 Of- " F I N D I N G " T H E T R A N S A C t l U N U R T H E A S S U M P T I O N
THAT " INFLUENCE'
CAN MAKE THE GOI ANY MORE I IKELY TO ENGAGE OR NOT
T O E N G A G E IN A C E R T A I N T R A N S A C T I O N .
G F N T n t i F A N l A N w A S P A R T T r m -rci v
359:
A OA HA M I
THAT
THE
GCU
WOULD
MOT
PAY
COSTS
HEASUREO
AS
A PERCENTAGE
OF
S A L E S ; EVEN 1/2 OF 1 P E R C E N T UF A £ 1 0 0 FULL 1UU T R A N S A C T I O N IS
C L E A R L Y ()I5PRUPGRTIQNAYE TO REAL S E R V I C E S AMO RE*L V A l U c TO THE GOI*
G E N TOUPAC4IAM O l O M O T O B J E C T TO THE PRACTICE Of U . S , F I R M S U S I N G
A G E N T S IN IRAN FOR CIVIL S E C T O R M E R C H A N D I S E , HE M A K E S H I S P O I N T
UfiLY_L£U*EGARD TO THE IRANIAN P U R C H A S E OF M I L I T A R Y E Q U I P M E N T *
B E C A U S E OF THE INTENTIONS OF THE 601 TO USE THE FMS C H A N N E L W H E N E V E R
P O S S I B L E * THE G O ! SIMPLY S E E S N U V A L l Q SERVICE TO AC P E R F O R M E D B Y
AN A G E N T •
4 . O U R D I F F I C U L T Y IS T H A T THE ASPR C U R R E N T L Y P E R M I T R E A S O N A B L E *
V A L I D A N O A C T U A L A G E N T S ' F E E S AS A P A R T UF "COST OF S A L E S " A S S O C I A T E D
W I T H AM FMS T R A N S A C T I O N *
WE P O I N T E D OUT TO GEN T U U p A f U A N THAT IT H A Y
NOT OE S I M P L E TO E L I M I N A T E ALL S U C H F E E S . THEY MAY* F O R E X A M P L E *
GE I N C L U D E D IN A G R E E D O V E R H E A D . T H E Y MAY NOT HE I S O t A T A O l E A N D IT
IS P O S S I B L E T H A T THE U.S* C O N T R A C T O F F I C I A L D O E S N O T K N O W OF T H E I R
E X I S T E N C E , liUR D I F F I C U L T Y IS-NOT IN E L I M I N A T I N G U N R E A S O N A B L E F E E S ;
IT IS THAT WE H A Y H O T BE A8LE TO A S S U R E C O M P L E T E E L I M I N A T I O N OF
ALL F E E S .
5 . AS A R E S U L T OF THE A B O V E O l S C U S S t O M S THE r 0 U 0 W l M G A C T I O N S ARE
U N D E R W A Y . A*
FOR C O N T R A C T S C U R R E N T L Y B E I N G N E G O T I A T E D W H I C H A R I S E
F R O M OR I N C L U D E G O ! FMS CASE R E Q U I R E M E N T S W H I C H ARE A S S O C I A T E D W I T H THE C O N T R A C T U A L O B L I G A T I O N S OF A U . S . FIRM E M P L O Y I N G A R E P R E S E N T A T I V E IN IRAN* THE FEE WILL BE I S O L A T E D A N D I D E N T I F I E D T O GDI
FOR GOI A P P R O V A L P R I O R TO C O N T R A C T A W A R D . D E T A l L E O J U S T I F I C A T I O N
AND OR E X P L A N A T I O N OF THE FEE W I L L A C C O M P A N Y THE NOT I F I C A T I O N T O .
THE GOI«
IT IS INTENDED T H I S P R O C E D U R E , B E INlIlAfED U R L Y A F T E R
N E G O T I A T I O N W I T H THE FIRM INVOLVED*
THJS P R O C E D U R E IS B E I N G
•IMPLEMENTED I M M E D I A T E L Y . B . A* US/GOf^ M E M O R A N D U M 0*= U N D E R S T A N D I N G
OR P O S S I B L Y A S I M P L E R E X C H A N G E OF L E T T E R S IS B E I N G P F E P A R E D T O
E X P R E S S THE G O I R E Q U E S T A N D TO A U T H O R I Z E A C T I O N S B E I N G C O N T E M P L A T E D BY OfiO. T H I S W O U L D BE R E G A R D E D BY 0 0 0 AS AN" I M T E R N A T t O M A L A G R F E H E N T " W I T H I N M E A N I N G OF A S P R , P U R P O S E OF THIS M » U OR S U C H L E T T E R S
IS TO G A I N A U T H U R I T Y FOR A C T I U N S U N D E R ASPR W H I C H A R E N o t P O S S I B L E
U N L E S S N O R M A L P R O C E D U R E S ARE O V E R R I D E N IN A C C O R D A N C E W I T H A S P R
6*705*3(0)*
C* N O T I C E TO U.S* T N O U S T R Y WILL BE P R O V l O E D BY '
O A S O ( U L ) A F T E R A G R E E M E N T IS C O N S U M M A T E D , IN THE INTERIM* U * 5 *
I N D U S T R Y M A Y 8E A D V I S E D OF THE GOI R E Q U I R E M E N T S R E G A R D I N G A G E N T S '
F E E S A N D T H A T THE D O D IS I N V O K I N G A S P R 6 . 7 0 5 . 3 ( 0 * C L A U S E ( S U P R E M A C Y
OF I N T E R N A T I O N A L A G R E E M E N T S * * IN O R D E R TO CARRY W
Ogi REQUIREMENTS
P L A C E O U P O N THE 0(10 AS O U T L I N E D H E R E I N , IT IS R F C O M N E N O E D T H A T
U . S . D E F E N S E INDUSTRY C O N S I D E R M A K I N G ALL FUTURE A R R A N G E M E N T S FOR
R E P R E S E N T A T I O N ON A S A L A R Y R A T H E R T H A N A COfittlSSION B A S I S AND T H A T .
T H E Y S H O U L D A T T E M P T TO H O D I F Y ALL E X I S T I N G A R R A N G E M E N T S TO T H A T E N D .
I N F O R M A T I O N IN PARA S«A. P A R T I C U L A R L Y S H O U L D 8£ P R O V I D E D AS A P P R O P R I A T E TO U . S . D E F E N S E I N D U S T R Y .
jattiJ*
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rTJ. U F U C . n p T n R O C M P A X Y , otvtm TON O F T E X T I U W . T K C .
Kcrro:»
.-27
.1.
SPKCIAT, PROVISIONS
OTHER COSTS
T h e C o n t r a c t o r ' s proposal. £or
i n i t i z a t i o n o f thl« c o n t r a c t d o e s n o t I n c l u d e c o s t s
or s e r v i c e s o f his a u t h o r i z e d r e p r e s e n t a t i v e s a s s o c i a t e d w i t h this c o n t r a c t . T h e p a r t i e s
u»rcbv a ^ r c e that in the e v e n t the C o n t r a c t o r eLc.cts t o s v b n i t u propositi for the c o a t s
»f s u c h s e r v i c e s , the p r o p o s e ! s h a l l b e n e g o t i a t e d it\ goo<5 feith a n d if a p p r o p r i a t e ,
n c l u d e d a s p a r t o f this c o n t r a c t .
SECURITIES
REPLY OF
TO SENATE
AND EXCHANGE
INQUIRY
COMMISSION
INTO TEXTRON,
COMMITTEE ON BANKING,
AND URBAN
AFFAIRS
(361)
INC.
HOUSING,
SECURITIES AND EXCHANGE COMMISSION
V/ A SHI I i T O N , U.C.
200-13
February 22, 1978
The Honorable William Proxmire
United S t a t S e n a t e
Committee on Banking, Housing
and Urban Affairs
Washington, D.C. 20510
Re:
Textron, Incorporated
File No. HCKL055
Dear Senator Proxmire:
On February 21, the staff of the Senate Banking Committee reguested
that we provide the Committee, for purposes of inclusion in the record
of its pending proceedings into the t nomination of G . William Miller,
an indication of the scope of the Commission's inquiry into Textron,
Incorporated. As I indicated to you in my letter of February 21, 1978,
the Commission authorized an inquiry into this matter to determine, among
other things, whether information that was referred to us by the Committee
implicated Textron, or any of its subsidiaries or officials in violations
of the federal securities laws. As you know, the Committee's information
indicated that Bell Helicopter, a wholly-owned subsidiary in Textron's
Aerospace Division, paid $2.95 million over a two year period to Air
Taxi, an Iranian sales agent, in connection with the sale in 1975
of 489 helicopters to the government of Iran for $500 million.
With respect to the remaining areas of the Conraission's inquiry,
I should emphasize that to preserve the integrity of its investigative
processes, it is essential that the premature or unwarranted public
disclosure of the details of its investigations be avoided. Also,
when such disclosures occur, individuals involved, many of whom may
in the final analysis be determined to have engaged in no illegal
or improper conduct, may have their privacy — and in some cases their
safety — jeopardized and markets for securities may be unnecessarily
impaired. Accordingly, while we have
supplied the Committee's staff
1
a Confidential Memorandum detailing the matters we have currently
under investigation, we are reluctant to provide more than a general
outline of those matters in a letter we understand is intended to.be
made a part of the Committee's public record. Those matters include:
(a)
the remittance of $300,000 by a Textron
subsidiary to an independent foreign sales
representative in connection with a $1.6
million sale of equipment manufactured by that
subsidiary to a foreign government entity;
(363)
364:
(b)
the use of "push reoney," salary contrloutions
and other promotional practices by another
Text t on subs idiary;
(c)
the disclosure of instances ot overbillings,
underbillings and other btllir/j practices
apparently employed by several divisions of
Textron, to accommodate their customers in the
establishment of questionable funds of cash;
ard
(d)
the adequacy of Textron*s disclosures with
respect to information regarding numerous
proceedings brought by federal or state
governmental authorities regarding alleged
employment discrimination on the basis of
race, sex, age, religion, etc.
As you can expect, an investigation as comprehensive as the
one I have outlined for you involving an entity as complex as Textron,
could result in several additional areas of inquiry being undertaken
by the staff before the investigation is finally concluded. That is
not to suggest, however, that the culpability of any individual
or entity can be properly resolved prior to a balanced assessment
of the totality of the evidence obtained and a determination whether
indications of violative conduct exist and are sufficiently strong
and reliable to warrant enforcement action.
As I indicated in my letter to you of February 21, 1978, Textron
has not conducted an extensive internal investigation to determine
whether it engaged in any unlawful activities in connection with its
overseas operations or those of its subsidiaries. Thus, the staff
expects that at least four to six months, and perhaps more, will be
required to complete the inquiry and to satisfy itself with respect
to Textron's activities in various foreign countries.
If you or your s t a f f has further questions on this matter, v;a
shall be happy to attempt to answer them.
RESPONSE FROM C I T I B A N K
TO SUBPOENA
FROM COMMITTEE
(365)
23-586 O - 78 - 24
ATTORNEY
SHEARMAN
5 3
&
WALL
NEW
YORK
STERLING
STREET
21 A V E N U E G E O R G E 3T
75008 PARIS
10005
2«L
B3-48
"NUMLATUS
PARIS"
TELEX: 6 4 2 - 850296
(212) « 3 - I O O O
CABLE:"NUMI_ATUS" TELEX: ITT -42t2©5
WU 128103
4 0 BASING HALL S T R E E T
LONDON EC2V 5 D E
oi-«2e s e e s
"NUMLATUS LONDON
TELEX: 8 S I - 8 6 4 2 7 4
EC2"
February 17, 1978
BY H A N D
Mr. Kenneth A . McLean,
Staff D i r e c t o r
United States Senate Banking,
H o u s i n g and U r b a n A f f a i r s C o m m i t t e e
5300 D i r k s e n S e n a t e O f f i c e B u i l d i n g
Washington, D.C.
Dear M r . McLean:
On F e b r u a r y 9 , 1 9 7 8 , o u r c l i e n t C i t i b a n k w a s a d v i s e d
by its W a s h i n g t o n c o u n s e l t h a t the C o m m i t t e e w a s in the p r o c e s s
of issuing a s u b p o e n a , a d d r e s s e d t o " C i t i b a n k , N . A . ( i n c l u d i n g
the P a r i s o f f i c e ) " c a l l i n g for r e c o r d s r e l a t i n g t o c h e c k i n g
a c c o u n t s of A i r T a x i , T e h r a n , I r a n , o r M r . A . H . Z a n g a n e h d u r i n g
the p e r i o d J a n u a r y 1 , 1 9 6 8 t h r o u g h D e c e m b e r 3 1 , 1 9 7 5 .
In a n t i c i p a t i o n o f the s u b p o e n a , I a d v i s e d y o u by
t e l e p h o n e o n F e b r u a r y 1 4 , 1 9 7 8 , t h a t o u r c l i e n t had n o t
l o c a t e d any r e c o r d o f c h e c k i n g a c c o u n t s in N e w Y o r k in the
n a m e of e i t h e r A i r T a x i o r M r . Z a n g a n e h d u r i n g t h e p e r i o d
m e n t i o n e d . O u r c l i e n t d i d find a r e c o r d of a b u s i n e s s c a l l
in I r a n in 1 9 7 5 , and I e n c l o s e c o p i e s of t h o s e m e m o r a n d a
h e r e w i t h ( m e m o r a n d a d a t e d M a r c h 7 , 1 9 7 5 and M a y 1 2 , 1 9 7 5 ) .
B e c a u s e o f the r e f e r e n c e to C i t i b a n k ' s P a r i s o f f i c e ,
w e , a s c o u n s e l for C i t i b a n k , a l s o c o n d u c t e d c e r t a i n i n q u i r i e s
through our firm's Paris office in a n effort to determine
w h e t h e r a n y d o c u m e n t s c a l l e d for e x i s t and w o u l d be l e g a l l y
a v a i l a b l e from C i t i b a n k ' s P a r i s b r a n c h . T h o s e i n q u i r i e s led
to c o n f i r m a t i o n of a d v i c e w h i c h w e and o u r c l i e n t had
r e c e i v e d in r e c e n t y e a r s r e g a r d i n g a p p l i c a b l e F r e n c h l a w ,
indicating that compliance with such a subpoena would place
C i t i b a n k d i r e c t l y in j e o p a r d y o f v i o l a t i o n of F r e n c h law
m a n d a t i n g c o n f i d e n t i a l i t y of c u s t o m e r i n f o r m a t i o n .
(367)
368:
I p r o m i s e d to p r o v i d e for you r e f e r e n c e s to U . S . and
French legal a u t h o r i t i e s that give rise to the d i l e m m a in w h i c h
our client w o u l d thus be p l a c e d .
M a n y c o u n t r i e s h a v e either codified the p r i n c i p l e of
b a n k - c u s t o m e r c o n f i d e n t i a l i t y or r e c o g n i z e d it as an implied
term of the c o n t r a c t b e t w e e n bank and c u s t o m e r . * O u r c l i e n t ,
C i t i b a n k , has had o c c a s i o n in the p a s t to seek French c o u n s e l
on this s u b j e c t and r e c e i v e d a formal o p i n i o n , in D e c e m b e r ,
1 9 7 3 , stating in p a r t :
"This w i l l confirm that you m a y not under French
law d i s c l o s e to third p a r t i e s c o n f i d e n t i a l inform a t i o n a b o u t the a f f a i r s of a c l i e n t , subject to
c e r t a i n s p e c i f i c s t a t u t o r y e x c e p t i o n s w h e r e you
are r e q u i r e d or a u t h o r i z e d by law to d i s c l o s e
i n f o r m a t i o n to a u t h o r i t i e s such a s , for e x a m p l e ,
c e r t a i n Banque de F r a n c e , t a x , customs and exchange c o n t r o l o f f i c i a l s . T h e p r o h i b i t i o n covers
any c o n f i d e n t i a l i n f o r m a t i o n o b t a i n e d by you as
a r e s u l t of the r e l a t i o n s h i p of b a n k e r and c u s t o m e r
o r , m o r e g e n e r a l l y , in the e x e r c i s e of y o u r p r o fession of b a n k e r . "
The o p i n i o n of French counsel d e r i v e s from A r t i c l e
378 of the French P e n a l C o d e * , and d e c i s i o n s of French c o u r t s
i n t e r p r e t i n g the Code p r o v i s i o n . A r t i c l e 3 7 8 , p r o v i d i n g for
c r i m i n a l p e n a l t i e s for b r e a c h of p r o f e s s i o n a l s e c r e t s , d o e s
not e x p r e s s l y r e f e r to b a n k e r s . The relevant c a s e s , h o w e v e r ,
d e c l a r e that the A r t i c l e d o e s apply to b a n k e r s , and C i t i b a n k ' s
French counsel has f u r t h e r confirmed that to be the p o s i t i o n
of the French M i n i s t r y of J u s t i c e . Among the d e c i s i o n s referred to by c o u n s e l a r e : P e o . v . F r i b o u r g (Criminal C o u r t of
La S e i n e , D e c e m b e r 2 3 , 1 9 3 1 ) and Heim v . C . I . A . L . et a l . (First
I n s t a n c e C o u r t of S t r a s s b o u r g , A p r i l 2 8 , 1 9 5 4 ) . T h e French
S u p r e m e C o u r t (Court de C a s s a t i o n ) h a s , as r e c e n t l y as last
y e a r , supported the view that A r t i c l e 378 imposes c r i m i n a l
s a n c t i o n s for breach of c u s t o m e r - b a n k e r c o n f i d e n t i a l i t y .
*
The f i r s t p a r a g r a p h of A r t i c l e 378 of the F r e n c h
C o d e p r o v i d e s that:
Penal
" D o c t o r s , s u r g e o n s and o t h e r health o f f i c i a l s as w e l l
as p h a r m a c i s t s , m i d - w i v e s and all o t h e r p e r s o n s w h o by r e a s o n of
their p o s i t i o n , p r o f e s s i o n or t e m p o r a r y or p e r m a n e n t a p p o i n t m e n t ,
are the r e c i p i e n t s of s e c r e t s e n t r u s t e d to t h e m , w h o , o u t s i d e the
c a s e s w h e r e the law c o m p e l s them or a u t h o r i z e s them to m a k e a
d e n u n c i a t i o n , shall h a v e revealed the s e c r e t s , shall be p u n i s h e d
by i m p r i s o n m e n t from o n e to six m o n t h s and by a fine of F . 500 to
F.3,000".
369:
The courts in the U n i t e d S t a t e s have c o n s i s t e n t l y
refused to require the p r o d u c t i o n of records and o t h e r d o c u m e n t s held by a foreign branch of an A m e r i c a n bank w h e r e the
p r o d u c t i o n w o u l d v i o l a t e the laws of the foreign state in
w h i c h they are l o c a t e d , p a r t i c u l a r l y where those laws impose
c r i m i n a l s a n c t i o n s upon a local branch of a U . S . bank for
d i s c l o s u r e , or breach of the c o n f i d e n t i a l r e l a t i o n s h i p .
"Upon f u n d a m e n t a l p r i n c i p l e s of i n t e r n a t i o n a l
c o m i t y , our courts d e d i c a t e d to the e n f o r c e m e n t
of our laws should n o t take such action as may
cause a v i o l a t i o n of the laws of a friendly
n e i g h b o r o r , at the l e a s t , a c i r c u m v e n t i o n of
its p r o c e d u r e s . "
Ings v . F e r g u s o n , 282 F.2d
1 4 9 , 152 (2d C i r . 1 9 6 0 ) .
"[A]n a t t e m p t to c i r c u m v e n t P a n a m a n i a n
law * * * s c a r c e l y r e f l e c t s the kind of r e s p e c t
which we should a c c o r d to the laws of a f r i e n d l y
foreign s o v e r e i g n s t a t e . J u s t as we w o u l d e x p e c t
and r e q u i r e b r a n c h e s of foreign banks to abide
by our laws a p p l i c a b l e to the conduct of their
b u s i n e s s in this c o u n t r y , so should we h o n o r
their laws a f f e c t i n g our bank branches w h i c h
are p e r m i t t e d to do b u s i n e s s in foreign countries." A p p l i c a t i o n of Chase M a n h a t t a n B a n k ,
297 F.2d 6 1 1 , 613 (2d C i r . 1 9 6 2 ) .
F i r s t N a t i o n a l City Bank v . I . R . S . , 2 7 1 F.2d
6 1 6 , 619 (2d C i r . 1 9 5 9 ) , c e r t , d e n i e d , 361 U . S .
948 ( 1 9 6 0 ) .
The force of these cases w a s c o n c e d e d by U . S . D e p a r t m e n t of
J u s t i c e w h e n it a r g u e d in U . S . v . F i r s t N a t i o n a l C i t y Bank and
L o v e l a n d , 396 F . 2 d 897 (2d C i r . 1 9 6 8 ) , for a l i m i t a t i o n of
the rule to cases i n v o l v i n g p o t e n t i a l c r i m i n a l s a n c t i o n s .
In its brief in the L o v e l a n d c a s e , the D e p a r t m e n t of J u s t i c e
s u m m a r i z e d its a r g u m e n t , in p a r t , as f o l l o w s :
" A p p e l l a n t s ' d i s o b e d i e n c e of the D i s t r i c t C o u r t ' s
o r d e r d i r e c t i n g c o m p l i a n c e w i t h the s u b p o e n a d u c e s
tecum as it r e l a t e s to d o c u m e n t s in the F r a n k f u r t ,
G e r m a n y branch of C i t i b a n k is n o t e x c u s a b l e on the
ground of p o t e n t i a l c i v i l liability in G e r m a n y if
it p r o d u c e s the d o c u m e n t s . To be excused from
c o m p l y i n g w i t h a U n i t e d S t a t e s court o r d e r , the
w i t n e s s m u s t show that it w i l l s u f f e r c r i m i n a l
l i a b i l i t y in that foreign country following comp l i a n c e . S o c i e t e I n t e r n a t i o n a l e v . R o g e r s , 357
370:
U . S . 197 (1958); First N a t i o n a l City Bank v .
I n t e r n a l R e v e n u e S e r v i c e , 271 F.2d 616 ( C . A . 2 ,
1 9 5 9 ) , c e r t i o r a r i d e n i e d , 361 U . S . 948 ( 1 9 6 0 ) .
C i t i b a n k has shown no s t a t u t o r y p r o v i s i o n s nor
a d m i n i s t r a t i v e r e g u l a t i o n s to e x c u s e its c o m p l i a n c e .
It h a s p o i n t e d to no p e n a l sanctions that it w o u l d
suffer."
(Brief for A p p e l l e e , p . 1 0 ) .
A l t h o u g h the g o v e r n m e n t p r e s s e d for a rule that the d i s c o v e r y
o r d e r m u s t e n t a i l c r i m i n a l p e n a l t i e s before Citibank should
be excused from c o m p l i a n c e , the C o u r t r e p l i e d :
"Such a rule w o u l d show scant r e s p e c t for intern a t i o n a l comity; a n d , if this p r i n c i p l e is v a l i d ,
a court of one country should m a k e an e f f o r t to
m i n i m i z e p o s s i b l e c o n f l i c t b e t w e e n its orders
and the law of a foreign state affected by its
d e c i s i o n . C f . R e s t a t e m e n t , s u p r a , § 39(2); Ings
v . F e r g u s o n , s u p r a , 282 F.2d at 1 5 2 . The vital
n a t i o n a l i n t e r e s t s of a foreign n a t i o n , e s p e c i a l l y
in m a t t e r s relating to e c o n o m i c a f f a i r s , can be
e x p r e s s e d in w a y s o t h e r than through the c r i m i n a l
l a w . For e x a m p l e , it could not be q u e s t i o n e d t h a t ,
insofar as a court of the U n i t e d S t a t e s is conc e r n e d , a s t a t e m e n t or d i r e c t i v e by the B u n d e s b a n k
(the c e n t r a l bank of G e r m a n y ) or some o t h e r o r g a n
of g o v e r n m e n t , e x p r e s s e s the p u b l i c p o l i c y of
G e r m a n y and should be g i v e n a p p r o p r i a t e w e i g h t .
Equally i m p o r t a n t is the fact that a sharp d i c h o t omy b e t w e e n c r i m i n a l and c i v i l p e n a l t i e s is an
i m p r e c i s e m e a n s of m e a s u r i n g the h a r d s h i p for
r e q u i r i n g c o m p l i a n c e w i t h a s u b p o e n a . In A p p l i cation of C h a s e M a n h a t t a n B a n k , s u p r a , this C o u r t
a f f i r m e d the m o d i f i c a t i o n of a subpoena b e c a u s e
s t r i c t o b e d i e n c e w o u l d have resulted in a v i o l a t i o n
of P a n a m a n i a n law p u n i s h a b l e by a fine of no m o r e
than 100 B a l b o a s ( e q u i v a l e n t to $100); w e held t h a t
a m i s d e m e a n o r under our c r i m i n a l l a w . It w o u l d be
a g r o s s fiction to contend that if the B u n d e s b a n k
w e r e to r e v o k e the license of Citibank for v i o l a t i o n
of bank secrecy the impact would be less c a t a s t r o p h i c
than having to pay an i n s i g n i f i c a n t fine b e c a u s e the
r e v o c a t i o n is t h e o r e t i c a l l y not 'equivalent to a m i s demeanor* or c r i m i n a l s a n c t i o n . We are n o t r e q u i r e d
to d e c i d e w h e t h e r p e n a l t i e s m u s t be u n d e r the 'criminal l a w ' to p r o v i d e a legally s u f f i c i e n t r e a s o n for
n o n - c o m p l i a n c e w i t h a s u b p o e n a ; b u t , it w o u l d seem
371:
unreal to let all hang on whether- the label 'criminal*
were attached to the s a n c t i o n and to d i s r e g a r d a l l
o t h e r factors."
396 F.2d at 9 0 2 .
W h i l e the subpoena was in fact e n f o r c e d in the L o v e l a n d c a s e ,
the d e c i s i o n of the C o u r t took p a i n s to p o i n t o u t that e n f o r c e m e n t did not turn merely upon the absence of criminal s a n c t i o n s
in G e r m a n y .
H e r e , h o w e v e r , the bank is faced with a d e m a n d that
clearly w o u l d invoke a c o n f l i c t with French c r i m i n a l l a w s .
It is our v i e w , based upon the a d v i c e of C i t i b a n k ' s French
c o u n s e l , that the s i t u a t i o n p r e s e n t e d by the p r e s e n t inquiry
thus falls s q u a r e l y w i t h i n the d o c t r i n e of the cases cited
above e x c u s i n g c o m p l i a n c e w i t h such a subpoena upon fundam e n t a l p r i n c i p l e s of i n t e r n a t i o n a l c o m i t y .
I w o u l d like to e m p h a s i z e that Citibank in no w a y
d e s i r e s to impede the p r e s e n t i n q u i r y . I can advise you
that it is our u n d e r s t a n d i n g , based upon the a d v i c e of F r e n c h
c o u n s e l , that it may be feasible for a third p a r t y to o b t a i n
d i s c l o s u r e of c o n f i d e n t i a l i n f o r m a t i o n regarding a c u s t o m e r
of a bank through the p r o c e s s of a French criminal c o u r t .
We u n d e r s t a n d that there is some French case a u t h o r i t y to
that e f f e c t and that it r e p r e s e n t s a common view among F r e n c h
lawyers and law p r o f e s s o r s . The n o r m a l m e t h o d for seeking to
enlist the aid of a foreign court in such m a t t e r s would be
through letters rogatory t r a n s m i t t e d through d i p l o m a t i c
c h a n n e l s . I u n d e r s t a n d it is also p o s s i b l e in s p e c i a l c i r c u m s t a n c e s to o b t a i n such i n f o r m a t i o n p u r s u a n t to A r t i c l e 26
of the C o n v e n t i o n b e t w e e n the United S t a t e s and the F r e n c h
R e p u b l i c with r e s p e c t to taxes on income and p r o p e r t y .
F i n a l l y , I s h o u l d note that w h i l e the concern
of our c l i e n t , C i t i b a n k , d e r i v e s p r i n c i p a l l y from the e x i s tence of a c r i m i n a l s t a t u t e in France threatening c r i m i n a l
sanctions for c o m p l i a c n e w i t h the s u b p o e n a , our c o n c e r n is
not based e n t i r e l y on the e x i s t e n c e of the c r i m i n a l p r o v i s i o n . We are a l s o informed that in a d d i t i o n to the c r i m i n a l
p e n a l t i e s , the bank can be held c i v i l l y liable p u r s u a n t to
A r t i c l e s 1382 and 1384 of the French Civil C o d e . The d e c i sion in the L o v e l a n d c a s e , s u p r a , w e l l indicates that a
p a r t y need not be in j e o p a r d y of v i o l a t i o n of a f o r e i g n
c r i m i n a l law to be e x c u s e d from c o m p l i a n c e with a p r o d u c t i o n
order.
The p r i n c i p l e s of i n t e r n a t i o n a l comity r e f l e c t e d
in the U . S . C o u r t d e c i s i o n s r e f e r r e d to above are c o m p a t i b l e
w i t h the v i t a l i n t e r e s t s of the U n i t e d S t a t e s in the d e v e l o p m e n t of our f o r e i g n c o m m e r c e and trade r e l a t i o n s h i p s .
372:
As in the U n i t e d S t a t e s , banking is a regulated and
s e n s i t i v e industry in m o s t c o u n t r i e s of the w o r l d . It r e q u i r e s
no c i t a t i o n of a u t h o r i t y to e s t a b l i s h the p r o p o s i t i o n that the
a b i l i t y of A m e r i c a n b a n k s to secure or retain l i c e n s e s to
o p e r a t e in foreign c o u n t r i e s w i l l be impaired if the l i c e n s e
implies a right to f u n c t i o n in the foreign country as an
a d j u n c t of e x c u r s i o n s by United S t a t e s a u t h o r i t i e s into
e x t r a t e r r i t o r i a l e n f o r c e m e n t of A m e r i c a n l a w . A l s o selfe v i d e n t is the fact that the ability of A m e r i c a n banks to
p e r f o r m their c o m p e t i t i v e e c o n o m i c function abroad w i l l be
d e s t r o y e d if they are r e q u i r e d by United S t a t e s g o v e r n m e n t
o f f i c i a l s to d i s r e g a r d the legal o b l i g a t i o n s and b u s i n e s s
p r a c t i c e s i n h e r e n t in their r e l a t i o n s h i p with their o v e r seas c u s t o m e r s .
Indeed the c o n c e p t of b a n k e r - c u s t o m e r c o n f i d e n t i a l i t y is one r e c o g n i z e d by our own courts in applying
c o m m o n law p r i n c i p l e s .
"It is implicit in the c o n t r a c t of the bank w i t h
its c u s t o m e r or d e p o s i t o r that no i n f o r m a t i o n m a y
be d i s c l o s e d by the bank or its e m p l o y e e s concerning the c u s t o m e r ' s or d e p o s i t o r ' s a c c o u n t , and
t h a t , u n l e s s a u t h o r i z e d by law or by the c u s t o m e r
or d e p o s i t o r , the bank m u s t be held liable for
breach of the implied c o n t r a c t . "
Peterson v .
Idaho First N a t i o n a l B a n k , 83 Idaho 5 7 8 , 367 P.2d
2 8 4 , 2 9 0 , 92 A . L . R . 2 d P 9 1 , 899 (Sup. C t . , 1 9 6 1 ) .
G r a n e y D e v e l o p m e n t C o r p . v . Taksen and C i t i b a n k
( M i d w e s t e r n ) N . A . , 400 N . Y . S . 2 d 717 (Sup. C t .
Monroe Co. 1978).
T h i s view is c o n s i s t e n t w i t h E n g l i s h a u t h o r i t i e s .
leading case in E n g l a n d , the C o u r t said:
In the
"I have no d o u b t that it is an implied term of
the b a n k e r ' s c o n t r a c t w i t h h i s c u s t o m e r t h a t the
b a n k e r s h a l l not d i s c l o s e the a c c o u n t , or t r a n s actions r e l a t i n g t h e r e t o , of this c u s t o m e r e x c e p t
in certain c i r c u m s t a n c e s . "
Tournier v . National
P r o v i n c i a l and U n i o n B a n k , 1 K . B . 4 6 1 , 4 8 0 , 12
B . R . C . 1 0 2 1 , 1040 ( 1 9 2 4 ) .
In a d d i t i o n to r e c o g n i t i o n by the c o u r t s of the
legal as w e l l as the e t h i c a l duty of c o n f i d e n t i a l i t y of a
bank with i n f o r m a t i o n c o n c e r n i n g its c u s t o m e r s , c o n s i d e r a b l e
373:
p u b l i c a t t e n t i o n has lately been focused on this i s s u e . An
e x a m p l e of this concern is expressed in P e r s o n a l P r i v a c y in
an I n f o r m a t i o n Society (July, 1 9 7 7 ) , an e x h a u s t i v e study
r e c e n t l y p u b l i s h e d by the P r i v a c y P r o t e c t i o n S t u d y C o m m i s s i o n .
T h e study confirms the strong p u b l i c policy favoring c o n f i d e n t i a l i t y of a c u s t o m e r ' s d e a l i n g s with a f i n a n c i a l instit u t i o n . This c o n c l u s i o n is echoed in the final r e p o r t of
the N a t i o n a l C o m m i s s o n on E l e c t r o n i c Fund T r a n s f e r s to the
P r e s i d e n t and the C o n g r e s s of the U n i t e d S t a t e s , e n t i t l e d
EFT in the U n i t e d S t a t e s : Policy R e c o m m e n d a t i o n s and the
P u b l i c I n t e r e s t ( O c t o b e r , 1 9 7 7 ) . A c h a p t e r of this r e p o r t
is d e v o t e d e n t i r e l y to the e x a m i n a t i o n of the right to
p r i v a c y in the E F T c o n t e x t and to r e c o m m e n d a t i o n s that
m e a s u r e s be taken and F e d e r a l l e g i s l a t i o n enacted to
p r o t e c t this r i g h t from u n w a r r a n t e d i n f r i n g e m e n t .
These
s t u d i e s , as w e l l as F e d e r a l and S t a t e l e g i s l a t i v e i n i t i a tives in the a r e a , such as the p r o p o s e d R i g h t to F i n a n c i a l
Privacy A c t , H . R . 8 1 3 3 , 95th C o n g . , 1st S e s s . ( 1 9 7 7 ) ,
u n d e r s c o r e the i m p o r t a n c e o f , and need f o r , our c l i e n t ' s
strong i n s t i t u t i o n a l policy of p r e s e r v i n g the r i g h t of
c u s t o m e r s to the c o n f i d e n t i a l t r e a t m e n t of their f i n a n c i a l
affairs.
I h o p e the foregoing d i s c u s s i o n is h e l p f u l in
your u n d e r s t a n d i n g of our client's p r o b l e m , and that you
w i l l a p p r e c i a t e that in l i g h t of the French law and the
r e c o g n i t i o n a c c o r d e d to it by the U n i t e d S t a t e s , our c l i e n t
h a s no p r a c t i c a l a l t e r n a t i v e but to d e c l i n e to r e s p o n d
f u r t h e r r e g a r d i n g r e c o r d s of c u s t o m e r s as may be m a i n t a i n e d
at its P a r i s b r a n c h .
V e r y truly y o u r s ,
@FedFRASER