WASHINGTON / CATHERINE COLLINS : BCCI Scandal Illustrates Need for Disclosure Law on Foreign Investments

Apretty good argument for the disclosure of foreign investments in the United States is emerging in Congress as a result of the furor over the apparent secret purchase of Washington’s largest bank by the shadowy Bank of Credit & Commerce International.

The Federal Reserve says the Luxembourg-based BCCI broke several banking laws in acquiring hidden stakes in three U.S. banks. Even high-powered lawyer Clark Clifford, who was chairman of First American Bankshares for 13 years, claims that he was duped and never knew that BCCI owned a controlling interest in the institution through nominee shareholders.

It seems unlikely that BCCI would have revealed its stake in First American, even if there had been a disclosure law for foreign investors. However, a strong law requiring foreign investors to register their purchases with the U.S. government would have added another level of scrutiny, proponents say.

That argument is reviving mild interest in long-pending legislation by Rep. John Bryant (D-Tex.) to require ownership disclosures by foreign investors. The crux of Bryant’s proposal is “signing in at the door” to provide the name, nationality and industry of the foreign investor and to identify the investments.

“Under the current law, no one really knows who is buying U.S. property,” said Bryant. “In the case of Iran and Libya, when the President intended to impound assets, he couldn’t because we didn’t know where they were. Frankly, the news media does a better job disclosing foreign purchases of U.S. property than the Commerce Department.”

Pat Choate, a political economist and critic of Japan’s influence in the United States, said that what is required is “a Bryant bill with teeth. If people as savvy as Clark Clifford can be deceived, then voluntary disclosure cannot work. What is required is mandatory disclosure, coupled with tough penalties for those who fail to comply.”

Bills Would Provide Health Care for More

Two influential lawmakers have a proposed prescription to help working people and their dependents who are not covered by health insurance, a group that accounts for about 80% of the nation’s 30 million uninsured.

Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) and House Ways and Means Committee Chairman Daniel Rostenkowski (D-Ill.) hope to introduce similar bills next week to expand affordable health-care coverage for small businesses.

In a recent speech, Bentsen said that even when small businesses reduce or eliminate health-care coverage for employees, they are not being callous or insensitive. Instead, Bentsen said, “they are trying to stay in business and protect the jobs of their employees.”

Congressional staffers say the bill is expected to set minimum federal standards for insurance offered to businesses with fewer than 50 employees.

In outlining some aspects of the proposal, Bentsen said the measure would require insurers to cover all members of a group, making it impossible to exclude a diabetic worker or a child with leukemia. It would also prohibit “redlining” certain businesses or geographical areas. And it would address the problems of workers who, because of pre-existing conditions, lose insurance when they switch jobs.

In addition, Bentsen wants to provide self-employed workers with a full tax deduction for health insurance premiums, something they have demanded for years.

“We’ve only seen the outline of the bill, but from what we’ve seen we are very encouraged,” said Carolyn Miller, a lobbyist for the National Federation of Independent Business.

Doctors’ Investments in Labs May Be Curbed

Federal restrictions on investments by doctors in health-care facilities to which they refer patients may get tougher as a result of evidence indicating that facilities owned by doctors cost more and provide a lower quality of care than hospitals.

The House Ways and Means health and oversight subcommittees heard testimony Thursday about a new Florida survey that found that doctors’ ownership of laboratories and diagnostic imaging centers increases the cost and frequency of such services.

Among the services singled out for questions in the study performed for Florida state government and by witnesses was imaging centers, which use expensive techniques such as CAT scans and magnetic resonance imaging to diagnose abnormalities and other problems.

The issue has been a hot topic nationally, and the Florida study provided the first empirical evidence of a connection between the use and quality of the facilities and ownership by doctors.

Rep. Pete Stark (D-Oakland), chairman of the health subcommittee, pushed for the existing regulations governing physician investments in clinical laboratories to which they refer patients. Although the regulations just took effect in July, Stark is considering new legislation to ban Medicare payments for treatments performed at any medical facility in which the referring physician owns an interest.

The American Medical Assn. has convened a panel to review information on ownership of medical facilities and referrals to them by doctors. An AMA spokesman said more stringent rules could be required or situations in which an investment is necessary could be spelled out, but the AMA opposes any outright ban.

“There are areas in the country where a commercial entity might not want to open a facility and, were it not for investment by local physicians, the public would not have a facility,” the spokesman said.

Labor Dept. May Help Curb Smoking on Job

As more employers ban smoking, the Labor Department’s Occupational Safety and Health Administration is considering regulating smoking on the job as part of a broader study of indoor air quality. OSHA has requested comments and information on major issues concerning workplace air quality to determine whether regulatory action is required to remedy any health problems.

Comments on the issue can be sent to Docket Officer, Docket No. H-122, Room N-2625, U.S. Department of Labor, 200 Constitution Ave. NW, Washington, D.C. 20210. Four copies of the comments should be provided and the deadline is Jan. 20, 1992.