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In a letter dated May 13, 1975, a senior vice president of
Lockheed sent petitioner a letter expressing concern over
communications that had been brought to his attention suggesting
that the Government of Iran might refuse to do business with
companies that used middlemen, such as petitioner, in offering
products for sale to Iran. Petitioner responded to Lockheed by
explaining that the policy of Iran was to continue doing business
with legitimate representatives. In July 1975, petitioner was
interviewed by U.S. Senate Foreign Relations Committee personnel
concerning possible questionable payments to foreign government
officials in connection with product sales. After this
interview, the record shows no Lockheed commission payments to
either Diesel Power or CTC. On January 28, 1976, the
Lockheed/Zand/Sunvaco agreement was terminated effective
October 10, 1975. The termination was a result of the U.S.
investigation into Lockheed's use of consultants. The
termination agreement was signed by petitioner on his own behalf
and on behalf of Sunvaco.
In the notice of deficiency for 1976 respondent increased
petitioner's commission and fee income from Lockheed by $321,066.
Lockheed issued a check dated January 26, 1976, to Sunvaco and
petitioner in the amount of $481,600. This check was mailed to
petitioner's Columbus, Ohio, address and was deposited in full
into the CTC CNB account. Of this amount $100,000 was paid by
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