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DECLARATION OF FRANK D. KITTREDGE
FRANK D. KITTREDGE declares as follows.
1. My name is Frank D. Kittredge. From 1989 to present, I have served as the President of the National Foreign Trade Council ("NFTC"), which is a non-profit corporation organized and existing under the laws of the State of New York.
2. Prior to joining the NFTC as its president, I served 36 years as an executive with the General Electric Company ("GE"). During my years with GE, I held numerous international assignments in Europe, Latin America, and the Far East, including as Vice President of GE's Asia-Pacific Division and Vice President of GE's Power Systems International Sales Operation. In these capacities, I obtained extensive experience in government procurement matters, since GE has long been a leading supplier of goods and services to governments of all types - federal, state, and local; domestic and foreign.
3. The NFTC was founded in 1914 by a group of United States industrial companies engaged in international trade and investment. Since its founding, the NFTC has been a leading spokesman on behalf of the private sector for an open international trade and investment regime.
4. At present, the NFTC has a membership comprised of approximately 580 United States companies, including United States subsidiaries of foreign companies, that are engaged in international trade and investment. The NFTC's membership includes United States manufacturing companies, financial institutions, and other United States firms that have substantial international operations or interests. NFTC members account for at least 70% of all United States non-agricultural exports, and approximately 70% of United States private foreign investments.
5. The NFTC is authorized by its members to represent their interests in international-trade-related matters before the United States Congress, the Executive Branch of the United States government, the federal regulatory agencies, and the courts. Indeed, on February 17, 1998, the NFTC's Board of Directors adopted a resolution opposing state and local governmental restrictions upon foreign trade (such as the Massachusetts Burma Law at issue in this case). Among other things, this resolution provides that "these laws and ordinances adversely affect trade and commerce, and in particular, they interfere with the ability of members of the [NFTC] to conduct international trade, and cause financial and other injury to" the NFTC's members. The February 17, 1998, resolution also specifically authorized the NFTC to bring legal challenges (such as this case) to these state and local governmental restrictions upon foreign trade. (A true and correct copy of this resolution is attached as Exhibit A to this Declaration.)
6. The consequences of the Massachusetts Burma Law are several. First, companies on the restricted purchase list are forbidden from receiving competitively bid contracts with the Commonwealth of Massachusetts, its agencies, authorities, and other related entities, unless (i) every single non-"restricted" company has submitted a bid that is more than ten percent greater than the "restricted" company's bid, or (ii) the state agency, authority, or entity certifies in writing both that "the procurement is essential" and that "compliance [with the Massachusetts Burma Law] would eliminate the only bid or offer, or would result in inadequate competition." Second, the law "voids" any contracts entered into in violation of the Massachusetts Burma Law. Third, any company seeking to provide goods and services to state agencies, authorities, or similar entities must submit a statement signed "under the pains and penalties of perjury" that details the nature and extent of that company's business ties to the Nation of Burma (the Union of Myanmar).
7. The Massachusetts Burma Law penalizes these companies in the Commonwealth's competitive-bidding process by adding ten percent to their bids for government contracts, and by forbidding the Commonwealth's agencies and authorities from contracting with these companies except in unusual circumstances. In my experience in government contracting, the bidding process is so competitive that a ten-percent penalty such as imposed by the Massachusetts Burma Law would operate as a virtually complete bar to receiving a government contract. Thus, in general, the result of the Massachusetts Burma Law is companies which engage in business with the Union of Myanmar are - because of that fact alone - in general effectively excluded from competitively bidding upon, or receiving, contracts from the Commonwealth of Massachusetts, its agencies, authorities, and other related entities.
8. The impact of the Massachusetts Burma Law is not felt merely at the point that bids are considered. Companies doing business with Myanmar that wish to do business in Massachusetts (as well as companies doing business with Massachusetts that wish to do business with Myanmar) must, as a practical matter, plan their activities before actually expending their resources. Each year, companies must decide where to focus their economic activities in advance. The current impact of the Massachusetts law on business planning activities is thus substantial.
9. A number of NFTC members have been placed on the "Restricted Burma Purchase List" required by the Massachusetts Burma Law. Indeed, the most recent version of that list, dated April 1998, contained more than 30 NFTC members. Other companies have been forced to sever business ties with Myanmar because of the Massachusetts Burma Law.
10. A number of NFTC members are injured by the Massachusetts Burma Law and have altered their business operations because of the Massachusetts Burma Law. For as long as the Massachusetts Burma Law is enforced, these companies must continue to structure their business decisions based on the law.
11. The Massachusetts Burma Law also impacts the conduct of foreign companies and governments and, thus, the United States' companies with which they do business. Foreign companies and governments are discouraged from contracting with United States companies abroad because of the possibility that various United States' states and municipalities will, in the future, adopt sanctions legislation.
12. The approach taken in the Massachusetts Burma Law - declining to do business with companies that do business in a particular foreign country because of objections to that country's human rights record - would not be taken by any private contracting party. Thus, Massachusetts is not acting the way a private party would act in similar circumstances.
13. The Commonwealth of Massachusetts is by no means the only state or local government to impose similar sanctions on foreign trade. For example, at least 18 local governments - including, among others, New York, New York and San Francisco, California - around the country impose sanctions on trade with the Union of Myanmar. Nor are these state and local laws aimed only at Myanmar: Numerous state and local laws forbid either contracting, or investment, or both, with several other foreign countries as well. Additionally, I am aware of approximately a dozen other jurisdictions that presently have pending similar "foreign policy" legislation - that is, legislation restricting trade with a variety of foreign nations.
14. The NFTC determined to file this lawsuit only after it became clear that the Massachusetts Burma Law was not going to be eliminated except by means of a judicial challenge.
FURTHER DECLARANT SAYETH NOT.
I DECLARE UNDER PENALTY OF PERJURY THAT THE FOREGOING IS TRUE AND CORRECT. EXECUTED ON APRIL 29 , 1998.
/s/ Frank D. Kittredge
Frank D. Kittredge
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