HANSON'S LATIN AMERICAN LETTER - 28 July 1979 - Number 1973 - Dear Sir - Mexico, Chile, Nicaragua, Bolivia, U.S.A

Sep 21, 2026

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HANSON'S LATIN AMERICAN LETTER dated 28 July 1979, Number 1973, addresses a complaint involving International Systems and Controls Corporation (ISC). It summarizes SEC filing allegations tied to Chilean and Latin American operations, including payments recorded as commissions, government-contract influence, and failures to properly disclose activities. The letter also transitions to U.S. congressional debate on Mexico-related border cooperation and illegal-alien flows, criticizing Carter Administration changes to border patrol staffing.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages5

Reading Time13 min

AccessFree to download

Chilean Government contracting and SEC complaint material

Exhibit 129 and the alleged ISC method

Nicaragua contract and alleged undisclosed payments

ISC disposal of Brazilian subsidiaries and fraud allegations

U.S. House debate on Mexico, border patrol, and illegal-alien flow

HANSON'S LATIN AMERICAN LETTER WASHINGTON 28 July 1979 Number 1973 Dear Sir: Mexico Chile Nicaragua Bolivia U.S.A The documents filed in the Securities &Exchange Commission complaintSECagainst International Systems and Controls Corporation(ISC)are worthCOMPLAINTreading.(There is the 56-page "Motion for Preliminary Injunction andAGAINSTother Relief,"and "Affidavit of A.M.Schwartzstein in support of MotionISC:for Preliminary Injunction.") Exhibit 129,the complaint notes,"is a memorandum from the former di-HOW TO DOrector of ISC's Latin American operations regarding ISC's attempts toBUSINESSsecure a contract in Chile. It is highly instructive of the ISC methodIN CHILE:of doing business.It is a study of the Chilean Government and who inA MEMOthe government should be paid for securing government contracts and itdemonstrates how ISC went about instructing officials in foreign govern-ments as to methods of concealing payments they were receiving for assist-ing ISC in its efforts to secure government contracts." Quoting now from the 56 page complaint:"Subsequent to receiving noti-CHILEANfication in 1975 that the Chilean Junta had reacted negatively to ISC'sJUNTA,proposal to construct a $375 million LNG production project in the StraitsLEIGH,ANDof Magellan,ISC dispatched Alfred M.Lerner to Chile.Among others,THE ISCLerner met with Daniel Fuenzalida M.,chief economic adviser to GeneralCONTRACTLeigh,a member of the ruling Junta,and General Leigh himself. Lernerencouraged Fuenzalida and Pedro Yoma to organize a Chilean Company knownas Chilco S.A.to represent ISC in Chile. "ISC viewed Fuenzalida as the "key member"of its group.To avoid possibleconflict,another individual was made president of Chilco.Chilco was to be paid one-half of one percent of the value of any contracts which ISC secured in Chile. ISCexpected Fuenzalida to present to,and gain acceptance of,its proposals fron the Junta. "During the period when ISC was attempting to obtain the LNG project con-contract,ISC paid Chilco approximately $30,000.The payments referred to were recordedin ISC's accounting records as a "commission." "The individual defendants knew or should have known of the matters re-referred to above.Defendants failed and/or failed to cause ISC to adequately disclosethese matters in its public filings with the Commission and in other materials dissem-inated to the investing public." Another country cited in the SEC complaint is Nicaragua:NICARAGUANThe complaint carries this material:"ISC through Lang Engineering(aCONTRACT ANDwholly-owned subsidiary)and related subsidiaries was engaged in 1971 A.SOMOZAto design,engineer,supply and erect a $5.2 million grain storage fa-Y CIA.cility in Nicaragua. "Between 1971 and 1975 Lang Engineering paid approximately $228,538 totwo Nicaraguan agents in connection with the project.Approximately $25,000 was paidto A.Somoza y Cia., A company owned by Genera1 Somoza,president of Nicaragua,andhis wife.The remainder was paid to Comdecosa,a company composed of employees ofother entities controlled by the Somozas.Additionally,about $127,000 was paid to oneof the two agents. A weckly lete for buriesmem pablisbd privsey im Wasbington,D.C. "The aforesaid payments were not accurately recorded in ISC's financialrecords. The defendants knew or should have known of the matters referred to above.Defendants failed to disclose and/or failed to cause ISC to adequately disclose thoseactivities in the public filings with SEC and in other materials disseminated to theinvesting public." The SEC complaint notes also that "in its fiscal year 1978 ISC disposedISC INof certain of its Brazilian subsidiaries to a company owned in whole orBRAZILin part by Alfred M.Lerner. The bulk of the ISC activity which the SEC considers to be "a fraud andLATIN AMERICAdeceit upon the shareholders"involved activity outside Latin America -ACTIVITYSaudi Arabia,Algeria,Iran,Ivory Coast.MINOR Now,turning to debate on the floor of the

FAQs

What is the letter’s main focus regarding ISC and the SEC complaint?

It outlines alleged SEC complaint material about ISC’s Latin American operations, including how payments were handled and recorded and the claim that disclosures in public filings were inadequate.

What Chile-related contracting details are highlighted?

The letter quotes that a memorandum describes ISC’s attempts to secure a Chile contract, including organization of Chilco S.A., commission-style payments, and the claimed lack of accurate disclosure.

How does the document connect to U.S.-Mexico border policy discussions?

It shifts to a House floor debate about illegal-alien flows from Mexico, citing responses to Mexico’s crackdown and criticizing changes the Carter Administration made to border patrol staffing.

Sep 21, 2026

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