After Baxter International acquired medical-training company Medcom for $52 million in 1982 and fired Medcom chief executive Richard Fuisz, Fuisz sued over his termination. He later alleged that Baxter had structured Middle East business dealings involving its Israeli facility to avoid Arab League boycott restrictions. The U.S. Department of Commerce Office of Anti-Boycott Compliance investigated the claims and referred the matter to the Justice Department in 1991, producing what the source describes as the first criminal prosecution of a company for violating U.S. anti-boycott laws.
The government could not prove Fuisz’s broader allegations about Baxter’s dealings with Syria. Baxter nevertheless pleaded guilty in 1993 to illegally delivering information about its Israeli business to Arab officials, conduct prohibited under export-control provisions of the Export Administration Act. The company paid $6.5 million in fines and penalties. The case remains a consequential example of how multinational firms’ Middle East commercial strategies collided with U.S. export controls and anti-boycott rules, while also illustrating the limits of claims made by a financially interested former executive.
