February 6, 2001



In 1995 Hughes Electronics CEO (C. Michael Armstrong) - head of Clinton's export council - urged Secretary of State Warren Christopher that satellites no longer be treated as military goods. On 2/6/96 Clinton approved 4 applications for launches. On the same day, Wang Jun ("Chinese arms dealer") met with Ron Brown and had coffee with Clinton. On 2/15/96 a State Department memo said "the administration wanted to wrap this up." On 3/14/96 Commerce email recommended a low key spin on the news to "not draw attention to the decision." State Department issued regulations shifting most satellite licensing to Commerce on 11/5/96, the day Clinton was re-elected.

Gary Milhollin testimony, Wisconsin Project on Nuclear Arms Control: "What . I will talk about today, are decisions by our government that have given Chinese companies a green light to sell missile technology to countries like Iran and Pakistan. The Administration has made three crucial decisions in this regard. First, it has decided to transfer control over satellite exports from the State Department to the Commerce Department, an action that effectively pulls the teeth from any future U.S. sanctions against Chinese companies guilty of missile proliferation . Second, it has decided to suspend, without any legal basis, the implementation of U.S. statutes that require sanctions to be imposed against Chinese companies for past sales of missile technology to Iran and Pakistan . Third, it has decided to invite China to join the Missile Technology Control Regime, an invitation that, if accepted, would immunize Chinese firms from any future application of U.S. sanctions laws for missile proliferation . When we look at the cumulative effect of these decisions, we see something both surprising and alarming. Our government has enabled Chinese companies to proliferate missile technology with little fear of punishment. More specifically, Chinese companies have been able to sell Iran and Pakistan components for nuclear capable missiles without worrying about losing U.S. satellite launch contracts. "

DNC documents turned up by Congressional investigators show how Hughes Electronics Corp. successfully persuaded the Clinton administration through two key Democrats (Mankiewicz and Hoog) to ease 1993 Chinese sanctions (for suspected missile parts shipments to Pakistan) so the company's satellites could get to China. The company got congressmen of both parties to send letters to the State Department and ended up with a favorable legal interpretation from Commerce. Said Frank Mankiewicz of the President ``If you employ 30,000 people in California, you've got his eye.''

In a November letter to Clinton, Hughes' executive Armstrong wrote, noting that jobs were at stake: ``You asked me to support your economic package. I did. ... You asked me to support your changes to export policy and controls. I did. You asked me to support NAFTA more strongly in California. I did . I am respectfully requesting your involvement to resolve the China sanctions . Due to circumstances, this will be public and political shortly.'' On December 4, 1993, Armstrong, was invited to attend an event with Clinton in Los Angeles and got to make a personal pitch. At that event, Clinton told Armstrong he was looking into what to do even though he secretly had approved the new interpretation weeks earlier. By early January, Clinton's decision was disclosed and Hughes won a license for one of it satellites shortly after. Two years later, Armstrong was appointed by Clinton to be chairman of his export council.

Twelve year veteran adviser, Peter Leitner in testimony to the Senate Governmental Affairs Committee on 6/25/98 about the Defense Technology Security Administration, said that under the Clinton administration, the Pentagon office in charge of guarding US technology exports to China grew lax and instructed staffers to soften or reverse their recommendations that certain technology not be exported. He said that when he returned from vacation in 1996, his recommendation against supercomputer exports to Russia had been rewritten to neutral. He also said that the strict attitude of the office changed as the Commerce Department was given primary responsibility for reviewing commercial satellite exports. He said the result was to "deceive both the Congress and the American people ... while shortsighted business interests line their pockets."

American Spectator Kenneth Timmerman 9/98 "On July 13, a Norwegian-built cargo ship, the Sea Launch Commander, steamed into the former U.S. Naval Station at Long Beach, California, carrying Russian and Ukrainian-built missiles. Sound like some cockeyed real-life version of a James Bond movie? Not if you talk to Boeing Space Systems, the U.S. partner in an international joint venture to launch satellites from a floating platform in the South Pacific, using Cold War rocket technology from the former Soviet Union..After several rounds of closed-door meetings at the White House, Gore's staff convinced the State Department's Office of Defense Trade Control to issue the temporary license allowing the ship to dock on July 10--just three days before it actually arrived from Saint Petersburg, where it had been fitted out with more than 600 tons of mission control equipment and a huge covered assembly bay where the rockets would be put together. Government officials said the license has not allayed their fears that Boeing could inadvertently transfer strategic technology to its Russian and Ukrainian partners through the project. One area of concern: NASA's Tracking Data and Relay Satellite System, a network of six military satellites launched by the Space Shuttle in the late 1980's better known by its acronym, TDRSS. Government investigators say that a search carried out on December 12 at the home of [redacted], a Russian-born translator working for Boeing in Seattle, turned up computer disks with codes needed to access the highly classified TDRSS system. [redacted] came to the United States in 1992--well after the failed coup against Yeltsin--and claimed political asylum on grounds that he feared for his life if he returned to Russia. The Immigration and Naturalization Service granted him temporary asylum in 1996. But [redacted]s fears vanished miraculously once he was hired by Boeing as a translator for the Sea Launch project. Since then, he has returned to Russia several times with Boeing officials on contract negotiations and for technical talks. Boeing fired him in October 1997 after they were informed by U.S. officials that as a foreign national he posed a security risk and that allowing him access to munitions-list items was illegal.. Like the Russians, the Chinese have contracted with the Sanam Industries Group, the lead organization for the development of the Shahab-3 missile, the officials said. China Great Wall Industry Corporation, which makes China's space launch rockets as well as the DF-31 ICBM, was the supplier of the telemetry gear. Under existing U.S. legislation, the president is required to cut off U.S. cooperation with foreign entities found to be supplying missile technologies to countries such as Iran. If the president applied the law, that would put an end to U.S. satellite launches in China--and probably in Russia, as well..U.S. and Israeli intelligence sources say Iran is seeking to build a series of solid fuel ICBMs with Chinese and Russian help, that would be capable of reaching targets in the continental United States. So far, the U.S. believes these programs are not very far along; but then, just last year CIA Director George Tenet was saying the U.S. believed the Shahab-3 missile was not likely to be deployed for "at least five to ten years." Now the CIA believes it will be deployed later this year. With the Russians, as with the Chinese, the Clinton administration has sought to buy good behavior with generous commercial deals and astonishing transfers of advanced U.S. technology. Again and again, both countries have shown they are more than willing to take the prizes--and extremely reluctant to offer anything in exchange, until Congress threatens to upset the applecart by passing new sanctions legislation. The missile and nuclear sales to Iran and to other rogue states continue unabated--and increasingly, U.S. intelligence sources say, the Russians and the Chinese are incorporating U.S. technologies in the products they are offering for sale overseas. Clearly the Clinton export control scandals, which initially focused on satellite technology transferred by the Loral and Hughes Electronics corporations to China (see "Loral Exams," TAS, July 1998), are much broader and deeper than initially thought. And far from buying good behavior, the Clinton administration policy of setting a price for every misdeed is interpreted by more and more companies as simply the price of doing business.

New York Times 9/18/98 Eric Schmitt "In a major rebuke of President Clinton's export policy, House and Senate negotiators agreed Thursday to shift the control over exporting U.S. satellites back to the State Department from the Commerce Department. Some space experts and a senior government auditor have said that controls on exports of satellites to China have been loosened since the administration transferred licensing authority to the less restrictive Commerce Department in 1996, compromising national security. The Commerce Department denies this. Nonetheless, more than 10 House and Senate committees are investigating whether this approach has contributed to the release of sensitive satellite technology and engineering know-how to China that may have helped Beijing improve the reliability of its long-range missiles."

San Jose Mercury News NY Times 9/17/98 "When the Clinton administration relaxed export controls on high-performance computers in 1996, it relied on a flawed report that did not study the national security implications and concluded with scant data that the computers were already easily available around the world, government auditors said Wednesday.. The auditors said ``a key element'' in the decision to relax the export controls was a Stanford University study, commissioned by the Commerce and Defense departments without any competition, that said some U.S. computer technology was uncontrollable worldwide and efforts to control it would harm the industry..Within a year after the export rules were loosened, military installations in Russia and China obtained a few powerful new American computers, prompting criminal investigations. Congress tightened the supercomputer export controls again late last year. ."

New York Times Jeff Gerth 10/19/98 ".According to a 1995 Commerce Department document, the President "made clear," in private conversations he had with Brown, that "he does not believe we have done enough to streamline and liberalize." The document mapped out how Brown should lobby high-level Administration officials to ease controls on computer exports and shift items like communications satellites, engine technology and commercial data-scrambling devices. Such items were on a list of equipment that required a State Department license, and companies believed they could close more deals if authority over the exports were moved to Brown's Commerce Department..Secretary of State Warren Christopher insisted that his department retain jurisdiction. He was overruled in early 1996 by Clinton, opening the way to billions of dollars of satellite sales to Chinese companies. At about the same time, the Administration was weighing whether to lift restrictions on the export of some advanced computers. Officials asked outside consultants to study the issue, and they came back with a report that asserted the controls were pointless. The powerful computers manufactured by American companies would soon be widely available from foreign competitors, the report said. The Administration asked the consultants to assess whether computer sales could pose a threat to the American military. Their report did not take a position, saying the Government did not have enough information to draw a conclusion. This left the issue to Clinton, who decided to fulfill his pledge to the Silicon Valley executives and relax the restrictions..The new rules took effect early in 1996. Soon after, Chinese companies bought 77 of the high-speed computers, which can be used to predict weather patterns but can also scramble secret communications or design powerful nuclear weapons. Disclosure of those sales prompted Congress to reinstate license requirements for some advanced computers. This year, the Central Intelligence Agency and other Federal agencies concluded that at least some of those computers are being used by China's military. The details of their use remain unclear, officials said..Just this month, Congress reversed Clinton's 1996 decision and returned satellite exports to the State Department. At the same time, lawmakers created a senior Pentagon position for technology security after concluding military officials' role in controlling exports to countries like China had been "significantly and improperly reduced over the years." ."

WorldNetDaily 11/23/98 Charles Smith ".The Navy's inability to explain the decision to select a Russian missile over a U.S. made system also involves national security concerns. Navy officials met with congressional representatives and assured them that Boeing and McDonnell Douglas would restrict Russian access to advanced U.S. technology. However, there are allegations that U.S technology has already been given away. The short-range Kh-31 is so dangerous that Boeing and the Navy would not risk a pilot. The problem forced Boeing/Douglas to use a radio controlled F-4 Phantom to carry the missile close enough for firings against Navy ships. Boeing and Russian engineers shared enough data to fit the Kh-31 to a U.S. built fighter in order to fire the missile safely.. Boeing/McDonnell Douglas assured congressional representatives that they take the utmost care in guarding U.S. military secrets. Yet, in 1998 Boeing paid a multi-million dollar fine to the U.S. government for an illegal transfer of advanced missile technology to Russia through their joint SEA-LAUNCH project. McDonnell Douglas is also charged with the illegal transfer of advanced aircraft manufacturing equipment to China. The technology, a giant stretch press for aircraft manufacture, was sold in 1994 to CATIC, a Chinese-state owned corporation, controlled by generals of the People's Liberation Army. The Clinton administration approved the sale to CATIC through the Commerce Department then under Ron Brown. The approval came just before Mr. Brown left on his whirlwind tour of China in August 1994. Federal investigators charged McDonnell Douglas knew the hinese company never had any intention of purchasing the equipment for civilian use because the facility constructed to house the giant machine was put at the Nanchang military aircraft plant. The equipment sent to China is currently manufacturing fighters based on the Russian Su-27 Flanker. Recent photos taken at a Russian airshow displayed a variant of the Su-27 armed with two Kh-31 missiles. China has expressed an interest in the Kh-31 to arm its own jet fighters but acknowledged the short range missile needed improvement.."

Wall Street Journal 11/30/98 ".Michael Maloof is convinced China's military is grabbing sophisticated U.S. technology. His bosses at the Pentagon insist he is crying wolf..Mr. Maloof, a manager in the Pentagon's Defense Technology Security Administration since 1986, has become a fertile source for hawks seeking evidence of national-security damage. And he is becoming a major headache for Hughes Electronics Corp., which he accuses of knowingly assisting the People's Liberation Army. In 1993, the Clinton administration eased licensing requirements for products -- such as high-speed computers, telecommunications equipment and machine tools -- deemed to have both civilian and military uses. The industry hailed the changes, but some Defense Department bureaucrats accustomed to tight Cold War controls were aghast. It so bothered Mr. Maloof that earlier this year he began keeping a diary of his dealings with Pentagon superiors, which was obtained by The Wall Street Journal. The export control system is now dominated by Commerce Department officials, whose mind-set is much more pro- export...Hard-liners found ammunition earlier this year when it was learned that the Justice Department is investigating whether U.S. satellite makers illegally leaked sensitive missile data to China. During congressional hearings, the DTSA's senior strategic trade adviser, Peter Leitner, echoed many of Mr. Maloof's charges. "What passes for an export-control system has been hijacked by long-time ideological opponents of the very concept," Mr. Leitner claimed. A House panel headed by Republican Christopher Cox of California is probing high-tech exports to China, looking for possible national-security damage. The Pentagon's inspector general is examining procedures at the DTSA. Mr. Maloof has been a major source of information for both. He has told congressional investigators that David Tarbell, DTSA director since 1994, has cut him out of decisions about China, often siding with the pro-export Commerce Department in licensing decisions..Mr. Maloof's criticism of his bosses has included speculating about their relationship with the satellite industry. He wrote June 9 that he met with a Customs agent and "raised concerns for the first time whether Tarbell may be showing unusual favor toward Hughes." ..In a memo this summer to Mr. Tarbell, Mr. Maloof charged Hughes sold satellite ground stations to China that were "supplied and wittingly installed by Hughes for Chinese ground and rocket forces." Mr. Maloof argued in the memo that the ground stations are part of the People's Liberation Army's effort to upgrade encrypted its voice and data communications. Mr. Maloof claimed Mr. Tarbell said the findings weren't "enough to go on." .Officials of Hughes, a separately traded unit of General Motors Corp., acknowledge they often have limited information about their Chinese customers. Hughes said it sold the VSATs to a company called China Electronic Systems Engineering Co., which several U.S. officials say is associated with the Chinese military. It asked that the VSATs be fitted with a special port and circuit boards to load encryption software, Hughes said...Mr Maloof's memos, they say, often draw sweeping conclusions based on thin evidence. Still, some of his findings have been explosive. He discovered recently that in 1994 Hughes had hired the son of Lt. Gen. Shen Rongjun, a senior Chinese military official, while competing for a $600 million contract to sell a civilian communications satellite to a consortium that included People's Liberation Army companies linked to Lt. Gen. Shen. By 1995, Hughes got the contract. In a May 28 entry, Mr. Maloof wrote that the information came to him from an anonymous telephone tip. He confirmed it by checking the DTSA's classified computer database. Embarrassed, Hughes said Jun Shen, a naturalized Canadian with a doctorate in computer science, was indeed an employee but had little to do with the project. The Clinton administration was similarly chagrined. In 1996, it had granted Hughes an export license, but the satellite was never sent due to other problems. Now the administration has delayed issuing a new license, partly because of concerns about People's Liberation Army involvement.."

Softwar 12/1/98 Charles Smith ".In November, the State Department released a detailed 1996 report on U.S. high-tech exports to China as a result of a Freedom of Information Act (FOIA) request. But it refused to release another document on Clinton-sponsored exports to China, claiming to do so would threaten the "national defense." The report was written by James Sasser, ambassador to China and former Tennessee senator. Sasser sent his report to the White House, the State Department and the Commerce Department. Sasser, by the way, is the target of an (as yet) unrelated Department of Justice investigation that resulted in 47 indictments against a million-dollar Democratic donor and Sasser associate, Franklin Haney. The Sasser report contradicts Clinton administration claims that advanced communications exports to China were for "civilian" projects. The report states that the Chinese Army was keenly interested in obtaining U.S. communications technology and the purchases were being financed by Far East billionaire, Li Ka- Shing. ."

Softwar 12/1/98 Charles Smith ".According to the GAO, Hua Mei, a joint U.S.-China hotel venture, was no ordinary Chinese "Red Roof" inn. The GAO noted the Chinese partner, Galaxy New Technology, was also owned and operated by the Chinese Army. "In 1993, SCM Brooks Telecommunications entered into a joint venture with Galaxy New Technology, a Chinese company controlled by the Commission of Science, Technology, and Industry for National Defense (COSTIND), an agency of the Chinese military," the report said. COSTIND, according to the GAO, "oversees development of China's weapons systems and is responsible for identifying and acquiring telecommunications technology applicable for military use." The recently released 1996 report written by Sasser states that the People's Liberation Army (PLA) was also directly involved in the so-called "civilian" Chinese fiber optic communication systems. Sasser's report noted that the PLA actively worked on an MPT fiber optic network that the Clinton administration stated was "civil" for the House National Security Committee."

Softwar 12/1/98 Charles Smith ".In 1997, Rep. Henry Hyde wrote Attorney General Reno a letter outlining his concerns about Galaxy New Technology. According to Hyde, "In 1994, sophisticated telecommunications technology was transferred to a U.S.-Chinese joint venture called HUA MEI, in which the Chinese partner is an entity controlled by the Chinese military. This particular transfer included fiber- optic communications equipment which is used for high-speed, secure communications over long distances. Also included in the package was advanced encryption software." However, in 1996, Defense Department officials were adamant that there was no need to check the Chinese firm, Galaxy New Technology, since it was led by a civilian, Madam Nie Lie. Still, DoD officials did admit that Galaxy New Technology head Madam Nie Lie was also the wife of Chinese Army General Ding Henggao, commander of the Chinese unit COSTIND. Galaxy New Technology staff wear green, have little red stars and they kill for a living. In fact, the so called "civilian" firm was heavily laced with Chinese Army officers and experts. One member of Galaxy New Technology management, according to the 1996 Defense Department report, was Director and President "Mr. Deng Changru". Mr. Deng Changru is better known as Lt. Colonel Deng Changru of the People's Liberation Army, head of the PLA communications corps. Another interesting staff member from Galaxy New Technology was co- General Manager "Mr. Xie Zhichao." Lt. Colonel Xie Zhichao, is also the Director of the COSTIND Electronics Design Bureau.." 12/2/98 ".In a special 20/20 investigation, Chris Wallace reports on the possible transfer of sensitive American technology to the Chinese, on 20/20 Wednesday, Dec. 2 (10-11 p.m., EST). In an exclusive interview with 20/20, a former U.S. government monitor alleges that national security has been compromised by American aerospace companies which went to China to launch their satellites on Chinese rockets. In his first public interview, Lt. Col. Al Coates, who was responsible for monitoring American companies in China, tells Mr. Wallace, "They want to get the job done. They don't consider it helping the Chinese. They consider it getting their payload and getting their job accomplished." Lt. Col. Coates tells 20/20 that he sent numerous reports of infractions back to U.S. government officials, but did not receive any responses. The infractions ranged from what Coates deemed inadequate security at work locations to U.S. personnel getting into subjects he considered off limits during working meetings with the Chinese. Out of frustration, Coates quit the Air Force last month, after 29 years of service.

ABC.Com 12/3/98 20/20 ".Wallace: Did Hughes put American national security at risk? Coates: I believe they did, and I think they put them at risk for profit. Wallace: It's a pretty tough thing to say about an American corporation? Coates: But if you accept the mentality that you're doing it strictly for commercial nature of launching Communication satellites, then I guess you can have a clear conscience. Hughes denies that its personnel compromised national security. In a statement to 20/20, Hughes said the U.S. government never told the company of any violations. "We can only assume that if Mr. Coates communicated these incidents to his superiors, they were deemed unworthy of passing on to us."."

Softwar Website 12/7/98 Charles Smith ".Reinsch wants to re-apply his vast technical expertise to oversee more military exports such as satellites. However, Reinsch, according to his own bio, HAS NO technical expertise in military technology. His only business experience is in running housing for the elderly in southern Maryland.."

Defense News 12/8/98 Barbara Opall-Rom ". White House and Commerce Department officials are crafting an end run around much of the government's national security bureaucracy with a plan to inject business interests into the arms export licensing process. Prepared in coordination with the U.S. aerospace industry, the plan is to be presented in an executive order by President Bill Clinton early next year. It would give Commerce officials the right to appeal State Department decisions governing export of satellites and other items appearing on the so-called Munitions List. The list is a category of sensitive technologies requiring the highest level of scrutiny by the U.S. government. State Department, Pentagon and congressional critics say the planned executive order will dilute the restrictive nature of Munitions List items administered through the Arms Export Control Act. Moreover, they say it violates the intent of the 1999 National Defense Authorization Act, which transferred authority for satellite and related exports from Commerce to State in response to congressional concerns of inappropriate technology transfers to China. "The intent of Congress with placing satellites back on the Munitions List was to inject more rigor into the export review process. Instead, the administration appears to be intent on dumbing down the State Department process," Marc Thiessen, a spokesman for Sen. Jesse Helms, R-N.C., chairman of the Senate Foreign Relations Committee, told Defense News Dec. 4. Rep. Benjamin Gilman, R-N.Y., chairman of the House International Relations Committee, warned Dec. 4 that such exports "should be guided by those agencies which ... give an overriding priority to national security considerations."."

E-Mail 12/20/98 Charles Smith ".The Pentagon -U.S. war-planners are not all that happy with operation DESERT FOX. The strike was telegraphed to Iraq far in advance and mostof the Iraqi mobile Surface to Air missile (SAM) units escapeddamage. The prime target for U.S. strikes, the IraqiIntegrated Air Defense network (NATO code-name "Tiger Song"), suffered no major damage and appears to have lost no missile units. The only real "hard target" kills that can be claimed are a few attack helicopters destroyed at a northern Iraqi air-base. Ironically, the Iraqi "Tiger Song" system was built using American and French parts exported to China. Iraq purchased the encrypted - secure - fiber optic system from the Chinese Army in 1996. The Clinton administration authorized the exports of a secure, fiber optic, communication systems to China in 1994. According to the GAO, Clinton also authorized the export of an encrypted - secure - air control system directly to the Chinese Air Force using a Presidential waiver.."

New York Times Jeff Gerth 1/22/99 Freeper Jolly ". The State Department told Congress Thursday that the Commerce Department would have a voice but not a vote in approving the export of American-made satellites.. President Clinton originally opposed the measure but it was part of the military budget that he signed last fall. The president's strong opposition had prompted senior congressional Republicans to warn the president last month not to undermine the intent of the law by giving the Commerce Department a significant role in the process...The new law takes effect in mid-March, three years after Clinton initially decided to make the Commerce Department responsible for satellite exports. In October 1995, after a review, the secretary of state concluded that satellites should stay under his jurisdiction. The Commerce Department appealed to the White House, and the 1995 decision was reversed. ."

New York Times 2/23/99 Jeff Gerth David Sanger "...Swayed by criticisms that commercial satellite deals with China could threaten national security, the Clinton administration decided on Monday to reject the sale of a $450 million satellite to a consortium with close ties to the Chinese government, senior administration officials said. The decision cast considerable doubt on the future of high technology sales useful to the Chinese....The decision came after the Defense and State Departments objected to allowing China to launch the satellite. Overruling the Commerce Department, which had favored the sale, the State and Defense officials concluded that the technology to place the satellite in orbit would help the Chinese military make its intercontinental ballistic missile fleet more accurate. Some experts also feared that that Chinese military would benefit, both commercially and technologically, by controlling the satellite once it was in orbit. The deal involves a Hughes Space and Communications satellite designed to set up a mobile telephone network over much of Asia, reaching from China to Indonesia, and then across the Indian Ocean as far as Pakistan...The decision effectively revokes President Clinton's quiet approval of the sale two and a half years ago. At the time, Clinton's aides assured him it would not contribute to Chinese military capabilities. The State Department and the Defense Department concurred with the decision, but had not thoroughly vetted the military links of the Singapore-based consortium, which was the official buyer of the satellite. Top officials of the consortium included top military officers of the People's Liberation Army, who also served in posts with the China Satellite Launch and Tracking Control Corp....At a high level interagency meeting on Feb. 11, the Pentagon said it was troubled by the involvement of the Chinese military in the regional satellite system, called Asia-Pacific Mobile Telecommunications, an official said. The State Department's concerns at the meeting included questions about Hughes' dealings in recent years with China, the official added. One troubling episode involved a 1995 tutorial on rocket launching given by Hughes engineers to Chinese scientists, now the subject of a criminal inquiry. Another involved the company's hiring of the son of the Chinese general who oversees his country's military satellite programs, officials said....At the time of the company's questioned deals with China, its chairman was C. Michael Armstrong, who also served as head of Clinton's export advisory council, a group of private-sector executives and labor leaders who advice the administration on trade policy. Armstrong now heads AT&T...."

Newsweek 3/15/99 Michael Hirsh "…For U.S. manufacturers of high-performance computers, satellites and other "dual-use" goods—advanced technology with possible weapons applications—the fallout could be dire. "When the lid comes off the Cox report, there's going to be an explosion of [public] outrage," warns Dana Rohrabacher, a conservative Republican from California. A Senate committee is expected to release similar findings soon. And the main victim of this new anxiety over national security may well be America's computer-export market—especially for supercomputers. Why supercomputers? NEWSWEEK has learned that the main thrust of the Cox report will not be the transfer of satellite and missile capability—the issue that prompted the probe last June—but theft from U.S. nuclear labs. In the mid- to late '80s, Chinese operatives allegedly gained knowledge of the top-secret W-88 nuclear warhead. Supercomputers can help transform such nuclear secrets into state-of-the-art weapons—in the case of the W-88, by miniaturizing the warhead so that several can fit on a single missile. Sources close to Cox say he is also worried that China and other potentially unfriendly nations will use supercomputers or "superclusters" of high-end computers to do "virtual" nuclear testing. That would allow them to evade the Comprehensive Test Ban Treaty…. "

Washington Post 3/9/99 Michael Laris "… Over the past 13 months, the U.S. government received 512 requests to export high performance computers to China, 70 of which were denied, according to the Commerce Department. Several of the denials were reversed on appeal. The actual number of shipments to China was substantially lower because some deals fell through, bringing the total of deliveries last year to 191. Powerful U.S. computers are used here for everything from sorting mail to running e-commerce businesses. The problem is that American computers and the tiny microchips that drive them are getting faster every day -- and cheaper. The U.S. government has concentrated its efforts on controlling exports of the 500 fastest American-made computers -- supercomputers that cost tens of millions of dollars each. These are the machines that the Department of Energy uses to manage the U.S. nuclear arsenal and that could pose the greatest danger in foreign hands, said William Reinsch, the Undersecretary of Commerce for Export Administration and an outspoken advocate of increased high-technology sales abroad. "The problem is, No. 500 keeps going up in capability," he said, adding that the calculating speed of No. 500 will nearly double this year from 11,000 to 20,000 MTOPS. "When the high end is going up that rapidly, you have to make adjustments to continue your ability to do that. Otherwise, what we are doing is controlling low-end PCs."…"I can't tell you there are no national security implications to exporting high performance computers," Reinsch said. "There are national security implications to exporting personal computers. . . . We have to weigh costs and benefits. We also have to weigh controllability." Reinsch's critics say his brand of pragmatism is dangerous, that U.S. computer companies are basically more concerned with the bottom line than national security. Peter Leitner, an official with the Pentagon's Defense Threat Reduction Agency, is one of those critics. "By simply decontrolling these things in response to technological development," he said, "there is a real cost . . . that is going to be borne by the taxpayer, going to be borne by young people who are going to be killed unnecessarily in the future when they come up against a weapons system that is more sophisticated than it had to be." Many of the common tools of intelligence gathering will be rendered useless if key weapons testing in China is done on powerful computers with sophisticated software, rather than in actual performance tests, Leitner said…. "

The Union Leader 3/16/99 Richard Lessner "…It is hardly surprising that the Clinton administration, informed in April 1996 that a Red Chinese agent had penetrated our super-secret Los Alamos nuclear weapons laboratory, did nothing. Consider that was going on in 1996: In the spring of that year, the Clinton-Gore re-election campaign and the Democratic National Committee -- the two by then were nearly indistinguishable -- were smack in the middle of a huge international fundraising effort facilitated by a cast of shady Asian businessmen, organized crime figures and agents of the People's Republic of China. Millions of dollars were being raised from these foreign sources to pay for Dick Morris' stealth media campaign that buried the hapless Bob Dole and turned Bill Clinton's re-election into a walkover. So in the middle of all this, is it any wonder that Deputy National Security Adviser Sandy Berger did nothing when investigators told him in April 1996 of the Red Chinese penetration at Los Alamos? Is it mere coincidence that Mr. Berger learned our nuclear security had been compromised the same month (on the 29th) that Al Gore was holding a gala fund-raiser at a Buddhist temple in California, at which hundreds of thousands of dollars were illegally funneled into the Clinton-Gore campaign from Asian sources with connections to Beijing? Then there is Mr. Berger himself. It now is known from White House documents obtained by congressional investigators that as deputy national security advisor it was Mr. Berger who led the fight inside the administration in 1995 to shift responsibility for export controls on satellite technology from the State to the Commerce Department. This transfer of control to the late Ron Brown's more "user friendly" Commerce -- a change opposed by the Pentagon and Secretary of State Warren Christopher -- was rewarded by millions in campaign contributions from the Loral and Hughes Aerospace corporations. And it was Mr. Berger who pressed Bill Clinton to provide Loral and Hughes with export-control waivers that allowed the companies to transfer sensitive satellite technology to the Red Chinese, this despite an on-going Justice Department and FBI investigation into their activities. So much for Sandy Berger's interest, his title notwithstanding, in national security…."

INVESTOR'S BUSINESS DAILY 3/22/99 Brian Mitchell "…Starting in 1993, the Clinton administration began dismantling controls on the sale of technology with possible military uses. It also transferred responsibility for reviewing sensitive exports from the State Department to Commerce. The relaxation of controls has been a boon to high-tech companies, but it also has bolstered China's military capabilities. In late 1993, China acquired from McDonnell-Douglas a factory full of giant computer-controlled machine tools used to make high-performance aircraft. China also has acquired high-speed telecommunications equipment, supercomputers and satellite technology. In 1996, Loral Space Systems and Hughes Electronics helped China correct a fatal flaw in the guidance system of its Long March missile. This prompted a federal grand jury investigation into possible export-control violations. But in February 1998, Clinton let Loral and Hughes off the hook by granting them a waiver on the transfer of similar missile-guidance technology to China. With the help of Loral and Hughes, China was able to perfect the Long March. In 1994, Clinton adopted a less favorable policy toward Taiwan, downgrading Taiwan's status vis-a-vis China. The State Department even tried to keep high-level Taiwanese officials from visiting the U.S., but was overruled by Congress. In 1996, China tried to intimidate Taiwanese voters, in an election between pro-Beijing and pro-independence candidates, by lobbing missiles over the island. The U.S. responded by sending the carriers Nimitz and Independence to the Taiwan Strait….."

Washington Times 3/31/99 Timothy Burn "…Details contained in a potentially explosive report on China's theft of U.S. nuclear secrets could ruin Clinton administration efforts to make it easier to sell advanced technology to other countries. …The Commerce Department is working on a proposal to ease supercomputer-export controls, but the plan likely will face strong opposition in Congress….."Because of the possible illicit transfer of technology, many Washington veterans have told me this is the worst climate for high-tech trade with China in 20 years," Mr. Daley told the Beijing-based U.S. business community. "The ... report, to be released by Congress soon, will no doubt be used by some as an excuse for tightening controls. Some export licenses may be more difficult to obtain -- especially if an organization had even minor involvement with the military," he told the American Chamber of Commerce….. In 1997, the House National Security Committee released a report that revealed the Russian ministry in charge of building nuclear weapons had illegally obtained U.S. supercomputers……In the midst of these security concerns, the Clinton administration has continued efforts to revise Cold War-era export-control regulations in the light of swift advances in computer technology. The changes, which were implemented in 1994, raised the level on the speed of computers that could be exported without a license from 195 million theoretical operations per minute (MTOP) to 1,500 MTOP…...But in 1997, mainly because of increased security concerns after the technology transfers to Russia, Congress modified the president's export-control rules as part of the National Defense Authorization Act. As it stands now, Congress requires exporters to notify the Commerce Department of exports to end-users in "Tier III" countries, a group of 50 nuclear-risk countries, including Russia, China and Israel. Agencies involved in export control, like Commerce, the Defense Department and the State Department, have 10 days to object to a sale…...Commercially available computers are five times faster than they were in 1996. Intel Corp., for instance, plans next year to release its Merced microprocessor that operates at 5,622 MTOP, well above the current export limit….."

World Net Daily 4/2/99 Jon Dougherty "...A former stockholder in a now--defunct commercial space company said, "there is every indication" that the current crisis involving the transfers of U.S. military technology to China had its roots in the late 1980s. The source, who requested anonymity, told WorldNetDaily that the company -- Space Commerce -- tried unsuccessfully "back during the Reagan and Bush years" to get contracts to launch U.S. satellites in the former Soviet Union. The source said Space Commerce had a partnership arrangement with a Soviet space counterpart called Glavkosmos, which he said was "akin to our version of NASA." Though there were "a number of organizations in the Soviet Union that were related to their space program," Glavkosmos "had the ability to sell satellite sights on Soviet Proton rockets -- in other words, to sell launches," explained the source.....

Sometime in the late 1980s, the source said, Hughes Electronics -- now implicated in the Clinton administration "Chinagate" scandal -- approached Space Commerce with a proposal to launch two commercial satellites. Hughes made a "substantial down payment to buy these two launches," and the source said company executives informed shareholders that the Hughes satellites only "contained technology that was already readily available." "They told us you could go down to the local library and get the technology," the source said The deal between Space Commerce and Hughes specified that the launches would take place aboard Proton rockets in the Soviet Union, so the space company applied for the necessary permits from the U.S. government. However, the Bush administration would not allow Hughes to export the satellites to the USSR for launching because of a possible compromise of technology.

"For years afterward," the source continued, "because of a concern about a transfer of technology, the company could not get an export license to export the satellites to Russia." As a result, "Space Commerce spent a great deal of time, effort and all our money trying to lobby to get those permits." The source said, "I believe that Hughes also tried to lobby the government to get them as well," but neither company was successful. When it was over, the satellites could not be launched and "the company went belly-up," the source said, having spent all of its money lobbying for permission to launch. Shortly after Space Commerce went defunct "in the early 1990s," Hughes was finally granted permission to launch those satellites instead "on the Chinese Long March rocket" in mainland China...."

Washington Times 4/5/99 Barbara J Saffir "...In a fateful sign of the new mission -- over objections from the State Department -- Mr. Clinton in 1996 switched oversight of export licenses for satellites and other technology to China to Mr. Brown's business-friendly department. Satellite deals by Loral and others would become the focus of harsh criticism in Congress that key military technology had been essentially handed over to the Chinese. "We saw the administration's national security process at work ... and it was overridden on the recommendation of Ron Brown," Mr. Christopher said at the time.

William Norman Grigg 7/6/99 "…Corporations lusting for Beijing's business have taken notice of the Clinton Administration's decimation of export controls. In a dispatch from Beijing, the May 24th Washington Post observed: "Almost nine years after the United States slapped an embargo on the sale of military technology to China after the crackdown on student-led protests in Tiananmen Square, U.S. defense contractors are doing what few thought possible: preparing for the easing of these restrictions. Even as a controversy exploded in Washington ... over allegations that the Clinton administration allowed American companies to pass sensitive missile technology to China, five prominent U.S. companies participated in China's first defense electronics trade show in a Beijing exhibition hall."…"

Source: Departments of Commerce and Defense. 4/12/99 "... The addition of new controls over satellites transferred to Commerce's jurisdiction in 1996 addressed some of the key areas where the Commerce procedures are less stringent than those at State. There remain, however, differences in how the export of satellites are controlled under these new procedures. -- Congressional notification requirements no longer apply, although the Congress is currently notified because of the Tiananmen waiver process. -- Sanctions do not always apply to items under Commerce's jurisdiction. For example, under the 1993 Missile Technology sanctions, sanctions were not imposed on satellites that include missile-related components. -- Defense's power to influence the decision-making process has diminished since the transfer. When under State jurisdiction, State and Defense officials stated that State would routinely defer to the recommendations of Defense if national security concerns are raised. Under Commerce jurisdiction, Defense must now either persuade a majority of other agencies to agree with its position to stop an export or escalate their objection to the cabinet-level Export Administration Review Board, an event that has not occurred in recent years. -- Technical information may not be as clearly controlled under the Commerce system. Unlike State, Commerce does not require a company to obtain an export license to market a satellite. Commerce regulations also do not have a separate export commodity control category for technical data, leaving it unclear how this information is licensed. Commerce has informed one large satellite maker that some of this technical data does not require an individual license. Without clear licensing requirements for technical information, Defense does not have an opportunity to review the need for monitors and safeguards or attend technical meetings to ensure that sensitive information is not inadvertently disclosed...."

World Net Daily through 4/13/99 through E-Mail Alert "... According to a May 1995 CSPP document sent to Ron Brown, "controls on computer exports to Russia and China for commercial, civil end-users should be eliminated; controls on exports for actual military end-uses may be appropriate until there is greater certainty that neither country poses a threat to U.S. national security." ...According to the Federal Advisory Committee Act (FACA) the Commerce Dept. was required to make public disclosure if a government agency consults advisors who are not government employees. FACA was established to force Federal officials to hold formal policy meetings in public, instead of meeting with special interests, lobbyists and industry behind closed doors. The Commerce Dept. was legally obliged to offer open access to the public, media and other qualified individuals the same access as the members of the CSPP - who are NOT members of the Federal Government. Instead, the Commerce Dept. engaged in a cover-up of the secret meetings with the CSPP and Podesta Associates employees at the White House. No notification was issued for the secret meetings, nor the classified materials offered to any other company...."

The American Spectator 5/99 Kenneth R. Timmerman "...Similarly, prior to January 1996, when computer export controls were lifted after intensive lobbying from Silicon Graphics and other top DNC contributors, the Chinese had only three U.S. High Performance Computers (HPCs), all of which were subject to stringent Defense Department monitoring. In April 1997-- just 14 months after the decontrol--Undersecretary of Commerce William Reinsch told Congress that U.S. companies had sold 46 supercomputers to Chinese end-users, and that the Chinese were not allowing the U.S. government to verify how they were being used. By June 1997, concerned that we were helping the PLA to improve weapons design, missile targeting, and nuclear simulation, the House voted to restore licensing requirements on HPCs. But the measure was ultimately defeated under intense industry and administration pressure. In January 1999, Reinsch's Bureau of Export Administration delivered its first congressionally mandated report detailing supercomputer exports over the preceding 12 months. Out of a total of 390 HPCs exported by the United States during that period, 191 of them had gone to China. Despite U.S. efforts, the Chinese only allowed government officials to inspect three of them once they had reached China. Congressional sources tell TAS that they have been told by administration officials that as many as 600 HPCs have been sold to the Chinese since the 1996 decontrols--more raw computing power than can be found in the Pentagon and the Department of Energy's nuclear weapons labs, combined. ..."

The American Spectator 5/99 Kenneth R. Timmerman "...I have been investigating Chinese high-tech espionage activities in the United States since 1993, and discovered early on just how sensitive a subject this can be. As a congressional staffer working for California Democrat Tom Lantos, I requested licensing records of U.S. high-tech exports to China from the Department of Commerce. When Commerce finally delivered the several- thousand-page print-out to the Rayburn House Office building in late March 1993, I was prevented for three weeks from even looking it over, despite the fact that the information was not classified. ...They did not want the story to leak out of just how much dual- use technology U.S. companies had been allowed to sell to the Chinese military, for fear that would impede the U.S.-China high-tech pipeline. Unbeknownst to most people at the time was a plan devised by top Clinton administration appointees to lift export controls on a wide range of strategic technologies. The plan was first laid out in a 1992 National Academy of Sciences study authored by William Perry, Ashton Carter, and Mitchel Wallerstein, who all went on to top Pentagon jobs under Clinton. Calling export controls a "wasting asset," they argued that for U.S. high- tech firms to maintain a technological edge over their foreign competitors they needed to be allowed to export ever-more sophisticated equipment, so they could plow those profits into developing new technologies..... After the election, William Perry became deputy secretary of defense and went to work putting the plan into action within the bureaucracy. Ron Brown, as secretary of commerce, was tasked with selling the decontrols to corporate America and Congress as part of an administration-wide "Trade Promotion" package, aimed at creating jobs and "growing" U.S. exports. On September 30, 1993, Brown issued a landmark report, "Toward a National Export Strategy," which first made the argument--oft-repeated until the Loral-Hughes satellite scandals erupted last year--that each additional $1 billion in U.S. exports creates 20,000 jobs in the U.S..... In 1993 and 1994 the administration tried to rewrite the EAA to eliminate most controls, but Congress balked; so they simply made an end run around the law, and dismantled the controls through executive branch regulations. The administration's efforts reduced the voluminous licensing lists I had once received, and Defense Department officials now complain there are no more records of what has been shipped to the Chinese military--and thus no way to gauge the damage to U.S. national security. Like small-time hoods dreaming of the perfect crime, Clinton's "best and brightest" thought they had covered up all traces of their acts...."

The American Spectator 5/99 Kenneth R. Timmerman "...Supercomputers are only one element in a deadly mix of high technologies released for sale to the Chinese by the Clinton administration since 1993. An internal memorandum written by Michael Maloof of the Pentagon's Defense Technology Security Administration (DTSA), subpoenaed by the Cox committee, paints an astonishing picture of the cumulative impact of U.S. technology transfer to the Chinese military over the past five years. The combination of supercomputers, satellite sales, and advanced telecommunications switching technology since 1994 "have provided the Chinese military with a nationwide encrypted command, control, communications, computers and intelligence (C4I) network that will serve it well into the next century," Maloof warned his superiors. "Together, they provide the PLA with a communications infrastructure that it could not have developed on its own." Extensive manufacturing technologies were decontrolled along with the actual products U.S. companies were allowed to ship to China. Since 1993, the PLA has been importing massive amounts of equipment to manufacture fiber- optics cable, which allows for secure communications links impervious to electronic eavesdropping. And companies tied to former colleagues of then- Deputy Defense Secretary William Perry led the way in transferring encrypted Asynchronous Transfer Mode (ATM) telephone switching equipment, now used by the PLA for its military communications network. "The decision to allow... ATM switching technology in 1994 occurred over the objection of DoD technical experts," Maloof wrote. "Despite initial NSA concerns, it was silent when the decision finally occurred." As I wrote in "Peking Pentagon" in April 1996, it appeared that William Perry personally intervened to get NSA to drop their objections to the sale of this technology, despite the fact that the Chinese buyer was a PLA-owned company....."

New York Times 5/5/99 Gary Milhollin Jordan Richie "...The state-owned China National Nuclear Corporation was allowed to buy equipment useful for uranium prospecting made by International Imaging Systems, a California company. China National Nuclear then helped Iran prospect for uranium that American intelligence officials believe will be used in making nuclear weapons...."

New York Times 5/5/99 Gary Milhollin Jordan Richie "...The state-owned China Precision Machinery Import-Export Corporation, which manufactures China's newest anti-ship cruise missiles, was allowed to buy a computer system that is useful for simulating wind effects. Not only did these missiles strengthen the Chinese military, but the company has also exported some to Iran, where, according to the United States naval commander in the Persian Gulf, they threaten our personnel...."

New York Times 5/5/99 Gary Milhollin Jordan Richie "...The Chinese Academy of Sciences was allowed to buy equipment from the Convex Computer Corporation (which has since been bought by Hewlett-Packard) for processing data from an experimental fusion reactor. The academy then exported the reactor to Iran, where it is used for training nuclear scientists...."

New York Times 5/5/99 Gary Milhollin Jordan Richie "...American equipment was approved for export to the National University of Defense Technology, which helps the People's Liberation Army design advanced weapons; the University of Electronic Science and Technology, which helps develop stealth aircraft and advanced military radar, and the Beijing University of Aeronautics and Astronautics, which helps develop missiles and specializes in guidance, navigation and flight dynamics. (The licensing records do not reveal whether all the items approved were actually shipped, but there is no reason to think they weren't.) ..."

New York Times 5/5/99 Gary Milhollin Jordan Richie "...In the decade we studied, American companies were also licensed to sell China a great deal of noncomputer equipment that could be used for weaponry. This included $241 million worth of machinery for making special semiconductors that can go into missiles, torpedoes, smart munitions, fuses and secure communications equipment; $131 million worth of high-speed oscilloscopes, which can record data from nuclear weapon tests, help design nuclear weapon firing circuits and develop missile guidance systems; $111 million worth of high-accuracy machine tools that can produce the precision parts needed for nuclear weapons and long-range missiles, and $5.4 million worth of vibration-testing equipment, which can enable nuclear weapons and missiles to withstand shock, impact and rapid acceleration...."

Reuters 5/5/99 "...The Senate Intelligence Committee Wednesday approved a report on its investigation into how U.S. satellite exports to China affected America's national security and will release it soon, senators said. The investigation into technology transfers was triggered by reports that China acquired secret missile technology as part of the commercial use of Chinese rockets to launch U.S. satellites into space. The report on the committee's investigation will be made public after national security agencies decide releasing the information would not harm U.S. security. The report also looked into allegations that China tried to influence U.S. policy through election campaign contributions. It does not cover the scandal over allegations of Chinese spying at U.S. nuclear weapons research laboratories. "The China report has been adopted by the intelligence committee by an overwhelming vote,'' Senate Intelligence Committee Chairman Richard Shelby, an Alabama Republican, said..... Asked whether the Senate report was critical of President Clinton's policies, Kerrey replied: "It's certainly not a love letter. It's a candid evaluation of what went wrong and it makes no attempt to target the president.'' Monitoring and oversight had been weak, he said. "There was an inherent conflict in this policy. It is in our interest to have China in their launch, when they're doing commercial launches, to be as ineffective as possible. It's in our interest to have their performance be very, very low because they can transfer it over to the military side,'' Kerrey said....."

Bill Gertz THE WASHINGTON TIMES 5/7/99 "....The bipartisan committee report sets out that the Chinese government is engaged in a covert operation aimed at influencing U.S. policies. "Technical analyses and methodologies provided by American satellite companies to the [People's Republic of China] during various satellite-launch campaigns result in the transfer to the PRC of technical knowhow," the report says. "Such transfer enables the PRC to improve its present and future space launch vehicles and intercontinental ballistic missiles." A senior Republican Senate aide said the report "confirms our worst fears" about the Clinton administration's policy of loosening satellite-export controls and trying to deal with aggressive Chinese spying on technology. "China developed and implemented a covert-action plan to influence U.S. policy and through illegal campaign contributions sought to loosen controls on critical technologies," the aide said. "And it worked." The aide said technology transfers to China "damaged national security" because "Chinese rockets are now or will become more reliable, more deadly and more potent and could be used against the United States." The report says there is evidence that U.S. satellite technology "was incorporated into the PRC space-launch program," and the panel assumed that "any improvements in the PRC's space-launch vehicles would be incorporated wherever practicable in the PRC's military ballistic missile program. "The committee concludes that the technical information transferred during satellite-launch campaigns enables the PRC to improve its present and future space-launch vehicles and ICBMs." If Beijing uses the space technology in its growing force of strategic intermediate-range and short-range missiles, "national security will have been damaged," the report says. "The committee believes . . . the PRC will use the transferred information to improve its short-range ballistic missiles, intermediate-range ballistic missiles and related technology. These missiles could threaten U.S. forces stationed in Japan and Korea, as well as allies in the region."

Bill Gertz THE WASHINGTON TIMES 5/7/99 "...The intelligence committee says the CIA regards space launchers as "missiles in disguise," and notes that the Chinese Long March space booster "shares components with the PRC's CSS-4 intercontinental ballistic missile," most of which are targeted at U.S. cities.... Chung received a $300,000 donation from a Chinese aerospace company that contributed to President Clinton's 1996 re-election campaign. According to the committee, China in 1995 launched "a plan to influence the U.S. political process favorably toward that country. . . . The plan was an official PRC plan, and funds were made available for its implementation." The report says the CIA failed to recognize "the scope of PRC efforts to influence our foreign policy and our elections." It recommended increased efforts to monitor Chinese political-influence operations. .... The Clinton administration transferred jurisdiction for licensing commercial satellites from the State Department to the Commerce Department, which subordinated national security to business interests, the committee says.

Associated Press 5/6/99 "...The Senate Intelligence Committee has concluded in a bipartisan report that the Clinton administration was lax in protecting U.S. missile technology from leaking to China through commercial satellite exports. .... It focuses on a policy that began during the Reagan and Bush administrations and was enthusiastically embraced by Clinton to let U.S. companies ship their commercial satellites to China for launch atop Chinese rockets. U.S. companies needed access to Chinese rockets because of a shortage of rockets for commercial launches in the United States. But after several launch failures, insurance companies underwriting the launches questioned the reliability of Chinese rockets. U.S. satellite makers such as Hughes Electronics and Loral Space & Communications participated in studies and reviews that examined possible causes for the failures. The American companies denied any wrongdoing, but Pentagon officials and a subsequent House review concluded that China had gained valuable missile-related know-how from these reviews. The rockets used by China to launch commercial payloads, according to U.S. intelligence, are all but identical to China's ICBMs. Shelby said the report was adopted in a near-unanimous vote of the intelligence committee members. He did not provide the final tally.....Democrats battled Republican committee members to produce a report that could win bipartisan approval. As a result, some of the tougher language of earlier drafts was scrubbed out, according to Kerrey. The report also examined allegations that the Chinese government was involved in funneling money illegally into U.S. political campaigns, particularly to the Democratic Party, and that the effort revolved around gaining influence over key foreign policy and trade matters. An official familiar with the report said it finds no direct link between China's involvement in contributing to campaigns and the satellite export issue...."

World 5/10/99 Middle East News Line "...The Clinton administration has acknowledged that despite Beijing's pledges Chinese companies are still helping Iran's intermediate ballistic missile program. The administration -- responding to a congressional report by Senator Richard Shelby, an Alabama Republican, about Chinese proliferation -- said China continues to help Iran's nuclear program. "We are concerned, in many respects, about certain Chinese entities that may provide technology - especially to Iran and Pakistan," State Department spokesman James Rubin on Friday, "and we have made those concerns made to the Chinese leadership at the highest levels, including most recently in Premier Zhu's visit. We will continue to work with China to bring its policies and practices more and more in line with international norms.".....Rubin also acknowledged U.S. concerns that despite its commitments Beijing is transferring missile technology to North Korea. "We do have concerns that they are seeking certain technology -- materials called "specialty steel" that can be used in their missile program," he said. "We have heard reports to that effect. We're concerned by those reports. We've raised this issue directly with the Chinese and we're going to be following it very closely." Chaired by Shelby, the Senate Intelligence Committee report said Clinton administration officials and certain U.S. aerospace companies joined to allow unlicensed and unauthorized transfers of U.S. technology to China. "We left the door open for the PRC to abscond with a lot of our most advanced space technologies, and we may never know the full extent of what they got," Shelby said on Friday. "All of you probably realize that the PRC [People's Republic of China] is one of the world's worst proliferators of missiles and missile technology to potential U.S. adversaries and to other unstable parts of the world. The committee found that these missiles may now benefit from U.S. technology."..."

WorldNetDaily 5/11/99 Charles R Smith "...A 1997 Commerce e-mail to Frank Deliberti at the Commerce Bureau of Export Administration (BXA) from Robert Bannerman in Beijing states, "This list, called 'China's Defense-Industrial Trading Organizations' published by DIA (Defense Intelligence Agency), was posted in several places in the BXA/OEE section I worked in a year ago." "I used the chart to discover that Yuanwang Group," continued Bannerman. "The importer that is alleged to have imported the Sun Computer shipped to the National Defense Technical Institute of China in Changsha was directly under the control of COSTIND. I keep a copy of this chart in my files." The Commerce Department knew computers were being sold directly to the Chinese army. The U.S. Commerce Department acted as a contact point for both the PLA buyers and the American computer manufacturers. The same PLA-owned Yuanwang Corp. that Commerce would push as an official contact in 1995 for peaceful "defense" conversion projects, acquired high-speed Sun computers for the Chinese army in 1997. According to another document from the Commerce Department, Defense Secretary Perry had promised Ding, "a Cray super-computer to be used directly by the Chinese weapons establishment to help design newer and safer nukes."

WorldNetDaily 5/11/99 Charles R Smith "...In 1995, eager to make new foreign sales, Cray sales representatives traveled to Beijing to meet with PLA officers during a Commerce-sponsored event. In 1995, Cray attended the "JCCT Meeting" in China. The Joint U.S.-China Technology summit held in October 1995 in Beijing, included major American defense computer manufacturers such as IBM, SUN, Apple, Digital, Silicon Graphics and Cray. Nor was China's missile program left begging for CPU power. In 1994, Tandem Corp. exported computers to China Great Wall Corp., a company owned by the Chinese army, during a Ron Brown trade trip. Commerce documents show that China Great Wall Industry is owned by "China Electronics Systems Engineering Company (CESEC), a subsidiary of the People's Liberation Army."..."

WorldNetDaily 5/11/99 Charles R Smith "...In 1993, Great Wall, along with nine other PLA-controlled companies, sold nuclear tipped M-9 missiles to Pakistan. In response, Great Wall was banned from purchasing U.S.-controlled technology such as computers. Yet, only a few months later, Great Wall was allowed to buy over $100 million of U.S. computers. Tandem Corp. CEO James Treybig attended an August 1994 presidential trade mission to Beijing with Ron Brown. A Brown trade mission document states, "Tandem and China Great Wall Industry will announce in August their joint venture." Another document found in the files of former Commerce Secretary Ron Brown states that Treybig "negotiated a $100 million dollar joint venture for Tandem Computers while in China." The PLA purchase of U.S. computer power was the perfect cap to Chinese nuclear espionage operations against America...."

San Diego Union-Tribune 5/16/99 Gary Milhollin Jordan Richie "...Even after stealing the plan for an advanced warhead, one would need high-performance equipment to manufacture and test its precision parts. Sadly, China is getting those machines from the United States -- and it doesn't even have to steal them. A study we recently completed shows that the Commerce Department approved more than $15 billion worth of strategically sensitive exports to China in the last decade. Although supposedly intended for civilian purposes, the department's records show that much of this "dual-use" equipment went directly to nuclear missile and military sites, the vertebrae of China's strategic backbone. And unbeknownst to the American suppliers, several of these Chinese companies later sold nuclear and other military equipment to Iran and Pakistan, according to American intelligence reports and news accounts. More than half of the $15 billion in exports consisted of computers. China had been denied access to high-performance computers until President Clinton loosened computer controls in 1996, after strenuous lobbying by his political supporters in Silicon Valley. Then a flood of computer exports began. By now China has imported about 400 high-performance machines, just what would be needed to process the American nuclear codes and simulate the workings of our arsenal. Although China has insisted that these computers were imported for civilian uses, it has refused virtually all requests to let United States officials see what the machines are really doing. In all, the military and strategic value of what China got from the Commerce Department was at least as great as what it may have gotten from spies....."

San Diego Union-Tribune 5/16/99 Gary Milhollin Jordan Richie "...*American equipment was approved for export to the National University of Defense Technology, which helps the People's Liberation Army design advanced weapons; the University of Electronic Science and Technology, which helps develop stealth aircraft and advanced military radar, and the Beijing University of Aeronautics and Astronautics, which helps develop missiles and specializes in guidance, navigation and flight dynamics. (The licensing records do not reveal whether all the items approved were actually shipped, but there is no reason to think they weren't.)..."

San Diego Union-Tribune 5/16/99 Gary Milhollin Jordan Richie "...In the decade we studied, American companies also were licensed to sell China a great deal of noncomputer equipment that could be used for weaponry. This included $241 million worth of machinery for making special semiconductors that can go into missiles, torpedoes, smart munitions, fuses and secure communications equipment; $131 million worth of high-speed oscilloscopes, which can record data from nuclear weapon tests, help design nuclear weapon firing circuits and develop missile guidance systems; $111 million worth of high-accuracy machine tools that can produce the precision parts needed for nuclear weapons and long-range missiles, and $5.4 million worth of vibration-testing equipment, which can enable nuclear weapons and missiles to withstand shock, impact and rapid acceleration..."

Koenig's International News 5/18/99 Charles Smith "...According to a 1997 report forced from the U.S. Commerce Dept. by a Federal lawsuit, "The most troubling potential transfer to China is Rockwell's proposed joint venture deal with the Shanghai Broadcast Equipment Factory and the Shanghai Avionics Corporation, the latter of which is a key enterprise of the Aviation Industries of China." "Rockwell Collins Navigation and Communications Equipment Company, Ltd.," states the 1997 report. "Will design, develop, and build Global Positioning System (GPS) navigation receivers systems for the Chinese market." "These components have serious dual-use applications, since the acquisition of reliable GPS data can enhance, to varying degrees, the capacity of militaries to field highly accurate cruise and ballistic missiles, such as those used to intimidate Taiwan during March 1996." Clearly, Clinton officials were aware of the military affects of the Rockwell/Shanghai venture. Furthermore, the Clinton administration also knew the geo-political impact of the GPS military sale to the Chinese Air Force. For example, the report noted the diplomatic effects on Taiwan of the GPS sale. "More accurate GPS systems would enhance the PLA's ability to carry out attacks against Taiwan's military and industrial facilities," states the report. "Potentially reducing the ability of the Taiwanese military to defend itself against PRC coercive diplomacy." However, the most chilling conclusion was reserved for the effects on U.S. military forces, especially U.S. Naval Forces. "The use of GPS to enhance the accuracy of long-range Chinese cruise missiles, coupled with long-range sensors, would raise serious concerns for the U.S. Seventh Fleet in the Pacific, and possibly circumscribe their ability to provide an effective deterrent in a crisis over Taiwan." Furthermore, the Chinese may have obtained the "long-range sensors" from the Clinton administration as well...."

Washington Times 5/18/99 Bill Gertz "...The United States had imposed sanctions against China in 1993 for selling M-11 missile components but lifted them the next year at the urging of Mr. Brown and C. Michael Armstrong, chairman of Los Angeles-based satellite maker Hughes Electronics. Mr. Armstrong had written a terse letter to President Clinton on Oct. 29, 1993, first highlighting how he had done what the president requested by supporting his economic and trade policies and calls for looser export controls. "I am respectfully requesting your involvement to resolve the China sanctions," Mr. Armstrong wrote, noting that he had spoken to a Chinese official who informed him Beijing was "positive" about the idea. But when then-Secretary of State Warren Christopher told the Chinese that the United States needed to see "some sign of movement" by China on curbing weapons proliferation, a National Security Council memorandum reported, "The Chinese were not forthcoming." The memo said Mr. Armstrong and Hughes Electronics "lobbied aggressively" to be allowed to sell satellites to China. In 1995, the president named Mr. Armstrong to the influential Export Council, where he worked hard against trade controls designed to protect national security. The council produced a lengthy paper arguing against imposing sanctions on foreign trading partners that engaged in illicit weapons sales. Bernard L. Schwartz, chairman of Loral Space & Communications Ltd., also lobbied hard to ease restrictions on satellite sales to China. Mr. Schwartz denied that his large donations to the Democratic National Committee (DNC) were meant to influence Mr. Clinton's policies on satellite exports...."

San Diego Union-Tribune 5/16/99 Gary Milhollin Jordan Richie "...*The state-owned China National Nuclear Corporation was allowed to buy equipment useful for uranium prospecting made by International Imaging Systems, a California company. China National Nuclear then helped Iran prospect for uranium that American intelligence officials believe will be used in making nuclear weapons...."

San Diego Union-Tribune 5/16/99 Gary Milhollin Jordan Richie "...*The state-owned China Precision Machinery Import-Export Corporation, which manufactures China's newest anti-ship cruise missiles, was allowed to buy a computer system that is useful for simulating wind effects. Not only did these missiles strengthen the Chinese military, but the company has also exported some to Iran, where, according to the United States naval commander in the Persian Gulf, they threaten our personnel...."

San Diego Union-Tribune 5/16/99 Gary Milhollin Jordan Richie "...*The Chinese Academy of Sciences was allowed to buy equipment from the Convex Computer Corp. (which has since been bought by Hewlett-Packard) for processing data from an experimental fusion reactor. The academy then exported the reactor to Iran, where it is used for training nuclear scientists...."

Washington Post 5/25/99 Juliet Eilperin and Vernon Loeb Page A01 "...As for stolen U.S. military technology, the committee reports that China has stolen guidance technology now being used in U.S. missiles and fighter aircraft, including the F-14, F-15, F-16 and F-117 fighter jets. The committee concludes that this guidance technology is of enormous value to China in its development of intercontinental ballistic missiles and short-range CSS-6 missiles, which China test-fired over Taiwan's main ports in 1996. The committee, which began its probe last July by focusing on missile and satellite technology transfers, concludes that U.S. satellite manufacturers gave China missile design information without obtaining required U.S. government licenses that enabled Chinese engineers to improve the reliability of Chinese rockets used for commercial and military purposes. The committee concludes that Hughes Electronics Corp. and Loral Space & Communications passed sensitive technical information to China as part of a 1996 investigation into the failure of a Chinese Long March rocket carrying a Loral-built commercial satellite without an export license, even though both companies knew they needed a license.... Loral's chief executive officer, Bernard Schwartz, was the Democratic Party's largest single donor in 1996. C. Michael Armstrong, Hughes's chief executive from 1994 to 1997, strongly lobbied for the Clinton administration's March 1996 transfer of licensing authority over commercial satellites from the State Department, known for its focus on national security concerns, to the Commerce Department, with its emphasis on promoting U.S. exports. ...."

5/25/99 Bloomberg Press Dina Temple-Raston Tony Capaccio "...A bipartisan U.S. congressional committee that detailed 20 years of spying by China unanimously recommended a series of steps to tighten export controls, prompting some U.S. companies to say they fear a backlash that will hurt trade with China....``Our cities are being held in threat by information that left our country decades ago,'' Cox said at a press conference. ``The PRC has mounted a widespread effort to obtain U.S. military technology both legal and illegal.'' The report says stolen U.S. technology runs from classified information on every currently deployed thermonuclear warhead in the U.S. ballistic missile inventory to guidance systems used on Navy and Army missiles and aircraft, including the F-117 stealth fighter.....The panel approved 38 recommendations to tighten security, including implementing counter-intelligence programs at the National Laboratories, giving scientists at the labs polygraph tests, and resurrecting high-technology export controls similar to those in a 1949 accord, the Coordinating Committee for Multilateral Export Controls, or Cocom..... The report concluded the U.S. should impose strict, Cold War- style controls on high-technology exports to China and called on the Clinton administration to coordinate with other countries to limit exports of high-performance computer chips, machine tools and other sensitive goods...... Specifically, the Clinton administration said it would support efforts to review technology transfers to China and is already moving to shift the review of high-technology sales from the Commerce Department to a reviewing board at the State Department. U.S. shipments of advanced technology such as satellites and computers to China almost doubled to $6.1 billion in 1998 from $3.1 billion in 1994, according to Commerce Department figures....."

5/25/99 Bloomberg Press Dina Temple-Raston Tony Capaccio "...The Cox report singles out two companies - Hughes Electronics Corp., the nation's No. 1 maker of commercial satellites, and Loral Space & Communications Ltd. -- for directly improving China's Long March rocket program by providing information that helped China get to the bottom of several of its failed rocket launches. The companies' advice not only had commercial applications but also helped the Chinese develop their ballistic missile program, the report said. What's more, Cox said, the two companies didn't get the necessary licenses to share the information with China, even though they knew it was required...."

5/25/99 CBN News "...LEE WEBB: Mr. Gertz, thank you for being with us this morning. BILL GERTZ: Good morning.....WEBB: Bill, if you will, connect the dots for our viewers because of these technology transfers, the spying, the Chinese contributions to the Clinton Administration. Do the dots in fact connect? GERTZ: We are starting to connect the dots, and I think this Cox report will be the first step in that direction. Is there a smoking gun document that somewhere says, 'Campaign contributions from the Chinese government to the Democratic Party in '96 led to the relaxation of export controls? We haven't found that yet. Congress has tried to look into that. Reporters have tried to look into that but it hasn't been found. It clearly looks like that on the surface. In the Cox report, they detail how certain high tech satellite makers in the U.S. pressed hard to get these changes so that they could sell their satellites with what seems to be little or no regard for the national security consequences. And the administration was fueling that lack of concern because they kept downplaying the threat from China as well as other nations...... "

1/22/98 Jay Kraemer (c) 1998 Fried, Frank, Harris, Shriver & Jacobson "....In a significant change made without preambular explanation (and separate from President Clinton's January 12 certification of China as having provided satisfactory assurances that it is not assisting in nuclear weapons proliferation), the Commerce Department's Bureau of Export Administration (BXA) has just amended its regulations to eliminate control list-based license requirements from a broad range of nuclear power-related equipment and technology. These changes, nominally a part of BXA's regulatory changes implementing the list of dual use items adopted by the Wassenar Arrangement (the successor to COCOM), will likely have their greatest impact with respect to exports to China, but will also significantly facilitate nuclear trade with other countries as well. BXA's amendments to the Commerce Control List (CCL), published in the Federal Register on January 15, 1998 (63 F.R. 2452, et seq.), are also designed to clarify the line between BXA's export control jurisdiction and that of the Nuclear Regulatory Commission (NRC) and the Department of Energy (DOE).... "

5/25/99 Bill Gertz Washington Times "...The report states that Hughes' chairman C. Michael Armstrong and Loral's chief Bernard L. Schwartz advocated the transfer of export licensing authority from the stricter controls of the State Department to the Commerce Department. Mr. Schwartz and Mr. Hughes signed a letter to President Clinton urging the relaxation of satellite export controls, which was ultimately adopted by the president. Loral and Hughes won waivers or export licenses for their satellites to be launched in China on five projects between 1993 and 1999...."

New York Times 1/28/97 Editorial "The Clinton Administration's tendency to let commercial opportunities override sensible national security policies is troubling. Recent days brought word that last summer business considerations led the White House to waive a law prohibiting American companies from doing business with countries that sponsor terrorism. Specifically, officials gave approval to the Occidental Petroleum Corporation to take part in a $930 million oil project in Sudan. The Administration has also dropped a longstanding ban on sales of the Amraam air-to-air missile to countries outside NATO. The decision cripples efforts to negotiate limits on arms sales and increases the risk that this highly effective weapon may one day be used against America or its allies. The ban was dropped to allow American aerospace companies to gain a competitive edge over Russian and French rivals. The most effective way to fight terrorism or restrain arms sales is through international action. But with the world's biggest economy and its most technologically advanced arms industry, America can exert considerable influence on its own, provided it maintains strict and consistent standards. When Washington starts selectively enforcing its own rules, its policies become meaningless.."

WorldNetDaily 6/1/99 Charles Smith The JL-2 explains why the Chinese were so interested in American space contractor, Hughes, upgrading PLA rockets with "nose-cone" or "shroud" technology. The Cox report details Chinese Lt. Gen. Shen Rougjun and his penetration of Hughes through his son, Shen Jun. In May 1994, Shen, was second in command at COSTIND -- the Chinese Commission for Science, Technology and Industry for National Defense. Shen served underneath the PLA spy-master, Gen. Ding Henggao. In 1994, COSTIND Gen. Shen attended several business meetings with Hughes. During a 1994 visit, Shen's son, Shen Jun, attended a business lunch with his father and Frank Taormina of Hughes. Taormina later assisted Shen Jun in obtaining a job at Hughes. The Cox report details "son" Shen played a significant role in the interaction between his PLA general-father and the highest of Hughes executives, including CEO Michael Armstrong. In 1994, Hughes executives were scrambling to avoid a major expense. Hughes helped PLA engineers after the failure of a PLA Long March rocket carrying a Hughes-built satellite. Hughes, anxious not to see a hike in their satellite insurance rates, eagerly pinned the failure on the PLA nose-cone "shroud" design and not on their satellite. The help included Hughes proprietary software for nose-cone design and analysis derived from years of ballistic missile tests in America. Although, Shen Jun was hired at Hughes in August of 1994, according to the Cox report, "a division of Space Systems/Loral was also considering hiring Shen for a position that would have allowed him access to classified information." In August 1994, Lt. Gen. Shen also met and consummated a series of satellite deals with Bernard Schwartz, the CEO of Loral. The Beijing meeting was arranged by President Clinton and included Commerce Secretary Ron Brown. The technology obtained from Loral is also detailed by the Cox report, including rocket guidance and encrypted satellite telemetry systems...."

Jewish World Review 6/1/99 Mona Charen "...It was Clinton's decision, overruling the recommendation of then-Secretary of State Warren Christopher, to permit American companies to help China modernize its missiles. Very soon thereafter, The Washington Times reported that China was assisting Iran and Libya to develop missile programs. The Clinton administration continues to claim that China is abiding by its non-proliferation agreement...."

Jewish World Review 6/1/99 Mona Charen "...It was also Clinton's decision to transfer authority over technology transfers from the somewhat vigilant Department of State to the anything-goes Department of Commerce. Bernard Schwartz, chairman of Loral Corporation, donated $100,000 to the DNC and was then provided with a technology-transfer waiver, according to the Cox report. The Loral technology has helped China dramatically improve the accuracy of its missiles. And as the Cox report documents, the Chinese government has been able to steal pretty much all of our nuclear secrets, thanks to docility of the Clinton administration...."

Rep Curt Weldon Web Page 9/15/93 Bill Clinton "...Dear Edward:....I wanted to bring you up to date on a topic we were not able to discuss at lunch: the issue of export controls. As you know, for sone time the United States has inposed stringent exports controls on many of our most competitive exports...I wanted you to know that we hope to announce some important reforms by September 30. As you may know, Commerce secretary Ron Brown has been leading a process within the Trade Promotion Coordination Commettee (TPCC) to examine how we might better promote U.S. exports. As part of that process, the National Security Council has led as effort to develop specific export control reforms.... Let me give you a sense of the reforms we are considering: Liberalize Computer and Telecommunications Controls... Reduce Processing Times...Expand Distribution Licenses.... Elimimate Unnecessary Unilateral Controls....I expect that these reforms will help liberalize controls on tens of billions of dollars worth of U.S. exports. It can help unleash our companies to compete successfully in the global market.These reforms fit into a broader framwork. Soon we will complete our review of nonproliferation and export control policy, which will set guidlines for further steps we should take. I am also currently engaged in seeking major reforms to COCOM, which should lead to significant liberalization of controls on computers, telecommunications, and machine tools, while establishing a more effective structure for addressing the changing natiional security threats we will face in the years ahead. Let me assure you that I am personally committed to developing a more intelligent export control policy, one that prevents dangerous technologies from falling into the wrong hands without unfairly burdening American commerce.....Sincerely, Signature - Bill Clinton Mr. Edward McCracken Chief Executive Officer Silicon Graphics..."

New York Times 6/4/99 Jeff Gerth "...In a diplomatically sensitive case, the Justice Department is nearing a decision on whether to indict one of China's most powerful state-owned corporations, law-enforcement officials and lawyers say. Some career prosecutors in the department have recommended the indictment of the corporation, Catic, an aerospace giant, on charges of buying American machining equipment for civilian use in 1994 and diverting some of it to a military plant, the officials and lawyers said. The equipment was sold to the Chinese by McDonnell Douglas, now part of The Boeing Company, which has also been under criminal investigation for possible violations of American export laws..... Catic agreed with the Justice Department last month to extend the deadline for filing charges, the officials and lawyers said. It was five years ago that McDonnell Douglas applied for a Commerce Department license to sell the machining equipment to Catic, which buys and sells civilian aerospace technology. Since the extension, the parties have been in a "continuing dialogue," and Catic has discussed the possibility of paying a civil penalty to resolve the case, one lawyer said. ....The sale of machining equipment was part of a billion-dollar jetliner deal in 1994 in which McDonnell Douglas was to build aircraft in China. At the time, the aircraft deal was promoted by President Clinton and Commerce Secretary Ronald H. Brown as a centerpiece of the Administration's commercial diplomacy, the policy of using economic engagement to broaden ties with Beijing and promote exports. But within a few months of the announcement of the deal, McDonnell Douglas discovered that some of the equipment it sold to China had been sent 800 miles from Beijing to a military facility in Nanchang that makes missiles and fighter aircraft. And though the 1994 deal announced by President Clinton called for the building of 20 planes, a Boeing spokesman said today that China would build only 1 or 2 planes with the company..... The committee's unanimous report also found that Catic had played a central role in China's drive to acquire technology with civilian and military uses and that on several occasions Catic had "misrepresented the proposed uses of military useful U.S. technology." The Clinton Administration prevented the committee from disclosing further details. In addition, Justice Department officials blocked the committee from disclosing 1994 cables that showed how Administration officials delayed seeking timely assurances from Catic on how it planned to use the machining equipment so as not to disrupt Brown's announcement in China of the McDonnell Douglas aircraft deal, officials familiar with the report said. The Commerce Department received an assurance from Catic after Brown left China but it left unanswered the question of exactly where the machining equipment would be located, according to excerpts from a Sept. 13, 1994, cable included in the Cox committee report. On Sept. 14 the department approved the export of the machining equipment -- some of it more than a decade old, including machine tools to shape and bend large aircraft parts -- for use in Beijing as part of the McDonnell Douglas project to build aircraft in China. The license included some last-minute additions to allay concerns raised by the Pentagon. In August, the Defense Intelligence Agency warned that the Chinese did not really need the equipment for the civilian aircraft deal but that "an advanced machine tool facility presents a unique opportunity for Chinese military aerospace facilities to access advanced equipment which otherwise might be denied," the Cox report said...."

Fox News Channel 6/6/99 Carl Cameron Freeper Watchdog "...Less than two weeks after the Congressional Cox report criticized the Clinton Admin for approving exports of High Performance Computer to China, the Commerce Dept. wants to ease export controls to another 100 plus countries. The new countries that would be granted access are worldwide; Poland, Hungary, the Czech Republic and other nations in Asia, South America, Central and Eastern Europe, and Africa. Some restrictions will remain on exports to about 50 countries including China which the Cox Report says has illegally diverted US super computers to military complexes for development of nuclear, space based, and conventional weapons Source say the White House is divided over how much can be loosened. Super Computing is measured in millions of technical operations per second (MTOPS) Currently the ceiling is 10,000 MTOPS, manufacturers want the limit raised to 30,000. The Clinton Admin has loosened Super Computer export rules twice before. Any significant decontrol would be considered highly provocative in the wake of the COX report. Source say WH COS John Podesta is supposed to discuss the move with a group of industry leaders Friday from IBM, Hewlett-Packard, Intel and Sun-microsytems ...."

Wall Street Journal 6/8/99 Rep Cox and Rep Dicks "...As Americans weigh the findings of the report and debate its implications, one question we frequently encounter is: Now that the PRC has stolen our nuclear secrets, what can we do about it? This week, we will offer several of our committee's 38 recommendations as a floor amendment to the defense authorization bill. These include giving the Defense Department control of security at Chinese launches of U.S. rockets, and centralizing responsibility for nuclear weapons counterintelligence at the Department of Energy. In addition, we have urged the Clinton administration to move forward aggressively with our recommendations in the critical matter of export controls....If U.S. firms are the only ones prevented from making sales of militarily useful technologies, America will be twice the loser. First, we will lose out on profitable deals, to the detriment of both individual workers and our overall economy. Second, China will remain free to acquire militarily useful technology from third countries, to the detriment of our national security. That is why our select committee unanimously recommended reviving an effective international export control regime on the model of the Coordinating Committee on Multilateral Export Controls. Cocom forbade member governments to sell their most sensitive militarily useful technologies to Warsaw Pact countries and the People's Republic of China. But in 1994, amid the euphoria that followed the end of the Cold War, Cocom was allowed to expire. For two years we had no replacement for Cocom at all. Then, in 1996, the U.S. and other countries, recognizing the mistake they had made, entered into the Wassenaar Arrangement on Export Controls. But Wassenaar is a remarkably weak accord. It furnishes a list of controlled items but allows each country to make sales of these items at their own discretion. In practice, this means that any country can do whatever it wants. The U.S. must now exercise its leadership to establish binding multilateral controls on technology transfers that threaten international peace and U.S. national security. A new regime of multilateral controls will enhance America's global competitiveness, since we won't have to go it alone when it comes to export policy. This is also consistent with our goal of promoting trade with China, which for too long has been too much a one-way street. And the timing is propitious. This is the year for an already scheduled international review of the efficacy of the Wassenaar Arrangement....."

Drudge 6/7/99 "...The White House is preparing to loosen government controls on the sale of powerful super computers to more than 100 countries only two weeks after a congressional committee charged it with carelessly permitting sales to China, the LOS ANGELES TIMES is planning to report in Tuesday editions. ...The Commerce Department has proposed easing restrictions on sales of supercomputers to "most countries in Asia, Africa, Latin America and Central and Eastern Europe, administration sources said Monday." Gosselin reports that "virtually all restrictions are likely to be lifted on sales to Poland, Hungary and the Czech Republic, which recently became NATO members." The White House's John Podesta, last seen drafting a new Medicare proposal that extends drug coverage to all beneficiaries, has taken charge of announcing the new supercomputer policy. According to Gosselin, first official word that the White House is prepared to ease export limits on the 100 countries could come during a meeting scheduled for Friday between Podesta and a group that includes "IBM Chairman and Chief Executive Louis Gerstner, Intel Corp. Chairman Andy Grove, Sun Microsystems Inc. CEO Scott D. McNealy and Hewlett-Packard Co. Chairman and President Lewis E.Platt." ..."

Curt Weldon Website 6/8/99 "...the bottom line question has to be asked, Mr. Speaker, is: What made this happen? What was the grease that caused these transactions to take place? What caused these proliferation controls to be lowered? What caused these accesses to take place? And that gets to my second chart, Mr. Speaker, which is the time line.....Up until 1993, Mr. Speaker, under Democrats and Republican Presidents alike, there was a process in place to control technology from Nations like America to be sent abroad to what we consider to be Tier 3 nations or nations that are not allowed or were not supposed to have very capable technology that could come back to hurt us. This process was called COCOM. COCOM was an international organization of allied nations, the U.S. and Japan, that met on a regular basis, and they decided collectively what kind of technology would be allowed to be sold and to which countries it could be sold to. In 1993, without pre-approval of any of the other countries, France, Great Britain, Japan or any of the other ones, this administration ended COCOM, ended it, and the doors opened up. Now they put into place something called the Wassanar agreement which everyone has acknowledged is a total failure, yet COCOM worked. In 1993 COCOM ended, and the floodgates opened...."

Curt Weldon Website 6/8/99 "...from the White House dated September 15, 1993, to Edward McCracken, Chief Executive Officer of Silicon Graphics from Bill Clinton. Mr. Speaker, every American needs to read this letter because this letter was sent by the President of the United States September 15, 1993, and who did he send it to? To one of his biggest contributors and one of those blocks of people who supported his candidacy, Edward McCracken, Chief Executive Officer, Silicon Graphics, Mountain View, California....So here it is in black and white where the President is telling the CEO of Silicon Graphics this is what we are going to do for you over the next 6 years. Guess what, Mr. Speaker. They did it. What were some of the highlights? Let me read from the letter. Quote: Liberalize computer and telecommunication controls, reduce processing times, expand distribution licenses, eliminate unnecessary unilateral controls, and it goes into detail in describing. Now, Mr. Speaker, I am a free trader, and I believe in allowing our companies to compete. But what you had in 1993 was the wholesale opening of the flood gates...."

INVESTOR'S BUSINESS DAILY 6/9/99 Paul Sperry "...In fact, previous administrations beefed up counterspying efforts. ''This doesn't say there wasn't spying on my watch, but we spent $1.5 billion covering counterintelligence operations when the Reagan administration came in and acknowledged security problems at the labs,'' said Frank Gaffney, Reagan's assistant secretary of Defense for international security policy. Export Controls Clinton argues, reasonably, that past administrations opened the door to satellite exports to China. But he also claims he was just following suit. Here, he's at odd with the facts. Though Reagan and Bush allowed exports of commercial satellites to China, they still worried about the Chinese military getting its hands on dual-use technology. So they maintained export licensing safeguards. The same can't be said for Clinton. If satellite technology were a present, the degree of gift-giving among the three presidents can be compared like this: Reagan provided the box. Bush provided the paper. Clinton put the technology in the box, wrapped it up, tied a bow and shipped it FedEx to Beijing...."

INVESTOR'S BUSINESS DAILY 6/9/99 Paul Sperry "...After the Challenger blew up that year, the U.S. government and industry found they could no longer rely on the space shuttle to launch their satellites. So Reagan turned to, among other countries, China. It not only had a lot of capacity but, thanks to state subsidies, cheap launch rates. For the first time, Reagan granted export licenses for satellite launches on Chinese rockets -provided the Defense Department monitored talks between U.S. and Chinese engineers. In fact, both the State Department and Defense still had the authority to reject export license applications on national security grounds. In 1991, Bush tightened controls, citing China's proliferation of missile technology. He imposed sanctions on Chinese entities, including satellite launchers. The CIA has described China's satellite launch rockets as ''ballistic missiles in disguise.'' After pressure from China and U.S. satellite makers, Bush softened his stance. In 1992, he put the Commerce Department in charge of vetting export applications for satellites - but only commercial ones. That is, only those with no military use. But in November 1996, Clinton took it one big step further. He not only removed Bush's sanctions on Chinese launchers, but put Commerce in charge of vetting applications for all fully assembled satellite exports to China - no matter their potential military use. Unlike State, Commerce no longer required Defense to monitor technical talks between Chinese and U.S. engineers. In many cases, such talks went beyond ''form, fit and function'' -basic information needed to mate satellites to rocket platforms...."

INVESTOR'S BUSINESS DAILY 6/9/99 Paul Sperry "...What's more, Commerce - primarily a trade booster - eschewed State's munitions list to screen for military use. So basically Clinton took satellites off one list and put them on another to make them easier to export. Clinton has OK'd 19 U.S.-China satellite launches - the most of the three presidents. Of those, 16 have been launched. According to a senior Pentagon official, Clinton has also taken the teeth out of the Pentagon's arms-control oversight role. In the previous two administrations, if there was a dispute between the White House and the Pentagon over technology transfers, the Pentagon usually won when China was involved. Not so under Clinton. ''We've had no successes,'' the Pentagon official said...."

INVESTOR'S BUSINESS DAILY 6/9/99 Paul Sperry "...James Woolsey, Clinton's first CIA director, said in a recent interview: ''The United States has substantially liberalized its export policy. That's one thing that has changed during this administration.'' Woolsey added: ''We've gone too far.'' In a 1993 letter to Silicon Graphics CEO Edward McCracken, Clinton wrote: ''I expect to . . . eliminate wherever possible unnecessary U.S. unilateral export control policies.'' Silicon Graphics makes high-speed computers. True to his word, Clinton in January 1996 lifted export controls on high-speed computer exports. Since then, China's gotten more than 600 U.S. high- speed computers. It had virtually none before...."

Los Angeles Times 6/8/99 Peter Gosselin "...The Clinton administration is preparing to loosen government controls on the sale of powerful computers to more than 100 countries only two weeks after a congressional committee charged it with carelessly permitting sales to China. The Commerce Department has proposed easing restrictions on sales to most countries in Asia, Africa, Latin America and Central and Eastern Europe, administration sources said Monday. In addition, virtually all restrictions are likely to be lifted on sales to Poland, Hungary and the Czech Republic, which recently became members of the North Atlantic Treaty Organization. In a move that seems certain to anger U.S. computer makers, however, the administration will not ease restrictions on China and almost 50 other countries. The split decision is a graphic illustration of the powerfully conflicting impulses that now grip Washington over the export of American technological know-how...."

Washington Times 6/11/99 Kenneth R. Timmerman "....With the help of U.S. technologies approved for export since 1993 by the Clinton administration, China has been able to improve its existing fleet of ICBMs and move forward deployment of its next generation DF-31 and DF-41 by at least five years, putting at risk American cities and America's children. This is because China learned the secrets of reliable solid fuel rockets from American companies, and was able to design them using U.S.-built supercomputers, licensed for sale by the Clinton administration. The report demonstrates that U.S. technology approved for export to China by the Clinton administration has helped the Chinese military build a new encrypted communications network, improving its command and control. And by welcoming large Chinese military delegations to our military exercises in the Pacific, the U.S. has shown the Chinese how to exploit this technology to their advantage on the battlefield..."

6/12/99 SCMP Chris Yeung "...Any attempt by the US Congress to ban technology exports to the SAR would be opposed, the Government vowed yesterday. The pledge followed the "unfounded" attack on Hong Kong's trade control regime in the Cox report. In a full response to the report, which accused Beijing of stealing US nuclear secrets and alleged that key commodities were being smuggled into the mainland via Hong Kong, senior trade officials stressed the control regime was well-established and there was no need for any adjustments. Acting Secretary for Trade and Industry Yvonne Choi Ying-pik said: "The SAR Government considers the allegations regarding the use of Hong Kong as a point of diversion as unfounded and groundless. Our control over strategic trade is quite adequate. And we will further co-ordinate with the US side to do better." ...."

6/12/99 AFP "...Responding to allegations of Chinese spying, the chairman of the US Senate banking committee has vowed to act quickly to re-authorise a lapsed law that would tighten curbs on hi-tech exports to China. "The one thing Congress can do as part of dealing with the problem is to re-authorise the Export Administration Act, strengthening its provisions, streamlining its process," Senator Phil Gramm told a committee hearing on Thursday. "We are going to proceed on a very tight time schedule" in considering and amending the law, said Senator Gramm, a Republican whose committee has jurisdiction in the Senate over US export controls. He plans a series of public hearings, followed by a "mark-up" session on June 29 at which committee members may make changes in draft legislation. In this instance, legislators are particularly concerned with controlling dual-use technologies such as computers with both civilian and military applications. The Export Administration Act of 1979 lapsed in September 1990 because then Republican president George Bush and Congress failed to agree on an export control policy. Mr Bush and his successor, President Bill Clinton, have since extended the law for short periods, but its tough criminal penalties have lapsed...."

Koenig's International News 6/10/99 Charles Smith "...According to Defense Secretary Perry, the U.S. contact for PLA General Ding was Barry Carter, Commerce Deputy Undersecretary of Export Administration. According to Federal Election Commission records, Barry Carter is a DNC donor and currently a Professor of Law at Georgetown University. In 1994, Carter worked at the Commerce Dept. under Ron Brown. Barry Carter exchanged correspondence with several major China-Gate players including PLA Lt. General Huai Guomo, PLA Major General Deng Yousheng, Ken Kay, a lobbyist for Sun Computers, and Eden Woon of the Washington State China Relations Council. The 1995 PLA list given to Carter is part of a series of letters between the Commerce Dept., various Chinese Army officers and anxious U.S. vendors. The 1995 list provided to Carter included "China YuanWang (Group)" and several other well know Chinese Army owned companies such as "NORINCO", "China National Nuclear", "China State Shipbuilding" and "China Aerospace." Carter also included his own personal touch to the list, by providing the phone, fax and address for his PLA contact in Beijing, "Lieutenant Colonel Wang Zhongchao", and his contact at the Chinese embassy in Washington, D.C., "Colonel Xu Cunyong." Carter provided the list of PLA companies and contacts to Eden Woon, donor to U.S. Senator Patty Murray (D-WA), Executive Director of the Washington State China Relations Council (WSCRC) and Director of the Hong Kong General Chamber of Commerce..... In December 1995, Eden Woon and the WSCRC hosted a delegation of Chinese Army representatives from PLA owned companies. Woon took them on a tour of the Washington state companies anxious to do business with the Chinese Army. The 1995 delegation to Washington state included "Feng Hui, Staff officer" of the COSTIND "Foreign Affairs Dep't." Feng Hui is better known as Major Feng Hui of the Chinese Army. Major Feng was accompanied by other officers from the PLA unit COSTIND, and a host of engineering specialists from various PLA owned companies, including "Chengdu Aircraft plant", the "Jiangnan Shipyard" and "No. 614 Institute", a PLA institute staffed by weapons experts. There is a clear reason why Major Feng trusted Eden Woon to help the Chinese Army do business in Seattle and beyond. Woon's radical views of U.S./Sino relations do not include a free Taiwan. In 1997, Woon and the Washington State China Relations Council sponsored a conference that included U.S. Senator Patty Murray (D-WA). On October 14, 1997, at the close of the conference, the participants issued a report that states, "The U.S. should ensure that Taiwan understands that if conflicts arise (especially if apparently provoked by Taiwan), it cannot necessarily count on the U.S. coming to the rescue." ..."

Koenig's International News 6/10/99 Charles Smith "...In 1994, Carter corresponded with "Ken" Kay who was then "Director" of the Computer Systems Policy Project (CSPP), a consortium of powerful U.S. computer makers. According to the CSPP, in March 1994, the CSPP Director "Kenneth R. Kay," was also "a partner in the law firm of Preston Gates Ellis & Rouvelas Meeds."..... In 1994, CSPP Director Ken Kay contacted Barry Carter and Ron Brown in an extensive effort to expand computer exports to China and Russia. Kay pressured Ron Brown by issuing an internal report to ease "export control policy" and seek "new thresholds for computers"......By April 1994, Ken Kay left the employ of Preston Gates and took a new position at Podesta Associates, the powerful lobby firm owned by Tony Podesta, brother of White House advisor John Podesta. Kay, of course, took his CSPP clients with him by retaining his executive directorship of the consortium. The shift to Podesta Associates was quickly felt by the CSPP members and the PLA. In August, 1994, CSPP members IBM, Cray and Tandem were invited to participate on a Brown trade trip to China. While on the trip, CSPP member Tandem sold over $100 million in computers to PLA owned Great Wall Industries, manufacturer of the Chinese Army nuclear tipped missiles...."

Koenig's International News 6/10/99 Charles Smith "...According to a May 1995 CSPP document sent to Ron Brown, "controls on computer exports to Russia and China for commercial, civil end-users should be eliminated; controls on exports for actual military end-uses may be appropriate until there is greater certainty that neither country poses a threat to U.S. national security." The Clinton administration saw no "threat" to U.S. national security in the U.S. "strategic partner" Communist China. In response, CSPP members IBM, and Tandem were given the list of approved PLA owned companies wanting their business by Barry Carter. In 1995, both companies elected to join the "Chinese Defense Conversion" project. The list of IBM and Tandem contacts were given to the Chinese Army in an exclusive report on U.S. companies provided by Barry Carter directly to PLA General Huai Guomo of COSTIND. By November, 1995, the CSPP sent a letter to Ron Brown thanking him for the change in export policy. The CSPP letter states "we want to express our great appreciation for your role in the President's recent decision to significantly reform computer export controls." ..."

Investor's Business Daily 6/15/99 Editorial "...The Clinton administration has proposed easing controls on the export of high-speed computers to more than 100 countries. The White House also says limits on technology sales to China won't be relaxed. How effective will this be? It sounds like the administration is playing it safe in light of the Cox report's charges that the White House didn't do enough to stop the export of powerful computers into China. It's a ruse. Clinton can pretend to be tough on China, but this hard-line position is as porous as a sieve. Many of the countries on the just-approved list are trading partners with China. So if China wants the computers -and it does - it only has to buy them from these countries. In fact, China has already used other countries as brokers, the Cox report says. The practice will surely grow if Clinton's proposed export rules are adopted. High-tech hardware will run unchecked into China through the back door - which Clinton will hold open. Controlling computer exports is a tricky issue. Free trade - one of the hallmarks of a free people - must be balanced by security concerns..... The White House can undo some of the damage by creating a group like the Coordinating Committee for Multilateral Export Controls. COCOM was an international concern formed in 1949 to control technology exports for security purposes. It was dissolved in 1994 through an effort led by Clinton. Two years later the White House lifted export controls. China then went from having almost no U.S. high-speed computers to more than 600. It also benefited from the export of U.S. satellite technology that has the potential to make Chinese missiles more accurate. Yet this White House still won't acknowledge that it's neglected - and fueled - a security threat. Now it wants to be a door stop for Chinese exports. Congress should slam the door shut...."

5/28/93 Office of the Press Secretary Statement by the President "...Yesterday the American people won a tremendous victory as a majority of the House of Representatives joined me in adopting our plan to revitalize America's economic future. Today, members of Congress have joined me to announce a new chapter in United States policy toward China. China occupies an important place in our nation's foreign policy. It is the world's most populous state, its fastest growing major economy, and a permanent member of the United Nations Security Council. Its future will do much to shape the future of Asia, our security and trade relations in the Pacific, and a host of global issues, from the environment to weapons proliferation. In short: our relationship with China is of very great importance.... To implement this policy, I am signing today an Executive Order that will have the effect of extending Most Favored Nation status for China for 12 months. Whether I extend MFN next year, however, will depend upon whether China makes significant progress in improving its human rights record.....The Administration is now examining reports that China has shipped M-11 ballistic missiles to Pakistan. If true, such action would violate China's commitment to observe the guidelines and parameters of the Missile Technology Control Regime. Existing U.S. law provides for strict sanctions against nations that violate these guidelines. We have made our concerns on the M-11 issue known to the Chinese on numerous occasions. They understand the serious consequences of missile transfers under U.S. sanctions law. If we determine that China has, in fact, transferred M-11 missiles or related equipment in violation of its commitments, my Administration will not hesitate to act....."

11/14/1994 Office of the Press Secretary "...Dear Mr. Speaker: (Dear Mr. President:) Pursuant to section 204(b) of the International Emergency Economic Powers Act (50 U.S.C. 1703(b)) and section 201 of the National Emergencies Act (50 U.S.C. 1631), I hereby report to the Congress that I have exercised my statutory authority to declare a national emergency and to issue an Executive order that consolidates the functions of two existing Executive orders, eliminates provisions that have been superseded by legislation, and expands certain existing authorizations in order to enhance our ability to respond to the threat of weapons of mass destruction-related proliferation activities around the world.... My Administration continues to believe that the harmonized proliferation sanctions legislation it included as part of the proposed new Export Administration Act represents the best means of maximizing the effectiveness of sanctions as a tool of U.S. nonproliferation policy while minimizing adverse economic impacts on U.S. exporters. Until such harmonized sanctions legislation is enacted, however, I believe that it is appropriate as an interim measure to take the steps described above to consolidate and streamline the restrictions of the former nonproliferation Executive orders...."

3/21/95 Office of Press Secretary "....Additionally, section 401(c) of the National Emergencies Act (NEA) (50U.S.C. 1601 et seq.) requires that the President, within 90 days after the end of each 6-month period following a declaration of a national emergency, report to the Congress on the total expenditures directly attributable to that declaration. This report, covering the 6-monthperiod from August 19, 1994, to February 19, 1995, is submitted in compliance with these requirements. 3. Since the issuance of Executive Order No. 12924, the Department of Commerce has continued to administer and enforce the system of export controls, including anti boycott provisions, contained in the Export Administration Regulations. In administering these controls, the Department has acted under a policy of conforming actions under Executive Order No. 12924 to those required under the Export Administration Act, insofar as appropriate...... Effective September 30, 1994, the Department of Commerce revised thecontrol language for MTCR items on the Commerce Control List, based on the results of the last MTCR plenary. The revisions reflect advances in technology and clarifications agreed to multilaterally. On October 4, 1994, negotiations to resolve the 1993 sanctions imposed on China for MTCR violations involving missile-related trade with Pakistan were successfully concluded. The United States lifted the Category II sanctions effective November 1, in exchange for a Chinese commitment not to export ground-to-ground Category I missiles to any destination..... In February 1994, the Department of Commerce issued a Federal Register notice that invited public comment on ways to improve the Export Administration Regulations. The project's objective is "to make the rules and procedures for the control of exports simpler and easier to understand and apply." This project is not intended to be a vehicle to implement substantive change in the policies or procedures of export administration, but rather to make those policies and procedures simpler and clearer to the exporting community. Reformulating and simplifying the Export Administration Regulations is an important priority, and significant progress has been made over the last 6 months in working toward completion of this comprehensive undertaking...... 5. The expenses incurred by the Federal Government in the 6-monthperiod from August 19, 1994, to February 19, 1995, that are directly attributable to the exercise of authorities conferred by the declaration of a national emergency with respect to export controls were largely centered in the Department of Commerce, Bureau of Export Administration. Expenditures by the Department of Commerce are anticipated to be $19,681,000 most of which represents program operating costs, wage and salary costs for Federal personnel and overhead expenses...."

Washington Times 3/9/97 William Triplett "....* Technology transfers to the PLA: President Bush used his powers to forbid a Chinese takeover of an American aerospace firm in Seattle. High technology exports to China were strictly controlled by an international arrangement of the Western powers called "COCOM ' " Although the British and French privately complained to Capitol Hill about this, the Clinton administration scrapped COCOM as a first order of business. Not only has the Clinton administration drastically raised the levels of militarily critical goods and technology that can be exported to China, Kenneth Tiananmen reveals in this month's American Spectator that a secret committee headed by Ira Magaziner hopes to lift the export ban American nuclear technology to China...."

Washington Times 3/9/97 William Triplett "....* Enhancing the PLA's military build-up: After Tiananmen President Bush canceled all sales to the PLA. Under President Clinton, there has been a very quiet effort to enhance positively the PLA's military build-up in other ways. ...."

U.S. Newswire 6/22/99 "...The U.S. Senate moved today to stem illicit transfers of sensitive technology to China through front companies in Hong Kong and Macao, adopting legislation by U.S. Sen. John Ashcroft (R-Mo.). The Ashcroft-sponsored export controls were recommended by the General Accounting Office after an investigation of potential technology losses to China through exports to Hong Kong. If China diverts sensitive U.S. technology, the provision would impose new controls on exports of dual-use and militarily significant equipment. Detonation devices, agents for chemical weapons, and equipment that could be used for nuclear weapons development are examples of items that would be covered under the Ashcroft provision. Military explosives and propellants are examples of Munitions List items. Machine tools that can be used for civilian or military purposes are examples of "dual use" technology. Ashcroft said: "As recent reports document staggering U.S. intelligence losses to China, it is past time to ensure safeguards are in place to protect sensitive U.S. exports to Hong Kong. Investigators have identified Chinese front companies in Hong Kong with illicit efforts to buy sensitive technology and re-export it to countries that proliferate weapons of mass destruction. Prudence demands that if China diverts sensitive U.S. technology, we impose on Hong Kong and Macao the same export controls that govern sales to China itself." Hong Kong became a Special Administrative Region of China in 1997; Macao is to revert to China at the end of 1999. Hong Kong is treated as a separate customs territory by the U.S., and less stringent export controls on sensitive technology to Hong Kong could directly benefit China's People's Liberation Army...."

SUBCOMMITTEE ON INTERNATIONAL TRADE AND FINANCE, SENATE BANKING COMMITTEE 6/24/99 Dr Stephen D Bryen "...The critical question to be asked and answered is the following: will the proposed legislation advance the objective of having a credible and workable export control program that can protect national security? A first glance suggests that many changes will be needed to accomplish the goal...... My assessment is that the export control program is in chaos and that vital technology is being exported to rival countries, particularly China. This is leading to significant erosion of the balance of power in the Pacific, which I expect to get worse in the next few years as China converts acquired technology into weapons. There is a growing danger of a nuclear missile threat to the United States, in part caused by licensed technology transfers and also the result of espionage. The U.S. Export Control program has been severely weakened by: --the elimination of COCOM without a clearly thought-out alternative to it, and the lack of a multilateral strategy that could protect key United States and allied interests; --a disregard for national security resulting in the export of critical technologies such as supercomputers (over 600 have been delivered to China compared to less than 50 high performance computers available to the Defense Department and military services), satellite and launch technology, hot section jet engine technology, global positioning system manufacturing technology, advanced machine tools, high speed fiber optic communications and control systems, cryptographic equipment and know-how; high temperature "skull" furnaces important to manufacturing nuclear warheads; --the purging of the export control lists without considering fully the national security impact of decontrolling technology; --a pro-export promotion tilt and policy that has undermined the use of export controls as an instrument of national policy; --the alleged intimidation of national security experts in the Defense Department, CIA, Energy Department and elsewhere in the government in order to make it easier to promote the liberalization of export controls and licensing of technology; and --the failure of the intelligence community to properly evaluate and warn about the impact US exports have had on China's military and strategic nuclear programs...... Features of the Proposed EAA of 1999 .... The proposed EAA does not address the current threat, and therefore misses the main point in my opinion. Instead, the draft version of the legislation is written as if it were an exporter's bill of rights. Previous EAA versions have tried to accurately reflect the main national security goals and requirements that export controls are expected to achieve as a part of our national security objectives. Such policy guidance is not in this legislation....The proposed EAA makes it plain that multilateral controls are to be favored and that "unilateral" controls can only be used under very limited conditions. These conditions include (a) that the unilateral control can advance a specific and compelling national security purpose within a reasonable time; (b) other "less restrictive" alternatives have been examined and found to be "inadequate" and (c) the economic costs of such export controls have [been] identified and fully evaluated. This provision may sound good but it is unwieldy and unworkable. Worse yet, it suggests that national security interests are to be weighed against economic interests. This is made explicit in Section 301 (3)(1)(1) where it states that "national security risks of allowing an export of an item are [to be] balanced against the economic costs of controlling that item." ..."

Federal Computer Week 7/12/99 Daniel Verton "…Testifying this month before the House Armed Services Committee, John Hamre, deputy secretary of Defense, and Barbara McNamara, deputy director of the National Security Agency, said the Security and Freedom through Encryption (SAFE) Act could make it easier for terrorists to obtain the tools they need to evade detection and could disrupt the government's move to electronic commerce. The SAFE Act would remove most of the restrictions placed on exports of strong encryption technology, making it easier for anyone, including terrorists and criminal organizations that might plan acts of violence, to conceal electronic communications. The House Armed Services Committee plans to mark up the SAFE Act next week. If passed into law, the SAFE Act would "undermine the government's ability to provide timely, critical intelligence data to our national leaders and warfighters," Hamre said. In addition, the SAFE Act's mandatory prohibition on key escrow - a concept describing the ability of federal law enforcement agencies to recover and view encrypted data - could have a negative impact on the government's planned use of encryption products for programs ranging from electronic commerce to internal messaging, Hamre said….. McNamara added that the SAFE Act would "ultimately result in the loss of essential intelligence reporting." She holds the No. 2 position at NSA, the Defense Department's intelligence arm that is responsible for the interception and analysis of electronic communications around the world…."

NSA TESTIMONY ON THE SOCKOWITZ FILES UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA…. Civil Action No. 95-2228 RMU….JON A. GOLDSMITH, hereby declares and states: 1. I am the Chief of External Affairs and Policy for the National Security Agency (NSA). I have served in this position since January 1994. I have served in the NSA for twenty eight years.... Through the exercise of my official duties, I have become familiar with the referral by the Department of Commerce of the documents at issue in this case: A STUDY OF THE INTERNATIONAL MARKET FOR COMPUTER SOFTWARE WITH ENCRYPTION (hereafter the "STUDY"), a document authorized jointly by the Department of Commerce and NSA…… 4. NSAs signals intelligence mission is to obtain information from foreign electromagnetic signals and to provide reports derived from such information or data, frequently on a rapid-response basis, to military commanders, national policy makers and the intelligence community of the United States government. A primary signals intelligence mission of the NSA is to intercept, communications of foreign governments in order to obtain foreign intelligence information necessary to the national defense, national security, or the conduct of the foreign affairs of the United States. The signals intelligence collection mission of the NSA provides national policy maker and the intelligence community with highly reliable foreign intelligence information. Information obtained from intercepted foreign communications is called communications intelligence (hereinafter "COMINT"). NSA's COMINT efforts constitute part of the core functions and activities of the Agency…. 6. In developing its portion of the STUDY, NSA sought and received, information from the Department of State, the CIA and from foreign sources. Some of the information NSA acquired from these sources is classified or otherwise protected information. Those portions, along with the classified or otherwise protected NSA originated information, are identified below in the Vaughn index sections of this declaration….PART II: INDEX OF SPECIFIC PARAGRAPHS WITHHELD From the Document "A STUDY OF THE INTERNATIONAL MARKET FOR COMPUTER SOFTWARE WITH ENCRYPTION," Dated July 1995….. Page II-2, 3rd full paragraph, last sentence: References the views of NSA on the export control process and is protected in its entirety pursuant to exemption (b) (1) (E. O, 12958, Section 1.5 (c), and (g)), exemptions (b) (2) and (b) (3). (Applicable statutes 88-36 and 403). Page II-8, 2nd full paragraph, last sentence: This sentence refers to international export controls and is protected in its entirety pursuant to exemption (b) (1) (EO 12958, Sections 1.5 (b), (c), and (g)). (Applicable statutes 86-36 and 403)…..Refers to export controls between the United States and Canada and is protected in its entirety pursuant to exemption (b) (1) (EO 12958, Section 1.5 (b) and (d))….. Executed this 14th day of June 1996…"

Michael Chapman Investor’s Business Daily 6/19/98 "…When the White House in '96 abruptly gave the Commerce Department power to control exports of sensitive technology to China, it came as a shock... Even more shocking is that, during that same year, Commerce had a hard time controlling breaches of security within its own building. In fact, shortly after the transfer of controls, a former Commerce employee walked in, put classified files about encryption and satellites in a box, and walked out the door. That former employee was Ira Sockowitz, who had been special general counsel at Commerce. Without authorization, he took 136 files -- a total of 2,800 pages. It's unclear how those files were used. But the trove Sockowitz took contained data vital to U.S. security -- and valuable to rival nations. And they may be linked to the current probe of whether technology was illegally transferred to China. Encryption data, for instance, are used by U.S. intelligence to keep government communications -- including instructions sent to satellites or nuclear missiles -- secret. The CIA deemed the material so sensitive that it tried to seize Sockowitz's files as soon as it learned what had happened. Despite the security breach, the Justice Department has decided there is no case against Sockowitz, and Commerce's own inspector general also balked at a probe. Sockowitz claims his reasons for taking the files were innocent. Still, the Sockowitz affair raises troubling questions about the connection between national security and the White House's drive to raise campaign cash in '96.

The American Spectator 8/99 Kenneth R. Timmerman "...The key to allowing the massive transfer of strategic technologies to China was the administration's decision in 1993 to abolish CoCom, the multilateral export control regime based in Paris. That paved the way for a host of less public regulatory changes enacted by the Commerce Department, which eliminated controls on specific technologies...President Clinton laid out this strategy in a letter, released last month by Weldon, to Silicon Graphics President Edward McCracken dated September 15, 1993. "By some estimates, unnecessary export controls cost U.S. companies $9 billion a year in lost sales," Clinton wrote. "One reason I ran for President was to tailor export controls to the realities of a post-Cold War world."

The American Spectator 8/99 Kenneth R. Timmerman "...Over the next year, according to Weldon's chart, the administration formally removed controls on encrypted telecommunications equipment, approved the sale of advanced machine-tools from a B-1 bomber plant, liberalized controls on stealth technologies, exempted U.S. satellites from sanctions imposed on China because of China's sale of M-11 missiles to Pakistan, abandoned the security review previously required on foreign nationals working for U.S. companies and the national nuclear laboratories, and took delegations of high-tech firms on official trade missions to China, officially blessing their efforts to offer China the latest in U.S. military technology.

The American Spectator 8/99 Kenneth R. Timmerman "...The administration contends that the export liberalization was inevitable, and would have occurred anyway. But this administration bent the rules repeatedly, and brazenly, to favor the Chinese. An unclassified review conducted by the Congressional Research Service shows some 20 cases in which Chinese state-owned entities have been caught since 1993 selling missile and nuclear weapons technology in violation of their own international commitments and U.S. law. Despite the overwhelming evidence, the administration imposed sanctions on Chinese firms only twice, and lifted them in both cases before their term expired. Had the laws been applied as Congress intended, Loral, Hughes, and Motorola could not have launched satellites in China, nor could hundreds of other sales--now seen to have damaged U.S. national security--have taken place.

Koenig's International News 7/20/99 Charles Smith "…Charles Smith Files RICO Suit Against Commerce Department over Computer Sales to China ….IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division …. Civil Action No. 3:99CV280 …REPLY COMES NOW Plaintiff, Charles R. Smith, to respond to the Answer Motion dated 13, June 1999, made by Helen F. Fahey, United States Attorney, counsel for the defendant, the U.S. Commerce Department.

1. The defendant has issued a blanket denial of all accusations and a repeated declaration questioning the Plaintiff's legal interpretation of the law. One such example, defendant's reply #11 to item #11 of Plaintiff's original complaint, the export of Super-Computers to Russian and Chinese military laboratories for nuclear weapons research, the defendant states that the violations documented by plaintiff are "the legal and/or exegetical opinion of the Plaintiff."

2. Plaintiff notes that the defendant (The U.S. Commerce Dept.) shares the same "legal and/or exegetical opinion" with regard to illegal exports of super-computers to military end users. The Defendant has successfully prosecuted several cases cited as the examples in the Plaintiff's original complaint. The following items were documented in the U.S. House Select Committee Report (Cox Report) issued Jan. 3, 1999:

- On July 31, 1998, the Dept. of Commerce (defendant) announced that CSPP (Computer Systems Policy Project) member IBM entered a guilty plea for the illegal export a Super-Computer to Russia. IBM received the maximum allowable fine of $8.5 million for 17 counts of violating U.S. export laws through the sale of a Super-Computer to a Russian nuclear weapons laboratory known as Arzamas-16.

- On April 18, 1997, the Commerce Department (defendant) imposed a $55,000 civil penalty on CSPP member Compaq Computer Corporation of Houston, Texas, for alleged violations of the Export Administration Regulations. The Commerce Department alleged that, on three separate occasions between September 17, 1992 and June 11, 1993, Compaq exported computer equipment from the United States to several countries, including China, without obtaining required export licenses. Compaq agreed to pay the civil penalty to settle the allegations.

- On December 26, 1996, a Hong Kong reseller for CSPP member Sun Microsystems, Automated Systems Ltd., sold a Super-Computer to the Chinese Scientific Institute, a technical institute under the Chinese Academy of Sciences - a State laboratory specializing in parallel and distributed processing. At some point after the sale but before delivery the computer was sold to the Yuanwang Corporation. Yuanwang is an entity of the Chinese Army unit COSTIND (Commission on Science, Technology, and Industry for National Defense). According to the Chinese Foreign Ministry, Sun Microsystems had been aware of this corporation's Chinese military ties. The Super-Computer sale came to the attention of the U.S. Commerce Dept. (defendant) Deputy Assistant Secretary for Export Enforcement, Frank Deliberti. Deliberti gave the information he obtained to Sun Microsystems, which then initiated efforts to have its computer returned. The computer was returned to the United States on November 6, 1997.

3. Plaintiff asserts that defendant meetings with Chinese Army owned companies took placed prior to the above documented transfer to YUANWANG Corp. Plaintiff prays the Court to accept as evidence documents supplied by the defendant in Smith v. The Commerce Dept. - 398cv716.

- A list of Chinese military officials complied by the Commerce Dept. including PLA General Ding and PLA General Huai. (Document R-1)

- An April, 6 1994 unclassified memo from Defense Intelligence Agency (DIA) official Col. Blasko to Commerce officials Deliberti, Albanse and Isbell. The memo states that "YUANWANG" Corporation and "GREAT WALL INDUSTRIES" industries are "significant to the Defense conversion" along with other known PLA companies such as "CHINA NATIONAL NUCLEAR", and "China North" NORINCO. Plaintiff submitted in the original complaint that CSPP member "TANDEM" Corp. sold "$100 million" of computers to the PLA owned company "GREAT WALL INDUSTRIES" in 1994. Plaintiff notes that in the defendant's reply, item #10. "Defendant lacks knowledge or information sufficient to forma a belief as to the truth of the allegations of paragraph 10 of plaintiff's complaint." The above document shows that defendant does know of the contacts made directly with PLA owned companies such as Great Wall and Yuanwang. (Document R-2)

- A list of U.S. and Chinese officials at the Oct. 17, 1994 Joint Defense Conversion, including PLA General Ding, PLA General Huai, Commerce Dept. official Barry Carter and Defense Dept. official Eden Woon. (Document R-3)

- A Nov. 10, 1994 letter to PLA General Huai Guomo from Commerce Dept. Barry Carter. Mr. Carter wrote to General Huai "the key to rapid involvement of U.S. industry in China is the development of a national civil/military strategy for modernization... Without a broad plan for harmonizing civil and military requirements, any equipment acquisitions and installations run the risk of resulting in incompatible systems that will not satisfy your national objectives." (Document R-4)

- A Jan. 31, 1995 letter from U.S. Secretary of Defense to Commerce Sec. Ron Brown designating "Barry Carter" as the official contact for the Joint Defense Conversion Commission. (Document R-5)

- A Jan. 31, 1995 letter from U.S. Secretary of Defense to PLA General Ding Henggao informing him of Ron Brown's activities in the "Defense" conversion project. (Document R-6)

- A June 2, 1995 letter with attachments from Commerce Dept. Barry Carter to Eden Woon "Executive Director" of the Washington State China Relations Council, including a Feb. 25, 1995 letter from General Ding with contacts for PLA activities under the Defense Conversion project. Included in the list given to Eden Woon was "YUANWANG CORP" - the PLA owned company responsible for the illegal transfer in 1996. (Document R-7)

- A Dec. 22 1997 email from U.S. Foreign Commerce official Robert Bannerman to various officials at the Commerce Dept that states enforcement officials in Beijing had to turn to the "DIA" to obtain a list of PLA owned companies despite known contacts being compiled by the Commerce Dept. Commerce officials Mark Byauk wrote "I used this chart to discover that Yuanwang Group, the importer that the is alleged to have imported the Sun Computer shipped to the National Defense Technical Institute of China in Changsha, was directly under the control of COSTIND." (Document R-8)

4. The Plaintiff notes for the Court that Section 120.9 of the International Traffic in Arms Regulation (ITAR) 22 C.F.R. Part 120.9 wherein a "defense service" is defined to include the furnishing to foreign persons of ITAR-controlled technical data or assistance (including training) in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction processing or use of defense articles. Defense articles included under PART 121-THE UNITED STATES MUNITIONS LIST Category XI-Military Electronics are "(6) Computers specifically designed or developed for military application and any computer specifically modified for use with any defense article in any category of the U.S. Munitions List."

5. Plaintiff asserts that the Defense Department has determined the U.S. Commerce Dept. (defendant) issued licenses for technology transfers to Chinese military units covered by the State Department's International Traffic in Arms Regulations (ITAR) under the Arms Control Act (ACEA). Defendant is NOT authorized to issue such licenses. The plaintiff notes that the U.S. Department of Defense released a report dated December 7, 1998. The Defense Department report states the defendant (Commerce Department) issued licenses to the Chinese military that constituted a "defense service" within the meaning of the State Department's International Traffic in Arms Regulations (ITAR) under the Arms Control Act (ACEA). The Defense Department wrote "This was clearly beyond the scope of Commerce export control jurisdiction because only the Department of State is authorized to issues licenses for defense services".

6. Plaintiff notes that example #13 of the original complaint was provided by the defendant and supplied as evidence in the Plaintiff's original complaint (399cv280). This document clearly shows that Computer Systems Policy Project (CSPP) members such as IBM, Sun, and Compaq, sought Commerce officials to approve transfers of computers to "military" end-users in "Russia and China". Plaintiff asserts that defendant is illegally withholding documentation on such illegal transfers - in part - as an effort to obstruct lawful access to evidence that defendant issued licenses for "defense services" in violation of ITAR 22 C.F.R. Part 120.9.

7. Plaintiff submitted to the Court extensive evidence in the original complaint (399cv280) that White House advisor John Podesta engaged in "conflict of interest" during the period of 1994 through 1995 with his brother, Anthony Podesta, owner of Podesta Associates. Plaintiff has shown that Anthony Podesta had his employee, Ken. Kay, Director of the Computer Systems Policy Project (CSPP), engaged in secret meetings inside the Commerce Dept. and the White House. Plaintiff notes that White House employee John Podesta directed and controlled computer export and computer security policies with a direct financial impact on Anthony Podesta's client - the CSPP. Plaintiff notes that defendant (the Commerce Dept.) is withholding documents on CSPP activities sought by the Plaintiff.

8. Plaintiff herein provides additional evidence that John Podesta was employed by Podesta Associates prior to and directly after his White House employment by Podesta Associates. Plaintiff submits Federal Election Commission records showing that John Podesta donated money from his employment for Podesta Associates in 1992, before taking his position at the White House, and in 1995, within days after leaving his employment at the White House. (Document R-9)

Plaintiff asserts that John Podesta, who has since returned to Federal employment at the White House, is directly and financially connected to his brother, Anthony Podesta, through his terms of employment. Plaintiff notes that 18 U.S.C. § 208 prohibits government employees from officially participating personally and substantially in particular matters in which they have a financial interest. For the purposes of 18 U.S.C. § 208, the interests of an employee's general partner, as well as the interest of any organization in which the employee serves as officer, director, trustee, general partner, or employee, are imputed to the employee as if they were the employee's own interests.

9. Plaintiff asserts that John Podesta violated 207 (c) by taking employ with Podesta Associates in 1995, before the 18 U.S.C. 12 month restriction expired. Plaintiff notes that 18 U.S.C. § 207 prohibits a Federal employee after leaving Government service from representing anyone other than the Government in connection with a particular matter:

(1) in which the Government is a party or has an interest,

(2) in which he or she participated personally and substantially, and (3) which involved a specific party or specific parties at the time of participation

Section 207(c) places a 1 year restriction on senior level officials and employees from representing anyone other than the government before his or her former department or agency after terminating Federal employment. Section 207 (d) applied the 1 year restriction in 207 (c) to "very senior" personnel including persons at Executive Schedule levels I and II, and certain persons on the White House executive staff, including Mr. John Podesta. Unlike those covered by subsection (c), officials covered by subsection (d) also may not undertake any representation before any Executive Schedule levels I through V person in any executive branch or agency.

10. Plaintiff asserts that John Podesta also violated provisions of 18 U.S.C. § 207 (f) with respect to representation of "foreign" entities. Podesta Associates was a registered Foreign Agent during the period of 1994. Plaintiff submits U.S. Dept. of Justice Foreign Agent Records, showing that Anthony Podesta registered and reported as a "foreign" agent with the Dept. of Justice. during the 1994 thru 1996 time period in question. (Document R-10)

11. Plaintiff notes that Example #7 of the Plaintiff's original complaint submitted to the Court show that John Podesta obtained permission from White House legal counsel to work on computer export and computer security policy by disclosing his conflict in 1997. Plaintiff asserts that Mr. Podesta's recognition of his conflict of interest - came nearly THREE years after the first documented conflicts occurred in 1994. Plaintiff asserts that that no "pardon" has been issued for any criminal activities prior to 1997.

12. Plaintiff asserts that the defendant (Dept. of Commerce) is withholding documents on illegal meetings with CSPP representatives, and Podesta Associate representatives. Plaintiff asserts that defendant's illegal withholding is part of a larger effort to obstruct lawful access to evidence that officials violated 18 U.S.C.

13. Plaintiff asserted in paragraph 8 of the original complaint that the CSPP violated the Federal Advisory Committee Act (FACA). Plaintiff asserts that the CSPP qualifies as FACA covered group or a mailing that included non-government individuals to reach a consensus or make decisions. Plaintiff asserts that the CSPP non-government members operated to jointly make binding decisions on Federal lands with taxpayers resources.

Plaintiff submits the following documentation from the U.S. Government "NEXT GENERATION INTERNET" (NGI) website The NGI includes the "High Performance Computing and Communications" HPCC program. According to the document, "the HPCC Program is planned, funded, and executed with the close cooperation of Federal agencies and laboratories." The HPCC "Association Speakers Speakers before the Presidential Advisory Committee" included "Ken Kay" of the CSPP. The HPCC members include the "Computer Systems Policy Project (CSPP)". Plaintiff asserts that the defendant has shared decision-making authority the CSPP. The CSPP is a group of companies which are making decisions that transcend but include issues under Federal jurisdiction. The CSPP is directly involved in allocating federal funds through the defendant as per a special advisory committee covered by FACA. (Document R-11)

14. Plaintiff prays the Court to accept a document, two pages from a 1997 Rand Report, obtained from the defendant in Smith v. The Commerce Dept. 398cv716. (Document R-12) The Rand report states that U.S. government sponsored projects with the Chinese Army included corrupt activities. The defendant was aware that U.S. government funds were being used by the Chinese Generals for "corrupt purposes, such as paying for lavish meals, expensive foreign luxury automobiles, and Swiss bank accounts." Plaintiff assert that defendant is withholding documents on CSPP computer transfers to PLA owned companies - in part - to obstruct lawful access to evidence that foreign officials also participated in actions that violate the Foreign Corrupt Practices Act U.S.C. 15 §§ 78m (FCPA).

15. The violations documented by plaintiff in this reply, and in the original complaint, show the actions taken by the defendant, White House officials, the CSPP computer companies and foreign military officers includes evidence of criminal activity via financial gain, and direct conflicts of interest. Plaintiff asserts that bribery, as defined by the Travel Act 18 U.S.C.§ 1952(a) (3) (1998) and the Foreign Corrupt Practices Act U.S.C. 15 §§ 78m (FCPA), is the primary reason for U.S. government officials to withhold records.

16. Plaintiff asserts for the Court that the documented violations rise to private cause of action under the Racketeer Influenced and Corrupt Organizations Act 18 U.S.C.§§ 1962-1968 (RICO) through violations of Section 120.9 of the International Traffic in Arms Regulation (ITAR) 22 C.F.R. Part 120.9, the Travel Act 18 U.S.C.§ 1952(a) (3) (1998), and the Foreign Corrupt Practices Act U.S.C. 15 §§ 78m (FCPA). In Dooley v. United Technologies Corp., 803 F. Supp. 428 (D.D.C. 1992), a court allowed plaintiff's Travel Act/FCPA violation claims as a predicate offense under RICO to withstand a motion to dismiss.

17. Plaintiff prays the Court to order the defendant to prepare and submit to the Court a "Vaughn" index of all responsive documents defendant intends to withhold in this matter. According to the Court of Appeals for the District of Columbia Circuit Vaughn v. Rosen,THE DEFENDANT AGENCY BEARS THE BURDEN OF SUSTAINING ITS ACTIONS OF WITHHOLDING RECORDS.

18. Plaintiff prays the Court to deny the defendant's request for "Affirmative Defense" and provide immediate access to documents and records refused, pursuant to 5. U.S.C.§ 552 (a) (3).…"

Softwar 7/26/99 "...Over 46 US super computers have been exported to China. Commerce Bureau of Export Administration Director William Reinsch testified in 1997 before the Senate that US officials could not determine the location of many of the computer sold to China. The Commerce Department authorized the additional export of a US super computer in 1997 even though they were denied access to inspect the Chinese site. In addition, Chinese officials denied access in 1998 to US inspectors who wanted to verify the exported super computers were not being used for military purposes...." 7/26/99 "...Russia is deploying a new series of nuclear tipped missiles with warheads designed with the aid of US supercomputers. The new Russian SS-X-27 missile is being moved directly into deployment with an advanced 550 kiloton nuclear warhead made by the Arzamas-16 nuclear design bureau. Russian Atomic energy officials (MINATOM) admitted in early 1997 that an IBM super-computer was purchased from Europe by MINATOM in late 1996 for $7 million. The IBM super-computer was transferred directly to the nuclear weapons center in Arzamas-16. In addition, MINATOM official admitted that that Silicon Graphics, Inc., sold four computers to Chelyabinsk-70, another Russian weapons facility in the fall of 1996 for $650,000 each

Softwar 7/26/99 "...Former Secretary of Commerce Ron Brown led several trade trips to China and Russia which included major computer deals. In addition, a letter obtained from the files of Ron Brown detail his first efforts to export US super computers under the Clinton administration. The letter from NSA Director Adm. McConnell in dated November 1993 gave Brown the NSA okay to begin exports only days before President Clinton met with Chinese President Jiang Zemin...."

WorldNetDaily 7/27/99 Charles Smith "...Despite the White House spin, the truth about the "bilateral military relationship" between Clinton and China is that Ron Brown was an arms dealer and his customers were Chinese Generals. The known Chinese Generals who dealt with Brown includes the three commanding officers of the Chinese Commission of Science, Technology, and Industry for National Defense (COSTIND), General Ding Henggao, General Shen Rougjun and General Huai Guomo. One document provided to Ron Brown by Loral CEO Bernard Schwartz just prior to meeting General Shen states "WEAPON DELIVERY, TARGET ACQUISITION AND NIGHT VISION". The Loral document is a picture filled catalog of "Mao Anniversary gift" items for the modern Chinese Army...."

WorldNetDaily 7/27/99 Charles Smith "...These Chinese Army/Brown meetings were approved by Bill Clinton. It was Bill Clinton who decided to arm China with U.S. made weapons. Since 1993, all the advanced sales and all the waivers for each export were approved by Bill Clinton. According to a 1995 letter from Motorola Chairman, Gary Tooker, it was Bill Clinton who signed the "Presidential waiver for encryption export sales to China." In 1996, Clinton transferred export oversight to the inept and ill-equipped Commerce Dept. President Clinton signed the executive order that ended 40 years of legislation designed to prevent war. The transfer also forced the paper trail for military exports to China to now end at the Commerce Dept. instead of at the Oval Office. In 1997, after the transfer of authority by Clinton, Commerce Dept. officials in Beijing clearly stated they did not track Chinese Army owned companies. Thus, the only U.S. government agency with the legal authority to stop exports had no idea what to do but say "yes"...."

WorldNetDaily 7/27/99 Charles Smith "...U.S. tax dollars put together a June 1995 catalog for General Ding and the Chinese Army, titled "U.S. Industry Directory - A Directory of U.S. Businesses Interested in Defense Conversion Opportunities in the People's Republic of China." The 73 page report of U.S. defense companies represents the Clinton "bilateral military" relationship with communist China. The catalog of 58 U.S. military manufacturers includes direct contacts at Boeing, Northrop, Rockwell International, Westinghouse, Raytheon, Pratt & Whitney, TRW, Lear Astronics, IBM, and Segate. Even CIGNA offered to provide "insurance" for the Chinese Army....."

WorldNetDaily 7/27/99 Charles Smith "...In 1995, Bill Clinton placed a wide variety of military products up for sale from HUMVEEs to the latest in aerospace technology. AMC Corp. offered the Chinese Army the "HUMMER" and their "state-of-the-art in 4X4 technology." Boeing Helicopters emphasized for the PLA they were already working on the "234 Commercial Tandem Rotor Chinook helicopter in China." Concord Corp. wanted to sell "non-volatile memory devices" and "scramblers/descrambling devices." Gerris U.S. pursued PLA sales in "High speed, 30 meter catamaran for military and coastal work." And for those pesky legal matters that might bother the Chinese Army, the firm of Kaye, Scholer, Fierman, Hays and Handler were there to offer their services. Motorola, already a major supplier of electronics to the Chinese Police, offered "Secure telephones" and "C3I" (Communications, Command, Control and Intelligence). The listing from "Motorola Military & Aerospace Electronics" includes contact name, number and fax number for "C3I secure information systems."..."

Reason website 7/28/99 Cox Reports Interviewed by Michael W. Lynch and Jeff A. Taylor 8/9 99 Reason: In an op-ed, you write, "The exercise of joining the democracies together behind an international export-control regime, like the annual human rights resolution in the U.N. Commission on Human Rights, is important." Could you expand on that? Cox: We have the worst of all possible worlds when it comes to U.S. export control. There is paperwork. There are denials of licenses. As a result, there are administrative overhead expenses and lost market opportunities. Competitors in allied countries eat our lunch. When the U.S. government denies a sale, U.S. citizens have a right to expect that it will be for some overriding national security benefit. If the United States government doesn't lift a finger to win the cooperation of our allies in such an effort, then it is twice shame on us. Until 1994, there was such a regime [the Coordinating Committee for Multinational Export Controls (COCOM), which restricted exports to communist countries]. The Clinton administration led the way in dissolving it. Undoubtedly, COCOM should have been updated after the collapse of the Soviet Empire. But COCOM covered not only the Soviet Union and the Warsaw Pact but also the PRC.

Newsbytes 8/3/99 Bob Woods "...The Department of Commerce's Bureau of Export Administration (BXA) officially eased export controls to Tier I, II, and III nations, a little more than a month after President Clinton called for the relaxation of export control rules. When he announced the action last month, Clinton said the easing of computer export controls would "strengthen America's high-tech competitiveness, while maintaining controls that are needed to maintain our national security." Clinton also said the reforms are needed "because of the extraordinarily rapid rate of technological change in the computer industry...."

Investors Business Daily 8/10/99 Joseph Guinton "..."Loral and Hughes undermined national security and now the whole satellite industry is suffering as a consequence." --Rep Dana Rohrabacher, (R-Calif) ...In March, Congress shifted responsibility for approving satellite exports from the business-friendly Commerce Department to the security-minded State Department. Since then, customers have openly questioned whether U.S. manufactueres will be able to get their exports approved in a timely manner, if at all. And, foreign rivals of U.S. firms are now angling to get a bigger share of the commercial satellite business by trumpeting their lighter regulatory burdens. The bottom line for the U.S. satellite industry: $1 billion in lost revenue or additional compliance expense, according to the Aerospace Industries Association. "This is an Achilles' heel for the U.S. satellite industry," said Vijay Savant, managing director and satellite industry analyst at Bear, Sterns & Co. For the industry, the switch from Commerce to State comes at a time of record profits. Merrill Lynch analysts say the $35.6 billion global satellite industry is growing at nearly 20% a year. Much of that growth comes from U.S. companies. Revenues are projected to reach $171 billion in 2008....While Commerce has more than 100 people processing export reviews, State has just 14 in its Office of Defense Trade Controls, which handles exports of products that have military uses. That office already processes 45,000 export licenses a year. To that work-load, they'll have to add the 3,000 export license applications filed by commercial satellite makers annually. Commercial satellite makers want State to get more money to hire more people...."

Hong Kong Trade Development Council 8/16/99 "…In the wake of the Cox report's publication, US policymakers are grappling with the implications of the information technology (IT) revolution for US industry and national security… US trade policy with regard to the export of high-technology products has remained on course in terms of relaxing export controls for civilian use while military restrictions tighten for China and other markets. This is a reflection of the fact that existing restrictions - designed to keep foreign militaries from acquiring the most sophisticated US technologies - have failed to stay abreast of the rapid advances in commercially available computers and communications systems. …The Chinese market for PCs already is one of the world's four largest markets. Moreover, it is widely anticipated that it will become the second largest market in the near future. In view of the Chinese market's commercial potential for US industry, the Clinton administration reasons that it must protect US national security without doing so at the expense of US producers. The US Department of Commerce (DOC), Bureau of Export Administration (BXA), issued a final ruling, which became effective on 3 August 1999, amending the Export Administration Regulations (EAR) by raising the performance parameters for computers that may be exported and re-exported. The BXA raised the composite theoretical performance (CTP) threshold for "Tier 2" and "Tier 3" countries, as well as for military end-users in "Tier 3" destinations. Now, US producers may export computers for civilian use to Tier 2 destinations including Hong Kong up to 20,000 million theoretical operations per second (MTOPS) and to Tier 3 destinations including the Mainland China up to 12,300 MTOPs without applying for US export licence. …"

Hong Kong Trade Development Council 8/16/99 "… The situation is similar in the field of telecommunications. On 29 July 1999, DOC reiterated that there has been no change in US policy regarding code division multiple access (CDMA) technology exports to China. This, of course, was one of the subjects addressed during DOC Under-secretary for International Affairs David Aaron's visit to Beijing on 27 July. The DOC restated that the US continues to support the use of CDMA technology in China's civilian telecommunications system, and that CDMA equipment used in cellular telephone systems generally does not require export licenses for export to China. An exception to this rule is when the exporter "knows or is informed" that the equipment is destined for programs developing weapons of mass destruction - i.e., nuclear, biological or chemical weapons programs - or delivery systems, such as missiles. Export licenses also are necessary, if the system includes voice or data encryption capabilities. In fact, certain equipment, whether or not incorporated into CDMA systems, remains subject to license requirements. More specifically, this export license requirement applies to radio equipment with user-programmable spreading codes, or a total transmitted bandwidth which exceeds the bandwidth of any one information channel by 100 or more times and has a frequency greater than 50 kHz….."

Gretchen Glass 8/21/99 "…After a flagrant disregard for U.S. jobs, there is suddenly a push to promote the sale of U.S. products to the Communist Chinese by way of taxpayer financed and guaranteed loans. Loans that are too high risk for normal private financing, but not too risky for the U.S. taxpayer financed Export-Import Bank…. China is Ex-Im Bank's second-largest customer. "In China, Ex-Im Bank has total exposure of more than $5 billion and estimates it will support approximately $1 billion of U.S. exports to Chinese companies and government-sponsored infrastructure projects in fiscal year 1998." The Bank devotes a considerable amount of space to ranting and raving about their special treatment of the Chinese customers since: "The Clinton administration's commitment to expanding trade and cooperation between the United States and China is clear. Ex-Im Bank is working hard to act on that commitment. We are doing so by streamlining programs, increasing outreach and providing superior customer service. By doing this, we expect to significantly increase the number of Chinese companies buying goods and services from the United States." (Yes, and we have a bridge to sell...) ……."

US Attorney Eastern Pennsylvania 9/15/99 "....Michael R. Stiles, United States Attorney for the Eastern District of Pennsylvania, and Richard Smith, Special Agent in Charge, United States Customs Service, Office of Investigation, Philadelphia, announced today that Orbit/FR, Inc., a Delaware corporation headquartered in Horsham, Pennsylvania, has been charged by criminal Information with two counts of violating the Arms Export Control Act (AECA), Title 22, United States Code, Section 2778. The charges arise from Orbit/FR, Inc.'s export of defense articles and defense services to the People's Republic of China from in or about September, 1997 to in or about May, 1998. Stiles also announced the filing of a guilty plea agreement signed by Orbit/FR, Inc. The Information charges that Orbit/FR, Inc. sold sophisticated military equipment, including software originally developed for the Israeli Defense Forces, to China's Ministry of Aerospace (MOA) for use in China's missile development program. The software and equipment were designed to measure the effectiveness of antennas placed in the nose cones of missiles, commonly called "radomes." In addition, the Information charges that Orbit/FR, Inc. provided technical expertise to China North Industries Corporation, or NORINCO, to improve the accuracy of a Chinese surface-to air missile system similar to the United States' Patriot missile system. NORINCO is a major military systems manufacturer for the People's Liberation Army of China....."

Insight Magazine 5/26/97 Timothy W. Maier "....A 1995 General Accounting Office, or GAO, report ordered by the Pentagon and State Department and critical of exports to China portrays the United States as being a blind trading partner of China. The unclassified report shows that the United States approved 67 export licenses to China for military-industrial products between 1990 and 1993, including $530 million of missile-related technology. "The Department of Justice is concerned the Department of Commerce might not be identifying or seeking interagency concurrence on all potential missile technology export-license applications," the report declares. According to William Triplett II, former chief Republican counsel to the Senate Foreign Relations Committee, the British and French were furious when Clinton dismantled the Coordinating Committee for Multilateral Export Controls, or COCOM--an international arrangement to prevent export of military high-tech. That decision, he says, secured the export to Russia and China this year of supercomputers capable of building sophisticated nuclear-guidance systems. California-based Silicon Graphics, now under federal investigation for illegal exporting, sold the supercomputers to the China Academy of Sciences and to a Russian nuclear-weapons lab, claiming the sales were based on an understanding that the technology would be used for environmental purposes. The company says it now feels terrible about these sales.

USA TODAY (AP) 10/1/99 "....Ending a long-standing conflict over the illegal sale of high-performance IBM computers to Russia, visiting U.S. Energy Secretary Bill Richardson on Friday inaugurated a civilian computer center that would use them. Russia bought the 16 computers in 1996 for nuclear weapons research, bypassing U.S. export regulations. Under U.S. policy, the computers required licenses for export to military and nuclear installations. In the following years, the United States tried to persuade the Russian government either to return the computers or have them officially dedicated to civilian research. Moscow eventually agreed to incorporate the computers into a civilian computer center located in Sarov, a city that is home to a major nuclear research laboratory and nuclear weapons production center. The city, which was called Arzamas-16 during Soviet times, is the equivalent to Los Alamos National Laboratory. The computer center is intended to help Russian researchers find civilian jobs as Sarov converts from weapons research to peaceful work......"

AFP 10/8/99 ".....The US Justice Department is preparing to indict McDonnell Douglas and a Chinese aerospace firm over the sale of machine tools that ended up in a Chinese factory making missiles, Time magazine reported Friday. Time's online service said Attorney General Janet Reno had approved indictments for both McDonnell Douglas, now part of the Boeing Company, and Catic, a state-owned Chinese aerospace company that bought the tools. The tools were sold in 1994 for use in commercial aircraft production at a specific location but ended up in a facility that produced, among other things, Silkworm missiles -- a violation of the export license, Time said....."

Time 10/7/99 Viveca Novak ".... Federal prosecutors have told lawyers for McDonnell Douglas to expect a criminal indictment in connection with its 1994 export of machine tools to China unless the company agrees to a plea bargain later this month. Federal law enforcement sources tell TIME that Attorney General Janet Reno has approved indictments under the Export Administration Act for both McDonnell Douglas, now part of the The Boeing Company, and Catic, the huge state-owned Chinese aerospace outfit that bought the equipment. The companies were informed last week. McDonnell Douglas sold the surplus machine tools to Catic, the China National Aero-Technology Import Export Corporation, in 1994. Under the terms of the export licenses obtained for the shipments, the equipment was to be used for the production of commercial aircraft in a specific location. But within months of the $5 million sale, McDonnell Douglas discovered that some of the tools had been diverted to a facility that produced, among other things, Silkworm missiles -- a violation of the export license. The company reported back to the U.S. government, and seven months later, the Commerce Department began an investigation. But the case was also referred to the Justice Department, where in 1996 prosecutors from the U.S. Attorney's Office in Washington, D.C. began a grand jury investigation of whether Catic and McDonnell Douglas had violated export control laws. ...."

Freeper excerpts of Johnny Chung transcript "....
JC: You were telling me that LIU Guniang's (Ms. LIU's) friend is here?
RL: You ... you're not to ask these things. It's sufficient that you are aware ... that you're aware that they're working on your case. They are making contacts with these two major companies. They are working, helping you. They don't want to have any conflicts with that other side. How can they expect to do business with the other side if there's conflicts between them? They are talking long-term business relations. These two companies are the 2nd ... other than MACDONALD DOUGLASS ... MACDONALD DOUGLASS handles 80% of businesses of the country.
JC: Which one does?
RL: MACDONALD DOUGLASS. The other two are INDEPENDENT (companies), not really looked after by China. They won't want to make the Communists angry, if they do, they'll ruin their changes for working with the Communist Party. Therefore, no matter what, they've got to find the way to iron out things. It's difficult to see it this time ... it's a stage of swaying back and forth. The future is not forseeable at this moment. I strongly believe that these two companies can work together hand-in-hand and I don't believe they can't accomplish great tasks.
RL: The rest is not important. (UI) The Communist Party ... Generally speaking, one hopes that technology in China gets better, with better equipment. They ... their future ... ,Well, they dislike MACDONALD DOUGLASS, that's for sure.
JC: They dislike what?
RL: The two of them, dislike MACDONALD DOUGLASS immensely.
JC: Okay.
RL: Because they ... because MACDONALD DOUGLASS received the DEAL directly....
JC: Whom did you mean when you said, "they"?
RL: That's HUGHES and LORAL.

Defense Week 10/12/99 John Donnelly "....The U.S. government accidentally sold Egypt equipment used in the manufacture of ballistic missiles, congressional auditors have found. Under a Foreign Military Sales agreement begun in 1989, the United States provided Egypt the tools to help Cairo build M1A1 Abrams tanks. But in at least two cases, the equipment transferred is not only useful for building a tank's gun barrel. It is also among the 20 dual-use technologies crucial to building missiles capable of delivering weapons of mass destruction. However, the departments of State and Defense, which are supposed to identify and review such technologies, were unaware when the transfers occurred in the early 1990s, according to the General Accounting Office. Officials first learned of the technology leak last May. Significantly, U.S. officials told GAO they cannot be sure how many other times such missile-tech transfers have happened-or are happening. Experts cannot recall an agency of the U.S. government ever before accusing another of violating the Missile Technology Control Regime (MTCR), a voluntary coalition of nations who agree to limit the export of certain technologies, including the 20 dual-use ones, because they could "make a contribution to delivery systems" for nuclear, chemical and biological agents......"

PRNewswire 10/11/99 QUALCOMM Incorporated "....QUALCOMM Incorporated (Nasdaq: QCOM - news) today announced Chinese government approval of its contract with Guangdong South Satellite Telecommunications Service Co., Ltd. (SST), a subsidiary of Guangdong Nanfang Communications Group, to provide satellite data services in China. SST will offer QUALCOMM's OmniTRACS(r) mobile information management system to China's transportation industry. ``Broad support for the Chinese market is a key goal for QUALCOMM and essential for a global communications company,'' said Dr. Irwin M. Jacobs, chairman and CEO of QUALCOMM Incorporated. ``The extension of our OmniTRACS system into China is an important milestone as we continue to expand our core technologies, products and services worldwide.'' ``QUALCOMM is very honored to receive approval from the Chinese government which allows us to bring our OmniTRACS system to China,'' George Mansho, vice president and general manager of international business for QUALCOMM Wireless Business Solutions. ``We look forward to working with SST, a well respected and prominent Chinese company, to help them continue to improve their revenues and increase their overall productivity.'' ``We are very pleased to be working with QUALCOMM, offering one of the leading communications technologies,'' stated Gu Cai Ming, general manager of SST. ``QUALCOMM's expertise in the field of wireless communications will be a great asset to the Chinese marketplace.'' Headquartered in Guangzhou China, SST is a subsidiary of Guangdong Nanfang Communications Group Corporation and is under the jurisdiction of the Guangdong Post and Telecommunication Administration (GPTA). SST specializes in VSAT telecommunication services that support a wide range of applications in voice, data, facsimile and video transmission, as well as various network interfaces and protocols. The company operates a public satellite network and provides integrated VSAT services to both domestic and international customers. Nanfang has joint ventures with Ericsson for GSM infrastructure equipment, Nokia for GSM subscriber products and Siemens for fiber optic networks....."

San Diego Union-Tribune Dean Calbreath 3/7/99 "....Leitner, the Pentagon's trade specialist, fears the Chinese are using VSATs and other imported materials from the United States to develop a command, control, communications, computer and intelligence system that will bring their headquarters operations into the 21st century. "VSATs, or very-small aperture terminals, have a very narrow bandwidth, which makes them very hard to jam or intercept," says Leitner. "The more the PLA acquires that kind of equipment, the more we have a chance of being caught by surprise in a future conflict." ..... The manager of Leitner's office, Michael Maloof, raised concerns about VSAT and other high-tech exports in November during Rep. Cox's hearings on technology transfers to China. Maloof declines to discuss the matter with reporters, but his testimony reveals he was especially troubled by a decision by Hughes Electronics to sell VSATs to China Electronic Systems Engineering, a trading company that, like National Instruments, is affiliated with the army. ........ Qualcomm, for instance, is testing its Omni-Tracs system to improve truck communications in southern China, under a deal struck last May with the Guangdong South Satellite Telecommunication Service. With Omni-Tracs, a small satellite dish is installed behind the cab of a truck. Not only does the dish allow the driver to engage in two-way satellite communications, but it also works as a global-positioning system, allowing the trucking company to know where its vehicles are at all times. ......Omni-Tracs already has been used for military purposes. U.N. troops in Bosnia and Kuwait used Omni-Tracs to keep track of their supply operations.

Leitner questions whether there is enough truck traffic in China to justify such a purchase. "And if you're in a city," he says, "you don't need a global-positioning system to tell you where you are. You're in a traffic jam." Qualcomm says that as the Chinese roll out a multibillion-dollar transportation program, they will need to upgrade their trucking companies, but Omni-Tracs spokeswoman Susan Hind says Qualcomm is not sure who the ultimate customers will be. "When we go into the international market, we sell the system to companies over there," she says. "They're responsible for the marketing and selling of the system." ...."

United Press International 10/20/99 "....The Commerce Department is investigating whether two U.S. supercomputers exported to an unnamed country may now be in the hands of a military possibly bent on developing nuclear weapons, a General Accounting Office report said Wednesday. The GAO said the country is not China, which nevertheless imported 191 supercomputers from the United States last year but is blocking the Commerce Department from verifying how all but one of them are used. Supercomputers are considered key components in the development of modern nuclear weapons...... In 1996, the Clinton administration streamlined the export process for supercomputers, making exporters responsible for determining whether an export license is needed for each sale. In 1997, however, several supercomputers were exported to Russian nuclear weapons laboratories and to a military end-user in China without the required license, which carries with it a government review of the sale. Congress thereafter required companies to notify the Commerce Department on all proposed exports of high-speed computers to so-called sensitive countries, including China, Russia, Israel, India and Pakistan..... GAO reports that in 1998, the first year following the new rules, companies notified the government of 938 high -peed computer export proposals. The government objected to 101 of them, of which only six were denied after a review. Sixteen were approved, and the remainder were returned for more information. The six denied licenses included Indian and Chinese end-users involved in missile proliferation..."

Federal Computer Weekly 10/20/99 Daniel Verton "....China and Russia may have stolen sensitive technical data, including information on missile guidance and control hardware and software, during 14 overseas launches of U.S. commercial communications satellites, according to a General Accounting Office report released today. Lack of export licensing controls and technical monitoring on behalf of the departments of State, Commerce and Defense may have led to unauthorized transfers of technology to China and Russia that could allow them to improve the reliability and accuracy of offensive ballistic missiles, according to a report released today by GAO...... For eight out of 43 licensed launches that took place in China and Russia, Commerce did not require monitors, technology control plans and adherence to other safeguards, according to the GAO report. In addition, "DOD and State documents show that monitoring problems, unauthorized transfers of technology and other violations of export control regulations possibly occurred in 14 launch campaigns in China, Russia and Ukraine," the report states The report also states that two out of three cases where technology may have been transferred raised significant national security concerns....."

Freeper jettester 10/21/99 "....I seem to remember that there has been concern about the use of those tools for a long time. I believe what I heard was that one of the uses proposed for these five axis machines was the ability to handle the machining of complex details from exotic metals. The original contract/concept for the China Trunkliner program was to take existing MD-80's and modify them to handle heavier loads (more payload/passengers). To do this you either have to build stronger runways to handle the heavier aircraft, or beef up your airplanes. China felt it would be cheaper to do the airplanes. The critical area of the MD-80 which needed the most work was the landing gear (which currently are called double bogies because they have two wheels on each gear). The "new" Trunkliner aircraft were to get beefed up landing wells and spars then topped off with newly designed landing gear which would be made up of four tires per gear. In fact, the program had another name which was the "DTG Program" or Dual Tandem Gears. MDC had to do a lot of design work to get this sized gear together into an existing airplane. One of the purposes for the machines was to fabricate these gears. Were you aware of the fact that most landing gears are made of "hi-tuff" steel which is a restricted material to export? These machines were going to allow the Chinese to have a shot at making this design concept work. Also, the planes were never intended for resale anywhere outside of China. As a side note, a friend of mine got a tour of one of China's facilities where aircraft were made and it was interesting that they made commercial on one side and military craft on the other. The military side was blocked off from his viewing, but the testing areas were not. He and I worked in a similar testing area in Long Beach and I was interested in hearing about their capabilities. When I asked my friend about what he saw relative to the capabilties of their testing equipment, he said that China in some ways was more advanced than us. He even said they had brand, new state of the computers (better than ours at home) just sitting there stacked up waiting to be installed...."

MSNBC Website 10/19/99 Robert Windrem "....The McDonnell Douglas division of Boeing and China's leading aviation company were indicted in Washington on Tuesday for export violations in the 1994 sale of machine tools, some of which the Chinese shipped to a cruise missile factory....."

MSNBC 10/19/99 Robert Windrem "....SENIOR OFFICIALS told NBC on Monday night that the indictment would say McDonnell Douglas and the Chinese company, CATIC, knew the equipment was bound for military uses, a violation of the export license issued by the U.S. Commerce Department at the time of the shipment. The license had been controversial even then, with Pentagon officials predicting that the machine tools - the most sophisticated ever shipped to China - would wind up in military hands. One U.S. official told NBC News that prosecutors have a "secret witness" at McDonnell Douglas who will say the company knew the materials were going to Chinese factories other than the one specified in the export license McDonnell Douglas was an independent company until three years ago, when Boeing bought it, and the charges deal with events just prior to the acquisition...... In 1994, after McDonnell Douglas closed its military aircraft plant in Columbus, Ohio, the Chinese bought $5 million in machine tools that had been used to make parts for the space shuttle, B-1 bomber and MX missile. It was a bargain for the Chinese: According to documents obtained by NBC News, CATIC told McDonnell Douglas that if it didn't agree to the price, the Chinese would not look favorably on the aerospace company's plan to sell airliners to China....."

United Press International 10/19/99 "....U.S. defense contractor McDonnell Douglas Corp. and a Chinese firm were indicted Tuesday on federal charges of making false statements regarding the export of military-use machinery from the United States to China. The charges involve machining equipment made in Columbus, Ohio, and shipped to China for civilian use. But federal prosecutors allege the equipment was instead diverted for military use. The machining equipment, designed to build aircraft parts, was used in the United States to bend and shape steel for aerospace products, including the B-1 bomber and MX and Titan missiles...... Also named in Tuesday's 16-count indictment were three of CATIC's affiliates, Beijing-based CATIC/Supply, and CATIC (USA) Inc. and TAL Industries Inc., both in El Monte, Calif.; two Chinese nationals employed by CATIC, Hu Boru and Yan Liren; Douglas Aircraft Co., a subsidiary of McDonnell Douglas; and Robert J. Hitt, who was director of the China program office at Douglas. The indictment says the corporate defendants made false and misleading statements about the 13 pieces of sophisticated machinery equipment when applying for export licenses in 1994. ...."

The Washington Times, Frank J. Gaffney Jr. 6/21/98 "....The administration's conduct with respect to assisting the Chinese military's rocket program is not an isolated incident, but part of a pattern that threatens incalculable harm to the United States and its vital interests.....This point was demonstrated by "60 Minutes" by focusing on an export licensing decision taken by the administration - over Dr. Leitner' s objections - in 1994. It described one of the Chinese government' s preferred techniques for securing sensitive U.S. technology: "blackmail" of the owner by threatening to withhold market access if the goods are not turned over. In this case, the PRC wanted a factory's worth of advanced machine tools that had been used by McDonnell Douglas to manufacture B-1, C-17 and F-15 aircraft for the U.S. Air Force. Despite the obvious dangers, the Clinton administration approved the transfer. And, as the DTSA analyst had predicted, these machine tools found their way into a Chinese plant producing, among other things, cruise missiles...."

60 Minutes (CBS) Steve Kroft 6/6/99 "....KROFT (voice-over): But for some people at the Pentagon, it was. Dr. Peter Leitner is a defense analyst who was assigned to review the McDonnell-Douglas proposal to see if it threatened national security. (on camera): Did you oppose this deal?
PETER LEITNER: I did, and I definitely opposed it, and it was based upon a bunch of considerations, including what the Chinese might use it for. And one of the principal things was the possibility of diversion, of diverting these machine tools to military production.
KROFT: How likely did you think it was that they might be diverted?
LEITNER: Very likely.
KROFT (voice-over): Very likely because Dr. Leitner and other Pentagon officials were pretty sure the machines were not going to go where the Chinese said they were going, a factory near Beijing which was supposed to make parts for passenger jets.
LEITNER: Turned out the facility didn`t exist....
KROFT (voice-over): But when Leitner recommended to his bosses at the Pentagon that the deal not be approved, he was told to change his recommendation.
LEITNER: I said that "I`m not willing to do that. I`m not able to do that, and I`m not going to do that." They said, "Well, fine. Somebody else will do this, then." KROFT (on camera): And did they say why?
LEITNER: Because the decision`s been made to approve it.
KROFT: By whom? Do you know?
LEITNER: I was told it was made a high levels within the government, within the Pentagon and within the rest of the government. The decision was made to approve this case. And that was that......"

60 Minutes (CBS) Steve Kroft 6/6/99 "....KROFT (voice-over): Undersecretary Reich told us that if the department had know the precision machine tools were headed for a missile factory, the export license would not have been approved.
REICH: I mean, you`re in an easy position. You can look at what happened in 1995 and `96 and `97 and say, "Gee, you should have turned that one down." Well, I think if we`d known what we know now at the time, you know, we probably would have.
KROFT: But sources at the Pentagon swear the Commerce Department did know that the equipment was going to end up at Nan Chang or someplace like it and had copies of these documents showing that the Chinese government was shopping the precision machine tools around to various defense installations. In the end, McDonnell-Douglas, as required by the export license, notified the U.S. government, which ultimately convinced the Chinese to move the machines out of the missile factory and to put them in storage, where most of them are still sitting in crates...."

Special Report with Brit Hume (Fox News Network) 6/2/99 "....LEITNER: Right. Right. And it was a collegial body of 16 nations that sat together and were able to actually veto sales of each other' s in terms of threatening products to threatening locations. One of the primary goals of the Clinton administration, as it turned out, was to destroy the regime called COCOM.
HUME: Well, wasn't that in part because of the belief that the cold war was over and it was no longer needed, and that it was a time to stimulate trade? I mean...
LEITNER: Well, there was a belief that it -- there certainly was a belief pre-dating the end of the cold war that it was no longer needed by the people who came in with the Clinton administration....
HUME: So it wasn't pro-China so much as it was pro-trade.
LEITNER: For the most part.
HUME: Right.......
HUME: So in addition to whatever they were able to take from the labs in terms of technological knowledge, this was equipment they' d been able to simply buy and have sent to their shores, correct?
LEITNER: Correct, including an entire factory, let's say, from Columbus, Ohio, that made the C-17 -- large parts of the C-17 bomber, the " Peacekeeper," the MX missile, parts of the B-1 bomber that were simply transferred lock, stock and barrel to -- to China.
HUME: And was there -- was the responsibility for deciding whether this should be done or not moved outside the Pentagon? Was it taken -- was it taken away from you personally?
LEITNER: Well, probably the greatest amount of change that took place in the administration was the weakening of the Pentagon in the export control process. The Pentagon basically, under -- under the current regime basically took itself out of the process. It became a very weak player. Very often it wound up siding with the Commerce Department against -- and it left the State Department, of all people, on the -- anchoring the conservative end of the continuum, which was a terrible shock, particularly to the State Department, that suddenly they became the voice for national security because DoD, in large part, abrogated its mission.
HUME: Now, was this under -- this was under -- under Secretary -- well, Cohen wasn't there...
LEITNER: Well, under Perry.
HUME: Yeah, Perry.
LEITNER: Perry was the big...
HUME: Well, was he an advocate for this, or was he not aware of it, or what was going on?
LEITNER: Well, Perry was a very, very strong advocate for -- not only for China and in establishing preferential treatment for China in all things, including military matters, but also was an ideological opponent for the concept of export controls. Even when he was in the Pentagon originally, as the deputy director -- well, the director for defense research and engineering, years ago under the Carter administration, he was an opponent of the concept of export control. He's a long-term free trader....."

The Washington Times, Audrey Hudson 6/24/99 ".....Peter M. Leitner, a senior strategic trade adviser for the Defense Department and a witness in congressional investigations, says retaliation against him prompted letters from Tennessee Republican Sen. Fred Thompson to the Pentagon expressing his concern for his witness. As a result, the Office of Special Counsel is investigating political reprisals and illegal retaliation against Mr. Leitner. "Ever since these testimonies, I have been subjected to, in staccato fashion, one adverse harassing act after another," Mr. Leitner states in his victimized by my own government - particularly the Defense Department - for consistently putting the near- and long-term national security of the United States ahead of all other considerations is something that I still find astounding to this day," he said...."

AP Military Writer, Defense Dept. Employee Investigated 6/29/99 Robert Burns "....The Defense Department is investigating an attempted computer security breach last week at a defense agency responsible for reviewing sensitive technology exports. An unidentified employee of the Defense Threat Reduction Agency is under investigation for allegedly seeking unauthorized access to the computer system of a co-worker, agency spokesman Clem Gaines said Tuesday. Gaines said the employee under investigation by the Air Force Office of Special Investigations had requested electronic access to the government computer used by Peter Leitner, a senior adviser to the defense agency on matters involving exports of sensitive technologies...."

Judicial Watch 10/20/99 "....The Clinton Justice Department of Janet Reno has indicted McDonnell Douglas, the client of the law firm of WACO special counsel and former Republican Senator John Danforth, for alleged breach of U.S. export regulations, but conspicuously not indicted the Loral Corporation, chaired and run by Bernard Schwartz, who has given millions to the Democrats since the election of Bill Clinton, gone on a trade mission to China (where he met Chinese agents) and whose company transferred high technology to the Communist Chinese. Judicial Watch is prosecuting a lawsuit against Loral, Schwartz, Bill and Hillary Clinton, Al Gore, John Huang, Terry McAuliffe, Marvin Rosen and the Democratic National Committee over these allegations. See "Is it a coincidence that the Clinton Justice Department indicts a company, like McDonnell Douglas, with Republican connections, but fails to take action against Loral, Schwartz and their alleged co-conspirators?" asked Judicial Watch Chairman and General Counsel Larry Klayman. "The campaign finance scandal continues...," he added....."

U.S. REPRESENTATIVE JAMES SAXTON (R-NJ) CHAIRMAN HOLDS HEARING ON CHINESE ACCESS TO DUAL USE & MILITARY TECHNOLOGY. , Washington Transcript Service 4/8/98 ".....SAXTON: Dr. Leitner, we referred several times, earlier in this hearing, to the U.S. business role and policy on China being under question in this New York Times article. Are you aware of any incident similar to the Loral-Hughes case, where federal officials used their offices to, in any way, promote or cover up alleged violations of the law by the postfacto approval of an activity hitherto not authorized?

LEITNER: Well, the one that comes to mind is the closest parallel, but it's different, since the company was never accused of any wrongdoing, you know, directly -- at least, it's subject to current investigation-- would be the sale of the machine tools from the McDonnell Douglas plant in Columbus, Ohio, and then retransferred and diverted by the Chinese once they got in the country. After that occurred, there was a big attempt to try to get the --a new license issued, or a modification of the license, to gather up machine tools and move them down to Shanghai and basically say -- instead of demanding the machine tools be repatriated back to the United States, ones that went for an end-user which didn't exist and then were later diverted to an end-user that made missiles, some of the machines, instead, the government processed-- went on in such a way as to allow the machines to stay in China, even though there was no clear end-use for the machines in China. I think the substance of this case is quite different than the --what's being discussed with Loral Hughes on the Loral Hughes issue, but it is an example of government almost legitimizing an action by allowing it to stay -- commodities to stay in a country which had no business being in the country after the whole deal was blown up....."

Freeper ohmlaw98 10/20/99 GEORGE J. CHURCH Reported by David Aikman/Washington, Sandra Burton/Hong Kong and Jaime A. FlorCruz/Beijing, DIPLOMACY: TWISTING OFF THE HOOK....Time, 05-30-1994, pp 40. "...."Any retaliation might threaten a market for U.S. exports in aircraft, telecommunications equipment, wheat and other food products that is expected to grow enormously in coming years. Chief executives of seven of the biggest U.S. companies doing business with China signed a letter to the President estimating that ''in 10 years our cumulative sales to China will reach $158 billion, assuming normal relations.'' Clinton evidently got the message: in discussions with his advisers, he repeatedly ticked off the exact dollar losses for Boeing and McDonnell Douglas airplane makers -- and the electoral votes he could put at risk in states crucial to his re-election."...."

Freeper ohmlaw98 10/20/99 "...Campaign Contributions - McDonnell Douglas*
Democrats $461,550
Republicans $744,995
* Includes donations of parent company Boeing...
Sources: Common Cause and Center for Responsive Politics..."

China Shops, by Kenneth R. Timmerman ".....One of China's biggest and best suppliers of advanced U.S. technology is McDonnell Douglas, America's largest defense contractor and maker [in addition to its line of MD-80 and MD-90 civilian airliners] of the F-15, F-18, and C-17 military jets. According to U.S. government investigators probing a potential security breach, a team of Chinese procurement agents inspected the sprawling McDonnell Douglas C-17 plant in Columbus, Ohio, previously used by Rockwell to assemble the B-1 bomber, from September 11-19, 1993. The Chinese were allowed to photograph production lines inside the huge multi-story hangars, and sought technical documentation on a wide variety of advanced production technology, much of it classified. The nine-day inspection by the Chinese was considered so sensitive that the company only allowed the inspectors in during the evenings and on the weekends, after the plant's unionized workers had gone home. According to a government memo on the visits, McDonnell Douglas officials told investigators that "if parts in production were left in machinery during the non-work hour tours, those parts were covered up prior to allowing photographing of the machinery" because of the sensitive defense-related nature of the plant. McDonnell Douglas officials interviewed about the visits insisted that the technical data actually given to the Chinese was "readily available in the public domain."..."

China Shops, by Kenneth R. Timmerman ".....Following their visit, the Chinese submitted an eight-page, single-spaced list of equipment they wanted to buy. It included thirty-one large, computerized machine-tools that the Joint Chiefs of Staff consider to be "militarily-critical" and that normally can only be exported to U.S. allies, if at all. After initially arguing that the production tools were not sensitive, McDonnell Douglas applied for twenty-four export licenses from the Commerce Department in May 1994. Although the face value of the deal was less than $10 million, it constituted the single largest shipment of advanced aerospace production gear ever sold to China, and the Chinese were determined to get it....."

China Shops, by Kenneth R. Timmerman ".....While McDonnell Douglas insists the Chinese will only be using the equipment to make civilian airliners, NBC News reported in September 1994 that the Chinese purchaser, CATIC, had written to McDonnell Douglas in October 1993, threatening to curtail further purchases of civilian airliners from the company if it did not supply the production gear. Government intelligence analysts believe the Chinese are intending to use the five-axis profiling machines from Columbus to beef up an assembly line for the Russian-made MiG-31 long-range fighter, a purchase they have already negotiated with Russia. [China produces military aircraft and civilian jetliners in the same facilities.] They want U.S. production gear, one analyst said, "because it is better than anything the Russians currently offer." The Commerce Department approved the licenses in August, McDonnell Douglas confirmed. As promised by the Chinese, an agreement extending the MD-82 program was signed with CATIC in November....."

Christian Science Monitor 10/25/99 Kevin Platt "….A state-run Chinese company is denying it violated US export laws by diverting aircraft equipment purchased from McDonnell Douglas Corp. to a People's Liberation Army (PLA) missile plant. Both China National Aero-Technology Import-Export Corp. (CATIC) and the Chinese government claim that an indictment issued last week in Washington is part of a wider campaign to fan the flames of China-bashing in the US…… But a Western military analyst says there is no question but that Nanchang is a PLA-run arms factory. "It is common knowledge in defense circles that the Nanchang factory makes Silkworm missiles, fighter aircraft, and other weapons," says the analyst, who asked not to be identified. Zhang Qiyue, a spokeswoman at the Chinese foreign ministry, said "reports that the terminal user of the [aircraft] equipment is a Chinese factory making Silkworm cruise missiles are fabrications with ulterior motives." …."

Investor's Business Daily 11/8/99 Paul Sperry "…. The Clinton administration plans to move the Defense Department's export licensing offices to a U.S. Army base far from the Pentagon and other Washington agencies that seek technical military advice on exports, Investor's Business Daily has learned. Career licensing officials complain it's the latest in a series of steps that have weakened the Pentagon's role in blocking the transfer of military-related technology to China and other countries viewed as threats to U.S. security. For the first time, their office, which often recommends vetoes of such sensitive exports, will be located outside the Pentagon area. Officials fear that will in effect freeze them out of export review meetings with the Commerce and State departments. And the move is being rushed. Just a couple of months ago, it was scheduled for 2005….."

Freeper ServesURight Reader's Digest 12/99 Kenneth Timmerman - Just finished reading an article titled Our Secrets On Sale in the December, 1999 edition of Reader's Digest magazine. Here's a sample paragraph from the article: "In June of 1998, according to an intelligence source, the Chinese loaded several hundred tons of chemicals for short-range missiles onto a ship that was bound for Iran, in full view of American satellites. Ironically, the chemicals were loaded the same month President Clinton was visiting mainland China. After returning, Clinton declared that his efforts had produced tangible results, including 'stopping the spread of weapons of mass destruction'". Here's another one: "The Bush Administration began easing the controls in order to allow American companies to compete more successfully abroad. The Clinton Administration has gone much further. Since 1993, it has changed the process for granting many exportlicenses, especially reducing the influence of the Pentagon, while giving more control to the Commerce Department." …." 11/12/99 David Ruppe "....The Clinton administration in the past three years has approved for export to China hundreds of high-performance computers capable of aiding that country's nuclear and other weapons programs. And while U.S. law requires the government to check up on the machines to make sure they are not used to improve China's military might, the Commerce Department, which is supposed to perform the checks, has conducted only a handful...... of those 190 HPCs, Commerce investigators completed a check on only one, according to a recent congressional report....."

7/7/99 And Now, For The Truth By Linda A. Prussen-Razzano Right Magazine, "…..On the very same day that Cox was granted permission to examine the technology transfers and their potential impact on American national security, William A. Reinsch of the Commerce Department was sharing this "testimony" with the Senate: "I believe this Administration's policy on the export of commercial communications satellites to China both protects our national security and facilitates our economic well-being. In allowing China to launch U.S. satellites and transferring licensing jurisdiction for commercial communications satellites to Commerce, this Administration has continued and enhanced the policy of the Reagan and Bush Administrations and has been consistent with Congress' expressed intent" (Testimony of William A. Reinsch, Under Secretary of Export Administration, U.S. Department of Commerce, Before the Subcommittee on International Security, Proliferation, and Federal Services, The Adequacy of Commerce Department Satellite Export Controls, June 18, 1998). The truth: While Reagan did allow several launches to occur, he did not transfer licensing of communication satellites to the Commerce Department. Any references implying otherwise are disingenuous or the work of a fanciful imagination. In October of 1992, after a careful, two-year interagency review, and in consideration of the COCOM guidelines, President Bush allowed roughly half of the communication satellites to be placed under Commerce's Control List. Mr. Reinsch conveniently overlooked the fact that COCOM expired in 1994, and the inferior GLX license was provided in its place. Subsequent reports by the General Accounting Office in 1994, 1995, and 1996 advised that pre-license checks and post-shipment verifications were inadequate and repeatedly warned that controls needed to be strengthened……."

INSIGHT Magazine 12/29/99 Kenneth Timmerman "….. Communist China once again has succeeded at making U.S. appeasement appear like Chinese concessions, this time in the terms of agreement for China's admission into the World Trade Organization, or WTO. American business leaders and consumers would be advised to take a closer look at how China has exploited U.S. trade concessions in the past before they leap on the bandwagon of this latest agreement. In August, when it tested the DF-31, a new long-range intercontinental ballistic missile, or ICBM, Beijing revealed just how successful free trade with American defense and high-tech firms has been -- not in expanding U.S. exports, but in advancing China's own strategic interests.. . . . Some experts believe the missile will be topped with a specially designed nose cone that will give China the ability to launch multiple nuclear warheads deep into the American heartland. Despite the fact that China developed the DF-31 with U.S. targets in mind, an investigation I conducted for Reader's Digest has discovered that both the missile as well as the warhead dispenser were developed with assistance from the U.S.-based companies -- and apparently, with the approval of the U.S. government. . . . . "Our factory was in trouble before I started working there," the Chinese scientist told me during the last six months. "Then we got a major contract from Motorola, and things took off." The sudden influx of hard currency "financed the DF-31 program," he said, as well as another, shorter-range missile, the DF-21, which will be used to target Japan……..

WorldNetDaily 11/23/99 Joseph Farah "….I'm talking about Bill and Hillary Clinton, the Rosenbergs of the '90s. The latest development in this ongoing saga was revealed by WorldNetDaily's Charles Smith last week: The Clinton administration has approved the shipment to Communist China of uranium U-235 - the nuclear isotope used in the atomic bomb exploded over Hiroshima in 1945. This is part of a long pattern of technology transfers approved by the White House, often over the heads of other oversight agencies, including the FBI, Justice Department and Pentagon….Now, Investor's Business Daily reporter Paul Sperry reveals the Clinton administration plans to move the Defense Department's export licensing offices to a U.S. Army base far from the Pentagon and other Washington agencies that seek technical military advice on exports. "Career licensing officials complain it's the latest in a series of steps that have weakened the Pentagon's role in blocking the transfer of military-related technology to China and other countries viewed as threats to U.S, security," Sperry writes….As usual with this administration, it hasn't notified Congress of the move, as required by law.

WorldNetDaily 11/23/99 Joseph Farah "….It seems Hamre is filling the shoes of Ron Brown. He's the new go-to guy in the Clinton administration with respect to clearing all national-security hurdles to high-tech transfers to China. Last year, he folded the Defense Technology Security Administration and other related agencies into the newly created Defense Threat Reduction Agency. Under the reorganization, Sperry reports, DTRA's export-control office now comes under the Pentagon's undersecretary for acquisition, who deals mainly with defense contractors. It formerly reported to the undersecretary for policy, "whose office has traditionally been more concerned with security issues like stopping the spread of arms to unfriendly nations." Last month, Hamre ordered DTRA to come up with a plan by Dec. 16 to speed up the time it takes to OK export licenses, which are sent to the Pentagon by the State Department. His new plan gives the armed services just two days to submit a veto of such deals in the future…." 12/2/99 David Ruppe "….The Clinton administration may soon allow China to buy an immensely powerful IBM computer that experts say Beijing could use to improve the targeting of its nuclear warheads. Sources tell administration officials recently approved an unprecedented proposal to allow China to import an IBM RS/6000 SP supercomputer with an estimated processing speed of at least 30 billion operations per second. Nearly all high-performance computers previously exported to China were estimated to perform 7 billion operations per second or less. The IBM supercomputer, one of the most capable on the market, is intended for China's Meteorological Administration, a branch of the government, ostensibly for running programs for forecasting winds and other weather more accurately…… But experts say the supercomputer China is requesting would be able to predict weather to such a degree of accuracy that it also could be used to improve its ability to direct nuclear warheads as they re-enter the Earth's atmosphere and head toward their targets. And they say the United States would have a hard time preventing China from doing so. "Since there is no effective arrangement for verifying what such a computer would be used for, we would be taking a terrific national security risk," says Gary Milhollin, director of the Wisconsin Project on Nuclear Arms Control, which closely tracks nuclear weapons-related technology proliferation. 'Could Pose Real Risks' How could a seemingly benign piece of computer equipment pose such a risk? ….."

WorldNetDaily (Exclusive) 11/24/99 Charles Smith "…..The National Aeronautics and Space Administration "erroneously authorized the export of radiation-hardened electronic parts to Russia" - components vital for military satellites and nuclear weapons - according to the General Accounting Office's review of export controls over the multi-billion-dollar joint U.S./Russia International Space Station. "NASA was unaware of the error for about 18 months until the U.S. company affiliated with the Russian company applied to State for an export license for the same parts," states the Government Accounting Office report. The specialized electronics parts are designed to withstand the intense radiation of space and global thermonuclear warfare. Such technology is controlled by the U.S. State Department through the "U.S. Munitions list" -- and "therefore required an export license." ….."

American Spectator 11/30/99 Kenneth Timmerman "…. The Clinton administration has demoted at least four top analysts at the Central Intelligence Agency who raised alarms about Chinese efforts to acquire sensitive U.S. military technology through civilian contracts, current and former intelligence officials told TAS recently. Specifically, these analysts warned that U.S. aerospace companies, through satellite launch contracts, were transferring military equipment and technical information that could benefit China's nuclear weapons and missile programs. The disavowed analysts also authored reports containing explicit warnings that U.S.-made supercomputers were helping the Chinese to improve their strategic weapons systems, develop information warfare strategies against the United States, and improve their biological and chemical weapons. Until the Clinton administration lifted export controls on the sale of supercomputers to China in January 1996, the PRC had only managed to acquire a handful of these powerful machines. Since then, according to the bipartisan report released in May by Reps. Chris Cox (R-Calif.) and Norm Dicks (D-Wash.), more than 600 supercomputers have been shipped to China. "That figure is current only until January of 1999," Cox said in an interview. "Since then, these sales have accelerated." Cox warned that the administration now plans to allow the PRC to gain access to even more powerful supercomputers starting in January 2000, with no U.S. controls whatsoever……"

Chinese Journal of Aeronautics 12/14/99 Freeper shawnlaw summary "… It appears that the article is a review of gyro error correction techniques. If you look at the credits, the stuff they are using is in some cases almost 20 years old. There is no telling from the article what technology they are using. In terms of rate measurement (i.e. how fast is the satallite changing position), star field accuracy checks taking from a couple tenths of a second to several seconds combined with millisecond or better resolution for the optical system...wait lets do this the easy way. We drive looking outside to see where we are and how fast other drivers are going. On occassion we check our speedometer to see how fast were really going, especially if we know were near a speed trap. Same idea here. The equations are basically a way for the system to check and see if it still where its supposed to be. And every once in a while it has to check its speedometer. This article tells us NOTHING about their technology. Only that some Chinese engineer sat down with his Stanford coffee mug and pulled his notes from a engineering grad class on systems stabalization, read a few old articles his professor wrote and published it. The stuff could apply to a sophisticated system or a simple one. We don't know from these facts……..

Chinese Journal of Aeronautics 12/14/99 Freeper shawnlaw summary "… This is about stabalization of a space platform, not about ballistic correction which is a dynamic stabalization techniqe. Its a slightly different problem keeping a satallite stable enough to say...take pictures of slick with his new girl from 120-150 miles as opposed to actually throwing the big rock at him. Total flight time of a ICBM from MLC to the USA is probably under 30 minutes. I'm a jet guy so this really ain't my bailywick, but it seems to me that ballistic guidance systems are based on reaching a particular spot in the ionosphere in order to reach a given target. That means at the appogee (highest point in the payloads trip) the missile has to already know where its going. What this means is that within 15 minutes of launch that missile is nothing more than a "rock." So even if you had the time to use the star charts to check your position and had optics capable of operation under high heat conditions (did I forget to tell you that ICBMs go real fast and get real hot, and that as a result optics are pretty useless?) Maybe I made the point...I seem to be rambling a bit. The fact is that the CHICOMS are dangerous. Not just becuase BJC sent them a care package of technology, but because he has found a way to get them and the Russians together. THATS the real problem, cause we know the Russians HAVE fixed most of the ICBM problems. Bottom line? The article proves nothing. China's relationship with Russia does……. Correction to my last post. Both platform stabalization and ballistics may use dynamic correction techniques (dynamic just means the thing is moving) …."

Chinese Journal of Aeronautics 12/14/99 Freeper jungleboy summary "… Rockwell International has sold the Communist Chinese every advanced missile guidance system technologies that they have. Now, to actually build some of these complex, State-O-The-Art guidance systems is beyond communists current capabilities. The technical expertise by humans, which REQUIRES experience cannot be replecated via supercomputers or "smart" engineers. It takes repeated attempts to master some of the details in the manufacturing process. However, the commies are getting up to speed very quickly, by having American companies set up these s-o-t-a manufacturing facilities in China. I kid you not. It's in the "agreement" the Corporate whores signed with the commies….." response by shawlaw "… It used to be that stuff like that didn't get out of the country. The contractors used to have to go through DoD and the State Department to sell to a freindly country like spain or Isreal. The budget crunch has changed that. In its the Commerce department in much did you say we can get for that? SOLD! …."

Washington Post 1/9/00 Bradley Graham "…..One of the nation's leading defense laboratories sold one of the world's 100 fastest computers at a bargain-basement price to a U.S. firm controlled by a Chinese citizen in late 1998. Ten months later, fearing that the supercomputer's parts could end up in China, lab officials hurriedly repurchased the machine at nearly three times the sale price. In a detailed report released last week, the Energy Department's inspector general faults officials at Sandia National Laboratories for ignoring risks to national security in the botched deal…... Those involved in the deal treated the computer as just another item of surplus equipment, neglected to apply controls required for potential exports and failed to review operating manuals and data storage disks sent with the computer, the report says. Soon after the sale, the report reveals, lab officials dismissed suspicions voiced by the computer's manufacturer, Intel Corp., that the buyer might transfer some parts to China. Only when press reports last summer called attention to the sale and highlighted the buyer's Chinese citizenship did Sandia officials reclaim the computer….."

ABCNEWS.Com 1/23/2000 David Ruppe "….The Clinton administration just made it easier for military operations in countries such as China, India and Pakistan to obtain strategically sensitive, U.S.-made high-performance computers. New regulations went into effect today enabling U.S. companies to export more powerful computers to countries that pose significant national security risks - without first having to obtain a Commerce Department export license or notify the government. Prior to the change, U.S. companies could export U.S. supercomputers capable of performing up to 2 billion theoretical operations per second, or 2,000 "MTOPS," to military entities in the 50 such countries of concern without obtaining an export license. he threshold has now been raised to 7,000 MTOPS….."

China Daily 1/22/2000 "…. US President Bill Clinton met leaders of major US high-tech companies on Thursday to enlist their support in an uphill battle to secure Congress' approval of a landmark trade agreement with China. White House spokesman Joe Lockhart said Clinton stopped in to talk to several of the industry's top executives while they were at the White House for talks with Chief of Staff John Podesta. "The president's main focus of his comments to the group was the importance of, early this year, getting NTR (normal trade relations) on China worked through," Lockhart said. Clinton discussed "the importance not only to their particular businesses, which it clearly is important, but also to the American economy and to the idea that we can continue this prosperity, we can continue this economic expansion," Lockhart said. The industry executives who met with Clinton and Podesta included Cisco Systems CEO John Chambers, Dell Computer CEO Michael Dell, Intel Corp Chairman Andrew Grove, Compaq Computer CEO Mike Capella, Hewlett-Packard CEO Carly Fiornia, NCR Corp CEO Lars Nyberg and Silicon Graphics Inc. Chairman and CEO Robert Bishop. …."

Moscow Times 1/20/2000 David Sander and Jeff Clausing/new york times service "… The administration of U.S. President Bill Clinton has lifted more of the licensing requirements on software products that are used to keep computer data and communications secure after industry complaints last fall that its efforts to rewrite the rules still placed American companies at a disadvantage. Under the new rules, virtually any program sold on the retail market to encrypt data can be sold overseas after what the Commerce Department said last week would be a "one-time review" to give it an exemption from export license. But more important, for the first time the administration said it would allow the export, without licenses, of most types of "source code," the computer code used to create programs that encrypt data. The only exceptions would be to nations on the State Department's terrorist list, including Cuba, Iran, Iraq, Libya and Sudan. The action is another retreat by the National Security Agency and the FBI, which have long opposed the export of cutting-edge encryption products for fear they would be unable to break coded communications sent by foreign governments and terrorist groups……"

Los Angeles Times 1/23/2000 Gary Milhollin "….Just over two months ago, CATIC, the Chinese military and aviation giant, was indicted for diverting American machine tools to a Chinese cruise missile and military aircraft plant. The powerful machines had produced parts for the B-1 strategic bomber and the MX nuclear missile, and CATIC was charged with lying to get the machines out of the U.S. in 1995 by promising to restrict them to civilian use. Yet with the ink barely dry on the indictment, the Clinton administration has begun to undermine it. According to U.S. officials, the Commerce Department wants to allow one of CATIC's sister companies to buy the same kind of American machine tool that CATIC is accused of diverting. …"

Los Angeles Times 1/23/2000 Gary Milhollin "….A company in Milford, Mass., named Bostomatic has requested permission to sell the machine to China's Xian Aero Engine Co., which makes engines for China's military aircraft, including the nuclear-capable H-6 strategic bomber. Bostomatic was purchased last year by the Agie Charmilles Group, a Swiss concern. According to U.N. inspectors, 11 of Agie's machine tools were found at five of Saddam Hussein's leading nuclear weapon and missile sites in 1992. And in January 1999, Gen. Alexander Zdanovich, a spokesman for Russia's foreign intelligence services, said that Agie also had supplied Iran with equipment for making liquid-fueled ballistic missiles. ….."

Los Angeles Times 1/23/2000 Gary Milhollin "….The Pentagon is fighting the export license. The same officials who tried to block the export of the machines that CATIC diverted in 1995 are objecting to this one. The officials were right the last time, but got overruled. Xian Aero Engine is pledging to use the milling machine only to make civilian aircraft. That is what CATIC promised. Since Xian and CATIC are part of the same state-owned organization, no one should be fooled. Nor should anyone be fooled by the CATIC indictment. It took more than four years for the Justice Department to get around to it, and Justice is dragging its feet in a string of other apparently illegal exports of U.S. high technology.

Los Angeles Times 1/23/2000 Gary Milhollin "….In 1996, Silicon Graphics Inc. of Mountain View, Calif., sold four supercomputers to one of Russia's leading nuclear weapon laboratories without the required export license. The U.S. computers were 10 times more powerful than anything the Russians had….. The case was sent to a a federal grand jury in 1997, where it has languished. Also in 1996, Silicon Graphics sold a powerful supercomputer to China's Academy of Sciences, which develops nuclear warheads and long-range missiles, and IBM sold an equally powerful supercomputer in 1997 to the Indian Institute of Science, India's leading missile research site. Neither Silicon Graphics nor IBM bothered to obtain the required export licenses. ….The Cox committee on Chinese spying found that Hughes Electronics and Loral Space and Communications, two big American satellite makers, "deliberately acted without the legally required licenses and violated U.S. export control laws" when they helped China improve its rockets in 1995 and 1996. To boost their profits, these U.S. firms gave China technology that could, in the committee's words, increase "the reliability of all PRC ballistic missiles." A federal grand jury has had these cases for more than a year and a half….."

Reuters 2/1/2000 ".... President Clinton eased some U.S. computer export controls on Tuesday to relax what the White House called ``unnecessary regulatory burdens'' on the high-performance computer industry. ``This decision reflects my commitment to a control system that will enhance U.S. national security by implementing controls on computer exports that are effective and enforceable,'' Clinton said in a statement. Bowing to the wishes of manufacturers, the administration relaxed a series of export limits. Unless Congress takes action to block the changes, most will take effect within about six months. Clinton announced in an executive order that the United States would decontrol the export of all computers operating below 12,300 Millions of Theoretical Operations Per Second (MTOPS) to all countries except for so-called rogue nations. ...."

General Accounting Office 11/11/1999 …. Export Controls: Statutory Reporting Requirements for Computers Not Fully Addressed Letter Report, 11/05/1999, GAO/NSIAD-00-45. …… Pursuant to a congressional request, GAO reviewed the executive branch's report on high performance computer export controls, focusing on: (1) whether the July 1999 report to Congress satisfied the requirements of the Fiscal Year 1998 National Defense Authorization Act; (2) whether the report was factually supported; and (3) how many high performance computers at the current control levels have been approved for export to certain sensitive countries. GAO noted that: (1) the President's July 1999 report to Congress did not fully satisfy the reporting requirements of section 1211 of the Fiscal Year 1998 Defense Authorization Act; (2) the report did address two of the three requirements--to determine the availability of high performance computers in foreign countries and the potential for use of the newly decontrolled computers for significant military use; (3) it did not, however, assess the impact of such military use on the national security interests of the United States; (4) instead, the report discussed the economic importance of a strong U.S. computer industry to U.S. national security; (5) a 1998 Department of Defense- and Commerce-sponsored study and data from the U.S. computer industry generally provided evidence to support the report's statements that the capabilities of high performance computers and their related components are increasing; (6) however, the President's report implied that there is a greater level of foreign supply of high performance computers than is supported by evidence in the Commerce- and Defense-sponsored study; (7) the study found that U.S. companies and their international business partners overwhelmingly dominate the international market for most high performance computers; (8) further, GAO was unable to assess the justification for the new export control levels because the President's report did not define key terms or explain how they were applied; (9) from November 1997 through August 1999, the United States approved for export 4,092 high performance computers, as defined under the current export control levels, to certain sensitive countries such as China and Russia; (10) China, by far the largest importer of high performance computers, received 1,924 of these approvals; (11) 141 of the computers going to certain sensitive countries, or 3.4 percent of the total, required a license; and (12) the requirement for a license is an indication that the end-use or -user might be connected to the military or a proliferation related end-use or -user….."

World Net Daily 2/9/00Charles Smith "…..According to a Rand Corporation report forced from the U.S. Department of Commerce by a federal lawsuit, a Chinese army company called Poly Technologies made millions of dollars selling guns in America. Poly Tech's prime U.S. subsidiary, PTK International of Atlanta, Ga., was run by Chinese princeling Baoping "Robert" Ma. The Rand report noted that the Poly Technologies businesses included "importation and distribution of semi-automatic rifles for the U.S. domestic market. ... Between 1987 and 1993 PTK sold more than US$200 million worth of these guns in the United States."…..In 1994, Poly Tech took advantage of Clinton's executive order banning assault weapons or semi-automatic rifles. The 1994 Clinton ban on so-called "assault" rifles also included surplus arms imported from China. "Loopholes allowed importers to bend the rules," states the Rand report. "Specifically, Congress exempted weapons in transit post hoc. The U.S. Treasury initially estimated this exemption would cover 12,000 weapons, but importers actually brought in 440,000."….."

Virginian Pilot 2/26/00 Marc Davis "…..A California couple who shipped military supplies to China from a warehouse near Old Dominion University have been indicted on 47 counts of money laundering and illegally exporting arms. They are accused of exporting missile, aircraft, radar and tank parts in 1998 and 1999 that they legally bought at surplus from United States military agencies. They made shipments through Norfolk International Terminals off Hampton Boulevard. By law, arms cannot be exported from the United States without a license from the State Department. It is impossible to get such a license for export to China because the United States has an arms embargo against China. The couple, Bing Sun and Patte Sun, were born in Taiwan but became American citizens in 1994. They were indicted Thursday by a grand jury in Norfolk's federal court. The wife, Patte, 47, was arrested Thursday in California. The husband, Bing, 51, is still at large. They live in Fontana, Calif., near Los Angeles. The investigation is continuing, said prosecutor Alan M. Salsbury. ………… According to the indictment, the Suns exported military supplies through the state port terminal on 22 occasions from June 1998 to January 1999. They also tried to export six containers of parts from the terminal last May, but they were stopped. The first 22 shipments made it to China. The last two were seized by federal agents, the indictment says. Among the parts seized were helicopter tail-gun pods, missile fins for air-launched guided missiles, underwater mines, wing assemblies for guided bombs and wings for tactical missiles, according to the indictment. Agents also plan to seize the warehouse at Killam Avenue, along with four tractors used to transport the supplies, if the couple are convicted. ......In 1998, an international arms broker from New York, Parviz Lavi, was accused of masterminding a scheme to sell F-14 engine parts to Iran. He later pleaded guilty to violating the federal Arms Export Control Act. He was sentenced to five years in prison and fined $125,000. The investigation of Bing and Patte Sun was conducted by the Defense Criminal Investigative Service, the Customs Service, the Defense Logistics Agency and the Defense Contract Audit Agency. ……"

Insight 2/2000 Douglas Burton "……He [Trie] also confessed to orchestrating the sale of a 500-liter (130-gallon) medical fermentation device to a pharmaceutical plant in China suspected of manufacturing chemical and biological agents for military purposes. Insight has obtained copies of the secret depositions given by Trie to the FBI's Campaign Finance Task Force that, until recently, was thought to have begun shutting down operations after skirmishes with the Reno Justice Department concerning the scope and direction of the long-running investigation. In fact, based on the FBI's 302 summaries of Trie's lengthy depositions, the task force appears significantly to have expanded its operations and is zeroing in on key targets involved in suspected illegal campaign donations from overseas, most notably China and Indonesia. ….."

Insight 2/2000 Douglas Burton "……Trie, who pleaded guilty to making illegal campaign operations and is cooperating with federal authorities, has revealed extensive details about the machinery of campaign-finance irregularities involving the Democratic National Committee, or DNC, and Clinton's political operations. He lays bare the elaborate methods he and others used to collect and channel illegal contributions from Asian-Americans and overseas nationals. It is the revelation about the estimated $1 million sale of dual-use medical technology to China, however, and the involvement of a respected U.S. government scientist in a company Trie used to facilitate the sale, that most deeply has shocked federal investigators and national-security officials contacted by Insight. ……"

Insight 2/2000 Douglas Burton "……Peter Leitner, a senior Defense Department licensing analyst who specializes in export controls of dual-use technology, has reviewed Insight's copies of the confidential FBI interviews with Trie. Leitner says the transfer of the highly sophisticated pharmaceutical-grade fermenting machine poses significant risks to U.S. security at home and abroad if used to make advanced germ-warfare products such as anthrax and botulism. The evidence of the fermenting machine's sale and transfer sometime in 1993 to the Changchun Biological Products Institute is alarming, according to Leitner, given that the Chinese facility has been flagged by some experts as a biological-weapons laboratory run by the People's Liberation Army. Leitner tells Insight: "This whole affair has the classic earmarks of a Chinese military-intelligence operation." What the FBI has done with the information newly obtained from Trie is not clear. However, Insight has learned that Rep. Dan Burton, the Indiana Republican who is chairman of the House Government Reform Committee, is aware of the new development and has scheduled hearings on this and other revelations made to the FBI by Trie. ......"

Insight 2/2000 Douglas Burton "….Wheeler and Leitner, who appears in the documentary, were asked to comment on the FBI summary materials. Leitner tells Insight that Trie's export of biotech materials to China illustrates "a major diversion of U.S. military and technological assets to biowarfare plants in China." According to Wheeler: "This is a new basis for the congressional oversight committees to revisit the federal task-force investigation of campaign-finance violations in light of compelling evidence that the Reno Justice Department has failed to conduct a thorough investigation."

Insight 2/2000 Douglas Burton "…..Trie told the FBI he formed an international-trading business in 1991 that "brokered the export of biotech machinery and elevator equipment to China." It was this company, Daihatsu International Trading Inc., that arranged the sale in mid-1992 of the 500-liter fermenting machine from Sulzer Biotech Systems in Woodbury, N.Y., which, only after Clinton took office in January 1993, shipped the equipment from its Swiss manufacturing plant to the Chinese facility…….. Trie told the FBI that he didn't see the fermenter sale as a big deal. What appears to have impressed him is that on trips to China he met with high-level intelligence, military and business officials, some of whom gave him hundreds of thousands of dollars that he used to make illegal donations. ….."

Insight 2/2000 Douglas Burton "…….According to Wheeler, Rene Losher, former executive director of Sulzer Biotech Systems, has advised government investigators that a Swiss engineer was sent to Changchun to help install the tank. The buyer was Zhang Jiaming, director of the Changchun Biological Products Institute. Leitner says the FBI also should have been concerned with the likely participation in the deal of Peter Fu, a toxicology expert at the U.S. Food and Drug Administration's research facility on the grounds of the Pine Bluff military arsenal in Arkansas. The arsenal originally was established to produce and store biological weapons, Leitner says. According to the FBI summaries, Trie said Fu and his wife, Violetta, were "silent partners" in the formation of Trie's Daihatsu International Trading Inc. and invested thousands of dollars in start-up capital. According to government sources who have seen Trie's full FBI interviews, the Fu's gave Trie $40,000 in "start-up capital" for this joint venture……."

Insight 2/2000 Douglas Burton In fact, Fu tells Insight in an exclusive interview that he was not a "partner" with Trie and did not invest money in Daihatsu, per se. But he admits that he and his wife lent the Tries $40,000 as a favor and that the loan was repaid. At the same time, Fu acknowledges that the registered mailing address for Daihatsu was Fu's home in Little Rock, Ark.. …..A summary of Trie's depositions to the FBI reads, in part: "Trie acknowledged being a close friend of Dr. Peter Fu, a research biochemist who was chief of the toxicology branch of an FDA facility near Little Rock," adding that "the Fus withdrew from the partnership in 1992 or 1993." Trie also told the FBI that Zhang was present when Trie formed United Biotech and that Trie had introduced Fu to Zhang in Little Rock……. The 500-liter fermentation tank transferred to the Changchun facility would be prohibited for sale by the Department of Defense's Militarily Critical Technologies List because it allows the manufacture of large quantities of biological agents, such as botulism or anthrax bacteria, for military purposes, Leitner says. Several 500-liter tanks of this type were discovered in Iraq and seized as contraband by U.N. Special Commission inspectors in 1991. According to government sources, China has listed the Changchun facility on the international registry of facilities producing biological or chemical agents but claims its only use at this time is for the production of pharmaceuticals such as hepatitis vaccines. ….."

Insight 2/2000 Douglas Burton "…….Leitner calls Trie's deposition regarding the fermentation tank and the involvement of Fu "a revelation" that should have been followed up but apparently wasn't. "Here we have an FDA guy who is head of the toxicology branch of his lab, who gives Trie $40,000 and gets introduced to the manager of a bioweapons program in China. They gave direct assistance to a biological-weapons program, and the FBI did not follow up. It's right there on page four of the FBI summary. You can't get more blatant than that." ………. "

Reuters 2/24/00 "…..The United States will allow a computer scientist to put instructions for writing a powerful computer data-scrambling program on his Web site, but his high-profile lawsuit challenging U.S. export restrictions on encryption may continue, his lawyer said on Thursday. President Clinton in January dramatically liberalized once-strict U.S. export limits on encryption programs, which scramble information and render it unreadable without a password or software "key." The changes recognized that encryption, used in everything from Web browsing software to cellular telephones, has become essential for securing electronic commerce and global communications. The move also followed a May 6, 1999 decision by a U.S. Appeals Court panel that the old rules barring University of Illinois professor Daniel Bernstein from posting instructions for his "Snuffle" program on the Internet were an unconstitutional violation of the scientist's freedom of speech. ….."

Washington Times 2/24/00 Kenneth Timmerman "….. Investigators at the National Transportation Safety Board now believe that manufacturing problems in China caused the crash of an MD-83 airliner last month, killing all 88 Americans on board. If their suspicions are borne out, Alaska Air Flight 261 could become a powerful symbol for all that has gone wrong with President Clinton's failed policy of appeasement toward China, as well as a tragic monument to the shortsightedness of major U.S. exporters such as Boeing, who have shipped jobs overseas relentlessly in pursuit of the phantom Chinese market. Shanghai Aviation Industrial Corp. manufactured the defective horizontal stabilizer for all MD-80 and MD-90 series aircraft as part of a massive offset agreement negotiated with McDonnell Douglas more than a decade ago. Boeing has since purchased McDonnell Douglas.……"

"I first began investigating the sell-off of U.S. defense production equipment to China in 1994 for Time magazine. At that time, U.S. government sources provided me with documentation detailing how a Chinese military manufacturing company, CATIC, was seeking to buy advanced machine-tools from a McDonnell Douglas plant in Columbus, Ohio. Customs inspectors and Defense Department analysts raised concerns from the outset because the Columbus plant had been used to produce the B-1 bomber and the C-17, the largest military jet cargo plane in the world. The equipment and the manufacturing processes used in the plant were considered critical military technologies and were safeguarded by strict export controls - until Mr. Clinton came around. In a letter sent to McDonnell Douglas executives in late 1993, CATIC made clear that if the U.S. company wanted to sell more airliners to China, they would have to overcome the U.S. government objections one way or another. If not, CATIC intended to cancel a follow on contract to purchase more MD-80 and MD-90 series aircraft. CATIC's approach was out-and-out blackmail.......As I pursued my investigation in the summer of 1994, I discovered that the Columbus plant was not the only one the Chinese were attempting to buy. They had approached Allison in Indianapolis to purchase sensitive helicopter manufacturing equipment and jigs, and Heinz Aerospace in Philadelphia to purchase helicopter engine manufacturing gear. They were also attempting to buy an entire factory from Garrett Engines, a unit of Allied Signal, so they could manufacture small gas turbine engines that could be fitted into a new generation of advanced cruise missile…….My investigation was scheduled for publication in mid-July 1994, but was pulled abruptly on a Friday afternoon. Only later did I learn why: Time editors had been contacted by political appointees at the Department of Commerce, who protested my story and requested that Time withhold it from publication until the administration could better spin the facts. In their defense, Time editors called my investigation "advocacy" journalism….." - Washington Times 2/24/00 Kenneth Timmerman


Sources (Security Intelligence News Service) 3/10/00 "……Senior U.S. defense officials increasingly are worried about Chinese military advancements using American supercomputers that no longer are banned from export to China's military, SOURCES has learned. High-ranking defense department leaders are said to believe that the U.S. military could face Chinese weapons systems that were built with U.S. supercomputers should China make good on its growing threat in recent weeks to use force to prevent Taiwan from becoming independent from the mainland. ……… According to Pentagon and Capital Hill sources, U.S. defense and intelligence officials are worried that supercomputers like those used by the U.S. to design the proposed new Joint Strike Fighter (JSF), for example, "now can be exported to military end-users in Russia or China without a license," as Congress' investigative arm, the General Accounting Office (GAO), recently informed lawmakers. The concerns of some Pentagon officials are at odds with higher-ranking Pentagon brass who support a defense department analysis prepared in support of the White House's recent decision to relax export controls on supercomputers. ……On Capital Hill, there are also worries that the White House's still secret new trade deal with China contains provisions which may be inimical to U.S. national security interests. The White House's refusal this week to make public the details of its landmark trade agreement with China is certainly impeding efforts to win congressional approval for the deal, key senators say. ….."

World Net Daily 3/2/00 "…..Communist China worked through Clinton-Gore fund-raiser Yah Lin "Charlie" Trie to import equipment used in the production of bacteria for deadly biological weapons during the first two years of the administration, and possibly longer, it was revealed in hearings held yesterday by the House Government Reform Committee. Trie swore to the FBI last year that his role in helping a Chinese laboratory buy such equipment ended with the November 1992 sale of a single fermentation tank....... But committee investigators produced documents showing Trie, who ran a Little Rock, Arkansas-based export-import business, was still discussing Chinese deals with New York-based supplier BioPro International Inc. through at least May 1994. ……. In a Jan. 18, 1994, letter to Lohser, Trie's assistant told him that Trie and a delegation of Chinese officials would be in New York by the end of the month to meet with him. A week before, Lohser had sent Trie a list of biotech products he could offer Chinese labs, including:
* Incubation shaker cabinets.
* State-of-the-art fermenter systems.
* Control systems.
* High-tech dryers and mixers.
* Sophisticated sensors, such as "turbidity" meters.
"We can also provide Changchun with spare parts for their fermenters," Lohser wrote.
Trie confessed to FBI agents that he had helped sell a 132-gallon bio-fermenter to the Changchun Biological Products Institute in Changchun in China's Jilin province, which borders North Korea. The government-run lab is suspected of being involved in the Chinese army's biological warfare program. But after grilling from Rep. Bob Barr, R-Ga., Trie admitted to selling at least two bio-fermenters, one of which sold for more than $550,000, to the Changchun lab. He collected a $15,000 commission for each sale......."

World Net Daily 3/2/00 "…..The panel, chaired by Rep. Dan Burton, R-Ind., asked an expert on Russia's biological weapons program to review the manufacturer's specifications for the bio-fermenters. He concluded they could, in fact, be used for "weapons-related production of bacteria." "The fact that they have double mechanical seals and are equipped with an exhaust gas filter jacket -- into which various types of filters could be installed -- means that they could be used with highly hazardous pathogens," advised Kenneth Alibek, former deputy director of the Soviet Union's biological weapons program. Alibek, who now heads Virginia-based Hadron Inc., also said the bio-fermenters could be used to mass-produce biological weapons. They "could conceivably be used to produce tons of bacteriological weapons in the course of a year," he wrote the panel in a letter obtained by WorldNetDaily. Barr pointed out to Trie that the export of such sensitive dual-use gear is controlled by U.S. export laws. Asked if he got a license to ship the gear, Trie said that would be the job of the manufacturer. "My job is to find the buyer and seller," he said. "I just get a commission." ……."

World Net Daily 3/2/00 "….."If they don't get it from me, they get it from someone else," Trie replied. "They gonna get it." At that, one of Trie's lawyer's whispered something in his ear. Then Trie quickly added: "If I thought it (the tanks) would make poison for people, I wouldn't agree" to help sell them. Barr questioned if Trie really thought that, or was just repeating what his lawyer told him to say. "Yeah, he told me ... and I agree," Trie said -- to the chagrin of his lawyers, who blushed as several spectators snickered. One of Trie's lawyers, Reid Weingarten, represented the late Commerce Secretary Ron Brown when he was a target of an independent counsel probe in 1995 and 1996. It also turns out that the Changchun lab wasn't the only one for which Trie helped procure biotech gear. He also helped the Wuhan Institute of Biological Products in Wuhan, China. Zhang Jianming, the director of the Changchun lab, has "good contacts" with the Wuhan lab, Lohser wrote in one memo. Zhang, a geneticist, first visited Trie in the U.S. in November 1992, after Clinton and Al Gore were elected, whereby they formed a shell company called United Biotech. According to Barr, Zhang is a Chinese Communist Party boss. Besides being lab director, he also holds the title of deputy to the National People's Congress. ......"

Congressional Record – Senate 2/21/91 Sen Dixon/Bernard Schwartz "…..Mr. DIXON. Mr. President, Adm. Bobby Inman, former Deputy Director of the CIA--here is the former Deputy Director of the CIA, not Senator Dixon talking, here is Admiral Inman; I quote him directly: Nevertheless, three does not currently exist a systematic method for assessing import dependency in critical items. This was noted in at least two of the major reports on the defense industrial base. The CSIS report concluded that no service has a complete set of analysis on the ability of the defense industry to supply its needs for future conflict situations. The report by the Under Secretary of Defense for Acquisition entitled `Bolstering Defense Industrial Competitiveness' concluded the Department of Defense does not know the extent to which foreign-sourced parts and components are incorporated in the systems it acquires. There is no systematic, established means to identify foreign-sourced parts and components and, hence, no way to determine the extent of foreign dependencies or vulnerabilities……Here is Bernard Schwartz, chairman of the Laurel Corp., and I do believe my friend Senator Heinz referred to him as well. Bernard Schwartz, testifying before our committee: [Page: S2105] The Government needs to systematically collect and analyze data related to foreign ownership and foreign dependency. It is one of the most astounding facts of the computer age that the U.S. Government does not now know the extent of the foreign penetration in our defense marketplace and the degree to which we depend on foreign suppliers for key materials……"

WorlNetDaily 2/26/00 Paul Sperry "….. In 1991, when Bill Clinton let on he was running for the White House, Arkansas fund-raiser Yah Lin "Charlie" Trie tried to develop a sister city relationship between Little Rock and Changchun, China -- a key biowarfare research hub, sources say. While visiting the Chinese city, where he eventually bought a home, Trie brokered deals to export biotech equipment to a Changchun lab suspected of being a Chinese army front for the manufacture of agents used in biological weapons. Changchun is in Jilin province, which borders North Korea. It's also near Harbin, China's new propaganda center for biowarfare. "During one of his early visits to Changchun, Trie met with Zhang Jianming, director of the Changchun Biological Products Institute," according to a copy of FBI summaries of interviews with Trie obtained by WorldNetDaily. The lab, a unit of the Public Health Ministry, is run by the Chinese communist government……"

WorlNetDaily 2/26/00 Paul Sperry "….. Trie formed a close bond with the bio lab chief while in Changchun, where Trie and his late wife bought a home for $20,000. "Trie provided a letter of invitation for Zhang to use in obtaining a visa to the United States," the 150-page FBI reports says. "Once in the United States, Trie accompanied Zhang on his travels." Zhang visited Little Rock and, in November 1992 -- after Clinton was elected president -- he and Trie set up what appears to be a shell company called United Biotech. The company had a bank account and a Little Rock address, but no business plan or real income. The firm was dissolved a year later. But in that time, Trie helped Zhang procure a 132-gallon "medical fermentation tank" from a New York-based manufacturer, according to the FBI. …."

WorlNetDaily 2/26/00 Paul Sperry "….. "He got them the fermenting equipment to grow the bugs" used in germ warfare, a senior Pentagon official told WorldNetDaily. Special agents worry that the Chinese government may have used the apparent shell company to acquire other biotech equipment……. A search of Arkansas secretary of state records for DBAs, sole proprietorships and incorporations registered under Trie's name turns up no less than six import-export or international consulting businesses. They include Jesco International Inc., Asian Pacific International Inc., Daihatsu International Trading Inc., Premier International Investment Inc. and T&L International Inc. At least one, Jesco International, traded with China before going out of business. …."

WorlNetDaily 2/26/00 Paul Sperry "….. According to the FBI report, the 50-year-old Trie had an ethnic-Chinese "silent partner" -- Dr. Peter P. Fu -- who invested in Daihatsu International. An FDA toxicologist, Fu met Chinese scientist Zhang in Little Rock after Clinton was elected. Fu works for the National Center for Toxicological Research in Jefferson, Ark., which is about halfway between Little Rock and Pine Bluff, Ark. The federal lab, on a 496-acre campus, conducts experiments in biochemical toxicology, genetic toxicology, neurotoxicology, microbiology and molecular epidemiology, its website says. Some pathology labs do studies of "microorganisms multiplying and producing infections." The center has an active lab-to-lab scientific exchange program with a medical institution in China. And in 1993, it hosted an "international group of inspectors interested in Biological Weapons Treaty issues." Trie told FBI agents he didn't think Fu, 58, had any ties to Beijing. At that, agents produced one of Fu's business cards "indicating that Dr. Fu has ties with two institutions managed by the PRC government." ……"

WorlNetDaily 2/26/00 Paul Sperry "….. He [former Brookings Institution defense analyst] added that the PLA, through its front companies, is interested in acquiring U.S. biotech equipment for use in "precisely this area.[biotech military]" ….. Even though China joined the Biological Weapons Convention in 1984, it has violated the pact and maintained an offensive germ-warfare program, according to a 1997 report by the Arms Control and Disarmament Agency. That year, Secretary of State Madeleine Albright had to concede to the Senate Foreign Relations Committee that classified reports show Chinese firms have shipped biowarfare equipment to Iran. ……"


Washington Times 3/7/00 Frank Gaffney Jr "……When the final net assessment is performed on the immense harm done to U.S. national security by the Clinton-Gore administration, the cause of the most grievous, long-term damage may come as a surprise: The most serious and enduring harm may prove to have resulted from the systematic, purposeful and wholesale dismantling of U.S. export-control mechanisms and multilateral arrangements that until 1992 governed the transfer of militarily relevant or "dual use" technologies………. As things stand now, the vice president is fully and uniquely implicated in the practice of giving priority to politically influential companies' desire for short-term profits in overseas markets, without regard for the larger national interest. This practice has jeopardized the U.S. military's qualitative edge - the access to superior technology that allows U.S.armed forces to fight and prevail even when substantially outnumbered. ………."

The Washington Post 3/12/00 Gary Milhollin "……HIGH-PERFORMANCE COMPUTERS aren't like most other products that U.S. companies sell abroad. They're more like weapons, the author argues. Israel has begun to outfit Chinese planes with a powerful new radar, one reportedly able to see targets and help direct air battles as far as 250 miles away. The Clinton administration has been trying to stop this deal, but it is facing a formidable barrier: its own desire to promote U.S. exports. In fact, the deal is getting a boost from Uncle Sam. The Commerce Department has allowed Israel's premier maker of military radar, Elta Electronics Industries, to buy two high-performance computers from Sun Microsystems Inc. of Palo Alto, Calif. Elta will be able to use them to outfit the Chinese planes cheaper, faster and better. This means that if the United States ever has to defend Taiwan, American pilots could be targeted by radar built with American equipment. Unfortunately, this alarming sale is just a drop in the flood of computers the administration has decided to let American companies sell abroad. On Jan. 23, President Clinton lowered export controls that had blocked scores of American high-performance computers from being shipped to nuclear and missile programs in countries including China, India and Russia. ….."

INSIGHT 3/24/00 Douglas Burton "…..House Government Reform Committee investigators plan to keep questioning Clinton fund-raiser Charlie Trie in connection with controversial transfers of dual-use technology to the People's Republic of China, or PRC, that he arranged in 1993, news alert! has learned [see "Trie's Deadly Deals," March 20]. As reported in this magazine, Trie's company, Daihatsu International Trading Inc., acted as a conduit for the sale of sophisticated medical fermenters to a medical-research lab in China that allegedly is involved in producing biological weapons. …… Some experts on dual-use weapons transfers to the PRC are concerned about Trie's sale of the two 500-liter fermenters to the Changjung Biological Products Institute, a transfer that seems to have eluded investigation by the FBI on President Clinton's watch. ………Rep. Bob Barr, a Georgia Republican, questioned Trie at length during a Government Reform Committee hearing on March 1. Afterward, Barr stated: "Not only did Charlie Trie directly assist the Chinese military in accessing the top political echelons of the Democratic Party, he also helped them obtain the means to manufacture new weapons of mass destruction. Such weapons directly threaten American lives. Standing by idly while they proliferate is unconscionable. If President Clinton is serious about leaving an important legacy to the American people, he should investigate Trie and his other friends who have endangered American lives in their relentless pursuit of campaign cash." ….."

INSIGHT 3/24/00 Douglas Burton "…..Beijing insists that it never has researched, manufactured, produced or possessed biological weapons and that it would never do so. However, according to Proliferation Threat and Response, published by the Defense Department in 1997, "China possesses an advanced biotech- nology infrastructure and the biocontainment facilities necessary to perform research and development on lethal pathogens." The government report further states: "Moreover, China likely has maintained the offensive biological warfare program it is believed to have had before acceding to the Biological Weapons Convention." ….."

BXA 3/20/00 "……. Commerce Assistant Secretary for Export Enforcement F. Amanda DeBusk today announced a $20,000 civil penalty imposed on U-Freight, Inc., a freight forwarder in South San Francisco, CA., to settle allegations that the company arranged for a shipment of computers to the People's Republic of China, in violation of a condition on the Commerce export license. The Department alleged that in September 1993, U-Freight arranged for a shipment of Sun Microsystems computers to the People's Republic of China when it knew or had reason to know that the shipment was contrary to a condition on the validated export license. While neither admitting nor denying the allegations, U-Freight, Inc. agreed to pay the penalty; a portion of which, $10,000, was suspended. ......"

Washington Post 3/12/00 Gary Milhollin "…… HIGH-PERFORMANCE COMPUTERS aren't like most other products that U.S. companies sell abroad. They're more like weapons, the author argues. Israel has begun to outfit Chinese planes with a powerful new radar, one reportedly able to see targets and help direct air battles as far as 250 miles away. The Clinton administration has been trying to stop this deal, but it is facing a formidable barrier: its own desire to promote U.S. exports. In fact, the deal is getting a boost from Uncle Sam. The Commerce Department has allowed Israel's premier maker of military radar, Elta Electronics Industries, to buy two high-performance computers from Sun Microsystems Inc. of Palo Alto, Calif. Elta will be able to use them to outfit the Chinese planes cheaper, faster and better. This means that if the United States ever has to defend Taiwan, American pilots could be targeted by radar built with American equipment. Unfortunately, this alarming sale is just a drop in the flood of computers the administration has decided to let American companies sell abroad. On Jan. 23, President Clinton lowered export controls that had blocked scores of American high-performance computers from being shipped to nuclear and missile programs in countries including China, India and Russia. .....The truth is, high-performance computers aren't like most other exports--they're more like weapons. They are essential to develop the software and hardware that make things like advanced military radar work. And one of the driving forces behind the development of "supercomputers" has always been the desire to design better nuclear weapons and the missiles that deliver them. ……"

Worldtribune 3/16/00 "……The Clinton administration has permitted a U.S. company to sell high-tech equipment to an Israeli company, to improve radar systems bound for China. The administration has permitted Sun Microsystems to sell high-performance computers to Israel's Elta Electronics Industries Ltd., Ashdod. A leading U.S. arms control critic said the supercomputers will help Elta in its project to supply China with an early-warning airborne system. "Israel has begun to outfit Chinese planes with a powerful new radar, one reportedly able to see targets and help direct air battles as far as 250 miles away," Gary Milhollin of the Wisconsin Project said in an article for the Washington Post. "The Clinton administration has been trying to stop this deal, but it is facing a formidable barrier: its own desire to promote US exports "This means that is the U.S. ever has to defend Taiwan, U.S. pilots could be targeted by radar built with U.S. equipment." ….."

ohmlaw 00 research 4/5/00 "…….Ignore any references to political contributions to Republicans, it is irrelevant in this case. There was an extremely close relationship between Lockheed and the Clinton Commerce Department under Ron Brown. Loral, Hughes and Lockheed were intertwined in China and they all benefitted greatly from the relaxation of export controls. They would not have even been able to meet and discuss missle technology so openly without the Administration's approval. As the story unfolds I believe we will see that this story is as much ado about the Clinton Commerce Department as it is about Lockheed. Just as in the McDonnell Douglas case, Lockheed has already taken the position that the Commerce Department approved these contacts and transfers....

Lockheed Martin Dewells in Beijing Liu Wei 1996 "…… The well-known aerospace giant Lockheed Martin opened and office in Beijing April 12, 1996, with Thomas J. Dwyer being the Chief Representative. This move suggests that Lockheed is getting aggressive in China, a country with great potential market. Russell T. McFall, President of Lockheed Martin Astrc Space Commercial, presided over the ceremony, which was attended by Bai Baier, Vice President of China Aerospace Corporation(CASC), and other space officials in China…….. both sides reviewed the possibilities for cooperation in the following areas:
1. Lockheed's global telecommunications business project called AstroLink. The spacecraft works in the Ka band, transmitting wide band data.. .
2. Communications satellite. …..
3. Telecommunications hardware. ….
4. Launch service. Lockheed believed that China would overcome the difficulties with the Long March 3B failure and showed its confidence in the Chinese launch vehicles by discussing with the Great Wall Corp. on a bulk buy of multiple Long March launchers in 1998. Lockheed would also join the Great Wall Corp. working with the insurance companies to achieve competitive insurance. Back in the States Lockheed has done a substantial amount of work in lobbying the U.S. Government to issue export licenses for commercial satellites. And recently the paperwork for license issue has been transferred from the State Department to the Commerce Department, which suggests a trend of less hindrance from the Government in such issues.
5. RadarSat for China. With Synthetic Aperture Radar (SAR) as its principal payload, the satellite would serve the disaster-mitigation purpose for China plagued with constant natural disasters exemplified by floods, droughts, forest fires, earthquakes and insects.
6. Meteorological satellite. China is developing a polar-orbit MetSat called FY-1, slated for launch around the turn of 1996 and 1997 and a subsequent FY-2, a GEO satellite due for launch a year later.
7. Direct broadcasting satellite(DBS). Lockheed enjoys the rich experience of developing a Direct-to-Home (DTH) system and building a direct broadcasting satellite EchoStar-1.. …….At this point Bai and McFall have agreed that both would be happy enough if some of the above items could be identified for cooperation.

Freeper ohmlaw 00 March 18, 1997 "…..The $600,000 that Schwartz gave various Democratic fund-raising committees in 1995 and 1996 made him one of the party's biggest donors. Schwartz, chief executive of Loral Space & Communications Ltd., said he has never asked for a favor in return, or received one. The numerous Pentagon contracts and favorable decisions he has received from the Clinton administration, including its antitrust approval of Bethesda-based Lockheed Martin Corp.'s $9 billion purchase of his Loral Corp. last year, would have been rendered without the donations, he said……"

Freeper ohmlaw00 March 12, 13 1998 "….* Chernomyrdin and Vice President Al Gore sign 13 documents on bilateral trade, technology transfer, and environmental issues before departing for San Jose, California, visit Lockheed-Martin and other high-tech companies, Interfax reports. Visiting high-tech plants in California with Vice President Gore, Chernomyrdin calls for the U.S. to drop restrictions on sales of supercomputers to Russia. [Editor's note: This comment comes three days after the State Department acknowledged that Russia had refused two official U.S. requests to help investigate the illegal diversion of U.S. supercomputers to Russian nuclear weapons labs.] Russia Reform Monitor, No. 412 March 18, 1998 American Foreign Policy Council, Washington, D.C.

Freeper ohmlaw00 May 24, 1998 "….* Five prominent U.S. companies participated in China's first International Defense Electronics Exhibition in Beijing, anticipating an easing of the U.S. embargo on selling military technology to China, reports the Washington Post. Defense experts said products advertised at exhibits by Lockheed Martin Corp., Hewlett-Packard, Raytheon, Teradyne Inc. and Motorola - including radars and satellite launch technologies - all have military applications. China Reform Monitor, No. 75, May 12, 1998 American Foreign Policy Council, Washington, D.C.

Freeper ohmlaw00 January 14, 1999 "….* "The U.S. actions aimed at restricting Russia's launches of foreign satellites will harm several U.S. companies," Russian Space Agency Deputy Director Yuri Milov tells Interfax. Among the casualties, he says, are Lockheed Martin and the scandal-plagued Loral and Hughes satellite manufacturers which are under investigation for providing nuclear missile technology the People's Republic of China. Russia Reform Monitor No. 576, January 21, 1999 American Foreign Policy Council, Washington, D.C.

Freeper ohmlaw00 April 19, 1999 "….* Lockheed Martin Air Traffic Management, a business unit of Lockheed Martin Corporation won contracts from the China Aviation Supplies Import and Export Corporation for two air traffic control (ATC) automation systems in the People's Republic of China. Lockheed Martin to supply China with two ATC systems, Defense Systems Daily

ABC 4/4/00 "……..Defense Department research centers released technical information of potential military value to Chinese, Russian and other foreign visitors in recent years without determining whether export licenses were required, an internal audit by the department's inspector general found…….. Under U.S. export rules, any such contact is deemed an export to the home country of the visitor. The audit found that Defense Department laboratories and other research facilities lacked procedures for determining whether export licenses were required in these cases. In fact, the auditors found that the Army, Navy and Air Force were not even aware of the concept of "deemed" exports. ……….."

ABC 4/4/00 "……..Among facilities that the Pentagon inspector general audited was the Army Communications-Electronics Command at Fort Monmouth, N.J. It had more than 4,300 foreign visitors in 1998-99, including seven people from China. The auditors found no export license or other documents there that would describe the specifics of the Chinese visit or the technical information that was released to them. Similarly, for a November 1999 visit by two Russians to the aircraft division of the Naval Air Warfare Center at China Lake, Calif., no export license or other documentation could be found by the auditors. The Russians were there to discuss issues regarding aeronautics systems, which the Defense Security Service identified in 1999 as one of four technology areas most sought by foreign entities. The other three were lasers and sensors, information systems and explosives and detonators. ……" 4/4/00 Mary Motta "…….U.S. aerospace companies are losing business to global competitors because a congressional ruling last year designed to prevent sensitive technology from falling into the wrong hands has slowed contracts processing down to a crawl. "This issue is becoming a national scandal," Don Vanlandingham, chief executive officer of Ball Aerospace and Technology said Tuesday, April 4 at the 2000 National Space Symposium. is the official web sponsor of the event. The dispute is the latest battle in a long-running war between defenders of national security and an industry fighting to stay the course with fast-paced technological advances. Members of the aerospace industry pointed out that they have lost business to their European competitors since Congress transferred authority over export licensing from the Commerce Department to the State Department a year ago. Congress acted on concerns that two U.S. satellite companies may have transferred sensitive satellite and missile technology to China. This shift in control means that all technology deemed sensitive by the United States government requires licenses by the State Department, which has a reputation for taking a more hawkish position on the transfer of technology than the Commerce Department. ......"

Lockheed Martin Dewells in Beijing 1996 Liu Wei "…… The well-known aerospace giant Lockheed Martin opened and office in Beijing April 12, 1996, with Thomas J. Dwyer being the Chief Representative. This move suggests that Lockheed is getting aggressive in China, a country with great potential market. Russell T. McFall, President of Lockheed Martin Astrc Space Commercial, presided over the ceremony, which was attended by Bai Baier, Vice President of China Aerospace Corporation(CASC), and other space officials in China. ........., Before the ceremony, McFall had met with Bai at the headquarters of CASC, focusing on establishing a long-term, mutually beneficial partnership. Both acknowledged the need to improve and continue the positive existing relationship, evidenced by the successful launches of Lockheed Martin-built AsiaSat-2 and EchoStar-1 atop Long March 2E and the purchase of two Lockheed Martin A2100 spacecraft by China Orient Telecommunications Satellite Coo. To this end, both sides reviewed the possibilities for cooperation in the following areas: .........4. Launch service. Lockheed believed that China would overcome the difficulties with the Long March 3B failure and showed its confidence in the Chinese launch vehicles by discussing with the Great Wall Corp. on a bulk buy of multiple Long March launchers in 1998. Lockheed would also join the Great Wall Corp. working with the insurance companies to achieve competitive insurance. Back in the States Lockheed has done a substantial amount of work in lobbying the U.S. Government to issue export licenses for commercial satellites. And recently the paperwork for license issue has been transferred from the State Department to the Commerce Department, which suggests a trend of less hindrance from the Government in such issues. ……."

China Reform Monitor, No. 75, May 12, 1998 American Foreign Policy Council, Washington, D.C. May 24, 1998 "……. Five prominent U.S. companies participated in China's first International Defense Electronics Exhibition in Beijing, anticipating an easing of the U.S. embargo on selling military technology to China, reports the Washington Post. Defense experts said products advertised at exhibits by Lockheed Martin Corp., Hewlett-Packard, Raytheon, Teradyne Inc. and Motorola - including radars and satellite launch technologies - all have military applications. ……"

Russia Reform Monitor, No. 412 March 18, 1998 American Foreign Policy Council, Washington, D.C. March 12, 13 1998 "…… Chernomyrdin and Vice President Al Gore sign 13 documents on bilateral trade, technology transfer, and environmental issues before departing for San Jose, California, visit Lockheed-Martin and other high-tech companies, Interfax reports. ………Visiting high-tech plants in California with Vice President Gore, Chernomyrdin calls for the U.S. to drop restrictions on sales of supercomputers to Russia. [Editor's note: This comment comes three days after the State Department acknowledged that Russia had refused two official U.S. requests to help investigate the illegal diversion of U.S. supercomputers to Russian nuclear weapons labs.]……"

Russia Reform Monitor No. 576, January 21, 1999 American Foreign Policy Council, Washington, D.C. January 14, 1999 "….."The U.S. actions aimed at restricting Russia's launches of foreign satellites will harm several U.S. companies," Russian Space Agency Deputy Director Yuri Milov tells Interfax. Among the casualties, he says, are Lockheed Martin and the scandal-plagued Loral and Hughes satellite manufacturers which are under investigation for providing nuclear missile technology the People's Republic of China. …."

Lockheed Martin to supply China with two ATC systems, Defense Systems Daily April 19, 1999 "…. Lockheed Martin Air Traffic Management, a business unit of Lockheed Martin Corporation won contracts from the China Aviation Supplies Import and Export Corporation for two air traffic control (ATC) automation systems in the People's Republic of China. ......"

Washington Post 4/6/00 Vernon Loeb "…… The State Department has charged Lockheed Martin Corp. with violating the Arms Export Control Act by providing a scientific assessment of a Chinese-made satellite motor to a state-owned Chinese conglomerate. ……… The allegations are similar to those lodged in 1998 against two other U.S. satellite makers, Hughes Electronics Corp. and Loral Space & Communications, which have been under criminal investigation for possibly passing sensitive data to China. ………According to Lockheed, the company sent a team of scientists to China in 1994 at the request of a Hong Kong-based client, Asia Satellite Telecommunications Co., to assess the "kick motor" that Asiasat planned to use in launching its Asiasat-2 communications satellite. A kick motor fires after launch to send a satellite into its final orbit. …..After Lockheed completed its study, the company forwarded 10 copies of the 50-page document to Asiasat, which successfully launched the commercial TV and telephone satellite the following year. Asiasat is partially owned by China International Trust and Investment Corp. (CITIC), a state-owned conglomerate whose chairman, Wang Jun, attended a 1996 White House coffee for political contributors hosted by President Clinton. ……" 4/7/00 "…..The State Department is accusing Lockheed Martin Corp. with illegally exporting technology to a Chinese company that could help China improve its missile technology. Lockheed, the largest U.S. defense contractor, conducted 30 violations of the Arms Export Control Act and the International Traffic in Arms Regulations, the department said in a letter to the company dated Tuesday. The Bethesda, Maryland-based company could be fined up to $15 million and barred from export licenses for three years. A company spokesman told reporters that Lockheed had done nothing wrong and would appeal the State Department decision…………The letter, a copy of which was obtained today by ABCNEWS, says that Lockheed had specialists assess Chinese manufactured satellite kick motors for use in Chinese government Long March 2E launch vehicles, or missiles. A kick motor fires after launch to send a satellite into its final orbit………… In addition, Lockheed had in 1994 sent the company, Asia Satellite Telecommunications Company Limited, or Asiasat, a 50-page technical letter that the Pentagon had ordered reduced to about five pages, according to the State Department…….."Lockheed Martin Corporation did not at any time inform the U.S. government of these exports prior to the recent disclosure of these facts through an investigation conducted by the U.S. Customs Service," the letter says……….In performing and sharing the study, Lockheed also violated U.S. rules by identifying flaws in Chinese testing procedures, confirming the results of Chinese tests pinpointing faulty insulation, and identifying problems with U.S. solid rocket motor technologies, according to the State Department letter……." 4/21/00 Charles Smith "…..In addition, a 1996 State Department report contradicts Clinton administration claims that advanced communications exports to China were "civilian" projects. The report states that the Chinese army was keenly interested in obtaining Loral Globalstar satellite technology and the Loral purchase was possibly being financed by Chinese billionaire, Li Ka-Shing. The 1996 Department report was written by then-Ambassador to China James Sasser, a former U.S. Senator from Tennessee. The 1996 State Department report was obtained through the Freedom of Information Act……. The 1996 report written by Sasser alleges that the Ministry of Posts and Telecommunications (MPT) and Li Ka-Shing were both directly involved with the People's Liberation Army in financing the Loral export to China. "Already, foreign companies are interested in the new PLA-backed entity that is likely to emerge over the next year," states the report. "Recent press reports indicate that Hutchison Whampoa may be involved with the PLA about possible funding options." ……… Li Ka-Shing owns Hutchison Whampoa Ltd. and is reportedly the sixth richest man in the world. Hutchison Whampoa is the shipping company awarded the contract to control the ports at both ends of the Panama Canal. ….. Li Ka-Shing has been described by intelligence sources as a "Howard Hughes" for the Chinese Military Intelligence Department, or MID. U.S. Army Southern Command documents on the Panama transfer noted that Li Ka-Shing was an "indirect" threat to the United States. ……." 4/21/00 Charles Smith "…..Loral's Globalstar is not the only satellite system under fire for alleged illegal transfers to the Chinese army. The State Department recently accused Motorola's Iridium system of passing significant missile technology to China. ……. However, neither satellite system seems to be a big hit with consumers or Wall Street investors. The ill-fated Iridium satellite phone system declared bankruptcy last year and now plans to write off the entire $5 billion space-based system. The extraordinary process of de-orbiting and destroying the array of 66 satellites is under way as Iridium operations shut down. ……… "There's not room for three to five Iridium-like systems, only one or two," the article noted. "... Bernie Schwartz built the cheap one (Globalstar) and he will win." ……." 4/21/00 Charles Smith "….."The addition of China Telecom as a full partner solidifies Globalstar's commitment to bringing the promise of mobile satellite communications to China's 1.2 billion people," said Schwartz in a public statement in 1998. The deal specified that Beijing's government companies would manage all Globalstar operations in China, according to Schwartz. With the world's largest population and one of the fastest-growing economies, the deal was estimated to increase Loral's revenues by $250 million annually. The telecommunications deal was the result of a meeting between Schwartz and top Chinese officials made possible by a trade mission coordinated by then-Commerce Secretary Brown in August 1994. Schwartz met with People's Liberation Army Gen. Shen Roujun. Besides construction, operation and maintenance of a Chinese telecommunications infrastructure, China Telecom lists among its specific responsibilities "emergency communication during wartime"; the construction and operation of government communications networks; ensuring security in communication; exercising "centralized control over public satellite communication" and "any duty that may be entrusted by MPT" (Ministry of Posts and Telecommunications) or the new Ministry of Information Industry. ……."

Washington Times 5/9/00 Bill Gertz "……Two years after President Clinton allowed sales of civilian nuclear technology to China, Beijing is blocking implementation of a 1985 cooperation agreement by refusing to provide assurances it won't sell U.S. know-how to other nations. U.S. national security officials said several Energy Department export licenses have been held up because the Chinese government will not make promises about re-exports, a requirement sought by the Clinton administration and American businesses. Mr. Clinton called the implementation of the agreement a "win-win-win" accord that will help national security, the environment and business. …….. However, China's failure to follow through is raising new questions about its policy on selling technology related to weapons of mass destruction to rogue states; specifically, Beijing's cooperation with Pakistan's nuclear program. ……."

Washington Times 5/9/00 Bill Gertz "……Until recently, the administration had been demanding blanket assurances from China on nuclear cooperation as a result of the agreement reached in October 1997 between Mr. Clinton and Chinese President Jiang Zemin during the Washington summit meeting. …..The Chinese were identified in a CIA report made public earlier this year as a major supplier of nuclear, chemical and biological weapons and missiles around the world. The report said China's promise in 1996 to limit nuclear cooperation with Iran "appears to be holding," but another pledge to halt exchanges with Pakistan is not. ….."

Washington Times 5/9/00 Bill Gertz "……As for the required assurances, "we're not going to sell nuclear-power technology until we get the assurances," the official said, "That's one of the essential parts of the agreement. If they want to buy U.S. stuff, they have to agree to that provision." A Senate defense specialist said the Chinese failure to provide the assurances is the result of bad policy by the administration. "This just underscores why the administration should never have certified as acceptable China's record as an arms proliferator in order to go forward with the deal," the aide said. "The president should have gotten these re-export assurances first, and the fact that China is unwilling to give them demonstrates its continuing interest in weapons proliferation." …….The aide said that as Mr. Clinton has done in the past regarding policies toward China "he will allow the Chinese to have what they want without the assurances."….."

Aerospace Daily 5/4/00 Lauren Burns "…… To meet such challenges as export control and technology transfer in the era of globalization and still maintain the vitality of the defense industrial base, says former deputy defense secretary John Hamre, the U.S. government must come to terms with the demands of the new century and stop reinforcing parochial interests. Trying to control or license technology when manufacturing processes have become transcontinental causes more problems and doesn't protect U.S. interests, Hamre said in the keynote address Monday at the National Defense Industrial Association's international conference in Washington. Building a wall around industry won't keep out problems, said Hamre, now president of the Center for Strategic and International Studies (CSIS). The key, he said, is to create incentives with countries that share U.S. values……"

Washington Times 4/23/00 Frank Gaffney Jr "…..In a column earlier this month, we considered the effects of the Clinton-Gore administration's purposeful evisceration of the domestic and multilateral export-control regimes - a record of misfeasance, if not actual malfeasance, that will be among the most lasting and expensive of this presidency's dubious legacies. While it may not be possible to undo all the damage thus wrought, there are nonetheless a number of steps that would help to mitigate the dangers associated with this "anything goes" approach to technology transfers: …….. * First, do no harm. It would be a grave mistake to adopt in its present form S.1712, a bill that would reauthorize - but greatly weaken - the Export Administration Act (EAA) that was allowed to expire in the early 1990s. As currently written, this legislation would confirm in law the Clinton-Gore practice of precluding executive branch agencies responsible for national security from exercising real influence over the export-control process. It would grant the Commerce Department, for all intents and purposes, sole authority over which technologies are subjected to restrictions. The bill would also confer on the Banking Committee exclusive jurisdiction for areas clearly within the purview of other Senate committees charged with oversight of the defense, foreign policy and intelligence portfolios. ……" 4/21/00 Charles Smith "…… Despite an ongoing FBI investigation into the unauthorized transfer of advanced missile-guidance technology to China, Loral Space & Communications Corp. requested and received Clinton administration approval to sell communications satellites to Beijing in 1996, a secret National Security Council memo obtained by WorldNetDaily shows. Congressional investigators have raised concerns that the satellite technology shared with the Chinese may have allowed them to improve their capability of launching intercontinental ballistic missiles. China currently targets 13 such nuclear-tipped missiles at the United States. ………. The July 1, 1996, action memo to National Security Adviser Anthony Lake, obtained through an intelligence agency source, reveals Loral requested that President Clinton delay a pending waiver for a satellite export. "In mid-June, Globalstar's parent company, Loral requested that we temporarily delay evaluation of their request for a national interest waiver for this project," the memo explains. "The company has now asked us to resume processing of their application, and State has confirmed its support for approval of the license…….President Clinton signed the waiver for Loral later that month. Loral was then under investigation for the loss of an encryption control board from a Loral Intelsat satellite that crashed in China. The missing board prompted an investigation by the FBI. 4/21/00 Charles Smith "…….According to documents obtained from the U.S. Commerce Department, Loral was aware that the exported satellite systems were developed from American military equipment. Loral documents obtained from the files of the late Commerce Secretary Ron Brown included a folder labeled "for Secy. Brown" with a page titled "Commercial Applications Of DoD Technology." The Loral document lists "Intelsat," "Cellular -- Globalstar" and "Direct Broadcast Satellite" technology along with a variety of other products developed from Department of Defense projects. ……"

Yahoo/Reuters 5/18/00 Christopher Wilson "……. Just over a year ago, Congress, concerned that two U.S. companies may have unwittingly given sensitive satellite technology to China, moved the authority for approving satellite exports from the Commerce Department to the security-minded State Department. Now, after a 40 percent drop in U.S. commercial satellite sales and complaints by many of Washington's European allies that even noncontroversial satellite sales are heavily bogged down in red tape, some in Congress are questioning whether transferring the export controls was a smart move. ………. John Hamre, until recently the deputy secretary of defense and now president and CEO of the Center for Strategic and International Studies in Washington, believes placing commercial satellites in the same category as weapons is overkill. .......''

WorldNetDaily 5/17/00 Joseph Farah "…..The Clinton administration is lobbying hard for congressional approval of permanent normal trade relations with China. But before such a bill is even considered by Congress later this month, another issue must be resolved. That is the issue of what sanctions should be placed on China for selling M-11 ballistic missiles to Pakistan. A 1999 declassified intelligence report states unequivocally that Beijing transferred the missiles nearly a decade ago. If true, and there is no reason to believe the report is not true, then U.S. law requires sanctions. ...... About six months ago, the Clinton administration and Sen. Jesse Helms, chairman of the Senate Foreign Relations Committee, struck a secret deal that involved approval of a senior administration appointee, Assistant Secretary of State for Non-Proliferation Affairs Robert Einhorn, for a promise by the White House to form a task force to determine how sanctions would be implemented. The deadline for that task force report is also about to expire. ……"

WorldNetDaily 5/17/00 Joseph Farah "…..First, the U.S. must come to grips with the fact that China's long-range global military ambitions are at odds with the best interests of the United States. The leadership in Beijing will never accept self-determination for the people of Taiwan any more than it will agree to self-determination for people on the mainland of China. ……..Secondly, we cannot ignore that the Clinton administration has done everything in its power to advance China's interests -- including military and intelligence interests -- throughout the course of the last seven years. This White House can be trusted to continue such policies in its last year in power. ……..Therefore, it is imperative that the issue of sanctions for past violations of agreements with China be settled before new, permanent trade agreements are addressed by Congress. ……"


Washington Post 6/18/00 "…..The parent company of the top contractor at the Savannah River Site nuclear weapons complex says it might fire some workers over a security breach in which some of the complex's computers were sold as scrap overseas. ……. Morrison Knudsen, owner of Westinghouse Savannah River Co., will take "appropriate personnel actions," said John Roberts, director of administration for the company, based in Boise, Idaho. "We take this matter very seriously."…….. His announcement Friday came two days after confirmation that some surplus computers from the complex wound up in China. The Energy Department, the agency's inspector general and Westinghouse all have investigated the year-old incident. Energy Department spokesman Bill Taylor said the lapse did not result in the release of classified information……."

Nando Times 6/17/00 AP "….. The parent company of the top contractor at the Savannah River Site nuclear weapons complex says it may fire the workers responsible for a security breach in which some of the complex's computers were sold as scrap overseas. …….. His announcement Friday came two days after confirmation that some surplus computers from the complex wound up in China. The Department of Energy, the agency's inspector general and Westinghouse all have investigated the year-old incident. ...... The computers had been sold as scrap to Allied Fabricators and Constructors Inc. of Aiken. ……. The Energy Department's inspector general said Wednesday that at least two disks from a security system at the government-owned complex were found among items at a reseller's business last fall. ……Earlier this month, Westinghouse Savannah River Co., which operates the complex for the Energy Department, lost $1 million in incentive fees from the government because of the security breach. ……"

RCR 6/26/00Jeffrey Silva "…… Ellen Bork, a former Senate Foreign Relations Committee staffer, recently wrote a marvelously illuminating piece for The Washington Post that captured President Clinton's Pollyanna-ish view of high-technology in the New World Order. Bork contrasts, on the one hand, Vice President Gore's concern about the Internet's threat to civil liberties via privacy invasion with President Clinton's glib prediction of the seductive, democratizing influence of the Internet and mobile phones on China. …..The problem, Bork points out, is that Communist China sees digital networks not as a means to empower individuals but rather as an opportunity to monitor and, ultimately, control them. …..But it's not just China. Internet access in Vietnam reportedly has slowed to a crawl as government authorities look for 'libelous' material. …..''In the new century, liberty will spread by cell phone and cable modem,'' Clinton declared in a March 8 speech. ….." 6/30/00 Charles Smith "…... "We have now discovered that China is building a second M-11 missile plant in Pakistan," stated Sen. Fred Thompson, R-Tenn., during a speech this week before the William Casey Institute. "Of course, it's a nuclear tinder-box in that part of the world. China, in this case, is guilty of the continued proliferation of weapons of mass destruction." According to Thompson, an effort to push new bi-partisan legislation at the same time the Chinese trade pact or PNTR is before the Senate is now under way. Thompson noted that the legislative move was in response to the Chinese missile sales to Pakistan and other "rogue" nations. Thompson stated that the new legislation "tightens the loopholes" and "gives the president less options." "There is nothing quite so important -- nothing that is so significant to Congress -- than the national security of this country," said Thompson. "This is something we do not take lightly. It makes it more difficult for the administration to do things like in the past. Such as 'Yes -- we observed M-11 canisters on the ground in Pakistan from China but we're not sure that there are missiles in those canisters.' That kind of foolishness." "It is beyond belief to me that we can have a major, all-consuming public debate in consideration of something as important as PNTR without considering [that] our new strategic partner, so-called, is the world's greatest proliferater of weapons of mass destruction," stated Thompson. "We are repeatedly told that. Cox had hearings on that; we get bi-annual CIA assessments that continue to tell us that; Rumsfeld tells us that; …….. A U.S. defense intelligence source informed WorldNetDaily that the Chinese M-11 missile factory is being built as part of a joint deal to acquire advanced American technology through Pakistan. "The Pakistanis turned over a complete F-16 Falcon directly to the Chinese air force," stated the source. "In return, the Chinese gave them the M-11 missiles and a plutonium warhead design." The M-11 missile facility is under construction near Pakistan's Sargodha air force base west of Lahore and near a plutonium nuclear plant at Khushab. The M-11 missile, also known as the East Wind 11, has a range of over 300 kilometers and is armed with a plutonium nuclear warhead. China is known to have deployed nearly 100 East Wind 11 units as part of a planned tactical force of over one thousand nuclear-tipped missiles to be fielded by 2004. ……"

BUREAU OF EXPORT ADMINISTRATION 6/26/00 "…….Assistant Secretary of Commerce for Export Enforcement F. Amanda DeBusk today announced agreements with Los Alamos National Laboratory (LANL), Los Alamos, NM, and Lawrence Livermore National Laboratory (LLNL), Livermore, CA, concerning alleged shipments of various commodities without the proper Department of Commerce authorizations. ……In 1996, the Department of Energy (DOE) discovered that the labs may have made the unauthorized exports and brought the matter to the attention of the Department. LANL and LLNL fully cooperated in the investigation. ……. The Department of Commerce alleged that LANL, on four occasions from 1994 to 1996, and LLNL, on one occasion in 1994, shipped commodities to Russia without obtaining the export licenses required under the Export Administration Regulations. The exports by LANL occurred under the Department of Energy Material Protection, Control and Accounting Program, designed to reduce the threat to U.S. national security posed by unsecured Russian weapons-usable nuclear material. The commodities consisted of devices for measuring nuclear material, a communications router, a 486 computer and a printer. The export by LLNL occurred under a separate lab-to-lab project. ……. "

Department of Energy Inspector General 6/00 "…… We learned that the disk marked secret, as well as hard drives and floppy disks containing UCNI,( Unclassified Nuclear Information) were among two trailer loads of computer equipment being processed for a September 1999 shipment to the People's Republic of China (PRC). ......... This computer equipment was reacquired and destroyed. However, the inspection disclosed that other SRS computer equipment had been shipped to the PRC in the July 1999 timeframe. The shipper told us that he believed the shipment did not contain hard drives. But, he acknowledged that no inventory records of the shipment were kept. Thus, we had no way to determine the exact content of this shipment. We noted that over 16,000 computers and computer related items were sold publicly by SRS during Fiscal Years 1998 and 1999. …….. During Westinghouse's preliminary inquiry, it was determined that five of the 23 sampled hard drives contained UCNI files that are restricted from release under the Atomic Energy Act of 1954. ……..During our inspection, Westinghouse was unable to locate the other 30 E3S memory disk drives that had been excessed. In the conclusions of its November 1999 preliminary inquiry, Westinghouse's Computer and Information Security Section assumed that the E3S data had been totally compromised to an adversary, but concluded that the potential impact of all 32 E3S memory disk drives being lost was minimal. With respect to the compromised memory disk drives, the Westinghouse preliminary inquiry report stated that "Information that could be revealed is the social security numbers of those individuals with access to the E3S system." Further, the report stated that "The alarm sectors of the E3S system detailing what alarms are in a specific monitoring sector would be revealed" and "The software used to monitor the E3S system is revealed . . . ……We believe that the compromise of the 32 memory disk drives from the SRS umbrella security system is a significant security and privacy concern which warrants further review by security officials with detailed knowledge of physical, personnel, and computer security safeguards systems….."

Department of Energy Inspector General 6/00 "…… In addition to the equipment identified by Westinghouse, the owner of Allied provided us with a listing of other hard drives, optical media discs,6 and diskettes that he had voluntarily returned at various times to Westinghouse officials. The list included 47 hard drives, 63 optical media discs, 16 51/4 inch floppy diskettes, and 25 31/2 inch floppy diskettes. Allied's owner stated that he had returned the listed items to Westinghouse between June and October 1999. He stated that he had directed his employees to look for and pull hard drives during their walk through the storage area because of the concerns raised after locating and returning the 63 optical media discs. He had read recent newspaper articles of instances where security might have been jeopardized because government sensitive information had been released to China. ……..Allied's owner told us he returned the diskettes and drives he had received from Westinghouse because he was concerned they might also contain sensitive information. The OIG was informed by Westinghouse officials that Westinghouse had begun developing procedures to prevent the release of sensitive computer equipment in the future. With respect to the computer equipment returned by Allied's owner, a Westinghouse manager told us that all of these hard drives, optical media discs, and floppy diskettes have since been destroyed. Consequently, it is impossible to determine if sensitive information was contained on the drives/diskettes and the optical media discs. ……."

Washington Times 6/22/00 Carter Dougherty "……. The Clinton administration desires by the end of the year to dramatically ease export controls on high-powered computers that have become ubiquitous in the Internet age, but that also have important military uses, according to sources close to the issue……… Preparations for this change, which are being carried out with the support of the Pentagon, amount to an admission by much of the Washington national security establishment that these computers are so widely available that traditional controls have become futile…….. Exports of advanced computers, also known as supercomputers, have been the subject of intense debate over the past four years as powerful machines have wound up in Chinese and Russian laboratories involved with their countries' military establishments……… But U.S. companies now are producing even more powerful computers, and they say they rely on those sales to maintain their technological advantage. In addition, their foreign competitors are producing more products that compete with American supercomputers……… "

Washington Times 6/22/00 Carter Dougherty "……. The president has the authority to make many changes to export controls without congressional approval. But administration officials, mindful that key committees might object to these changes, have discussed these potential policy changes with members of Congress, congressional sources said..........On a technical level, the change would abandon the standard the government uses for applying export controls on computers. Currently, controls are based on how many million theoretical operations per second (MTOPS) a computer can process.......Mr. Goure, who is organizing a major study on export controls for the Center for Strategic and International Studies, agrees. "There ought to be export controls where you can prevent something bad from happening, and where you can effectively control something," he said. "In the case of computers, we have neither."……"



Washington Times 7/25/00 Rowan Scarborough "…..The Pentagon is excluding the Defense Intelligence Agency from reviewing weapons sales to Israel, raising fears that American technology will be diverted to unintended third countries. A memo circulating within the Pentagon's Defense Threat Reduction Agency says its analysts no longer must contact the DIA for input before approving transfers to Israel of sensitive technologies such as aircraft and missile parts. "There has been a new focus on Israel upstairs," says the memo, a copy of which was obtained by The Washington Times. "That is what's prompted the guidance." "Cases for Israeli companies or the Israeli [Defense Ministry] should be staffed to [technology security operation] only," says the memo. "Israeli cases will not be routinely staffed to DIA."………The memo, say Pentagon officials opposed to the change, means the Defense Department will be hamstrung in stopping transfers since it is the DIA that determines whether an Israeli company would divert the material……."

Washington Times 7/26/00 Rowan Scarborough "…….Defense Secretary William S. Cohen yesterday told a Senate committee he will look into a report that the Pentagon is excluding his intelligence branch from commenting on proposed weapons transfers to Israel……… "I will look into it," Mr. Cohen said during testimony on a proposed national missile defense system. "I am someone who is very familiar with the importance of maintaining the integrity of our arms sales, making sure they don't go into third countries. . . . We are concerned whenever there is a transfer in a region that could shift the balance of power and possibly involve us in some negative, adverse way." The defense secretary was responding to a question from Sen. Robert C. Byrd, West Virginia Democrat, who cited a story in yesterday's editions of The Washington Times……..The Times reported that a memo circulating inside the Pentagon's Defense Threat Reduction Agency told analysts they no longer had to gain input from the Defense Intelligence Agency before deciding whether controlled technology should be transferred to Israel……."

Bureau of Export Administration U. S. Department of Commerce 6/26/00 "…….-- Assistant Secretary of Commerce for Export Enforcement F. Amanda DeBusk today announced agreements with Los Alamos National Laboratory (LANL), Los Alamos, NM, and Lawrence Livermore National Laboratory (LLNL), Livermore, CA, concerning alleged shipments of various commodities without the proper Department of Commerce authorizations. …….In 1996, the Department of Energy (DOE) discovered that the labs may have made the unauthorized exports and brought the matter to the attention of the Department. LANL and LLNL fully cooperated in the investigation. …….The Department of Commerce alleged that LANL, on four occasions from 1994 to 1996, and LLNL, on one occasion in 1994, shipped commodities to Russia without obtaining the export licenses required under the Export Administration Regulations. The exports by LANL occurred under the Department of Energy Material Protection, Control and Accounting Program, designed to reduce the threat to U.S. national security posed by unsecured Russian weapons-usable nuclear material. The commodities consisted of devices for measuring nuclear material, a communications router, a 486 computer and a printer. The export by LLNL occurred under a separate lab-to-lab project. ……."

The Washington Times 7/17/00 Rowan Scarborough "…… The Clinton administration has permitted defense and computer companies to hire hundreds of Chinese technicians to work on military-related technologies whose export is tightly controlled, according to internal documents. Critics of the program argue that the administration is issuing too many of the licenses, given that a congressional panel and U.S. officials say communist China is waging an aggressive intelligence campaign to steal American technology. …….. But the Commerce Department, which issues companies a two-year license for each such employee, defends the program. Roger Majak, assistant secretary for export administration, said a prospective employee is scrutinized by the FBI, intelligence agencies and the State Department. …….."The Chinese have an immigration policy that allows these people to leave, which by the way we press them to have in our human rights program," he said. "These are cases where we felt the risk was not great." ……The confidential documents obtained by The Washington Times show that People's Republic of China specialists are working on export-controlled commercial technologies inside some of the nation's key defense contractors. For example, Texas Instruments employs Chinese workers on integrated-circuits programs. Intel Corp. hires them to develop semiconductors. ……."

FindLaw Legal News 7/17/00 AP "……A federal judge dismissed an indictment against a McDonnell Douglas Corp. executive who was charged in a broader case that accused the aircraft company of trying to circumvent U.S. export controls and ship sophisticated machine tools to China for use in military production. U.S. District Judge Paul L. Friedman, in a ruling Friday, threw out the case against Robert Hitt, who directed the company's China program office, because it exceeded the five-year statute of limitations. …… Hitt was charged in only one of the 16 counts against McDonnell Douglas and a Chinese government-owned company, the China National Aero-Technology Import Export Corp., or CATIC. The case involved McDonnell Douglas' sale in 1994 of 19 surplus machine tools to the Chinese company for $5 million. The U.S. government licensed the export of the tools only for use in a joint Chinese-McDonnell Douglas program to build 40 McDonnell Douglas civilian airliners in China. …….Six of the sophisticated machine tools were diverted, in violation of license restrictions, to the Nanchang Aircraft Corp., where China makes Silkworm cruise missiles and A-5 attack aircraft. ……."


WorldNetDaily 8/11/00 Bill Gertz Rowan Scarborough ".......Peter Leitner, a senior strategic trade adviser within the Pentagon's Defense Threat Reduction Agency, DTRA, is charging the agency with "waste, fraud and abuse.'' In a memorandum, he asserted the Clinton administration is guilty of "the reckless export decontrol of much of our advanced military and military-related manufacturing and operational technology.'' The three-page memorandum to the Pentagon inspector general, Mr. Leitner, a critic of Clinton administration export policies, charged DTRA with padding its personnel rolls "to create the false appearance that U.S. national security is being protected in response to a series of critical congressional and IG hearing and inspections.'' He called the effort "a Potemkin village.'' The staffing issue also is an attempt by "anti-export control forces within the Pentagon'' to further isolate and weaken the Pentagon group in charge of monitoring exports of strategic goods -- those that can be used for foreign nations for weapons development, especially to nations that might use those weapons against the United States. ......... Mr. Leitner also stated that the DTRA has an inherent conflict of interest with the export control branch within it known as the Defense Technology Security Administration. DTRA currently is seeking to carry out "a series of ill-advised exports ... to Russian nuclear end-users'' that the export control branch is questioning. ....... "In addition,'' he writes, "several DOD officials are trying to undermine the State Department-managed arms transfer regulations by having dangerous nuclear-weapons related technologies transferred to Commerce Department jurisdiction where its export to even the most dangerous foreign end users, particularly China, is all but assured.'' .....Mr. Leitner asked the IG to investigate the issued and warned, "The last few months of the current administration will likely see additional attempts by current officials to curry favor with potential future employers at the expense of national security -- the one chip they have to trade.'' A spokeswoman for the Defense Threat Reduction Agency said the agency has no knowledge of an inspector general probe, a sign the IG may have ignored Mr. Leitner's appeal. ......."

China Online 9/15/00 "...... (GE)U.S. corporate giant General Electric is the first foreign company to receive certified permission from the Chinese government to establish an official China branch specializing in purchasing and exporting products from China. GE made the announcement Sept. 8 at the China Xiamen Investment and Trade Talks. The business activities of the new unit, which will be called the GE (China) Purchasing and Exporting Co., include providing purchasing and exporting services to GE, GE worldwide subsidiaries and to Chinese suppliers, as well as providing services concerning improvements to quality, technology and processes, and technological consultations to Chinese suppliers, reported the Sept. 9 Zhongguo Xinxi Bao (China Information News)......."

China Online "...... Multinational companies have set up about 100 high-tech research and development centers in China, the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) announced on Sept. 10. ..... This demonstrates that there is a surge of foreign investment in China's high-tech industry, according to the Sept. 11 Zhongguo Zhengquan Bao (China Securities). Over a dozen nations including the United States, Japan, Germany and France have set up research and development centers, 30 of which are large in scale and a few of them well-known. These include the Microsoft China Research & Development Center, Intel China Research Center, Lucent China Laboratory, Hewlett-Packard Technological Center of Digital Signal Processing, and the Sino-European Research Institute of High-Performance Textile Products. ....."

China Online 9/15/00 "..... U.S.-based Sun Microsystems recently established the first bonded warehouse in China in Shanghai's Pudong Waigaoqiao Bonded Zone. Sun Microsystem's warehouse will provide comprehensive technologies and services to help Chinese enterprises go online and develop their e-commerce business, the Sept. 6 Tongxin Chanye Bao (Communications Weekly) reported. ..... It features a SunEnterPrise 10000 (Starfire) server and Sun StorEdge T3, an advanced memory device. ......"

Boston Herald 9/8/00 Andrea Estes "…… More than five years after a Boston jury convicted two high-tech executives for selling India the know-how it needed to build medium-range nuclear missiles, the men remain free and are earning millions of dollars from new government contracts. Walter Lachman, 67, of Concord and Maurice Subilia Jr., 53, of Kennebunkport, Maine, were found guilty in United States District Court on March 31, 1995. But federal judge Douglas P. Woodlock still hasn't jailed them. "We're very disappointed that sentencing has not occurred," said Amanda DeBusk, U.S. Commerce Department's assistant secretary for export enforcement yesterday. ……. "This is very important and very serious. We're very hopeful the judge will move forward and proceed to sentence these folks," she said…….. Until the judge enters paperwork finalizing their conviction, their companies - Fiber Materials Inc. of Biddeford, Maine, and Materials International of Acton - continue to benefit from taxpayer-financed government contracts. ….."

White House Website 8/23/00 "……Attached is a report on my decision to take no action to suspend or prohibit the proposed acquisition of Verio, Inc., a large U.S.-based Internet Service Provider (ISP), by NTT Communications Corporation (NTT Communications), a wholly owned subsidiary of Nippon Telegraph and Telephone Corporation, (NTT). NTT is a Japanese corporation that is owned and controlled by the Government of Japan (GOJ). I have taken this decision under the authority vested in me as President by section 721 of the Defense Production Act of 1950, also known as the "Exon-Florio" provision, 50 U.S.C. App. 2170. This report is submitted pursuant to subsection (g) of the Exon-Florio provision……Sincerely, WILLIAM J. CLINTON……"

Bill Gertz 10/20/00 THE WASHINGTON TIMES "......The Senate has identified 50 Chinese weapons firms that are eligible to buy advanced U.S. computers under new Clinton administration rules easing controls on overseas high-technology sales. All the Chinese companies are involved in developing advanced conventional weapons or nuclear, chemical and biological weapons and missiles, according to Senate Foreign Relations Committee Chairman Jesse Helms, North Carolina Republican. ........ Mr. Helms and Sen. Russell D. Feingold, Wisconsin Democrat, listed the companies in an Oct. 6 letter to President Clinton asking that they be included on a government list of high-risk buyers. The letter also is intended as a warning to U.S. manufacturers that sales of advanced computers to these firms and institutes should require export licenses. ........ The White House announced in August that it was loosening controls on overseas sales of U.S. supercomputers, systems that have numerous military applications ranging from designing long-range missiles to testing nuclear warheads. .......The administration announced then that it would help U.S. manufacturers identify weapons makers but failed to produce a comprehensive list. ......For example, the current warning list on Chinese companies contains only six entities, Mr. Helms and Mr. Feingold noted. ........"

Bill Gertz 10/20/00 THE WASHINGTON TIMES "......Gary Milhollin, director of the Wisconsin Project on Nuclear Arms Control, which tracks foreign weapons programs, said the export decontrol will benefit China's strategic nuclear warhead modernization and missile program. "The boost to China's military will be dramatic," Mr. Milhollin said. The firms identified by the Senate are the "strategic backbone" of China's advanced military weapons complex, he said in an interview. "I think it's too dangerous to let powerful technology to flow to the Chinese military without a review," Mr. Milhollin said. "These are the most dangerous entities." ......."

San Jose Mercury News 10/14/00 Heather Fleming Phillips "......A federal grand jury in San Jose indicted two men and their companies Wednesday for illegally transferring sensitive technology to Chinese companies. Charlie Kuan, president and partial owner of Suntek Microwave Inc. of Newark, and Jason Liao, owner of Silicon Telecom Industries of Santa Clara, were arrested following the indictments......Kuan is a naturalized U.S. citizen, and government officials did not know whether Liao is a U.S. citizen.......Suntek manufactures microwave technology that has military applications in radar, missiles and radios. Under U.S. Department of Commerce regulations, technology that can be used for both commercial and military purposes cannot be exported to China without first obtaining a license........ The case marks the first time that the government has brought charges against a company for transferring illegal technology products to foreign nationals within the United States. The government considers an illegal export to be not only when restricted goods are shipped out of the country, but when they're handed over to foreign nationals within the U.S......."

US Attorney Northern District California 10/23/00 "...... The United States Attorney's Office for the Northern District of California announced that Charlie Kuan, 59, of Union City, and Jason Liao, 54, of Santa Clara, and their respective companies, Suntek Microwave, Inc., and Silicon Telecom Industries, Inc., were indicted yesterday by a federal grand jury in San Jose on one count of conspiracy to violate the export regulations of the United States and eight counts of violating export regulations regarding exports to China. ........ According to the indictment, Mr. Kuan is the president of Suntek and Mr. Liao is the president of Silicon Telecom. The indictment alleges that a Chinese-based company called Jeway Telecom owned 50 percent of the outstanding shares in Suntek. According to the indictment, between May 27, 1996 and June, 1998, Mr. Kuan and Mr. Liao and their respective companies conspired to violate U.S. Export Administration Regulations by exporting controlled U.S. origin goods and technology to China, a country to which exports are controlled for national security purposes, without the authorization required by the Department of Commerce. The indictment specifically alleges that in December 1996 and January 1997, Suntek manufactured detector log video amplifiers and arranged to have the amplifiers hand-carried to China by the president of Silicon Telecom, Jason Liao. As alleged in the indictment, detector log video amplifiers are complicated electrical equipment with military applications in radar, missiles and radios....... "

US Attorney Northern District California 10/23/00 "...... The indictment further alleges that following this original transport of detector log video amplifiers, in July 1997, Mr. Kuan submitted an export application to the Department of Commerce for the export of detector log video amplifiers to China which contained a false statement as to the actual end-user of the shipment, and that Mr. Kuan and Suntek, in October 1997, released controlled technology subject to export control to three Chinese nationals for the purpose of permitting those individuals to learn the technology and transport that technology to China in violation of export regulations. The indictment further alleges that on five other separate occasions between January and June 1998, Mr. Kuan sent shipments of detector log video amplifiers via Federal Express to Jeway Telecom in Chengdu, China in violation of export regulations. ....."

Nando Times 10/19/00 D. Ian Hopper ".......After years of pressure from the computer industry, the Clinton administration is letting companies export powerful encryption programs to almost two dozen foreign governments. .... Starting Thursday, the security products can be sold to members of the European Union, as well as Australia, Japan, New Zealand, Norway, Switzerland, Czech Republic, Poland and Hungary. Earlier this year, the Commerce Department had approved sales of the products to businesses in those countries. The products can now be sold to their local and national governments as well, and the department's new rules also streamline the reporting process for U.S. companies and allow more products to be exported. ....."

Insight Magazine 11/13/00 Jamie Dettmer "……… China is at it again, seeking to secure dual-use technology by violating Department of Commerce controls on the exporting of items that have both commercial and military applications. This time the target was U.S. microwave-assembly technology, specifically detector log video amplifiers (DLVAs), components used in radar, early-warning systems, electronic warfare and electronic countermeasures. ……. And the effort was successful, but at a cost. In October, the Department of Commerce indicted Santa Clara, Calif.-based businessmen Charlie Kuan and Jason Liao and their respective companies, Suntek Microwave Inc. and Silicon Telecom Industries Inc., on nine counts of violating U.S. export regulations. …….. According to the indictment in the Northern District of California, Kuan and Liao exported to China Suntek-made DLVAs between May 1996 and June 1998. On one occasion they were hand-carried to China by Liao; in five other cases they were sent via Federal Express to a Chinese company in Chengdu called Jeway Telecom, which is controlled by the Southwest Institute of Electronics Engineering, a Chinese government entity. Jeway owns 50 percent of Suntek. Further, the indictment alleges that Suntek trained three Chinese nationals in the DLVA manufacturing process "for the purpose of permitting those individuals to learn the technology" - a breach of "deemed-export" rules. ......"

Washington Times 10/20/00 Bill Gertz "……Senate leaders yesterday accused the White House of withholding documents and announced hearings next week to explore back-channel deals between Vice President Al Gore and Russian Prime Minister Viktor Chernomyrdin on Moscow's arms deals with Iran……. Mr. Smith said the administration has refused for a week to provide a copy of the classified 1995 "aide-memoire" signed by Mr. Gore and Mr. Chernomyrdin that stated the United States would not impose penalties on Moscow required under "domestic law." ……. Mr. Smith and Sen. Sam Brownback, Kansas Republican, showed reporters a poster-size reprint of a portion of the aide-memoire that was published in Tuesday's editions of The Washington Times……… Mr. Brownback, chairman of the Near East subcommittee, said the aide-memoire reveals an explicit agreement to ignore several U.S. laws governing the U.S. response to arms sales to terrorist nations, including Iran. "Without an explicit act of Congress, the vice president did not have the power or authority to commit the United States to ignore U.S. law," Mr. Brownback said. "He doesn't have that authority or power to do that." …….. The senators said they will hold a hearing Tuesday on the issue and plan to issue subpoenas for documents if the administration refuses to produce them………. Mr. Smith dismissed White House claims that the matter was "political." "It ought to be of grave concern to every American citizen," he said. "We are bringing young men and women home in body bags right now. We should not be aiding and abetting those who would do us harm. That may have happened here." …….Mr. Brownback said statements by the White House and Mr. Gore's office defending the policy of not sanctioning Russia was contradicted by a letter sent to Russia in January by Secretary of State Madeleine K. Albright. The letter to Russian Foreign Minister Igor Ivanov, first disclosed by The Times on Tuesday, states that the United States would have imposed sanctions on Russia for its arms sale if there had been no 1995 agreement. "Secretary Albright's letter is an admission that this administration willfully concluded a secret agreement with Russia to ignore U.S. statutes," Mr. Brownback said. Congress was not informed about Mrs. Albright's letter. "We learned about it in The Washington Times," Mr. Brownback said……. "This withholding of information from Congress may itself be a violation of law," Mr. Brownback said, citing a law requiring notification of international agreements. "This law clearly has been broken."….." 10/19/00 "….. Sen. Gordon Smith said the Senate Foreign Relations Committee will hold a hearing Tuesday to investigate a secret agreeement between Al Gore and then-Russian Prime Minister Viktor Chernomyrdin. In the deal, penned in 1995 and reported by The New York Times last Friday, Gore agreed that the administration would turn a blind eye to Russia's violation of U.S. non-proliferation laws in its arms deals to Iran. …… "Clearly this was a case where there was controlling legal authority," Smith said, referring to a term used by Gore in defense of questionable fund-raising calls made from his White House office. "We are concerned that it may not have been observed." …….Iran is categorized by the State Department as a sponsor of terrorism. Countries that transfer arms to Iran violate the 1992 Iran-Iraq Arms Non-proliferation Act written by Gore and Sen. John McCain, R-Ariz. The law calls for sanctions on countries that violate it. ...... Russia also has been delivering nuclear technology to Iran in violation of the United States' nuclear non-proliferation law, according to a story in The Washington Times earlier this week. Chernomyrdin and Gore apparently made a separate agreement for the U.S. to ignore those violations. The deals were supposed to last until 1999, but Russia is still transferring arms to Iran. …….. Sen. Sam Brownback, R-Kan., said that a committee review of sanctions imposed by the United States revealed "not one instance since the 1995 secret deal that the administration imposed sanctions on Russia for its arms sales to Iran. They did not sanction Russia." ….. Brownback also complained that Congress, as stipulated in the agreement, was deliberately kept in the dark about the deal. "This withholding of information from Congress may itself be a violation of U.S. law," Brownback said, citing another law requiring all agreements with foreign nations to be submitted to Congress within 60 days. …… "This law was specifically enacted in order to protect American democracy by holding the president and his people accountable for their international agreements, but that law clearly has been broken," Brownback said. ……Brownback said the president has failed to submit two reports required under law to be filed with Congress on proliferation of weapons to Iran. "Those reports were due on June 12 and Sept. 14 of this year," Brownback said. "They clearly would have contained evidence of arms transfers from Russia to Iran. I would like to know where those reports are. What is the administration afraid of sharing?" Smith said the committee will invite Gore and other administration officials to testify at the hearing. ….."

Washington Times 10/19/00 Bill Gertz "….. The Senate has identified 50 Chinese weapons firms that are eligible to buy advanced U.S. computers under new Clinton administration rules easing controls on overseas high-technology sales…… All the Chinese companies are involved in developing advanced conventional weapons or nuclear, chemical and biological weapons and missiles, according to Senate Foreign Relations Committee Chairman Jesse Helms, North Carolina Republican…….. "

Kenneth R. Timmerman 10/13/00 "….. When Bill Clinton and Al Gore came to power in January 1993, the United States was at the apex of its power. The People's Republic of China (PRC) was then a minor player on the world's stage, both militarily and diplomatically. The Chinese Communist leadership had shocked the world by ordering the People's Liberation Army (PLA) to open fire on pro-democracy students in Tiananmen Square in June 1989 and was still reeling from the international isolation that followed. President Bush, harshly criticized by then-Arkansas governor Clinton for "coddling dictators from Baghdad to Beijing," had in fact issued an executive order cutting off military sales to Communist China following the Tiananmen Square massacre, much to the chagrin of major U.S. defense contractors. The Bush administration also tightened export controls on dual-use technologies, which have both civilian and military applications. ……..China's inability to gain free access to advanced U.S. technologies after 1989 had a direct impact on China's military hardware. When Clinton and Gore came to power, the PLA had no modern air-defense systems; it lacked a military communications network; it had no modern command-and-control systems; it had no imaging or electronic eavesdropping satellites; its strategic rockets were unreliable and its theater missiles were at a nascent stage of development, hampered by technology bottlenecks. And in all of these areas, there was no solution on the horizon. ……..What a difference seven years have made. In this interval we have seen dramatic changes brought about by the Clinton/Gore administration in the way the United States manages its national-security export-control system. Unbeknownst to voters, or even to most policy experts, the new administration came to Washington in January 1993 with a coherent plan for gutting the entire export-control system, which it called a "wasting asset" left over from the Cold War. ......The plan was devised by William Perry, Ashton Carter and Mitchel Wallerstein and published with little fanfare in 1992 by the National Academy of Sciences. Perry, Carter and Wallerstein were appointed to the Defense Department during the first weeks of the new administration and given responsibility for putting the plan into action. ......"

DEPARTMENT OF COMMERCE REPORT 1/1/01 Office of Strategic Industries and Economic Security - Defense Market Research Reports ....U.S. Commercial Technology Transfers to the People's Republic of China January 1999 - "....EXECUTIVE SUMMARY.......There have been numerous reports over the last several years, however, of US companies being "forced" to transfer technology to China in exchange for access to this enormous market. The purpose of his study is to assess the extent to which US commercial technology is being, in effect, "coerced" from US companies engaged in normal business practices and joint ventures in China in exchange for access to China's market. The cumulative effect these transfers may have on China's efforts to modernize its economy as well as its industrial and military base is also examined. Finally, this study addresses the impact of US technology transfers to China on the issues of long-term US global competitiveness and broad economic and national security interests. ........... Conclusion: US Commercial Technology Transfers to China ....... Key Findings:...

According to experts and executives interviewed for this study, the transfer of advanced US technology is the price of market access in China for US high-tech companies.

Most US and other foreign investors in China thus far seem willing to pay the price of technology transfers - even "state-of-the-art technologies - in order to "gain a foothold" or to "establish a beachhead" in China with the expectation that the country's enormous market potential eventually will be realized. .....

Numerous US high-tech firms have agreed to commercial offset or technology transfer agreements in exchange for joint ventures and limited market access in China. ....

Technology transfer is both mandated in Chinese regulations or industrial policies (with which US companies wishing to invest in China must comply) and used as a deal-maker or sweetener by US firms seeking joint venture contracts in China.

Unless significant changes are made to China's current investment regulations and import/export policies, US commercial technology transfers to China are likely to continue, potentially enhancing Chinese competitiveness in high-technology industry sectors such as aerospace and electronics. ...

In the industry sectors studied, it is apparent that what technological advances and increased exports exist are disproportionately due to foreign investment capital and technology rather than to indigenous technological advances.

The US export control review process is not designed to evaluate continuing US commercial technology transfers to China that are demanded or offered in exchange for market access.

Although it is not possible to make a clear determination of the US national security implications of commercial US technology transfers to China, the continuation of the trends identified in this study could pose long-term challenges to US national security interests. This study does not identify any specific Chinese military advances made as a result of US commercial technology transfers, but does suggest that continued pressures on foreign high-tech firms to transfer advanced commercial technologies, if successful, could indirectly benefit China's efforts to modernize its military. ....."

Washington Times 1/26/01 Bill Gertz "..... China is buying U.S. weapons technology illegally through front companies in Hong Kong and Singapore, U.S. intelligence officials said. ...... According to sensitive intelligence reports, China last month acquired "radiation-hardened" integrated circuits from a U.S. company that were shipped to China from Singapore, said officials familiar with the reports. ...... The Chinese company involved in the diversion was identified as the China Aircraft and Space Technology Co.......In a second activity, a Chinese missile-manufacturing firm purchased American-made communications-test equipment from a U.S. company based in Hong Kong. The U.S. company was not identified under intelligence-collection rules....... All military-related goods sold from the United States to China require an export license. However, Chinese companies secretly have been purchasing embargoed technology and hardware under export rules relaxed during the Clinton administration......."

Washington Times 1/26/01 Bill Gertz ".....In a related development, China is continuing to sell missile-related equipment to Iraq and Iran in apparent violation of its pledge last fall to curb such transfers, said officials who spoke on the condition of anonymity. ....... The officials provided a briefing to The Washington Times to highlight what they said were ongoing Chinese sales of weapons and missile technology to rogue states, in violation of official pledges by Beijing to curtail such transfers. "The Chinese appear to be selling everything to everybody," said one defense official......In November, the Clinton administration announced it would not impose sanctions on China for selling missile technology to Iran and Pakistan after Beijing promised to curb further sales. Iran and Pakistan, however, were slapped with sanctions......."

Washington Times 1/26/01 Bill Gertz "..... Regarding the Iraqi missile-related sales, the officials said a delegation of representatives of a Chinese company was set to travel to Iraq last month to discuss the sale of "missile-related guidance and test equipment." The company is offering gear to be used in testing missile inertial guidance systems, which are key components of long-range missile systems. ...... The company was using what U.S. officials said is a "cover name" to mask the true nature of the sales trip. The company was identified as the Shandong Arts and Crafts Co. ......"

Washington Times 1/26/01 Bill Gertz "..... The report noted China's sales of missile-related goods to Iran, Libya and North Korea. According to the officials, in addition to its own weapons-proliferation activities, China covertly is helping North Korea buy and sell missile goods. ...... In November, a North Korean company based in China sent specialty steel used in missiles to Egypt, the officials said, noting that the steel is controlled under the 29-nation Missile Technology Control Regime....... That same month, the U.S. administration waived sanctions on China based on promises from Beijing to tighten export controls on missile-related goods....... Also in November, a North Korean company in Japan purchased a U.S.-made high-speed video camera used in missile development from an unidentified American company. The camera was shipped from the United States to Egypt, and then was transferred to Russia and China before finally reaching North Korea, the officials said......."

Washington Times 1/19/01 Kenneth R. Timmerman "…… Among the many last-minute regulations, rules and executive orders of the outgoing administration is a Commerce Department bid that lifts export controls on military grade computers, virtually guaranteeing that the United States will face dangerous new threats in the coming years that our defense planners are ill-prepared to meet. …… The new regulations, announced amid yawns by the White House on Jan. 10, allow a handful of U.S. companies to export super-computers more powerful than those used in most Defense Department weapons labs to Russia, China and other nations that do not have the best interests of the United States at heart…….. This is the sixth time the Clinton-Gore anti-defense team has raised the limits on exports of high-performance computers (HPCs) to please a handful of computer manufacturers and their cronies who have contributed millions of dollars to the Democratic National Committee. As a result of these earlier steps, the White House now concludes - gee whiz - that there are "no meaningful or effective control measures" any more......."

Associated Press Wire Service from Postnet 1/10/01 "......The following is a transcript of a telephone briefing by Chief of Staff John Podesta, Under Secretary of Commerce Bill Reinsch, and Deputy Secretary of Defense Rudy Deleon on U.S. export controls on high performance computers (1/2):...... MR. PODESTA: Why don't I start. And I think Secretary DeLeon and Mr. Reinsch will be following onto what I am about to say. I will try to be relatively brief and I think we all will be, so that we can get to your questions. I believe you have paper in front of you, but as you know, the President today is announcing the sixth revision to U.S. export controls on high performance computers since 1993....... Until recently, we kept pace with growth in high performance computing hardware availability by periodically adjusting controls. .....Again, if you have the fact sheet in front of you, you will note that what we are doing is combining the old their one which were essentially friends in our allied countries with Tier 2, the countries that posed a proliferation risk, into a new Tier 1. And those exports to the new Tier 1 countries won't require a license, although there will be some continued post shipment reporting requirements. And that change will be effective when Commerce publishes the rule, which we expect to do before we vacate the premises on January 20th....... We are moving Lithuania from Tier 3 to the now combined new Tier 1, based on improvements to its export control system, and continued good cooperation on export controls. That will be effective pursuant to legislation. That will be effective 120 days after notice goes to Congress, which will be in the next several days, I guess. And then we will raise Tier 3 licensing and defense authorization act notification level to 85,000 MTOPS. This is the performance level of uncontrolled computers the DOD has determined can be easily networked together by relatively unskilled individuals. That new level will be effective 60 days after notice goes to Congress........."