Drew, Evidently someone in the Pentagon agrees with you. Courtesy of Reuters. - CB
Pentagon withdrawing security award to Loral
TUESDAY, JULY 18, 2000 12:03:00 PM EST
By Charles Aldinger
WASHINGTON, July 18 (Reuters) - The Pentagon said on Tuesday it was withdrawing an industrial security award given to Loral Space and Communications LOR because the firm was still under investigation for allegedly providing sensitive rocket launching information to China.
The award "for outstanding security performance and practices" had been presented to the big satellite-builder and 49 other defence companies on Monday by the Defence Department's Defence Security Service (DSS).
"It is my understanding that, because the firm is still under investigation, they (DSS) are withdrawing the award" from Loral, Susan Hansen, a Pentagon spokeswoman, told Reuters in response to questions.
"They feel that, in keeping with the principles of the programme, it is not prudent to give Loral this award," Hansen said of the oversight and quick reversal based on a case that began four years ago.
In 1996, a team headed by Loral investigated the destruction of one of the company's satellites when a Chinese launch rocket failed to put it in orbit from China.
The following year, a federal grand jury in New York began an investigation into whether Loral had violated export control laws by supplying the accident report to the Chinese without first obtaining State Department approval. That investigation is still ongoing.
Defence analysts said at the time that details in the accident report could have benefited China's long-range missile programme.
The Washington Post first reported on Tuesday that the Cogswell Award for Outstanding Industrial Security, given periodically to defence firms, was being withdrawn from Loral virtually hours after it was awarded.
The award list was originally approved by the office of Defence Secretary William Cohen.
"It was one of those things that just didn't come up on anybody's radar screen" initially, Hansen told Reuters.
The DSS is the Defence Department's security arm, handling thousands of tasks from investigating civilian and contract workers at the Pentagon to checking the care with which industry protects military secrets and sensitive information.
SUSPENDED SATELLITE LICENSE
The Post quoted Thomas Ross, a spokesman for Loral, as saying that the company learned that the Pentagon was withdrawing the award because it was "policy not to present the award to anyone who is under investigation."
A U.S. House of Representatives subcommittee in 1998 concluded that Loral had broken the law in faxing the technical conclusions of the rocket crash review panel to the Chinese.
Loral's license to sell the satellites was suspended following congressional investigations into the incident and the launching of the grand jury investigation.
The Post also noted that the withdrawal was the latest twist for Loral, whose president recently was cleared after being accused two years ago by some Republican lawmakers of using campaign contributions to influence White House decisions to benefit the company.
Some Republicans said Loral's president, Bernard Schwartz, was one of the biggest political contributors to the Democratic Party from 1994 to 1996. They alleged that the donations were related to a 1997 White House waiver that permitted Loral's sale of a new communications satellite to China, the Post reported.
Hansen said on Tuesday that the selections for annual security awards are now made chiefly from nominations submitted by the firms themselves based on their records during a two-year period. The submissions are reviewed by the Pentagon and other government security agencies, she said.
The Post quoted Loral spokesman Ross as saying that the rocket accident took place three years ago and therefore was not part of Loral's entry.
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