Berger's aides sought advice from officials at the State Department, who
informed them that Loral's offenses appear to be "criminal" and "knowing."
Ms. Tucker was told that the Pentagon investigated Loral's assistance to the
Chinese after the 1996 missile explosion and concluded that the company
provided "potentially very significant help" to Beijing's ballistic missile program
And the Indian government cites that as their reason for going nuclear. Looks like a definite quid pro quo, from today's NYT:
The White House Dismissed Warnings on
China Satellite Deal
By JEFF GERTH and JOHN M. BRODER
WASHINGTON -- The caution signs made it evident that the
application by Loral Space & Communications to export a satellite to
China earlier this year was anything but routine.
Justice Department prosecutors warned that allowing the deal could jeopardize
possible prosecution of the company for an earlier unauthorized technology
transfer to Beijing. The Pentagon reported that Loral had provided "potentially
very significant help" to China's military rocket program. And senior White
House aides cautioned that the deal was certain to spark opposition from
critics of the Administration's nonproliferation and human rights policies toward
China.
But the White House pressed ahead, concerned about the financial costs to
Loral of delaying approval of the deal and certain that it could defend the
decision against subsequent criticism.
Rarely is the public given a detailed look inside the White House
decision-making process on a matter of national security as sensitive as the
export of a satellite to China. These records ordinarily remain sealed for years,
buried under the Government's strict regime of secrecy.
But documents produced by the White House 10 days ago in response to a
demand from Congress provide an unusually rich account of the evolution of a
Presidential decision in which numerous warning signals were raised and then
dismissed.
According to the records, the February decision by President Clinton to
approve the Loral satellite launching was treated as an urgent matter not
because of its importance to the national security, but because the company
was facing heavy fines for delay.
Concerns about European competition for the satellite business and fears that
denying the deal would damage the United States-China relationship overrode
words of caution from other Government agencies.
The presumption throughout was that the deal would be approved, as had 19
previous applications under Presidents Clinton and Bush. The documents
reflect the White House staff's search for a defensible rationale for the
decision.
Federal and Congressional investigators are now examining what led the
President to risk political embarrassment by creating the perception that he
might be letting Loral -- headed by the Democratic Party's largest campaign
contributor -- off the hook in a serious criminal inquiry into whether Loral
executives helped China's missile program.
Decision Traced To a Satellite Crash
amuel R. Berger, the national security adviser, had a preemptive answer
in the decision memorandum he forwarded to the President on Feb. 12.
The memo briefly noted the Justice Department's concerns and referred to the
possibility that Loral might have significantly aided China's military rocket
program.
But he urged the President to approve the deal regardless.
"In any case," Berger wrote, "we believe that the advantages of this project
outweigh this risk, and that we can effectively rebut criticism of the waiver."
Clinton approved it with his distinctive backward check mark six days later.
Since 1989, the export of American satellites for launching on Chinese rockets
has been suspended as a result of sanctions imposed after the killings in
Tiananmen Square. A deal can go forward only if the President concludes that
the export is in the national interest and issues a waiver.
President Bush approved all nine waiver requests that reached his desk;
President Clinton routinely followed the practice in his first four years in office,
signing 10 waivers with little internal debate or external controversy.
But the waiver Clinton signed on Feb. 18 was not routine. The roots of his
unusual decision trace back two years when a Chinese rocket carrying a Loral
satellite crashed into a village seconds after liftoff, killing and injuring dozens of
civilians.
A few months later, Loral led an outside review team to help the Chinese
figure out what had happened. The company says its officials did nothing
wrong. But Loral also acknowledged serious mistakes in a June 1996
disclosure to the State Department, including an admission that it allowed the
Chinese to see its lengthy review of the rocket mishap without prior Federal
approval. Such technological assistance to the Chinese requires prior
Government approval, which Loral had not received.
At virtually the same time that Loral made its disclosure to the Government, the
company was seeking another Presidential waiver for a satellite. Its chairman,
Bernard L. Schwartz, donated $100,000 to the Democratic Party four weeks
before the waiver application was approved in early July 1996 by Clinton.
It is not known whether Loral's help for the Chinese was mentioned in the
memorandum that went to the President because the White House has not
released documentation on that decision.
It is known that the State Department had already alleged in a letter to satellite
industry executives that there had been a violation of American export control
laws in the accident review.
But as of July 1996, no criminal inquiry was under way. The Justice
Department began its investigation only after the Pentagon completed an
assessment of the accident review in May 1997.
That is the same month Loral applied for its most recent waiver, for the
Chinasat 8 satellite.
Company's Concerns Reach White House
The first notice to the White House of unusual problems with the Chinasat
8 waiver application came in an early January memorandum from the
State Department detailing the factors for the President to consider.
Although couched in careful bureaucratic language, the State Department
document made it clear that this was no routine export license application.
The State Department pointed out that China's transfer of missile technology to
Iran might prohibit the export of the Loral satellite or any other satellites or
related items.
"Moreover," the State Department memo stated, "information about
unauthorized defense services provided by Space Systems/Loral and another
U.S. firm to China's Long March 3B Launch Vehicle" could lead to imposition
of harsh sanctions against the company.
But the State Department and other agencies nonetheless recommended
granting the waiver, because the deal would enhance the United States'
leadership in commercial telecommunications, provide an incentive for China to
adhere to international nonproliferation rules and improve trade ties with
Beijing.
After virtually no debate at the White House, the State Department
memorandum was rewritten as a decision paper for the President.
The State Department's concern about technology transfers to Iran appeared
nowhere in the decision document, but a new element is inserted in the first and
in most subsequent drafts. The President must act quickly, the draft states; any
delay will cost Loral money.
"Due to severe contractual penalties which Loral will incur if it cannot begin
technical discussions with the Chinese by next week, we recommend that you
take action on this issue by January 20," read the first draft of the Presidential
memorandum, dated Jan. 13.
A day earlier, Loral officials had made known to the White House their
frustration at the slow Government response to their waiver application, which
was submitted in May 1997.
A Loral letter found in White House files stated that unless the approval is
granted within a week, the launching, scheduled for November, would be
delayed by several months, costing the company at least $6 million. Any such
delay would give the Chinese grounds for canceling the project, which would
cost Loral $20 million, the company warned.
"Our competitors in Europe," Loral officials complained, "do not suffer delays
due to export licensing or legal complications."
The company's concerns clearly were heard at the White House.
A senior aide at the National Security Council, Maureen E. Tucker, repeatedly
pressed for a rapid decision in forwarding early drafts of the Presidential
decision paper to associates at the council.
She described the memorandum and accompanying documents as "a very
quick turnaround package for which I am seeking your clearance by
tomorrow," she wrote on Jan. 13.
By Jan. 20, one frustrated aide scrawled on a draft of the memo, "Needs to go
to POTUS today!!" POTUS is the White House jargon for President of the
United States.
But the waiver request was held up by questions from Berger, who asked his
legal aides to research the status of the Justice Department investigation and
determine whether it would bar approval of the waiver.
Tellingly, Berger asked Gary Samore, the National Security Council's top
weapons proliferation expert, in a handwritten note if the approval can be
granted in phases "to get over immediate crunch."
Berger did not ask whether Loral's cooperation with the Chinese after the
1996 accident would require denial of the export license. Instead, he wonders
in the note to Samore where there is "anything we can hang our hat on to
characterize Loral's 'offense.' "
Berger's aides sought advice from officials at the State Department, who
informed them that Loral's offenses appear to be "criminal" and "knowing."
Ms. Tucker was told that the Pentagon investigated Loral's assistance to the
Chinese after the 1996 missile explosion and concluded that the company
provided "potentially very significant help" to Beijing's ballistic missile program.
Behind Decision To Grant a Waiver
The White House counsel Charles F. C. Ruff told a Security Council
lawyer that the Justice Department's investigation mattered less than
maintaining close diplomatic and business relations with China.
"Issue is not [underlined twice] impact on DOJ litig(ation)," the Security
Council deputy counsel Newell Highsmith wrote in notes of his conversation
with Ruff, "but whether bilateral U.S.-China concerns and economic factors
outweigh risk of political embarrassment."
A principal argument behind Clinton's decision was that it would be unfair to
penalize Loral by denying it a license if it was under investigation but had not
been charged with any crimes.
The export law allows the President to deny a license if the license seeker has
been indicted or if there is "reasonable cause to believe" the license seeker "has
violated" United States export control laws. The White House documents
show that some White House and State Department officials believed the
latter, but Administration officials say they relied on a 1993 State Department
memo which said that companies will be denied licenses only after indictment.
"In an ideal world we would wait until this matter is resolved," Malcolm R.
Lee, a National Security Council aide, told other White House officials in an
electronic message a month before the President's decision, referring to the
pending Justice Department inquiry. But, Lee added, "that is impracticable."
A senior Administration official, speaking not for attribution, said that waiting
for the results of the Justice Department investigation could delay the satellite
launching for months, if not years.
And, the official added, "There were some imperatives to get a timely decision
because of the penalties facing the company."
But the company acknowledges that no such penalties have been imposed and
the launching is still scheduled for November, as it has been for the last year.
"We believe we will not incur penalties because we can work around the
problem," a Loral official said late last week.
Pentagon Troubled By Loral's Role
The President did not receive a detailed assessment of the potential
damage to American security caused by Loral's help to China in
determining the cause of the 1996 launching failure. The Pentagon was
troubled by Loral's technological assistance because the rocket science
involved in putting a satellite into orbit is similar to that needed to deliver a
nuclear warhead.
The Pentagon, relying on Air Force missile and intelligence experts, did not
find grave damage but did conclude that the United States national security had
been harmed, according to Administration officials.
A White House official said that the National Security Council never received
the Pentagon report, which was prepared to assist the State Department. "We
did the best we could in the memo for the President in describing what we
understood to be the allegations," the official said. "We didn't beat around the
bush."
White House aides overcame the major impediment to the waiver -- the
concern of Justice Department prosecutors that it would jeopardize any
possible prosecution -- by relying on the fact that "the Department had every
opportunity to weigh in against the waiver at the highest levels and elected not
to do so," as Ruff, the White House counsel, wrote on Feb. 13.
But Justice Department officials say that Ruff, in his discussion with Robert
Litt, the top aide to the Deputy Attorney General, asked only about the impact
of the waiver on possible prosecution -- not whether the department opposed
the waiver.
It is not known how the Justice Department would have answered that
question. http://www.nytimes.com/yr/mo/day/news/washpol/clinton-china-satellite.html
Gee, the WH didn't get the Pentagon report - sure they didn't.
It all looks more and more like Clinton sold national security out for campaign cash and that his national security team were working for Loral. At least no one can now say with any credibility that Clinton's waiver was anything like those granted by Bush.
It should be interesting to see the reports the WH has refused to release, no doubt because they connect the rest of the dots. |
