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Technology Stocks : LORAL -- Political Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Dragonfly who wrote (378)	6/3/1998 6:56:00 AM
From: peter a. pedroli	Respond to of 880

Satellite export concerns date to '95 By Bill Gertz THE WASHINGTON TIMES previously undisclosed improper export by Hughes Aircraft of satellites containing embargoed technology was a key reason for former Secretary of State Warren Christopher's rejection of a plan to give the Commerce Department full authority to control such overseas transfers. A classified memorandum obtained by The Washington Times reveals the improper sale of two satellites by Hughes in 1995 -- the second major report of a questionable technology transfer by the Los Angeles-based aerospace firm that manufactures communications satellites. Mr. Christopher was ultimately overruled by the White House, which transferred the power to regulate sensitive satellites to Commerce, under Secretary Ronald H. Brown. Before moving to Commerce, Mr. Brown headed the Democratic National Committee, now under fire for improper fund raising. According to a Sept. 22, 1995, memorandum, Mr. Christopher rejected plans to give Commerce the sole power to approve satellite exports after an interagency study warned that "significant" military and intelligence capabilities could be lost in the licensing authority switch. The memorandum said the Pentagon and U.S. intelligence agencies strongly opposed the policy change because Hughes "recently" had exported two satellites with sensitive cryptographic technology without first -- Continued from Front Page -- getting a State Department munitions license. Hughes Electronics Corp. and Loral Space & Communications Ltd. are under investigation by the Justice Department concerning unauthorized transfers of military-related missile technology to China. The probe began after scientists from the two companies provided data on space launchers that helped China improve its strategic nuclear missiles, according to U.S. officials. Mr. Christopher, who was overruled by the president five months later, signed the memo on Oct. 9, 1995, recommending that some weapons controls on satellite exports be loosened. But he also tried to keep oversight of sensitive satellite technology exports under an interagency review group. Cryptographic technology is used to scramble communications sent to satellites to prevent unauthorized access. It cannot be exported without a munitions license. Mr. Christopher approved the option favored by the Pentagon, the intelligence community, U.S. Arms Control and Disarmament Agency, and the State Department's political-military and intelligence bureaus. He marked "disapprove" for a plan to give all satellite licensing authority to Commerce. That option was backed by the Commerce Department and the State Department's office of undersecretary for economic and agricultural affairs, as well as its bureaus of economic and business affairs and East Asian and Pacific affairs. The document contradicts recent statements made to congressional investigators by senior Commerce Department officials. They said published reports of Mr. Christopher's opposition to changing the satellite licensing procedure were "part of popular mythology" among critics of the administration's policies. The memorandum, labeled "confidential," was written by Thomas E. McNamara, assistant secretary of state for political-military affairs, who argued that State should keep control of satellite exports covered by International Traffic in Arms Regulations (ITAR). "U.S. firms dislike ITAR control of comsats chiefly due to congressional oversight under [Arms Export Control Act], by which major sales must be notified to Congress 30 days in advance of approval," Mr. McNamara wrote. U.S. businesses particularly feared Congress could impose new sanctions on China that would block all satellite exports, he said. Mr. Christopher agreed to loosen the rules by excluding some satellite technologies from State licensing requirements. The areas included special equipment with anti-jamming capabilities, special antennas, intersatellite relay links, space-based communication processing bands, radiation-hardened devices, and spacecraft maneuvering controls. Those proposed changes became irrelevant when President Clinton in March 1996 overruled the objections and agreed to give Commerce complete control for the satellite licensing system, a decision finalized in November 1996. The president put aside concerns expressed by Mr. Christopher, now retired, after Mr. Brown prevailed in the political turf battle and won Mr. Clinton's support for overruling the national security objections to the licensing change, according to U.S. officials. Congress is investigating whether political contributions from U.S. satellite companies to the Clinton re-election campaign influenced the policy change and whether U.S. national security was harmed as a result. The matter also is currently under investigation by several House and Senate committees. They are examining whether Hughes and Loral leaked military technology to China in 1996 in the process of investigating the failure of a Chinese space booster during the launch of a U.S. satellite. The memorandum said that Mr. Christopher in 1995 ordered an interagency review of controls on communications satellites, or "comsats." Mr. McNamara, in arguing for keeping control within the State Department, said the best option was a "balanced approach" that helped U.S. business and also would provide "adequate protection for what [Department of Defense] and [the intelligence community] believe are significant military and intelligence interests," the memorandum said. U.S. intelligence and defense agencies want "positive control over crypto devices on board comsats when launched by Russia and China," the memo said. "They strongly oppose removing such devices from ITAR control, and are concerned about a recent voluntary disclosure from Hughes Aircraft, which admits it improperly exported two comsats with crypto devices under a DOC license when a State munitions license should have been obtained," the memo said. A Hughes spokesman said the transfer did not involve China or Russia, but rather a country in the Western Hemisphere. The memorandum said "a wholesale transfer of comsats to DOC control could provoke an adverse reaction in Congress and raise suspicions we are trying to evade sanctions." Sanctions imposed for violations of the 29-nation Missile Technology Control Regime "are more severe for ITAR-controlled satellites than for DOC-controlled satellites," it said. The memorandum said Commerce is "more limited" than State in controlling sensitive exports. "Unlike DOC's controls, ITAR items are controlled to all destinations, and controls are not limited by end-use or country." The memorandum said "we are already encountering problems in assuring [U.S. government] oversight for satellites transferred to [Department of Commerce] jurisdiction in 1993," including problems with contractors paying back the U.S. government for "oversight functions for a Hughes APSTAR launch from China."