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

To: jlallen who wrote (390)	6/6/1998 7:20:00 PM
From: Zoltan!	Respond to of 880

June 6, 1998 Arguments Over Whether Satellite Companies Illegally Aided China Related Articles Scientist Who Led Missile Review Promised Help to China Coverage of Campaign Fund-Raising Debate Forum Join a Discussion on Campaign Fundraising By ERIC SCHMITT WASHINGTON -- Top intelligence and security officials in the Clinton administration are divided over whether two U.S. satellite companies illegally gave space expertise to China. A classified report by the CIA concluded that the companies, Loral Space and Communications and Hughes Electronics, did not reveal information to China in 1996 that could harm national security, government and congressional officials said on Friday. But the intelligence arm of the State Department found just the opposite -- that U.S. security had been jeopardized, the officials said in disclosing the report's findings for the first time. The State Department's damage assessment parallels the previously reported conclusions of a Pentagon agency that is responsible for preventing the transfer of militarily sensitive technology. The Pentagon agency's report in mid-May 1997, based on the work of intelligence and rocket experts who are considered the government's top specialists in the field, led the Justice Department to open a criminal inquiry into Loral and Hughes. The conflicting judgments of government intelligence and security analysts muddy an already complicated inquiry by House and Senate committees into accusations that China used sensitive U.S. technology to improve the reliability of its nuclear ballistic missiles. Specifically, the dispute underscores the significance of a fight between the Justice Department and the Senate intelligence committee that broke out again on Friday. In the second day of wrangling over documents, Attorney General Janet Reno appeared on Friday before the panel and again balked at turning over to Congress the underlying analyses conducted by intelligence and security agencies. Senate investigators said on Friday that because federal agencies have conflicting views on the importance of Loral's disclosure to the Chinese, they need to see the technical analysis supporting each agency's conclusions. But Reno renewed concerns that disclosing such details could undercut the department's criminal inquiry. Reno promised to reconsider this approach and get back to lawmakers within 30 days, but Senators insisted on a speedier response, aides said. "The attorney general indicated she will reevaluate what information she can furnish to the committee," Sen. Richard Shelby, R-Ala., who heads the panel, said after a three-hour closed hearing with Reno and Louis Freeh, the director of the FBI. At Friday's hearing, Senate officials said Freeh provided "significant new" information about attempts by China to influence the 1996 elections, but they refused to give any details. A Democratic fund-raiser, Johnny Chung, has told investigators that a large part of the nearly $100,000 he gave to Democratic causes in 1996 came from the Chinese army. The money came through a Chinese lieutenant colonel and aerospace executive whose father was a Chinese general and a leader of the Communist Party, the investigators say Chung told them. Senate officials said Freeh added new detail and texture to what Congress had already been told. Justice Department officials differ over how to comply with the Senate's request for documents. Some officials are reluctant to give up any potential evidence in a criminal request unless they are heavily edited. Other officials say that senators have a legitimate request. Director of Central Intelligence George Tenet caused a stir on Thursday when he refused to discuss with senators some information, citing the Justice Department's inquiry. But by day's end, the Justice Department relented, and on Friday allowed the CIA to give the panel the disputed document, a one-page report that exonerated Loral and Hughes of hurting national security. The overarching dispute focuses on what happened after a Chinese rocket carrying a U.S. satellite blew up seconds after liftoff on Feb. 15, 1996. International insurers insisted that China have an outside review panel examine the causes of the accident. Loral headed the industry team, which included experts from Hughes. The industry commission blamed the accident on an electrical flaw in the electronic flight control system, documents show. But the report, which was promptly shared with the Chinese, also discussed other sensitive aspects of the rocket's guidance and control systems. Loral executives have acknowledged that they failed to notify federal officials before communicating with the Chinese, but have insisted that no sensitive information was transferred. The State Department learned of the information sharing, and asked at least three government agencies with some degree of expertise in rocket technology or missile proliferation to review the industry commission's report to see whether the document revealed information that could help China improve its long-range missiles. The State Department's intelligence arm specializes in political analyses. The CIA has experts in tracking shipments of missiles and missile components, and some specialists in missile technology. But the government's main repository for technical rocketry is the Pentagon's Defense Technology Security Administration, which can tap into the vast technological resources of the branches of the military, especially the Air Force. One administration official said the Pentagon's review carried the most weight, and that the other agencies were consulted to ensure no information "was accidentally overlooked." nytimes.com