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Technology Stocks : Loral Space & Communications -- Ignore unavailable to you. Want to Upgrade?


To: dougjn who wrote (3769)6/14/1998 11:23:00 AM
From: DaveMG  Read Replies (1) | Respond to of 10852
 
More from NY Times

By ERIC SCHMITT

ASHINGTON -- The chairman of the Senate Foreign Relations Committee
accused the Clinton administration Thursday of shielding China from
sanctions that could block Chinese companies from launching U.S. satellites.

The chairman, Sen. Jesse Helms, contended that the administration had turned a
blind eye to China's missile sales to Pakistan and Iran over the last several years in
order to preserve ties with Beijing.

The North Carolina Republican's accusation came on the same day that the White
House defended waivers that President Clinton approved between 1993 and 1996
that allowed U.S. companies to launch their satellites on Chinese missiles.

Several congressional committees are examining another waiver that Clinton
approved last February to permit Loral Space and Communications and Hughes
Electronics to launch a satellite in China.

While the waiver was under consideration, the Justice Department voiced concern
that granting it would undercut a criminal inquiry into whether the two companies
had disclosed sensitive technology to the Chinese.

Republicans have tried to link the waiver to political interests by pointing out that
Loral's chief executive, Bernard Schwartz, was the Democrats' top individual
donor in 1996. Schwartz and the Clinton administration have denied any such
connection.

Administration officials insist that the controversy over the Loral waiver was an
anomaly in an otherwise routine process. Indeed, no company appealing for a
waiver, first from President Bush and later from President Clinton, has ever been
denied.

A review of recently declassified administration documents delivered to Congress
this week shows that the reasons given for the Clinton waivers varied little from
the reasons given by the Bush administration: enhancing U.S. global leadership in
telecommunications, encouraging China to stop its missile sales, promoting bilateral
relations and helping the U.S. satellite industry.

Many of these issues swirling around Capitol Hill were cast in relief Thursday at
the Foreign Relations Committee hearing, the latest in a multipronged
congressional inquiry into whether sensitive technology was disclosed to China
and, if so, why.

Senators focused Thursday on the White House's sometimes conflicting goals of
combating the spread of missiles, promoting the U.S. satellite industry and
maintaining good relations with Beijing.

At the heart of Helms' accusations is the administration's handling of intelligence
information that China sent 34 M-11 medium-range ballistic missiles to Pakistan in
late 1992.

In August 1993 the Clinton administration imposed sanctions on China for selling
M-11 missile parts, but not complete missiles, which would have called for far
stricter measures, including the end of all satellite exports.

Administration officials have repeatedly insisted that the proof needed for stronger
sanctions did not exist. But intelligence officials have always contended that their
findings were ignored because tougher sanctions would have ruptured
U.S.-Chinese relations.

"No administration likes automatic sanctions, because they limit flexibility in
negotiating," Gordon Oehler, the CIA's former top expert on countering the spread
of weapons, told the senators Thursday.

Oehler said he was "virtually certain" that China had shipped complete missiles to
Pakistan, not just parts or technology.

Helms said, "The administration has sought to shield China, and the U.S. satellite
vendors, from the effects of U.S. sanctions."

The reported missile sale and the dispute between policy-makers and intelligence
analysts have been disclosed before. But the context of the argument is different
now.

Against this backdrop, the documents that the administration released to Congress
this week offer a window into the competing pressures on Clinton in 1993 when
he considered granting his first waiver, for the Chinese launching of
communications satellites made by Motorola and Martin-Marietta.

The documents' contents were first reported Thursday by The Washington Post.

A July 1, 1993, memo to Clinton from Anthony Lake, who was the national
security adviser, and Robert Rubin, who was the head of the National Economic
Council, described the pros and cons of a waiver, even as officials expected
sanctions to be imposed on China.

"At this point we must balance U.S. competitive concerns against a strong but not
yet conclusive case for sanctioning China," the two advisers wrote in the memo.
"The waivers act as an incentive for China to deliver" on its promises to stop
exports of missiles and missile parts, "deter China from renouncing those
commitments and create useful leverage, as we continue to investigate this
matter," the memo added.

But the welfare of the satellite makers also weighed heavily on the administration.
Lake and Rubin declared an "urgent" economic consequence of delay: Without a
waiver by July 5, 1993, Motorola faced a $45 million "nonperformance" penalty.

In addition, a June 29, 1993, memo from the National Security Council staff said
the Motorola project would support 4,500 jobs and the Martin-Marietta project
1,300 jobs.

The memo to Clinton was blunt about possible pitfalls: "There are risks to granting
these waivers," the memo said. Congress could interpret the waiver as
"backsliding" on a commitment to ensure that China kept its promises to curb
missile sales. "It would also be embarrassing to grant the license and then impose
sanctions a short time later," the memo said.

But Clinton's advisers were willing to take these risks, in large part because they
believed they could later stop the deal if needed.

"In terms of economic benefit and nonproliferation interests, we believe we should
approve the waivers now," the memo said. "Since the satellites will not be
exported until 1995 at the earliest, there is ample time to sanction China and
prevent the exports from taking place, should that be necessary."

Clinton approved the waiver the next day, July 2, 1993. The State Department
imposed sanctions on China on Aug. 24, 1993, slowing the exports. The sanctions
were lifted in 1994. The Motorola satellites were not launched until December
1997.



To: dougjn who wrote (3769)6/14/1998 7:09:00 PM
From: Bernard Levy  Read Replies (2) | Respond to of 10852
 
*** off topic ****

Hi Doug:

Regarding LMDS, I think that Winstar is the clear leader.
However, it is not clear that it will be able to take
control of the whole market (business for big cities,
smaller cities, Europe, and broadband wireless for
residential users) without having other players
controlling pockets of this market. Winstar is the clear
leader for business users in big cities. Teligent still
has an opening for smaller markets, Europe is up for grabs
(ARTT has lots of licenses but no cash to exploit them,
so that WCII is likely to take over ARTT). WNP may target
residential users, but this will be a tough market to
crack. On the whole, the best and safest bet is Winstar,
but is is useful to be aware of the other players.

Best regards,

Bernard Levy