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

To: Bill who wrote (6219)	5/26/1999 10:16:00 AM
From: Jeff Vayda	Respond to of 10852

Lehman report on the web (eom) lehman.com

To: Bill who wrote (6219)	5/26/1999 9:01:00 PM
From: Snow Shoe	Respond to of 10852

A beefed up letter from the company website. Apologize for contributing to this political discussion about old news. But after posting the original letter, felt it was best to ensure this got on the board also. May 26, 1999 Dear Loral employees, customers and shareholders: A year ago, almost to the day, we refuted allegations that our company engaged in the illegal transfer of technology to China during a review of a launch failure investigation in February 1996. We would not change one word of that statement today, despite assertions contained in the Cox committee report released yesterday. There is no "new" news in the report, nothing we have not heard and addressed already. Over the last year, further exhaustive investigation - by Loral and by independent experts - has reaffirmed our conclusion that Loral did not violate any laws or regulations; that our employees acted in good faith; and, that Loral did not transfer sensitive information to the Chinese. As we acknowledged last year, a Loral employee on the review committee, contrary to company policy, conveyed its preliminary evaluation of the launch failure report to the Chinese before consulting with the State Department licensing authorities. Immediately upon learning of this, company officials alerted both the State Department and the Defense Department and subsequently volunteered a full report of the facts to the U.S. Government. It is particularly distressing to us that the Cox committee, in summarizing the report, characterized events in a manner not supported by the facts as presented in the body of the report itself. Our review clearly established that the Chinese independently identified the cause of the Long March failure - a relatively low-tech soldering defect. We did not, as the report suggests, help the Chinese find the problem but, instead, as requested by the insurance industry, reviewed the adequacy of their conclusions. We believed then, as we believe now, that we were acting within the regulations governing participation in such reviews. Loral and its employees continue to cooperate with all relevant government agencies as the investigation of this matter by the Justice Department continues, a process we are eager to see concluded. We take very seriously the security interests of the United States and the matters explored by the Cox committee, despite taking issue with its misinterpretation of the facts. We believe that the resultant focus on the need to improve the Government's licensing process and domestic launch capability will, in the long term, benefit our industry and allow the U.S. to maintain its superiority in space. Sincerely, Bernard L. Schwartz