The board of electronics missing from a fallen Loral satellite
contains very special chips. The U.S. made chips are built to withstand
the intense radiation of space and continue to perform. They can also do
the same thing under the intense radiation in a nuclear war.
The “encryption” control board that disappeared from a sealed box
inside a $200 million dollar satellite is a more sophisticated version
of the scrambler on your “pay per view” TV. The crypto board translates
commands from ground control stations sent to the satellite — move up,
down, right, left, roll, change channels, turn on camera … etc. These
commands are randomly unscrambled by the satellite with “digital keys”
embedded inside the hardened chips. In turn the satellite scrambles its
telemetry — the electronic pulse of a space craft — which is decoded
by the ground stations.
In June 1998, the National Security Agency (NSA) director wrote a
letter which was read by Rep. Cox in a open session of the House. That
letter outlines the first of many actions taken by the U.S. military
because of the missing satellite board. The very first action was to
change all our codes. This action, a temporary measure, will now have to
be taken on a more frequent basis, increasing our national security
The second action, which will come shortly, in secret session of the
House. The military request to replace existing equipment with a whole
new series of encryption electronics, radically different than the
There is more than prudence pushing step two. The fact that China now
possesses advanced U.S. super-computers and a fully operational
encryption board also means the Chinese Army will be able to break codes
on a regular basis. More advanced code systems will need to be fielded
and they will be more difficult to apply. That will require a whole new
series of electronics.
Total taxpayer cost, two to three billion dollars — all because
Bernard Schwartz wanted to save a few million.
The fact that the board is missing is one item of a common, very
disturbing, thread. John Huang attended 37 briefings from the CIA on
satellite encryption. Yet the Commerce Dept. has denied in writing that
they have any such documents in Huang’s files.
Webb Hubbell, Ron Brown and Vince Foster were all assigned to
encryption tasks involving chip technology. Even Janet Reno was
personally tasked to encryption export policy. Janet Reno, who did
nothing when her own Justice Investigators complained about White House
interference in the Loral investigation.
Then there is Ira Sockowitz, a former DNC fundraiser who walked out
of the Commerce Dept. with over 2,000 pages of secret material on
encryption and satellites. In fact, President Clinton, according to
General Accounting Office (GAO) testimony, personally authorized the
transfer of military strength encryption technology to China with a
It is almost as if there were an official operation by China to
obtain or penetrate U.S. encryption technology.
In fact, the GAO wrote a report on the transfer of an advanced
telecommunications, secure, fiber-optic system sold to a Chinese Army
front company. The export included advanced encryption software. That
1994 deal, called “Hua Mei,” was the subject of a SOFTWAR Freedom of
Information Act (FOIA) request. One document returned from the Commerce
Dept. for the “Hua Mei” request, outlines the details of how China and
the Clinton administration used an obscure license technique, called
GLX, to avoid verifying the end user was the Chinese military.
However, the first thing the 1995 Commerce Dept. report notes is the
reason why China would want a board full of radiation hardened
“This authorization, General License GLX, however, is not available
for items that are also subject to nonproliferation or foreign policy
controls. For example, exports of telemetering and telecontrol equipment
usable as launch support equipment for unmanned air vehicles or rocket
systems still require a validated license. The United States still
requires prior authorizations for exports and retransfers to military
end-users or end-uses. Such exports will continue to require an
individual validated license and the U.S. Government will consider them
on a case by case basis.”
For China to legally obtain “telemetering and telecontrol” technology
President Clinton had to authorize the export. Thus, President Clinton
authorized the Loral satellites — crypto board included — to China for
launch into space.
Yet, in military terms, Chinese engineers would have to examine the
electronics for far longer than the time to set up and launch the Loral
satellite. It would take years to disassemble U.S. chip technology.
Thus, for them to keep it, and for us to not be suspicious, a “Tom
Clancy” like accident had to be implemented.
In theory, once in orbit, the Loral satellite would not have
functioned without the missing board. The flaw would not have been in
the Long March rocket since the U.S. equipment failed. China would have
been off the hook. Without control, the satellite would have been lost
in space. No evidence.
Perhaps, the unreliable Chinese Long March had other things in mind.
Bernard Schwartz and the Chinese cut safety costs by launching on
rockets with a tendency to explode. It cost him a $200 million dollar
satellite. It cost the rest of us $2 billion in U.S national security.
Of course, the fact that 200 innocent Chinese villagers were in the way
is of no concern to the Chinese Army, Loral or Clinton.
Yet, there were less costly and public means to get U.S. encryption
technology under the Clinton administration. In the case of Hua Mei, the
Chinese Army bought technology by using front companies. The Commerce
Department under Ron Brown did very little, if anything, to stop them.
In fact, according to the Commerce Dept., of the 734 licenses applied
for advanced telecommunications export to China in 1994 under the “GLX”
category only five were denied!
Furthermore, the Commerce report states, “In 1995, we estimate that
the Department will approve approximately 450 applications for China
worth a half a billion dollars. Approximately 40 percent of that dollar
volume will involve telecommunications equipment. The high dollar volume
approved items are primarily encrypted cellular telephones and radios.
So far, we have denied only one application involving telecommunications
items. This involves a low level item destined for a potential missile
The encrypted radios, however, were not exported to a front company.
I had the good fortune to obtain a taped interview with Chinese
dissident Harry Wu. Mr. Wu was quick to point out that the cellular
telephones and radios sold by the U.S. are being used by the People’s
Armed Police. Basically, the Chinese gestapo, the execution branch of
the Chinese communist party, is equipped with U.S. made secure radios.
Additional documents obtained by SOFTWAR using FOIA from the White
House National Security Council (NSC) show that Motorola sought and
obtained President Clinton’s permission to sell encrypted radios to
China. Motorola did so with the help of a former Clinton and Bush NSC
official, Dr. Richard Barth. Barth was brought back into the Clinton
White House as a contractor in 1993 and helped make U.S. encryption
The amazing part is that Barth wrote U.S. policy while employed as a
lobbyist for Motorola at the same time. I find it very interesting that
one can simultaneously write government policy and lobby for a company
affected by that policy. Motorola, of course, says they broke no laws.
Barth and the White House, meanwhile, have both refused to answer my
The topper to all this is that Clinton opposes the sale of the same
type of equipment to all U.S. citizens. In fact, FBI Director Freeh has
sought legislation to ban encryption in America because we — the
citizens — could be criminals!
Report after report obtained by this author from the Clinton
administration note that U.S. citizens could be using encryption to
perform criminal acts. Just because free Americans use scrambled
cellular phones to protect personal privacy is of no matter.
The fact the Chinese police execute dissidents and cut their bodies
up for sale as human organ donation parts is of no matter. Americans
could be criminals, and the Chinese police? Well after all, they are law
enforcement of a sort. The human vivisection part is just for profit.
Motorola estimated they could make $750 million dollars over ten
years on the deal. Their argument is that someone else could have sold
the Chinese the same radios.
Actually, I think of it as a great advertising endorsement. More
murdering secret police prefer Motorola over the next brand. And look at
it from the Chinese secret police point of view. If they need more
radios — all they have to do is execute another dissident.
U.S. Commerce Report on encryption radios exports to China
GAO report on Hua Mei export to China
Letter by Rep. Hyde on questionable high tech exports to China
Data on Ira Sockowitz and the 2,000 secret documents
FOIA letters – secret email from and to Dr. Richard Barth
Secret Encryption Radio Deal For Motorola
Other Missile related technology sold by Motorola to China