In 1994, William Hambrecht, a major donor to Bill Clinton, profited
directly from advanced military technology sales to the Chinese army.
Hambrecht is the financial backer of the Internet magazine Salon.
Hambrecht, a very liberal investment banker, owns the firm Hambrecht and
Quist (H&Q), based in San Francisco.
In 1994, Hambrecht also employed Defense Secretary William Perry as
an executive vice president of H&Q Incorporated. Perry joined William
Hambrecht and founded H&Q Technology Partners, Inc. in 1985. William
Perry stayed in his executive position at H&Q even while he was serving
as secretary of Defense. Perry continues to serve part-time as chairman
and chief executive officer of H&Q.
In 1994, H&Q financed an American company, SCM/Brooks
Telecommunications, in a joint Sino-U.S. venture called Galaxy New
Technology. This venture led to the direct export of advanced,
fiber-optic communications systems to a Chinese army unit.
In 1994, Perry personally pushed for the SCM/Brooks deal, lobbying
with the NSA, while serving as secretary of Defense. Perry was also
close to the “matchmakers” of the Galaxy New Technology deal, Professor
John Lewis from Stanford, and Hua Di, a Chinese defector, also working
“Defector” Hua Di was born into a family of prominent Communist
officials. Hua studied missiles in Russia and worked in China’s missile
program for 24 years. In 1989, Hua fled China after the Tiananmen Square
crackdown on student democracy demonstrators.
Hua went to work as a researcher at Stanford’s Center for
International Security and Arms Control. The center’s co-directors are
Perry and Lewis.
Perry, Hua and Lewis shared more than an academic career at Stanford.
In 1992, Chinese Commission of Science, Technology, and Industry for
National Defense (COSTIND) Lt. General Huai Guomo contacted Hua Di to
start a joint venture called Galaxy New Technology.
“Lewis and I were matchmakers,” recalled Hua about Galaxy New
Technology in 1996. “(General) Huai is my good friend.”
The Chinese army venture needed financial backing. Thus, Perry
secured H&Q to provide the money to Galaxy New Technology. Galaxy New
Technology used the cash to finance a contract with SCM/Brooks.
SCM/Brooks then purchased large quantities of encrypted AT&T fiber-optic
communications equipment and shipped it to China under a joint venture
called “Hua Mei.”
Perry was not the only Hua Mei participant on double salary.
Documents obtained from the Department of Defense using the Freedom of
Information Act (FOIA) shows Dr. Lewis was being paid by the Chinese
army for Hua Mei while serving on the U.S. Defense Policy Board and
while working for DoD as a contractor.
John Lewis and “defector” Hua Di worked together in 1994 on the Hua
Mei project using SCM/Brooks. Hua Di located a Madam Nie Li in China to
run the project and be co-chair with an American director. Dr. Lewis
located Adlai Stevenson III, the former Democratic senator from Ohio, to
lead the American side.
Of course, Galaxy New Technology head Madam Nie Lie was also the wife
of Chinese army General Ding Henggao. Madam Nie is the daughter of
Marshal Nie, a close associate of Mao. Madam Nie also has the rank of
General in the Chinese army.
In 1994, Madam Nie’s husband, General Ding Henggao was director of
COSTIND, the Chinese Commission on Science Technology and Industry for
National Defense. General Ding Henggao was also the boss of Lt. General
Huai Guomo, the PLA contact for Hua Di.
COSTIND, according to the GAO “oversees development of China’s weapon
systems and is responsible for identifying and acquiring
telecommunications technology applicable for military use.”
In 1994, SCM/Brooks contracted AT&T to ship advanced, secure
communication systems directly to the Chinese army. AT&T officials who
sold most of the equipment and software to SCM/Brooks were adamant that
there was no need to check the Chinese firm, Galaxy New Technology,
since it was led by Ms. Nie Lie, a civilian.
Other than Madam “General” Nie, the so-called “civilian” firm was
heavily packed with Chinese army officers and experts. One member of
Galaxy New Technology management, according to the Defense document, was
Director and President “Mr. Deng Changru.” Mr. Deng Changru was also Lt.
Colonel Deng Changru of the People’s Liberation Army, head of the PLA
communications corps. Another Chinese army officer in the Galaxy New
Technology staff is co-General Manager “Mr. Xie Zhichao.” Xie was also
Colonel Xie Zhichao, Director of the COSTIND Electronics Design Bureau.
With the help of Perry, Hambrecht, Hua and Madam Nie, the Galaxy New
Technology fiber-optic communication system was sold directly to the
General Logistics Division of the People’s Liberation Army. It is
currently providing communications for the PLA and hard cash to the
The Hua Mei system has since been modified by the PLA for re-export,
providing command and control for Iraqi air defense. The Chinese
re-exported version of Hua Mei is code-named “Tiger Song” by NATO. It is
an internet for surface-to-air (SAM) missiles built with U.S. and French
parts by the PLA under contract to Saddam Hussein.
U.S. aircraft have been bombing Tiger Song since “Desert Fox/Monica
Storm.” Saddam’s secure internet for SAMS is still up and running
although “degraded,” according to Defense Department officials. The
recent U.S. air attack that knocked out an Iraqi oil pipeline shows the
classic mix of commercial/military networking equal to the Hua Mei
system in China.
The Tiger Song system shifted from one damaged network to piggyback
on to the computer network running the Iraqi oil pipeline. The U.S.
attack knocked out the pipeline and the command link via Tiger-Song for
local Iraqi SAM missile batteries.
Saddam Hussein and General Ding Henggao can thank Perry and
Hambrecht. China did not have the technology nor the money to field
advanced missile command networks. William Perry supplied the technology
and William Hambrecht supplied the money. Today, the Chinese Army
re-exports U.S. technology directly to the sworn enemy of America and
profits from it.
John Lewis and Secretary Perry still work at Stanford. Hua Di,
however, has chosen to return home. In late October 1998, it was
announced that Hua Di had returned to China. He met with Chinese
security officials in late 1997 and was assured that he would not be
prosecuted. On Dec. 31, 1997 Hua returned to China.
On Jan. 6, 1998, the “defector” Hua was arrested and charged with
passing state secrets to U.S. officials. Stanford officials and Dr. John
Lewis have written to the Chinese government appealing for Hua’s
Of course, Hua Di was no defector and he certainly will not return to
America. Hua, like Perry and Lewis, was working for the PLA. Hua’s
arrest was faked. Hua Di was an agent of COSTIND, the espionage unit led
by General Ding. Hua served the Communist Party and made a tidy profit
in the process. Hua returned to a fat bank account from Hua Mei and a
promotion in the Chinese army.
COSTIND General Ding and his wife, Madam-General Nie, also made money
on the Hua Mei project. There were profits enough to share. Perry, Lewis
and even Mr. Hambrecht all made money on the Hua Mei export.
The exported “civilian” technology now threatens the lives of
Americans in the skies of Iraq and every nation around the globe. The
secure line that now carries orders from Chinese generals to
thermonuclear tipped missiles started with a pay-off to American
officials. The direct line from pay-off, to export, to weapon of war
goes through William Perry and his millionaire buddy, William Hambrecht.
Source documents and the court order