The State Department has accused two leading U.S. aerospace firms of illegally providing China with technology that improved the People’s Liberation Army’s intercontinental ballistic missile force.

The government says Hughes Electronics Corp. and Boeing Satellite Systems allegedly committed 123 violations of U.S. export laws, reports said today, in connection with transfers of satellite and rocket data to China.

“The number and substance of charges reflect the seriousness of the violations,” State Department spokesman Lou Fintor said yesterday. “There are many similarities between a space launch vehicle and an intercontinental ballistic missile.”

Included in the technology transfers, some analysts believe, was the know-how for Beijing to develop multiple independent warheads for its ICBM force.

A January 1999 U.S. Bureau of Export Administration report noted that “China’s investment and industrial policies frequently include explicit provisions for technology transfers in the form of local content requirements, production export quotas, and/or collaboration in production, research or training.”

“China’s economic and industrial development strategies and defense conversion programs are also intended to assist China’s military development,” the report said.

A year ago, aerospace giant Loral Space & Communications reached a settlement with the State Department on similar charges. Both Boeing and Hughes, however, have denied the charges.

Loral agreed to pay $20 million in fines but never admitted to wrongdoing.

“The department has had several rounds of discussion with Hughes and Boeing to explore a resolution similar to the one with Loral,” Fintor said. “We can note, however, that unlike Loral, Hughes and Boeing have both failed to recognize the seriousness of the violations and have been unprepared to take steps to resolve the matter.”

Richard Dore, a spokesman for Hughes, said the company did not violate any laws.

“We did not do anything to assist the Chinese,” he said, adding that the company complied with Commerce Department regulations, which – under the late Secretary Ron Brown – oversaw technology exports at the time.

WorldNetDaily reported in May 2000 that Loral, Hughes, Boeing and Lockheed Martin were either under indictment, awaiting indictment or under current investigation by the Justice Department for illegally passing rocket and satellite technology to China.

Also, WND reported that former Reagan defense official Larry M. Wortzel asserted that China improved its ballistic missile technology through dealings with Lockheed and two other political contributors, Hughes and Loral.

By then, however, an investigative committee led by Rep. Christopher Cox, R-Calif., had already asserted that Lockheed scientists discussed technology issues with Chinese scientists without Defense Department monitors present.

Loral and Hughes were under investigation for allegedly sharing a scientific evaluation report of a Chinese-made satellite motor with Hong Kong-based client Asia Satellite Telecommunications without informing the Department of Defense. The Washington Post reported that the military information Loral and Hughes transferred to China was so sensitive that 45 of the report’s 50 pages were blacked out and thus shielded from public scrutiny.

The State Department’s charges are the latest to emerge from China-technology scandals that had their roots in the Clinton administration. Lockheed’s military technology ties to China became even more visible when Loral president and heavy Clinton-Gore donor Bernard Schwartz became vice president of Lockheed after it bought out most of Loral in early 1996.

On Oct. 19, 1999, a federal grand jury issued a 16-count indictment accusing McDonnell-Douglas, along with a Chinese-run company, of conspiring to violate U.S. export laws in the sale of aerospace equipment that wound up at a Chinese military plant.

In 1994, McDonnell sold the China National Aero-Technology Import and Export Corporation 13 pieces of sophisticated machining equipment used to build aircraft parts believed to have been used in improving China’s Silkworm anti-ship missiles.

The indictment alleged that the Chinese company intended to “divert the equipment to the military plant and that McDonnell-Douglas acted with ‘willful blindness’ in arranging the sale.”

WorldNetDaily also reported in August 2000 that the Clinton administration helped Russia develop a better anti-radar weapon.

According to U.S. Navy documents, the Clinton administration had a contract with Russia-based weapons-maker Zvezda Strella and Boeing/McDonald Douglas to jointly develop “pre-planned product improvements (P3I)” for the Kh-31 “Krypton” anti-radar missile. The Krypton is designed to attack U.S. Patriot and Aegis radar systems.

American companies began using Chinese rockets in the 1980s to launch satellites because the launch costs were cheaper. But after a score of failed launches, Hughes and Loral participated in a series of studies to try to find the problems. Congress and the government found that China gleaned sensitive information from those reviews.

Related stories:

Technology leaks and training?

China’s strategic threat to the U.S.

Strange bedfellows of China’s PNTR



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