No site check on China super-computer

June 23, 1998

New documents show that the Clinton administration approved the
export of a U.S. built super-computer to communist China without
performing a required inspection of the PRC site. U.S. Commerce
Department officials working out of the Beijing embassy failed
to obtain a “Pre-License Check” or PLC through the Chinese
government for a U.S. super-computer exported in December 1997.
Commerce officials later cleared the export, claiming they had
obtained verification the end user was not a military site.
Defense officials fear the computer is now being used for
biological and chemical weapons research at a Chinese military
facility.

The documentation, obtained using the Freedom of Information
Act, shows that Commerce officials approved the super-computer
export without an end use inspection. The documents also show
that U.S. Commerce officials denied a U.S. Customs Department
request to meet with Chinese government officials on the super
computer inspections. Customs, unlike Commerce, is considered a
“law enforcement” agency. The Customs Department and the FBI
have been investigating the export of several types of advanced
technology, including super-computers, to Russia and China.

In December 1997, U.S. Commerce officials sought permission to
inspect Xian Jiatong University prior to the export of a high
performance computer made by Digital Corp. (DEC). Commerce
inspectors wanted to verify the Chinese university was not in
violation of U.S. export control laws but were denied access by
the PRC government.

In a letter written to Liu Hu, Director General for Science and
Technology of MOFTEC (Ministry of Foreign Trade & Economic
Cooperation) US Commerce Department officials noted that they
were not given permission to perform the license check.

We were disappointed at MOFTEC’s decision not to allow an on-
site end use check and refusal to permit an Embassy
representative to travel to Xian Jiatong University at the
university’s invitation. … Because we were unable to work
through MOFTEC, we gathered information on the end-user
through other sources and have approved the license.

In addition, the December 1997 letter to MOFTEC’s Liu Hu
reminded the Chinese government of the requirements that US
representatives do a “post” export follow up inspection.
However, U.S. Commerce officials were reduced to seeking “help”
from the Chinese communist government in performing the post
export inspections and sought another meeting to discuss the
issues.

In January, 1998 the Commerce Department again contacted the
Chinese government, seeking approval for verification
inspections. The Commerce Department arranged for Bureau of
Export Administration Chief Counsel, Hoyt Zia, to meet with
China’s MOFTEC to discuss the denied pre and post export checks
on U.S. super-computers.

U.S. Customs Service officials also requested that they attend the
January meeting. U.S. Customs Service officer David Brenner asked
Commerce Official Mark Bayuk if he could attend the meeting.
Bayuk wrote in a email to Commerce official Matthew Borman “I
told him rather flatly and abruptly, no.” Bayuk described
Customs Service Officer Brenner as “not happy” because Bayuk
felt that Customs had no reason to attend the January meeting.

Commerce counsel Hoyt Zia’s meeting in January 1998 with China’s
MOFTEC official, Zhou Ruojun, failed to obtain Chinese
permission for the inspections. Commerce documentation of the
meeting noted that the Chinese denied all end use super-computer
inspection checks. Chinese MOFTEC officials argued that there
“was no formal agreement between the two governments on
conducting these checks”.

The Chinese delegation also claimed that a 1983 U.S. trade letter
agreeing to the checks “was unsigned” in the Commerce December
1997 complaint letter. MOFTEC’s Zhou considered the matter
“inappropriate” because the letter was unsigned. US officials
dropped the end use inspection issue “rather than engage in a
fruitless discussion of the U.S.-side’s ‘understanding’ of the
‘intent’ of the signed exchange of letters.”

The Chinese diplomatic stall also continued for pre-export
verification inspections as well. MOFTEC representative Zhou
stated that she was “not in a position to talk too much about
this.” The Commerce document notes “she was unwilling to
discuss this (pre-license inspection) issue any further.”

In the last four years, the Clinton administration has approved
the export of U.S.-made super-computers to China and Russia. The
Russians and Chinese diverted some of these advanced systems
into their militaries.

For example, in 1995 a U.S. built IBM supercomputer was sold to
Russia under the pretense of conducting groundwater research.
The $7 million computer actually was shipped to a Russian
nuclear-weapons facility. The GAO wrote a report on the export
of the IBM supercomputer to the Russian Ministry of Atomics
(MINATOM) Arzamas-16 weapons lab. In fact, the Russian MINATOM
director openly bragged the U.S. super-computer would be used for
nuclear weapons development. Moreover, five additional Silicon
Graphics super-computers were shipped to the Chelyabinsk-70
Russian nuclear weapons lab.

In 1997, to prevent the transfer of U.S. super-computer
technology, Congress, led by House National Security Committee
Chairman Floyd D. Spence of South Carolina, passed new
regulations on the export of supercomputers which required U.S.
officials to verify, through inspection, the sale and use of any
advanced US computers.

Chairman Spence recently wrote a letter to his House colleagues,
warning that the Clinton administration was trying to soften the
new export controls. “Of great concern was the Administration’s
1995 decision to loosen export regulations on super-computers
(high-performance computers),” wrote Spence in his letter of
April 21. “As a result of these loosened regulations, a number
of US built supercomputers were sent to nuclear-weapons
laboratories in Russia, as well as China and other countries of
proliferation concern. Congress last year closed many of the
loopholes in the president’s export-control policy. However,
recent news reports indicate that the administration may use the
findings of an impending Stanford University report to justify a
further weakening of export controls of supercomputers.”

Yet, even before Spence wrote his complaint letter, in December
1997, the Commerce Department was unable to inspect the Xian
Jiatong facility because the Chinese government denied such a
verification. The Clinton administration authorization of the
export took place despite Spence’s “closed” loopholes in U.S.
export regulations.

To make matters worse, Pentagon sources claim that Xian Jiatong
University is a center for Chinese Army biological and chemical
warfare research. It is one of the China’s super-key
universities directly under the State Education Commission.
There are 1075 Universities in China and Xian Jiatong University
is one of the ten universities included in the priority
construction projects.

Xian Jiatong University is located in the remote north west of
China near the city of Xian, the site of the underground
Terra-cotta Army of the First Qin Emperor. Xian is also a known
location of several People’s Army weapons manufacturing sites
such as the Xian Aircraft design bureau which makes China’s H-6
nuclear strike bombers. The Xian Jiatong sale is the first US
super-computer export associated with Chinese biological and
chemical warfare.

Pentagon sources are concerned that China is using the
super-computer to develop a chemical cluster “bomblet” munition
to arm missiles and bombers. Instead of a single warhead – a
bomblet warhead would disperse hundreds of miniature warheads
each filled with a deadly payload of bio-toxins. Defensive
missiles such as Patriot would be faced with a cloud of
miniature bomblets and be quickly over-whelmed.

There is, however, an even stranger twist to the recent Chinese
super-computer export. The Clinton administration choice of BXA
counsel Hoyt Zia to lead the January 1998 negotiations with
China can be legitimately questioned because Hoyt Zia is a self
described “close friend” of John Huang.

Huang, a former DNC fundraiser and LIPPO banking executive, has
fled the U.S. to avoid questioning on illegal campaign donations
from China. Zia was questioned in 1997 by Larry Klayman of
Judicial Watch about his close relationship with Huang and his
involvement in 1996 donations to President Clinton.

Zia claimed under oath he called Huang several times when US
Marshals were seeking to serve Huang a subpoena for questioning.
Zia acknowledged in his deposition given to Judicial Watch that
he knew Huang was being sought by U.S. authorities. Yet, Zia
choose not to inform U.S. law enforcement officials.

Zia also admitted that he assisted Huang raise donations at the
DNC while he was still employed at the Commerce Department in
1996. Zia abruptly ended his deposition with Judicial Watch
immediately after his admissions and has since refused to submit
any further testimony.

Charles Smith

Charles R. Smith is a noted investigative journalist. For over 20 years, Smith has covered areas of national security and information warfare. He frequently appears on national television for the Fox network and is a popular guest on radio shows all over America. Read more of Charles Smith's articles here.

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