[Congressional Record Volume 144, Number 73 (Tuesday, June 9, 1998)]
[Extensions of Remarks]
[Pages E1063-E1064]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E1063]]



            GENERAL SCOWCROFT ON CHINESE SATELLITE LAUNCHES

                                 ______
                                 

                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                         Tuesday, June 9, 1998

  Mr. HAMILTON. Mr. Speaker, Gen. Brent Scowcroft, the former National 
Security Advisor, and Mr. Arnold Kanter, the former Under Secretary of 
State for Political Affairs, wrote an excellent article in the 
Washington Times on June 5, 1998 on the topic of Chinese satellite 
launches: ``What Technology Went Where and Why.''
  Their article treats this issue fairly and dispassionately, and goes 
a long way toward dispelling much of the misinformation in current 
public discussion.
  I commend this article to the attention of my colleagues.

               [From the Washington Times, June 5, 1998]

                   What Technology Went Where and Why

                 (By Brent Scowcroft and Arnold Kanter)

       The last few weeks have seen an avalanche of melodramatic 
     charges about American ``technology transfers'' to China and 
     claims that these actions have enhanced the capabilities of 
     nuclear missiles aimed at the United States. In combination 
     with confusing--and confused--media reporting and inept 
     responses by the Clinton administration, these accusations 
     threaten both to do needless damage to important U.S. 
     national security interests and to impede the investigation 
     of serious allegations of wrongdoing.
       A great deal hangs in the balance. The consequences, if 
     these allegations are proven, would be substantial. But the 
     costs of accusations which turn out to be ill-founded--if not 
     reckless--also can be great. Nowhere is this more clear than 
     in the case of our relations with China. Not only is the 
     character of our strategic relationship with China of 
     fundamental importance to U.S. national security, but that 
     relationship also is at an unusually critical and formative 
     state both bilaterally and with respect to larger issues 
     ranging from North Korea to South Asia.
       The investigative congressional committees that are being 
     established will have the responsibility for sorting out this 
     complicated affair. Meanwhile, however, the protagonists in 
     this controversy need to cool the rhetoric, get some basic 
     facts straight and identify the real issues before more harm 
     is done to U.S. security, political and economic interests.
       Much of the confusion arises from the fact that four 
     different issues are being lumped together:
       U.S. government waivers to permit American commercial 
     satellites to be launched on Chinese space boosters.
       The unauthorized transfer to China of technical information 
     by two U.S. satellite manufacturers, Loral and Hughes.
       Large campaign contributions to the Democratic Party by 
     Loral's chairman, Bernard Schwartz.
       Alleged contributions to the Democratic Party by Chinese 
     citizens with ties both to the Chinese military and the 
     Chinese company that launches American commercial satellites.


                           Satellite waivers.

       The current controversy has its roots in the 1986 
     Challenger disaster. There was serious concern that the loss 
     of U.S. launch capability that resulted from the ensuing 
     moratorium on shuttle flights would jeopardize America's pre-
     eminence in space. The Reagan administration responded by 
     adopting a policy that opened the way for U.S. commercial 
     satellites to be launched on Chinese space boosters on a 
     case-by-case basis. The sanctions imposed by the Bush 
     administration following the Tiananmen Square massacre in 
     June 1989 blocked satellite launches by the Chinese but 
     included a provision for case-by-case presidential waivers.
       Last February, the State and Defense Departments 
     recommended, and President Clinton approved, such a waiver to 
     allow a commercial communications satellite built by Loral to 
     be launched into orbit by a Chinese booster. This was the 
     eighth waiver--covering eleven launches--approved by the 
     Clinton administration. Previously, the Bush administration 
     approved three waivers covering the launch of nine 
     satellites.
       The satellites in question are civilian, not military. More 
     important, no ``technology transfer'' is permitted in 
     connection with these satellite launches, which are the 
     space-age equivalent of having Federal Express deliver a 
     package across the country. On the contrary, there are strict 
     safeguards designed to confine Chinese access to the most 
     basic information about the U.S. payload these rockets 
     carry--for example, size, weight and other mating data needed 
     to ensure that the satellite will fit on top of the rocket 
     and can be boosted into the correct orbit. (The waivers in 
     question relate to the application of Tiananmen sanctions--
     which are designed to punish the Chinese for human rights 
     abuses--not the safeguards against technology transfer.)
       In principle, these safeguards mean that the Chinese learn 
     no more about the ``package'' they are launching than FedEx 
     knows about the package it is shipping, and that no 
     information is provided which would improve the capabilities 
     of their civilian space boosters, much less their nuclear-
     armed missiles. The March 1996 transfer of responsibility for 
     licensing commercial satellite exports from the State 
     Department to the Commerce Department likewise should not 
     have had any effect on the strictness or application of the 
     safeguards because a separate State Department license 
     typically is still required to permit the Chinese to launch 
     U.S. satellites, and the Defense Department continues to 
     review all proposed waivers to ensure they are in the 
     national security interest of the U.S.


               Assistance to the Chinese Rocket Program.

       The Justice Department is investigating the 
     unauthorized transfer of information to China by Loral and 
     Hughes in connection with a 1996 review of the explosion 
     of a Long March rocket launching a U.S. satellite. Because 
     of the virtual identity between these Chinese ``space 
     boosters'' and military missiles, assistance to the former 
     could lead to improvements in the latter.
       Experts from Loral, Hughes and other companies became 
     involved in this review at the insistence of the 
     international insurance industry, which refused to insure 
     more Long March launches until an ``outside'' team reviewed 
     the Chinese analysis of, and remedies for, the malfunctions 
     their rockets had been experiencing. Ironically, the Chinese 
     initially resisted this proposal, and allowed the 
     international team of experts to conduct their review only 
     when they became convinced that these insurance problems 
     would jeopardize their commercial space launch business.
       According to news reports, a Pentagon agency has determined 
     that the information which Loral and Hughes transferred to 
     the Chinese caused ``harm'' to U.S. national security, but 
     the nature and extent of whatever harm was done is not yet 
     clear. The congressional investigating committees will try to 
     get the answers to that question. What does seem clear at 
     this point is that the Chinese government never requested 
     information or other assistance from our government to 
     improve the space boosters they use to launch satellites. 
     What is even more clear is that in 1996 the U.S. government 
     did not provide, or approve Loral and Hughes providing, 
     information which would improve Chinese space launch or 
     missile capabilities.
       Indeed, Loral and Hughes are under investigation for 
     unauthorized transfer of information. The Justice 
     Department's reservations about the February 1998 satellite 
     waiver stemmed not from the waiver itself, but from a concern 
     about how it might affect a jury's psychology should Justice 
     decide to prosecute these two satellite manufacturers for 
     what they may have done in connection with their review of 
     the 1996 Long March rocket failure.


                      Loral Campaign Contributions

       According to news reports, Mr. Schwartz--Loral's chairman 
     and CEO--is the largest single contributor to the Democratic 
     Party. Loral also was the beneficiary of the waiver which 
     President Clinton approved in February. In addition, Loral 
     successfully sought (along with other U.S. satellite 
     manufacturers), presidential approval for the transfer of 
     authority over the licensing process from the State 
     Department to the Commerce Department. Many have suggested a 
     relationship between the Schwartz campaign contributions and 
     these Clinton decisions.
       The question not only is legitimate, but goes to the heart 
     of the larger issue of the impact of campaign fundraising and 
     contributions on the American political process. But even if 
     suspicions prove correct, the fact remains that no 
     ``technology transfer'' is authorized when Loral (or any 
     other American) satellites are launched by Chinese rockets. 
     Moreover, there is no current indication that any of the 
     laws, policies and other safeguards against such 
     technology transfers were relaxed as a result of campaign 
     contributions. The issue of whether campaign contributions 
     influenced presidential decisions in this case is of 
     profound seriousness and should be pursued by the 
     congressional investigative committees, but appears at 
     this point to be essentially unrelated to the issue of 
     technology transfer to China.


                    Chinese Campaign Contributions.

       Democratic fundraiser Johnny Chung reportedly has told 
     investigators that he served as a conduit for political 
     contributions from the Chinese government. Specifically, he 
     claims that Liu Chaoying, who is

[[Page E1064]]

     an officer in the Chinese army and an executive in the 
     Chinese company which (among its many business enterprises) 
     launches satellites, gave him money with instructions to 
     donate a portion of those funds to the Democratic Party.
       If substantiated, these assertions could have serious 
     implications. That said, it also should be noted that, 
     provided the safeguards described above do their job, even if 
     a quid pro quo were sought and given, a satellite waiver 
     might work to the commercial advantage of Liu's company, but 
     would not have contributed to China's military capabilities.
       In sum, several of the issues being raised in the current 
     controversy are real and serious. Others, particularly those 
     related to charges that satellite launch waivers somehow 
     enhanced Chinese missile capabilities, may be based on 
     fundamentally mistaken premises. Key to making that 
     determination is an assessment of the practical effectiveness 
     of the safeguards policies and practices that apply to these 
     satellite launches.
       If careful analysis determines that these safeguards have 
     substantially achieved their objectives, then the imposition 
     of blanket prohibitions on satellite launches by China would 
     largely miss the point. On the one hand, it would not deal 
     with concerns about how campaign contributions--from 
     Americans, to say nothing of Chinese--might influence 
     government decisions in ways which produce commercial 
     advantage. on the other hand, it could prove to be worse than 
     redundant with the safeguards already in place, because it 
     would both place American industry at a competitive 
     disadvantage and do needless damage to our critically 
     important relationship with China.
       One fact, however, already is abundantly clear: A great 
     deal is at stake in the answers to the questions being raised 
     in the current controversy. It therefore is essential that we 
     get it right--that all of the charges be thoroughly 
     investigated, that penalties be levied where appropriate, and 
     that remedial actions be taken where required. But we should 
     let the congressional committees do their jobs before a rush 
     to judgment that may harm rather than advance our interests.

     

                          ____________________