[Congressional Record Volume 146, Number 25 (Wednesday, March 8, 2000)]
[Senate]
[Pages S1277-S1280]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     THE EXPORT ADMINISTRATION ACT

  Mr. THOMPSON. Mr. President, I thank Senator Enzi very much. I do 
wish to make a couple of comments in response to the chairman of the 
Banking Committee, the Senator from Texas.
  First of all, I appreciate his taking the bill down and giving us an 
opportunity for further discussions and negotiations. Apparently, there 
are still some items on which some Members are trying to come together. 
I must say, and have said to my friends, Senator Gramm and Senator 
Enzi, that my concern goes deeper than some of the details we are 
working on right now. Unless some very substantial changes can be made, 
which I do not anticipate, I could not support the bill. I will not be 
the one standing in the way of proceeding on the bill, but I reserve 
all my rights as we proceed and discuss it. It does need full 
discussion. It is a very serious matter. I am afraid it has not yet 
gotten the attention it deserves. We will have some amendments, 
hopefully, to improve the bill as we go along.
  I agree with my friend from Texas that it is a different time. We are 
not in the cold war anymore. No one can put the technological genie 
back in the bottle. But our export policies have quite adequately taken 
that into consideration. In fact, many on this side of the aisle, 
people around the country, have been quite critical of this 
administration because of the liberality or the looseness of the export 
controls that we are operating under now, under Executive order. As we 
know, we have not had a reauthorization of the Export Administration 
Act since 1994. We have been operating basically on Executive orders. I 
personally feel the Executive orders we are operating under with regard 
to our export controls are too loose and need tightening.
  We saw what happened with regard to the exporting of our satellite 
technology and the Hughes and Loral situation that is under 
investigation by the Justice Department right now, where we got the 
Chinese to send our satellites up in orbit but apparently in the 
process gave the Chinese some very sophisticated technology that would 
assist them with regard to their missile program. So Congress reacted 
to that.
  The Commerce Department had, previous to that, transferred the 
jurisdiction of satellites from the State Department to Commerce. It 
was all under Commerce. We took a look at that and said that does not 
belong in Commerce. Commerce has a legitimate concern about trade and 
exports for sure, but that is not the only concern. When you are 
exporting materials that have national security significance, so-called 
dual-use items that might be militarily significant to countries that 
you do not want to be helping, then the State Department needs to be 
concerned, too. So Congress insisted that jurisdiction be brought out 
from Commerce and given back to the State Department.
  We have also seen what the administration has done with regard to 
high-performance computers. They reassess the situation every 6 months. 
They are increasing the MTOPS level for the export of high-performance 
computers to

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countries such as China and other third-tier countries at a very brisk 
rate. The MTOPS level has gone from 2,000 in 1996 to 12,500 for 
military, as we speak. The anticipation is that the MTOPS level will 
continue on apace very significantly.
  Now we have an amendment this morning, as I understand it, that would 
cause that review to happen not only every 6 months but every 30 days. 
The Department of Commerce would be looking at our high-performance 
computers and whether or not we ought to reassess sending more 
computers, something that we have had the dominant position on 
throughout the world, something the Chinese, until recently, had no 
indigenous capability of developing. We continue to supply them. We 
take into consideration things such as the abilities of foreign 
countries.
  My point is, the Department of Commerce is hardly being guarded as 
they establish their policies of exports as far as high-speed computers 
are concerned. Many people, including myself, are concerned that they 
go too far and too fast because we do not know what the Chinese, for 
example, are really doing with them. We are told they have clustered 
together computers of lower MTOPS levels and have come up with 
something much, much more significant than what, perhaps, we think they 
have.
  We were told by the Cox commission that the Chinese are using our 
high-performance computers for their simulations for their nuclear 
program. We were told that they use our high-performance computers to 
assist them in their biological and cryptology programs.
  The cold war is over, and the last time we reauthorized this act, 
Jimmy Carter was in the White House. Indeed, the cold war has come and 
gone, but we have new challenges on the horizon. We do not have the old 
Soviet Union anymore, but we do have the Chinese who, the Rumsfeld 
commission tells us and the Cox commission in great detail explains to 
us, are very aggressively attempting to get their hands on our 
technology.
  We know about the situation in Los Alamos. We know about their 
endeavors, as far as their commercial enterprises around the country. 
They tell us, in addition to that, they are feeding off our technology 
that we are exporting to them to use in the most troublesome manner, as 
they continue to be one of the world's greatest proliferators of 
weapons of mass destruction. It is not just what they are doing in 
China, but it is what they are doing around the world.
  We have every reason to be extremely concerned about our export 
policies in light of these developments. We were warned by the Rumsfeld 
commission that we are facing a threat such as we have never faced 
before in this Nation with regard to these rogue nations and their 
increasing capabilities. We were warned by the Deutch commission. We 
were warned by the Cox commission. We were warned by at least two 
recent national security estimates in terms of the capabilities of 
these rogue nations. They all say they are getting much of their stuff 
from the Russians and the Chinese.
  This is the backdrop against which we are considering reauthorization 
of the Export Administration Act. My concern is not that we are 
reauthorizing and taking a look at it, it is that we are looking at it 
totally from the wrong direction. We should be looking at ways of 
getting more training for our people who are serving as export 
licensers. We need to do more on end users. We do not know when we send 
a high-speed computer or high-performance computer to China what 
happens to it.
  Up until 1998, the Chinese would not even let us check on end users. 
Out of 600-some computers we have sent over there, we have had one end 
user check.
  According to the Cox commission, in 1998, we got an agreement with 
the Chinese to check with the end users, but the administration will 
not release that agreement. The Cox commission says they have seen it--
they cannot release it--but it is totally inadequate. This is the 
backdrop against which we are considering reauthorizing the Export 
Administration Act.
  What do we do with this bill, S. 1712? The bill does some good 
things, I think. There are some provisions in it that move in the right 
direction, but they are fairly minimal. In many important respects, it, 
first of all, further incorporates into law things this administration 
has been doing by Executive order and then creates new legal 
categories, all of which liberalize or loosen export controls.
  It creates a category with regard to foreign availability. Foreign 
availability is taken into consideration now by the Department of 
Commerce in making its decisions as it increases these end-top levels. 
They take that into consideration. What this bill will do is put it 
into law and set up a technical group within the Department of Commerce 
to make a determination if there is foreign availability, and, if so, 
lickety-split, it does not matter what the end-top level is at Commerce 
when that happens, it goes out the door.

  We have seen from hearings in our committee that there is sometimes 
great disagreement as to whether or not there is foreign availability 
with a certain item. It is not just strictly a green-eyeshade matter of 
physics; it is something that ought to be considered very carefully and 
should not be left up to the unilateral discretion of Commerce.
  This bill gives Commerce more discretion than it has ever had before. 
We have been very critical of the practices of the Department of 
Commerce in this administration in times past. I suggest we consider 
very carefully whether or not we want to give even more authority to 
the Department of Commerce as we move forward.
  Another category is created out of whole cloth: mass marketing. That 
is not in common practice now; that is not in current Executive orders 
now. It basically says if it is mass marketed in this country, even if 
it is not in another country, the assumption is they are eventually 
going to get it, so let's send it to them, taking into consideration 
the advantage we might have of at least having a delay as we consider 
our policies in this Nation, such as the National Missile Defense 
Program or things of that nature.
  We are creating mass marketing. We are creating foreign availability. 
We are creating embedded components: No matter if a component is 
controlled, if it is part of a larger component, and it is only so much 
of the value of that larger component, you look at the value and not 
the inherent nature of the component itself. That is not right. We 
ought to look at the component, and if it is controlled, it ought to 
remain controlled whether it is in a larger item or not. It is another 
category where we are taking additional items out of control.
  Each of these things can be and, I assure you, will be debated in 
some detail as to whether or not it is good policy, but I think there 
can be no argument on two points: First, there is greater discretion in 
many respects in the Department of Commerce and in the Secretary of 
Commerce. Second, this bill tips the scales in favor of more exports. 
That is the reason we are doing it.
  I personally have not heard any complaints--maybe there are 
complaints out there; I do not say there are not--from exporters who 
are not getting things through fast enough. Maybe we need more people. 
Maybe we need more folks handling the paperwork. Whatever. I do not 
argue that point.
  I do not hear any hue and cry that we are not shipping dual-use 
possibly militarily significant items out fast enough. But one could 
look at this bill and assume that is the underlying motivation, that we 
believe we need to loosen up the export controls a little bit.
  It is an honest disagreement. My friends have worked very hard on 
this. They have tried to be as accommodating as they know how, but we 
approach this from a fundamentally different vantage point.
  I look forward to the discussion when we get on the bill. I thank the 
Chair. I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, as you can tell from the discussions that 
have gone on today, this is not the simplest bill that has ever come 
before Congress. There are a lot of complexities. There are still, 
obviously, a lot of misunderstandings about what is in the bill.
  There is increased money for enforcement, increased people for 
enforcement, a tie-down on how we check on end users. But I do not want 
to get into

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those very stimulating, exciting details right now. I want to make some 
more general comments so that my colleagues and other people who are 
interested in this bill have some idea of why we are having the 
difficulties we are having.
  I am one of those people who agrees--and I think Senator Thompson 
agrees--that the system is broke. I thought we were going to have a 
debate today on how Congress can fix it because Congress is quickly 
realizing that we are sacrificing national security and impeding export 
growth at the same time. We have a chance to fix that problem with this 
bill or to let it remain broken for about 18 months, at a minimum.
  If we do not debate this before the budget and appropriations bills 
come up, which will be the agenda for the rest of this year, we will 
not be able to debate it until the nominations of a new administration 
have been completed and those people understand this difficult area.
  In January of 1999, I became the chairman of the Banking Subcommittee 
on International Trade and Finance. Shortly thereafter, this issue was 
thrust into prominence. It was disclosed that China had access to 
United States military secrets, and the congressional Cox commission 
emphasized the problem with the release of their classified report.
  I also found out the Export Governing Act had expired in 1994. That 
was the Export Administration Act of 1979. Our country was operating 
under emergency Executive orders to keep any semblance of security at 
all.
  I had a briefing on and read the classified Cox report. I was 
dismayed.
  I followed the history of export licensing and found out there had 
already been 11 attempts to renew the Export Administration Act. All 
had gone down in flaming defeat. I read the documentation on the failed 
bills. I am always amazed at how much documentation there is of what 
has been done in Congress.
  Several people who had tried to rescue the failed bills are still 
around. I visited with them. I made several trips downtown to see how 
the committee process of export licensing works at the present time. I 
drafted a bill. I began working with the ranking member of my 
subcommittee, Senator Johnson of South Dakota. Without his cooperation 
and interest, and without the dedication and involvement of his staff, 
we would not have gotten to this point today.
  We looked at the problem. We searched for the difficulties. We 
established some goals. We began to meet with anyone and everyone. We 
met with all the agencies involved. We met with companies. We met with 
industry groups. We met with any Senator willing to give a few minutes 
or a long period of time. I was amazed at how many were interested.
  This bill has an interesting constituency. There are two main groups. 
Neither group has the votes to pass the bill, but each of them has the 
votes to kill the bill.
  Of course, everyone knows it is easier to kill a bill than it is to 
pass a bill. To kill a bill, you only need one negative vote anywhere 
in an 11-step process, and it is dead. You just have to be able to get 
a majority confused enough at one point to get a negative vote. But to 
pass a bill, you have to have a positive vote at each one of those 
places and get the signature of the President. So it is 11 times easier 
to kill a bill than it is to pass one.
  At just one single step for each of the previous 11 attempts at this 
bill, there was a perception that each of the previous bills that were 
attempted was either too strong for national security or too easy for 
imports. The trick on this bill has been to maintain a balance.
  Along the way, I found that most of the provisions are not in 
conflict--the goals are just different--and the difference has been 
perceived as a counter to each other's interest. I know we can have a 
vigorous export economy and protect the national security.
  I appreciate the confidence shown by Senator Gramm. He has given 
Senator Johnson and me a free rein to go after a solution. He has 
allowed the flexibility to review many unusual solutions. Senator 
Sarbanes has provided a quiet leadership of fatherly questioning and 
direction. I appreciate the hours my fellow Senators have taken to 
explore this national problem and review this proposed solution.
  Senator Shelby, the chairman of the Intelligence Committee, and a 
ranking Banking Committee member, was a big contributor and adviser 
before the bill even came up in committee. Senators Warner, Thompson, 
Helms, and Kyl have spent countless hours in the last 3 weeks ironing 
out difficulties. I have to mention Senator Cochran. He is a warrior of 
past battles, and he has been a tremendous help. Meetings I have been 
in during the last year were often so educational that I sometimes 
thought maybe I ought to be paying tuition.
  Industry needs reliability and predictability. Industry needs to be 
able to make it to the marketplace at least at the same time the 
competitor does; for the sake of the United States, I hope they can 
make it a little bit ahead of the competitor.

  For our national security, we need to be sure items that can be used 
against this country do not fall into the wrong hands.
  We formed a tough love partnership in this bill that achieves both 
goals. Teamwork in the bill was begun by higher penalties for 
violations.
  I would like to use an example of a conviction that has happened with 
McDonnell Douglas. They violated the export law. Under the present 
Executive order, they may be charged as much as $120,000. For a big 
corporation, they spend more on an ad than that. That is incidental 
business. Under this bill, they could be fined up to $120 million. That 
gets the attention of business.
  Also, the individuals who are willingly and knowingly involved in 
this could go to jail. They could go to jail for up to 10 years for 
each offense. So you can see that if there are enough offenses under 
this bill, they could have life imprisonment. Those are penalties that 
have their attention.
  There are several other items. I will not go into all of them. But 
the teamwork is completed by a well-defined system for reliability and 
predictability, one that relies on prioritizing enforcement assets to 
catch the bad guys. The United States makes so many products, they 
cannot all be watched.
  I need to make a clarification. While we are talking about national 
security, we are not talking about guns and missiles. That would be on 
the munitions list. That isn't under the control of the Export Act. 
That list, the munitions list, is controlled by the Department of 
Defense and is much stricter--and has to be. We are not talking about 
satellites and the technology that goes with that. That technology is 
controlled by the State Department.
  We are referring to products which we have given a fancy name. We 
call those products dual-use technologies. They were not designed for 
war. Most were not even intended to be dangerous. Many things are 
common household items. We call them dual-use technologies because they 
can be used for more than one use, and we worry about those items that 
can be used in a way that would be harmful to the United States.
  For example, a stick can provide stability when you are walking or it 
could be a club. A knife can be a dagger or it could be a vegetable 
peeler. A precision machine can manufacture toys or stealth airplane 
parts. A computer can teach you math or it can run math models to test 
nuclear weapons. Everything your senses can sense can be used for good 
or for evil. Some evil is worse than others.
  I think you begin to get a sense for the kind of items this bill 
could control. I think you can see where the bill could have some 
validity controlling every single item made or used, except everybody 
agrees that would not be feasible. If the universe is too great, we 
cannot afford the enforcement and business will not be able to sell 
anything. This bill was worked to prioritize logical enforcement.
  To have a better idea of how enforcement works, I have had a person 
on loan to my staff for the last several months who is a law 
enforcement agent, a very specialized enforcement agent, a person who 
has worked daily with the enforcement of dual-use exports. That help 
has been valuable beyond belief.
  We and every one of our constituents know the value of hands-on 
experience. There are some things about a job you can only learn by 
experience. I am

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thankful we have had experience helping us.
  Also, during the drafting part of this bill, I sought out a person 
who had experience actually applying for export licenses. He served as 
a fellow on my staff for a few months and was also instrumental in 
drafting the bill.
  I would be remiss if I did not thank all the people from the 
administration who spent hours showing me what they do or explaining 
how the system works.
  The PRESIDING OFFICER (Mr. Santorum). The Senator's time has expired.
  Mr. ENZI. With the indulgence of the Senator from New Jersey, I ask 
unanimous consent for some additional time so I can finish this 
explanation, which I think is critical to the bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ENZI. I thank the Senator.
  Mr. President, some of the people working for the Federal Government 
right now have worked in a number of capacities and have seen export 
licensing from more than one side. I would be especially remiss if I 
did not mention the dedicated and time-consuming help of Undersecretary 
of Commerce Bill Reinsch and especially Undersecretary of Defense Dr. 
John Hamre. At one point, they had visited so much over the telephone 
about this bill that they caught an ``electronic bug'' and were ill for 
24 hours.
  On my own staff, I thank Katherine McGuire, my legislative director, 
who also works with the committee, and Joel Oswald, who is my committee 
person.
  On Senator Johnson's staff, I not only have to mention his tremendous 
work and coordination, but I have to mention Paul Nash, who sat in on 
hours and months of meetings; on Senator Gramm's staff, particularly, 
Wayne Abernathy; on Senator Sarbanes' staff, particularly, Marty 
Gruenberg; the staffs from all of the different committee chairs who 
have been involved in this.
  This bill has a lot of rabbits, and it has taken a lot of people to 
keep track of all of the rabbits, particularly as they multiply. I 
would like to tell you the debate we will hear on this bill is going to 
be fascinating. I would like to tell you that the bill will hold your 
attention, that you will be sitting on the edge of your seat, but that 
would be false advertising. If the bill were that thrilling instead of 
that detailed, it would have passed long ago.
  This may be the most important debate we have this year, but I have 
to warn you, you can't tell the players without a program, and some 
parts of this debate don't even allow a program. We will ask you to 
pretend that you are James Bond, but the most exciting mission you will 
be assigned might make you feel like a proofreader in an atlas factory.
  We need to talk about country tiering. That is where all the 
countries in the world are classified according to the risk to our 
country. We are going to talk about control lists; that is, the list of 
items we need to keep an eye on and have special instances in which 
they might need to be licensed. We are going to talk about a process 
for getting on the list and getting an item off the list. To really 
complicate the process, we are going to go back to our country list of 
risk and vary the risk by each item on the control list. Because that 
will cause some gray areas, we have this little handbook. This little 
handbook is a translation, a simplification of the rules that, if you 
are exporting a single thing, you better be aware of because you could 
be violating the law if you aren't following all 1,200 pages.
  All of those things have to be blended together into something 
workable for industry and national security. I am prepared to explain 
any of those concepts, to go into great detail with anyone who needs 
that. Hopefully, we will not do that on the floor. I have been doing 
that for groups as small as one or as great as 500 for the last year.
  But before you think that is all there is, we threw in two new 
concepts that have been mentioned before, so I will not go into detail 
on those except to mention that they are critical. We threw in mass 
markets and foreign availability. We recognized that if an item is 
available all over the world, probably the bad guys get that, too. And 
if a product is mass marketed in the United States, if it is so small 
and so cheap and sold at enough outlets that it could be legally 
purchased, easily hidden, and taken out of the country, that if you try 
to enforce that, you will probably not get anywhere either.
  I could go on for a long time about the complexities in this bill--
158 pages of detail. We have established a system that is transparent 
and accountable to Congress, requires recorded votes, has ways of 
getting things up to the President, and allows for the President to 
control some things. We recognized the deficiency in the present system 
of difficulty of objecting to licenses, objecting to things on the 
list, and we have cleared those up. Now we need to clear up the 
misunderstandings that there are with the bill.
  Industry and national security--each side has the ability to walk 
away from this bill and cause its demise. It would be the simplest 
thing in the world. I commend business and the security agencies for 
their efforts, their teamwork, and their cooperation. They have read 
the reports that have come out on this. The Cox report has been 
referred to many times. The Cox report says this needs to be done. 
Congressman Cox appeared before the Banking Committee and testified 
that this bill needs to be done.
  I could go into other examples there. I am asking both sides, 
industry and security, to stay together, to keep working to stay in the 
middle so that we can have a system in place that will solve some of 
the problems of the United States while it increases exports. It can be 
done.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from New Jersey.

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