[Congressional Record Volume 146, Number 83 (Tuesday, June 27, 2000)]
[Senate]
[Pages S5910-S5911]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SHELBY:
  S. 2801. A bill to prohibit funding of the negotiation of the move of 
the Embassy of the People's Republic of China in the United States 
until the Secretary of State has required the divestiture of property 
purchased by the Xinhua News Agency in violation of the Foreign 
Missions Act; read the first time.


            the chinese news agency divestiture act of 2000

  Mr. SHELBY. Mr. President, the Washington Times reported last week 
that the Chinese Government-owned news agency, Xinhua, had purchased 
property on Arlington Ridge Road in Virginia a location that overlooks 
the Pentagon and has direct line of sight to many of our key Government 
buildings including this Capitol and the White House.
  In fact, the property is so appealing that the East Germans bought it 
in the early 1980s, which led Congress to amend the Foreign Missions 
Act.
  The Secretary of State, through the Foreign Missions Act, has broad 
authority to oversee the purchase of buildings in the United States by 
foreign government entities. Under the Act certain identified 
governments are required to notify the State Department of their intent 
to purchase property in the United States. China is one such country.
  The Secretary of State then has 60 days to review the sale, and 
receive input from the Secretary of Defense and the Director of the 
FBI. She has the option to disapprove the sale during this period.
  None of this occurred--despite the fact that China was notified in 
1985 that its news agency was required to follow these procedures--and 
on June 15 the sale was finalized.
  The Foreign Missions Act provides the Secretary of State with the 
authority to remedy this violation of law. Under section 205 of the 
act, the Secretary may force the news agency to divest itself of the 
property.
  The legislation I am introducing today will ensure that this broad 
authority is used.
  The legislation has two basic requirements: First, it requires the 
Secretary of State to report to the Intelligence and Foreign Relations 
Committees whether she intends to force the news agency to divest 
itself of the property.
  Second, the bill prohibits any State Department funds from being used 
to negotiate with the Chinese on the relocation of the Chinese Embassy 
in Washington until she certifies that she has instituted divestiture 
proceedings and will ensure that any further purchase of property by 
the news agency will be pursuant to the Foreign Missions Act.
  By prohibiting funds for further negotiations until this violation of 
U.S. law is resolved, this second provision

[[Page S5911]]

will also ensure that this issue is handled separately from on-going 
negotiations to relocate both the U.S. Embassy in Beijing and the 
Chinese Embassy in Washington, DC.
  The potential for this building to be a source of unparalleled 
espionage is not a theoretical matter. While there is nothing new about 
PRC spying, as an emerging economic and military power, China 
increasingly challenges vital U.S. interests around the globe through 
its aggressive security and intelligence service--employing both 
traditional intelligence methods as well as non-traditional methods 
such as open source collection, elicitation, and exploitation of 
scientific and commercial exchanges.
  In December 1999, the Director of Central Intelligence and the 
Director of the FBI reported to the Intelligence Committee, in 
unclassified form, that:

       As the most advanced military power with respect to 
     equipment and strategic capabilities, the United States 
     continues to be the [Military Intelligence Department of the 
     People's Republic of China]'s primary target.

  The DCI went on to report:

       During the past 20 years, China has established a notable 
     intelligence capability in the United States through its 
     commercial presence.

  And added that China's commercial entities play a significant role in 
pursuit of U.S. proprietary information and trade secrets.
  One of China's greatest successes has been its collection against the 
U.S. nuclear weapons labs. As the U.S. Intelligence Community concluded 
last year:

       China obtained by espionage classified U.S. nuclear weapons 
     information, [including] at least basic design information on 
     several modern U.S. nuclear reentry vehicles, including the 
     Trident II (W88).

  The special advisory panel of the President's Foreign Intelligence 
Advisory Board PFIAB concluded:

       [T]he nature of the intelligence-gathering methods used by 
     the People's Republic of China poses a special challenge to 
     the U.S. in general and the [DOE] weapons labs in particular. 
     . . . The Chinese services have become very proficient in the 
     art of seemingly innocuous elicitations of information. This 
     approach has proved very effective against unwitting and ill-
     prepared DOE personnel.

  In another example, an investigation by the Senate Select Committee 
on Intelligence concluded that U.S. officials ``failed to take 
seriously enough the counterintelligence threat'' in launching U.S. 
satellites on PRC rockets. Technology transfers in the course of U.S.-
PRC satellite launches:

       Enable the PRC to improve its present and future space 
     launch vehicle and intercontinental ballistic missile.

  But the Chinese are also active in traditional methods of 
intelligence gathering, which brings us to the subject of my 
legislation. Especially in the wake of U.S. military success in the 
Gulf War, the acquisition of advanced U.S. military technology has been 
a primary thrust of PRC espionage and intelligence collection efforts.
  If you want money, and if you are so inclined, you rob a bank 
because, as a bank robber Willy Sutton famously observed: ``that's 
where the money is.''
  If you want information on the most advanced military power in the 
world, the Pentagon is where the information is.
  I am hopeful that this bill can be taken up and passed quickly by the 
Senate and the House in order to ensure that the divestiture occurs in 
an orderly and speedy manner.
  Mr. President, this is a serious matter.
                                 ______