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. 98-485 F
CRS Report for Congress
Received through the CRS Web
China: Possible Missile Technology Transfers
from U.S. Satellite Export Policy - Background
.and Chronology
Updated November 14, 2000
Shirley A. Kan
Specialist in National Security Policy
Foreign Affairs, Defense, and Trade Division
COllgressioltul Research Service .:. The Library of Congress
�China: Possible Missile Technology Transfers
From U.S. Satellite Export Policy
Background and Chronology
Summary
Congress has been concerned about whether t..; .S. finns, in exporting satellites,
provided expertise to China' for usc in its ballistic missile and space programs and
whether the Clinton Administration '5 policies have facilitated transfers of military
related technology to China. This CRS report provides background intomlUtion,
congressional action: and a chronology of major developments since 1988,
Some critics oppose satellite exports to China, while others are conccnlcd that
the Clinton Administration relaxed export controls and monlmring of commercial
satellites in moving the licensing authority from tbe State Department to Commerce
Department in 1996. A range ofconcerns were prompted by Nell' York Times reports
in April 1998 that the Justice Department began a criminal investigation into whether
Loral Space and Communications Ltd. and Hughes Electronics Corp. violHtcd export
control Jaws. The firms allegedly shared their findings with China on the cause of a
rocket's explosion while launching a U.S.-origin satellite in February 1996. In sharing
their conclusions, the companies are said to have provided expertise that China could
use to improve the accuracy and reliability of its future ballistic missiles, including
their guidance systems. At least three classified studies reportedly S<lY that C.S,
national security was harmed. Congress and the Justice Department have also
investigated Hughes' review of China's launch failure on January 26, 1995,
In addition, the press reports alieged that President Clinton in February 1998
issued the latest wa,ver of sanctions (for Loral's Chinasat~8) that undermined the
inves.tigation by allowing the issuance of licenses for the export of assistance similar
to that in question. Moreover, the Times article alleged that political considerations
may have influenced the Administration's decision, since Land's chuirm;1I1 was the
large:st individual donor to the Democratic Natimllli Committee fmthe 1996 election.
In the fall of 1998. Congress passed the FY 1999 National Defense Authorization
Act lhat transferred licensing authority over sutcllites baek to the State Depanment
on March 15, 1999. On December 30, 1998~ the Cox Committee unanimously
approved a classified report conduding that China' s technology acquisitions over the
past 20 years. not only that associated with satellitc launches, have hamlcd U.S,
national security. The Senate fntelligence Committe.! n;::lea.qed its unclJs~ified report
on May 7, and the Cox Committee issued a declassified report on May 25, 1999. On
October 5, 1999, the President signed into law the FY2000 National Defense
Authorization Act (P.L. 106-65) ill which Congress addressed export cootrols relating
to missHe technology, satellites, and other issues. In April 2000, the State
Depilrtment charged Lockheed Martin Corp. with violating export controls, but they
agrc(:d in Junc to a settlement involving penaiticsofS13 million, Congress may watch
for possible further legal action by the Justice Department based on the investigations
(begun in September 1997), any new waivers or licenses for exports ofsatcltites (such
as Chinasat-8), and a possible review of the U.S, policy to export satellites to China
(given their potential military use).
�COIltents
Introduction ................. , ................................ .
Background .................................................... 2
China Great Wall Industry Corporation .......................,.... 2
Missile Technology or Expertise ................................ 3
Security Concerns ....................................... 3
Loral's Case ............................................ 4
Beyond the Loral Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7
Motorola ........................ : ........... " ......... 8
Hughes ................................................ 8
Lockheed Martin ............................. . . . . . . . . .. 11
Military Benefit ........................................ 12
Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14
Waivers .................................................. 15
Congressional and Administration Action ............................
Hearings of the I05 1h Congress. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
Investigations ....................... ' . . . . . . . . . . . . . . . . . . . . . ..
Cox Committee .........................................
Clinton Administration's Response ..........................
Senate Intelligence Committee .............................
Clinton Administration's Response ..........................
Export Controls and Intelligence ...........................
Senator Specter's Investigation ............................
Legislation to Revise Export Controls ...........................
I05 lh Congress .........................................
I06 lh Congress .............. : ..........................
Denied and Pending Satellite Exports ............................
18
18
18
18
23
24
26
26
27
28
28
30
3I
APMT ............................................... 31
Chinasat-8 .......... '.................................. 33
Others ................................................ 34
Chronology ................................................... 35
List of Tables
Table I. Presidential Waivers ofPost-Tiananmen Sanctions
for Exports of Satellites or Parts to China ........................ 17
�China: Possible Missile Technology Transfers
From U.S. Satellite Export Policy
Background and Chronology
Introduction
Members of Congress have been concerned about allegations that U.S. fimlS
provided expertise to the People's Republic of China (PRC) that could be used in its
balli5tic missile and space programs and that the Clinton Administration's policies on
satellite exports facilitated legal or illegal transfers of military-related technology to
China. The New York Times reported in April 1998 that the Justice Department began
a criminal investigation into whether Loral Space and Communications Ltd. (of New
Yarle), and Hughes Electronics Corp. (afLos Angeles) violated export control laws, I
The firms were alleged to have shared their findings with China, without approval
from the U.S. government, on the cause of a PRC rocket's explosion while launching
a U.S.-origin satellite in February 1996. In sharing their conclusions, the companies
allegedly provided expertise that China could use to improve tlie accuracy and
reliability of its ballistic missiles, including their guidance systems. Several classified
government studies reportedly concluded that the U.S. technical assistance provided
to China damaged U.S. national security by helping the PRC to improve the guidance
systems on its ballistic missiles.
In addition, the media reports alleged that President Clinton in February 1998
issued a waiver of sanctions that undemlincd the investigation by allowing the
issuance of licenses for the export of technology or expertise similar to that in
question - despite "strong opposition" from Justice.
Moreover, political
considerations allegedly influenced the Administration's decision, with Loral's
chaitman being the largest individual donor to the Democratic Party in 1996.
This CRS report provides detailed background information, significant
congressional and administration action, and a comprehensive chronology. The
events sumniarized below, based on various open sources and interviews, pertain to
various aspects of U.S. foreign and security policy:
• U.S. policy since the Reagan Administration to allow exports of satellites to
China (increasingly for its use, not just launch);
• Presidential waivers for exports of satellites, including the latest waiver for
Chinasat-8 (built by Loral) during an ongoing criminal investigation into
J Gerth, Jeff. "Companies are Investigated for Aid to China on Rockets," and "Aerospace
Firms' Tics with China Raise Questions," New York Times, April 4 and 13, 1998.
�CRS·2
alleged assistance by Loral and Hughes to China's missile program; waivers are
for U.S. san'ctions imposed after China '5 Tianunmen Square crackdown;
" sanctions imposed for
n~issilc
proliferation by China's space launch company,
China Great Wall Industry Corporation, and other companies;
• quotas on PRe launches ofsatellites;
• controls on exports of U.S.-origin satcJl1tesandJorsatellltc technology, us well
as controls and monitoring ofteclmical exchanges with PRe enginCCI1\;
q export controls to prevent technology transfers that .could contribute to
China's ballistic missile force and/or military satellites.
Congressional investigations have also led to media reports in early 1999,
conflnued by U.S. intelligence in April amI tbe Cox Committee's declassified rep'ort
in May 1999, rhatlhe PRCobtainedinformationon U.S, fluclearweapons. 2 Members
arc concerned about the PRe's modernization of its ballistic missiles. 3
Backgrouud
China Great Wall Industry Corporation
China Great WalllndustryCorporntion (CGWIC. or China Great Wall) has been
China's commercial space launch company sinee 1986. It markets the use of rockets
developed by the China Academy of Launch Vehicle Technology (CALT) and other
acro;;pace academies. China Great Wall and CALT ure part of China's dcfense*
related aerospace industry under the China Aerospace Corporation (abbreviated by
China as CASe). CAse. established in 1993, oversees space as well as missile
research and development. CASe and its subordinate companies, research academies,
and factories develop and produce strategic and tactical ballistic missiles. space launch
vehicles, surfacc-to-air missiles, cruise missiles. and military (reconnaissance,
communications, or other) and dvilian satellites. CASe was previously known as the
Ministry of Aerospace Industry, also known as tbe Seventh Ministry of Machine
Building. Sincc ApIiI1998, China's military. the People's Liberation Army (PLA),
has ~!xercised control over PRe satellites under the new General Equipment
Department.
China reportcdly launched its: first satellite, Dongfallghong ("East is Rcd") on
April 24, 1970. By the end of 1997, Cbina reportedly had launched 40 domestic
satellites: 17 retrievable reconnaissance satelUies, 3 meteorological satellites, 8
communkations and broadcasting satelJirc~, and 12 "experimentat" (possiblymilitllry)
satcllitcs. China is using the satellites and space technology to enhance its national
defense, economy, and international prestige:' On April 7,1990, China Greal Wall
u.s.
Sec 111so: CRS Report RL30 )43, China: Stl,~pccred ACt/uis/lion of
Nucleur Wi/afton
Do/a, and CRS Report RL)0220, China's Technology Acquisitions: Cox Commiltee '$
Reporl- Findings. Issues, una Recomment/ulions. by Shirley A. Kan.
2
3
Sec CRS Report 97·391, China: Ballislic alld Cmise Missiles, by Shirley A, Knn,
4Chou Kuan~\\'U, "China's Reconnaissance Satellites," Kuung Chfao Ching (in Hong Kong),
(continued.. ,)
�CRS·3
launchc{fa foreign satellite, Asiasat, for the fin;t time,S Since then, the company has
expanded its foreign business, especially with U.S. fitms such as Hughes Electronics,
Lockheed Martin, and Loml Space and Communications. China probably seeks
foreign sapital and technology to apply to its domestic satellite research and
development efforts, in pan to lessen reliance on purchasing foreign satellites, The
president of the Chinese Academy of Sp.a.cc Technology said that the PRe's
Dongfanghong (East is Red) satellites match the capacities ofadvan<:ed satellites built
by Hughes, but are backward in satellite navigation and stabilization technologies.
The Academy hopes to sell its satellites at world standards by 2000.b
China has experienced a number of embarrassing and costly failed sateHite
launches. In 1992, a PRe rocket stalled while attempting to launch the Optus~Bl
satellite and another rocket exploded and destroyed the Optus-B2 satellite (both built
by Hughes). In 1995, A Long Mareh rocket exploded and destroyed lhe Apslaf·2
satellite (built by Hughes). In 1996, another PRe rocket exploded and destroyed the
Intel sat satellite (built by Loral), Aside from the dramatic explosions, otberproblems
have prevented tbe PRe rockets from successfully launching satellites into the correct
orbits.
China's aerospace industry has shifted from denying aU responsibility in failed
laundlCS of foreign satellites to a wiltingncss to work with foreign companies in
detelmining the causes of explosions and other failures. This pn1.ctice may have been
a stratcgy to learn from foreign companies methods to improve China's rockets,
satellites, and other related space technology. China may also have tried to reassure
foreign insurance compames and satellite manufacturers that it can solve problems
with the Long March rockets.
Missile Technology Qr Expertise
Security Concerns. One question in
the controversy involves the applicability of
satellite-launch technology to the
modernization of China's ballistic missiles.
China Great WaH uses the Long March scries
of rockets to launch satcllitcs. China's
"LOllg March (LM)" ("Chang Zheng") space
laum:h vehicles (SLVs) arc related to its
"East Wind" ("Dong Fcng" (DF))
imercontinental ballistic missiles (ICBMs).
China has used the LM rockets to j,:HH1ch its
Corresponding Designations
PRe
ICB~1:
U.S.
CSS·3
CSS·4
SLY:
LM
CZ
ICBM:
DF·4
DF·SA
4(... continued)
Mar;:h 16, 1998; transilltcd in FBiS.
l'Por commercia! space l<lunches in general, sec CRS Issue Brief lB93062, Space Launch
Vehicles: Govcrnment ReqJlirefJIclUs and COlllmercial Competition, and CRS Report 98-515,
China's Space Progrum: A Brie/Ovel'view Including Commercial Launches of US,~BrJ.ill
Satellites, by Marcia S. Smith.
i>parkcr, Jeffrey. "China (0 Expand Rocket Production," Reuters, August 25, 1993.
�CRS-4
own satellites (since 1970) and foreign satellites (since 1990). The Long March
boosters are also produced as China's eSS-3 (DF-4) and CSS-4 (DF-SA) ICBMs
deployed in the Second Artillery, the PLA's missile force. China's launch facilities,
c.g., the Xichang Satellite Launching Ccnter in Sichuan province, are at PLA bases.
A review ofopen sources finds agreement that the tirst Long March rockets used
to launch satellites were derived from ballistic missiles developed earlier and that there
has been parallcl research and development for the 'modernization of the SLVs and
ICBMs. 7 The eS5-3 ICBM has also been produced as the booster for the LM-I
SLY. The CSS-41CBM has also been used as the booster farthe LM-2, LM-3, and
LM-4 series of SL Vs. In a 1984 publication, the Defense Intelligence Agency (DlA)
called the LM-I SLV the "booster variant" of the CSS-3, and LM-2 the "booster
variant" of the CSS-4. Indeed, this factor has made it difficult to accurately count
the numbers'of ICBMs that China has produced and allows for China to increase the
potential number of ICBMs available for deployment.
When the Reagan Administration first decided to allow China to launch U.S.
origin satellites, it cited the need to protect "legitimate U.S. national security
interests" and promised Congress that an agreement would be concluded with China
to safeguard U.S. technology from "possible misuse or diversion."g Such an
agreement on technology safeguards was signed on December 17, 1988, but
apparently required renegotiation. A new agreement was signed on February 11,
1993. One question concerns whether China has abided by these agreements.
After the end of the Cold War and with increase in U.S.-China trade, some say
that national security intcrests need not be sacrificed by commercial interests. Within
the current controvcrsy, some argue that launching satellites from China is in the U.S.
national security interest because of the benefits to U.S. satellite manufacturers."
Loral's Case. Specifically, the Department of Justice's investigation looks at
Space Systems/Loral (SS/L), Loral's subsidiary in Palo Alto, CA, which chaired a
review committee on the launch failure ofthe Intelsat-708 satellite in February 1996.
7Defense Intelligence Agency, Handbook of the Chinese People's Liberation Army,
Novcmbcr 1984; John Wilson Lewis and Xue Litai, China Bllilds the Bomb (Stanford
Univ{:rsity Press, 1988); Lennox, Duncan, "China's Development of Ballistic Missiles,"
Jane's Intelligence Review, August 1991; Phillip S. Clark, "Chinese Launch Vehicles Chang Zheng I," "Chinese L.aunch Vehicles - Chang Zheng 2," "Chinese Launch Vehicles
- Chang Zheng 3," "Chinese Launch Vehicles - The Rest of the Story," "Chinese Launch
Vehicles - Further Details," Jane's Intelligence Review, November 1991, May 1992,
August 1992, October 1992, June 1993; John Wilson Lewis and Hua Di, "China's Ballistic
Missile Programs," Internaliollal Security, Fall 1992; Iris Chang, Thread of lhe Silkworm
(BasicBooks, 1995); "People's Republic of China: Offensive Weapons, Jalle's Strategic
Weapon Systems, September 1997; Jane's Space Directory 1997-98.
"Export of U.S. Satellite to China for Launch," Deparrmellt of State Bulletill, November
1988.
g
9J-1irsh, Michael (Newsweek), "The Great Technology Giveaway?" Foreign Affairs, Sept./Ocl.
1998; Clayton Mowry (executive director of the Satellite Industry Association), "Satellites
Do No Good Stuck on the Earth," Washington Times, Sept. 8,1998.
�CRS·5
As for Loral's case, Acting Undersecrelary of Slate John Holum confirmed on April
9, 1998, that after the accident in February 1996, the Department of State '''became
aware that there may have been a violation:" The case was referred to the
Department ofJustice for investigation. He said that there are "strong legal remedies"
for violations of export controllaws, including a denial of future licenses.
Loral issued a statement on May i8, 1998, saying that allegations that it
provided missile guidance technology to China arc false. Loral also says that it did
not ,ldvlsc China "on how to fix any problems with the Long March rocket." The
company states that "the Chinese alone conducted an independent investigation ofthe
luunch failure [in February 1996] and they determined that the problem was a
dcfCt<tive solder joint tn the wiring -: a 'l{}w~[ech' matter." Loral denied that it and
I lughcs conducted an independent investigation to determine the cause of that launch
failure. However, at tbe insistence of insurance companies, which required nQn~PRC
confirmation of resolutions of problems with Long March rockets, Loral formed a
committee of several satellite companies, including Hughes, to review the PRe
investigation. According to Loral, the review committee obtained infonnation from
the PRe and was not formed to help them solve their problems. The review agreed
with the PRe conclusion (that a defective solder joint was responsible), without
pcrfonning tests or providing any test data to the rRC. The committee did note that
furthcrtests by China would be required to establish certainty. Loral says that, during
the review, it discussed the {;ommittec's work with U,S. officials, As far as Loral'"s
engineers can determine, the sfatement saysj "no sensitive information - no
significant teChnology - was conveyed to the Chinese."
Loral has further explained that in April 1996. at China's request, Dr. Wah L.
Lim, then a senior vice president and cngincer at Loral, chaired a review committee
to study China's technical evaluation of tile cause of the accident on Feb. 15, 1996.
Loral says China had identified·the problem as residing in the inertial measurement
unit (IMU) ,of the guidance system of the rocket Lorat believed that it did not have
to request a U,S. government license and monitoring. The first meeting was held in
Palo Alto, CA, but the second, in China. Notably, PRC aerospace engineers attended
the meetings.
Nevcllheless, Loral admitted tbat, contrary to its policies, "the' committee
provided a report to the Chinese before consulting with Stnte Department export
Jicensingauthorities," Accotdil1gto Loml, as soon as its executives found out in May
1996, the company notified the Departments of State and Defense, In June 1996,
Loral provided to the U.S. government a detailed, written report concerning all
communications with China, Loral adds that it is in fun cooperation with the Justice
Department in its invcstigation and with Congressional commince.'>. Loral concludcs
that based upon its own revu,::w,lt "does not believe that any ofits employees dealing
with China acted illegally or damaged U,s, national security" In addition, the
statcrncnt says that LoraJ's chairman, Bernard Schwartz, was not personally involved
in any aspect of this maHer, "No poliiical favors or benefits of any kind were
requested Or extended, directly or indir<.:cUy, by any means whatever." Loral also
denies any connection between lhe launch Ihllure in february 1996 and the
Presidential waiver for another Loral-built satellite in february 1998. The export
liccn:;e for the latest launch (for Chm3sat-8) "applied the strictest prohibitions on
technology transfer and specified that any new launch failure investigati~n would
�CRS-6
require a separate license." Loral stresses that it complies strictly with export control
laws and regulations.
Administration officials say that export licensing procedures and strict security
measures (including monitoring by the Defense Department of pre-launch meetings
and the launches) preclude any assistance to the design, development, operation,
maintenance, modification, or repair of any launch facility or rocket in China.
Moreover, Undersecretary of Commerce William Reinsch testified to Congress on
April 28, \998, that effective export controls on dual-usc technology (with military
and civilian applications) allow U.S. exporters to compete while protecting U.S.
security interests. He disputed that there were objections within the executive branch
to allowing recent satellite exports to China, saying that since November 1996 (when
the licensingjurisdiction was transferred from the Department of State to Commerce),
the Commerce Department has issued three export licenses for satellites to be
launched from China - with the concurrence of all agencies.
However, at least three classified studies have found serious concerns about the
U.S. finns' assistance to China's ballistic missile modernization program. A classified
report at the Department of Defense's Defense Technology Security Administration
(DTSA) reportedly concluded on May 16, 1997, that Loral and Hughes transferred
expertise to China that signiticantly enhanced the guidance and control systems of its
nuclt:ar ballistic missiles and that "United States national security has been harmed,"
according to the New York Times (April 13, 1998 and June 27, 1998). These
concerns were first raised in a classified report at the Air Force's National Air
Intelligence Ccnler (NAIC) in March 199Tand supported by the State Department's
Intelligence and Research Bureau (INR), according to the Washington Post (June 7,
1998). These reports apparently prompted the Justice Department's criminal
inve~.tigation that began in September 1997.
Also, the Justice Department had expressed concerns about the February 1998
Presidential waiver for the Chinasat~8 satellite. A memorandum, dated February 12,
1998, written by National Security Adviser Samuel Berger for President ·Clinton,
acknowledged that the Justice Department "cautioned" that such a waiver "could
have a significant adverse impact on any prosecution that might take place" in Loral's
case. 10 Finally, there is little public infomlation on the export licenses issued by the
State or Commerce Department for technical assistance agreements (TAAs)
concerning the transfer of technical assistance and data needed to mate satellites to
launch vehicles (so~caJ[ed "form, fit, and function" technical data).
While Loml's case continued to be under investigation by a federal grand jury,
two incidents occurred with some embarrassment for the Clinton Administration. On
March 16,2000, U.S. Ambassador Joseph Prucher hosted a dinner in Beijing for
representatives of Loral, Lockheed Martin, Hughes, CASC, and ChinaSat. The
Embassy denied that the subject of an export license for ChinaSat 8 was discussed. 11
On July 17, 2000, the Defense Security SClVicc issued an award for "outstanding
1(1
The memomndum was printed in the New York Times, May 23, 1998.
11
Gertz, Bill, "Envoy Hosted Satellite Firms in China," Washington Times, April 4, 2000.
�CRS-7
security pcrfonnance and practices" to Loral and 49 other companies, but then
rescinded the award for Loral after realizing it remains under invcstigation. 12
Meanwhile, the Justice Department's campaign finance task force reportedly
found no evidence that LOTal's chaimlan Bernard Schwartz corruptly influenced
President Clinton in his decision to approve Loral 's export of a satellite to China in
199B, according to the contents of an internal memo and related documents disclosed
by the press. I) At a Senate Judiciary Subcommittee hearing on May 2, 2000, Senator
Spcetcrrcferrcd to this memo, written to Attorney General Janet Reno in the summer
of 1998 by Charles LaBella, then chief of the task force. According to Senator
Specter, Schwartz had donated $1.5 million to the Democratic National Committee.
LaBella is said to have written that Schwartz' case "was a matter which likely did not
merit any investigation." Nonetheless, LaBella recommended that Reno appoint an
independent prosecutor to dispose of the case, because the allegations of political
favors involved the President. LaBella reportedly also criticized Justice Department
officials for ordering the investigation of Schwartz while excluding President Clinton.
Reno denied LaBella's recommendations for the special counsel.
Beyond the Loral Case. Beyond the 1996 incident involving Loral and Hughes,
there arc wider concerns that the policy of allowing China to launch U.S.-built
satellites effectively subsidizes and assists China's missile modernization. Observers
point out that the same PRC companies and engineers work in both civilian and
military programs and that much oflhe technology used in launching sateJlites can be
used in military programs on missiles, satellites, and other areas.
Future developments in China's ICBM program are believed to be related to that
in the space launch program. U.S. intelligence reportedly has gained information
about developments in China's ICBMs from information about PRC SL VS. 14 Jane's
Space Directory 1997-98 notes that China is not known to usc liqui<:i
oxygenlkerosene engines that are used extensively in other countries, "reflecting the
spact: variants' parallel development nlongside storable propellant long range
missiles."
There have been concerns that China may deploy ICBMs with multiple
independently tnrgetnble reentry vehicles (MIRVs) in the future. In 1999, the House
Select Committee on U.S. Nationnl Security and Military/Commercial Concerns with
the People's Republic of China (popularly known as the "Cox Committee") judged
that, by 20 IS, the PLA could deploy up to 100 ICBMs with as many as 1,000
thcmlOnuclear wmheads.
12 Pincus, Walter, "Defense Award Rescinded From Finn Being Probed," Washington Post,
July 18,2000.
IJ Rempel, William C. and Alan C. Miller, "Internal Justice Memo Excuses Loral From Funds
Probe," Los Angeles Times, May 23, 2000. Also see: David Johnston, "Memo Shows
Another Push For Clinton Inquiry," New York Times, May 3, 2000.
14Pinclls, Walter, "U.S. Gains Intelligence Data in China Launches," Washington Post, June
13,1998.
�CRS-8
The Director of Central intelligence (Del),s unclassified damage assessment of
the PRe's suspected acquisition of U.S. nuclear weapon secrets found that China
already has the "technical capability" to develop a MIRV system for the currently
deployed ICBM but has not deployed MIRVs, Nonetheless, the DCI warned that
"U.s. infonnation acquired by the Chinese could help them develop a MIRV for a
future mobile missile:"$ China first decided to develop MIRVs for deployment in
1970. Development was in part stalled, however, by a lack of capability to
miniatun7,c warheadsY' TIle priority for the project on MIRVs was lowered in March
1980. but research and development on MIRVs resumed on November 10, 1983, as
part oflhc DF~5 modification progrnm. Also, ChillU reportedly will add a new solid~
propellant third stage (TS) to introduce a new LM-2r"rrS SL v. This third stage may
have a multiple-satellite dispenser to launch up to 12 satellites, Jane's Space
Directory 1997-1998 reported that China developed a rcstartable, cryogenic
(extremely low temperature) stage 3 for the LM~3 SLV.
Motorola. There had been concernS that Motorola's use of.a PRC~developed
multi-satellite dispenser (caned "Smart Dispenser") on a variant of the LM~2C to
launch two Iridium satcUitcs at a time helped the PRe to develop MIRV capability,
The Wasltington Times reported that a December 1996 classified study by the Air
Force's National Air Intelligence Center (NAIC) concluded that the new ('Re
developed "smart dispenser." an upper-stage booster used to laun-.:h two satellites for
Iridillm on one LM 2C/SD rocket. could be modified to deploy multiple re·cntry
vehides, Nevertheless, the report n(lied that there is no evidence that China is using
the dispenser, built in 1996. for warheads and that'the PRe multiple warhead system
woutd be tess nccumte than U.s. and Russian systems. 17 A Pentagon spokesman said
on July 14, ]998, that Motorola provided data to allow the PRe to attach satellites
to th(~dispcnser that itdesigl)ed withuut U,S. help and that releasing multiple satellites
and targeting multiple warheads require different technology. Moreover, the Cox
Committee concluded that "Motorola did not provide the PRe with information on
how to design the Smart Dispenser; rather, the PRe built the Smart Dispenser
indigenously to Motorola'S specifications,"18
Hughes. Some arc especially concerned about PRe launches in 1995 and 1996
of three satellites built by Hughes which were not monitored by the Defense
Department. On June 18, 1998, Jan Lodal. Principal Deputy Under Secretary of
Defense for Policy, testified to a joint hearing of the House National Security and
Inlcrnational Relations Committces that there were three launches that were not
!SCIA, "The Intelligence Community Damage Assessment On the Implications of China's
Acql.lislllon of U,S, Nuclear Weapons lnfonnation on the Developmc:n: of Future Chinese
Weapons," (unclassified release), April 2 !, 1999. See also: CRS Report RU0143, China:
Suspected Acquisilioll of u.s. Nuclear Weapon Data, by Shirley A. Kan.
leeRS Repon 97-1022,
I'GCtlZ, Bill, "U.S, Tcch:lOlogy Builds 'Bridge' for China Missile," WU3hingron Times. July
14,IV98,
"Cox Committee'sde<:lassified report, releu5Cdon May 25, 1999; sec CRS Report RUOnO,
Chif/O'S Technology Acquisitions: Cox Commiuee's Report - Finding$, Issues, and
Recommendations, June 8, 1999, by Shirley A. Kan,
.
�CRS-9
monitored by the Defense Department, because the satellites did not require State
Department licenses and monitoring had been tied to licenses from the State
Department for Munitions List items. The Director ofDTSA, Dave Tarbell, testified
to tbe Senate Select Committee on Intelligence on July 15, ! 998, that the three
UIilllonitored launches took place in January 1995 (Apstar-2), July 1996 (Apstar-l A),
and August 1996 (Chinasat-7). The Department of Defense then concluded that full
monitoring should be required for satellites licensed by the Commerce Department,
and the requirement was added after late 1996, he said. Nevertheless, Tarbell stated
that "we arc not aware orany transfer of technology from these unmonitored launche~
that contributed to China's missile or military satellite capabilities." Hughes responds
that its security measures prevented unauthorized technology transfers.
However, Air Force Lieutenant Colonel Al Coates, a fornler Pentagon official
who monitored launches in China until he resigned in November 1998, says that even
with monitoring, Hughes employees were more concerned about successful launches
and were often careless about discussing sensitive information with the PRe. Coates
says he did not get responses from superiors in the Pentagon to his reports of security
problems, but has now told Congress and the Justice Department. 19
Some experts say that monitoring of technical exchanges is more crucial than
monitoring the launches. Senator Kyl said on July 16, 1998, that, in addition to the
three unmonitored launches, there was no monitoring of. pre-launch technical
exchanges on the mating ofsatellitcs to the launch ve~icles for three satellite projects:
Optus B-3 (Hughes), Echostar-I (Martin Marietta), and Chinastar-l (Lockheed
Martin).20
Congress and the Justice Department are now also investigating Hughes' review
of the! PRC launch failure on January 26, 1995 (of the Apstar-2 satellite).21 Testifying
before a joint hearing of the House National Security and International Relations
Committees on June 18, 1998, Under Secretary of Commerce for Export
Administration William Reinsch acknowledged that, in the 1995 case, his department
alone: had allowed Hughes to provide launch failure analysis to China. He stated that
after the Apstar-2 launch failure in 1995,
the company involved [Hughes] conducted an analysis without the participation
of the Chinese launch service provider. The analysis was written in order to
satisfy insurance requirements. The analysis was reviewed by the Department of
Commerce, which determined that it contained only information already authorized
for export under the original Commerce license issued in February 1994. The
unclassified report was provided first to a consortium of Western insurance
companies and later to the Chinese launch service provider.
"Did U.S. Companies Share Technology with China?" ABC News, 20/20 Program,
December 3, 1998.
)9
20
Congressional Record, July 16, 1998; Aerospace Daily, July 21, 1998.
21 Anselmo, Joseph C. and James R. Asker, "U.S. Broadens Probes of China Tech Transfer"
and "Hughes Defends China Security," Aviation Week and Space Technology, June 29 and
July 6, 1998.
.
�CRS-IO
At that bearing, David Tarbell, Director of the Defense Teclmology Security
Administration (DTSA), confinued that the Department of Defense (DOD) did not
monitor the launch or the launch fililure analysis. Reinsch acknowledged that the
Commerce Department did not consult with either the Department of State or DOD.
The decision to release the report to the PRe was made solely by a Commerce
Department licensing officer,n
Reinsch also acknowledged, however, that the
authority foranadditionallicense to conduct launch failure analysis was later specitied
to be the Department of S1ate, not Commerce, when the licensing jurisdiction was
transferred to Commerce in 1996.
At the request of Congress, DOD's DTSA and NAIC prepared and issued, on
Dectmbcr 7, 1998, an initial as.sessment of the documents concerning Hugh<.::s' 1995
investigation that the Department ofCommerce provided to DO[) iu July t 998, The
unclassified report says that Commerce did not <.::onsult with DOD or State (nlthough
the technical assistance constituted a «defense service" under State's export control
jurisdiction and subject to DOD's monitoring) nor disclosed the documents until the
June 1998 Congressional hearings. The report concluded that Hughes' tethnical
exchanges INith the PRe raise national sccurityconccrns regarding violating standards
of not improving PRe satellite or missile capabilities and "potentially contributing to
China's missile capabilities." While the report adds that the benefits likely did not
alter the U.S.~China "strategic military balance," the report did not look at whether
Cbina used the infoffilation for the PLA DOD and State further examined whetber
the transferred infonnation benefitted China's militaryP On December 18. 1998, the
State Department's Office of Defense Trude Controls (DTC) completed a sensitive'
but unclassified report, concluding thaI Hughes, in reviewing the January 1995 launch
failure ofApstar·2, provided technical lessons that are"inhercntlyapplicable" io PRe
missile as well as satellite launch programs.24
DOD says that, from February to August 1995, Hughes conducted the
investigation closely and jointly with the PRe, specifically> CALT and China Great
Wall, that included "significant interaction" and meetings in China. Hughes gave PRe
aero~.pace engineers specific infonnation to make their rockets more reliable.
According to DOD, Hughes provided "sufficient know-how to correct the overall
deficiencies" of "oversimplified" mathematical models used in designing launch
vehicles, modifications for launch operations, details aoout satellite designs, as wen
as "insights" into U,S. diagnostics for improving rocket and satellite designs.
Specifically, Hughes showed China how to improve its coupled loads analysis that is
"critically important" for ensuring the integrityofthe rocket during Hight and "serious
flaws" in PRC modeling of aerodynamic loads on the rocket fairing (the top part of
llTmnscript of continuation Qfhearing on June 23.' 1998.
21 Fulghum, David A. and Joseph C. Anselmo, "Pentagon Plans New Look At China Tech
Transfer," Aviation Wak & Space Technology, December 14, 1998.
For text ofthe Department of State's memo, see the Cox Committee's declassified May
1999 report, volume II, p. 76-84. Gerth, JefT, "C,I.A. Ignored Report ofPaymcnts To
Chinese For Safellite Contracts," New York Times, December 24, 1998; Warren Ferster,
l4
"Export Plan Shrinks Role For Commerce," !!'pace News, January t8, t999,
�CRS-II
the rocket that covers payloads). Hughes denies advancing China's missiles and says
,that its report was approved by the Commerce Department. 25
A task force fonned by Hughes in December 1999 to assess its export
compliance program issued its report on July 25, 2000. Fonner Senator Sam Nunn
and fonner Undersecretary of Defense Paul Wolfowitz led the task force. They
recommended 12 "best practices" for ensuring compliance with export coritrolS?6
Lockheed Martin. On April 4, 2000, the Department of State charged
. Lockheed Martin Corporation with 30 violations of the Anns Export and Control
17
ACt.
The charges were civil charges and did not involve criminal law. The
maximum penalties involved $15 million and a prohibition against exporting satellites
or satellite technology for up to three years.
Lockheed Martin denied that it violated export control laws and said that Martin
Marietta (later acquired by Lockhced) had obtained a license from the Department of
Commerce before it assessed, in 1994, a PRC kick motor for the Asiasat-2 satellite.
A kick motor is fired after launching a satellite to send it into its final orbit. Asiasat-2
is owed by the Asia Satellite Telecommunications Company, based in Hong Kong,
that is partly owned by the China International Trust and Investment Corporation
(CITIC), a PRe state-owned enterprise. Lockheed said that it had sent its 50-page
technical assessment to the Department of Defense for review and removal of
sensitive information before sending copies of the study to Asiasat and China Great
Wall Industry Corporation. China also denied the charge, claiming that it had
developed the kick motor by "entircly relying on its own cfforts.,,2H
However, the State Department charged that Lockheed had sent the unedited
version to Asiasat, before the Defense Department blacked out all but five pages of
the n:port. The charges also alleged that Lockheed failed to infonn the Pentagon that
it had already sent 10 unedited copies of the report to Asiasat, until the U.S. Customs
Service discovered them. The State Department also said that sharing even the
redacted version with China Great Wall violated export controls by sharing technical
assistance that might enhance the PRe's space launch vehicles. Lockheed was also
charged with identifying flaws in PRC testing procedures, confirming the results of
"Department of Defense Initial Assessment of Certain Documents Concerning An
Investigation by Hughes Space and Communications Company Into the Failure ofthe Launch
of the Apstar lion China's Long March 2E Launch Vehicle," December 7, 1998. Also see:
Pincus, Walter and John Mintz, "Report Faults Hughes On Data Given China," Washington
Post, December 9, 1998; JeffGerlh, "Pentagon Inquiry Faults Missile Maker's China Aid,"
New }'ork Times, Dcccmber9, 1998; David S. Cloud and Robert S. Greenberger, "Commerce
Depaa1ment is Also Criticized in Pentagon Report of Hughes ' Dealings," Wall Street Journal,
December 10, 1998.
25
Singer, Jeremy, "Study Puts Satellite Export Law Compliance Over Sales," De/ense News,
Augu:;t 7, 2000; for report, see [http://www.hughes.com].
26
27Loeb, Vernon, "Lockheed Aided China on Rocket Motor, U.S. Says," Washington Post,
April 6, 2000.
28
Xinhua, April 10, 2000.
�CRS-12
PRe tests that identified faulty insulation, and identifying problems with U.S. solid
rocket motor technologies.
On June 14, 2000, the Department of State announced that it had reached a
consensual settlement with Lockheed Martin that involved total penalties of $13
million. Lockheed agreed to pay $8 million over four years and use $5 million to set
up a comprehensive computer control system to which the Departments of Defense
and State will have access over the next four years and improved oversight
procedures. The State Department said "we think that the infonnation that was
transferred was inappropriate, and that the reports that were transferred were not
appropriate, and that there was a serious problem here that information had thc
potential to be used to be applied to missile development.,,2<J
Military Benefit. Beyond the question of whether sensitive technology or
teclmical expertise in connection with satellite launches was transferred to China,
then: is disagreement on the extent to which such transfers have military benefit in the
context of China's modernization of its nuclear-anned ballistic missiles and space
systems. China reportedly is developing new land-mobile, solid-fuel DF-31 and DF
41 ICBMs for deployment in the early part of the 2pl century.30 In charging
Lockheed Martin in April 2000 with violating the Arms Export Control Act by
assessing a PRC kick motor for the Asiasat-2., satellite, the State Department
spokesman declared that "any assistance to China that enhances its capabilities in
space launch has the potential to be applied to missile development.,,)l
Some, including officials in the Clinton Administration, have stressed that there
are differences between the PRC SL Vs and ICBMs and there have been no authorized
missile technology transfers to China. On September 17, 1998, Principal Deputy
Assistant Secretary of Defense Franklin Miller testified only about authorized
significant tcchnology transfers and that satellite launches have not provided any
benefits to current generation PRC ICBMs. He was not able to elaborate publicly on
potential improvements to new PRC ICBMs under development. 32 Admiral Joseph
Prueher, Commander in Chief of U.S. Pacific forces, said on October 23, 1998, that
any transfers of missile technology or know-how in connection with launching U.S.
satellites in China have improved PRC ICBMs "only incrementally, not by any
quantum leaps and bounds" and "accelerated solution ofa tcchnical guidance problem
for one of their missiles.,,33
290epartmenl ofSlale, press briefing by Richard Boucher, June 14,2000; David E. Sanger,
"U.S. Fines Lockheed $13 Million in China Satellite Case," New York Times, June 14,2000.
30
Set~: CRS Report 97-391, China: Ballistic and Cruise Missiles, by Shirley A. Kan.
Lo,~b, Vernon, "Lockheed Aided China on Rocket Motor, U.S. Says," WashingIoII Post,
April 6, 2000 .
31
Hearing of the Senate Committee on Commerce, Science, and Transportation,
"Tmnsfer of Missile Technology to China," September 17, 1998.
. 32
Capaccio, Tony, "U.S. Finns Marginally Helped China ICBMs," Defense Week, October
26,1998; "China Benefitted From Tech Transfer, Adm. Prueher Says," Aerospace Daily,
October 26, 1998.
33
�CRS-J3
John Pike, Director of the Space Policy Project at the Fcdcmtion of American
Scientists, has argued that there are significant differences between China's ballistic
missiles and the Long March SLVs. J4 He says that the Long March SLVs are longer
than the CSS-4 ICBM, so they flex more during ascent. They also have bigger nose
cones to hold satellites that are bigger than warheads. These characteristics have
resulted in stresses on the Long March. He also says that deploying two satellites
from one Long March
(as China has done for Iridium) is very different from
launching MIRVs. Warheads, unlike satellites, are designed to survive greater
vibrations and the heat of rcentering the atmosphere.
Other experts stress that there are commonalities betwcen the technology as
well as technical expertise used in rockets and missiles. A Senate subcommittee
provided a graphical comparison of the applicability of technology in SLYs and
ballistic missiles prepared by the Central Intelligence Agency (CIA).15 In general
terms, the CIA compared 11 categories of technology and equipment. Six, or more
than half, of the categories arc the same for the SLY and ICBM; four categories are
similar; while only missiles contain warheads.
Comparison ofSLVs and Missiles
Technology and equipment generally unique to ballistic missiles:
• warhead
Technology and equipment that are similar in SLY and ICBM
(comparison requires case-by-case analysis):
• reentry vehiele
• payload separation
• inertial guidance and control systems
• strap-on boosters
Technology and equipment that are same in SLY and ICBM:
• staging mechanisms
• propellants
• air frame, motor cases, liners, and insulation
• engines or motors
• thrust vector control systems
Henry Sokolski (Executive Director of the Nonproliferation Policy Education
Center and a Defense official in the Bush Administration) argues that "all of our
satellite transfers have helped China perfect its military rocketry." He also writes that
"intangible technology" is critical to the timely, reliable, and accurate placement of
)4
"The China Satellite Debate," Proliferption Brief, June 23, 1998.
3sHearing of the Senate Governmental Affairs Subcommittee on International Security,
Proliferation, and Federal Services, "The Benefits of Commercial Space Launch for Foreign
ICBM and Satellite Progrums," May 21,1998.
�CRS-14
satellites into space as well as launches of warheads against targets by ballistic
missiles. Intangible technologies include: coupling load analysis, guidance data
packages, upper-stage solid rocket propellant certification, upper-stage control design.
validation, lower-stage design validation, and general quality assurance. Also, multi
satellite dispensers can modified as multiple-warhead dispensers, thus assisting
China'5 reported efforts to develop a capability in MIRVs for its ICBMs,J6 China has
lIsed such dispensers to launch multiple satellites for Iridium.
Experts at the Monterey Institute of International Studies also point out that a
significant portion of the components, technology, and expertise used in the research
and development of SLVs are "virtually interchangeable" with that of ballistic
missiles. These overlaps include: launching multiple satellites from a single SLV and
delivering multiple warheads on a single missile. Similar technology involves upper
stag(: control systems (separation and ignition ofthe upper stage, attitude control, and
spin release ofsatellites), satellite dispensers (delivery ofmultiple satellites to separate
orbits), coupling load analysis(to assure launches without damaging payloads), upper
stage solid·fuel engines, and kick motors (to deliver satellites into correct orbits).37
Nevertheless, they also argue that having the capability to launch multiple
satellites does not translate into having a military capability to deliver MIRVs.
Delivering multiple reentry vehicles into planned trajectories is more difficult than
launching multiple satellites into orbit. MIRV capability requires greater precision.
Reentry vehicles, unlike satellites, do not have their own kick motors. A MIRV
capability requires rocket motors that can stop and restart.
Sanctions
China Great Wall has been affected by two categories of sanctions imposed on
China: those imposed after the Tiananmen crackdown and those imposed for missile
proli feration. In 1990, the United States imposed post· Tiananmen sanctions as
required in the Foreign Relations Authorization Act for FY 1990 and FY 1991 (P.L.
101-246). Sec.902(a) requires suspensions in programs related to: (I) Overseas
Private Investment Corporation, (2) Trade and Development Agency, (3) exports of
Munitions List items, (4) exports of crime control equipment, (5) export of satellites
for launch by China, (6) nuclear cooperation, and (7) liberalization ofexport controls.
Suspensions (3) and (5) affected export of satellites to China. Sec. 902(b) allows
Presidential waivers of those suspensions by reporting that "it is in the national
inten:st" to terminate a suspension.
As for sanctions related to missile proliferation, on April 30, 1991, the Bush
Administration denied licenses for the export of U.S. parts for a PRC satellite, the
Dongfanghong-3, citing "serious proliferation concerns." On May 27, 1991,
President Bush declared sanctions on China for transferring to Pakistan technology
related to the M-II short-range ballistic missile (category II), but not for the transfer
Sokol ski, Henry, "US Satellites to China: Unseen Proliferation Concerns," International
Defense Review, April 1994; "Selling China the Rope ... ," Weekly Standard, June I, 1998.
36
l7Lamson, James A. and Wyn Q. Bowen, "'qne Arrow, Three St.ars:' China's MIRV
Progmm," Jane's Intelligence Review, May 1997.
�CRS-IS
of complete missiles (category I). These sanctions, required by Sec. 73(a) of the
Amls Export Control Act (P.L. 90-629) and Sec. IIB(b)(I) of the Export
Administration Act (P.L. 96-72), were intended to enforce the Missile Technology
Control Regime (MTCR). These sanctions, which took effect on June 16 and 25,
1991, denied export licenses and waivers of sanctions for: (I) high-speed computers
to China, which can be used for missile flight testing; (2) satellites for launch by
China; and (3) missile technology or equipment. They affected two PRe aerospace
corporations: China Great Wall and China Precision Machinery Import Export
Corporation. President Bush waived these sanctions on March 23, 1992, after China
agreed to abide by the MTCR guidelines.
The Clinton Administration imposed similar, category II sanctions on August 24,
1993, after China was again detennined to have transferred M-II related equipment
to Pakistan, but not. complete missiles. A total of II PRC defense industrial
companies were sanctioned, including China Great Wall again. In 1993-1994, the
U.S. aerospace industry and aerospace company executives, including then-CEO of
Hughes, C. Michael Armstrong, lobbied against sanctions and for expansion of
satellite exports to China. 38 China, on October 4, 1994, agreed not to export
"ground-to-ground missiles" inherently capable of delivering at least 500 kg to at least
300 km - an understanding the U.S. side sought to include the M-II missiles under
the MTCR. On November 1, 1994, the Administration waived those sanctions.
Waivers
Since sanctions for the Tiananmen crackdown were imposed in 1989, Presidents
Bush and Clinton have issued 13 waivers for 20 satellite projects (projects may
involve multiple satellites), based on "national interest," on a case-by-case basis, to
allow the export to China of U.S.-origin satellites or components subject to export
controls. (See the Table below.) Waivcrs havc bcen incrc"asingly issued for satellites
used by China - not just launched from China. Some waivers under P.L. 101-246
have specified whether sections 902(a)(3) and 902(a)(5), on Munitions List items and
satellites, applied; others simply referred to section 902 or 902(a).
The policy of allowing China to launch U.S.-built satellites has been tied to the
missile proliferation issue,J9 partly because the same PRe companies are involved in
both. Nevertheless, just before the Bush Administration issued missilc proliferation
sanctions on May 27, 1991, the President issued a waiver of post-Tiananmen
sanctions a month before for Australian and Swedish satellites, while denying an
export license for U.S. parts for a PRe satellite. The Clinton Administration again
imposed missile proliferation sanctions on August 24, 1993, but President Clinton first
issued a waiver of post-Tiananmen sanctions on July 2, 1993, for the export of
Iridium and Intelsat-8 satellites to China. Then, even while sanctions were in place
on China Great Wall and other PRC companies for missile proliferation, President
l8CRS Report 96-767, Chinese Proliferation ofWeapons ofMass Destructiol/: Background
alld Analysis, September 13, 1996, by Shirley A. Kan; John Mintz, "White I'louse Pupcrs
Trace Hughes Executive's Pressure for China Deals,". Washington Post, July 27, 1998.
Sce: CRS Issue Brief IB92056, Chinese Proliferation of Weapons ofMass Destruction:
Current Policy Issues, by Shirley A. Kan.
39
�CRS-16
Clinton issued another waiver ofpost-Tiananmen sanctions on July 13, 1994. In
addition, the Clinton Administration has considered supporting China as a partner in
the MTCR, issuing a blanket waiver of sanctions on satellites, and increasing the
quota on the numbers of sutcllitcs China is allowed to launch - in return for further
cooperation in missile nonproliferation, according to a Secret March 12, 1998,
National Security Council memo printed in the March 23, 1998 Washington Times.
�CRS-17
Table l. Presidential Waivers of Post-Tiananmen Sanctions
for Exports of Satellites or Parts to China
Satellite Project
(may have Illultiple
satellites per project)
End-User
Manufacturer
Waiver
Asiasat-l
Asia Satellite
Hughes
12119/89
* Asia Satellite Telecommunications is a consortium based in Hong Kong and owned
by China International Trust and Investment Corporation (CITIC) of China, Cable
and Wireless of Britain, and Hutchison Telecommunications Ltd. Of Hong Kong.
Aussat (OptllS)
Australia
Hughes
4/30/91
Freja
Sweden
various U.S .
• In the first waiver, President Bush had waived sanctions for Aussat satellites, but
he n:issucd a new waiver and licenses. He also denied export licenses for U.S.
components for a PRe satellite, Dongfanghong-3 (waived later).
9111/92
Afrispace
China
Martin Marietta
Hughes and Loral
Loral
(canceled)
Alcatel
China
Iridium
Intel:mt-8
Iridium/Motorola
Intelsat
Lockhecd Martin
Lockheed Martin
7/2/93
Echostar
Echostar
Martin Marietta
7113/94
Mabuhay (Agila 2)
Philippines
Loral
2/6/96
Chinastar-I (Zhongwei-l)
China
.. Used by China Oriental Telecom Satellite Co.
Lockheed Martin
2/6/96
Chinasat-7
Hughes
2/6/96
Asiasat-2
Apsat (or Apstar)
Intel.;at-708
Starsat
AfriSat (AfriStar)
Dongfanghong-3
Asia Satellite
APT Satellite
Intelsat
China
Asia Pacific Mobile
APT Satellite
Hughes
Telc<:ommunications (APMT)
.. Various PRC state-owned companies invest in the project.
6/23/96
Globalstar
Globalstar
LorallAlcatcl
7/9196
Fengyun I
China
China
11/19/96
Alcatel/
11/23/96
Aerospatiale
.. Cooperative product bctwecn Daimlcr-l3cnzAcrospace and China Aerospace Corp.
SinoSat-l
China
Chinasat-8
China
Loral
2118/98
�CRS-18
Congressional and Administration Action
Hearings of the 105'" Congress
Since the Reagan Administration's decision in September 1988 to allow U.S.
buill satellites to be launched from China, Members of Congress have expressed
concerns about the implications for U.S. national security. After the initial press
reports in April 1998, the lOSth Congress held a number of open and closed hearings
to examine the allegations of corporate misconduct and weaknesses in U.S. policy,
including those by the following committees.
Joint Economic Committee, April 28, 1998.
Scnlltc Governmental Affairs Subcommittee on International Security, Proliferation,
nnd Federal Services, May 21, 1998.
Senate Intelligence Committee, June 4, 1998.
Senate Intelligence Committee, June 5, 1998.
Senate Intelligence Committee, June 10, 1998.
Senate Foreign Relations Committee, June 11, 1998.
House National Security/International Relations Committees, June 17, 1998.
House National Security/International Relations Committees, June 18 and 23, 1998.
Senate Foreign Relations Subcommittee on East Asian/Pacific Affairs, June 18, 1998.
Senate Governmental Affairs Subcommittee on International Security, Proliferation,
and Federal Services, June 18 and July 8, 1998.
Senate Intelligence Committee, June 24, 1998.
House Science Committee, June 25, 1998.
Senate Foreign Relations Committee, June 25, 1998.
Senate Governmental Affairs Committee, June 25, 1998.
Senate Intelligence Committee, July 8, 1998.
Senate Armed Services Committee, July 9,1998.
Senate Intelligence Committee, July 15, 1998.
Senate Governmental Affairs Subcommittee on International Security, Proliferation,
and Federal Services, July 29, 1998.
Senate Commerce, Science, and Transportation Committee, September 17, 1998.
Investigations
Cox Committee. In addition to those hearings in the 10Sth Congress, House
Speaker Gingrich announced on May 19, 1998, that he wanted to create a select
committee, headed by Congressman Cox, to investigate the various allegations
concerning this case. The House voted on H.Res. 463 (Solomon) (409-10) on June
18, 1998, to create the Select Committee on U.S. National Security and
Military/Commercial Concerns with the People's Republic of China, popularly known
as the "Cox Committee.",4o The committee had nine members: five Republicans
(Representatives Cox, Goss, Hansen, Bereuter, and Weldon) and four Democrats
(Representatives Dicks, Spratt, Jr., Roybal-Allard, and Scott). The panel held
40 Also see CRS Report 98-549, Transfer of Missile and Satellite Technology to China: A
Summary of fI.Res. 463 Authorizing a House Select Committee, by Stephen W. Stathis.
�CRS-19
numerous closed hearings and received wide-ranging briefings.
The committee
expanded its investigations to include policies before the Clinton Administration, other
dual-usc technology exports, including high-performance computers and machine
tool~;,41 and suspected acquisitions of U.S. nuclear weapons secrets.
On December 30, 1998, Rep_ Cox and Dicks, the chair and ranking Democrat,
said in a news conference that the bipartisan committee unanimously approved a 700
page, classified report on its broad, six-month investigation. The committee was
extended for the first three months of the 106th Congress to work with the
Administration on a declassified vcrsion. 42 Meanwhile, the White House revealed the
recommendations in its February 1, 1999 response.
There were then disagreements between the Select Committee and the White
House on how much to declassify, particularly about the cases at the nuclear weapon
labs. Representative Cox said on March 3, 1999, that the House may vote during the
week of March 22 to release an edited, unclassified version ofthe report, ifthere were
no agreement with the Administration. However, Representative Dicks described
such a move as a "dangerous precedent" to release classified information over the
President's objections. 43 The House did not vote to release the report without the
Administration's approval, and on March 24,1999, passed H. Res. 129 to further
extend the Select Committee on China for a month, until April 30, 1999. Meanwhile,
Representatives Cox and Dicks briefed President Clinton on April 22, 1999, about the
findings of the committee's report. 44 The 1·louse agreed to 1-1. Res. 153, on April 29,
1999, to further extend theeommittee until May 14, 1999, and approved H. Res. 170,
on May 13, 1999, to extend the date toMay31, 1999. On May 25, 1999, the Cox
Committee released the declassified version of its January 3, 1999 classified report on
its investigation of U.S. technology transfers to China. 4s
The committee concluded that, over at least the last 20 years, China has pursued
a "serious, sustained" effort to acquire advanced American technology - covering
"morc serious national security problems than the Loral.l·lughes cases," and that
technology acquisition has harmed U.S. national security. The Committee's report
agret:d with intelligence assessments that Loml and Hughes helped to improve China's
41 Greenberger, Robert S., "House Panel Expands Its China Satellite Probe," Wall Street
Journal, October 7, 1998.
42 Congressional Record, January 6, 1999.
4) Pornper, Miles A. and Chuck McCutcheon, "State Department Talks Tough to Beijing As
GOP Assails 'Failed' Policy," CQ Weekly, March 6,1999; JefTGerth and Eric Schmitt,
"Political Battle: What to Reveal On China Anns," New York Times, March 10, 1999;
Vernon Loeb, "CIA Probe Gets Outside Review," Washington Post, March 16, 1999.
Risen, James, "U.S. Inquires Why Suspect At Atom Lab Kept Access," New York Times,
April 23, 1999.
44
4SU.S. House of Representatives, Select Committee, Report 105·851, u.s. National Security
and Military/Colllmercial Concerns with the People '5 Republic a/China, classified report
issued on J~nuary 3, 1999; declassified version issued on May 25, 1999. Scc CRS Report
RL30220, China's Tcchnology Acquisitions: Cox Committee's Report- Findings. Issues.
and Recommendations, June 8,1999, by Shirley A. Kan.
�CRS-20
missile capabilities. The committee made 38 fe<:ommendations for remedies, including
possible legislation, mostly to tighten export controls (e.g., giving the Departments
of Defense and State more say) and security at the national labs, The committee
apparently did not focus on the question of PRe political donatiQns nor requested the
Justice Department to begin new investigations. Loral and Hughes deny having
violated the law. 46
'
Shifting attention from missile technology to nuclear weapons, the Cox
Committee reviewed the rnost serious concerns that the PRe had stolen infonnalion
on nJciear wcnpons allcgooly from tJ ,S, national laboratories of the Department of
Energy. A third incident has been made public involving the W-88 nuclear warhead
(deployed on the Trident 11 submarine-launched ballistic missile):r1 The Federal
Bureau ofInvestigation (FBI) has investigated that incident in which China reportedly
received data from Los Alamos National Lab in the mid·1980s, but the case was
uncovered in 1995. Two other cases Involving China and U,S. labs were previously
reportcd:il8: Representative Dicks said that the most important matter to be learned
from the conunittee's report wilt be ''that for 20 years, starting in the i980s, we had
a 'major counterintelligence failure at Los Alamos and at other national labs that is
now being corrected."49 Allegations of the PRe's acquisition of nuclear weapon
secrets were publicly confirmed by U.S. intelligence on April 21, 1999. S!) In 2000,
U.s. intelligence reportedly concluded from additional translations ofPRC documents
obtained in 1995 that PRe espionage has gathered classified infom1ation on U.S,
ballistic missiles and reentry vehicles, in addition to that on nuclear weapons.3t
According to the Cox Committee, "(he PRe has stolen or otherwise illegally
obtained U,S. missile and space technology that improves the PRe's military and
intelligence capabilities." Afterthree failed satellite launches in 1992 1995,and 1996)
j
Press conlcn.::nce of Representatives Cox uno Dicks, December 30, 1998; Oenh, Jeff and
Eric Schmitt. "House Panel Says Chinese ObUlined U.S, Anns Secrets," New York Time.~,
December J 1, 1998; .lohn Minl7.. "Chinn Aid Hurt U.S. Security. Panel Says," Washington
PUS!, December 31,1998; Robert S. Greenberger. "Hughes, Loral Sales Hurt U.S., Panel
Says," Wall Street Journ(ll, December 31, 1998.
46
47See CRS R<:port RL30143. ChinG. Susp,'.cled Acquisfrfon of u.s. Nuclcar Weapon Data,
by Sbjrley A. Kan.
48 Mintt:. John. "Atomic LabsCriticll.cd
For SCCurltyConditiontl," WashingfOn Post, JanUlll)'
1, 1999; Carla Anne Robbins, ··China Received Secret Dalu On Advanced t.;,g, Wilrhcud,"
Wall Street Journal, Januury 7. 1999: James Risen and Jeff Gerth, "China Slole Nuclear
Secrets From Los Alamos, u.S. Offidals Say," New York Times, March 6, 1999. On whether
China may have passed nuclear weapon design infomtation to Pakistan, see eRS Report 96~
767, Chine.ve Pro1iftrali(Jn of Weapons of Mass Des/ruction: Background and Analysis,
September 13, 1996, by Shirley A. Kan.
Hlutervicw on NBC's "Mect the Press," March 14, 1999,
CIA, "The Intelligence Community Damage Assessment On The Implicntions Of China's
Acquisition of U.S" Nuclear Weapons Informatton On the Development of Future Chinese
Weapons," unclassified release. Apri121. 1999.
50
5lPincus, Walter and Vernon Loob, "China Spy Probe Shifts 10 Missiles," Wa,rhington Post,
Ocl.oher 19,2000.
�CRS-2!
u.s. satellite makers (Hughes and Loral) transferred missile design information and
know-how to China without required export licenses from the Department of State
"in violation of the lmcmational Traffic in Arms Regulations." The U,S, t1m1s gave
technical information that has improved the "reliability" of PRe rockets used to
launch satellites with ci..,lian and military purposes. The information is also useful for
the Jesign and improved reliability of"~u1ure PRe ballistic missiles," Specifically, the
committee found that in 1993 and 1995, I lughes '''illegally'' recommended to the PRe
improvements to the fairing (nosc cone thai protects the payload), and in 1996, Loral
and Hughes helped the PRe improve the guidance ofa roiled rocket. and in so doing,
"deliberately acted without the legally required license and violated lJS. export
conlrol laws."
Regarding Hughes, the committee's report printed an unclassified assessment
completed on December l8, 1998, by the State Department' s Office of Defense Trade
Controls. That office concluded that. in reviewing the PRe launch fatlure of January
1995 that involved a LM-2E space launch vehicle (SLV) and the Apstar II satellite,
Hughes engaged in technical discussions with the PRC, without U$. government
monitors, that resulted in "significant improvemellt to the PRC spaccHft program anti
contributed to China's gOal of assured access to space." Moreover, "the lessons
leamed by the Chinese
mherelltly applicable to their missile programs as well.
sinc(~ SLVs and ICBMs share mnny common technologies,"
are
As for Loraland Hughes' activities in 1996. tbe committee reponed that a 1998
interagency review determilled that the "techniclIl issue of greatest concern was the
exposure of the PRe to Western di<lgnostic processes, which could lead to
improvements in reliability for all PRe missile and rocket programs." The
improvements to China's missile program could come from "incfe<lsed production
efficiency, and improved reliability through adoption ofmlproved quahty control and
reliability-ellhancing measures in design and manufacturing that were introduced after
the accident investigation, including some that the [Loral~led] Independent Review
Committee advocated," Tbe committee judged that the guidance system of the Long
Man:h 38 rocket, reviewed by Loral and Hughes in 1996. is "among the systems
capable of being adapted for usc in the PRe's pli:mncd road-mobile intercontinental
ballistic missiles" (i,e" the Df-31),
There were previous concerns that after thc explosion tbat destroyed the Loral
built lntelsat 708 satellite in 1996, classified U.S, encryption boards were lost to
China, The committee reported that while the two FAC~3R encryption boards were
not r..::covered from the crash site by Loral, they "most likely were destroyed in the
explOSion:' While it is not known whether the PRe recovered the boards, even if
they did. "it would be difficult for the PRe to detennine the cryptographic algorithm
that was imprinted on them," and "reverse~cngineering of a damaged board would be
even more difficult." Thus, "the National Security Agency remains convinced that
there is no risk to other satellite systems l now or in the future t resulting from having
not recovering the FAC-3R boards from the PRC."
Contrary 10 earlier allegations of U.s. assistance for China's devetopment of
multiple satellite dispensers and MIRVs, the tommittee determined that "Motof()Ja
did not provide the PRe with infonnation 011 how to design the Smart Dispenser;
rather, the PRe built the Smart Dispenser indigenously to Motorola's specifications."
�CRS-22
The Cox report agreed with earlier public assessments of the Administration
that, in the 19908, the PRC has deployed a total of approximately 20 CSS-4 ICBMs
in silos. but contrary to the White I-louse's June 1998 announcement ofa detargchng
agreement with China, "most" of those ICBY1s remain targeted on the United States.
Nonetheless, the report noted previous statements by U.5. intelligence that the "CSS
4s are deployed in theirsilos without warheads and without propellantsrluring day-to
day operations!' The commiHee judged that "within 15 years," China's missile
modernization program could result in the deployment of up to 100 ICBMs.
Moreover, if China aggressively developed MIRVs. il could deploy "upwards of
1,000 thcm10nuclear warheads on ICB~s by 20IS:' Confinning suspicions of
problems in China's SLUM force, the committee reported that while China developed
a JL-I SLBM to be launched from the PLA's Xia-cJass nuclear-powered submarine.
<he I'RC has not yet deployed the ll-I SLBM.
In June 1999, Loral Space and Communications pubHsheda full-page response
to the Cox report. Loral said that its employees "acted in good faith and did nothing
to violate export control regulations or the law or to harm national security,"
Nonetheless, LoraPs sHitementacknowledgcd that "mistakes were made." Loral also
referred iO sensitive information thnt could have been conveyed at the meetings,
saying that "unfortunately, the [Review1 Committee secretnry, a Loral engineer, hud
already faxed a copy of thc rcport [reviewing the laum::h failure] to the Chinese in the
process of sending it to the Committee members, However, prior to doing so, the
secretary took measures to delete all sensitive material from the report. "$l
In its recommendations related to satellite exports. the Cox Committee:
• Expected that the exc<:utlve branch will aggressively implement the Satellite
Export Control provisions of the Strom Thunnond National Defense
Authorization Act for FY1999.
• Stated that the congressional judgment that the Department of State is the
appropriate agellcy for licenSing both exp0l1s of satellites and any satellite
launch failure investigations must be faithfully nnd fully implemented.
• Stated that the Department of State must ensure, consistent with national
security, that satellite export licenses and notices to Congress are acted on in
a timely tashion and' that exporters are informed about thc progress of their
applications and have access to appropriate dispute resolution procedures.
The executive brnnch and Congress should ensure that the Department ofState
has adequate personnel and resources devoted to processing export license
applications.
• Recommended that congressional comn".ittees report legislation to ensure that
satellite manufacturers are not disadvantaged in collateral areas such as tax
credits by the transfer of licensing responsibility to the Department ofStnte,
• Stated that DOD must give high priority to obligations under the Strom
Thurmond National Defense Authorization Act, including requirements for
mOilitol'ing launches and technology control plans.
• Recommended that congressional commiuces report legislation providing that,
in connection with foreign launches of U,S. satellites. DOD shan contract for
security personnel who have undergone background checks to verify their
~2 Washington Post, June 15.1999, p. A27; Space News, June 28,1999.
�CRS-23
loyalty and reliability. The number of guards shall be sufficient to maintain 24
hour security of the satellites and all related missile and other sensitive
technology. The satellite export licensee shall be required to reimburse DOD
for all associated costs of such security.
CI Recommended that DOD shall ensure sufficient training for space launch
campaib'll monitors and the assignment of adequate numbers of monitors to
space launch ca"mpaigns.
• Recommended that DOD monitors shall maintain logs of all information
authorized for transmission to the PRe, and such infonnation shall be
transmitted to DOD, State, Commerce, and the CIA.
• Recommended that relevant departments and agencies ensure that the laws and
regulations on export controls are applied in full to communications among
satellite manufacturers, purchasers, and the insurance industry, including
communications after launch failures.
• Recommended that, in light of the impact on U.S. national security of
insufficient domestic, commercial space launch capacity and competition,
congressional committees report legislation to encourage and stimulate further
the expansion of such capacity and compctition.
Clinton Administration's Response. The Clinton Administration expressed
concerns about implications of the Cox Committee's recommendations for U.S.
exports. Under Secretary of Commerce William Reinsch said in a speech on export
controls to high-tech companies that there are those in Congress who "do not
understand" the "political and economic transformations" in recent years and
"respond to them by trying to return to the simpler era of the Cold War and a single
bipolar adversary. Only this time, it is China. A good example of this is the Cox
Committee...,,53
On February 1, 1999, the National Security Council (NSC) of the White House
issued a 32-page unclassified version of its response to the House Select Committee's
38 recommendations,54 even before the committee's report is declassified. Those
issues pertain to several broad areas:
• security on nuclear weapons at national labs;
• multilateral export control and weapon nonproliferation efforts;
• satellite launches;
• high-performance computers;
• export controls; and
• counter-intelligence.
The White House said it agreed with somc of the recommendations or has
already addressed those concerns.
The NS~, however, opposcd other
recommendations, including the following objections:
• assessments at the Departments of State, Defense, Energy, and Justice, and
the CIA on security risks in U.S.-PRC lab-to-Iab exchanges should be
conducted by intelligence experts, not inspector generals;
SJ
Speech to the Silicon Valley Forum, Commonwealth Club, California, January 14, 1999.
s4NSC, response to recommendations, (unclassified), February 1,1999; John Mintz, "Clinton:
. Panel's Export Rules May Delay Deals," Washington Post, February 2,1999.
�CRS-24
• the United States should not deny exports of high-perfonnancc computers if
China does not penn it effective end-use verification, including surprise on-site
inspections, by an "arbitmry deadline" of September 30, 1999;
.. export control procedures do not need longer review periods where an
agency's mid-level officials may "stop the clock" on national security grounds
with "indefinite" and "unjustified" delays;
.. export control procedures requiring consensus of reviewing agencies would
"hinder the deliberative process;"
.. new legislation, beyond the Hong Kong Policy Act of 1992, is not needed to
require examination of trade flows to China through Hong Kong, U.S. export
control policy of treating Hong Kong differently from China, and unmonitored
border crossings by PRC military vehicles;
o legislation that would amend the Defense Production Act of 1950 to require
mandatory notifications to the Committee on Foreign Investment in the United
States (CFIUS) by any U.S. national security-related business of any planned
mcrgers, acquisition, or takcovers by a foreign or foreign-controlled entity
could "chill legitimate foreign investment" that is strongly in U.S. interests;
o the Department of Justice deems it "unnecessary" to have legislation directing
it to promptly share national security infonnation with other agencies through
the establishment of an interagency mechanism.
Senate Intelligence Committee. In the Senate, Majority Leader Lott
announced, on May 20, 1998, the creation of a Task Force, led by Senator Shelby
(chairman of the Intelligence Committee) and included Senators Thurmond, Helms,
Thompson, Cochran, Kyl, and Hutchinson. On May 29, 1998, Senate Democratic
Leader Daschle approved a Democratic Task Force, with Senators Kerrey, Biden,
Sarbanes, Glenn, Leahy, Levin, Kerry, and Feinstein.
On July 14, 1998, Senator Lou made a floor statement on interim findings that
sensitive U.S. technology relating to satellite exports has been transferred to China
and that those transfers provided military benefits. He reported five "major interim
judgments:"
• the Clinton Administration's export controls on satellites are wholly
inadequate;"
• sensitive technology related to satellite exports has been transferred to China;
• China has received military benefit from U.S. satellite exports;
• the Administration has ignored overwhelming information regarding PRC
proliferation and has embarked on a de facto policy designed to protect China
and U.S. satellite companies from sanctions under U.S. proliferation laws;
• new information has come to light about China's efforts to influence the U.S.
political process.
Senator Shelby stated on July 14, 1998, that "some of the tendencies of the
evidence tend to support" Senator Lott's statement, but that "the Intelligence
Committee has not reached any preliminary judgment." The Pentagon's spokesman,
Kenneth Bacon, responded to Senator Lon by saying that this Administration has
submitted requested documents to Congress and had inherited safeguards from
previous Administrations that prevent inappropriate technology transfers to China.
The Senate Intelligence Committee's investigations covered two categories:
�CRS-2S
• U.S. export control policies, since 1988, on PRe launches of U.S.·buiit
satellites and implications for U.S. national security;
• any secret PRe program to contribute political donations and influence the
U.S. political process in 1996,55
On May 7, 1999, the Senate Committee on Intelligence released its 45-page,
unclassified report that it had approved two days before in a bipartisan 16-1 vote. 56
The office of Senator Graham, who dissented, explained he was concerned that the
process did not allow sufficient time for the members to review the report before the
vote. As urged by Senator Levin, the sections on possible missile technology transfers
and PRe efforts to influence U.S. policies were kept separate, because no evidence
of a link between the two issues was found. 57 The report included a number of
findings and recommendations.
On security implications of any U.S. technology transfers for China's military
and missile programs, the committee found no evidence that U.S. technology has been
incorporated into the currently deployed PRC ICBM force, while noting that such
integration may not be apparent for several years if at alL The report also stated that
"ext{:nsivc assistance from non-U.S. foreign sources probably is inore important" than
technology transfers associated with satellite launches. Nonetheless, the committee
concluded that "the technical infommtion transferred during certain satellite launch
campaigns enables the PRC to improve its present and future ICBM force that
threatens the United States," as well as short-range and intennediale-range ballistic
missiles that threaten U.S. military forces and allies in Asia. Further, U.S. national
security may be harmed, according to the report, if China proliferated missile systems
improved by U.S. technology. The committee also found that improvements to
China's space launch capability also enhanced. its use of space for military
reconnaissance, communications, and meteorology, posing challenges to U.S, national
secUI·ity. The committee found, that Jespite assurances of government monitoring
and security safeguards, there were security violations and "significant weaknesses"
in th(: implementation of the satellite export policy since the Reagan Administration,
U.S. satellite exports to China, the committee concluded, have "created a tension
between U,S. national security interests and U.S. commercial interests," and "this
tension and conflict of interests have been problematic throughout the U,S.-PRC
satellite launch relationship."
The Committee made 10 recommendations related to strengthening controls
over satellite exports. These include:
• authority for monitors from the Defense Threat Reduction Agency (DTRA) to
suspend launch-related activities;
• strengthening DTRA to monitor satellite launches overseas;
Seuate Select Committee on Intelligence, "Investigation of Impacts to U.S. National
Security From Advanced Satellite Technology Exports to China and Chinese Efforts to
Influence U.S. Policy: Tenns of Reference," June 2, 1998,
55
Senate Sclect Committee on Intelligence, "Report On Impacts To U,S, National Security
Of Advanced Satellite Tcchnology Exports to the People's Republic of China (PRC), and
Report on the PRC's Efrorts to Influence U,S. Policy," May 1999.
$6
57
Schmiit, Eric, "Panel Finds Bann in China Launchings," New York Times, May 7, 1999,
�.
., annual reports from DTRA to Congress on implementation of technology
safeguards;
• adherence by the Department ofStatt: to strict timetables in reviewing license
applications;
o intelligence review in the liceusing process;
0 intelligence assessments of foreign efforts to acquire u.s. technology:
.. consideration of investigations for export control violations associated with
satellite exports;
.. call for the Administration to use all available means to obtain PRe compliance
.
wi.h .he MTCR;
o efforts by the Administfation and Congress to encouragee~pa.nsion Oflhe U,S,
commercial launch industry; and
o reappraisal of the policy to export satellites to China, including whether it
should be phased out.
Clinton Administration's Response. The White House issued a response to
the Senate Intelligence Committee's report on May 7, 1999. 58 The Administration
acknowledged that it shared the Committee's concern that ''unauthorized assistance
and transfers of technology relevant to space launch vehicles and ballistic missiles may
have occurred during certain space launch fhilurcanalyses," The statement also noted
the Department of Jusdce's investigations inlQ those allegations. The White House
agrci~d and confinncd that U.S, concerns do not center on China's "currently
deployed ICBtvi force," but that "unauthorized assiS1l:lnce and transfers of space
13uO(:1) vehicle and satellite technology could assist China in the development of future
ballistic miss.iles." While concurring with most ofthe committee's recommendations,
the Administration disagreed with the last one, saying that "the longstanding policy
of pennitting tbe I;:mnch of US commercial satellites by China. with strong
technology controls, serves our overall national interest" However, this statement
did not cover Chin.. ':; increasing use (not just launch) ofsuch satellites.
Export Controls and Intelligence. in addition, congressional investigations
expanded to include concerns about alleged politicization of export control and
intclligenct,! in the Clinton Administration, Export control specialists skeptical of
libemlizing controls Oon dual-use technology transfers to China complained that
decisionwmakers, in approving exports, have ignored evidence of U.S. firms helping
China's military, One manager in DTSA 1 Miehael Maloof, reportedly kept a diary of
export control cases critical ofthe Commerce Department and his superiors at DTSA
including David Tarbell. Maloors infomlalion was shared with the House Select
Committee in August 1998 and also with the Department of Justice: and Customs
Service. His criticisms reportedly covered alleged dose tics between Tarbell and
Hughes. Tarbell denied showing favoritism to Hughes. The Pentagon's spokesman
dismissed Maloors charges as. ''"ideological differences" about U.S. policy toward
China, while Peler Leitner, another DTSA employee who briefed Congress, criticized
"long-time ideological opponents" of export controJs,~
j
o~ White HOllse. "Statement by the Pres;: Sccrctnry: Adminhmution Response 10 Report on
China Satellite Launch," May 7, 1999.
!"
Cloud. David S.. "Beijing Expolt l3:1ttlc: Case Study of One
Hard~Liner," Wall Streef
(continued.,,)
�CRS-27
Meanwhile, at the request of the Senate Intelligence Committee, the Justice
Department began an unusual criminal investigation in 1998 into whether the CIA
obstructed justice when it allegedly warned Hughes about the committee's interest in
some of its employees. CIA officials agreed to testify before a federal grand jury in
Washington in December 1998. In April 1996, a CIA analyst, Ronald Pandolfi, had
reportedly prepared a National Intelligence Estimate (NIE) on how Hughes may have
helped to improve China's missile capabilities, but the CIA reportedly did not approve
the NIE. In September 1998, Pandolfi briefed the committee on what he found in
1995 (after Hughes reviewed the explosion ofa Long March rocket in January \995).
The CIA then told Hughes about Pandolfi's briefing for the committee.
Administration officials have said that the CIA advised Hughes about providing names
of its executives to the committee in order to urge Hughes to cooperate and· have
deni(!d that the CIA tried to hinder the committee's investigation. Nonetheless, the
committee has questioned whether the Clinton Administration's policy of engagement
with China has influenced intelligence assessments about China. 60 Confimling that he
and Senator Bob KeITey, the vice chaihnan, had found Oul about the CIA's contact
with Hughes in an internal CIA cable dated September 23, 1998, and then asked
Attorney General Janet Reno for the criminal investigation, Senator Shelby said in
September 2000 that the Justice Department decided not to charge an unnamed CIA
ofticial with obstructing a Senate investigation. b !
In another case, the Cox Committee asked the CIA to provide a classified cable
written in March 1996 on Hughes and Loral that had not been provided to the Justice
Department until these congressional investigations began. The CIA's inspector
general began investigating the alleged failure to pass the cable to Justice, which the
CIA characterized as an oversight. The,message was said to have reported on an
American consultant, Bansang Lee, who worked for Hughes from 1989 to 1995,
when Loral hired him to work on sales of satellites, including Chinasat-8. In helping
to sell satellites to China and to export them for launch from there, Lee allegedly
made: illegal payments to and received payments from PRC aerospace executives.
Lee's lawyer stated that Lee "has never made any unlawful or improper payments of
any kind to any Chinese official," <md spokesmen for Hughes and Loral also denied
any wrongdoing. 62
Senator Specter's Investigation. In October 1999, Senator Specter, under the
jurisdiction of the Senate Judiciary Subcommittee on Administrative Oversight and
"'{...continued)
Journal, November 27, 1998.
Locb, Vernon and John Mintz, "CIA Faccs Criminal Probe in China Case," Washington
Post, December 5, \99!S; JeffGcrth, "Old Concerns Over Data Transfer to China Get New
Attention," New York Times, December 7, 1998; Robert S. Greenberger and David S. Cloud,
"Justice Department Examines CIA Role in Probe Into Hughes' China Dealings," Wall Street
Journal, December 7, 1998.
60
Gertz, Bill, "CIA OfJiciai Spared Justice Prosecution," Washington Times, September 22,
2000.
61
~2 Gerth, Jeff, "C.I.A. Ignored Report of Payments to Chinese For Satellite Contracts,"
York Times, December 24, 1998.
New
�CR.S-28
the Courts, began holding hearings in his investigation into the Justice Department's
handling oftile PRe's suspected acquisition of missile technology and nuclear weapon
secrets, campaign finan<:c, Waco, and other issues,
Legislation to Revise Export Controls
105~h Congren. In the 105 111 Congress, the Housc·passed National Defense
Authorization Act for FY 1999 (llR. 3616) included amendments (sections 1206·
1209) passed on May 20, 1998. that sought to express chc sense ofCongrcss that the
Unil!:d States should not cnter into new agreements with China involving space or
missilc~rclatcd technology (Spence. agreed 4174)~ prohibit U.s, panicipalion in
invc~tigations of PRe launch failures (13ereuter, agreed 414-7): prohibit transfers of
missile equipment or technology to China (Hefley, agreed 412-6); and prohibit the
export or re~export of U.S. satellites to China (Hunter, agreed 364-54). Also, section
1212 sought to return control over li<''Cnsing export of satellites from the Commerce
Department to the State Department (under the Munitions List control1ed under the
Arm:) Export Control Act).
On June 4, 1998, Senator! futchinson submitted an amendment to the Scnalc
passed Defense Authorization Act for fY1999 (S. 2057). which was ordered to lie
on the tabte. It SO'ught to' amend the language authorizing Presidential waivers of
post·Tianllnmcn sanctiO'ns _by substituting a narrower basis (<<in the vital national
secudty interest") for the current language {"in the national interesf')t and add a
requirement for. the President to submit a detailed justification for each waiver.
On July 22. 1998~ Senator Hutchinson filed but did not ofter Amendmcnt 3250
to til" Senate-passed Defense Appropriations Act for fYI999 (S. 2132iH.R. 4103)
to transfer the export control of satellites back to the State Department and require
a de1ailed justification for Presidential waivers of PQst-Tiammrnen sanctions for
exports of satellites or defense articles. On July 30, 1998. Senator Kyl proposed
Amendment 3398 to thts bililO limit the use of funds pending the establishment -of the
position of Deputy Under Secretary of Defense for Technology Security Policy who
would also serve as the director of DTSA.
As agreed to by conferees, the National Defense Authorization Act for FY 1999
(P.L. t05~261) transfers the licensing authority over commercial satellites back to the
Stale Department in an effort to strengthen export controls. The act did not ban
further satellite exports to China or help the U,S. satellite launch industry, as some
havc advocated in calling fora reassessment of the policy ofallowing China to launch
U,S,~origin satellites,l>:! Othcrs say that it is up to Congress 10 assess the statc of U.S.
duaf~usc export controls by passing a law to replace the Export Administration Act
that expired in 1994,&4 U,S. policy might also distinguish between exports ofsatellites
for PRe luunch only and satellites for PRe usc, Some say it is difficult to prevent the
fiLA from using commercial satellites owned by China.
~3 Sokolski.
b4
Henry. "Protecting High Tech:' Washingro(l Times, September 30, 1998.
"Export Act lnertia" (Commentary), Defense News, NQvcmbcr 2-8, 1998; "Reinsch Says
Conglcss :.ieeds to Revise BAA," /::rp()rl Practili<.mcl', November 1998; Hcnry Soko!ski,
"What Now for China Po;:cy'!," Wall Street Joumat, March 15, 1999.
�CRS-29
Section 1511 of the act expresses the sense of Congress, among other views,
that the President should not issue any blanket waiver ofpost-Tiananmen sanctions
(in I'.L. 101-246) for satellite exports to China. Section 1512 requires the President
to certify to Congress before exporting missile technology to China that such export
will not be detrimental to the U.S. space launch industry and will not measurably
improve PRe missile or space launch capabilities. Section 1513 transfers satellites
controlled under the Commerce Department's Conunerce Control List back to the
State Department's Munitions List, effective March 15, 1999. That section also
requires a report from the Secretary of State on implementation, improvement to the
timeliness and transparency of the license review process, adequacy ofresourccs, and
recommendations for amending the Anus Export Control Act. Section 1514
mandates additional requirements to strengthen national security controls over
satcllite exports, including mandatory licenscs for launch failure investigations,
mandatory intelligence review of license applications and TAAs considered by the
Departments of Commerce and State for foreign launches of satellites, and
notilication to Congress of export licenses that are issued for satellite launches; with
the (:xception of satellites exported for launch by members of the North Atlantic
Treuty Organization (NATO) or a major non~NATO ally. Section 1515 requires a
detailed justification to accompany the President's waiver of post-Tiananmen
sanctions for satellite exports to China. Section' 1521 requires the establishment of
a Deputy Under Secretary of Defense for Technology Security Policy who serves as
the director of DTSA.
There had been concerns in Congress about how the Administration would
impkment the requirement to shift licensing authority back to State. Despite signing
the act on October 17, 1998, President Clinton said he "strongly opposed" the
transfer of authority. He also warned that he would "take action to minimize the
potential damage to U.S. interests" and order appropriate agencies to implement the
change "in a manner consistent with current dual-use export license processing."65
National Security Adviser Samuel Berger reportedly urged a veto and included the
strong language.66 In coordination with the U.S. satellite industry which prefers
speedier and more predictable licensing procedures,67 the White House's National
Security Council reportedly drafted an executive order for the President to issue to
accord the Commerce Department a continuing role in licensing satellite exports,
perhaps the authority to appeal the decisions of the State Department on Munitions
List items, including satellites. 68 In response, the chainnen of six House and Senate
cOllllllitte·es (National Security, Armed Services, International Relations, Foreign
65
President William J. Clinton's statement on the FY 1999 Defense Authorization Act.
66Lelyveld, Michael S., "Clinton Ripped On Satellites To China," Journal of Commerce,
December 14,1998.
"Conferees' Decision Draws Ire or Satellite Industry," Aerospace Daily, September 21,
1998; Interview with John Douglass, President/General Manager, Aerospace Industries
Association, Defense News, November 2-8, 1998; Interview with Clayton Mowry, Director,
U.S. Satellite Industry Association, Space News, November 9-15,1998; "A License to Do
Mischief(eommentary)," Space News, February 1, 1999:
.
67
Opall-Rome, Barbara, "White House Plots To Skirt Congress On Exports," Defense News,
December 7-13, 1998.
68
�CRS-30
Relalions, Intelligence) wrote a letter on December 9, 1998, warning the President
against "direct contravention" ofthe legislation.
As required by section 1513, the Secretary of State submitted to Congress on
January 21, 1999, the plan on regaining licensing authority over commercial satellites
as Munitions List items on March 15, 1999. It includes a goal (but not a limit) of
timely review of licenses within 90 working days; procedures for Commerce to
comment, but not veto, licensing reviews; and veto authority for the Defense
Department (that is not subject to appeal by the Commerce Department). It stated
that "no new Executive Order is needed," and decisions on defense exports are made
exclusively by the Departments of State and Defense and "solely on the basis of
national security and foreign policy.,,69 The Defense Department's new Space Launch
Monitoring Division of the Defense Threat Reduction Agency is reportedly hiring 39
engineers and other staff to review licenses for satellite exports and monitor foreign
launches. U.S. tinns are to reimburse the costs of monitoring?)
106th Congress. In the I 06 th Congress, Rep. Sweeney introduced H.R. 281 on
January 6, 1999, to prohibit the export to China of satellites and related equipment.
On May 19, 1999, he sponsored an amendment to the NASA authorization bill (H.R.
1654) to require NASA to certify, before any cooperative agreement with the PRC,
th:lt the technology transfer will not improve PRC ballistic missile or space launch
capabilities. The House agreed to the amendment. The NASA Authorization Act for
FYs 2000, 2001, and 2002 (P_L. 106-391, signed into law on October 30, 2000)
includes the requirement for certification to Congress, at least 15 days before such an
agre<.>ment, that it is not detrimental to the U.S. space launch industry and will not
improve the PRe's ballistic missile or space launch capabilities (Section I 26(a)(2)).
During the mark-up of the Foreign Relations Authorization Act for FY2000,
H.R. 1211, by the Committee on International Relations on April 14, \999,
Rcpn!sentative Rohrabacher introduced an amendment to give preferential treatment
in licensing for export of satellites and related items to NATO allies, major non
NATO allies, and other friendly countries; but not for China, countries that potentially
pose a security threat to the United States, or countries likely to proliferate satellite
technology to countries of security concern. (The FY 1999 National Defense
Authorization Act already exempts NATO and non-NATO allies from the more
stringent export controls.) As amended by Representative Gejdcnson, however, the
approved section 210 of H.R. 1211 (H. Rpt. 106-122) does not have references to
China and other countries not subject to preferential treatment. Rohrabacher's
amendment also directs the Secretary of State to obligate $2 million to the Office of
Defense Trade Controls to expedite the review of satellite export licenses. 71
"Report by The Secretary of State Pursuant to Section 1513(d) ofthe NOAA for FY 1999,"
January 21, 1999; Robert S. Greenberger and David S. Cloud, "State Department Seeks to
Allay Fears With 90-Day Satellite~License Reviews," Wall SrreelJuurnal, January 29, 1999;
NSC unclassified response to the Cox Committee's recommendations., February I, 1999.
69
7oFerster, Warren, "Pentagon Hires Staff For Review Office," Space News, April 26, 1999.
71 House Report 106-122; "$2 Million Pushed For State Tech Transfer Office; Attempt to
(continued...)
�CRS-3J
On May 27, 1999, the Senate agreed by voice vote to Senator Lou's
amendment to the National Defense Authorization Act for FY2000 (S. 1059). The
amendment sought to improve the monitoring of satellite exports and strengthen
safeguards, security, and counterintelligence at DOE facilitics.71 On June 9, 1999,
Representative Cox introduced an amendment 73 to the House's version (H.R.. 1401).
The amendment consisted of27 sections, with 25 sections requiring reports or other
actions, or amending the Jaw; a section simply providing a short title; and a section
providing a definition of "national laboratory." The sections or subsections of the
Cox amendment addressed fuUyor partially 21 of the 38 recommendations of the Cox
Conunittee. The House agreed to the Cox amendment by 428-0 on that day and
passed H.R. 1401 on June 10, 1999. In September 1999, Congress approved the
conference report (H. Rpt. 106-301) on S. 1059. The act, signed into law (P.L. 106
65) on October 5, 1999, includes sections 1401-1412 that addresses export controls
as they relate to missile technology, satellites, high-performance computers,
multilateral export controls, monitoring of foreign satellite launches, State Department
licensing, improved intelligence consultation, and notification to Congress of
investigations into possible export control violations by satellite makers. In addition,
section 1612(b) expressed the sense of Congress that the policy of exporting satellites
to the PRC for launch should be reexamined, with a review of whether to phase out
that policy. Congress did not require a report on this review.
On May 10, 2000, Rep. Gejdcnson introduced H.R. 4417 to transfer export
controls over satellites back to the SecretaI)' of Commerce. It would also provide for
certain procedures for satellite exports to the PRe.
Denied and Pending Satellite Exports
In addition to the FY 1999 Defense Authorization Act, Congress also passed
omnibus legislation (P.L. 105-277, Sec. 101(b)) appropriating funds for the
Department of Commerce in FY 1999 that required notification to Congress before
expending funds to process licenses for satellite exports to China. On' November 20,
1998, the Commerce Department reported processing of two export license
applications. Commerce again notified Congress on Februal)' 1, 1999, that it was
processing three additional applications to export satellites to China. Those five
satellite projects considered by Commerce were: Chinasat-8R, Asia Pacific Mobile
Telecommunications (APMT), Asiasat-3sb/4, Command and Control Software for
Satellites, and Iridium.
APMT. However, at least one of these, the APMT satellite project, has
encountered controversy. On July 2,1998, the State Department suspended a license
issued in 1996 to Hughes that permitted Shen Jun, son ofa PLA lieutenant general,
~l( ... cl)ntinucd)
Add Controls on China is Stymied," Spacebusines.l' Today, April 20, 1999; W~rrcn Pcrstcr,
"Pentagon Establishes Office To Review Satellite Export Requests," Defense News, May 3,
1999.
72For language of amendment, see Congressional Record, May 26, 1999, p. S6073-6074.
73Collgressiollu! Record, June 8,1999, p. H3862-3866.
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to work on the S450 million deal for the APMT {;:onsortium. Shen lun's father, Lt.
Gen. Shen Rongjun, was ,a Deputy Director of the Commission on Sdence,
Teehnology. and Industry for National Defense (COSTlND) from 1985 to 1998, with
spcdal responsibility foracrospJce. Also, the Administration re-exQmincd U1C AP:\1T
project, in part because the PRe governmental investors include those with ties to the
military: COSTIND, China Launch and Tracking Control, CASe, Ministry of
Information Industry, and China Telecommunications Broadcasting Satellite Corp.
(Chinasat), (In April 1998, COSTIND was reorganized as a civilian organization
under the State Council, while the IlLA retained control over satellites under the new
General Equipment Department.) Some are concerned that the: APMT satellite (with
powt:rful spot beams) could be used by the PLA to imprQve command and control
and lhat the satellite contains sensitive tt.'Chnologies, including a huge 40-ft.-wide
antenna and on-hoard digital processor, also used in Hughes' classified,
communications satellites used by the U,S. military. There have also been concerns
about Hughes' past record ofintcnlction with PRCaerospace engineers, including the
rcview of the January 1995 launch failure. 14
As for the PLA's possible use of ostensibly civilian communication satellites, a
DTSA official, Michael Maloof, wrotc a July 1998 memo about his concerns that the
PRe military has uscd U's,-marlc satellites to improve its encrypted command,
conti 01, communications, and intelligence (el), using the Asiasat and Apstar satellites
built by Hughes, is In an und:u;siticd report submitted as required by FY J 999
appropriations legislation, the Secretary of Defense reported on February 1, [999,
that China's military and civilian leaders arc paying "specific attention" to the ~I
infra~;tl'Ucture. The report further said that "the military's lack of communications
satellites could force the I'LA to rely on foreign satellite services to meet mili(ary
needs: in wartime or a crisis" and that, in a crisis, ;'the military would preempt the
donu:stic satellite systems for combat opcratlons. H76
On February 23, 1999. the Clinton Administration announced that it decided to
deny approvaJ to Hughes for the export ofthe APMT satellite. after the Departments
ofDC'fenseand State objected to the export, while the Commerce Department favored
it.:' The Administration cited concerns that the end~userwouJd be the PLA. Hughes
responded on March 15, 1999, asking the Administration ttlr a detailed justification
74 AISQ see: eRS Report 96w81\9, Chimt." Commissiril/ ojScience, Technology, and Industry
for A'allOrlaf Defense (COSTlND) ant! Dcfeme /rulusfnes, by Shirley A. Kan; Bruce
Dorminey and Michael Mecham. "Chlna~led Asian Team Buys Hughes OeQmobHe SatelUte£,"
Aviation Week & Space Technology. May 18. 1998: Jeff Gerth. "Administration Rethinking
$650 Million Cbina Satellite Deal," New York Times, June 18, J998; John Mintz, "Hughes
Corp. Pressmg White House to Clear New Deal wilh China," Washlngton Post, Aug. 9, 1998;
Steven D, Dorfman. Vice Chairman ofl-tughes, July 13, 1998, letter to the State Department.
7~
Capaeeio, Tony, "China Military Benefitted from U.S. Technology. U.S. Aldc Says,"
Bloomberg Neu'S, February 16.1999,
Secretary of Defense, "Report
February I, 1999.
H
iO
Congress Pursuant to the FY99 Appropriations Bill,"
Q Sntellile 10 ChlOa is Imperiled hy Conccms at
Pentagon," Wait Street Journal, Fcbruury22, 1999; JcffOcnh ami David E. Sauser, "Citing
Security, u.s" Spurns China On Salclii!c Dcal," New fork Times, February 23, 1999,
r CIClud, David S", "Hughes' S;)lc of
�CRS-33
for the denial. But on April 14, 1999, Hughes said that the APMT consortium
dropped Hughes as the satellite supplicr.?8
Concerning the PLA's usc of satellites, a report said that the indigenous satellite
(Chinasat-22) launched by China on January 26, 2000, is also called the Feng Huo-l,
repn:senting the first of China's military communications satellites for a new battle
management system, called the Qu Dian C4 ( system. The news story cited a classified
report by the Defense Intelligence Agency, reportedly describing the Qu Dian system,
when fully deployed in several years, as intended to be similar to the u.s. 10int
Tacticallnfonnation Distribution System (JTIDS), a secure data link network used
by U.S. and llllicd forces. 79 China has sllid tlmt it plans to deploy three major satellite
systems for remote·sensing, navigation and positioning, and communications. so
Chinasat-8. Meanwhile, Loral has encountered a delay in obtaining approval
from the Department of State for the export to China of the Chinasat-8 satellite, the
subject of the latest Presidential waiver in February 1998, which raised this
eontroversy.Sl In a full-page ad in the May 6, 1998 Washington Post, Loral had
boasted that Chinasat-8 is the "most powerful satellite China has ever purchased."
Chinasat-8 had been scheduled for launch in May 1999. The PRe government entity
buying the satellite is the China Telecommunications Broadcast Satellite Corporation,
subordinate to the Ministry of Information Industry (MII).~2 The Mil represents a
PRC defense industrial sector that WllS formed in March 1998 in a reorganization that
merged the Ministry of Electronics Industry and the Ministry of Posts and
Telecommunications. B3 Loral's chainnan, Bernard Schwartz, argued that the
government's delay in granting a technical assistance agreement (TAA) for Chinasat-8
risks the "commercial viability" of the whole U.S. satellite manufacturing industry in
Asia. 84 The trade publication, Space News, alleged in September 1999 that "the State
Department is delaying approval of the Chinasat 8 TAA to punish Loral for the still
unproven allegation that the company broke the law while participating with Hughes
in an independent review of a Chinese launch accident investigation." [t also
protested that "the export licensing process should not be used as a substitute for the
n"Singapore Customer Drops Hughes After Export License Delay," Aerospace Daily, April
15,1999.
Gel1z, Bill, "China's Military Links Forccs to Boost Power," Washing/on Times, March
16,2000.
79
80 Well Wei Po [PRC-owned newspaper in Hong Kong], October 3 I ,2000, translated by FBIS
("China Raises Satellite Positioning, Tracking Capability with Latest Launch").
8lSpace News, April 12 and 26, 1999.
82Lawrence, Stisan V.• "Clipping Their Wings," Far Eas/ern Economic Review, April 8,
1999.
83Defense Intelligence Agency, "China's International Defense-Industrial Organizations,"
Defense Intelligence Reference Document DI-1921-60A-98, June 1998.
84 Sil\'erstein, Sam, "Loral: Chinasat Dclay Threatens U.S. Suppliers' Credibility in Asia,"
Space News, August 23,1999.
�CRS-34
judicia1 system,'035 The Department of State reportedly decided not to rule on a
license for Chinasat-8 until after a new Administration takes office in January 200 1"86
Others. On May 10, 1999. as required by section 15120fthe FY1999 National
Defense Authorization Act (P.L. 105-261), I}resident Clinton issued certifications for
the export of satemte fuels and sepamtion systems for the Iridium satellite project
(owned by Motorola)" Hi.! certified that the export is not detrimental to the U.s.
space launch industry and that the material and equipment, including any indirect
technical benefit that could be derived from such expon, wtll not measurably improve
PRe missile or space launch capabilities.81
H "Free Chinasat 8," (commentary), Space Neh,l" September 6, J 999,
t;6
Space News, October 2, 2000.
>.lJcffcrson. Witliam 1., "Certification Regarding Export of Satellile Fuels to China,"
CongyessionaJ Record, May 11, 1999, p. H2955; 55029.
�CRS-35
Chronology
Date
Enot
198~
9/9/38
The Reagan Administration notified Congress that it will approve the
first export licenses for the usc ofPRC space launch services (for one
Asiasat and two Aussat satellites), subject to conditions.
'12117/88 '
The United States and China signed agreements to establish
technology safeguards on launching satellites from China and on
insurance liability; and initialed an agreement on intcmational
commercial launch services.
198~1
Jan, 1989
The United States and China signed an agreement for six years under
which China agreed to charge prices for commercial launch services
"on a par" with Western competitors and to allow China to launch
nine U.S.-built satellites through 1994.
6/4/89
Crackdown on peaceful, political demonstrators in Beijing.
12119/89
President Bush waived sanctions for export of Aussat-I, Aussat-2,
and Asiasat communications satellites for launch from China, under
sec. 610 of the Department of Commerce, Justice, and State, the
JUdiciary, and Related Agencies Appropriations act 1990 (P.L. 101
162),
1990
2116190
P.L. 101-246 enacted to require post-Tiananmen sanctions, including
suspensions in approving exports to China ofMunitions List items and
satellites.
4/7/90
China Great Wall Industry Corporation, ,using a LM-3 rocket,
launched a foreign satellite, Asiasat (built by Hughes), for the first
time.
1991
4/30/91
President Bush waived sanctions under Sec. 902(b) of P.L. 101-246
to allow exports of Aussat-I and -2 and Freja satellites for launch
from China in part because China was not the end-user. President
Bush denied a license to export U.S. satellite components for a PRC
satellite, Dongfanghong-3, citing "serious proliferation concerns." In
addition, Space News (May 6-12, 1991) reported that President
Bush's denial was to punish China for attempting to obtain classified
�CRS-36
missile-rei_ted technology.
The liccnse to export parts for
Dongfanghong-3 was requested by a German finn, but the U,S.
components were produced by MIA-COM, Inc, (Burlington, MA),
61 ! 6/9 1
The Bush Administration announced sanctions to be imposed on
China for transferring missile rdated technology to Pakistan. The
sanctions affected high technology trade with China, covering (1) high
performance computers, (2) satellites for launch from China (except
for the Prcj3 and Aussat satellites), and (3) sanctions for missile
proliferation as required by the Anus Export Control Act and Export
Administration Act (imposcd on China Great Wall Industry Corp. and
China Precision Machinery Import/Expon Corp.), The U,S, sanctions
were intt!nded to enforce the MTCR.
6/25:91
The sanctions on the two PRe state-owncd companies for missile
prolifemtion in Pakistan took effect
1112!i9!
After Secretary ofState James Baker visited Beijing, the PRC foreign
ministry issued a vague stalcment that China '''intends to abide" by the:
MTCR.
1992
2I!/92
According to the Bush Administration, the PRe foreign minister sent
a secret IcttcrtQ the U.S. Secretmy ofState promising to abide by the
MTCR.
2122192
The PRe foreign minis!!), issued a statement saying that "Chillu will
act in accordullce with the guidelines and parameters of the existing
missile and lTIissilc technology control regime in its export of missiles
and missile technology;' after the United States effectively lifts the
June 1991 sanctions.
3122192
Aborted launch of Aussat (Optus-B 1) satellite from China after LM
2E rocket mulfunctioned and the rocket stalled on the launch pad.
Beijing Review (Nov. 2~8, 1992) reported thut the rocket's
malfunction was caused by a fault in the ignition system which
triggered an emergency shut~down,
3123192
The Bush Administl1ltion effectively waived the sanctions imposed in
June 1991 on China for missile proliferation.
8Ji4i92
China successfully launched the Optus~B 1 satellite (built by Hughes).
91[[/92
President Bush waived sanctions under P.L. I0 1~246 to allow exports
Intelsat~ 7A, Starsat, and AfriStar)
for launch ,from China and parts for China's Dongfanghong~3.
of five smellites (Asiasat~2, Apsat,
10123192
Under the Bush Administmtion, the State Department issued a rule to
amend section 38 of the Arms Export Control Act.
The rule
�CRS-37
transferred commercial communications satellites that do not have
certain sensitive characteristics (under nine categories) to the export
licensing control ofthe Commerce Department. Military satellites and
communications satellites with any of the nine categories of sensitive
characteristics remained on the State Department's Munitions List.
Nov. 1992
Chinn may have supplied M-l1 short-range ballistic missiles or related
technology to Pakistan, according to President Clinton's report to
Congress submitted in May 1993. This transfer may have been taken
in retaliation for President Bush's decision in September 1992 to sell
F-16 fighters to Taiwan.
12/21/92
A PRe LM-2E launch vehicle exploded and destroyed the Australian
Optus-B2 satellite (built by Hughes) it was carrying. After the
explosion, PRC officials denied that PRC rockets were responsible,
blaming the satellite built by Hughes. Aviation Week and Space.
Technology (Jan. 30, 1995) reported that Hughes and China Great
Wall Industry Corp. agreed to declare the cause of that failure to be
undetermined. Some experts, however, reportedly identified the
premature opening of the launch vehicle's payload fairing as causing
the accident.
1993
2/11/93
After renegotiating security procedures, the United States and China
signed a new agreement on satellite. technology safeguards,
super~eding the agreement of 12/17/88.
5/28/93
President Clinton decided to extend most-favored-nation trade status
to China with conditions on human rights, but no linkage to weapons
proliferation. Nonetheless, after persistent reports that China was
continuing to transfer missile components to Pakistan - if not
complete M-li short-range ballistic missiles, the President also
reported to Congress that "at present, the greatest concern involves
reports that China in November 1992 transferred MTCR-class M-II
missiles or related equipment to Pakistan."
7/2193
President Clinton waived sanctions under P.L. 101-246 to allow
exports to China of Iridium and Intelsat-8 satellites for launch from
China.
8116/93
Hughes and CGWIC issued a joint statement after seven months of
"vigorous and cooperative investigation" into the cause of the
explosion on 12/21192. The statement di~ not identify a cause, with
each side denying blame.
8/24/93
The Clinton Administration determined that China had shipped M-II
related equipment (not missiles) to Pakistan and imposed sanctions
required by the Amls Export Control Act and Export Administration
Act. The sanctions were imposed on Pakistan's Ministry of Defense
�CRS-38
and 11 PRe defense industrial aerospace entities, including China
Great Wall Industry Corp. The Category II sanction denied U.S.
government contracts and export licenses for missile equipment or
technology (items in the MTCR annex) for two years.
The
Department of State argued that the sanction banned all licenses for
satellite exports, hut the Department of Commerce'argued that the
sanction did not cover satellites.
8/26/93
The U.S. aerospace industry lobby, including the Aerospace Industries
Association, called on the Clinton Administration to weaken the
missile proliferation sanctions. 88
8/31193
One week after imposing sanctions, Assistant Secretary. of State
Winston Lord said thut "we're ready at any time to sit down with the
Chinese, both to try to find a way to lift the sanctions if they
cooperate but also to explain more fully the MTCR and its revised
guidelines."
9/25 193
National Security Adviser Anthony Lake told the PRC ambassador
that the Clinton Administration was willing to negotiate a waiver of
the sanctions, but a more fonnal and binding PRe commitment than
the one made in November 1991 was needed.
10/20/93
The Washington Post reported that top executives of U.S. satellite
manufacturers, Martin Marietta Corp. and Hughes Aircraft Co., were
lobbying intensively for the Clinton Administration to waive the
export ban for satellites. Reportedly due to these objections from
private industry (which were supported by the Commerce
Department), the National Security Council (NSC) reviewed the
decision to implement the sanctions. In September 1993, Nonnan R.
Augustine, chainnan of Martin Marietta, wrote a letter to Vice
President AI Gore, arguing that the sanctions "present U.S. companies
as an unreliable supplier." Some Members of Congress supported the
export of satellites for launch from China.
11/9193
The CEO of Hughes Aircraft Company, C. Michael Armstrong,
delivered a speech in which he objected to' the inclusion in the
sanctions of commercial communications satellites. He also said that
he "asked the President of the United States to review the situation."
11116/93
National Security Adviser Anthony Lake wrote a memo to President
Clinton proposing the NSC's interpretation of the sanctions imposed
in August to allow the export of two satellites controlled by the
Commerce Department, but not the five controlled by the State
Department. State had argued that all satellite licenses were
~g"Statement by Don Fuqua, President of the Aerospace Industries. Association, on the
Imposition of U.S. Economic Sanctions on China," August 26, 1993~ Steven Greenhouse,
"Aerospace Industry Seeks Weaker Sanctions on China," New York Times, August 28, 1993.
�CRS-39
suspended under the sanctions, but Commerce argued that sanctions
did not cover any licenses. The President approved the NSC's
recommendation.
11119193
President Clinton met with PRe President Jiang Zemin at the Asian
Pacific Economic Cooperation (APEC) meeting in Seattle. On the
eve of the meeting, press reports said that the Administration had
formally proposed waiving the sanctions in return for another PRe
promise, in more detail and with more authority, not to export
MTCR~class missiles.
1994
1/6194
The Clinton Administration announced a new policy exempting
commercial communication satellites from sanctions for missile
proliferation imposed on 8/24/93, facilitating export licenses for one
Hughes and two Martin Marietta satellites.
4/2/94
A PRC weather satellite exploded in a plant.
7113/94
President Clinton waived sanctions under P.L. 101-246 for the
Echostar satellite to he exported for launch from China.
7/21194
A PRC LM-3 rocket launched the Apstar-I satellite (built by Hughes).
8/28;94
A PRC LM-2E rocket launched Australia's qptus-B3 satellite (built
by Hughes).
Sept. 1994
Secretary of Commerce Ron Brown led trade delegation to China,
including Bernard Schwartz, Loral's chainnan.
1014/94
Secretary of State Warren Christopher and Foreign Minister Qian
Qichen issued ajoint statement in which the United States agreed to
waive the August 1993 sanctions (for missile prol iferation) and China
agreed not to export "ground-to-ground missiles" that arc "inherently
capable" of delivering at least 500 kg to at least 300 km (an important
understanding meant in part to include the M-11 missiles under the
MTCR guidelines).
1111/94
The Administration's waiver of the sanctions for missile proliferation
took effect.
11/30/94
China launched its Dongfanghong-3 satellite, but failed to launch it
into the correct position due to a fuel leak.
Dec. 1994
President Clinton selected Armstrong of Hughes to head the Export
Council.
1995
�CRS-40
1/26/95
A PRe LM-2E launch vehicle exploded after'liftoff, destroying the
Apstar-2 satellite (built by Hughes) it was carrying. Hughes and
China Great WalllndustI)' Corporation were reported as planning to
dctennine the cause of the explosion. (Aviation Week and Space
Technology, Jan. 30, 1995)
2/9195
The Wall Street Journal reported that PRe aerospace industry
officials contradicted an official PRe newspaper's account that
blamed Hughes for the explosion on January 26, 1995. Instead of
blaming Hughes, as Ta KUlig Pao (in Hong Kong) did, officials from
China Great Wall Industries Corp. and the China National Space
Administration said that the article did not reflect China's official view
and that the investigation had not concluded. A spokesman for
Hughes said that a thorough investigation into the cause of the
explosion would take months to complete.
3/13/95
The United States and China concluded a new agreement for 7 years
to allow China to launch up to II new satellites to geostationary orbit
at prices not less than 15 percent below that charged by Western
competitors.
7/21··28/95
The PLA Second Artillery test-fired M-9 short-range ballistic'missiles
toward Taiwan, after Taiwan's president visited Cornell University in
June.
7/25/95
Hughes and CGWIC issued a joint statement on separate findings of
six-month investigations into the eause of the explosion on 1126195.
CGWle blamed strong winds for shaking Hughes' satellite apart,
while Hughes said that severe winds caused the PRC rocket's fairing
to collapse.
8/15195
Hughes provided to the Department of Commerce the final report on
the investigation of the launch failure of Apstar-2. The report
included a summary of infonnation conveyed to China Great Wall
during several meetings that took place from February to June 1995.
10/9195
Secretary of State Warren Christopher initialed a classificd
memorandum to retain the State Department's licensing authority over
commercial communications satellites (cited in New York Times, May
17,1998).
11/28/95
A PRC LM-2E rocket launched the Asiasat-2 satellite (built by
Martin Marietta), but the bumpy launch knocked the satellite's
antenna-feed horns out of alignment, resulting in a loss of signal
power. Asiasat company claimed $58 million in insurance for the
damage. (Flight International, Oct. 2-8, 1996).
,
12/6195
President Clinton issued Executive Order 12981 glvmg the
Departments of State, Defense, and Energy, and the Arms Control
and Disarmament Agency authority to separately review export
�CRS-41
license applications submitted to the Department of Commerce under
the Export Administration Act and relevant regulations.
12/28/95
A PRe LM~2E rocket launched the Echostar-l slltcllite (built by
Martin Marietta).
1996
2/6/96
President Clinton waived sanctions under P.L. 101-246 for the
Chinasat-7 satellite to be exported for launch from China.
2/6196
President Clinton waived sanctions under P.L. 101-246 for 2 Cosat
(later called Chinaslar) satellites to be exported for launch from China.
2/6196
President Clinton waived sanctions under P.L. 101-246 for the'
Mabuhay satellite to be exported for launch from China.
2115/96
A LM-3B rocket exploded after liftoff, destroyed the Intelsal-708
satellite (built by Loral), and smashed into a village. The death toll
was probably higher than the official report of six deaths and 57
injured.
3/8-15/96
Despite the dramatic explosion ofa PRC rocket one month before, the
PLA's Second Artillery again test-fired M-9 shortMrange ballistic
missiles toward targets close to Taiwan's ports, on the eve of
Taiwan's first presidential election.
3110-11/96
In further deterioration of U.S.-China relations, the United States
deployed two carrier battle groups to waters off Taiwan, calling
China's liveMfire exercises "reckless" and "risky."
3112/96
President Clinton approved a memo written by then deputy national
security adviser Samuel R. Berger to reverse Secretary Christopher's
decision of October 1995 and transfer export control authority over
commercial satellites from the State Department to the Commerce
Department (New York Times, July 18, \998).
3114/96
The Clinton Administration announced a decision to move commercial
communications satellites from the Munitions List to the Commerce
Control List of dualMuse items, so that the export license jurisdiction
was moved from the Department of State to the Department of
Commerce (implemented in November! 996).
March 1996
The CIA had a classified cable on an American consultant, Bansang
Lee, who worked for Hughes and later Loral, and possible payments
exchanged between him and PRe aerospace executives, but the CIA
did not pass the cable to the Justice Department until 1998 (New York
Times, December 24,1998).
�CRS-42
April 1996
A CIA analyst, Ronald Pandolfi, had reportedly prepared a National
Intelligence Estimate (NIE) on how Hughes may have helped improve
China's missile capabilities in reviewing the explosion of a Long
March rocket in January 1995, hut the CIA did not approve the NIE
(New York Times, December 7, 1998).
April 1996
At China's request, Dr. Wah L. Lim, then a senior vice president and
engineer at Loral, chaired a review committee to study China's
technical evaluation of the cause of the accident on Feb. 15, 1996.
Loral says China had identified the problem as residing in the inertial
measurement unit (IMU) of the guidance system of the rocket. Loral
believed that it did not have to request a U.S. government license and
monitoring. The first meeting was held in Palo Alto, CA, and the
second, in China. PRC engineers participated in the two meetings.
517196.
A draft preliminary report ofLoral's review committee wa.s sent to all
participants of the meetings. The report eonfinned that the cause of
the accident was an electrical flaw in the electronic flight control
system. The report allegedly discussed weaknesses in the PRC
rocket's guidance and control systems (New York Times, April 13,
1998).
5/1 0196
Loml's executive in charge of export controls told Dr. Wah Lim not
to send the report to China.
5/13/96
Loral's executives provided the report to the Departments of State
and Defense.
6117/96
Lornl provided a voluntary disclosure to the Department of State,
concerning all communications with China. The company argues that
its policy of consultation with the Department of State was not
implemented, but it did not violate U.S. laws.
6/23196
President Clinton waived sanctions under P.L. 101-246 for the Asia
Pacific Mobile Telecommunications (APMT) satellite to be exported
for launch from and use by China.
7/3/96
China launched the Apstar-IA satellite (built by Hughes) on a LM-3
rocket.
7/9/96
President Clinton waived sanctions under P.L. 101-246 for a
Globalstar satellite to be exported for launch from China. 89
8/18/96
China failed to launch its Chinasat-7 satellite (built by Hughes) into
the correct orbit, after the third stage of the LM-3 rocket shut down
early, reported the Far Eastern Economic Review (Aug. 29, 1996).
China Telecom will invest $37.5 million 10 become a full partner in GlobalSlar, according
to Aviation Week & Space Technology, October 5, 1998.
89
�CRS-43
10115/96
President Clinton issued an Amendment to Executive Order 12981
(issued on 12/6/95) concerning export licensing procedures for
commercial communications satellites and hot-section technologies for
commercial aircraft engines that are transferred from the State
Department's Munitions List to the Commerce Department's
Commerce Control List (of dual-use items).
10/21/96
The Bureau of Export Administration of the Department of
Commerce issued regulations to implement the transferofcomrnercial
satellites from control under the Munitions List to the Commerce
Control List.
11/5196
The Department of State issued regulations to implement the transfer
of commercial satellites from control under the Munitions List to the
Commerce Control List, even if the satellites include individual
components or technologies on the Munitions List. 91l
11/19196
President Clinton waived sanctions under P.L. 101-246 for U.S. parts
for the PRe Fengyun-I (FY-I) meteorological satellite. The waiver
cited suspensions under sections 902(a)(3) and 902(a)(5), indicating
that technologies controlled under the Munitions List were involved.
11/23/96
President Clinton waived sanctions under P.L. 101-246 forthe Sinosat
satellite to be exported for launch from China. The waiver cited
suspensions under sections 902(a)(3) and 902(a)(5), indicating that
technologies controlled under the Munitions List were involved.
1997
March 1997
The Air Force's National Air Intelligence Center (NAIf.:) reportedly
concluded in a classified report' that Loral and Hughes provided
expertise that helped China to improve the guidance systems on its
ballistic missiles and that U.S. national security was damaged
(Washington Post, June 7, 1998). NAIC's'report was sent to DTSA,
the State Department, and the Justice Department.
5/12/97
China successfully launched its Dongfanghong-3 communications
satellite, built by China Aerospace Corp. on a LM-3A rocket,
prompting personal congratulations from top government and military
leaders.
5116/97
A classified report at DTSA concluded that Loral and Hughes had
transferred expertise to China that significantly enhanced the reliability
of its nuclear ballistic missiles and "United States national security has
been harmed" (New York Times, April 13, 1998 and June 27,1998).
90AIso see GAO report GAOfNSIAD-97-24, Export Controls: Change in Export Licensing
Jurisdictionfor Two Sensitive Dual-Use Items, January 1997.
�CRS-44
May 1997
The U.S. Trade Representative (USTR) reported that China had
violated the pricing provisions of a bilateral agreement on the
Mabuhay launch.
611 0/97
China successfully launched its Fengyun-2, a second-generation PRe
meteorological satellite, on a LM-3 rocket.
8119197
China launched the Agila 2 (formerly called Mabuhay) satellite (built
by Lora1).
911197
China launched two test satellites for Iridium to demonstrate the
technical viability of the new Long March variant, LM-2C/SD.
911 0197
The Washington Times, citing Israeli and U.S. intelligence sources,
reported that China Great Wall Industry Corporation was supplying
key telemetry equipment (for sending and collecting guidance data
during flight tests) to Iran for its development of the Shahab-3 and
Shahab-4 medium-range ballistic missiles.
Sept. 1997
Likely prompted by DTSA's report, the Department of Justice began
its criminal investigation into allegations that Loral and Hughes
illegally passed technical assistance to China.
10117/97
China launched Asia Pacific Telecommunications Satellite (ApStar
2R) (built by Lora1) 011 LM-JB rocket.
10/27/97
The USTR announced that the United States and China agreed on
new provisions for the Bilateral Agreement on Space Launch Services
(signed in 1995). The new provisions set clear terms for PRC pricing
of launch services to low earth orbit.
11/2/97
After a summit in Washington, PRC President Jiang Zemin toured a
Hughes satellite plant in Los Angeles, California.
12/8/97
China launched two satellites for Iridium (built by Motorola) on one
Long March 2C/SD rocket to low earth orbit. The rocket had two
stages and a "smart dispenser" on top that deployed the two satellites.
199H
2/12/98
National Security Adviser Samuel Berger wrote a memorandum for
President Clinton on whether to waive post-Tiananmen sanctions for
the export of the Loral-built Chinasat-8 satellite. Berger said that the
Department of State, with the concurrence of the Department of
Defense and the Arms Control and Disarmament Agency,
recommended the waiver. However, the memo noted that "the
Criminal Division of the Justice Department has cautioned that a
national-interest waiver in this case could have a significant adverse
impact on any prosecution that might take place, based on a pending
�CRS-45
investigation of export violations" by Lora!. (printed in the New York
Times, May 23, 1998)
2/\8/98
President Clinton waived sanctions under P.L. 101-246 for the
Chinasat-8 satellite (built by Loral) to be exported to China. Loral
says that it is the most powerful satellite that China has ever bought.
3/12/98
Gary Samore, Special Assistant to the President and Senior Director
for Nonproliferation and Export Controls in the National Security
Council, wrote a Secret memo proposing to support PRe membership
in the MTCR, issue a "blanket waiver" of the post-Tiananmcn
sanctions to cover all future satellite launches, and increase the
in return for PRe
number of space launches from China cooperation in missile nonproliferation. (The classified memo was
printed in the Murch 23,1998, Washington Times.)
3116198
Loral Space and Communications signed an agreement with China
Great Wall Industl)' Corp. to launch five of Loral's communication
satellites between March 1998 and March 2002 using Long March-3B
rockets.
3/22/98
China Aerospace Corp. kicked offa Quality Promotion' Plan to help
ensure success in its commercial launch business in research,
production, and testing.
3/26/98
China launched two lridiwn satellites, built by Motorola, on a LM
2C/SD rocket. (According to China, this launch was China's 15 th
"successful" commercial launch for foreign customers since 1990.)
3/26/98
John Holum, Acting Under SecretaI)' of State for Amls Control and
International Security Affairs, concluded his visit to China and
confirmed that he discussed increasing the quota on the number of
satellite launches from China.
3/29/98
A I'long Kong newspaper owned by the PRC government reported
that China Aerospace Corporation found in its investigations into past
failed launches of satellites that all the failures were caused by
problems in production and management related to quality control.
A previous explosion of an LM-3B rocket (on 2115196) was found to
have been caused by a defect in a power pack nodal point which
caused a short circuit when the rocket ignited, resulting in a
malfunction in the inertial platfoml.
4/31'18
China's official news agency quoted Zhang Haiming, general-manager
of a division of Lockheed Martin, as saying that the company is
"consulting with the PRe on satellite manufacturing."
4/4/98
The New York Times reported that a Federal grand jul)' is
investigating whether Loral Space and Communications ofNew York
and Hug,hes Electronics of Los Angeles provided expertise to China
�CRS·46
thaI "significantly advanced" the guidance systems of its ballistic
missiles in studying the accidental destruction in February 1996 of a
satellite built by Lorn!. Administration officials reportedly said that
the Department of Justice, fearing that ltscrimina! investigation would
be undcmlined, opposed the {'resident's February 1998 waiver and
approval for expon of similar technOlogy to China (for Chin?sat~8).
Lorar's chiefexecutive was reported as the la~,;c$t personal donor to
the Democratic National Commitlee for the 1996 election.
419198
John Holum, Acting Undersecretary of Stale for Arms Control and
lntemational Security Affairs stressed that exports of salellites to
China for launch occur with an export license and strict security
measures to "preclude assistance to the design, development,
operation, maintenance, modification or repair of any'launch facility
or rocket in China, and we monitor that vcry carefully." He also
con finned that after the accident in February 1996, the Department of
State "became awarc that there may have been.a violation!' The case
was refcrred to the D.epartmem of Justice for invesiigation. He said
that there are "strong legal remedies" for violations of export c(mtrol
Jaws, including n denial of future licenses.
j
4/~ 3/98
TIle Nf..'h' YorA Times again reported on the criminal investigation of
Loral and HUghes. adding that a highly classified Pentagon report
concluded in May 1997 that the companies had transferred expertise
to China that "significantly improved" the reliability of China's nuclear
ballistic missiles.
4115198
Loral's president and chief operating officer, Gregory Clark, stated
that Loral "did not divulge any infonnation that was inappropriate,"
4/i6/98
A PRe Foreign Ministry spokesman stated that "the exchange of
technical infomlation about satellite launchings between U,S,
companies and the PRe aerospace depal1mcnt was a normal activity
and fell under imernational mles." He also said that the companies
"did not provide technical infonnation about missile technology!'
4121198
Loral's chainnan and CEO, Bernard Schwartz, said that "we have
done OUf own internal investigation, and I'm satisfied that our people
acted well- good behavior and in compliance [with U,S, export
control regulationsr'
4128198
Under Secretary of Commerce for Export Administration William
Reinsch testified to the Joint Economic Committee that satellite
exports to China have shown how effective duul~use export controls
allow U,S. exporters to compete and "win without risk to our llatioM!
security." He said that controls on satellite exports to China are
extensive and include measures to "reduce the risk" of ilHcit
technology transfers. Since November 1996 (when thc licensing
jurisdiction \Vas transferred from the Department of State to
�CRS-47
Commerce), Commerce issued three export licenses for satellites to
be launched from China - "with the concurrence of all agencies."
4/30/98
A spokesman at the State Department, James Foley, denied a
Washing/on Times report that the Administration presented China
with a draft agreement for space cooperation. He admitted, however,
that officials have considered scientific space cooperation as one way
to encourage PRC cooperation in missile non-proliferation. He also
stressed that "there still is not any U,S. plan or proposal to offer China
access to missile technology."
5/2/98
A PRe Long March 2C/SD rocket launched two Iridium satellites
(built by Motorola) to low earth orbit.
May 1998
The Justice Department began a prclin:inary inquiry into whether
political donations mfluenccd President Clinton's <lpproval ofstltcllites
to China.
5115198
The New York Times repofts that fund·raiser Johnny Cbung told the
Justice Department that part of his donations to the Democratic Party
in the summer of 1996 came from the PLA through Liu Chaoying, a
PLA lieutenant colonel and a senior manager and vice president for
China Aerospace International Holdings, Ltd. (a subsidiary of China
Aerospace Corporation in Hong Kong). She is also a daughter of
retired Generat Llu Huaqing, formerly a vicc chairman of the PLA '$
command, the Central Military Commission) and formerly a member
of the Standing Committee of the Politburo.
5/18/98
Loral issued a statement saying that allegations that it provided missile
guidance technology to China are false. The company states that "the
Chinese alone conducted an independent investigation of the launch
failure [in February 1996) and they detennined that the problem was
a defective solder joint in the wiring - a 'low·tech' matter." Lora'
denied that it and Hughes conducted an independent invcstig;ltion to
determine the cause of that launch failure. It was at the insistence of
insorance companies, which required non·PRC confirmation of
resolutions of problems with Long March rockets, that Loral formed
a connnittee of several satellite companies, including Hughes, to
review the PRC investigation. However, Loral admitted that, contrary
to its policies, "the cmr..mittee proVided a report to the Chinese before
consulting with State Department export licensing authorities." Loral
adds that it is in full cooperation with the Justice Department in its
investigation and with Congressional committees. Loral concludes
that based upon its own review, it "docs not bclic\'C that any of iL'l
employees dealing with China acted illegally or damaged U.S. national
security." In addition, the statement says that Lontl's chairman.
Bernard Schwartz, was not personally involved in any aspect of this
matter. "No political favors or benefits ofany kind were requested or
extended, directly or lndirecily, by any means whatever." Loral also
denies any connection between the launch failure in February 1996
�CRS-48
and the Presidcntinl waiver for another Loral~built satellite in February
1998. The export license for the latest launch (for Chinasat-8)
"applied the strictest prohibitions on technology transfer and specified
that any new launch failure investigation would require a separate
license," Loral stresses that it complies strictly with export control
laws and regulations.
5/30/98
China launched its Chinastar-I (Zhongwci-l) (built by Lockheed
Martin) on a LM-3B rocket.
June 1998
The Justice Department expanded its investigation to examine whether
Hughes violated export control laws in transmitting a report to China
on the failure on January 26, 1995 that destroyed the Apstar-2
satellite. The Commerce Department had approved Hughes' report.
6118198
The House voted on H.Res. 463 to create the Select Committee on
U.S. National Security and Military/Commercial Concerns with the
People's Republic of China (chaired by Rep. Cox). Popularly known
as the "Cox Committee," it was comprised of five Republicans and
four Democrats.
6/29198
President Clinton held a summit in Beijing with President Jiang Zemin,
at which the PRC refused to join the MTCR but said it was "actively
studying" whether to join.
7/2/98
The State Department suspended the license issued in 1996 to Hughes
that permitted Shen Jun, son of a PLA lieutenant general, to work on
a $450 million satellite deal for the APMT consortium.
717/98
A DTSA official, Michael Maloof, wrote a memo about his concerns
that the PRC militaty has used U.S.-made satellites to improve its
encrypted command, control, communications, and intelligence (C 4 1),
using the Asiasat and Apstar satellites built by Hughes.
7118/98
China launched its Sinosat-! (built by French companies, Aicatel and
Aerospatiale) on a LM-3B rocket.
8119198
A PRC Long March 2C/SD rocket' launched two replenishment
satellites for Iridium (owned by Motorola).
Summer
An intema! memo of the Justice Department's campaign finance task
force reportedly found no evidence that Loral's chainnan Bernard
Schwartz corruptly influenced President Clinton in his decision to
approve Loral's export ofa satellite to China in 1998, but the memo
recommended to Attorney General Janet Reno that she appoint an
independent prosecutor. Reno denied the recommendation.
9117198
Conferees on the National Defense Authorization Act for FY!999
(H.R. 3616) agreed to transfer the export licensing authority over
�CRS49
commercial satellites back to the State Department. among other"
provisions. but did not ban further sa!cllite exports to China.
Sept. J998
A CiA analyst, Ronald Pandolfi, briefed the Senate Jmelligence
Committee on what he had found in 1995 about Hughes' review of
the explosion of a Long March rocket in January 1995. The CIA then
allegedly alerted Hughes about PllndolfL '5 briefmg, reportedly
according to an internal CIA cable dated September 23, 1998. The
committee then asked Attorney General Janet Reno for a criminal
investigation into whether the CIA improperly obstructed a Senate
invesligation.
10/17/98
.
President Clinton signed the National Defense Authorization Act for
FY 1999 (P.L. 105·261), but ,aid he "strongly opposed" the
provisions on shifting controls over satellite exports back to the
Department of State.
11116/98
China Great Wall Industry Corp, failed to receive bids and infonnation
from any U.S. satellite manufacturers for a PRe proposal to set up a
joint satellite production facility, in part because of Congressional
concerns over sensitive technology tnmsfcrs (Space News, November
23·29,1998).
11/20/98
The Department of Commerce notified Congress, as required in
FY 1999 appropriations legislation (P.L. 105-277), that it is processlng
two applications for licenses to export satellites to China.
Dec. 1998
CIA officials agreed to testify before a federal grand jury in
Washington in the Justice Department's unusual criminal investigation
into whether the CIA obstructed justice when it allegedly warned
Hughes aomlt the Senate tnteltigcnce Committee's interest in some of
its emp!oyees. The investigation began at the. request of that
committee (Washingtun Post, December 5,1998),
1217198
Aviation Week & Space Technology reports that the Department of
Commerce granted pcmlission for the launch ofthe APtvtT satellite to
proceed,
12n198
DOD issued an initial assessment of documents provided by the
Department ofCommerce in July 1998 on Hughes' review thc January
1995 launch failure (for Apstar·2). The rcport prepared by OTSA and
NAIC concluded that Hughes provided infomlation to China thllt
potentially helpt'{] its n,issile prograin and violated standards of not
improving PRe satellite and missile capabilities.
Dec. 1998
The Departmcnts of Defense and Stale began a study after the
December 7, 1998 Pentagon report on Hughes' technical ~xchanges
with China in 1995. The follow-up study will assess any military
benefit to China of the technical exchanges.
�CRS·50
1219198
The chairmen of six House and Senate Committees (National
Security, Armed Services, International Relations, Foreign Relations,
and Intelligence) wrote II letter to President Clinton. warning against
"direct contravention" of legislation pnsscd by Congress to have the
State Department regain control over the export of satellites.
12115198
The New l'Of'k nmes reports that the Department of lustice's
investigation of China's role in the political campaigns of 1996 has
found new evidence that the PRe goal was acquisition ofU,S, high
technology, especially that with military uses,
1211,198
The State Depanment's Office of Defense Trade Controls (DTC)
completed a sensitive but unclassified report, concluding that Hughes,
in reviewing the January 1995 launch failure of Apstar~2, provided
technical lessons that arc "inherently applicable" to PRe missile us
well as satellite launch programs. (Printed in the Cox Committee's
repen, volume II, p, 76-84)
12119/98
A PRe Long March 2C1SD rocket launched two replenishment
satellites tor Iridium (owned by Motorola).
12130198
The "Cox Committee" unanimously approved a classIfied report 011 its
six-month investigation. According to Rep. Cox and Dicks, the chair
and ranking Democrat, PRe technology acquisitions. not only those
, associated weth satellite launches, hamloo U.S. national security.
1999
116199
The House extended the "Cox Committee" for three months in the
1O?!h Congress to work Oli the declassification of its report.
1114199
Under Secretary ofCommcrcc William Reinsch said in a speech that
the Cox COJnmittee is a good example of those in Congress who "do
not understand" the "political and economic transformations" in reeent
years and "respond to them by trying to return to tbe simpler era of'
the Cold War and a single bipolar adversary. Only this time, Lt is
China:'
1121199
The Secreta.ry of State submitted her plan to Congress on regaining
licensing authority over satellites on March 15, 1999, as required in
section 1513(d) of the National Defense AuthQrizatkm Act for
FY1999.
211/99
The NSC issued a 32-pagc, unclassified response to the "Cox
Committee's" recommendations. before release of iL'l declassified
report.
211199
As reqUired in FY1999 appropriations legislation (P.L,
l05~277),
Commerce again notified Congress (after the Nov, 20, 1998 notice)
that it is processing threc additional applications to export satellites: to
�CRS-51
China, The total of five satellite projects under consideration were:
Chinasat~8R, APMT, Asiasat-3sb/4, Command and Control Software
for Satellites, and Iridium ..
21l!99
The Defense Secretary reported that China's military and civilian
leaders are paying "specific attention" to the C4 1 infrastructure and
that "the military's lack of communications satellites could force the
PLA to rely on foreign satellite services to meet military needs in
wartime or a crisis,"
2123199
The Clinton Administration announced that it decided to deny
approval to Hughes for the export of the APMT satellite, after the
Departments of Defense and State voted against the Commerce
Department's support for the export. The administration cited
concerns that the end-user of the satellite would be the PLA.
3115199
The Department of State regained authority over the licensing of
satellite exports, pursuant to the National Defense Authorization Act
for FYI999(1',L, 105-261).
3/15 /99
Hughes responded to the Adrr.inistration·s decision to deny an export
license for the APMT satellite by asking for a detailed justification.
3/18199
The Department of Commerce published a rule in the Federal
Register on removing commercial communication satellites and
related items from the Commerce Control Us!.
3/22199
The Dcpanment of State published II rule in the Federal Register on
reinstating commercial communication satellites on the Munitions List
on Murch 15, 1999.
3/24/99
The I·louse passed H.Re:t 129 (Cox) to extend the "Cox Committee"
umil April 30. 1999.
4/4199
4/14/99
. The Los Angeles Times reports that Democratic fund-raiser Johnny
Chung told fcdcm{ investigators that Liu Chaoying, executive ofChina
Aerospace International Holdings. Ltd., helped to funnel $300,000
from General Ji Shcngdc. head of the PLA's intelligence department,
to Chung for President Climon's re-election campaign in 1996, but
most of thnl moncy did not go to the Democratic Party,
Hughes reported that the APMT consortium dropped Hughes as the
satcltite supplier, ufter it fuiled to obtain thc export licenses,
4!21/99
The Director of Central Intelligence publicly reported on the
Intelligence Community's damage assessment on PRe acquisitions of
infomlatloo on U.S. nuclear weapons and ballistic missiles.
�CRS-52
4122/99
Representatives Cox and Dicks briefed President Clinton 011 the
, fmdings of the "Cox Committee's" report.
4.129199
The House agreed to H. Res. 153 (Cox)" to extend the "Cox
Committee" until May 14, 1999.
517199
The Senate Sclcc( Committee on Intelligence released its report on
security implications of U;S. satellite exports to China and on PRe
political donations to U,S, pillitical campaigns. The committee had
approved the report on May 5, 1999, in a
16~1
votc, with Senate
Graham dissenting, There are to recommendations related to the
policy of satellite exports to China.
5/10;99
As required by section 1512 of the FY 1999 National Defense
Authorization. Ad (P.L. 105-261), President Clinton issued
certifications (for the Iridium satellite project) that the export of
smcllire fuels and scpamtion systems is not detrimental to the U,S,
space launch industry and that the material and equipment, including
any indire<:t technical benefit that could be derived from such export,
will not measurably improve PRe missile or space launch capabilities,
5110199
China launched two PRe sateUites (Fcngyun-I weather satellite and
Shijian-5 unspeciiicdscientific satellite) using a LM~4B rocket for the
first time,
5/13/99
The House approved H. Res. 170, on May 13, 1999, to extend the
"Cox Committee" until Ivlay 3 J, 1999,
5/25199
The "Cox Committee" released the declassified version of its January
3, 1999 report on its investigation of PRC technology acquisitions,
6111199
A LM-2C rocket launched two Iridium satellites (owned by
Motorola)_
1(1/5 199
The President signed into law (P,L, 106-65) the FY2000 National
Defense Authorization Act in which Congress addressed export
controls relating to missile technology, satellites, and other issues.
10/14/99
A LM-4B rocket launched the China~Brazii Earth Resources Satellite
(eIlERS-l), or Zi Yuan-I.
11/20199
A LCltg March 2F rocket launch~d the Shenzhou spacecraft in the
PRe's first successful unmanned flight test of a manned spacecraft,
12115199
Four cxpens at Stanford University'S Center for tntemational Security
and Cooperation issued a critique of the '''Cox Committee's" report,
Alastair rain Johnston, W, K. H, Panofsky, Marco OJ Capua, and
Lewis R, Franklin, edited by M. M, May, "The Cox Committee
Report: An Assessment," December 1999.
�CRS-53
2000
1/25/00
A Long March 3A rocket hmnchcd a PRe Zhongxing-22 (Chinasat
22) communications satellite. (The Wasltfnglon Times reported that
it is also called Feng Hue-I, the first of China's military
communications satellites for a new battle management system.)
3/16/00
U.S. Ambassador to the PRe Joseph Proeher hosted a dinner in
Beijing for representatives of Loral, Lockheed Martin, Hughes,
CASe, ~nd ChinaSat.
4/4100
The Department ofStotc charged Lockheed Martin Corporation with
violating the Arms Export and Control Act by assessing a PRe kick
motor for the Asiasat-2 satellite.
The Department of State announced a settlement with Lockheed
Martin, involving S13 million in total penalties,
6/25iOO
A Long March 3 rocket launched the PRe's Fcngyun 2 weather
satellite,
7117100
The Defense Security Service issued an award for security
perfomlance to Loral but then rescinded it,
9/1100
A Long March 4B rocket launched the PRe's China RcsQurces-2
(Zhongguo Ziyuan-2) remote sensing satellite to collect imagery.
Sept. 2000
According to Senator Shelby, the Justice Depallmem decided not to
eharge an unnamed CIA official with obstructing a Senate
investigation. (The Senate lntetligence Committee had found out
ubout the CIA's contad with Hughes in September 1998 and then
asked Altomey General Janet Reno for a criminal investigation.)
10/30/00
President Chnton signed (he NASA Authorization Act for FYs 2000,
2001, and 2002 (P,L. 106-391) that includes a requirement for
certification to Congress, at least 15 days before a U.S.-PRe
coopcrotive agreement, that it is not detrimental to the U.S. space
launch industry and will not improve the PRe's b.1l1istic missile or
.
space launch capabiltties (Section 126(.)(2)).
10/31100
A Long March 3A rocket launched the PRe's Scidou navigation
sate1litc, the first for a planned system to provide allwweather, round
the-clock navigational infonnation for usc on land and at sea.
�t
Order Code RL30143
CRS Report for Congress
Received through the eRS Web
China: Suspected Acquisition ofD.S. Nuclear
Weapon Data
Updated September 14, 2000
Shirley A. Kan
Specialist in National Security Policy
Foreign Affairs, Defense, and Trade Division
C:ollgressifJIlUl Rtwearc/r Service';' Tile Library of Cougress
�c:hina: Suspected Acquisition of U.S. Nuclear Weapon Data
Summary
This CRS Report discusses China's suspected acquisition of U,S, nuclear
weapon secrets, including that on the W88, the newest U,S, nuclear warhead, 8im;e
the ktc 19705. The press tirst reported on the W88 case in January 1999. This report
discusses background information, major actions of the Clinton Administration and
Congress, and public damage assessments as well as policy implications,
The Ctinton Administration acknowledged that improved security was needed
at the weapon labs but says Ih~lt it has taken actions in response to indications in 1995
thal China may have obtained U.S, nuclear weapon secrets, Critics in Congress and
eL<:ewhere argued that the AdministmtiQn was slow to rc~l'ond to st,'curity concerns,
mishandled the too narrow investigation, downplayed information potentially
unfavorable to China and the labs, and failed to notify Congress fully~ among other
poinls. Others urged policymakers to move beyond partisan debates to upgrade U,S.
sccUJity at the labs, assess potc:ntial damage, and take necessary corrective action,
On April 7, J999, I)rcsidcnt CHnton assessed the situation, saying that partly
"because of our engagement, China has, at best, only marginally increased its
deployed nuclear threat in the last 15 years" and that the strategic balance with China
"remains overwhelmingly in our favor," On April 21, 1999, Director of Central
Intelligence (DC I) George Tenet, reported the Intelligence Community's damage
·assessment (reviewed by an independent panelled by Admiral Jeremiah) to Congress
and the White House. The assessment confinned that "China obtained by espionage
classified U.S. nuclear weapons infonnation that probably accelerated its program to
develop future nuclear weapons," It also revealed that China obtained infonnation
on "several" U.s. nuclear reentry vehicles, including the Trident II submarinc
launched missile that delivers the W88 nuclear warhead us well as "a variety of'
design concepts and wcaponization reatures, including those of the neutron bomb.
On May 25, 1999, the Cox Committee raised serious questions about nuclear
weapon security by reporting that China bas "stolen" tla..'isified infonnation on the
W88 and six other C.S. nuclear warheads. On June 15, 1999, the President's foreign
Intelligence Advisory Bourd (PFIA13), chaired by fonner Senator Rudman, reported
that the Department of Energy is a "dysfunctional bureaucracy" and urged that a
scmi~autonomous or independent agency be treated to oversee nuclear weapons. 1n
September 1999, Congress passed the FY2000 Defense Authorization Act to create
a National Nuclear Security Administration (NNSA) within DOE on March 1,2000.
fn April 1999. the FBI expanded its investigation on the PRe (originally ca1led
"K indred Spirit" and flOW called "Fall-out"), beyond the Los Alamos lab and its
former scientist, Wcn Ho Lee. The FBI also pursued Lee's case, which was a result
of, but unrelated to, the probe ofPRC espionage. tn December 1999, the Justice
Department indicted Lee for mishandling nuc1ear weapons information, but not for
pilssing secrets to any foreign govemment(s). Lee was kept injail in solitary, In a
drnmatic conclusion, the prosecution and Lee reached a plea agreement On September
13, 2000, when Lee pleaded guilty to one felony eount of mishandling nuclear
intbnnation and was freed (with time served) by the judge, who ~Ipologized,
�Contents
Background ................................................... .
Congressional Concern ...................................... .
Reported Cases of Security Compromises ........................ .
Congressional Action ................................. , ...........
Investigations ........ '.' .......................... ,' .. '. .......
Hearings ..................................................
Major Legislation ............................................
Moratorium on Foreign Visits ..............................
4
4
6
7
7
New National Nuclear Security Administration (NNSA) ........... 8
Concerns abollt Compliance with the Law .................... 10
Other Action .......................................... II
Administration's Actions .........................................
Response to Security Concems ................................
Questions about the Response ..................... . . . . . . . . . . ..
Timeliness and Responsiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . ..
Law Enforcement vs. Security ................. . . . . . . . . . . ..
Wiretaps and Computer Monitoring .........................
Scope of Investigation ...................................
Indictment of Wen Ho Lee ................................
Sylvia Lee, Deutch Case, and Other Issues ....................
Racial Profiling and Selective Prosecution ....................
Notification to Congress ..................................
Role of the White House and NSC ..........................
Export Controls ........................................
Nuclear Cooperation with China ............................
Criticisms of Partisanship .....................................
12
12
17
17
18
19
22
23
28
32
36
38
40
40
41
Damage Assessments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
President on U.S. Superiority ..................................
Intelligence Community's Damage Assessment ....................
Cox Commiuee's Report .....................................
Findings .............. , ...............................
Prather Report .......................... '...............
China Confirmed Its Neutron Bomb .........................
PFIAB (Rudman) Report .....................................
Findings ..............................................
Recommendations ......................................
Stanford Critique ...........................................
41
41
42
44
44
45
46
46
46
47
48
Implications for U.S. Policy ........................ : ..............
Counterintelligence and Laboratory Security ......................
Nuclear Nonproliferation and Lab Exchanges ......................
U.S.MChina Relations ........................................
49
49
50
53
�China: Suspected Acquisition of U.S. Nuclear
Weapon Data
Background
Congressional Concern
In early 1999, serious congressional concerns about security over nuclear
m:apon data at the U.S. nuclear weapon laboratories (Lawrence Livermore, Los
Alamos, and Sandia) were heightened after public reports said that the People's
Republic of China (PRC) may have acquired the design of the W88 nuclear warhead
in the 19805. This is the third reported case involving the PRe's suspected
compromise of U.S. nuclear weapon secrets. It raises issues about whether U.S. data
heipc'd China to develop smaller nuclear warheads and the effectiveness of the
Administration's response to the confirmed security problems that may have persisted
to th,! present.
In April 1999, President Clinton stated that the PRC has fewer than two dozen
long-range nuclear weapons, compared to 6,000 in the U.S. arsenal.' Nevertheless,
. some are concemed that China is developing a new OF-31 solid-fuel, mobile
intercontinental ballistic missile (ICBM), with a range of about 5,000 miles, for
deployment perhaps after 2000, reportedly with a smaller warhead (700 kg; 1,500 lb.)
than the current OF-SA ICBMs. In addition, there are reportedly programs to
develop a next-generation JL-2 submarine-launched ballistic missile (SLBM) and a
longt:r-range OF-41 ICBM.1
Reported
Cas~s
of Security Compromises
Concerns about PRC attempts to acquire secrets from U.S. nuclear weapon labs
an: longstanding, including congressional concerns discussed below" A 1994 book
on PRe intelligence cited the head of counterintelligence at the Federal Bureau of
Intelligence (FBI) in Los Angeles as saying that the PRC had tried to recruit people
at Los Alamos and Lawrence Livennore. 2 In the three public cases that occurred in
the late 1970s to 1980s, China may have conducted clandestine operations at the labs
or benefitted from voluntary disclosures or lapses in security. In these cases, the
repOited suspects were U.S. scientists working at the labs who were born in Taiwan.
A fourth case, reported by the media in April 1999, suggests that China sought more
I See CRS Report 97-391, China: Ballistic and Cruise Missiles, by Shirley A. Kan; and CRS
Report97-1022, Chinese Nuqlear Testillgand Warhead Development, by Jonathan Medalia.
Eftimiades, Nicholas. Chinese Intelligence Operations (Annapolis: Naval Institute Press,
1994), p. 6.
2
�· CRS-2
neutron bomb data in 1995. However, it is unccnain whether this reported incident
involves any of the Department of Energy {DOE) labs.
In the first case, the press reported in 1990 that China had stolen data on the
neutron bomb from Lawrence Livermore sometime in the late \970s to 1980s, and
the FBI began an investigation 011 this ca"c perl-mps in 1986. As of 1999, this
investigation reportedly remained open. The PRe allegedly used U.S. data on the
W70 warhead to make anexpcrimcntal neutron bombtnat was tested in 1988 and also
passed the infonnation to Pakistan. The suspected infonnant resigned after being
investigated for two years, but, because of insufficient evidence, no one has been
charged. J (Also see discussion on the fourth case below.)
The second case came to light when a U.S. scicntist, Pcter H. Lee, admitted on
December 8, 1997, in a plea bargain that, during a trip to China in January 1985, he
gave PRe nuclear scientists classified infonnation about his work at Los Alamos on
using lasers to simulate thermonuclear explosions and problems in L:.S. simulations
of nuclear weapon testing, He also ndmitted fuilure to disc10sc bis lectures in China.
in :..tay 1997 on his work ou sensitive satellite r.1dar imaging to track submarines at
TR\V, Inc. (developed at Lawrence Llvennore lab). Lee disclosed the infonnation on
anti-submarine warfare at the Institute of Applied Physics and Computational
rv1athematics (IAPCM), a PRe nuclear weapon facility. Lee was not charged with
espionage, in part because the infonnation on the laser device was declassified by
Energy Secretary Hazel O'Leary in 1993 and the Navy did not want open discussion
of the sensitive radar technology. Lee's attorney, James Henderson, said that Lee is
not a spy but made mistakes. He rep<lrtedly explained thut he was trying to help PRe
scientists and boost his own reputation in China. After a seven-year investigation by
the FBI that began in 1990 (code~narned "Royal Tourist"), Lee was sentenced in
March 1998 to one year at a halfway house, This case was briefed to National
Security Advisor Sandy Berger by DOE intelligence officials in· July 1997 and
included in a classified counterintelligence report completcd in November 1998 that
was sent to the White House. 4 At hearings in 2000, Senator Specter criticized the
prosf"cution this case. (See fnvestigations below.)
of
The third case is the subject of the current and most serious controversy about
leaks of nuclear weapon secrets to China. The case became public as a result of a
comprehensive investigation into tecbnology transfers to China conducted in 1998
by the bipartisan House Select Committee on U.S. National Security and
Military/Commercial Co-ncerns with China (po-pularly known as the "Cox
J San Jose Mercury-News and New rork Times, November 22, t 990; Wall Sweet Journal,
January 7, 1999; Washing10n {>oS(, February 17, 1999; CRS Report 96~761, Chinese
Proliferation of Weapuns vjAf(Jss Des/met/on: B(Jckground und Analysis, September 13,
1996, by Shirley A. Kan,
Reuters, December 9,1997 and March 26,1998; Washington Post, December 12. 1997;
testimony -of FBl Director Louis Freeh before the House Appropriations Subcommittee on
Commerce, Justice, State, and Judiciary, March 17, 1999; Walter Pincus and Vernon Loeb,
"ForChines~ Sden1isls, a Subtle System ofEspionage," Washingrolt Post, May9, 1999; Jeff
Gerth and James Risen, "Reports Show Scientist Gave U.S. Radar Secrets to Chinese," New
York Times, May 10,1999.
.;I
�CRS-3
Committee"},
The press first reported in January 1999 that U.S. intcUigence
discovered in 1995 that secrets about the W88, the most advnnced miniature nuclear
wllrhead (deployed on the Trident [I SLBM). may have leaked from Los Alamos to
ChiWl between 1984 and! 988. U.S. intelligence rc(X)rtedly had obtained a secret
PRe document from 1988 containing designs similar to that of the W8S. The
discovery prompted an FBI investigation (codc-named "Kindred Spirit") that began
in September 1995.' Apparently considering "Kindred Spirit" to have been too
narrowly focused on one suspect, the FBI, in April 1999, reportedly expanded the
investigation (code-named "FaU~out"). Separately~ the investigation resulted in the
criminal investigation and indictment of Los Alarr.os scientist Wen Ho Lee in 1999.
Suspicions that China may have Wag data also led analysts to reexamine a series
of nuclear explosions detonated by China prior to its announcement of a moratorium
on nuclear testing (in July 1996}and new willingness to sign 1he Comprehensive Test
Ban Treaty (eTST) (in September 1996), After China became the last of the five
nuclear weapon states to begin a moratorium, there were some suspicions that China
took the step, not just because of anns control, but because it had reached its goals
in nuclear weapon modemi7..ation or achieved the capability to simulate nuclear
explosions. Some speeulated that China received lest data from Russia or France.c
In a fourth case that was reported by the media in April 1999 1 there are
allegations that PRe espionage directed at U,s. nuclear weapon designs continued
into the 19905. U.s. intelligence reportedly learned in early 1996 from one of its spies
that China sought in 1995 to acquire more U.S. infoOTIation on the neutron bomb
design thllt it obtained sometime in the late 19705 to 19805 from Llvcnnore. Some
speculate that China may have been seeking more data. bccnuse its 1988 test of a
neutron bomb was not successfuL Intelligence concerns reportedly led to; a criminal
iJlve:>tigation by the FBI and a report from the FBl to DOE on March 27; 1996; a
briefing in April 1996 for Sandy Berger (then Deputy National Security Advisor) on
concerns about PRe acquisition of neutron bomb and WR8 data; and an analysis of
the neutron bomb case completed at DOE in July 1996 (that raised the possible
involvement of Wen Ho Lee, the suspect in the W88 case). However, the U.S.
government reportedly bas no evidence that China hns been able to improve its
neutron bomb nor that Ilny of the nuclearwc:apon labs was involved in this case.'
Gerth, James ;md Eric Schmitt, "Bipartisan Report Finds Theft ofNocJc:arTechnology That
Hurt National Security," New York Times, December 31, 1998; Carla Anne Robbins, "China
Got Secret Data On U.S, Warhead," Wall Street JOUfIIU/, January 7,1999; Walter Pincus,
"U.S. Cracking Down On Chinese Designs On Nuclear Data" and "Spy Suspect Fired At Los
Alamos Lab," Washington POSt. February 17 and March 9, 1999; James Risen and Jeff
Gcrth, "China Stole NudearSeerets From los Alamos. U.S. Officials Say," New York Times,
March 6, 1999; testimony of FBt Director Louis freeh before the HQuse Appropriations
Subcommittee on Commerce, Justice, State, and Judiciary, March 17, 1999.
5
*Lim, Benjamin Kang. "China Nuclear Hah May Stem From Deal," ReUlers, July 30, 1996;
Roben KarniQI, "~u<:lear Blast Heralds A Chinese Momtorium," Jane's Defense Weekly,
Augt;st 7. 1996.
jeffand James Ri«en, "Intelligence Repon Points to Second China Nuclear Leak,"
New York Time.;;. April 8, 1999.
7 Gerth,
�CRS-4
Congressional Action
Congress has voiced long~standing concerns about security at the nuclear
weapon labs. Some attention focused on the foreign visitor program, which was
repo)1cdly not the primary concern in the pubhccases involving aUeged leaks by U.S.
scientists to China. In J988) Senator John Glenn, chainnan of the Senate
Governmental Affairs Committee, held a hearing. and the General Accounting Office
(GAO) presented a report on the extent to which foreign nationals work at the nuclear
weapon labs and the effeclivencss of security checks there, Senator Glenn also said
that back in October 1979, his committee began to examine access by foreign visitors
to mistakenly declassified documents at the public library at the Los Alamos lab.&
More recclul}', the House National Security Committee requested in May 1996
that Ibe GAO again study controls over foreign visitors at the labs," In October 1998,
Congressman Hunter held a hearing on DOE's foreign visitor program, I{}
Tbe National Defense Authonzation Act for FY 1997 (P,L, 104~20 1) prohibited
DOE from using: funds for cooperative activities with China related to nuclear
weapons or nuclear weapons technology, including stockpile stewardship, safety, and
USe tontro1. (Stockptle stewardship relates to the evaluation or nuclear weupons
without testing.) The Nntional Defense Authorization Act for FY 1998 (P,L. ! 05-85)
banned the DOE's usc of funds for activities with Chinn in cooperative sloekpile
stewnrdship. and similar legislation for FY 1999 (P.L. 105-261) made the ban
pennanent
Inv"stigations
Prompted hy reports that missile technology was transferred to China in
cOr'lItcction wilh satellitc exports. thc Senatc Intelligence Committee, in 1998,
carried out an investigation and issued its unclassified report on May 7, 1999. 11 On
Man",h 25, 1999, Senator Shelby, the committee's chalr, announced that it voted
unammously to begin an investigation jnto whether China obtained U.S, nuclear
weapon secrets and how the Administration dealt with espionage at the labs.u On
January 27, 2000, the committec's staff dire.cLOr, Nicholas Rostow, said that the
~ Senale Goverrunental Affuirs Committee hearing, "Security Weaknesses at the Nuclear
Weapons Laboratories," October II, ! 988; Nuclear Nonprofljeratfon: Major Weaknesses
in Foreign Visitor COtliro/s al Weapons Labora/ories (GAO/RCED~89~31). Oclober 1988.
"CiAO/RCED~97«229,
DOE Needs To Improve Controls Over Foreign Visitors to Weapons
Laboratories, September 1997.
II} Hearing of the House National Security Subcommittee on Military Procuremenl,
"Department of Energy's Foreign Visitor Program," October 6, 1998.
!I
Senate Selc<:t Committee On Intelligence, "Report On Impact..'> To U.s. National Security
or Advanced Satellite Technology Exports to the Peop!e's Republic of China (PRC), and
Report on the PRe's Efforts to Influence U.S. Policy," May 1999.
12 "SI!natc Intelligence Committee Votes Unanimous!y to Begin Formal Investigation into
Chinj:sc Espionage at Nuclear Rescarch Labs," news release, March 25,1999,
�CRS-5
committee will independently confinn that the DOE has improved security at the
labs,D
In the House, the Cox Committee, in the last half of 1998, examined broader
technology transfers to China, including possible leaks ofmissile and nuclearweapon
related know-how. The bipartisan committee unanimously approved a classified
report. with 38 recommendations, on December 30, 1998 and, after working with the
Clinlon Administration, issued a declassitied version on May 25, 1999. (Sec section
on Damage Assessment below.)
The Senate Governmental Affairs Committee conducted 13 hours of closed
hearings to review the investigatory steps of the Departments of Energy and Justice,
and the FBI. It issued a bipartisan report on August 5, 1999, under the names of both
Chairman Fred Thompson and Ranking Minority Member Joseph Lieberman. The
committee did not take a position on whether the W88 or other nuclear weapons were
compromised, but concluded that the federal government's handling of the
investigation since 1995 consisted of "investigatory missteps, institutional and
personal miscommunications, and ... legal and policy misunderstandings and mistakes
a.t all levels of government." The Senators said that "the DOE, FBI, and DOJ must
all share the blame for our government's poor performance in handling this matter.,,14
On October 26, 1999, Senator Specter, under the jurisdiction of the Senate
Judiciary Subcommittee on Administrative Oversight and the Courts, held the firsl
hearing in his investigation into the Justice Department's handling of the PRC nuclear
espionage investigation, satellite exports, campaign finance, Waco, and other issues.
(See also Hearings below.) Senator Specter criticized the Department's prosecution
of Peter H. Lee in 1997, which resulted in a plea bargain. Defenders have argued that
the information involved has been declassified, and the defendant is a not a spy and
did not pass nuclear weapon secrets. IS On March 8, 2000, Senator Specter issued a
repOIt critical of the investigation of Wen Ho Lee. 16
13 "Senate Panel Wants Independent Energy Dept. Security Check," CQ Weekly, January 29,
2000.
14 Senate Governmental Affairs Committee, "Department of Energy, FBI, and Department of
Justice Handling of the Espionage Investigation into the Compromise of Design Information
on the W88 Warhead," August 5, 1999; Walter Pincus, "China Spy Probe Bungled, Panel
Finds," Washingtoll Post, August 6,1999.
Vemon Loeb, "Justice Accused of Laxity in Spy Case," Washington Post, October 27,.
1999; "Questions About Another Chinese Spy Case," Washillgtoll Post, April 4, 2000; Bill
Gertz, "Specter Berates Justice's Spy Case Handling," Washillgton Times, April 6, 2000;
John Solomon, "U.S. Gave Spy A Plea Bargain Prior to Damage Report," Philudelphia
Inquirer, May 21, 2000.
IS
16 Senator Arlen Specter, "Report on the Investigation
Wen Ho Lee," March 8, 2000.
of Espionage Allegations Against Dr.
�CRS-6
Hearings
Congressional open and closed hearings in the 106 th Congress on the question
of suspected PRe acquisition of U.S. nuclear weapon secrets, first reported by news
media in January 1999, included these held by the following panels:
Senate Armed Services, and Energy and Natural Resources, March 16, 1999;
House Appropriations Subcom. on Commerce, Justice, State, and Judiciary, March'
17,1999;
Senate Select Intelligence, March 17, 1999;
Senate Armed Services, March 25, 1999;
Senate Armed Services, April 12, 1999;
Senate Energy and Natural Resources (closed), April 14, 1999;
House Armed Services Subcom. on Military Procurement, April 15, \999;
House Commerce Subcom. on Oversight and Investigations, April 20, 1999;
Senate Energy and Natural Resources, April 28, 1999;
Senate Intelligence (closed), April 29, 1999;
Senate Energy and Natural Resources, May 5, 1999;
Senate Judicia!)" May 5,1999;
House Commerce, May 5, 1999;
Senate Energy and Natural Resources, May 12, 1999;
Senate Intelligence (closed), May 12, 1999;
Senate Intelligence (closed), May 19, 1999;
Senate Energy and Natural Resources, May 20, 1999;
Senate Energy (closed), May 20,1999;
Sennte Government Affairs (closed), May 20,1999;
House Science, May 20, 1999;
1·louse International Relations Subcom. on Asia and Pacific, May 26, 1999;
Senate Governmental Affairs Subcom. on International Security; Proliferation, and
Federal Services, May 26, 1999;
House Intelligence (closed), June 8, 1999;
Senate Judicia!), (closed), June 8, 1999;17
Senate Governmental Affairs (closed), June 9, 1999;
Senate Intelligence, June 9,1999;
Senate Governmental Affairs, June 10, 1999;
Senate Banking, Housing, and Urban Affairs, June 10, 1999;
Senate Anned Services, Energy, Governmental Affairs, and Intelligence, June 22,
1999;
1·louse Commerce, June 22, 1999;
Senate Anned Services, June 23, 1999;
1·louse Armed Services, June 24, 1999;
1·louse Government Refonn, June 24, 1999;
House Science, June 29,1999;
Senate Intelligence (closed), June 30,1999;
House Commerce, July 13, 1999;
House Aimed Services, July 14, 1999;
17 On December 2 I , 1999, the Senate Judiciary Committee released an unclassified transcript
of ils closed hearing with Attorney General Janel Reno on June 8, 1999.
�CRS-7
Senate Energy and Natural Resources, July 16, 1999;
House Commerce, July 20, 1999;
Congressional Asian Pacific American Caucus (briefing), on October 5, \999;
Senate Governmental Affairs and Energy, October 19, 1999;
House Amlcd Services Subcom. on Military Procurement, October 20, 1999;
Senate Judiciary Subcom. on Administrative Oversight and the Courts, October 26,
1999;
House Commerce Subcom. on Oversight and Investigations, October 26, 1999;
House Armed Services Subcom. on Military Procurement, November 10, 1999;
Senate judiciary Subcom. on Administrative Oversight and the Courts (closed),
December 16, 1999;
Senate Judiciary Subcom. on Administrative Oversight and the Courts, March 29,
2000;
Senate Judiciary Subcom. on Administrative Oversight and the Courts, April 5, 2000;
Senate Judicial)' Subcom. on Administrative Oversight and the Courts, April 12,.
2000.
Major Legislation
Moratorium on Foreign Visits. Some Members expressed concerns about
foreign visitors to the national labs, but the Administration has said that foreign
visitors have not compromised U.S. nuclear weapon secrets. Representative Ryun
introduced H.R. 1348 on March 25, 1999, to prohibit foreign nationals who arc on
the DOE's Sensitive Countries List 18 from visiting the nuclear weapon labs, unless the
SecretaI)' of Energy notifies Congress ten days before waiving the prohibition.
Senator Shelby introduced similar legislation (S. 887) on April 27, 1999.
On May 27, 1999, the Senate agreed by voice vote to Senator Lou's amendment
to the National Defense Authorization Act for FY 2000 (S. 1059). The amendment
sought to improve the monitoring o,f satellite exports and strengthen safeguards,
security, and counterintelligence at DOE facilities. 19 On June 9, 1999, Representative
Cox introduced an amcndmenrl° to the House's version (H.R. 140 I). The amendment
consisted of 27 sections, with 25 sections requiring reports or other -actions, or
amending the law; a section simply providing a short title; and a section providing a
definition of "national laboratol)'." The sections or subsections of the Cox
amendment addressed fully or partially 21 of the 38 recommendations of the Cox
Committee. The I-louse agreed to the Cox amendment by 428-0 on that day and
passed H.R, 1401 on June 10, 1999. Meanwhile, Representative Ryun's amendment
(to impose a two-year moratorium on foreign visitors from sensitive countries to the
national labs) failed by 159-266 on June 9,1999. Section 3146 of the FY 2000
18 DOE, "Sensitive Countries List," May 1999. Because of reasons of national security,
terrorism, or nuclear proliferation, the following are included: Algeria, Annenia, Azerbaijan,
Belarus, PRC, Cuba, Georgia, India, (ran, Iraq (srael, Kazakstan, Kyrgyzstan, Libya,
Moldova, North Korea, Pakistan, Russia, Sudan, Syria, Taiwan, Tajikistan, Turkmenistan,
Ukraine, and Uzbekistan.
19
For language of amendment, see Congressional Record, May 26, 1999, p. S6073-6074.
20
Congressional Record, June 8, 1999, p. H3862-3866.
�CRS-8
I"udonal Defense Authorization Act (P.L. 106~65), enacted on October 5, 1999,
requires background cbecks on foreign visitors and imposes a moratorium on visits
to the national labs by foreign nationals of countries 011 the Sensitive Countries List,
until DOE's Director of Counterintelligence, the Director of the FBI, and (he DCI
issue certifications about security measureS for the foreign visitors program, The
Sccr~t.,ry of Energy, though, may waive the ban on a case-by-case basis. Secretary
Richardson said on Dcce~ber 2, 1999, that he wllJ begin (0 issue such waivers for
foreign scientists, in order to "restore the proper balance between security and
scicnce."2 1
New National Nuclear Security Administration (NNSA). In May 1999,
Senators Kyl, Murkowski. and Domenici drafted an amendment to the Defense
AuthoriL:ation bill (S. 1059) to create a new agency within DOE, but Senate leaders
removed the language on May 27 after Sccrctmy Richardson threatened to
recommend n Presidential veto. u The Administration, represented by Richardson,
opposed the Senators' proposal, saying it would undermine his authority and create
a new "fiefdom. ,,2.\ A critic of(he proposal wrote that "DOE is indeed a dysfunctional
bureaucracy, but the labs are not better., Making the labs more autonomous is the
wrong way to go. ,,24 Other opponents have said (hat the labs need to retain openness
in order to advance scientific research that is important to national security.
On the other side. the President's Foreign Intelligence Advisory Board (PFIAB),
chaired by fonner Senate Warren Rudman, recommended, on June 15, 1999, a new
Agency for Nuclear Stewardship (ANS-) and argued that semi-autonomous or
independent "organizations like NASA [National Aeronautics and Space
Administration] and DARPA [Defense Advanced Research Projects Agency] have
advanced scientific and technological progress while maintaining a respectable record
of s!!eurity,,,15
Secretary Rjchardson agreed with the PFIAB that DOE's
organizational structure requires serious change but expressed '''strong reservations"
abou: the rccomrr.endation for a semi-independent or independent agency.?!!
On June 7,1999, Representative Thornberry iotro4uced H.R. 2032 to establish
a Nue1ear Security Administration in the Department of Energy. Some Members also
looki~d at introducing language to reorsanize DOE in the Senate Intelligence
Authorization bill for FY 2000 (S. 1009).
Pincus, Walier, "Energy Chief to Allow Foreign Scientists to Visit Labs," Washington
Post. December 3, !999"
11
n Congressional Quarrerly, June: 19, 1m. p. l'415-76.
U
Congrcssional QuarrerJy, June 26,1999, p. l559-60.
l.> I~ldrcdgc. Maureen (dtrc:ctor of the AiHance for Nuclear Acc()ur.tabllity, a watchdog group
on DOE). "Don't Trust Our Nuclear Labs," WashingJm,! PO.H, June 28, 1999.
Prexident's Foreign InleHigenc:cAdvisory Board, Special Investigative Panel, Science at its
J3esi, Security at its }Vorst: A Report Oil Security Problems at the U.S. Depanment of
Energy, uncla.<;sdled, June 1999. Also called t:tc Rudman Report.
U
nOE, "Statement by Secretary ofEnergy Richardson on the President's Foreign Intelligence
Arlvi:;ory Boord Report," June 15, 1999.
l"
�CRS-9
On July 7,1999. however. Seerctary Richardson agreed to the proposal to ~et
up a new ANS, as long as it would be a semi-autonomous agency within DOE, under
his control, and not a fully autonomous agency,:!1 Bya vote of 96-1, the Senate on
July21, 1999, approved an amendment(S.Amdt. 1258. Kyl) to the Senate-passed FY
2000 Intel1igence Authorization Act (H.R. l555) to create the ANS. Richardson
praised the bill, saying it was "a good start" in codifYing refonns at DOE,l% The ANS
would be a separately organized agency within the DOE, under the direction of the
Energy Secretary. to be headed by the Under Secretary for NuciearStewardship who
shaH also serve as director of the ANS, Democratic Senators Bingaman and Levin
sought changes to the amendment. including explicit authority for the Energy
Secretary to continue to llse the field offices,9 and to control cOUiltcrintelhgence and
secUlity operations. The House's options included agreeing to the Senate's plan or
opting for another option, including leaving the organization of DOE unchanged,
creating an independent agency outside of DOE, and changing the contractual
arrangements for running the labs (under the University of California (UC), for
example), Some h<l:vC asserted that UC, whose contract has not been subject to
competitive bidding since 1943, provides "marginal" oversight of and "political
protection" for some DOE kths,JI) (tJC operates the Lawrence Livermore and Los
. Alamos lahs, while Lockheed Martin Corporation runs Sandia.)
Then, the House Anncd Services Committee argued that it has jurisdiction over
nuclear weapons and that thc FY 2000 National Defense Authorization Act (S. 1059;
P.L. 106-65) ought to legislate organizational changes at DOE. Conferees adopted
H. Rcpt. 106-301 on August 6, 1999, that wouldcrcate a National Nuclear Security
Administration (NNSA) within 1;)0£ effective March I) 2000. However, the
Administration and some Democrats on the Senate Anrtcd SCrVlces Committee
objected to what they argued would undermine the Energy Secretary's authority.
Senator Levin said that "t11e final product on DOE reorganization appears to go
beyond creation of a new. separately organized entity within DOE, which I support"
He sHid that the Energy Secretary would have direct control over the administrator
of NNSA, but not its employees. Representative Thornberry contended that the
secretary would bave no rcstluints on his authority over the hew administrator.:)!
27
Pincus, Walter, "Richardson Accepts Nuclear Agency Plan," Washington Post, July 8,
1999.
1S
DOE, news release, "Statement of Secretary of Energy Bill Rid:mn:lson on the Senate Bill
to Reorganize the lA-partmcot of Eoergy," July 21,1999,
The Rudman Rcport called for streamlining DOE's syslcm of 11 field offices, with 6,000
cmplc,yces, in addition to 5,000 at hoodquarters, thai resullcd in u "convoluted and bloated
;''1
managemenl structure,"
Trujillo, Manuel and Chuck Montano (Los Alomos employees), "Compromised: The los
Alrnnos Lab," leiter to Ihe edilor, WasltinglOi/ Post, July 7, 1999. UC runs Los Alamos and
Lawrence Livermore. lockheed Mar1in Corp,},uns Sandia.
3{)
McCutcheon, Chuck and Pat TO\vell, ""Defense Bill Negotiators Fail to Placate
Administration on Nuclear Security Proposal," Congressional Quarter~v Weekly, August 7,
11
1999.
�CRS-IO
Richardson initially wanted to recommend that President Clinton veto the bill,
as its provision on DOE reorganization differed from the Senate-passed intelligence
authorization act he supponed in July 1999. Richardson ohjected to the conference
report .because, he says, it would undennine his authority; blur the lines. of
responsibility in security, counterintelligence, environment, safety and health; and
direct budgetary proposals be made directly to Congress.J2 In addition to some
Democrats in Congress, 46 state attorneys general also urged a Presidential veto.')}
After the House and Senate passed S. 1059 in September 1999, Richardson
announced on September 26,1999. that he would not oppose the bill. He said, "1
believe we can interpret the provisions so there are-clear tines ofresponsibility and the
secretary is in charge and we protect our national security.")';
Concerns about Compliance with the Law. Upon signing the FY 2000
National Defense Authorization Act into law (P.L. L06~65) on October 5, 1999,
President Clinton raised concerns in Congress when he criticized the DOE
reor~:anjzation (Title 32) as "the most troubling'" part of'the act and said that
legislative action to "remedy {he detic-iencies" wjll help in the process of nominating
the new Under Secretary for Nuclear Security who will head the NNSA "Until
further notice;' the President directed the Secretary of'Energy to act as the Under
Secn:tary for Nuclear Security and to direct all personnel of the NNSA.35
At a Senate Armed ServIces Committee hearing two days later, Senator
Domenici charged that the Administration was trying to circumvent the new law, 3(>
Representative Spcnce t chainnanofthe House Anned Services Committee, wrote to
tIlt! President that his- order would undennine congressional intent.)? On October 19,
1999, the Senate Govemn~ent Aftairs, and Energy and Natural Resources Committees
held ajoint hearing to warn Secretary Richardson against failure to implement the law
to es:ablish thc NNSA. Richardson assured Members that he will comply with the
law hut urged Congress to use the Intelligence Authorization Act (H.R, 1555) to
correct what he saw as deficiencies in the Defense Authorization Act. Some
Members said it \vas premature to allege noncompliance, since the effective date is
Man:h 1,2000, In November 1999, the House and Senate passed H.R. 1555 without
provisions on secunty at the,DOE labs.
Pir,eus, Walter, "Richardson May Urge Veto of Nuclear Agency," Washingrorl Post,
August 7, 1999: "Richardson Likely to Urge Authorization Bill Veto Over DOE Language,"
Insid'1 the PenllJgon, August 12. 1999,
)2
Pincus, Walter and Vemoa Loch, "Veto Urged for Energy Revamp,"" Washington PI}st,
September 9, 1999"
JJ
J4 "Energy to Clinton Sign Defense Sill," Associated Press, September 27, 1999;
"Richardson Relents," CQ Weekly. October 2, 1999,
B
White House, "Statement by !he President," October S, 1999.
J6
Towell, Pnt, "Nuclear Agency Eruption," CQ Weekly, October 9, 1999.
J1
Pincus, Walter, "DOE Plan Riles Senate GOP\" Washingrofl Pust, October 19, 1999.
�CRS-II
A CRS legal memorandum for Representative Thornberry (that has been made
public) agreed that President Clinton's statement and directions raise legal and
constitutional issues on the question of the Administration's compliance with the law
creating the NNSA.38
On January 7, 2000, Secretary Richardson submitted DOE's plan for
implementation of legislation to establish the NNSA on March 1, 2000 and named a
committee to search for the first Under Secretary for Nuclear Security who is to serve
as the head of NNSA.J9
However, Richardson's plan raised questions about the semi-autonomous status
of the NNSA, calling for some DOE officials to "serve concurrently" in some
functions, including nuclear security and counter-intelligence. He cited reasons such
as "program continuity," "shortness of time for implementation," and the "scheduled
change in executive branch administration next January." Field managers at some
field operations will also "serve concurrently in dual positions."
Indeed, a special panel of the House Armed Services Committee, with
Representatives Thornberry, Tauscher, Hunter, Graham, Ryun, Gibbons, Sisisky, and
Spratt, reviewed DOE's implementation plan and cited some "serious flaws.'>4O While
the panel was encouraged by DOE's recent actions, it criticized the plan for "dual
hatting" DOE and NNSA officials; continuing the confused and inadequate lines of
authority (e.g., with no changes in thc field office structure); emphasizing DOE
authority; lacking improvements to NNSA programming and budgeting; lacking
specificity and comprehensiveness; and reflecting little outside consultation. The
panel's report concluded that the implementation plan, if carried out, would "violate
key provisions of the law." However, Representative Spratt offered his dissenting
views. While he agreed that the implementation plan fell short of the legal
requirements, he objected that the panel'S report was too conclusive and lacked a
critical review of the law that created NNSA and whether it is workable.
Other Action. In other action, Members of Congress have expressed concern
about possible racial profiling used in the investigation of Wen Ho Lee and
ramifications of this case on Americans of Asian Pacific heritage. The I-louse, on
November 2,1999, passed H.Con.Res. 124, introduced by Representative Wu to
express the sense ofCongress that the Attorney General, Secretary of Energy, and the
Commissioner of the Equal Employment Opportunity Commission should enforce
security at the labs and investigate allegations of discrimination. On August 5, 1999,
CRS Memonmdum, "Assessment of Legal Issues Raised by the President's Directions to
the Secretary of Energy With Respect to the Implementation ofthe National Nuclear Security
Administmtion Act in His Signing Statement of October 5,1999," November I, 1999, by
Morton Rosenberg. The congressional office has released the memo.
38
39 DOE. "Implementation Plan: National Nuclear Security Administration," January 1,2000;
"Energy Department Proceeds with Implementation of National Nuclear Security
Administration," news release, January 7, 2000.
House Anned Services Committee, Special Panel on Department ofEnergy Reorganization,
"Department of Energy National Nuclear Security Administration Implementation Plan: An
Assessment," February 11,2000..
40
�CRS-12
Senator Feinstein introduced S.Con.Res. 53, condemning prejudice against individuals
of Asian and Pacific Island ancestry, which the Senate passed on July 27,2000. (See
also Ethnic Profiling below.)
The Senate, led by Republican Members, voted (51-48) to reject the
Comprehensive Test Ban Treaty (CTBT) on October 13, 1999, because of
reservations about the implications for U.S. national security. Some supporters of the
eTBT argued that the treaty may be one way to impede tbe PRC's nuclear weapon
modernization, even ifit acquired U.S. secrets, because Beijing needs to test, while
blueprints and computer codes are not enough. Democratic Senator Byron Dorgan
and Republican Senator Arlen Specter wrote in September 1999 that "most
Americans have heard that China may have obtained secret infoIDlation about U.S.
nuck:ar weapon designs. What they haven't heard is that China may not be able to do
much with that information - if the U.S. Senate does the right thing.,,41
Administration's Actions
Response to Security Concerns
The Clinton Administration has acknowledged that improvements to security
measures have been required at the nuclear weapon labs and said that it took a
number of corrective actions in response to indications in 1995 that China may have
obtained secrets about the W88 in the 1980s. Officials have said that, by mid-1996,
DOE had reported to the FBI, National Security Council (NSC), and Intelligence
Committees in Congress that there were serio'us concerns about China: Prompted by
infonnation from DOE and the CIA, the FBI had begun an investigation in September
1995. On April 7, 1997, the FBI completed an assessment of "great vulnerability"
due to inadequate counterintelligence at the labs and reported those findings and 16
recommendations to DOE as well as the Senate Intelligence Committee. 42
Fonner Energy Secretary Federico Pena has defended DOE policies during his
tellure from March 1997 to June 1998, saying that the dcpartment took a number of
actions to strengthen security, including briefing the FBI, CIA, the Departments of
Justke and Defense, and the NSC. In July 1997, DOE officials briefed the White
House on its review of two decades of PRC efforts to acquire U.S. nuclear weapon
secrets. A special working group of the National Counterintelligence Policy Board
recommended ways to tighten Jab security in September 1997, and, in February 1998,
the White House issued Presidential Decision Directive (PDD-61 )43 to strengthen
cou"n1.erintelligence at the labs. In October 1997, FBI Director Louis Freeh and
41 Dorgan, Byron and Arlen Specter, "U.S. Wants, Needs Nuclear Test Ban Pact," USA
. Today, September 13, 1999.
Testimony of FBI Director Louis Frech before the House Appropriations Subcommittee on
Commerce, Justice, State, and Judiciary, March 17, 1999.
42
For an unclassified summary of PDD-61, see Appendix to the President's Foreign
Intelligence Advisory Board's June 1999 report, Science at its Best. Security at its Worst: A
Department ofEnergy.
Report on Security Problems at the
4)
u.s.
�CRS-13
Director ofCentrallnt;;l1igencc (DCl) George Tenet briefed Perla. In March 1998,
Frech and Tenet briefed lab directors on weaknesses in counterintelligence efforts.
DOE established an Office of Counterintelligence, headed by a fonner FBI
counterintelHgence official, Edward Curran, on April 1, 1998. Curran, on July 1.
1998, submitted a report to the Secretary of Energy, with 46 recommendations for
strengthening counterintelligence in response to PDD~61. The Secretary had 30 days
to respond to the National Security Advisor, but Richardson did not become
Secn:tary until September 1998, He issued an action plan on November 13, 1998. 44
Energy Secretary Richardson testified on March 16, 1999, that after he took
over DOE in September 1998, he ordered some corrective measures. He said those
steps included a requirement for employees with access Co classified infonnation to
take polygraphs, making DOE the only agency besides the CIA to have the
requirement; the hiring of counterinteUigence professionals at the nuclear weapon
labs:; repeated doubling of DOE's counterintelhgence budget ($7.6 million in FY
1998, $15.6 million in FY 1999, .nd. request for $31.2 million in FY 2000); and a
requirement for background checks on foreign visitors to the labs. Richardson .also
rcpOlicd that DOE has implcmc~tcd about 80 percent of the measures directed by
PDq-61 and was to have achieved full imp1ementation by the end of March 1999.4~
When he was fired from Los: Alamos on March 8, 1999. the government's only
suspect was identified in the press as Dr, Wen Ho Lee, a U.S. computer scientist.
Secretary Richardson reportedly said he fired Lee because the Wg8 case became
public and Lee allegedly f.iled. polygraph test in February 1999." Richardson .Iso
alleged that Lee failed to notifY officials about certain contacts with people in the
PRe to properly safeguard classified material, and to cooperate on security matters,
However, Richardson fired Lee before agents checked his computers at work later
thnt month and discovered that he had downloaded sensitive files to an unclassified
computer at Los Alamos, alleged crimes separate from the W88 case, FBI Director
Louis. Freeh said on March 17, 1999~ that this case "is an active investigation. We've
not made charges against anybody, so nobody should be accused of anything." The
Cox Committee'& unclassified report released in May! 999 was careful not to name
any suspects.
Appearing before the Senate Intelligence Committee on March 17, 1999,
Secretary Richardson announced seven initiatives to strengthen counterintelligence
at the Department of Energy, in addition to PDD-61. Those steps arc to:
• improve security of eyber-information systems, including electronic
mail;
H Pena, Federico, "Alert At The Energy Dej1al1ment," Washing/an POS!, March 16,
1999;
Richardson, Bill (Secretary omnergy), "Guarding Our Nuclear Security," Washington Post,
March 15, 1999; Energy Secretary Bill Richardson, testimony on March 16, 1999; Gary
Samore (NSC), briefing at Carnegie Endowment, March 17, 1999; Senate Anned Services
Committee Hearing, April 12, 1999.
4~ Joint Hearing, Scnate Anned Services and Energy Committees, March 16. 1999.
46
Pincus, Walter, "Spy Suspect Fired AI Los Alamos Lab," Wasltillgron Post, March 9,
1999,
�CRS·14
• improve security of documents containillg weapon design data;
• review the foreign visitors' progrom (to be led by former DCI John
Deutch);
• direct the deputy secretary and undersecretary to monitor the
program to strengthen counterintelligence;
• review all investigative files in the Office of Counterintelligence;
• report annually to Congress on the counterintelligence anq foreign
visitors' programs;
• begin an internal review to examine anegations that a top official
blocked notification to Congrcss.47
FurthcmlOrc, on April 2, 1999, Secremry Richardson ordered the nuclear
weapon labs to suspend scientific work on computers that contain nuclear weapon
secrets. This step was taken to prevent the possibility that sensitive data would be
copi(~d from
secure computers and sent electronically through unclassified computers.
Richardson acknowledged potential problems~ saying that "our computer security has
been lax, and I want to strengthen it, and the only way to do that is to stand down."
The suspension was ordered in part because Lee was an expert in the computer
systems, and an internal review showed that security measures at Los Alamos and
Livermore labs were "marginal," while Sandia received a "satisfactory" rating."g In
September 1999, Richardson reported that Los Alamos improved its security and
received a "satisfactory" rating, while Livennore and Sandia got "marginal" ratings.49
On May II, 1999, Energy Secretary Richardson announced further refonns of
DOE to increase control over the nuclear weapon labs, including the appointment of
a "security czar" who will report directly to the Secretary. One month later,
Richardson named retired Air Force General Eugene Habiger, former Conunander in
elliofof tile U.S, Strategic Command, as the Director ora new Office ofSecurity and
Emergency Operations. 50 Richardson also planned to consolidate security funds in
DOE under one $800 million budget and an additional $50 million over two years to
improve computer~related security. Also. there would be greater controls over floppy
disk drives that -could transfer files out of the classified computer systems, and DOE
would require electronic "batmers" all government computers warning users that they
computers are subject to monitoring. S! DOE originally requested S2 million for
computer security, but in-creased the request to $35 million after the PRe espionage
caSe .,;ame to light. However, Congress in September 1999 did not approve the
additional request in a conference committee on energy appropriations, and an
unnamed Member said the committee wants to see management reform before
41
Department of Energy release, March !7, 1999.
Risen, James, "Energy Ocpartment HaltsComputer \Vorkat Three NuclcarWeapon Labs,"
New York Times, April 7, 1999.
';8
DOE. news release,"Energy Secretary Richardson Releases Results ofIndependent Security
Reviews at National Labs." September 20,1999.
,;q
J!l
DOE, news release. "Richardson Selects Security 'Czar'," June 16, 1999.
Risen, James, "Energy Seeretary Announces Program to Strengthen Lab Security," New
York Times, May 12, 1999.
51
�CRS·15
approving a large funding increase. 52 In December t999. Habiger complained that
Congress did not provide all the funds he needs to improve security at the labs> but
Representative Cox countered that Habiger has not provided Congress with a detailed
H
pl~lU for h()w the additional minions would be used:
The first ofticial to lose his job as a result of the Los Alamos controversy was
Victor Reis, the Assistant Energy Secretary in charge ofdefense programs since 1993,
who resigned on June 25, 1999,5~ Testifying before the House Armed Services
COlmnittee on July 14, 1999, Reis acknowledged that he has "'some responsibility"
for the security problems and he "could have pressed harder" to strengthen security.
but [lsserted that many other officials at DOE and FBI share the blame. 55
In luly 1999, DOE in:itituted a new polky that requires DOE employees with
securitydearances to report any "c1Qse and continuing contacts" with foreigners from
the sensitive countrJes on DOE's listS<> Also in July, Richardson issued revised
pmc!:dures to more closely n1Oniror visits and assignments of foreign nationals to
DOE's facilities, as part of implementing PDD·6l. Lab directors no longer have
authority to grant waivers of DOE security requirements, and only the Secretary may
approve waIvers, Richardson also derided discrimination against Arr.ericans ofAsian
Pacilic heritage, saying that the new order only affects foreign citizens, not
Americans,S?
On August l2, 1999, Richardson announced the results Qf an internal DOE
inquiryby the inspcctorgenernl and ordered that three indhiduats be disciplined, (Sce
Law Enforcement vs, Security below,)
In October 1999, Richardson decided to narrow the scope of controvcrsial
polygraph tests, origiJUllly considered for over 5,000 lab employees. so that aoout
1,000 people working in the most sensitive areas, primarily at the three nuclear
w!~apon laboratories, will be tested. They include nuclear weapon designers, seeurity
and counterintelligence officials, employees at nuclear weapon produclion plants, and
17
Pincus, Walter and Vernon Loeb, "DOE ,Loses $35 Million for Cyber Securi~y,"
WasitilfgtOf1 Post, September 29, 1999.
Sum. Roberto, "Energy's SecurJ~y Initiative Lacks Fuel," W'ashingtUll Post, December 2,
1999
H
~'Pincus, Wulter, "Nuclear Officiuls' Future Un<;ertnin," Washing/fJn Post, June 25, 1999.
Walter. "Plenty of Blame to Go Around on Spyi:1g, DOE's Ex~Al1ns Chief Says,"
Wasliington Post, July 15, 1999.
!5 Plncus,
Pincus, Walter and Vemon Loeb, "Isn't It Romantic: Security Rules Exempt One~Njght
Stands." Washington Post, September 2, 1999.
51>
57
DOE, news relea;e, "Richardson Toughens Requirements for Unclassified Foreign Visits
and Assignments," July 14.1999.
�CRS-16
political appointees at DOE headquarte~.s~ [n December 1999, Richardson narrowed
the number to about 800 employees who will have to take the lie-detector test. w
On Deeembcr 10) 1999, as directed by Attorney General Reoa. the Justice
Department arrested and indicted Lee for mishandling classitied lnfonnmion -out not
for passing secrets to any foreign government. (See Jndictment of \Ven Ho Lee
below)
On January 7, 2000, Secretary Richardson presented his plan to establish the new
NNSA. (See section on nev" N;-.JSA above.)
Richardson,ooJanuary 19,2000, received the report and recommendations from
the Task Force Against Racial Profiling that he had established in June 199'9. (See
Rilclill Profiling and Selective Prosecution below.)
On January 25, 2000, Secretary Richardson said that security and counter~
intelligence have been dramatically improved, including training for 700 computer
systems administrators in cybcr-sccurity. DOE security czar, Eugene Habiger, said
that it is now almost impossible for lab employees to transfer nuclear secrets from
da.%ified to unclassified computer systems,6P With the tightening of security,
however, then.: arc concerns that a worsened scientific environment at the labs has
hurt their mission, ill
As of March 1, 2000, the NNSA began operations, Secretary Richardson
directed that about 2,000 DOE employees be realigned to be employees ofNNSA ii2
On May 3, 2000, President Clinton nominated u.s. Air Force General John A,
Gordon, Deputy Director of Central Intelligence since November 1997, to be the first
Under Secretary for Nuclear Security and adrr.inistrator of NNSA, a decision
announced by Secretary Richardson on Iv1arch 2, 2000.6J The Senate confinned {97
0) lhe nomination on June J 4, 2000. Richardson swore in Gordon on June 28, 2000.
5$
Pillcus, Walter, "Richardson Cuts Lab Lie Tests Sharply," Washington Post, OctQber 16.
1999.
DOE, "DOE Polygraph Implementation Plan Announced," press release, December! 3,
1999.
5)
Loeb, Vernon, "EnergyChiefTouts SxurityUpgradcs at Nuclear Labs," Washington Post,
lanum') 26,2000.
iii)
t>J Loeb. Vernon, "From Coast to Coasi, Fallout hom a Probe at Califomia Lab, Tightened
Secunty Too Much for Some," Washington Post, December 2 I, 1999.
SCi:relMy of Energy Richardson, "Memorandtom for All Department Employees," March
J,2000,
.
(.1
DOE, "General John A, Gomon Selccted to Head Xaflona! Nud~ar Security
AdIlHlhtmtion," March 2, 2000.
f,)
�Questions about the Response
Timeliness and Responsiveness.
Crilics have argued that tbe Climon
Administration was slow to respond to concerns about China and the labs and that
DOE-officials have resisted reforms for years. Thcyhavc said that in November 1996,
Charles Curtis (Undersecretary and then Deputy Secretary of Energy from February
1994 to April 1997), ordered new security measures (caJIed the Curtis Plan)s.I, but
these steps - induding requiring background checks again for all foreign visitors
were not carried out by the labs nor followed up hy DOE officials. They have also
voicl.!d concern:; about related devc!opments reported in the press, specifica1ly that in
April 1997, the FBI recommended changes at the labs, including reinstating
background checks on foreign visitors, but the DOE did not implement improvements
in counterintelligence until after Bill Richardson became Secretary of Enerb,), (in
Allgll" 1998), In the spring of 1997, DOE had sel""ted the suspect to head a
program to update the computer programming used in the stockpile stewardship
program that evaluates the performance ofllucicaf we!.lpons without testing, and he
hired a PRe citizen to assist him.6s Moreover, some critics have questioned why the
President did not issue PDD~61 until February 1998, although the suspicions that
China obtained W88 data arose tn 1995 and the FBl made recommendations to
tighten counterintelligence measures in April 1997.M
The President's Foreign intelligence Advisory Board (PFIAB), led hy former
Senator Rudman, reported in June 1999 that "the speed and sweep of the [Clinton]
Administration's ongojng response does not absolve it of its responsibility in years
pasl/' and "there is some evidence to raise questions about whether 118 aeti(~lfls came
later than they should have." The PFIAB also not<:d that ''the track record of
previous administrations' responses to DOE's problems 1s mixed, ,*1
The PFIAB noted that PDD-61 was issued on February 1t. 1998, and after
Secretary Richardson was sworn innn August 18. he submitted the action plan to the
t-.,"SC on November 13. However, the DOE's completed implementation plan was
deUvcrcd to Secretary Richardson on February 3. 1999 and issued to the labs on
March 4, .The board said that "we find unacceptable the more than four months that
elapsed before DOE advised the National Security Advisor on the actions taken and
specific remedies developed to implement the Presidential directive, particularly one
M
1·lcaring orlhe Senale Anned Services Comminee, April 12.1999.
Risen, James, "Suspect Scientist Led Key Los Alamos Program," New fork Times, March
24,1!>99,
M
Risen. James and Jeff Genh, "China Stole Nuclear Secrcts From Los Alamos, U,S.
Officials Say," New York Times, March 6, 1999; David E. Sanger, "Clinton Aides Admit
Lapses On Espionage by Chinese," New York Times. March 7, 1999; Jeff Gerth, "Nuclear
laps!.'s Known in '96, Aides Now Say," New York Times, Mnrch 17, 1999; Vernon Loeb and
Jutiet Eilperin, "GOP Attacks' Impact on China Ties Concern:.; White House," Washing/Oil
Post, March 17, 1999.
M
PresiJenl's Foreign lnteiligence Advisory Board (flFlAB), Specinl Investigative Panel,
Science at its Best, Security at its Worst: A Report 011 Security Problems at Ihe Us.
/)epui'ttmmf of Energy, unclassified, June 1999,
fit
�CRS-IS
so crucial." PFIAB further declared that "the fact that the Secretary's implementation
plan was not issued to the labs until more than a year after the POD was issued tells
us DOE is still unconvinced of Presidential authority (PFJAB's emphasis)."
On July 2,1999, House Commerce Committee chairman Tom Bliley and Rep.
Fred Upton, chairman of the Oversight and Investigations Subcommittee, issued a
joint statement onc day after receiving a classified briefing on DOE's May 1999
inspection of security measures at Lawrence Livermore. They said that the briefing
had been "delayed repeatedly by Secretary Richardson without any legitimate basis."
They stated that the inspection found "serious deficiencies" in the arcas of computer
secUJ;ty, foreign visitor controls and clearances, and protection of nuclear materials.
They also questioned why DOE managers failed to detect deficiencies on their own. 68
Law Enforcement vs. Security. There are additional concerns tbat the
Administration did not act promptly enough or investigated aggressively enough to
protect national security, because the prime suspect identified by DOE and the FBI
in the W88 case, though not charged with any crime, remained employed at Los
Alamos until March 8, 1999. The PFIAB's report stated in June 1999 that "there
does not exist today a systematic process to ensure that the competing interests of law
enforcement and national security are appropriately balanced."
Although criminal investigations usually require leaving the suspects in place to
obtain evidence and assess damage, the suspect was only required to take polygraph
tests in December 1998 (conducted by DOE) and in February 1999 (given by the
FBI). DOE did not remove him from access to highly classified information in the X
Division until December 1998 69 and did not dismiss until March 8, 1999 70 , even
though the Director of the FBI had informed DOE officials in a meeting on August
12, 1997, that there was not sufficient evidence to warrant keeping the investigation
a secret and that denying the suspect continued access to sensitive information may
be more important than the FBI's stalled case.7I In congressional testimony on March
16, 1999, Energy Secretary Richardson con finned that the FBI began its investigation
in 1995, and he asserted that DOE and the FBI have worked "extremely
cooperatively." Yet, Secretary Richardson acknowledged concerns when he decided
'to begin an investigation at DOE to detcmline how the prime suspcct retained his
access t.o classified information and hisjob. 72
"Bliley, Upton React to Briefing on LivemlOfe Security Inspection," press release, July 2,
1999.
68
69
Cox Committee's unclassified report, May 1999, Vol. 1, p: 90.
Pincus, Walter, "Spy Suspect Fired At Los Alamos Lab," Washinglon Po,I'I, March 9,
1999.
70
Risen, James and JeffGerth, "China Stole Nuclear Secrets from Los Alamos, U.S. Officials
Say," New York Times, March 6; 1999; Testimony ofLouis Freeh, Director ofthe FBI, before
the House Appropriations Subcommittee on Commerce, Justice, State, and Judiciary, March
17,1999.
71
Risen, James, "U.S. Inquires Why Suspect At Atom Lab Kept Access," New York Times,
April 23, 1999.
72
�CRS-J9
On August 12, 1999, Richardson announced the results of the internal DOE
inquiry by the Inspector General into the espionage investigation. Richardson
declared, "there was a total breakdown in the system and there's plenty of blame to
go around."n He said that "the espionage suspect should have had hisjob assignment'
changed to limit his access to classified information much sooner than it was, and
cooperation with the FBI should have been stronger." He also announced that of the
19 DOE officials identified by the Inspector General as bearing some responsibility
ror counterintelligence and security, three employees would be disciplined. News
reports identified those three individuals as Sig Hecker, former director of Los
Alamos from 1986 to 1997 still employed as a scientist; Robert Vrooman, former
head of counterintelligence at Los Alamos serving as a consultant; and Terry Craig,
a former counterintelligence team leader working at a different part of the lab. In
addition, former secretary Federico Pena, former deputy secretary Elizabeth Moler,
and former deputy secretary Victor Reis reportedly would have been subject to
disciplinary action if still employed by DOE.74
Wiretaps and Computer Monitoring. There are also questions about why the
FBI did not conduct electronic surveillance of the suspect or search his office and
hom<: computers earlier. FBI agents began to question him on March 5, I 999 7S and,
after he was fired, searched his office, including government computers, in March and
his home in April 1999. 76 Some question the Department of Justice's role in not
supporting the FBI's requests to electronically monitor him through wiretaps. The
FBI said that the Justice Department's Office of Intelligence Policy Review (OIPR)
denied the FBI's applications for electronic surveillance, or wiretaps, of the suspect
in August 1997 and in December 1998, because there was insufficient evidence that
the suspected espionage activity was current. Because the OIPR did not approve the
applications, they did not reach the court established under the authority of the
Foreign Intelligence Surveillance Act (FISA).
On May 24, 1999, Reno said that the Justice Department has not authorized
intrusions in the lives of American citizens "when, as in this case, the standards of the
Constitution and the Foreign Intelligence Surveillance Act (FISA) have not been
met." She further explained that "although I was not apprised of the details of the
case at the time the decision was made, I have reviewed the decision of the OIPR and
fully support it." Also, contrary to some reports, the 1997 request for FISA coverage
"did not contain a request to search any computer."n At a closed hearing of the
Senate Judiciary Committee on June 8,1999, Attorney General Janet Reno explained
DOE press release, "Richardson Announces Results of Inquiries Related to Espionage
Investigation," August 12, 1999.
73
Locb, Vernon, "Discipline Urged Against Los Alamos Employees," WUShillglUII Post,
August 13, 1999.
74
75
Risen, James, "U.S. Fires Nuclear Scientist Suspected of Spying for China," New York
Times, March 9,1999.
Vemon Loeb and Walter Pincus, "FBI Searches Home Of Scientist Suspected Of Spying
For China," Washington Post, April II, 1999.
16
Department of Justice, "Statement by Attorney General Janet Reno on the Los Alamos
Laboratory Matter," May 24,1999.
77
�CRS-20
that "the FISA appJication was legally insufficient to eSlablish probable c(luse,,,,g
Among the reasons, she said the request focused on the Lees, while "the elimination
of other logical suspects, having the same access and opportunity, did
110t
occur."
The PFIAB said that "the Department of Justice may be applying the FISA in a
manner that is too restrictive, particularly in light of the evolution of a very
sophisticated counterintelligence threat and the ongoing revolution in information
systems." The board also questioned "why the FBi's FISA request did not include
a request to monitor or search the subject's workplace computer systems,"
However, there are competing concerns about protection of civillibcrlies. As
the J1"ashington Post stated, "the Lee case, for example, has been cited us evidence
of the need to relax eivilliberties protections to make surveillance easier in national
security cases. This is a dreadful idea!' The Post also cautioned that Dr. Lee "is
entitled to a presumption of innocence that he has not typically received in public
discussions of the matter:iN
Some arc concerned that the tack of mOnItoring over the prime suspect's
computer use may have grave consequences for securing secrets of U.S. nuclear
weapons. Additional reports have revcaled [hat Secretary Richardson shut down the
lab computers on April 2, 1999, because investigators discovered after Lee was fired
and after obtaining pcnnission to check his computer in March 1999 that he had
. carried out a pO!.5ibly significant compromise of computer security affecting nuclear
weapons, The FBI discovered that he hud transferred enormous volumes of files
containing millions of lines of highly secret computer codes on nuclear weapon
designs (called "legacy codes") from a dassifiedcomputerto an unclassified computer
at Los Alamos. Moreover, someone who improperly used a password may have
subsequently accessed the files in the unclassified computeLOO Lee also tried to delete
some of the classified files. Sl The FBI says that it was not able to obtain a search
\varnmt to search the computer at Los Alamos eurlier, because the labs did not place
"banners" warning employees that the computers were outside the protection of
privacy rights and subject to government monitoring, However, in May 1999, a
repmt said that Lee, in 1995, had indeed signed a routine wnivcr giving Los Alamos
the right to audit his computer use. n
Speaking publicly for the first time in his own defense, Dr. Wen Ho Lee said in
a television interview on August 1, 1999, that he is innocent ofwfongdoing. he did
On December 21, 1999, the Judiciary Committee released an unclassified transcript of the
henrlng.
73
'9
"The Espionage Scandal," Washingwl! PO.I'I, August 19, 1999.
~o
Risen, James and Jeff Gerth, "U.S. Says Suspect Put Data on Bombs In Unsecurc Files,"
New York Times, April 28, 1999.
~I Loeb, Vernon and
Walter Pincus, "Los Alamos Security Breach Conftnned," WashingtOn
April 29, 1999; James Risen and Jeff Gerth, "China Spy Suspect Report¢dly Tried to
Hide Evidence," New York Times, April 30, 1999.
POSl,
Risen, James,."Eneq,')' Secretary AnnQunces Program to Strengthen Lab Security," New
York Timcs, May 12, 1999,
E2
�CRS-21
not disclose nuclear secrets to China Of any unauthorized person, and he transferred
the files on weapon data to an unclassified computer to protect the information, which
is "common practice" at the labs. Lee also said that he has been made a "scapegoat"
in the investigation even though he devoted "the best time afmy life to this country,"
because he wns the only Asian American working in the X Division, the group in
charge of weapon design at Los Alamos. Hl Others have reportedly described the
transfer of computer files between classified and unclassified computers at the labs to
have been common practice, particularly after the computer network at Los Alamos
split into two networks in December 1994. 84
On August 5, 1999, Senators Thompson and Lieberman of the Governmental
Affairs Committee reported on a bipartisan basis how DOE, FBI, and DOJ may have
mishandled the investigation, particularly in communications among them.8s
In announcing the results of an inquiry by DOE's Inspector General, Richardson
confirmed on August 12, 1999, that Lee had signed a computer privacy waiver in
April 1995, but a counterintelligence official failed to adequately search lab records
and missed the waiver. Thus, the FBI did not know about the waiver until May 1999.
Richardson recommended disciplinary action against the official. 86
On March 8, 2000, Senator Specter, as part of his investigation under the
jUl;sdiction of the Senate Judiciary Subcommittee on Administrative Oversight and
the Courts, issue.d a report critical of the investigations of Wen Ho Lee. The report
criticized the FBI's and DOE's investigations as "inept." It also criticized the
Department of Justice and Attorney General Janet Reno for not forwarding the FBI's
reqm:st for a warrant to the FISA court, despite "ample, if not overwhelming,
infomlution to justify the warrant.,,87 However, Senator Charles Grassley, chairman
of the subcommittee, criticized the FBI for not telling Congress through most of 1999
that the bureau had found that Lee was not the prime suspect in the espionage case
at Los Alamos. Senator Grassley said that he, along with Senators Specter and
Torricelli, had asked the General Accounting Office to examine whether a senior FBI
oflicial (believed to be Neil Gallagher, head of the National Security Division) had
withheld documents from Congress in 1999. (The FBI then asked that the
investigation be suspended after Wen Ho Lee's indictment.) Senator Grassley sent
CBS, "60 Minutes," August I, 1999; Robert Pear, "Suspect in Atom Secrets Case Publicly
Denies Aiding China," New York Times, August 2; 1999.
83
Ca;~y, Pete, "Intricate System Adds Complexity to Spying Probe; Inner Workings of
Weapons Lab May Slow Search for Evidence," Sail Jose MercUlY News, June 10, 1999.
84
Senate Governmental Affairs Committee, "Department of Energy, FBI, and Department of
Justice Handling of the Espionage Investigation into the Compromise of Design Information
on til(: W88 Wurhead," August 5, !999; Walter Pincus, "China Spy Probe Bung!ed, Panel
Finds," Washington Post, August 6, ! 999.
85
DOE, news release, "Richardson Announces Results of Inquiries Related to Espionage
Investigation," August 12, 1999.
H6
Senator Arlen Specter, "Report on the Investigation of Espionage Al!egations Against Dr.
Wen Ho Lee," March 8, 2000.
•
87
�CRS-22
a letter to Senator Specter that disputed his report, saying that the evidence- against
L« was weak. sa
. Scope of Investigation. Reports have said that the investigation in the W88
espionage-case (originally codc~namcd "Kindred Spirit") prematurely narrowed in on
one lab (Los Alamos) and one suspect (Wen Ho Lee). In Jun~ 1999, the PFJAB's
rcpO!l criticized the Administratkm's investigation as focusing too narrowly "on only
Doe warhead, the W~88, only onc category afpotential sources- bomb !.iesigners
at th::: national labs - and on only a four~year window of opportunity." The
investigation, itsaid, '''should have bee!l pursued in a morc comprehensive manner."g-f
The FBi reportedly had one or two agents to the case in 1996, increased [he number
of agents to three or four in 1997, and assigned 40 agents by mid-1999."U
Acknowledging conc-ems about how the W88 case was handfed, Attorney
Genera! Reno said on May 6, 1999, that the Justice Department \""ould establish a
panel of FBI agents and federal prosecutors to conduct an iniernal review of the
investigation of Wen Ho LCC,91 Then. on September 23, 1999, Attorney General
Janet Reno and FBI Dirc{.:tor Louis Frech announced that the government had
expanded its investigation to conduct a more thorough examination of evidence and
possible alternative sources of infonnation, including military facilities and defense
contractors,n The FBI reportedly began this expanded espionage investigation in
April 1999 and gave it the code-name "Fall-out.',,,3
However, a report said dmt as early as Jnnllaty 1999, two months before Wen
Ho Lee's arrest, the FBI had doubted that he was the source ofthe PRe's information
on the W88 nuclear warhead. The F6['s field offke in Albuquerque, NM, wrote a
memo to headquarters on January 22. 1999. questioning whether Lee was the prime
suspect in the W88 case (code-named "Kindred Spirit"), in part because he passed the
December 1998 polygraph test. An earlier memo. written on November 19,1998,
from the Albuquerque offiee to headquarters had stated that investigators would look
into 10 other people who had been named as potential suspects in DOE's
administrative probe, Senator Arlen Specter, however, at whose hearing the
documents emerged, dismissed those doubts abnut Lee being the prime suspect,
saying that FBI agents were "thrown off" course by tbe 1998 poJygraph.'!4
sa Loeb, Vernon, "GAO Probinj!; Senior FBI Official," Washington Post, March 9, 2000.
8'1
PPIAB.
Risen James and JeiTGel1h, "U.s. Is Said To H{ive Known Of China Spy Link in 1995,"
New York nmes, June 21.1999.
00
Walsh, Edward. "Reno Sets Review of'Process' on China Spying Concerns," Washington
Paw, May 7, 1999.
<)1
~1 Risen, James and
David Johnston. "U,S. Will Broaden Jnvestigation of China Nuclear
Secrets Case," New York Tultc.. . , September 23,1999,
H
Loeb, Vernon. "Spy Probe Raisetl Doubts." Washington Post, March 7, 2000.
'14
I,.,ocb, Vernon. "Spy Probe Raised Doubts,"
~V(JshingttJn Post,
March 7, 2000.
�CRS-23
By November! 999, the FBI reportedly had acquired new evidence that the PRe
may have acquired infonnation about U.S. nuclear weapons from a facility that
<ls5cmblcs those weapons. The evidence apparently stemmed from errors in the PRe
intelligence document said to contain n description of the W8S. warhead. The errors
were then traced to one ofthe "integrators" ofthe weapons, possibly including Sandia
National Lab, Lockheed Martin Corporation (which runs Sandia), and the Navy,4!
On May 16, 2000, Attorney General Janet Reno reportedly was briefed on tbe
classified, four-volume report of the Justice Department's internal review of its
handling orthe original investigation. The review is wid to have found that the FBI
mishandled the espionage probe. in part because of internal turfwurs, by not acting
sooner, not committing enough reSOurces sooner. and prematurely focusing on Wen
Ho Lee as the ooty prime suspect The report is said to state that the government
could have discovered Lee's downloading ofcomputer files years earlier. since he had
signed a privacy waiver and a court order was not reqUired.*'
lndictment of \Ven Ho Ltc. Former Los Alamos scientist Wen He Lee's
criminal case is a result of, but unrelated to, the government's investigation of
whether the PRe obtained WS8 secrets by espionage (the original probe called
"Kindred Spirit" and the expanded investigation called "Fall-out"), By November
!999, the Justice Department reportedly was not planning to charge Lee with
espionage, because there was no evidence that he passed nuclear weapon secrets: to
the PRe....l On December 4, 1999, the top law-en[orcemenl. sc<:urity, and DOE
officials held a meeting at the White I-louse on whether to indict the prime suspect
Anomey Gcneral Janet Reno, National Security Advisor Sundy Berger, Energy
Secretary Bill Richardson, FBI Director Louis Freeh, DCI George Tenet and U.S,
Attomey John Keliyattended. 9S
j
By December 1999, the FBI completed the specific investigation that focused
on Lee's transfers of computer files, which were discovered after he was fired in
March 1999 and FBI agents searched his home in April 1999. The case was
presented to a federal grand jury in Albuquerque, N.M. On December to, 1999, as
directed by Attorney General Reno, the Justice Department arrested and indicted Lee
for allegedly "mishandling classified information" - but not for passing secrets to any
foreign govcmmem(s).9'J Lee was charged with violations ofthc Atomic Energy Act,
q$
LQ,;b, Vernon and Walter Pincus, "FBI Wklcn!> Chinese Espionage Probe," Washington
November 19, 1999.
PO:>l,
Vise. David A. antl Vernon Loeb. "justice Study Faults FBI in Spy Case," Washingron
Post, May 19, 2000.
%
~
Pincus, Waller, "US. Near Decision on Indicting Lee in Los Alamos Case," Washingoon
Nov~mtw:r 5, 1999.
Po!>t,
Risen, Jame.~ and David Johnston, "Decisio~ Nears on the Fate of Ex-Los Alamos
Scientisl," New York Times, December 8,1999.
18
Department ofJuslice, U.S. Attorney John J. Kelly, DistrictofNew Mexico, news release,
"Wen Ho Lee Indicted for Violating the Atomic Energy Act of 1954 and for Unlawful
Gathering and Retention of National Defense Infonnation," December 10, t999.
'J"
�CRS-24
including unlawful acqUIsItion and removal of Restricted Data,IOO that carry a
maximwn penalty of life imprisonment. lOl The charges included the "intent to injure
the United States" or "to secure an advantage to any foreign nation." Furtheffilore,
Lee was charged with violations of the Federal Espionage Act, including unlawful
gatht::ring and retention ofnational defense information, that carry a maximum penalty
of imprisonment for ten years. 102
Specifically, the 59-count indictment alleged that Lee knowingly downloaded
and removed from Los Alamos extensive "classified files" relating to the design,
manufacture, and testing of nuclear weapons. The investigation, which included
holding over 1,000 interviews and searching more than 1,000,000 computer files,
found that Lee transferred classified files to 10 portable computer tapes and that seven
ofth~ tapes were unaccounted for. The government charges that Lee, in 1993 and
1994, transferred Restricted Data on nuclear weapon research, design, construction,
and testing from the classified computer system to an unsecure computer at Los
Alamos, and then later downloaded the files to nine tapes. As recently as 1997, Lee
alJegl~dly downloaded current nuclear weapon design codes and other data directly to
a I Otll tape. These simulation codes are used to compare computer calculations with
actual nuclear test data.
Four hours before the indictment, Lee's lawyer faxed a letter to the u.s.
AttolTley, saying that Lee wanted to take another polygraph and to provide "credible
and verifiable" information to show that "at no time did he mishandle those tapes in
question and to confirm that he did not provide those tapes to any third party.,,103
At a hearing in Albuquerque, N.M., on December 13, 1999, Wen Ho Lee
pleaded not guilty to the charges. Without elaboration, his defense attorneys
maintained that the seven tapes had been destroyed ~nd that there is no evidence that
Lee has the tapes or has disclosed or attempted to disclose the tapes. Lee was
ordered to be held injail without bail, until his trial, despite his attorneys' offer to post
$100,000 bond and place Lee on electronic surveillance at his home. I04 Lee was then
held in solitary confinement, placed in shackles for a significant time period, and
deni{:d outdoor exercise. Lee's trial was set to begin on November 6, 2000.
Meanwhile, on December 20, 1999, Wen Ho Lee and his wife filed a lawsuit
against the Departments of Energy and Justice and the FBI for alleged violations of
the Privacy Act of 1974. The Lees charge that, since at least early 1999, the
100 Restricted Data means data concerning: 1) the design, manufacture, or utilization ofatomic
weapons; 2) production of special nuclear material; or 3) the use of special nuclear material
in the production of energy.
101
42 USCS § 2275 and § 2276.
'" 18
uses § 793 (e) and § 793(,).
Loeb, Vernon, "Physicist is Indicted in Nuclear Spy Probe," Washington Post, December
11,1999.
10)
104 Berthelsen, Christian, "Nuclear"Weapons Scientist Pleads Not Guilty; Held Without Bail,"
New York Time~·, December 14, 1999.
�government has made numerous intentional, uoautbori7.ed disclosures about them,
causing them to be unfairly and inaccurately portrayed by the media as PRe spies. lOS
In Aprii 2000, Lce'sauorney revealed that, in 1999, only after Lee was fired, the
government re-assigned a higher security classification to the computer files
containing nuclear secrets that Lee is charged with downloading. At the time that Lee
downloaded the files, they were not classified information, but considered "protect as
restricted data (PARD)," a category of security assigned to voluminous and changing:
scientific data, not a security classification of Secret or Confidential, as the indictment
charged. Both sides arc said to agree that the government had changed this
classification after the downloading, as shown in the prosecution's evidence. While
Li..'C's defense attorney argued that the indictment was "deceptive," the Justice
Department maintained that Lee took the "crown jewels" of u.s. nuclear weapon
sccr('ts. Lee's Imvyers also found that PARD's security I1lnking was five on a .scale
of nine, the highest being secret restricted data. 1m:.
•
There has been another theory, that if Wen Ho Lee provided U.s. nuclear
weapon infmmation to a third-party, it was not to the PRe, but to Taiwan, where he
was born. In 1998, after having allegedly downloaded files to p<>rtabte computer
tapes in 1993, 1994, and 1997, Lce reportedly worked in Taiwun as a consultant to
the Cbung Shan Institute of Science and Technology, which conducts military
research and development. During a visit to Taiwan in December 1998, Lee is said
to have dialed up the main computer at Los Alamos and used bis password to access
the classified nuclear files he had downloaded. Lee's trips to Taiwan were approved
at Los Alamos. I07 Lee's- defense team requested, in May 2000, that the prosecution
namc the foreign nation(s) that Lee allegedly sought to help, saying tbat it was unfair
oftbe government not to name the countric.:: in charging Lce. 1118 The federal judge in
New Mexico then ordered the prosecution to disclose the foreign nation(s) by July 5,
2000. \()9 On that date, the U.S. Attorney filed a document that named eight foreign
governments- that Lee may have sought to help in rlownlooding the nuclear data.
Those places named are: the PRe, Taiwan, Australia, France, Germany, Hong Kong,
Singapore, and Switzerland, places {except for the PRe) where Lee had expressed an
inten:st in applying for work in 1993, when he feared losing his job at Los Alamos.Jhl
"Family of Dr. Wen Ho Lee Armounccs Filing of Privacy Act Lnwsuit Against lhe
Department of Justice, the FBI, and the Department ofEnergy," news release, Decernbcr 20,
1999.
10'
1Gb Broad, William J., "Files in Question in Los Alamos Case Were Rcclassiftcu," New York
Time:;, April 15, 2000,
)(17
Pincus, Walter, "Lee's Links to Taiwan Scrutinized," Washing/on Post, Dec. 31, 1999.
lOS Benke, Richard, "Defense Challenge, Government's Refusal 10 Name Foreign Counlry:'
Associated Press, May 30, 2000.
!<l9 Pincus, Walter and Vernon Loeb, ·'U.S. Told to Name Nmions Thn! Lee Would J lave
Aided," Washington Post, June 27, 200ft
\:0 Locb, Vernon and Waller Pincus, "Lee May Have Shared Copicd Data with 8 Nations,
U.s. Says," Washingfon Pos,. July 7, 2000.
�CRS·26
Another issue for the Administration and the prosecution has been how much of
the classified infonnatiQn can be released as evidence. Secretary Richardson was
responsible for pan of the decision, based on recommendations from his new security
czar. tIl On August 1,2000, U,S. District Judge James Parker ruled in favor afLee's
defense, requiring that the govcmmcnt publicly explain to ajury the nuclear secrets
Lee .allegedly do\vnloadcd. including any flaws in the tapes (which would not help any
possible recipients of the infoOTIJtion),1I2
In August 2000, there oogan a dramatic turn of public events, favomblc to Lee's
defense and his release. At a hearing to secure release for Lee on August
16~ 18,
2000, a top nudearweapons expert, John Richter, countered the prosecution's case,
testifying that 99 percent of tbe infonnation that Lee downloaded Were publicly
available. Also according to Richter, even jf a foreign government obtained the
information, there would be no "dcletenouseffect" on U.S, national security, because
other governments cannot build tbe sophisticated U.S, nudear warheads based on
computer simulation codes downloaded by Lee, Richter testified that the "crown
jewels" of U.S. nuclear weapons secrets are not the Simulation 'codes that Lee
downloaded. but the data from over 1,000 nuclear tests. Richter also conceded to
wanting Lee acquitted and iha't a foreign power could use the codes to heir design
nuclear weapons~ although not a complete design, At the same hearing, Lee's defense
attorneys also argued that fBI Special Agent Robert Messemer gave falS{: testimony
[levut Lee's alleged deception at the firNt hearing on his bail in December 1999.
Mes:>emer admitted that he gave inUCcuidte testimony, an "honest miSLike," Dnd that
Lee did not lie to a colleague (Kuok·Mee Ling) about writing a "resume," but
Messemer said that the error was not meant to mislead the court m
The hearing produced a major victory for Lee's defense on August 24, 2000,
when U, S. District Judge James Purkerreversed his decision from eight mOllths earlier
, and ruled that Lee may be released on bai1 to be kept under strict supervision at home.
Judge Parker's ruled that the government's argument to keep Lee in jail "no longer
has lhe requisite clarity and persuasive charactcr.,·tl4 Family, neighbOrs, and mends
began to plan a home~comjng welcome for Lee but had to repeatedly postpone it.
After a hearing on August 29, 2000~ Oil theconditiolls of lee's release, the judge
ruled that Lee can be released on $1 million bail and with tight restrictions at home.
with a three.day stay for the prosecution to search his house, consult with the Justice
Department, and prepare for possible appeal. The restraints would include
elcclronic monitoring of Lee, sUlveillancc of his phone calls and mail, and restrictions
u
III
Risen, James, "Security of Los Alamos Data Could Delay Trial U.S. Says," N~' York
Times, August 7, 1999,
m Pincus. Walter. "U,S, Judge Rules ror Lee On Nuclear Data Issue," Washington Post,
August 3, 2000.
Loeb, Vernon, "Nuclear Weapons Expert Urges Bail for Lee," Washington Post, August
17,2000; Vernon Loeb and Walter Pincus, "Judge: Lee Can Be Freed on Bail," W{/shington
II)
p.m, August 25. :WOO.
:;~
Locb, Vernon und Walter Pincus, "JwJg:e; Lee Can Be Freed on Bail," Wa,\'hinglon PO,\'I,
August 25, 2000; Order of U.S, Dis:ricl Judge, August 24, 2000.
�CRS-27
on visitors, including his daughter and son. However, the government argued,
unsuccessfully, that restrictions should also cover Lee's communications with his
wife, Sylvia, liS Lee's family and friends had offered over $2 million in assets for bail.
In an opinion, dated August 31, 2000, Judge Parker discussed at length new
revelations in the case that warranted his granting of release on bail after over eight
months. He said, "while the nature of the offenses is still serious and of grave
concern, new light has been cast on the circumstances under which Dr. Lee took the
information, making them seem somewhat less troubling than they appeared to be in
December." He noted, among many points, that top weapons designers testified that
the information Lee downloaded is less sensitive than previously described; that FBI
Agent Robert Messemer "testified falsely or inaccurately" in December J 999 about
Lee; that the government has an alternative, less sinister, theory that Lee sought to
enhance prospects for employment abroad; that the government never presented
direct evidence that Lee intended to harm the United States; that family, friends, and
colleagues supported Lee's character; and that what the government had described
as the "crown jewels" of the U.S. nuclear weapons program "no longer is so clearly
deselving of that label."1l6
Meanwhile, several groups of scientists wrote to express concerns about what
they considered unfair treatment of Lee. For example, on August 31, 2000, the
National Academy of Sciences, National Academy Of Engineering, and the Institute
of Medicine wrote to Attorney General Janet Reno expressing concerns that Lee
"appears to be a victim of unjust treatment" aQd "the handling of his case reflects
poorly on the U.S. justice system."117
Then, very shortly before Lee's scheduled release on bail on September 1,2000,
the loth U.S. Circuit Court of Appeals ordered a temporary stay of Lee's release,
pending a hearing. Soon after, the U.S. Attorney filed a formal request, saying that
Lee's release would pose "an unprecedented risk of danger to national security."llS
Then, on September 10, 2000, the prosecution and defense revealed that they
had negotiated a plea agreement, under which Lee would plead guilty to one felony
count of unlawful retention of national defense information, help the government to
verify that he destroyed the seven tapes (as he has maintained), and the government
would drop the other 58 counts and free Lee (with sentence to the nine months he
served in jail). U.S. Attorney General Janet Reno and FBI Director Louis Freeh
reportedly approved the plea agreement, which had been negotiated over the previous
liS Vernon Loeb and Walter Pinclls, "Lee Could b~ Freed on Bail Friday," W{LI'hinglon Post,
August 30, 2000.
116 Walter Pincus and Vernon Loeb, "Judge Questions Nuclear Case," Washington Post,
September 6, 2000; U.S. District Judge James Parker, Memorandum Opinion, August 31,
2000.
111 National Academy of Sciences, National Academy of Engineering, and Institute of
Medicine, open leiter to the U.S. Attorney General, August 31,2000.
Vernon Loeb, "At Last Minute, U.S. Court Bars lee's Release on Bail," Washington Post,
September 2, 2000.
118
�CRS-28
several wecks,I19 At times citing the Judge's rulings, Lee's defense, some reporters,
and critics said that the prosecution's case had crumbled and represented a gross
injustice that threatened the rights of all Americans because ofpolitics. However, the
prosl~cution and Clinton Administration officials argued that Lee's downloading of
files was unlawful and finding out what happened to the computer tapes was more
important than pro~eeding to trial.
After three days of delays, the prosecution and defense reached final agreement
on the pica. On September 13,2000, Wen Ho Lee pleaded guilty to unauthorized
possession of defense infommtion (downloading files using an unsecure computer to
tapes). The judge sentenced Lee to 278 days in jail (the nine months Lee already
servt:d before trial) and freed him. Lee agreed to answer questions for 10 days over
three weeks starting on September 26, 2000. The government may prosecute Lee,
have him take a polygraph test, and nullify the plea agreement if the government
believes Lee is lying. Both sides agreed to withdraw pending motions, including that
of the defense on selective prosecution. In a dramatic conclusion to the case, Judge
Parker noted "the fact that [he] lost valuable rights as a citizen" and apologized to
Lee for the "unfair manner [he was] held in custody." Parker said that he found it
"most perplexing" that the government now "suddenly agreed" to Lee's release,
despite its earlier warnings of risks to national security. The judge blamed the
executive branch, particularly top officials of the Departments of Energy and Justice,
saying they "have embarrassed our entire nation and each of us who is a citizen of
it. ,,1211
In response, U.S. Attorney Norman Bay argued that "this is a case about a man
who mishandled huge amounts of nuclear data and got caught doing it." He added
that justice is served because Lee must "tell us what he did with the tapes ...
something he refused to do for approximately the past 18 months."121 Attorney
General Reno said that "this is an agreement that is in the best interest of our national
security, in that it gives us our best chance to find out what happened to the tapes."I22
Sylvia Lee, Deutch Case, and Other Issues. A number of other issues have
complicated the case on Wen Ho Lee. One issue was the relationship between the
FBI and the suspect and his wife, Sylvia Lee. Contrary to earlier reports that a trip
the Lees took to China in the 1985 was suspicious because Mrs. Lee, a secretary, was
th(: one invited to speak, it now appears that she had been informing on PRe visitors
for the FBI from 1985 to 1991 and that Los Alamos encouraged her to attend the
119 Bob Drogin, "Scientist to Accept Plea Deal; Likely to Be Freed Today," Los Angeles
TimeJ', September II, 2000; James Stemgold, "U.S. to Reduce Case Against Scientist to a
Single Charge," New York Times, September 11,2000.
12(1 Richard Benke, "Wen Ho Lec Sct Free After Pleading Guilty to One Count," AP,
September 13, 2000; Vernon Loeb, "Physicist Lee Freed, With Apology," Washington Post,
September 14, 2000.
121 Marcus Kabel, "Wen Ho Lee Freed Amid Apologies from Judge," Reuters, September 13,
2000.
122 Statement from Attorney General Janet Reno, Washington Post, Sep~ember 14, 2000.
�CRS-29
conference. l23 In addition, it has been reported that Wen Ho Lee cooperated with the
FBI and passed a polygraph in 1982. Lee helped the FBI after he had made an
intercepted call to another scientist at Lawrence Livermore lab who was under
suspicion of espionage. The press reported in July 2000 that Sylvia Lee infonncd on
visiting PRe scientists for the CIA in the 19805, and Wen Ho Lee also met with the
CIA officer who worked with his wife before the Lees visited the PRe in 1986,124
. Another issue for Lee's case is the government's decision not to prosecute
former Del John Deutch. There is a debate about whether Deutch's case is
analogous to Lee's, with some saying that the treatment of Lee is unfair and there is
a doublcMstandard, and others arguing that the two people had different intentions.
The CIA investigated Deutch (DCI in 1995-1996) for repeatedly mishandling
classified infonnation and moving many classified intelligence files to his unsecured
personal computers in his house, computers used to access the Internet and'thus
vulnerable to attacks. The files reportedly include 17,000 pages of documents,
including top secret materials and files about presidentially-approved covert action.
Further, the CIA is said to have reported that Deutch may have tampered with
evidence allegedly showing his improper handling of classified files, including, on
December 20, 1996, trying to delete over 1,000 classified files stored on one of four
portable memory cards. Additional reports disclose that the CIA's inspector general's
classified report concluded that top CIA officials impeded the agency's investigation
of D(!utch, possibly to allow the time limit on appointing an independent counsel to
lapse, and that DCI George Tenet has sct up a special panel to examine those findings.
The CIA's investigation of Deutch began in December 1996, when he was
leaving office. The CIA did not notify the Justice Department until early 1998. The
Senate Intelligence Committee was notified of the case in Junc 1998. The Justice
Department decided in April 1999 not to prosecute, apparently ~ithout any FBI
investigation and before the CIA inspector general issued its report. After the
inspector general's report was completed in July 1999, the current DCI, in August
1999, suspended Deutch's security clearance indefinitely. According to the CIA's
announcement, the inspector general concluded that while no evidence was found that
national security information was lost, "the potential for damage to U.S. security
existed." The Senate Intelligence Committee received a copy of the inspector
general's report in late August 1999.12S
123
Pincus, Walter, "Fl3I Aided By Los Alamos Scientist's Wife," Washing/on Pos/, April 26,
1999.
124
Stober, Dan, "Wen Ho Lee's Wife Worked for CIA," San Jose MerclIIY News, July 23,
2000.
125 Klaidman, Daniel, "Was the SpymasterToo Sloppy," Newsweek, April 19, 1999; Steven
Lee Myers, "Fonner Chief of CIA Is Stripped of Righi 10 Classified Infonnation," New York
Times, August 2 I, 1999; "Double Trouble," Newsweek, November 8, 1999; James Risen,
"C.I.A. Inquiry of Its Ex-Director Was Stalled at Top, Report Says," New York Times,
February 1, 2000; Senate Intelligence Committee, "Senate Select Committee on Intelligence
Chainnan and Vice Chainnan Comment on Deutch Allegations," news release, February 1,
2000.
.
�CRS-30
On February 18, 2000, the CIA's inspector general released an unclassified
report of its investigation into Deutch's case,126 The report found, among other
findings, that Deutch had processed classified information on unsccurecomputers that
were connected to the Internet and thus were "vulnerable to attacks by unauthorized
persons."
Moreover the information concerned covert action, Top Secret
communications intelligence, and the National Reconnaissance Program budget. The
report concluded that despite Deutch's knowledge of prohibitions against processing
classified information on unclassified computers, he "processed a large volume of
highly classified information on these unclassified computers, taking no steps to
restrict unauthorized access to the infonnation and thereby placing national security
information at risk." The report also criticized "anomalies" in the way senior CIA
officials responded to the problem.
Reportedly concerned about appearances ofunfaimess in comparisons between
. the cases involving Wen Ho Lee and John Deutch, Attorney General Janet Reno
announced on February 24,2000, that her department would review Deutch's case.!27
Then, by May 2000, the Justice Department and the FBI began a criminal
investigation of whether Deutch had mishandled classified information - in a reversal
of Reno's 1999 decision not to prosecute.1 28 By August 2000, the former prosecutor
whom Reno asked to review the case, Paul Coffey, reportedly decided to recommend
that the Justice Department prosecute Deutch, and Reno is to make the final
decision. 129 By September 2000, the Senate Intelligence Committee met in closed
session with DCI Tenet on Deutch's case, and Coffey reportedly may recommend a
charge ofmisdemeanor against Deutch for taking classified information home without
authorization. Do
The resignationofNotra Trulock, DOE's primarywhistleblower, in August 1999
may also complicate the investigation. As the Washington Post wrote, "Mr. Trulock
may well have stated the overall problem in terms more dramatic than the evidence
clearly supported. And his single-mindedness with respect to Los Alamos and Mr.
Lee in particular - which is alleged by some detractors to have been related to Mr.
Lee':; ethnicity - also may have closed off significant investigative leads.,,131
CIA Inspcctor General, "Report of Invcstigation: Improper Handling of Classified
InfomlUtion by John M. Deutch (1998-0028-IG)," February 18,2000.
126
117 Loeb, Vernon and David A. Vise, "Reno Reviews CIA Probe of Ex-Director," Washingtoll
Post, February 25, 2000; Walter Pincus and Vernon Loeb, "U.S. Inconsistent When Secrets
arc Loose," Washington Post, March 18,2000.
12S Risen, James, "Criminal Investigation Follows Review of Agency's Internal Handling of
Dcut(:h," New York Times, May 6, 2000.
m David A. Vise and Vernon Loeb, "Reno Weighs Whether to Prosecute FonnerCIA Chief,"
Washington Post, August 26, 2000; Jerry Seper, "Document-Misuse Charges Sought Against
Ex-CIA Boss," Washington Times, August 29, 2000.
ilO
Robert L. Jackson, "Ex-CIA Director May Face Misdemeanor for Breach," Los Angeles
September 14,2000.
Time.~,
13!
"Mr. Trulock's Resignation," Washington Post, August 27,1999.
�CRS-3 J
Furthercomplicating the case is the debate over relative importance ofthe PRe's
own modernization efforts as opposed to foreign technology acquisitions, Some say
that the investigation overstated the importance of PRe cspionage.l.U
On Lee's transfers of files to an unclassified computer at the lab that was
discovered after he was fired, Administration officials reportedly said that none ofthe
legacy codes that Lee had transferred to an unclassified computer appeared to have
been accessed by unauthorized people. Some say that lab employees may want to
transfer codes to unclassified computers with a better editing program, m
Further reports say that on numerous times in 1994, someone at the University
of California at los Angeles (UCLA) used Wen Ho Lee's password to access Los
Alamos' computer system via the lnternet Lee's daughter, AHrerta, who was
majoring in mathematics at UCLA, has testified that she accessed the more powerful
computer systems at Los Alamos and aho at the Massaz:husetts Institute of
Technology to playa. computer game called "'Dungeons and Dragons." ProsecutorS
ha \ie questioned this. lJ4
Lee's case is further complicated by the FBI's reportedly aggressive tactics in
hi:; interrogation on March 7, 1999, the day before he was fired from Los Alamos
which was before the govemrr.ellt discovered his downloading of files to tapes.
According to the transcript, FBI agents :fu.lselytold Lee that he had failed a polygraph
given by DOE in December 1998, when Lee had actually scored highly for honesty.
The agents also threatened Lee with arrest and execution for espionage" Lee
maintained his innocence throughout the interrogation. Some say the FBI was unfair
and biased in misleading Lee, but others say the tactic is accepted practice in law~
enforcement in trying to elicit confessions, At a hearing in late December 1999, the
prosl!clItion conceded that Lee did pass the DOE's polygraph but said that he failed
the polygraph given by the FBI in February 1999.us Moreover, according to a report,
the FBI changed the results of Lee's DO 5 polygmph, which showed a high degree of
tmthfulness, Weeks after Lee had passed that test DOE changed the finding to
"incomplete" instead, and the FI3l1atcr said that Lee failed the tCSLI.l6
j
Another report said that Lee initially did not comprehend the severity of the
government's investigation of him and that he was wholly naive and unprepared for
the FBI's intensified interrogation, which actually began on March 5, 1999, Robert
Vrooman, then head of counterintelligence at Los Alamos; listened in another roorrL
He said that he'and the agerits came away convinced Lee was not a spy. However,
IJ:! Broad, William ),' "Spies Versus Sweat: The Debate Over China's Nuclear Advance,"
New York Times, September 7, 1999,
IJ) Locb, Vernon, "Spy Suspect Cooperated with FBI in '82," Washington Post, May 2,
1999..
134 Pincus. Waiter, "U,S, Probes RcmoleAccessing oflo.:; Alamos Computer," Washington
Post. January 24, 21)00.
m Loeb, Vernon and Walter Pincus, "FBI Misled We!1 Ho Lee Into Believing He Failed
Polygraphy," Washington Post, January 8, 2000.
,jll
CBS Evening News, "Wen He Lee's Polygraph Results Quest:oned," February 5, 2000.
�I
CRS-32
someone at the FBI then ordered two agents, Carol Covert and John Podenko, to
conduct the "hostile interview" of Lee on March 7, 1999, telling him falsely that he
had failed a polygraph, warned him of"c\cctrocution" and never seeing his children
again, and demanded that he sign a confession of "espionage" with a potential death
penalty, all without the counsel of a lawyer. According to Vrooman, Covert was
"distraught" after that aggressive interview, because she did not believe. Lee was
guilty, took three months sick leave, and transferred out orthe Sante Fe office,137
Racial Profiling and Selective Prosecution. There arc concerns that, in
rightfully protecting national security, racial profiling and selective prosecution have
~ccn used in law-enforcement and that Lee, as an American entitled to a presumption
of innocence, may have been unfairly targeted as the prime suspect in a narrow
investigation and in media reports because of his Chinese ethnicity (although he was
born in Taiwan).138 Aside from the implications of these issues for Lee's case, these
issues raise questions about the effectiveness of the government's approach in
countering PRC espionage in general and in investigating the W88 case in particular.
In his public statement on "60 Minutes" on August I, 1999, Lee said he believes
he has been made a scapegoat by investigators, because he was the only Asian
American working on nuclear weapon designs in the sensitive X Division at Los
Alamos in the last 18 years. Ed Curran, head of counterintelligence at DOE, is
quoted in the same show as expressing concern that "since Wen Ho Lee has not been
proven guilty of anything and thus must be presumed innocent, the surfacing of his
name has been devastating to his family and to his life."
The National Asian Pacific American Legal Consortium wrote a letter to
Secn:tmy Richardson on August 5, 1999, denouncing his accusation that Lee used the
"race card" and expressing concerns about racial profiling. On August 10, 1999, the
Committee of 100, an organization comprised of prominent Americans of Chinese
desct:nt, sent a letter to Attorney General Reno and Secretary of Energy Richardson
expressing concerns about "selective investigation" based on Lee's ethnicity. The
letter said, "Dr. Lee and the nation deserve a case made on the merits of a thorough
and professional investigation, not a racist witchhunt." The Coalition ofAsian Pacific
American Federal Employee Organizations (CAPAFEO) presented a position paper
to Pn:sident Clinton on September 30, 1999, whieh urged the Administration "to take
strong and effective measures to protect the rights and civil liberties of Americans of
Asian descent by vigorously enforcing our nation's laws which prohibit discrimination
based on race of national origin." The group wrote that "while law enforcement and
counter-intelligence agencies must be ever vigilant, in their zeal, they must also be
careful to safeguard the civil and employment rights of all Americans.,,139
131 Bob Drogin, "How FBI's Flawed Case Against Lee Unmveled," Los Angeles Times,
September 13, 2000.
138
Loeb, Vernon, "Spy Probe Worries Chinese Americans," Washington Post, August 14,
1999.
139 C01llition ofAsian
Pacific American Federal Employee Organizations (CAPAFEO), "Los
Alamos Position Paper," sent to President Clinton on September 30, 1999 and presented to the
Congressional Asian Pacific Caucus on October 5,1999.
�CRS-33
[n August 1999, Robert Vrooman, former head of counterintetligcncc at Los
Alamos, publicly said that Wen He Lcc was targeted because he is an American of
Chinese descent and that the case against "was built on thin air." Vrooman issued his
comments after Secretary Richardson recommended disciplinary action against him
and two other former Los Alamos officials for alleged mishandling of the
counterintelligence investigation. Vrooman said that "Lee's cthnidty was a major
tactor" in targeting him. while "0 lot of Caucasians" were not investigated, Vrooman
also said thHt a detailed description of the W8S warhead \1/35 distributed to 548
recipients lhroughout the government, military, and defense companies. so the
information could have leaked from many sources. 140 Two others who were involved
in the investigation, Charles Washington and Michael Soukup, also said that Lee was
singled out as a suspect because of his ethnicity, not because of evidence, 141
A news report said that Notra Trulock, who kd the investigation until the
summer of 1996. had compiled a list of70 people at Los Alamos who visited China
and then narrowed the list to 12 people, He said he give the list to the FBI. which
then eliminated the other 11 suspects,leaving Wen Ho Lee as the prime suspect. The
initial list of 70 people included those with no access to classified or weapons
information and who truveled to Chilia on non-work relaled trips. One Caucasian
scientist, however who was a specialist in the same field as Lee (hydrodynamics),
worked on classified information, and went to China on a professional trip, was not
among the 12, Further, Robert Vrooman said that there were 15 people who
conducted nuclear weapons research and visited China, but were not on the list of 12
j
suspcctS.l~2
However, Notra Trulock, who headed the coullterintelligence investigation at
DOE, has insistcd that "race waS never' a factor.,,141 Senators Thompson and
Licbcnnan, whose Governmental Affairs Committee reviewed the investigation, wrote
on August 26, 1999. that "the evidence we have seen and heard provides no basis for
the claim that the initial DOE-FBI inquiry focused upon the Lees because of their
race. Only much later in the process~ once Mr. Lee had already been identified as the
chief suspect, did the investigatioli consider the Lees' cthnicity - and then only
because. according to PBI counterintelligence expens, Beijing's in(elligelice actively
tries to recruit Chinese American scientists working in sensitive U.S, facilities."H4
One Qfthese experts, Paul Moore, who headed the FBI's counterintelligence efforts
aguinst China: from 1978 to 1998, has written publicly that "Chinese Americans arc
Loeb, Vernon, "Ex-Official: Bomb Lab Case Lacks Evidcr.c-c," Washington Post, August
17. 1999; William J. 13(001.1, "Official Assens Spy Case Suspe.ct Was a Bias Victim," New
York Times, August 18. i999.
1#j
141
Loeb, Vernon and Waller Pincus, "Espionage Whistkblowcr Re:;:igns," Washington Post l
August 24, 1999.
'41
James Sterngold, "u.s.
Time~,
:4)
,0
Reduce Case Against Scientist 10 a Single Charge,'" Ncw York
September 11, 2000.
Broad, William 1., "OffiCial Denies Spy Suspect Was Victim of Bias," New York Times,
Augm.t 19, 1999.
144 Thompson, Frcdand Joseph Liebenn,m, "On the Chinese Espionage InvestigOlion," (leIter
to the editor), Washington Pos., August 26,1999.
�CRS-34
subjected to oppressive ethnic intelligence profiling" by China and that "China's
espionage methodology, not a particular spy, is the main threat." He has explained
the PRe's unconventional espionage by saying that "China doesn't so much try to
steal secrets as to try to induce foreign visitors to give them away by manipulating
them into certain situations."145
Others argue that even if the PRe targets ethnically Chinese people, the
government should not target Americans of Chinese heritage as a group, nor would
such efforts be effective to counter PRe espionage. The policy director of Chinese
for Affirmative Action and an associate professor oflaw at Howard University wrote
that Lee's case "has raised disturbing allegations that the government uses a racial
profile when investigating espionage" and argued that "law enforcement based on
racial profiling is also ineffective.,,146 Fonner Ambassador to China James Lilley
wrote that "the fact that China tries to recruit spies doesn't mean that Chincsc
Americans as a group should be suspect.,,147 In his statement in support of Wen Ho
Lee's motion for discovery of materials related to selective prosecution, Charles
Washington, a fonner Acting Director of Counterintelligence at DOE, declared that
he is not aware of any "empirical data that would support a claim that Chinese
Americans are more likely to commit espionage than other Americans.,,148
Members of Congress have expressed concern about possible racial profiling
used in the investigation of Wen Ho Lee and ramifications of this case on Americans
of Asian Pacific heritage. In May 1999, Representative Wu introduced H.Con.Res.
124 to express the sense of Congress relating to recent allegations of espionage and
illegal campaign financing that have brought into question the loyalty and probity of
Americ,ms of Asian ancestry. Among other provisions, the resolution calls upon the
Attorney General, Secretary of Energy, and the Commissioner of the Equal
Employment Opportunity Commission to vigorously enforce the security ofAmerica's
national laboratories and investigate all allegations of discrimination in public or
private workplaces. The House passed H.Con.Res. 124 with the bipartisan support
of75 cosponsors, on November 2,1999. Moreover, on August 5,1999, Senator
Feinstein introduced S.Con.Res. 53 to condemn prejudice against individuals ofAsian
and Pacific Island ancestry in the United States. The Senate passed the resolution on
July 27, 2000. The Congressiontll Asian Pacific Caucus held a briefing on October
5, 1999, at which Secretary Richardson and others spoke. Chainnan Robert
Underwood said in his opening statement that "suspicions about a Chinese American
14S Moore, Paul D., "How China Plays the Ethnic Card," Los Angeles Times, June 24, 1999;
"Spie., ofa Different Stripe," Washingtoll Post, May 31, 1999; "China's Subtle Spying,"New
York Times, September 2,1999.
146 Theodore Hsien Wang and Frank H. Wu, "Singled Out, Based on Race," Washillgton
Post, August 30, 2000.
147 James Lilley (fonner ambassador to China and fonnerCIA officer), "Undoing the Damage
of the Wen Ho Lee Case," New York Times, September 12,2000.
14M
Declaration of Charles E. Washington, August 11,2000.
�CRS-35
connection to espionage have formed without evidence and with potential damage to
innocent individuals.,,14'1
Energy Secretary Richardson has declared that "while U.S. national security is
a lOp priority at the labs, I am also concerned that Asian Pacific Americans as a group
arc finding their loyalty and patriotism questioned in the wake of recent espionage
allegations. This behavior is unacceptable and I will not tolerate it.,,'SIJ In June 1999,
Richardson established a Task Force Against Racial Profiling, and he received its
report and recommendations on January 19,2000.151 The task force included 19
government employees,
con~ractors,
and U.S.-Civil Rights Commissioner Yvonne
Lee. In their visits to various DOE sites, they found that "an atmosphere of distrust
and :;uspicion was common." Such a hostile work environment for Americans of
Asian heritage resulted from the media exploitation of the espionage and related
allegations, and from managers and co-workers questioning the loyalty and patriotism
of some employees based on race.
The task force made a number of
recommendations for using leadership, building trust, improving communication, and
making assessments.
Since 1999, the Equal Employment Opportunity Commission (EEOC) has
investigated whether the Livennore and Los Alamos labs have discriminated against
Americans of Asian Pacific heritage. IS2
In August 2000, supporting theirselective prosecution motion filed in June 2000,
Lee's defense attorneys had statements from two fonner senior DOE counter
intelligence officials, Robert Vrooman and Charles Washington, contending that Lee
has been a victim of racial profiling and selective prosecution, including in the probe
led by Notra Trulock. Finding some merit to Lee's contention that he has been
singled out for investigation and prosecution because ofhis race, Judge James Parker,
on August 25, 2000, ordered the government to hand over documents, sought by the
defense, to him by September 15, 2000, for his review and decision as to whether they
should be given to the defense attorneys.IS3 However, on September 13,2000, when
the government and Wen Ho Lee reached a plea agreement, they also agreed to
withdraw pending motions. Responding to charges of selective prosecution after
Lee's release, U.S. Attorney Nonnan Bay, who isan American ofAsian heritage, said
149 Congressional Asian Pacific Caucus, briefing on the Federal Investigations at the
DepHl1ment of Energy National Laborntories, October 5, 1999.
DOE news release, "Richardson Toughens R~quirements For Unclassified Foreign Visits
and Assignments," July 14, 1999.
150
151 DOE, Task Force Against Racial Profiling, "Final Report," January 2000; "Richardson
Releases Task Force Against Racial Profiling Report and Announces 8 Immediate Actions,"
news release, January 19,2000.
152
"U.S. Nuke Lab Probed Over Possible Discrimination," Reuters, August I, 2000.
James Stemgold, "Judge Orders U.S. to Tum Over Data in Secrets Inquiry," New York
Times, August 30, 2000; Vernon Loeb, "Affidavits Cite Race in Probe 9fLee," Washington
Post, September I, 2000; Order of U.S. District Judge James Parker, August 25, 2000;
Declaration of Robert Vrooman, August 10, 2000; Declaration of Charles E. Washington,
August II, 2000.
15)
�CRS-36
that "Mr. Lee waS not prosecuted because of his mce, he waS prosecuted because of
what he did, He compiled his own personallibraty ofnuc1ear secrets ." This is a case
about a man who mishandled huge amounts of nuclear data and got caught doing
it. .. 154
Notification to Congress. The chair and ranking Democrat of the House
Intelligence Committee, Rep. Gass and Dicks. have been quoted as saying that they
were not sufficiently informed ortne problems at the labs and the infonnation that was
pmvided was "underplayed."155 In addition, the Cox Committee's bipartisan report,
approved in December 1998, urged Congress to insist on notification by the
Administration citing "the fact that the hends of Executive departments and agencies
of the Intelligence Community failed aJequately to comply with congressional
notilication requirements of the National Security Act" The Clinton Administration
rcspllnded that it has fulfilled its responsibilities to keep appropriate committees
mfonncd. 136
j
Representative Hunter, cnuimlan ofthe House National Security Subcommittee
on Military Procurement, has stated that Elizabeth Moler, then Deputy Secretary of
Enclgy, failed to testify about the W88 case in an October 6, 1998 hearing tnat
induded a dosed session,l51 On April 15, 1999, Representative Hunter held a hearing
to examine whether Moler (now a luv.'Ycr outside government} failed to provide
accurate rmd complete testimony in the dosed session of the October 1998 hearing
llnd wnether she instructed Notrn Trulock, Acting Deputy Director of DOE's Office
uf Intelligence, to withhold critical information, inCluding the W88 case, from
Congress. Trulock testified that Moler edited his written testimony to remove
references to "successful espionage" at the U,S. labs, even though the infonnation
was cleared by the CIA for notification to Congre~s, and thus did not provide the
subcommittee with a full picture of the threat against the United States. Moler stated
that she did not provide certain infonnation. because the questions were directed at
Trulock and he failed to fully disclose infonnation; the subject of the hearing '-vas on
the foreign visitors' program (wbich wns not involved in the espionage cases); &ome
infonnation ';Vas highly classified; and damaging information about PRe espionage
would "unfairly impugn" important DOE exchange programs,tS8
Furthermore, Trulock told the Senate Armed Services Committee on April 12,
1999, that his concerns were '''ignored,'' "minimized/' and sometimes "ridiculed"
1$1
Mnrcus Kabel, "Wen Ho Lee rreed Amid Apologies rrom Judge," Reulers, September 13,
2000.
IH Risen, James and JefT Gerth, "Chinu Stole Nuclear Secrets From Los Atamos, U.s.
Officials Soy," New York Times, March 6, J999; David Sanger, '''No Question: U,S. Says,
Leak Helped China," New York Times, March IS, 1999"
1%
NSC's unclassified respor.se to the rc!:OmmcnuutiOlts, February Jt 1999.
Locb, Vernon and Juliet Eilperln, "GOP AHacks'lmpact on China Tics Concerns White
House," Washington Post, March 17, 1999: Bill G-ertz. "Senators Briefed Privately on Spy
Cas(:," Washing/Oil Tim~s, March 17, 1999,
In
m Hearing of the House Anned Services Subcommittee on Military Procurement,
"Counterintelligence Problems at 0cparitnent of Energy Labs," April 15, 1999.
�CRS-37
especially by lab officials and that senior DOE officials "refused to authorize
intelligence" for several months before he could brief then Secretary Pena in July
1997. Trulock also charged that Moler denied him approval to respond to
Congressman Gass' July 1998 request to brief the 1·louse Intelligence Committee on
the W88 casco According to Trulock, DOE officials, including Moler, stated concerns
about negative impacts on the credibility of the labs and lab-ta-Iab programs with
China and Russia. In response to Senator Levin's statement that the FBI did brief the
Intelligence Committees 19 times from 1996 to 1999 on alleged espionage at the labs,
Trulock slated that DOE briefed the Senate Intelligence Committee in July 1996 and
the House Intelligence Committee in August 1996, but did not participate in the other
17 briefings. After 1996, Trulock said, he did not return to brief Congress until his
testimony to the House Select Committee on China in September 1998. ls9
As pointed out by Senator Levin, the Administration has said that it provided
nUffil!rous briefings to the Intelligence Committees about the cases involving China
and the labs. Moler has denied ,that she prevented Trulock from briefing
Representative Goss and that she took allegations of PRC espionage at DOE
seriously. On the question of whether the Administration was trying to preyent the
W88 case from interfering with the policy of engagement with China, Trulock
acknowledged that Gary Samore, an NSC official in charge ofnonproliferation policy,
did enco~rage DOE to proceed with "counterintelligence efforts in order to protect
sensitive information at the laboratories."I60
The House Government Reform Committee held a hearing on June 24, 1999, on
its concerns about firings, demotions, and harassment of "whistle·blowers," ofticials
at the Energy and Defense Departments who expressed concerns to Congress about
security problems. On July 2, 1999, Chairman Dan Burton wrote a letter to Defense
Secretary Cohen criticizing an alleged gag order at the Defense Threat Reduction
Agency (DTRA) against employees speaking to committee staff. 161
Energy Secretary Richardson recognized the allegation that Moler sought to
deny infonnati~n to Congress, when he announced an internal inquiry as one of seven
initiatives announced on March 17, 1999. In August 1999, Richardson announced the
results of the intemal probe by DOE's Inspector General, which investigated the
question of obstructing briefings to former Secretary Pena and Congress. However,
the report failed to "establish with any certainty that any Departmental official,
knowingly or intentionally, improperly delayed, prohibited, or interfered with briefings
to Mr. Pena or to the congressional intelligence committees.,,162 Notra Trulock, who
159 Hearing of the Senate Anned Serviccs Committee, "Alleged Chinese Espionagc at
Department of Energy Laboratories," April 12, 1999; James Risen, "White House Said to
Ignore Evidence of China's Spying," New York Times, April 13, 1999; Hearing oflhe I-louse
Armed Services Subcommittee on Military Procurement, April 15, 1999.
160
Htaring of the Senate Anned Services Committee, April 12, 1999.
161 Hudson, Audrey, "Congressman Asks Cohen to Lift Gag Order," Washington Times, July
8,1999,
162 DOE, news releasc, "Richardson Announces Results of Inquiries Related to Espionage
(continucd ... )
�CRS-38
led the investigation at DOE, criticized the Inspector General's report as "a
whitewash" and resigned as acting deputy director of intelligence to work at TRW
Inc., a defense contractor. He expressed frustration that he had been removed from
further involvement in the espionage investigation, called "Kindred Spirit," and that
the internal DOE report failed to support his assertions of political interference. 163
On March 8, 2000, Senator Specter, as part of his investigation under the
jurisdiction of the Senate judiciary Subcommittee on Administrative Oversight and
the Courts, issued a report critical ofthe investigations of Wen Ho Lee. The report
criticized the FBI's and DOE's investigations as "inept." It also criticized the
Department of Justice and Attorney General Janet Reno for not forwarding the FBI's
request for a warrant to the FISA court, despite "ample, if not overwhelming,
information to justify the warrant."l64 However, Senator Charles Grassley, chairman
ofthe subcommittee, criticized the FBI for not telling Congress through most of 1999
that the Bureau had found that Lee was not the prime suspect in the espionage case
at Los Alamos. Senator Grassley said that he, along with Senators Specter and
Torricelli, had asked the General Accounting Office to examine whether a senior FBI
otlicial (believed to be Neil Gallagher, head of the National Security Division) had
withheld documents from Congress in 1999. (The FBI then asked that the
investigation be suspended after Wen Ho Lee's indictment.) Senator Grassley sent
a letter to Senator Specter that disputed his report, saying that the evidence against
Lee was weak. 165
Role of the White House and NSC. Some raise questions about how seriously
National Security Advisor Sandy Berger has taken concerns about PRC espionage at
the labs and when he informed President Clinton about the W88 case as well as the
neutron bomb case. Some Members called for Berger to resign over the suspected
compromise to national security. There are reportedly discrepancies between various
accounts of when the President was briefed by the NSC about the alleged espionage
cases and whether the President knew about suspected continued PRC espionage into
the J990s. The President said on March 19, 1999, that "to the best of my knowledge,
no onc has said anything to me about any espionage which occurred by the' Chinese
against the labs, during my presidcncy."l66 After the New York Times reported on
April 8, 1999, that China sought additional neutron bomb data in 1995, however,
President Clinton explained his earlier statement as a response to a question
162 ( ... continued)
[nve:;ligalion," August [2, [999.
16] Loeb, Yernon and Walter Pincus, "Espionage Whistleblower Resigns," Washington Post,
August 24, 1999; James Risen, "Official Who Led Inquiry Into China's Reputed Theft or
Nuclear Secrets Quits," New York Times, August 24, 1999.
1&1 Senator Arlen Specter, "Report on the Investigation of Espionage Allegations Against Dr.
Wen Ho Lee," March 8, 2000.
16,
Loeb, Vernon, "GAO Probing Senior FBI Official," Washington Post, March 9, 2000.
Ihh Eric Schmitt, "Clinton Says Hc Is Unawarc Of Nuclear Spying During His Presidency,"
New York Times, March 20,1999.
�CRS-39
spcciftcallyaboul alleged PRe espionage at the Jabs, which were apparently not linked
to the neutron bomb case. 11))
In 1998, Berger reportedly told the House Select Committee on China that
President Clinton was l11fonned early that year. [n May 1999, Berger said that he
briefed the President in July j 997 after DOE briefed the NSC. 168 The press reports
j
that intelligence and DOE officials briefed Berget as eady as April 1996 on the W88
and the neutron bomb cases. Berger says that. in 1996, the reports to him were
"preliminary" and that "the fBI hadn't even begun its investigation" and there was no
suspect. Berger further explained that after a second briefing in ! 997 that was "far
mon; extensive"and suggested that "there was a potentially greater problem with
respect to Chinese acquisition of sensitive information," he did brief the President.
(Jerger also explained that the President did not raise the issue of PRe espionage at
the October 1997 summit with PRe President Jiang Zemin because of the need to
protect the secrecy of an ongoing investigation, i6'i .y ct, FBI Din..'Ctor Frech testiticd
in March 1999 that the FB[ began Its case (concerning the WEE data) in September
1995 and Ihat, in August i 997, he told DOE officials that the stalled case was not as
impnrtlnt as the protection of infonnationY()
The PFIAIl said in June 1999 that "although the current I"ational Security
Advisor was briefed on counterintelligence concerns by DOE officials in April of
1996, we are not convinced that the briefing provided a sufficient basis to require
ioitiation of a broad Presidential directive at that time. We are coovinccd, however,
that the July 1997 briefing, which we are persuaded was much more comprehensive,
was sllfficiem to warrant aggressive White House action."
Also, the PFIAB revealed that the White House knew about PRe espionage at
the nuclear weapon labs earlier than 1996, In discussing the track record of the
Clinton Administl1ltion, the report noted briefly that. in 1995, after DOE officials met
with the FBI O'n suspected PRC espionage ofU,S. nuclear weapon data, an analysis
group was fanned at DOE to review the- PRe nuclear weapon program, and senior
DOE, CIA, and White House officials discussed options. The PFIAB also noted in
its chronology that, in July 1995, senior DOE officials discussed possibility that
"China may have classified U.S. nuclear design infonnation with CIA, FBI, and White
House senior otlidals in several meetings:' Fonner White House Chic[ of Staff leon
P:.U1t!tta reportedly said that he was infonnedby then Energy Secretary Hazel O'Leary
in July 1995. Afterwards, Panetta reportedly requested then DCI John Deutch to
work with the NSC on the matter. Deutch briefed then NaHonnl Security Advisor
h',"l Clinton, William Jefferson. remarks at joint press conference with Chinese Premier Zhu
Rongji, Washiul;lon, D,C" AprilS, 1999.
1M COX
1M
Committee's report, Volume I, p. 95.
Risen, James and JelT Gerth, "China Slole Nuclear Se<:rets From Los Alamos, U.S.
Offidals Say," New York Times, March 6, 1999; Sandy Berger's interview on NBC's "Meet
the Press," March 14, 1999; Jeff Gerth and James Risen, "Intelligence Report Points to
Second Chiml Nudcur Leak," New York Times, April 8, 1999.
rl4 Hearing of fhe House Appropriations Subcommittee on Commerce, Justice, Stllte, and
Judiciary, March 17, 1999.
�CRS·40
Anthony Lake in November 1995. The senior officials reponcdly did not brief
PresidentCHnlOn in 1995. 111 Sandy Berger was the Deputy National Security Advisor
at that time. .
'
. Export Controls. Some critics have linked the controversy over lab security
with the Administration's export control policy toward China. They cited the export
ofhigh-perfonnance computers to China, In The Department of Commerce reported
. to Congress in January 1999 that 191 such computers were exported to China in
1998, fOf which three cnd~usc checks were conducted.11) There Were also concerns,
investigated by Congress in 1998, that
CXIX}fts
of U,S, satellites have resulted in
traIL,>fers of missile technology to China. 174 Some argued that the Administration's
export control policies have allowed dual~use exports "of great strategic value" to
China that have resulted in greater damage to U,S. national security than the leaks of
nuclear weapon data.l7$ President Clinton, nonetheless, said that his Administration
has been detemlioed to prevent diversions of sensitive technology to China and has
pJaced controls on exports to China that are "lougherthan those applied to any other
major exporting country 1n the world,"!U
~uclear Cooperation
with China. Some question whether it was appropriate
torthe Administration to have expanded nuclcarties with China, including exchanges
bCt\'.'een the two nuclear weapon establishments, white it had suspicions about
security compromises. At the 1997 U,S,~China summit) President Clinton promised
to issue ccrtilicaHons (signed in January 1998) to implement the 'l985 nuclear
cooperation agreement; during congrcss:ional review, the Administration did not
discuss problems at the lab.':i.~17 At the 1998 summit in Beijing) 00£ signed a
governmental agreement on peaceful nuclear cooperation, including e.whangcs at the
Iabs,l7S The Administration argues that lab-to-Iab exchanges were not the cause of
the alleged security problems.
I'1i Risen Jumc~ and Jeff Gcrth, "U,S. Is Suid To Havc Known of China Spy Link in 1995,"
New York Times, June 27,1999.
In
Laris, Michael, "China Exploits U.S. Computer Advances," Washington Post. March 9,
1999.
m Department of Commerce, "Commerce Report: Growing Demand For U.S. High
PenQnnance Computers." press release, January 8, 1999.
17'
See CRS Report 98·485, China: Possible Missile Technology Traw,fers From U.S,
Satellite Export Pf)li(v - BackgrQuud and Chronology, by Shirley A. Kan.
175
Wh;consin Project on Nuclcnr Anns Control, "U.S. Exports to Chinu, [988·1998: Fueling
Prolifer.Jtion," April 1999.
President William Jefierson Clinton, speech tn the U.S. Institute of Peace, at thc
Mayflower HOlel, Washington, D.C., April 7, 1999.
116
171 CRS Issue Brief 1B92056, Chinese Prolijerulion of WeapollS of Mass Destruction:
Current PoUty IN/mes, by Shirley A Kan.
!7! Agreement between the Department of Energy of Inc United States of America and the
State Development Planning Commission of the People's Republic of China on Cooperation
Concerning rcaceful Uses of Nuclear Technologies, June 29, 1998.
�CRS-41
Criticisms of Partisanship
Still others urge policy~maker5 to move beyond partisan debates to urgently
upgrade U.S. security at the labs, assess the potential damage from Chinu's reported
compromise of U.S. secrets, Dnd tnke corrective action, They also calltion against
partisan attacks in this case that might damage broader and long~term lJ,S.~Chi!1a
relations that are in U.S, Interests. such as efforts on trade and weapon
nonproliferation. They point out that, as FBI Director Frech confirmed, "great
vulnerability" to intelligence con:prorniscs of security at the nuclear weapon labs hus
been identified since 1988. ten years prior to PDD~61. Frech said, "unfortunately, this
situation has been well documented for over ten years:' Those concerns about
counterintelligence at DOE included a bearing held by Senator John Gleim in 1988
and studies by
FBI~ CIA, and GAO since then. 11\!
the
Damage Assessments
Tbere are concerns that China's suspected acquisition of the W88 data could
have increased the threat to the United States by helping China's modernization of its
nucJcar*unned ballistic missile roree~ which reportedly has included efforts to develop
a miniaturized nuclear warhead and more reliable and mobile missiles, possibly with
multiple independently targetablc reentry vehicles{MIRVs), China is believed to have
deployed over 100 nuclear warheads on its ballistk missiles, with more warheads in
storage and a stockpile of fissile materia),I&I Of those missiles, there arc reportedly
ahollt 20 DF-SA strategic, long,ronge (13,000 km.; 8,000+ mi.) ICBMs [hat could
reach all of the United States. Chillllis developing a new DF·31 solid-fue), mobile
ICBM, with 3 range of about 5,000 miles, for deployment perhaps aftcr 2000,
reportedly with a smaller warhead (700 kg; 1,500 lb.) than the Of-SA (CBMs. In
addition, there are reportedly programs to develop a next~geneI'iltionJL-2 SLBM and
a longer-range DF-4\ ICBM. 18I
President on U.s. Superiority
On April 7, 1999, President Clinton presented a public assessment that in the
strategic balance, U.S. nuclear forces still maintain dL'(';.sive superiority
ovcr China's relatively limited strategic nuclear forces, He declared.
U.S.~China
Now, we have known since the carly 1980s that China has nuclear unned missiles
capable of reaching the United Srutes.. Our defense posture has and will continue
to take account of thai reality. In part, because of our engagement, China has, al
best, only marginally increased its deployed nuclear threat in the last 15 ycarS. By
m Testimony of FBI Director Louis Freeh before the House Appropriations Suocomn-iittee
Commerce, Justice, Slate. and Judiciary. March 17, 1999.
00
IS:;
Secretary of Derense, Prolijfmlfl'on: Throar and Respmue, November 1997.
IS; Sec CRS Rl.1port 97<39;' China: Ballistic and Cruise Missiles, by Shirley A. Kan; and
eRS Report 97~1022, Chillcse Nllclear Tesling and Warhead De~'clop/l1enit by Jonathar.
McdaHa.
�CRS-42
signing the Comprehensive Test Ban Treaty, China has accepted constraints on its
abilily tn modernize its arsenal at a time wht.'l1 the nuclear balance remains
oVl'l'Whe!mingly in our favor. China hm; fewer lhnn two dozen long-nmge nuclear
weapons todDY, we have over 6,000,181
Intelligence Community's Damage Assessment
At the end of 1998, the HQuse Select Committee on China chaired by
Congressman Cox approved a report that urged, among other recommendations, that
"'the appropriate Executive departments and agencies should conduct a comprehensive
damage assessment of the strategic implic;uions of Ihe security breaches Ihat have
taken place" by China at the nuclear weapon labs, :83 The Intelligence Community.
J.ssc:;sco the diffl<:ult question of how much PRe nuclear weapon designs might have
benefitted if China obtained lhe \\'88 data, On this question, ~.atiotlal Security
Advisor Berger u<:know1edged soon after the news reports that, "there's no question
they benefitted from this, "11I~
DCI George Tenet further announced on March 15) 1999, that after an
interagency team completes a damage assessment by the end ,of March, an
independent panel led by retired Admiral David Jeremiah wHi review the findings.
The damage assessment ofthe Intelligence Community was completed by the end of
March, (Iud the independent panel reviewed that assessn~ent and made
recommendations for changes by early April. Some say that an independent review
was needed to give th¢ assessment greater credibility against any charges of
politieization intended to protect the polky of engagement toward China and other
politics. Some reports suggested that NSC official Gary Sarnore (in August 1997,
as the White house was preparing for President Clinton's first summit with the PRC)
had requested an alternative assessment from the CIA that downp1ayed DOE's
conclusion that successful PRe espionage was primarily responsible for the leaks at
Los Alamos,18$
The DCI briefed the final assessment to the appropriate congressional
committees and tbe White House on April 21, 1999, Robert Walpole, the National
Imelligence Officer for Strategic and Nuclear Programs, le'd the damage assessment.
which was prepared by the CIA, 00£, Department of Defense, the Defense
lntelllgence Agency, the National Security Agency, the State Department's Bureau
of Intelligence and Research, the fBt, the National Counterintelligence Center, and
nuclear weapon experts from Los Alamos, Livermore, and Sandia labs. 186 After being
m President William Jefferson Clinton, speech sponsored by the U.S. Institute for Peace at
the Mayflower HOfC:, Washington, D,C., April 7, 1999.
IS1 ~ational Security Council's response (unclassified version) to the I-louse Select
Comm[ttcc's rccommcndmkms. February I, 1999.
134
Sandy Berge(s interview on ::-'"BC's "Mee! the Press," March 14, 1999,
1M
Risen, James and James Ger1h, "Chinn Stole ~uc1ear Secrets From Los Alamos, U.S.
Officials Say," New York rimes, March 6,1999.
lill>
CIA, "111e lntelligence Community Damage Asscssme:u On the Implications ofChinu's
(continueu.,.)
.'
�CRS·43
briefed on the Intelligence Community's damage assessment on April 21, 1999,
President Clinton said that he has further asked tbe National Counterintelligence
Policy Board to assess potential vulnembilities at nuclear weapon institutions other
than the national labs,u.7
According to the unclasslticd key findings released by the DCI, the Intelligence
Community's danUlge assessment, with concurrence by the independent panel,
coniinncd that "China obtained by espionage classified U.S. nuclear weapons
infonnation that probably aceelcrated its program to develop future nuclear
weapons," That successful PRe espionage effort, which dates back to at least the late
19705, benefitted PRe nuclear weapon design program by allowing China to "focus
successfully down critical paths and avoid less promising approachcs to nuclear
weapon designs." furthermore. the assessment found that China obtained "basic
design information on several modern U.S. nuclear reentry vehicles, induding the
Tridem II" that delivers the W88 warhead as well as "a variety ofL' .S. weapon design
c(lUcepts and weaponizution features, including those oftbe neutron bomb_" The
information on U.S. nuclear weapons has made an "important contribution" to PRe.
efforts to maintain a second strike capability and develop future nuclear weapon
dest.b*1ls: However, it is uncertain whether China obtained documentation or
blueprints, and China also beneiittcd from information obtained front a wide variety
of sources, including open sources (unclassified information) and China'5 own efforts.
The assessment also states that the PRC has not demonstrated any "apparent
modemization" of the deployed strategic force or any new nuclear weapons
deployment, (China has not conducted nuclear tests since July 1996.) The
assessment also confirmed that China has the "technical capability" to develop a
MIRV system for the currently deployed ICBf..4. but has not done so. Nonetheless,
U,S, intelligence reported that "L'.S. information acquired by the Chinese could help
them develop a MIRV for a future mobile missile."
On the continuing need for effective counterintelligence and intelligence, the
assessment eonfinns that, even today, the PRe isu5ing "aggressive collection efforts"
directed at U.S. nuclear weapon secrets in order to fill Significant gaps in China's
programs. Adding nn1her to questions about possible politicization and erosion of
cxpe~1:isc in the Intelligence Community. the independent revlcw panel warned that
thc Intelligence Community has "too little depth." The pane) also added that multiple
countries "have gained access to classified U,S. information on a variety of subjects
for rll!cades, through espionage, leaks, or other venues," and such losses arc "much
more significant" in today's context of diminished U.S, research efforts intended to
ensure a "protective edge" over those countries using U.S. information.
11k> (.Hcontinued)
Acquisition or u.s, Nuclear Weupons fnfortnlltion On the Development of Fulurc Chinese
Weapons," (unclassified release). April 21. 1999.
111
Statement by tile President, April 21, 1999,
�CRS-44
Cox Committee's Report
Findings. According to its declassified report released in May 1999/ 811 the Cox
Committee reported that, since ihe late 19705 and "almost certainlyll continuing
today. the PRe has pursued intelligence collection that includes not only espionage,
but also review of unclassified publications and interaction with U,S, scientists at the
DOE'snationallaboratorics, including Los Alamos, Lawrence Uvcnnore, Oak Ridge,
and Sandia. The PRe has "stolen" classified information 01) the most advanced U,S.
thermonuclear weapons, giving the PRe design information on thcnnonuclear
weapons "on a par with our own." The infonnation includes classified infonnation
on seven warheads, including "every currently deployed tbcnnonuclcar warhead in the
U.S. ballistic missile arsenal;" on the neutron bomb; and on "'a number of' reen.try
vehicles of U.S. missiles. TIle PRe acquired information on seven U.S. nuclear
warheads, including the Was, the most advanced, miniature U,S. nuclear warhead
deployed on the Trident D:5 submarine-launched ballistic missile (SLBM):
.
WSS: deployed on the Tndent 0·5 submarine-Iaunehoo ballistic missile (SLI3M)
W87: deployed on the Peacekeeper intercontinental ballistic missile (ICBM)
W78: deployed on the Minuteman I1J ICBM
W76: deployed on the Trident C-4 SLBM
W70: previously deployed on the Lanee shorH",mgc ballistic missile {SRB~)
W62: deployed on the Minuteman III ICBM
W56: previously deploycd on the Minuteman JJ ICBM,
The committee focused on potential implications for U.S, national seeurity,
judging "that the PRe wi1l exploit clement>; Gfthe U.s. design information on the
I)RC's next genemtion of thermonuclear weapons," The PRC successfully tested
smaller thennonuclcar warheads in 1992 to 1996;~\I (prior to its july 1996
announcement ofa nuclear testing moratorium and its September J996 sii,,"ning ofthe
Comprehensive Test Ban Treaty (CTBT)). The committee reported that infonnation
lost from the DOE labs accc!erated PRC nuclear weapon modernization and "helped
the PRe in its efforts to fabricate and successfully lest its next generation of nuclear
weapons designs, These warheads give the PRe small, modem tbemlonuc!ear
warheads roughly equivalent to current U.s, warhead yields," The PRe "could begin
~erlal production" of such weapons during the next decade in connection with the
development of its next generation of solid~fuet mobile tCBMs. including the DF-31
that "may be tested in \999" aod "could be d~ployed as soon a82002"" Although the
PRC currcmlydcploysnuclenfwanned ICBMs, ''with stolen t..;,S. technology. the PRe
has leaped, in a handful (If years, from 1950swcra strategic nuclear capabiiitics to the
more modem themlOnuciear weapons designs," Regarding whethcr the PRe's
nuclear program continues to require testing, the committec judgcd that if tbc PRC
I~ Select CommIttee, U$, lJouse of Representatives, H.Rept. 105·851, u.s National
Security {m,,' A-liluw)!/Commcrci«l Concern.I' with the People 's Republic o/China, (clasliified
report issued on January 3,1999; declassified version issued on May 25,1999); See also:
CRS Report RLJ0220, China's Technology Acquisitions: Cox Committee's Report
Findings, ba;uf!s, and Rf!C()IJIf}II:ndatiolls, June 8,1999, by Shirley A. Kan.
~89 For infonnation, see CRS Report 97.1022, Chinese Nuclear Testing and Warhead
Development, by Jonathan ~lcdali!L
�CRS-4S
successfully steals U.S. nuclear test codes, computer models, and data, and uses them
with the U.S. !-Ipes already imported, the PRe "could diminish its need for further
nuclear testing to cvnluatc weapons and proposed design changes."
As for the strategic balance, the report noted that "the United States retains an
overwhelming qualitative and quantitative advantage in deployed strategic nuclear
forces" over the PRe's up to two dozen CSS-4 ICBMs. Nonetheless, the report
stated that "in a crisis in which the United States confronts the PRe's conventional
and nuclear forces at the regional level, a modernized PRe strategic nuclear ballistic
missile force would pose a credible direct threat against the United States,"
On the question of whether having smaller nuclear warheads would facilitate
PRe development of multiple independently targetable reentry vehicles (MIRVs) for
its nuclear missile force, the committee reported that it had "no infonnation on
whether the PRC currently intends to develop and deploy" MIRVs.
A complicating factor is that, as the committee revealed, the CIA obtained, in
1995 someplace outside of the PRC, a secret PRC document containing "design
infol111atiol1" on the WSS and "technical infonnation" on another five U.S .
. thennonuclear warheads from a "walk-in" directed by PRC intelligence. The "walk
in" volunteered various materials to the CIA and to Taiwan, according to
Representative COX.I'XI There arc questions about the credibility and motivation of the
"walk-in" who provided documents showing PRC possession of U.S. nuclear weapon
secrds. As the Cox report noted, "there is speculation as to the PRC's motives for
advertising to the United States the state of its nuclear weapons development." PRC
intelligence could have sought to raise the credibility of the ·"walk-in;" increase the
credibility of China 's nuclear arsenal as a deterrent to U.S. intervention in a regional
crisis; trigger a disruptive "spy hunt" in the United States; or raise suspicions ofPRC
students working in the United States to bring them back to China. 191 Also, China
could have made a major blunder or had another unknown objective. In addition, a
rival of the PRC could have planted the documents in Taiwan,192 or the "walk-in"
could have sold them in self-interest. In any case, as the Cox report said, PRC nuclear
tests conducted from 1992 to 1996 had already raised suspicions in U.S. intelligence
that China had stolen U.S. nuclear weapon infonnation, and the infonnation provided
by the "walk-in" in 1995 "definitely can tinned" those suspicions.
Prather Report. A report by a nuclear physicist Gordon Prather, released by
Jack Kemp on July 8, 1999, questioned the Cox Report's findings about PRC
espionage, but criticized the Clil1ton Administration (particularly fonner Energy
Secretary Hazel O'Leary) for its policies. Prather cited three policies as responsible
for security problems at the labs: support for the CTBT; a "reckless policy" of
unprecedentcd "openness" that declassi tied much nuclear weapon infonnation, so that
190
Pincus, Walter, "Prescriptions for Keeping Secrets," Washington Post, May 27,1999.
191 Loeb, Vernon and Walter Pincus, "Planted Document Sows Seeds of Doubt," Washington
Post, May 28,1999.
192 Weiner, Tim, "Nuclear Thriller With Ending As Yet Unwritten," New York Times, May
25. 1999.
�CRS-46
spying is unnecessary; and engaging the PRe nuclear weapon establishment with the
DOE's lab-ta-lab cxchanges. 191
China Confirmed Its Neutron Bomb. On July 15, 1999, the PRe government
issued a response denying the Cox Committee's charges that China stole U.S. secrets.
In the report was a short paragraph acknowledging that China has the neutron bomb.
The statement said China mastered "in succession the neutron bomb technology and
nuclear weapon miniaturization technology." In addition, "since China has already
possessed atom bomb and H-bomb technologies, it is quite logical and natural for it
to master the neutron bomb technology through its own efforts over a reasonable
period oftime.,,194
PFIAB (Rudman) Report
For a parallel review, on March 18, 1999, President Clinton appointed fonner
Senator Warren Rudman, head ofthe President's Foreign Intelligence Advisory Board
(PFIAB), to undertake a review of how the government has handled security
challenges at the labs over the last 20 years. The PFIAB's special investigative panel,
with four members, reviewed over 700 documents and interviewed over 100
witnesses - who apparently had concerns about reprisals and asked that .they not be
named. On June 15, .1999, the PFIAB issued an unprecedented unclassified report,
with findings and recommendations for both the Executive and Legislative
branches. 195 These findings and recommendations are summarized below.
Findings.
• Twenty years after the creation of DOE, most of its security
problems "still exist today."
• The national weapons labs "have been and will continue to be a
major target of foreign intelligence services, friendly as well as
hostile."
• "Organizational disarray, managerial neglect, and a culture of
arrogance - both at DOE headquarters and the labs themselves
conspired to create an espionage scandal waiting to happen."
• "Increasingly nimble, discreet, and transparent in their spying
methods, the Chinese services have become very proficient in the art
of seemingly innocuous elicitations of infomlation. This modus
operandi has proved very effective against unwitting and ill-prepared
DOE personne\."
Prather, James Gordon, "A Technical Reassessment of the Conclusions and Implications
of the Cox Committee's Report," July 8, 1999. See also: Jack Kemp's press release, July 8,
1999, and Robert D. Novak, "Republican China-Bashing," Washington Post, July 12, 1999.
For copies of report, COli tact Jack Kemp's office or Home Page or Polyconomics, Inc.
19)
1'14 PRC, Information Office ofthe State Council, "Facts Speak Louder Than Words and Lies
Will Collapse by Themselves- Further Rerutation of the Cox Report," July 15, 1999.
195 President's Foreign Intelligence Advisory Board, Special Investigative Panel, Science at
its Best, Security at its Worst: A Report on Security Problems at the u.s. Department of
Energy, unclassified, June 1999.
.
�CRS-47
• "Both Congressional and Executive Branch leaders have resorted to
simplification and hyperbole in the past few months. The panel found
neither the dramatic damage assessments nor the categorical
reassurances of the Department's advocates to be wholly
substantiated. "
• "We concur with and encourage many of Secretary Richardson's
recent initiatives to address the security problems ... "
• Energy Secretary Richardson "overstated the case when he asserts,
as he did several weeks ago, that' Americans can be reassured: our
nation's nuclear secrets arc, today, safe and secure'."
• Both intelligence officials at DOE and the Cox Committee "made
substantial and constructive contributions to understanding and
resolving security problems at DOE ... we concur on balance with
the damage assessment of the espionage losses conducted by the
Director of Central Intelligence. We also concur with the findings of
the indcpendent review of that assessment by Admiral David
Jeremiah and his panel."
• "On one end of the spectrum is thc view that the Chinese have
acquired very little classified infomlation and can do little with it. On
the other end is the view that the Chinese have nearly duplicated the
W88 warhead .... None of these extreme views balds water. ...
The most accurate assessment ... is presented in the April 1999
Intelligence Community Damage Assessment."
• "Despite widely publicized assertions of wholesale losses of nuclear
weapons technology from specific laboratories to particular nations,
the factual record in the majority of cases regarding the DOE
weapons laboratories supports plausible inferences - but not
irrefutable proof- about the source and scope of espionage and the
channels through which recipient nations received information."
• "Particularly egregious have been the failures to enforce cyber
security measures ..."
• "Never before has the panel found an agency with the bureaucratic
insolence to' dispute, delay, and resist implementation of a
Presidential directive on security, as DOE's bureaucracy tried to do"
to PDD-61 in February 1998.
• DOE is "incapable of reforming itself - bureaucratically and
culturally - in a lasting way, even under an activist Secretary."
Recommendations.
• "Reorganization is clearly warranted." Two alternative solutions for
a new Agency for Nuclear Stewardship (ANS) to be established by
statute:
I. A new semi-autonomous agency with DOE (similar to the National Security
Agency (NSA). Defense Advanced Research Projects Agency (DARPA) or the
National Oceanographic and Atmospheric Administration (NOAA») rcporting
directly to the Secretary of Energy.
�CRS·48
2. An independent agency (similar to the National Aeronautics and Space
Administration (NASA)) reporting directly to the: President,
• "The labs should never be subordinated to the Department of
Defense."
• "DOE cannot be fixed with II single legislative act. , , Congress and
the executive branch ... should be prepared to monitor the progress
of the Dcpnrtment's refomls for yenrs to t:ome,"
• "The Foreign Visitors' and Assignments Program has been and
should continue to be a valuable contribution 10 the scientific and
technologicul progress of the nation."
• "Abolish the Office of Energy Intelligence:'
• "Congress should abolish its currenl oversight system for national
weapons labs" with about 15 competing eommit1<:es. The report
recommends a new loint Comminee for Congressional Oversight of
'ANS/Labs.
Stanford Cr!tique
In December 1999, four scholars at Stanford University's Center for
International Security and Cooperation issued their critique of the Cox Committee's
und'lssifJed report,l% In the section on nuclear weapons, W, K, H. Panofsky found
that the Cox CommIttee's report "makes largely unsupported allegations about theft
of nuclear wcnpons information, but the impact of losses is either greatly overstated
or not stated at alL" Further, the nuthor wrote that "there is no way to judge the
extent, should China field a new generation of thermonuclear wea{mns, of the benefit
derived from publicly available knowledge, indigenous design efforts, and
clandestinely obtained infonnation:' Panofsky alw doubted the Cox Committee's
assertion that stolen U.S. nuclear secrets sive the PRe design infonnation on
th.:ml0nuc!eor wcopons on par with our own.
The Senate Intelligence Committee>s staff director, Nicholas Rostow. (formerly
the deputy staff director of and counsel to the Cox Committee) issued a response to
thl! critique by the group at Stunford. 1Il1 He maintained that lhe Cox Committee
repol1 "is valuable" and "factually accurate," He explained that "the important
findings of the Select Committee are almost all based on classiticd infonnation." He
assessed the critique as "an attempt to foster debate nnd to reiterate the authors'
views on U.S. relations with the People's Republic of China,"
116
Johnston, Ala~tair l<.Iin, W. K. II. Panofsky, Marco Di Cupua, and Lewis R. Franklin,
~lay), "The Cox Committee Report: An Assessment," December 1999.
(edited by M. M.
l'l' Ro&!ow, Nicholas, "1'he 'Panofsky' Crltique and the Cox Committee Report: 50 Factual
Errors in the Four Essays," December 1999,
�CRS-49
Implications for U.S. Policy
Counterintelligence and Laboratory Security'"
The Los Alamos incident has led to severnl reassessments. As norcd above, the
lnteJligencc Community is undertaking an assessment of potential damage to national
security from possible leaks of rtuctear weapons secrets, and DCI George Tenet has
asked retired Admiral David Jeremiah, fonner Vice Chainnan of the Joint Chiefs of
Staff, to review the in-house effort. In addition to the PFIAB's review mentioned
above, severnl congressional committees will be undertaking their OWn investigations.
These reviews may become parts ofa larger assessment ofV.S. counterintelligence
c~lpabilitics~
in May 1998 the Senate Intelligence Committee had expressed its
conceems about the FBI's failure to address technological challenges relating to
intonuation systems modcmiz3tion and criticized the Defense Department's
substantial reductions in the resources devoted to counterintelligence. lw
Administration spokesmen point to a concerted counterintelligence effort already
underway. In response to the revelations of spying for the Soviet Union by CIA
official Aldrich Ames, a Presidential Decision Directive signed in May 1994 placed
the policy and coordinating machinery of counterintelligence in the hands of the NSC
and created a National Counterintelligence Policy Board composed ofrepresentatives
of the principal law enforcement and intelligence agencies, reporting to the National
Security Advisor. The Board was subsequently given a statutory charter in the
FY 1995 Intelligence Authorization Act (P.L. I03_359).20(J
A major goal in establishing the Counterintelligence Policy Board was
coordination ofelA and FBI efforts with a focus on CQumerintelligenceat intelligence
agencies; concerns about Energy Department laboratories were not publicly discussed
in 1994, It is generally agreed that coordination among law enforcement and
intelligence agencies has Improved III recent years. As a result, however, of concems
dating at least from t995 that China may have acquired sensitive information from
Los Alamos, POD-61 was issued in February 1998. mandating a stronger
counterintelligence program within DOE laboratories. According to Energy Secretary
Richardson; steps taken in rcsponseto PDD-6! have included new counterintelligence
prot1:ssionals based at the laboratories, a doubling of the budget for
counterintelligence, a new screening' and approval process for foreign scientists
seeking access to the laboratories, and more extensive security reviews - including
the use of polygraphs - for sciemists working in sensitive programs. WI
1'!8
Pnpared by Rkhard A. Best, Jr., Specialist in National Defense:,
199 U.S. Congress, 10Sa. Congress, 2d session, Senate, Select Committee on Intelligence,
AUlhvrizing Appropriations/or Fiscai Year 1999/01' the Inrefligence Aclivl1ies oflhe Unaed
State.': Government and the Centra/Intelligence Agency Retirement and Di:.'abifif)' System
andJor Other Purposes, S.Rep;. 105-185, May 7, 1998, pp. 4-6.
lOO
108 StaL 3455.3456.
Bil! Riehardson, "Guarding Our Nuclear Security." Washington Post, March 15, 1999,
p.AI7.
l(!j
�eRS-50
secretary Rkhardson indicates that additional measures arc under consideration,
and there appears to be a widespread conviction that security at the laboratories needs
to be tightened to minimize the possibility of leaks of sensitive weapons~rclated
information. Some observers caul ion however that, given the nature of the mission
ufthe labomtories, it is unlikely that conditions of tight secrecy such as ex.isted during
World War If can be reestablished (and even that secrecy was effectively penetrated
by Soviet agents).201 They argue that scientific researchers at Los Alamos and tbe
other laboratories expC{;t and depend on II relatively free flow of infonnation with
theil counterparts throughout the world. There is a perceived need to engage
scientists and other technical experts from other countries in the effort to detect and
limit the spread of nuclear teehnology and weaponI)'. Such engagement, they argue.
depends on the development of good working relationshlps with their counterparts
and visits to U.S. research facilities?H
A matter ofintercst for Members is the reporting ofpotential <:ounterintelligenec
concerns to congressional committees. Annual reports of potential disclosures of
classified information to foreign powers fire required by statute to be made to
con~ressional committees ~ the two im~lligcncc and the two judiciary committees
- by the Director of the fBI in consultation with the oct,2!!4 Less fomwl venues for
reporting to oversight committees arc also available. Details of this reporting would
inevitably be classified. There appear to be differences ofopinion regarding the extent
and adequacy of congressional notification regarding the potential problems at Los
Aiamos. 21l5
Nuclear Nonproliferation and Lab Exchanges
In addition to questions about PRe weapon designs, there are impliC<ltions for
U.S. policy posed by China possibly passing U.S. nuclear weapon secrets to other
countries. As discussed above, in the late 1970s to 1980s. the PRe reportedly
acquired U.S. data on the neutron bomb from Livermore and passed it to Pakistan.
The United State-s and other countries have been concerned about PRe huc!ear
proliferation, especially in Pakistan and Irl.1n.;(I(, Advanced U.S, warheads have
features of value to would-be nuclear weapon states, 'These features might permit a
nation to develop more efficient warheads, in which case it could build marc bombs
M
On successful Soviet efforts to obtain information from Los Alamos, see Jo:.eph Atbrit>ht
and Marcia Kunslel, Bnmbshelf: The Secret Srory ofAmerica '$ Unknown Spy Conspiracy
(New York: Random House, 1997)~ Robert Louis Benson and Michael Wamer,e-ds., VenDI/a:
Soviet Espiol/age and the American Response, J9J9~J957 (Washinglon: >:ational Security
AgeR~Y
-and Centra! Intelligence Agency, 1996).
M Sec Siegfried S, Hecker [a fonner director of the Los Alamos Laboratory], "Between
Science and Security: At Los Alamos, Risk Comes with the Territory," Washington Post,
March 21,1999, p. BL
2{l4
108 SiaL 3456.
w, SCI: William Safire(quoting Reprcscntntive Cox), "Of Nukes & Spooks,"
New York Times,
March 15, 1999, p. AZ5.
106
See CRS Issue Brief 1892056, Chinese ProUferation ojWeaponj' oj}4ass Des/ruc/ton:
Cum;'nf ?ohcy /sst/.?S, by Shirley A. Kan.
�CRS-5J
with its supply of uranium or plutonium. They might solve engineering problems or
suggest production shortcuts. If China passed U.S. nuclear weapon information to
another country~ it could develop and deploy a more potent nuclear force faster.
The CIA's damage assessment, that was briefed to Congress and the
Administration on April 21, 1999, cited a greater concern for nuclear proliferation.
It acknowledged that China could pass U.S. nuclear weapon secrets to other
countries, although it is not known whether China has done so. The assessment
cautioned that, now that the PRe has morc modern U.S. nuclear weapon information,
they "might be less concerned about sharing their older techno)ogy.,,207
India or another country concerned about the advancement of PRC nuclear
weapons might pursue further development of nuclear weapons and the missiles to
deliver them in response to reports that. China may have acquired designs for the
W88. Citing security concerns about China, India conducted several nuclear tests in
May 1998 and has not signed the CTBT.
Citing concerns about nuclear proliferation, Members looked at curtailing the
U.S.-China lab-to-Iab program that the Clinton Administration initiated in July 1994
and fonnalized in a June 1998 official agreement. Leading a delegation to the Los
Alamos National Lab, Senator Shelby, Chairman of the Intelligence Committee, is
quoted as saying on April 12, 1999, that a "tourniquet" needs to be placed on the
"hemorrhaging" of bomb secrets to foreign countries. 208 lfthere are security gaps at
the Jabs stemming from foreign exchanges, Congress may want to ensure that
adequate counterintelligence measures are in place. (See Legislation above.)
The Intelligence Community's April 1999 damage assessment states concerns,
highlighted by some, about PRC "technical advances" based on contact with scientists
from the United States and other countries, among a variety of sources of
information. (Other countries may include Russia.) The review panel's note on the
damage assessment also warned of the dangers of exchanges between U.S. and PRC
or Russian nuclear weapon specialists, urging that a separate net assessment be done
on such fonnal and infonnal contacts. Yet, the panel also noted that "the value of
these contacts to the U.S., including to address issues of concern - safety, command
and control, and proliferation - should not be lost in our concern about'protecting
secrets. "
Another report on PRC espionage included warnings about exchanges at the
labs. According the CIA and FBI's 1999 unclassified report, "PRC scientists, through
CIA, "The Intelligence Community D:image Assessment On the Implications of China's
Acquisition of U.S. Nuclear Weapons Infonnation On the Development of Future Chinese
Weapons," (unclassified release), April21, 1999.
207
Brooke, James, "Senator Tells Nuclear Bomb Labs To End Foreign Scientists' Visits,",
New Yurk Times, Aprill3, 1999.
208
�CRS-52
mutually beneficial scientific exchange programs, gather [science and technology]
infomlation through U.S. nationallaboratories.,,209
China's nuclear weapon facilities include the China Academy of Engineering
Physics (CAEP), also known as the Ninth Academy, at Mianyang, Sichuan province;
Institute of Applied Physics and Computational Mathematics (IAPCM), in Beijing;
High Power Laser Laboratory, in Shanghai; and Northwest Institute of Nuclear
Technology (NINT), near Xian. 2H1 China's nuclear weapon installations have been in
transition since a reorganization of the defense industrial sector in the spring of 1998
that included the civilianization of the Commission of Science, Technology, and
Industry for National Defense (COSTIN D) solely under the State Council. PRe
nuclear weapon facilities may now be partly or fully subordinate to the Chinese
military's new General Equipment Department set up in April 1998 to centralize and
improve control over research and development, production, and deployment of
weapons.
Placing restrictions on the foreign VISltor program, however, may have
implications for U.S. policy on arms control and nonproliferation. The Administration
argues that foreign exchanges have not compromised U.S. security and have not
involved weapon secrets. Moreover, contacts with foreign nuclear scientists allow
U.S. nuclear weapon labs to learn about the secretive nuclear weapon establishment
in China - especially as it is undergoing changes. In October 1998, John Browne,
Director of Los Alamos, testified that "access to classified infomlation by foreign
nationals is not allowed" in DOE's foreign visitor program?11 The Administration
says that engagement ofPRC and other scientists fosters support for arms control and
nonproliferation objectives as well as advances U.S. interests in making sure that
foreign nuclear powers have sufficient control over nuclear materials so that they arc
not leaked to rogue states.2!2 The fonner Director of Los Alamos argues that "any
contact with China's nuclear weapons establislunent needed to be clearly focused to
avoid aiding their weapons program. Hence, the Department of Energy authorized
only small, restricted interactions on nuclear materials protection and verification
technologies for anns control treaties. These activities were and still arc clcarly in our
CIA and FBI, "Report to Congress on Chinese Espionage Activities Against the United
Stat,:s," December 1999, released March 8, 2000.
10')
210 Department of Commerce, "Entity List, Entities of Proliferation Concern Listed in
Supplement No.4 to Part 744 ofthe Export Administration Regulations," updated November
19, 1998;" Defense Intelligence Agency, Defense Intelligence Reference Document DI~ 1921
60A~98, "China's International Defense-Industrial Organizations," June [998; Conference
at the Monterey Institute of International Studies, November 1997.
105 lh Congress, Hearing of the House National Security Subcommittee on Military
Procurement, "Department of Ener!,'Y's Foreign Visitor Program," October 6, [998.
211
m Prindle, Nancy, "The U.S.-China Lab-Io-Lab Technical Exchange Program,"
Nonproliferation Rel'iew, Spring-Summer 1998; Wen L. Hsu, "The Impact of Government
Restructuring on Chinese Nuclear Anns Control and Nonproliferation Policymaking,"
NOllproliferation Review, Fall 1999.
�CRS-53
national security interest."m Testifying before the Cox Committee in October 1998,
C. Paul Robinson, director of Sandia, stated that "the Jab-ta-Jab program with China
has been beneficial in several ways. It provides the United States with perhaps its
only window on the Chinese nuclear weapons program ... Moreover, the program
has helped promote the establishment of an anns control program in China,,,214
U.S.-China Relations
The disclosures about suspected PRC espionage at the U.S. labs have further
complicated the Administration's policy of engagement with China. Vice President
Gore said on March 9, 1999, that "having a relationship with [the Chinese] within
which we can try to affect their behavior and improve human rights, eliminate unfair
trade practices, and bring about the kinds of changes that will lead to further
democratization in China, these things are in our interest."215 On March II, 1999,
President Clinton first defended his policy against charges of laxity in dealing with
China and asserted that engagement "has paid dividends" for U.S. interests in weapon
nonproliferation, Korea, and the Asian tinancial crisis. He also argued against an
"isolated no-contact" relationship with Bcijing. 216 In a major speech on China policy
on the eve of PRC Premier Zhu Rongji's.visit, President Clinton again explained that
seeking to resolve differences with China cannot be achieved "by confronting China
or trying to contain her," but through a "policy of principled, purposeful engagement
with China's leaders and China's people."217
Some critics have charged that the W88 case shows that engagement has not
adequately protected U.S. national interests, and a more confrontational policy
some call containment - should be pursued. They have said that the' credibility of
the White House on China policy has been further eroded and that engagement has
brought more harm than benefits to U.S. interests. Senator Helms wrote on July 8,
1999, that the Cox Report presented "damning disclosures on the Clinton
Administration's 'engagement' policy toward Beijing" and urged a "fundamental
rcas:;cssment"ofU.S. policy toward China. m
Still other critics have pointed out that PRC espionage and the Chinese military
has and will continue to challenge U.S. interests and the question is not whether the
213
Hecker, Siegfried S., "Between Science and Security," Washington Post, March 21, 1999.
Statement ofC. Paul Robinson, U.S. House of Representatives Select Committec on U.S.
National Security and Military/Commercial Concerns with the People's Republic of China,
October 14,1998.
214
Harris, John F. and Walter Pincus, "Gore Defends U.S. Stance On China, Security Issues,"
Washingtoll Post, March 10, 1999.
W
President William Jefferson Clinton, 'remarks at the signing ceremony and summit closing
in Guatcmala, March 11, 1999.
216
217 President William Jefferson Clinton, speech sponsored by the U.S. Institute of Peace, April
7,1999.
Helms, Jesse, "'Engagement' With China Doesn't Work. Now What'!" Wall Street
Journal, July 8, 1999.
211
�CRS-54
United States needs to remain engaged with China - as the President has said, but
how that long·slanding policy of engagement is carried out by the Clinton
Administration. According to them, engagement - but with a tougher approach
is still the most appropriate policy at this lime. For example, James Lilley, fonner
ambassador and CIA station chiefin China, argued, PRe spying and American spying
will continue, but exposing PRe espionage "should not derail our relationship with
China,,,Zl9
Concerns over PRe nuclear espionage have spurred even some supporters of
engagement to criticize the Clinton White House's pursuit of what it calls a
"constructive strategic partnership" with China. 220 Henry Kissinger, credited in part
with the opening to China, wrote that "a sustainable Sino-American relationship
requires sometbing beyond presidential invocations of "engagement' that imply that
contact between the two societies will automatically remove all latent tensions, or of
a 'strategic partnersbip' whose content is never defined."221
.
Besides the immediate concerns about lab-to-Iab exchanges, this W88 case also
has ramifications for other aspects of the relationship with China. In March 1999,
Representatives Gilman and Rohrabaeher wrote letters to Defense Secretary William
Cohen questioning exchanges with the People's Liberation Anny (PLA).222 The
Pentagon has pursued military-to-military ties with the PLA as a means to deter PRC
provocations, increase mutual understanding, and expand relations with important
leaders in China. Some observers arc also concerned that a worsened political
atmosphere could affect trade relations, including judgments about whether it is
appropriate for the United States to support China's entry into the World Trade
Organization.
21') Lilley, James R., "Blame Clinton, Not China For The Lapse At Los Alamos," Wall Street
Journal, March 17, 1999.
Notably, the Secretary of Defense's November 1998 East Asia Strategy Report does not
use the tenn.
220
Kissinger, Henry, "Single-Issue Diplomacy Won't Work," Washington Post, April 27,
1999.
221
222 Representative Rohrabacher, letter to Secretary Cohen, March 18, 1999; Bill Gertz,
"General Postpones China Trip," Washington Times, March 22,1999.
�CRS-55
�
Dublin Core
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Clinton Administration History Project
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Cinton Administration History Project
Council of Economic Advisers
Department of Commerce
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Department of Defense
Corporation for National Service
Council on Environmental Quality
Department of Justice
Domestic Policy Council
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Environmental Protection Agency
Federal Emergency Management Agency
General Services Administration
Small Business Administration
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National Economic Council
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Office of National Drug Control Policy
Office of Personnel Management
Office of Science & Technology Policy
Office of the Vice President
United States Trade Representative
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1993-2001
Description
An account of the resource
<p>The Clinton Administration History Project describes in detail the accomplishments of President Clinton's Administration for the period 1993-2001. The records consist of the histories of 32 agencies or departments within the Executive Branch. In general, each organization associated with the Project submitted a narrative history along with supporting documents. These narrative accounts are primarily overviews of the various missions, special projects, and accomplishments of the agencies. The supplementary records include substantive memos, press releases, briefing papers, and publications illustrated with photos and charts.</p>
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Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="http://clinton.presidentiallibraries.us/items/show/36051">Collection Finding Aid</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
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Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Extent
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1474 folders in 111 boxes
Text
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Original Format
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Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Dept. of Commerce - Bureau of Export Administration [2]
Creator
An entity primarily responsible for making the resource
History of the Department of Commerce
Clinton Administration History Project
Date
A point or period of time associated with an event in the lifecycle of the resource
1993-2001
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 4
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/Systematic/Administration-History-finding-aid.pdf">Collection Finding Aid</a>
<a href="http://catalog.archives.gov/id/1225014">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Format
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Adobe Acrobat Document
Publisher
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Clinton Presidential Library & Museum
Medium
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Reproduction-Reference
Date Created
Date of creation of the resource.
6/24/2011
Source
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1225014-commerce-bureau-export-administration-2
1225014