Clinton Legacy Watch # 21: Efforts to Help Chinese Missile Program Reek of Corruption, Betrayal of U.S. Interests

(Washington, D.C.): The front page of Saturday’s New York Times featured an
article that should
alarm every American. It reported that two of America’s leading aerospace companies —
Loral
Space and Communications and Hughes Electronics — are suspected
of having provided
“space expertise that significantly advanced Beijing’s ballistic missile program.”

It will be recalled that the PRC’s ballistic missile program includes missiles capable of
delivering
nuclear weapons against cities in the United States. This is hardly an abstract threat. Not so long
ago, a top Chinese official intimated to the longtime Number 2 man at the U.S. embassy in Beijing
that such an attack against Los Angeles would be in prospect if the United States interfered in
China’s campaign of intimidation against Taiwan.⁽¹⁾

‘Engagement’ Clinton-Style

Although this is not the first time that American firms are alleged to have supplied foreign
governments with militarily relevant equipment and know-how that could wind up being used to
harm the United States, its citizens or interests, it is a particularly egregious example of the
syndrome.

According to the New York Times, the two American concerns were called in to
help the Chinese
determine why their Long March space-launch vehicle blew up in February 1996, destroying a
$200 million satellite built by Loral that it was supposed to place in-orbit. The article states that
“Those exchanges, officials believe, may have gone beyond the sharing of information that the
companies had been permitted, giving the Chinese crucial assistance in improving the
guidance systems of their rockets. The technology needed to put a commercial
satellite in
orbit is similar to that which guides a long-range nuclear missile to its target.“
(Emphasis
added.)

Obstruction of Justice?

In fact, the military significance of this technology transfer was of sufficient gravity that a
criminal
investigation was opened and a grand jury empaneled to consider indictments in the matter.
Before formal charges were filed, however, “the criminal inquiry was dealt a serious blow two
months ago when President Clinton quietly authorized the export to China of similar technology
by one of the companies under investigation” — namely, Loral.

The chilling effect Mr. Clinton’s action would have was clearly understood at the time it was
taken. In the words of the New York Times: “The decision was opposed by Justice
Department
officials, who argued that it would be much more difficult to prosecute the companies if the
Government gave its blessing to the deal.” In fact, as a practical matter, it will probably be
impossible to prosecute the case against Loral and Hughes.

Scandals Upon Scandals

This is a scandal on at least three levels.

Arming Beijing

The Clinton Administration’s indifference to the arming of Communist China is
simply stupefying. Even the most pollyannaish of experts in the field recognize that
there is a
chance that the massive modernization program upon which the People’s Liberation Army (PLA)
has embarked may produce a “peer competitor” to the United States in the next century. More
realistic observers judge the PLA’s doctrine and procurement programs as dispositive evidence of
a determined effort to attain such a status.

The Clinton team has nonetheless approved among other technology transfers to China: the
sale
of machine tools used to manufacture advanced military aircraft; jet engines suitable for use in
fighter aircraft and cruise missiles; sophisticated telecommunications equipment; and 46
supercomputers that have wound up in the Chinese military-industrial complex, including its
nuclear weapons program. These transactions were of sufficient concern to the chairman of the
House Judiciary Committee, Rep. Henry Hyde (R-IL), and Rep. Tillie
Fowler (R-FL), a senior
member of the House National Security Committee, that they wrote Attorney General
Janet
Reno last May asking for an investigation into the decisions that authorized them.
Specifically, they raised the question as to whether these sales, made over the objections of
national security officials, could have been influenced by illicit Chinese efforts to divert funds to
the Clinton-Gore reelection campaign.

Now, the Administration has endorsed the sale of equipment and know-how that will assist
Beijing in delivering its nuclear arms to American targets. This is all the more appalling
given
Clinton-Gore’s determination to deny the American people near-term, effective defenses
against ballistic missile attack.

Lost on Space

Even if the Chinese space-launch program were not an inherently dual-use affair (that is,
a
program that has both military and civilian dimensions, with technology flows between the two
unavoidable), the Administration’s policy of abetting China’s space activities would still be
contrary to long-term U.S. interests.

The nature of the Chinese agenda was summarized well in a Reuters report circulated on 23
March 1998: “China’s efforts to woo satellite customers with cut-rate prices have been hampered
by technology that falls short of pricier but more advanced launchers in the United States and
Europe.” To be sure, correcting that shortfall is of interest to some U.S. companies
(notably,
Loral and Hughes) that are anxious to find inexpensive launch services for their satellites. From
their parochial point of view, such companies stand to benefit if Mr. Clinton eases restraints on
American use of massively subsidized space-launch operations in China and Russia, even though
the larger national interest should oppose such efforts to buy-into and ultimately to dominate the
commercial launch market. In fact, last month it was announced that Loral has bought five
Chinese Long March 3B rockets to launch its satellites between now and the year 2002.

In helping its friends in Beijing and the Kremlin to undercut an already-struggling U.S. space
launch industry, however, the Clinton Administration is further jeopardizing the United
States’
ability to assure its access to space. This is a critical national security, as well as
commercial,
capability.

Regrettably, Mr. Clinton does little more than pay lip service to the need for this and other
means
necessary for the United States to exercise the dominance of outer space necessitated by both
military and private sector requirements. Instead, he compounds the damage done by his line-item
vetoes last fall of critical U.S. space control technologies⁽²⁾
with initiatives that reward Russia and
China with dual-use missile technology for merely reaffirming their commitment to
non-proliferation — even as they continue to engage in it.

In the latter connection, it is worth noting that Pakistan — one of the
principal beneficiaries of
China’s “anything goes” attitude towards proliferation — announced today that it successfully
tested a missile with a range of 900 miles. One can only speculate at this juncture, but it
seems a
safe bet that at least some of the missile technology supplied by Loral and others that
is
now being used to assure the reliability of Chinese Long March rockets (Beijing had a
perfect launch record last year) is winding up in the weapons fielded by enemies of Israel
and
other American friends.

Corruption, Or Worse?

Finally, it must be asked: Could the fact that Loral’s CEO, Bernard Schwartz,
was the
largest personal contributor to the Democratic National Committee last year have anything
to do with the President’s decision effectively to vitiate legal proceedings against his
company? Or was this simply yet another instance in which a federal case involving
Chinese
interests was sabotaged by members of the Clinton team? (On a previous occasion, someone —
probably at the State Department — blew a sting operation as it was about to net a PRC
“princeling” implicated in running thousands of AK-47s to U.S. agents posing as purchasers for
drug lords and street gangs.)⁽³⁾

The Bottom Line

Any way you slice it, the Clinton Administration’s handling of the China account is a scandal.
The giga-billion dollar question is: Will the Administration be held accountable for the
damage it is thus doing to the Nation’s security, to long-term U.S. commercial interests
and, perhaps ultimately, even to the physical safety of individual Americans?

– 30 –

1. See the Center’s Decision Brief entitled
China Threatens Taiwan — And the United States:
Will ‘A Missile A Day’ Keep the U.S. Away? (No.
96-D 09, 26 January 1996).

2. See the Center’s Decision Brief entitled
Clinton Legacy Watch #8: Denying U.S. Military
the Ability to Dominate the Next, Critical Theater of Operations — Space ( href=”index.jsp?section=papers&code=97-D_153″>No. 97-D 153, 15
October 1997) and the Summary of its High-Level Roundtable Discussion entitled
The Need for
American Space Dominance (No. 98-P
16(Attachment), 23 January 1998).

3. See the Center for Security Policy’s Casey Institute
Perspective entitled Non-Renewal of
M.F.N. for China: A Proportionate Response to Beijing’s Emerging, Trade-Subsidized
Strategic Threat (No. 97-C 76, 9 June
1997).