Fire Sale On National Security: Commerce’s Latest Technology Decontrol Fiasco

The Decision to Decontrol Wire-Bonders

Today, the Commerce Department is informing the member nations of the Coordinating Committee on Multilateral Export Controls (COCOM) that the United States will decontrol the sale of wire-bonding technology to "proscribed destinations," i.e. the Warsaw Pact. Wire-bonders are devices essential to the efficient manufacture of high quality computer chips and other microelectronic devices. Such devices have been rigorously controlled by COCOM until now because of the obvious utility they would have to Soviet military applications.

Contending that wire-bonding machines were available to the Soviet Union from non COCOM-controlled foreign sources, Commerce Secretary Robert Mosbacher decided — despite vigorous objections from the Defense Department and a contrary finding from the U.S. intelligence community — to utilize his authority under the Export Administration Act to decontrol this technology. The result will enable the USSR for the first time legally to establish state-of-the-art production lines for microelectronic components; the principal — if not exclusive — beneficiary of this action will be the Soviet military.

The Emerging Pattern of Dangerous Decisions

Over the past six months, the Center has documented a series of actions by the Bush Administration that share a common characteristic: The fact that serious national security risks will arise from the decontrol of certain advanced technologies is not deemed by the Commerce Department to be sufficient reason to justify retaining the relevant controls.

• In July 1989, Commerce acted to remove controls on a vast array of sophisticated "personal" computers notwithstanding the reality that many of those that could be obtained by the Soviet Union as a result are more advanced than even the U.S. Defense Department envisions using in its next procurement of such computers.

 

• Throughout much of the fall of 1989, Commerce — with the support of the State Department — has strongly supported West German efforts to relax current COCOM constraints on extremely precise machine tools. The Germans and other allies wish to sell the Soviet Union and other Warsaw Pact nations machine tools with the capability of producing, for example, advanced aviation components with an accuracy of plus-or-minus five microns (two ten-thousandths of an inch) or better. This level exceeds that utilized by 95 percent of the American defense industrial base and is vastly in excess of what is currently available to the Soviet Union.

 

• In December 1989, Secretary Mosbacher made public statements indicating considerable support for a proposal along the lines of one being advanced by a consortium led by US West to install a fiber optic communications network in the Soviet Union. Such a system would revolutionize the USSR’s military command, control and communications (C3) system. It would, for example, decisively enhance the security, effectiveness and robustness of the Soviet C3 network.

While Secretary Mosbacher has subsequently sought to make a distinction between a state-of-the-art fiber optic capability (which he says he would oppose selling the Soviet Union on national security grounds) and an older version (which he evidently believes would not cause similar problems), in fact this is a distinction without a difference. Even a fiber optic communications system that is relatively obsolete by Western standards will have an extremely deleterious effect on U.S. security. What is more, it is only prudent to expect that, in the present environment, more rather than less sophisticated fiber optic and switching technology will be actually be utilized in any deal that goes forward.

It is also noteworthy in this vein that the Commerce and State Departments have been championing a plan to grant blanket exemptions to existing multilateral controls for certain countries of Eastern Europe. The theory is that assurances will be given by those to whom such exemptions are granted sufficient to ensure that militarily relevant (dual-use) technology provided to Eastern Europe does not hemorrhage through to the USSR. In fact, however, as long as these nations remain members of the Warsaw Pact and retain the various military, intelligence and technology sharing arrangements with Moscow it is ludicrous to place much stock in such assurances and associated safeguards (e.g., periodic visits to sites where advanced Western technology is located).

The Foreign Availability Scam

While the foregoing litany illustrates the mindset of many in the Bush Administration on the irrelevance of a rigorous technology security policy in the so-called post-Cold War world, the specific device being used to force reckless decontrol actions through the U.S. government warrants special mention.

Under the Export Administration Act, goods and technology must be decontrolled if an item is found to be available to a controlled country (e.g., the USSR) "in sufficient quantity and of comparable quality sufficient to meet the military needs of proscribed destinations" such that export controls are essentially ineffective in safeguarding militarily critical technologies.(1)

In other words, if the Commerce Department can demonstrate that the item in question is either produced indigenously in the controlled country, or available from a third country which does not maintain stringent export controls, the law stipulates that U.S. manufacturers of such items should not be disadvantaged by having to operate under an unfair control regime. In practice, however — as first the computer decontrol and most recently the wire bonder decisions have amply illustrated — the Commerce Department apparently believes it is not obliged to be either truthful or rigorous in assessments it makes about foreign availability, or to refute documented evidence from the national security community which contradicts its assessments.

In both of these episodes, the data presented by Commerce to support its findings of foreign availability were flimsy and suspect. In both instances — and especially the latter one — strong rebuttals were offered to the Commerce Department’s analyses by the Department of Defense and the U.S. intelligence community. Overwhelming evidence substantiates the position that the Soviet Union does not now possess an indigenous capability to produce wire bonders or to obtain them from foreign sources in sufficient quantity or quality to render U.S. export controls irrelevant.

Because the Secretary of Commerce is not required to seek the concurrence of any other Cabinet officer in making the final determination about foreign availability, however, and because there is no statutory mechanism established for resolving disputes over associated findings, Secretary Mosbacher has the authority to make decontrol decisions — no matter how ill-advised and irrespective of the serious deficiencies in the supporting analyses.

This latitude for reckless decision-making is the more worrisome for the fact that a vast array of other technology decontrol proposals are now the subject of foreign availability assessments. A partial list includes the following, highly sensitive dual-use technologies:

• polysilicon — materials used in advanced chips for a wide variety of electronic systems;

 

• anti-friction bearings — precision bearings used in numerous weapon systems (e.g., sophisticated inertial guidance systems for ballistic missiles);

 

• gallium-arsenide chip technology — chips whose inherent resistance to the non-blast effects of nuclear weapons make them very attractive for use in a wide variety of military systems;

 

• 32-bit personal computers — high speed computers with direct applicability to design and manufacturing techniques necessary for modern weapons.

Dennis Kloske’s Broken Promises

Some hopes were raised that a more orderly and rigorous process could be utilized for decisions affecting these and other foreign availability assessments when Dennis Kloske in August 1989 pledged to Senator Malcolm Wallop (R-WY) to ensure that Defense Department and intelligence community judgments were given appropriate weight. In the aftermath of the computer decontrol fiasco, Mr. Kloske (who was then awaiting Senate confirmation for his present position as Under Secretary of Commerce for Export Administration) promised to develop an interagency mechanism for eliciting and incorporating the views of technical and intelligence experts throughout the U.S. government with a view to avoiding the sort of problems that arose in the earlier case.

Unfortunately, the wire bonder episode reveals that these pledges amounted to little more than empty lip-service paid to appease momentarily the legitimate concerns of an important United States Senator in order to facilitate confirmation. In the event, information that Secretary Kloske should have ensured was rigorously factored into the Commerce Department decision was suppressed or ignored. Even though the absence of any foreign availability for wire bonding equipment outside of COCOM(2)

had been authoritatively established, for want of the sort of mechanism Mr. Kloske promised the Senate, it was evidently possible for yet another decision to decontrol sensitive dual-use technology to be taken, unencumbered by the facts.

More worrisome still, there continues to be no mechanism for appealing such decisions to the National Security Council before they are made. Indeed, the NSC has shown irresponsible disinterest in the whole matter of technology security, enormously compounding the risks of capricious decontrol actions — and increasing the likelihood that they will occur.

Time out on Tech Transfer

As Ambassador Alan Wendt, the State Department’s senior official for technology transfer matters, prepares to depart for a series of consultations next week with key COCOM partners, the pressure is on to show an American willingness to be "flexible" on further decontrol proposals. If past practice is any guide, what passes for a decision-making process in the executive branch on such issues will authorize the enunciation by Ambassador Wendt of a general commitment to such flexibility.

It is all the more ironic — and portentous — that this commitment is going to be made against the backdrop of an increasingly aggressive effort on the part of the Soviets and their proxies to acquire Western dual-use technology, legally or illegally. Moreover, as the future course of the Soviet Union becomes more and more uncertain, the advisability of providing militarily relevant technology to the USSR and its Warsaw Pact allies becomes ever more dubious.

In light of this backdrop, however, it is imperative that urgent action be taken to prevent further damage to U.S. security from a seriously flawed technology decontrol process. Fortunately, numerous congressional hearings are scheduled in coming weeks on the reauthorization of the Export Administration Act. The Congress should insist that, until the opportunity afforded by such hearings for a systematic review of that process and the direction of decision-making it is producing, a moratorium should be imposed on further decontrol actions.

At a minimum, Commerce should defer further decontrol action pending the outcome of a report required by law last year on the foreign availability process due to be submitted to the Congress on 15 April.

For his part, President Bush should embrace such a request. He should also become personally engaged in a review of the technology decontrol process. Among other means of doing so, he should direct that contested technology transfer issues get formally considered by an interagency committee chaired by his Deputy National Security Advisor. Should the President refrain from taking such steps, the consequences are likely to be severe and adverse.

At the very least, the course currently being pursued by the Commerce and State Departments will utterly undo President Bush’s efforts to argue against the pernicious notion that a "peace dividend" can be realized at once. Much of the impetus for such a notion arises from the sense conveyed by the Administration’s technology transfer policies, namely that this country’s principal adversary has been suddenly transformed into an utterly benign and cooperative nation.

1. P.L. 96-72, as amended by P.L. 100-418, the Omnibus Trade Act of 1988, Section 5(f).

2. The Commerce Department wrongly contended that, in addition to COCOM nations, a Swiss company could supply wire bonders when, in fact, no such capability currently exists.