SATELLITE EXPORTS TO THE PEOPLE'S REPUBLIC OF CHINA (Senate - July 14, 1998)

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Mr. LOTT. Mr. President, I am going to provide an update on the investigations that have been proceeding by four of our committees into this U.S. policy toward satellite exports. We have not reached any final determinations. I want to emphasize that. The good counsel is that we have made some progress. We are learning some things, but there is a good deal more work that needs to be done. I believe the Intelligence Committee has an open hearing scheduled tomorrow. Senator Cochran's subcommittee has hearings scheduled I believe next week. So we will continue this. We are going to be thorough and we are going to be cautious. We should not jump to conclusions.

In this connection, I recently came across the following statement from 1989 concerning the Bush administration's decision to allow export licenses for three United States satellites: `Allowing these launches is not in the best interests of our country or of our relationship with China. It casts a long shadow that distorts beyond recognition what the United States ought to represent to our own people and to the people fighting for democracy in China.' This statement was made by then-Senator Al Gore. He obviously has changed his position.

What we have to examine is whether the policy of allowing the export of U.S. satellites as implemented by the Clinton-Gore administration adequately protects American national interests.

Let me start with the bottom line. Senate investigations have only begun. Lack of cooperation from the Administration has hampered our efforts. Thirteen hearings with 32 witnesses have been held by four committees. I have met with the committee chairmen and other members of our informal task force on China. At this point, five major interim judgments can be made based on what we already know.

First, the Clinton administration's export controls for satellites are wholly inadequate. They have not protected sensitive U.S. technology. National security concerns are regularly downplayed and even ignored.

Second, in violation of stated United States policy, sensitive technology related to satellite exports has been transferred to China. We know what the case is.

Third, China has received military benefit from United States satellite exports.

Every day, there continues to be additional information that comes out in this area.

In fact, in today's Washington Times, there is a news article that says `U.S. Technology Builds `Bridge' for China Missile.'

Fourth, the administration has ignored overwhelming information regarding Chinese proliferation, and has embarked on a de facto policy designed to protect China and U.S. satellite companies from sanctions under U.S. proliferation law. We have a statement from White House official to that effect.

Finally, new information has come to light about China's efforts to influence the American political process. This new information should remove all resistance to naming an independent counsel to investigate the evidence and the allegations.

The administration has failed to fully cooperate with the Senate investigation, even though they have indicated that they would, and there is still time for that. But on May 22, 1998, along committee chairmen of jurisdiction, I sent letters requesting administration documents from the White House, the Departments of State, Commerce, Defense, and the Arms Control and Disarmament Agency. On June 1, 1998, a letter was sent to the Department of Justice requesting documents. On June 2, 1998, a letter was sent requesting documents from the Customs Service. On June 12, 1998, Senators Shelby and Kerrey sent letters requesting information from eight Governmental agencies and the White House as part of the Select Committee on Intelligence investigation.

The letters I joined in sending requested documents in three areas: First, all issues associated with the export of satellites to China, including waivers of U.S. law governing such exports and the decision to transfer control of satellite exports from the Department of State to the Department of Commerce; second, issues associated with China's proposed membership in the Missile Technology Control Regime, MTCR; and third, information on Chinese proliferation activities which indicate possible violations of U.S. laws.

A significant amount of documents have been provided concerning some areas of satellite exports--particularly from the White House and particularly on the presidential waivers allowing satellite exports. But virtually no information has been provided concerning the transfer of export controls from State to Commerce--from the White House or any other agency. And virtually no information has been provided on Chinese membership in the MTCR, or on Chinese proliferation activities in violation of U.S. law.

A review of executive branch compliance with our document requests demonstrates how limited the cooperation really has been.

Until Friday of last week, the Department of Commerce only provided an initial limited set of documents. More has been promised, but the response has again glacial and incomplete. The documents they have provided contain redactions that limit their utility, quite frankly.

The Department of Justice has provided nothing to the Committee on Governmental Affairs, and has insisted on reviewing virtually all documents provided by any other Government agencies--significantly slowing down the process in this area.

The Department of State has provided also virtually nothing. Classified documents, according to a July 2, 1998, letter, would not be provided to the Congress. Instead, documents could be read only at the Department of State. Given that far more sensitive information is routinely provided for the use of the Senate in Senate spaces, this can only be seen as bureaucratic obstruction.

The White House has not responded to the Intelligence Committee. Neither has ACDA, Customs, or State. Defense and Commerce have only provided limited information.

The White House initially declassified some documents concerning waiver decisions in June, but has provided nothing since then.

The Department of Defense has provided only a very limited number of documents.

The Customs Service has provided nothing other than a June 23, 1998, letter stating that they would not meet our June 15, 1998, deadline, but we haven't gotten that information as of yet.

After a review of the Clinton administration's compliance with our requests for information, it is hard to escape the conclusion that delay has become the standard operating procedure. Once again, it is going to make it difficult for us to get the information we need so we can make a clear determination about the damage that has been done with this technology transfer. After an initial show of good faith by the administration, we have not had a lot more cooperation since then.

We will be forced to consider other measures to compel enforcement. I don't plan to move nominees of these non-cooperative agencies until our legitimate oversight requests are honored. We are actively examining the possibility of subpoena options. It is becoming increasingly difficult to continue with the very productive hearings that we have had

without this cooperation.

Now, I would like to address the five points I raised earlier in some greater detail. Again, these are preliminary conclusions and we are seeking additional information.

First, the Clinton administration's export controls for satellites are simply inadequate. There has not been adequate protection of sensitive U.S. technology. National security concerns are regularly downplayed and even ignored. Hearings before several committees have detailed the shortcomings in the development and implementation of export controls of satellites.

For example, a senior official of the Defense Trade and Security Administration testified before the Committee on Governmental Affairs on June 25, 1998, that `over the past six years, the formal process to control dual-use items has failed in its stated mission--to safeguard the national security of the United States.'

Transferring the control of satellite exports from the State Department to the Commerce Department in 1996 really resulted in dramatic changes. According to the General Accounting Office testimony before the Senate Select Committee on Intelligence on June 10, 1998, the transfer reduced the influence of the Defense Department. It eliminated Congressional notification. It exempted satellite exports from certain sanctions. Technical information is not as clearly controlled, leading to uncertainty on the part of aerospace companies and to more technology transfer than previously allowed.

Testimony on July 8, 1998, before the Governmental Affairs Subcommittee on International Security, has established that the Department of Defense monitors are not required to be present at satellite launches. This is directly contrary to previous administration claims. No statute, policy, or regulation requires U.S. Government monitors.

At least three U.S. satellites have been launched in China with no U.S. monitors present. No one in the U.S. Government knows what transpired at these launches or if U.S. laws and policies on technology transfer were followed. No one in our Government is even attempting to examine what occurred at these unmonitored satellite launches. Looking at these unmonitored launches, I think, would be a critical element of the next phase of our investigation.

Today's satellite export control system relies on the good will of the Commerce Department, a department which has repeatedly demonstrated its willingness to ignore national security concerns on satellite exports. This is an area where we need to take a close look at how we are going to proceed in the future and what is going to be expected of the Commerce Department.

For example, Commerce has unilaterally removed items subject to interagency license review without notice to other affected agencies. Commerce has also refused to send approved licenses to Defense so officials there can evaluate the final product. When it involves satellites and technology, clearly the Defense Department should be a part of this process.

Second, sensitive technology related to satellite exports has been transferred to China. In at least two cases, U.S. companies analyzed Chinese launch failures and communicated with Chinese officials. In 1995, Hughes analyzed the `APSTAR 2' launch failure. Commerce now concedes that this analysis should have been subject to State and Defense Department reviews before a Commerce official gave it to the Chinese. Commerce only provided the report, concluded in 1995, 2 hours before a Governmental Affairs Subcommittee on International Proliferation hearing on July 8 of this year.

The 1996 Loral launch failure is the subject of a Justice Department review for possible illegal transfer of technology. Compliance with the law is the province of the Justice Department. So we are looking into the impact on American national securities. It is very important that the Justice Department complete that work.

I agree with three assessments by three elements of the State and Defense Departments that China derived significant benefits from their technical exchanges with U.S. companies after the Long March crash in 1996, exchanges which are likely to lead to improvements in the reliability of their ballistic missile, and especially their guidance systems. So we have to be concerned very much about this transfer.

Third, China has received military benefit from U.S. satellite exports. There is a division within the executive branch agencies over how much China has benefited. But there seems to be agreement that certainly some benefit was derived.

The New York Times has reported that U.S. satellites are being used by the Chinese military for its internal coded communications. Administration officials concede that China is using American-made and exported satellites for their military communications. This is a clear and uncontested military benefit for China. The New York Times also reports that an additional satellite export that could enhance the Chinese military's ability to eavesdrop on phone conversations is under review by the Clinton administration.

The administration has ignored overwhelming information

regarding Chinese proliferation and has embarked on what appears to be a de facto policy to protect China and U.S. satellite companies from sanctions under our U.S. proliferation law. For instance, on June 11, 1998, the Committee on Foreign Relations heard testimony from the former director of the Nonproliferation Center of the Central Intelligence Agency. The Clinton administration has used `almost any measure' to block intelligence judgments that China had transferred missiles to Pakistan--a clear violation of U.S. law that requires the imposition of sanctions. Intelligence analyses `were summarily dismissed by the policy community.'

According to the testimony, the intelligence community is `virtually certain that this transfer had taken place . . .' I am convinced, after a personal investigation, that it did take place, and it was a very dangerous for Pakistan to be receiving these missiles. Why has that been the case, and why hasn't the administration been willing to take actions providing sanctions where clearly that information has been provided?

Finally, new information has come to light about China's efforts to influence the American political process. This new information should remove any doubt about the need for an independent counsel in this area.

It has already been reported that FBI Director Freeh has indicated his view that an independent counsel should be appointed. It is time to renew attention on the Attorney General. It is time for an outside, impartial investigation by an independent counsel into the serious and credible charges of direct Chinese Government financing or involvement in the 1996 elections. We have very good committees that are working together in a bipartisan way and looking into these very important questions. I urge them to continue to do so, and to do it in a calm and methodical way. It is essential that we get cooperation from the administration to provide the additional information that we requested, the additional evidence. And we will carry out our constitutional responsibilities. Nothing less should be expected of us.

In view of the inquiries we had about how these are proceeding, what information we have been getting, what is outstanding, and also what is our plan, as far as future hearings, I thought it was important that I give some review of what has transpired.

Mr. President, I yield the floor.

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Mr. DASCHLE addressed the Chair.

The PRESIDING OFFICER. The Democratic leader is recognized.

Mr. DASCHLE. Mr. President, in light of the statements that have just been made and the time consumed by the majority leader, I ask unanimous consent that each side have 10 minutes to debate the pending amendment.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. DASCHLE. Mr. President, I will have the opportunity to discuss, in greater detail, the remarks just made by the distinguished majority leader. Let me just say that our interest, too, is to have a bipartisan review of the actions taken with regard to the technology transfer in China. But I do hope that it will be bipartisan. The majority leader gave what I would view to be a pretty partisan report this morning with regard to the allegations pending on this particular matter, and I will have a very thorough response to the majority leader at some point today. I do believe that the issue warrants our review. As he said, this is a constitutional responsibility, but it also warrants objectivity and very thoughtful and careful consideration of the facts. Many of the reports the distinguished majority leader cited were allegations that have yet to be proven, allegations

reported--he mentioned the New York Times on a number of occasions--allegations reported, citing unidentified sources, and what I would consider to be very questionable sources with regard to the information reported in some cases. So we are going to have to be very careful about the distinction between allegation and fact, the distinction between what has actually occurred and what is reported or what is alleged to have occurred. So I hope that we can do that, as he noted, in a bipartisan way, thoroughly and very carefully examining the facts and coming to some conclusion prior to the time we issue any reports.

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