DOWNSIDE LEGACY AT TWO DEGREES OF PRESIDENT CLINTON
SECTION: RED FLAGS OF TREASON
SUBSECTION: COMMUNICATIONS TECHNOLOGY
World Net Daily 3/9/99 Charles Smith "…Of course, Galaxy New Technology head Madam Nie Lie was also the wife of Chinese army General Ding Henggao. Madam Nie is the daughter of Marshal Nie, a close associate of Mao. Madam Nie also has the rank of General in the Chinese army. In 1994, Madam Nie's husband, General Ding Henggao was director of COSTIND, the Chinese Commission on Science Technology and Industry for National Defense. General Ding Henggao was also the boss of Lt. General Huai Guomo, the PLA contact for Hua Di. COSTIND, according to the GAO "oversees development of China's weapon systems and is responsible for identifying and acquiring telecommunications technology applicable for military use." In 1994, SCM/Brooks contracted AT&T to ship advanced, secure communication systems directly to the Chinese army. AT&T officials who sold most of the equipment and software to SCM/Brooks were adamant that there was no need to check the Chinese firm, Galaxy New Technology, since it was led by Ms. Nie Lie, a civilian…. With the help of Perry, Hambrecht, Hua and Madam Nie, the Galaxy New Technology fiber-optic communication system was sold directly to the General Logistics Division of the People's Liberation Army. It is currently providing communications for the PLA and hard cash to the Chinese generals. The Hua Mei system has since been modified by the PLA for re-export, providing command and control for Iraqi air defense. The Chinese re-exported version of Hua Mei is code-named "Tiger Song" by NATO. It is an internet for surface-to-air (SAM) missiles built with U.S. and French parts by the PLA under contract to Saddam Hussein…."
Softwar 3/10/99 Charles Smith "…General Ding Henggao has retired. The COSTIND commander made famous by his successful penetration of the Clinton White House has decided to hang up his spurs. He and the wife, General Nie Li, made a tidy profit working the "Hua Mei" espionage campaign against William Perry and the Clinton administration. No word on which General, Ding or Nie, will command the finances in their joint retirement….Four of the current COSTIND Deputy Directors served with General Ding, and two worked successful espionage operations against the Clinton administration. The four sub-Directors of COSTIND are Lt. General Shen Rougjun, Lt. General Xie Guang, Lt. General Huai Guomo and Lt. General Shen Chunnian… COSTIND Lt. General Shen met with Ron Brown and CEO of Loral Bernard Schwartz in 1994. General Shen's son, Shen Jun, was also the lead engineer for satellite software at Hughes. COSTIND Lt. General Huai Guomo worked with William Perry and "defector" Hua Di to export the advanced "Hua Mei" AT&T fiber optic communication system to China. AT&T sold the fiber optic system directly to the Chinese Army General Logistics Division (GLD) better known as the PLA Quartermaster Corps…"
Softwar.com 4/27/99 Softwar.com (Charles Smith) "...In 1994, Chinese General Ding Henggao announced a new project to modernize the People's Liberation Army. In 1994 General Ding Henggao was the head of COSTIND (Chinese Commission of Science Technology and Industry for National Defense). General Ding introduced the world to the red Army "16 Characters Slogan" or "military production first" project. The General's new project showcased a joint U.S./Chinese commission, co-chaired by Ding and U.S. Defense Secretary Dr. William Perry. According to an article published in Aviation Week and Space Technology, a Pentagon spokesman stated the Commission was "not going to be selling arms to China" (AW&ST page 62, March 21, 1994). ...According to documents forced from the Clinton administration in Federal Court, Perry had just returned from an October 1994 trip to Beijing. In October, 1994, Perry promised PLA General Ding a "Cray supercomputer to be used by the Chinese nuclear weapons establishment to help design newer and safer nukes." In addition, according to the Commerce Dept. documents, PLA Generals openly discussed with the Clinton officials a wide array of military technology including the main functions of the Army unit COSTIND, "1) Aerospace, 2) Aviation, 3) Electronics, 4) Ground Force Military Equipment, 5) Shipbuilding,[and] 6) Nuclear". .."
Softwar.com 4/27/99 Softwar.com (Charles Smith) "...PLA General Ding Henggao led a delegation of Chinese Army officers to Washington, D.C. in November, 1994. The mission to Washington included a closed meeting at the U.S. Commerce Dept. with Defense Secretary William Perry. Ding, of course, was not alone on his visit to Washington, D.C. The meeting at Commerce included some of the highest ranking PLA officers to travel outside of China. General Ding brought his trusted aide, and second in Command at COSTIND, Lt. General Huai Guomo. In addition, Ding brought Maj. General Fu Jiaping, and Maj. General Chen Kaizeng. Ding even brought one of the top spies in the Chinese Army, Major General Hou Gang, Deputy Director of the Intelligence Department of the PLA General Staff Headquarters. Nor was Perry alone on the American side at the D.C. Commerce Dept. meeting. The official U.S. government delegation included several familiar Pentagon faces such as Ken Bacon, Assistant to the Secretary of Defense for Public Affairs, and Major General David Mcilvoy from the office of the Joint-Chiefs of Staff. The meeting also included Commerce Deputy Undersecretary Barry Carter, Dr. Eden Wong from the office of the Secretary of Defense, and the Assistant for White House Affairs, Margaret Sullivan. In addition, Perry was also assisted by his trusted friend, Dr. John Lewis. Perry appointed Lewis to the Defense Policy Board. Lewis, however, is listed at the 1994 PLA meeting as "Stanford University, Civilian Consultant to SECDEF." According to the Commerce documents, Dr. Lewis was a paid consultant for the Dept. of Defense and a "consultant" to Dr. William Perry. Ironically, PLA General Ding, PLA General Huai, Secretary Perry and Dr. Lewis also shared a joint business deal. In fact, their "joint" business sold advanced, secure, communications equipment to the Chinese Army.
Softwar.com 4/27/99 Softwar.com (Charles Smith) "...In 1994, Dr. Lewis, Dr. Perry and General Ding helped form a U.S./China joint venture called Galaxy New Technology that included the U.S. company SCM/Brooks Telecommunications. This venture led to the direct export of advanced, secure, fiber-optic communications systems to a Chinese Army unit. A 1996 report from the Department of Defense shows that Dr. Lewis was being paid three times for the same meeting in 1994. First, Lewis was paid by the Chinese Army as a member of the Galaxy New Technology project. Second, Lewis was paid by the Pentagon for serving on the U.S. Defense Policy Board. Finally, Lewis was paid by Secretary Perry as his personal defense contractor.....According to these documents, in 1994, Defense Secretary Perry personally pushed for the Galaxy New Technology deal and personally lobbyied against NSA objections. Perry hired one of the two key "matchmakers" of the Galaxy New Technology deal, Professor John Lewis from Stanford as his personal contractor. Perry brought Lewis to the meeting with General Ding and Lt. General Huai.
Softwar.com 4/27/99 Softwar.com (Charles Smith) "...The Galaxy New Technology deal went public in 1996, drawing a firestorm of press and a GAO report. According to the GAO, "Defense Department officials told us that broadband telecommunications equipment could be used to improve the Chinese military's command and control communications networks." In 1997, Congressman Hyde wrote Attorney General Reno a letter outlining his concerns about Galaxy New Technology. According to Congressman Hyde's letter to Reno, "In 1994, sophisticated telecommunications technology was transferred to a U.S.-Chinese joint venture called HUA MEI, in which the Chinese partner is an entity controlled by the Chinese military. This particular transfer included fiber-optic communications equipment which is used for high-speed, secure communications over long distances. Also included in the package was advanced encryption software." Despite the GAO, Congress and the public press reports, the honorable General Janet Reno did nothing...."
The Chinese connection to the Galaxy New Technology venture was a defector also working at Stanford. "Defector" Hua Di was born into a family of prominent Communist officials. Hua studied missile engineering in Russia and worked inside China's missile program for 24 years. In 1989, Hua fled China after the Tiananmen Square crackdown on student democracy demonstrators. In America, Hua went to work as a researcher at Stanford's Center for International Security and Arms Control. The Center's co-directors were William Perry and John Lewis. In 1992, Chinese Commission of Science, Technology, and Industry for National Defense (COSTIND) Lt. General Huai Guomo contacted Hua Di to start a joint venture called Galaxy New Technology. The very same Lt. General Huai who attended the November 1994 meeting with PLA General Ding, Defense Secretary Perry and Dr. Lewis. "Lewis and I were matchmakers," recalled Hua about Galaxy New Technology in 1996. "(General) Huai is my good friend." .....In late October 1998, it was announced that Hua Di had returned to China. Hua Di met with Chinese security officials in late 1997 and was assured that he would not be prosecuted. On December 31, 1997 Hua returned to China. On Jan. 6, 1998, Hua was arrested and charged with passing state secrets to U.S. officials. Stanford officials and Hua's business partner, John Lewis, have written to the Chinese government appealing for Hua's release. The Clinton administration, Dr. Perry and the mainstream press remain strangely silent about imprisoned defector Hua Di. Hua Di passed false missile information to the west, obtained secure communications for the Chinese Army and penetrated into the Clinton White House through the U.S. Secretary of Defense. Hua Di served his party, and comrade General Ding. In the end, Hua arranged for his two employers, General Ding and William Perry, to profit in a deal to harden and secure Chinese military communications. Hua Di returned home to a hero's welcome and a fat bank account made on profits from the Galaxy New Technology deal. Hua Di was no fool - nor was he a dissident. Hua Di was a spy. One of many in a network of spies run by Chinese mastermind General Ding. In a single stroke, Dr. Perry and the Clinton administration sold Ding far more than his spies could ever steal in a decade of espionage. In the process, the Marxist General Ding and his American partners, Perry and Lewis included, also made a tidy profit...."
WorldNetDaily 5/11/99 Charles R Smith "...In 1995, Chinese Army Lt. Gen. Huai Guomo and several other key generals of the PLA, were taken on a tour of the U.S. Energy Department. The tour, part of a joint U.S-Chinese defense conversion project, included an invitation to the Chinese generals to form "joint" U.S.-Sino nuclear projects. Details of the 1995 Chinese army meeting at the Energy Department were written in a report by the U.S. Commerce Department... "She noted that the DOE Secretary visited China last month and that cooperation with China is a high priority," states the Commerce report. "(Tierney) noted that DOE and the China State Planning Commission have similar goals in the following areas: 1) Science and technology development (especially in energy); 2) Funding of research (such as fusion and fission)." The Chinese general who attended the meetings, Lt. Gen. Huai Guomo, was then vice minister of COSTIND -- the Chinese Commission on Science, Technology and Industry for National Defense. In 1995, Huai was under the command of COSTIND minister, PLA Gen. Ding Henggao. In 1994 Ding and Huai helped establish the Galaxy New Technology joint venture called "HUA MEI," a deal which allowed the Chinese army to purchase an AT-encrypted, secure, fiber-optic network...."
WorldNetDaily 5/11/99 Charles R Smith "...According to the March 1995 report, Huai explained that his unit, COSTIND, had "six specialty areas: 1) Aerospace; 2) Aviation; 3) Electronics; 4) Ground Force Military Equipment; 5) Shipbuilding; 6) Nuclear." "The business leaders asked for POC's (point of contact) for the 49 projects and Huai suggested they contact Col. Xu at the Embassy," states the Commerce Department report. "Barry Carter (Commerce) mentioned the package he was preparing which will include POC info. Ding offered his assistance in COSTIND if any company had difficulty communicating with industries in China. He said there are investment dollars put aside for the 9th five year plan, and they do not have to be limited to the 49 projects. ... The Chinese said that anyone wanting to make deals should move forward rapidly so that it will be covered in the next five year plan which is just being drawn up."...."At the end of the meeting at Energy," concludes the Commerce document, "the Chinese indicated that they would like to develop cooperation in the nuclear field. They expect to have problems in handling nuclear waste and would like to develop future cooperation in handling such waste. U.S. has no cooperation right now in the nuclear area, but China hopes to have some in the future."
WorldNetDaily 5/11/99 Charles R Smith "...Huai had good reason to hope for future U.S.-Sino nuclear cooperation. Gen. Ding, his commander, gave the Commerce Department an official 1995 list of PLA-owned companies wanting business. The list included contacts and projects at the "China National Nuclear Corp.," "The Academy of Engineering Physics" and "China Yuanwang (Group) Corp." Ding sent the list of official contacts from the Chinese defense industry, along with a personal letter, to be circulated to U.S. businesses by the Clinton Commerce Department. If any contact on the list should fail to respond, the Chinese army eagerly provided a "Col. Xu" as the prime contact at their Washington embassy, including the military attache's direct phone and fax number. The PLA-owned companies operated with the direct blessing of the Clinton administration, seeking joint ventures, American investors, and U.S. technology..."
Koenig's International News 5/19/99 Charles Smith "... The transfer in late 1994, known as the Hua Mei project, involved advanced telecommunications technology -- with a variety of battlefield and civilian applications -- from AT&T via SC&M Brooks in St. Louis to Galaxy New Technology in China. The fiber-optic technology sold to Galaxy New Technology is not a weapon itself, but it greatly enhances the command and control system linking the Chinese army, navy and air force. The Chinese may have repackaged the same system and resold it to Iraq, where it would be able to threaten the lives of U.S. pilots flying reconnaissance missions. According to Aviation Week & Space Technology, Iraq's air-defense system -- code- named "Tiger-Song" by NATO commanders -- is an advanced internet for surface-to-air missile batteries using secure fiber-optic communications. One of the advantages of Tiger-Song is that it allows the Iraqi radar installations not associated with Iraqi missile batteries to lock in on U.S. aircraft and transfer the information to the missile operators through the secure fiber-optic network. Perry faced a firestorm of criticism in early 1996 following reports that he overruled objections from the Pentagon's technology directorate, as well as from critics in the National Security Agency, who wanted to block the transfer in 1994...."
Koenig's International News 5/19/99 Charles Smith "...Newly released documents from the Commerce Department reveal that Perry and other officials met with several leading generals of the PLA at an unannounced closed-door meeting at Commerce on Nov. 17, 1994. The documents show the level of contact between the Chinese army and the Clinton Commerce Department to be far deeper than previously admitted. On the U.S. side, Perry was assisted by his friend and colleague at Stan ford University, John Lewis, who was a business partner of Galaxy New Technology and a member of the Defense Policy Board of the Pentagon, as well as a civilian consultant to the Secretary of Defense, according to Pentagon documents. In 1994 Lewis was executive director of Chicago-based SCM (which later became SC&M and merged with St. Louis-based Brooks Telecom.) According to the Far Eastern Economic Review, Lewis was a member of the SCM board until January, 1995, although Lewis told the Review that he left SCM at the time he was appointed to the Defense Policy Board in August, 1994. SC&M Brooks was acting as a conduit for AT&T fiber-optic technology wanted by the Chinese generals. SC&M/Brooks was financed on the U.S. side by Perry's investment-banking firm, Hambrecht and Quist, according to one of the bank's advertisements in 1995…."
Koenig's International News 5/19/99 Charles Smith "...Perry in 1985 helped found Hambrecht and Quist, which also is the financial backer of the liberal-leaning Salon magazine...The Chinese delegation was led by PLA Gen. Ding Henggao -- the head of the Chinese Commission of Science, Technology and Industry for National Defense, or COSTIND -- who brought with him some of the highest-ranking PLA officers to travel outside of China. Dine brought his aide and second in Command at COSTIND, Lt. Gen. Huai Guomo, as well as Maj. Gen. Fu Jiaping and Maj. Gen. Chen Kaizeng. Ding even brought one of the spymasters of the Chinese army, Major Gen. Hou Gang, deputy director of the Intelligence Department of the PLA. The military affiliation of the company officials meeting with Perry should have raised serious doubt as to the supposed civilian application of the fiber-optic system being traded, as required by Commerce Department licensing regulations. The cochairmen of the Hua Mei joint venture in 1994, according to Pentagon documents, were former senator Adlai E. Stevenson III and Madam Nie Li, wife of Ding. Lie holds her own military rank -- Madam General Nie of the People's Liberation Army. Lewis is listed in the same document as one of five directors under Stevenson's chairmanship...."
Koenig's International News 5/19/99 Charles Smith "... Although Commerce Department national-security export rules were relaxed in April 1994, a Commerce cable to the CIA that same year nonetheless states, "There is a presumption of denial for the export of controlled products to military end-users or for military end-use in China." Not only was the firm led by a Chinese general, the so-called "civilian company" was heavily packed with Chinese army officers and experts. One member of Galaxy New Technology management, according to the Defense document, was Director and President Deng Changru. Deng also was a lieutenant colonel in the PLA and head of the PLA communications corps. Another Chinese army officer on the Galaxy New Technology staff was Co-General Manager Xie Zhichao or Lt. Col. Xie Zhichao, director of the COSTIND Electronics Design Bureau. Still another embarrassing aspect of the 1994 transfer deal is that a key figure in the founding of Galaxy New Technology in 1992 is Hua Di, a Stanford University faculty member who returned to China in 1997. ... In 1992, COSTIND's Lt. Gen. Huai -- the same Lt. Gen. Huai who attended the November 1994 meeting with PLA Gen. Ding -- contacted Hua to start a joint venture called Galaxy New Technology. Hua in 1996 told the Far Eastern Economic Review: "Lewis and I were matchmakers," regarding Galaxy New Technology and SCM. "Huai is my good friend." ..."
Koenig's International News 5/19/99 Charles Smith "... The Galaxy New Technology deal went public in 1996, drawing reams of press and a General Accounting Office, or GAO, report. According to the GAO, "Defense Department officials told us that broadband telecommunications equipment could be used to improve the Chinese military's command and control communications networks." House Judiciary Committee Chairman Henry Hyde of Illinois tried to prompt an investigation in 1997 by writing Attorney General Janet Reno a letter outlining his concerns about Galaxy. According to Hyde's letter to Reno, "In 1994, sophisticated telecommunications technology was transferred to a U.S.-Chinese joint venture called HUA MEI, in which the Chinese partner is an entity controlled by the Chinese military. This particular transfer included fiber-optic communications equipment which is used for high-speed, secure communications over long distances." Despite the GAO report, Hyde's letter, a furious Congress and embarrassing press reports, Reno did nothing...."
Motorola advertising to China items of "military-use, police use, computerised command, control and communications networks" and "Battlefield-deployable Communications, leading the charge in information warfare."
WorldnetDaily 3/2/99 Charles Smith "…One fact remains above the sex, sordid lies and dangerous phone calls; the White House was penetrated by Chinese Army agents. COSTIND Col. Lui met with Bill Clinton in the White House after donating money through Johnny Chung. The Chinese Army engaged in the most successful espionage effort of the twentieth century. Of course, they picked an easy target, Bill Clinton…. Defense experts are already tracing the vast array of advanced U.S. military technology sold to China in the missile arsenals of Iraq, Iran and North Korea. In Feb. 1999, the repercussions of the Chinagate scandal shot-down $500 million worth of satellites for communist China. The cancellation of the HUGHES sale to Asia Pacific Mobile Telephone (APMT) is a victory for western national security. APMT, the buyer of the Hughes satellites, is reported to be half owned by COSTIND, the same Chinese Army unit that penetrated the White House. According to the Defense Dept., the Hughes satellites were equipped with a sophisticated 40 foot antenna that could intercept U.S. military communications. The APMT satellites sales also included secure, encrypted, voice and data communications…."
INVESTOR'S BUSINESS DAILY 3/22/99 Brian Mitchell "…Even after learning of the theft, the White House continued to push for more exports of satellite, missile and telecommunications technology to China. ….. The administration's partnership with China has indeed been good for some U.S. companies, but it also was very good for the Clinton-Gore campaigns in 1992 and 1996. Congressional investigators believe Chinese operatives funneled as much as $5.6 million to the Democratic National Committee, which the DNC used to support Clinton's campaigns. The DNC has already returned $3.8 million in illegal contributions….. Congressional investigators say that, between 1993 and 1996, Chinese contributors and their go-betweens visited the White House some 200 times, often meeting with the president. One frequent visitor was Johnny Chung, a California businessman who recently pleaded guilty to making illegal contributions to the Clinton-Gore campaign. Another was Ng Lapseng from Macau, who has ties with both China's burgeoning underworld and the Chinese government. On June 20, 1994, Ng entered the U.S. with $175,000 in cash. Two days later, he lunched in the White House mess with staffer Mark Middleton, who headed Clinton's Arkansas fund-raising efforts in 1992. Ng made at least five more apparent money runs before the 1996 election. Each time he entered the U.S. with large sums of cash and visited the White House within two or three days. Ng visited the White House a total of 12 times and met with President Clinton at least once. He also wired more than $1 million to Charlie Trie, an ethnic Chinese restaurateur from Little Rock, Ark., who also visited the White House at least 21 times. Known Chinese agents who met Clinton as campaign fund-raisers included Liu Chaoying, a lieutenant colonel in the People's Liberation Army and a trained technology spy. She met Clinton twice at events organized by Chung….."
WorldNetDaily 3/23/99 Charles Smith "…The joint interests of PRC billionaire Li Ka-Shing, a big U.S. union, and Sen. Rockefeller were teamed up to manufacture business jets in the remote mountains of rural West Virginia. The so-called SJ-30 "business" jet is state-of-the-art. The SJ-30 can travel 2,500 miles at nearly the speed of sound and is rated to cruise at 49,000 feet. The SJ-30 is considered to be the leading edge of U.S. commercial aerospace technology and includes all the latest in avionics such as GPS navigation. The immense speed, range and altitude capability of the SJ-30 can be attributed to the twin Rolls Royce/Williams FJ-44 turbofans that power it. The Williams FJ-44 is also used in the Swedish SK-60 military attack trainer and powers the USAF DarkStar stealth robot spy plane. Williams is best known for making the jet engines for U.S. Tomahawk and ALCM cruise missiles. The Sino-Swearingen facility is located at the Martinsburg airport just south of the town along U.S. Rt. 81. Martinsburg is a key point in the West Virginia hills, located only 50 miles from downtown D.C. The narrow valley is a major north/south and east/west crossing for U.S. microwave and fiber-optic telecommunications. The Martinsburg airport is supported by the U.S. taxpayer via the National Guard facilities and the airport ground facilities, such as fire and rescue……. According to Lunev, PRC special forces agents are rotated on a regular basis in and out of America, usually through diplomatic sites at the U.N. or the PRC Embassy. Washington and New York are only minutes away from Martinsburg by jet……… A so-called "civilian" project could put PRC bombers over the U.S. capitol without warning. A single "business" jet with a suitcase bomb could fly to ground zero with satellite navigation accuracy and a GPS autopilot. Such an unmanned flight in the crowded skies of Washington D.C. would go unnoticed until the final fatal second. …."
WorldNetDaily 3/30/99 Charles Smith "…General Ding and the PLA also passed money directly to Clinton through various agents such as Johnny Chung and Charlie Trie. In exchange, the PRC warlords got access to U.S. secrets other than W88 nuclear bombs. For example, Lt. General Shen's son, Shen Jun, was the lead software engineer for Hughes on all Chinese satellites. Loral provided the PLA with radiation-hardened encrypted telemetry control systems such as the missing board of chips from the 1996 Intelsat crash. In fact, according to the State Department, Loral satellite CDMA communications technology was preferred by the PLA. According to a 1996 Department of State cable to President Clinton by Beijing Ambassador Sasser, the PLA was using money from Chinese billionaire Li Ka-Shing to finance Chinese army communications systems….."
WorldNetDaily 3/30/99 Charles Smith "…Loral's Schwartz also decided to purchase a low-cost Russian rocket to put the CDMA Globalstar system into orbit. Schwartz had to get Clinton to personally sign a waiver in July of 1996 that Commerce official William Reinsch worked on in 1995, prior to Commerce oversight of the Loral satellites. The 1996 presidential waiver for the Loral export included two fully operational, encrypted, telemetry control stations to be built inside China. Loral even requested the presidential waiver be held back and then modified during the FBI investigation of the missing encryption chips from the Loral satellites. The modified waiver included the new telemetry stations for Beijing….. In March 1999, during a Beijing press conference, Premier Zhu Rongji ridiculed allegations of Chinese espionage. Zhu compared the charge to tales from "the Arabian nights."…. Zhu Rongji also claimed that Beijing would never target missiles at "our Taiwan brothers and sisters." …. Zhu and the PLA have a full year of invitations to military training events inside the borders of America. In fact, PLA soldiers are in America right now. PLA special forces will observe U.S. 82nd Airborne exercises at Ft. Erwin in June. PLA ships will visit California ports. An entire class of PLAAF cadets will participate in a USAF exercise involving how to use radar planes and bombers in hostile airspace….. Both Clinton and Zhu would like you to forget about the August 1994 meeting with million-dollar DNC donor Bernard Schwartz and Lt. General Shen. Both Clinton and Zhu would rather carry out their plans in secret, behind closed door, negotiations. ….."
U.S. Newswire 4/7/99 Transcript of Steinberg, Lieberthal and Brainard Briefing To: National Desk Contact: White House Press Office, 202-456-2100 "...MS. BRAINARD: .... In addition, Secretary Daley initialed an agreement for an Ex-Im financing line of $100 million that will help to support clean energy projects in China, which serves both our environmental and our energy goals....On the telecommunications side, Secretary Daley and his counterpart signed an agreement for the first time to allow foreign commercial deployment of the CDMA technology, CDMA wireless technology, the co-division multiple access. This is a U.S. technology, as many of you know. This is a very, very significant achievement for our companies.... Q Along the same lines, Jim, regarding Los Alamos and espionage, it doesn't seem the Chinese have paid much of a price for stealing our nuclear secrets. Is that going to be on the agenda? MR. STEINBERG: First of all, the full range of issues will be on the agenda. But let me say, I don't want to comment specifically -- there are a lot of allegations, there are a number of investigations underway. We will continue to pursue those investigations. We take very seriously the safeguarding of our sensitive information and technology..... "
WorldNetDaily,sm 4/23/99 John Doggett "...Summit leaders will discuss an American initiative that will allow NATO to respond to threats of nuclear weapons or non conventional terrorism from countries outside Europe or the United States, officials said. The initiative will develop joint logistics and improve interoperability command, control, and communications facilities, and develop detection of chemical and biological weapons. According the Thursday's New York Times: "Kosovo has brought NATO into the never-never land," said David Gompert, vice president of Rand who was on the National Security Council in the Bush administration. "It has brought us into a situation where a regime that slaughters its own people is no longer sovereign and where the United Nations Security Council is no longer a requirement." .....In 1992, Strobe Talbot, who is now Clinton's No. 2 National Security Advisor, said the idea of a nation-state didn't make sense anymore. ...."
The American Spectator 5/99 Kenneth R. Timmerman "....The cases of Chinese nuclear spying revealed to date are "perhaps just the tip of an iceberg," says Senator Richard Shelby, the powerful chairman of the Senate Select Committee on Intelligence. The reason is simple, and systemic: From its first days in office this administration has disdained nuclear weapons, seeing them as the cause of an expensive environmental clean-up, not the cornerstone of fifty years of world peace. Add the belief that we might share U.S. military technology with the Chinese, because we will always stay " one step ahead" of potential adversaries, and the result is contempt for any form of national security export controls. Whether it's nuclear weapons secrets from our labs, or supercomputers and advanced telecommunications gear from Silicon Valley, this administration has presided over the greatest transfer of military technology to a potential adversary of any administration in history. Repeated statements by Clinton and his advisors on the need to "engage" China, regardless of the spying scandals, can only encourage the Chinese to go for more...."
The American Spectator 5/99 Kenneth R. Timmerman "....U.S. law enforcement officials say they are "overwhelmed" by the sheer number of Chinese Communist agents operating in the United States, and can only focus on a few high-profile cases. On February 11, for instance, Customs undercover agents in Boston arrested Chinese national Collin Shu (a.k.a. Zhihong Xu) on charges of attempting to purchase state-of-the-art fiber- optics gyroscopes (FOGs) used in guidance and navigational systems for ballistic missiles and combat aircraft. ..."For every case like this one," a Customs agent says, "there are probably a hundred other cases we never see at all. We only catch these cases because we get lucky, or because someone tips us off. When the Chinese work with only Chinese networks, we never see a thing." ..."
The American Spectator 5/99 Kenneth R. Timmerman "...Supercomputers are only one element in a deadly mix of high technologies released for sale to the Chinese by the Clinton administration since 1993. An internal memorandum written by Michael Maloof of the Pentagon's Defense Technology Security Administration (DTSA), subpoenaed by the Cox committee, paints an astonishing picture of the cumulative impact of U.S. technology transfer to the Chinese military over the past five years. The combination of supercomputers, satellite sales, and advanced telecommunications switching technology since 1994 "have provided the Chinese military with a nationwide encrypted command, control, communications, computers and intelligence (C4I) network that will serve it well into the next century," Maloof warned his superiors. "Together, they provide the PLA with a communications infrastructure that it could not have developed on its own." Extensive manufacturing technologies were decontrolled along with the actual products U.S. companies were allowed to ship to China. Since 1993, the PLA has been importing massive amounts of equipment to manufacture fiber- optics cable, which allows for secure communications links impervious to electronic eavesdropping. And companies tied to former colleagues of then- Deputy Defense Secretary William Perry led the way in transferring encrypted Asynchronous Transfer Mode (ATM) telephone switching equipment, now used by the PLA for its military communications network. "The decision to allow... ATM switching technology in 1994 occurred over the objection of DoD technical experts," Maloof wrote. "Despite initial NSA concerns, it was silent when the decision finally occurred." As I wrote in "Peking Pentagon" in April 1996, it appeared that William Perry personally intervened to get NSA to drop their objections to the sale of this technology, despite the fact that the Chinese buyer was a PLA-owned company....."
The Chinese connection to the Galaxy New Technology venture was a defector also working at Stanford. "Defector" Hua Di was born into a family of prominent Communist officials. Hua studied missile engineering in Russia and worked inside China's missile program for 24 years. In 1989, Hua fled China after the Tiananmen Square crackdown on student democracy demonstrators. In America, Hua went to work as a researcher at Stanford's Center for International Security and Arms Control. The Center's co-directors were William Perry and John Lewis. In 1992, Chinese Commission of Science, Technology, and Industry for National Defense (COSTIND) Lt. General Huai Guomo contacted Hua Di to start a joint venture called Galaxy New Technology. The very same Lt. General Huai who attended the November 1994 meeting with PLA General Ding, Defense Secretary Perry and Dr. Lewis. "Lewis and I were matchmakers," recalled Hua about Galaxy New Technology in 1996. "(General) Huai is my good friend." .....In late October 1998, it was announced that Hua Di had returned to China. Hua Di met with Chinese security officials in late 1997 and was assured that he would not be prosecuted. On December 31, 1997 Hua returned to China. On Jan. 6, 1998, Hua was arrested and charged with passing state secrets to U.S. officials. Stanford officials and Hua's business partner, John Lewis, have written to the Chinese government appealing for Hua's release. The Clinton administration, Dr. Perry and the mainstream press remain strangely silent about imprisoned defector Hua Di. Hua Di passed false missile information to the west, obtained secure communications for the Chinese Army and penetrated into the Clinton White House through the U.S. Secretary of Defense. Hua Di served his party, and comrade General Ding. In the end, Hua arranged for his two employers, General Ding and William Perry, to profit in a deal to harden and secure Chinese military communications. Hua Di returned home to a hero's welcome and a fat bank account made on profits from the Galaxy New Technology deal. Hua Di was no fool - nor was he a dissident. Hua Di was a spy. One of many in a network of spies run by Chinese mastermind General Ding. In a single stroke, Dr. Perry and the Clinton administration sold Ding far more than his spies could ever steal in a decade of espionage. In the process, the Marxist General Ding and his American partners, Perry and Lewis included, also made a tidy profit
Commentmax.com 4/29/99 Tony Snow "... The Loral Corp. made hay, as well. The company's chairman, Bernard Schwartz, evidently bought his way onto a 1995 trade mission to China and sealed a deal that enabled him to sell sophisticated communications satellites to our former Cold War foe. Loral satellites now guide the Chinese air force, and China reportedly has acquired a Loral computer chip that holds the key to decoding communications between U.S. satellites....."
WorldNetDaily 5/4/99 Charles Smith "... In 1978, President Carter and Chinese Premier Deng Xioping made a secret Sino-U.S. pact "to setup, install, man, equip and service a series of SIGNIT (signals intelligence) sites along that country's border with the Soviet Union". According to a 1995 CHINA-GATE document forced from the Clinton administration by Federal Court, CIA and Chinese Army intelligence agents jointly share two military radio signals intercept stations in China. The two sites are located deep inside the far western province of Xinjiang at Qitai and Korla. The two stations were built and equipped with state of the art American electronics by the CIA's office of SIGNIT operations (OSO). Chinese Army personnel, who share the sites with U.S. NSA and CIA agents, are trained by the CIA inside the U.S. at a location just outside San Francisco. The PLA SIGNIT agents are identified as coming from the 2nd Department of the Chinese Army General Staff division (GSD)..... Yet, the 1995 document suggests that the joint PLA/CIA operation to gather signals from Russia may not have ended with the cold-war. Operations at these two sites appear to have expanded to include Asian military communication, radar and computer networks..... Modern war dictates that signal intercepts must be done by satellite. The most modern element of Chinese Army Signals intelligence (SIGNIT, COMINT and ELINT) is the "Ferret" satellites operated by Beijing. Chinese Army satellite intelligence operations are led by the Commission for Science, Technology and Industry for National Defense (COSTIND). In 1995, COSTIND was run by the notorious spy-master General Ding Henggao. Ding and other PLA officers under his command met and worked directly with Commerce Dept. officials to transfer a wide array of technology to China. COSTIND and General Ding bought satellites, fiber-optic communications, super-computers, GPS systems, encrypted (secure) communication, and radiation hardened micro-chips. ...."
WorldNetDaily 5/4/99 Charles Smith "... The Commerce Dept. knew in 1993 that Great Wall, along with nine other PLA controlled companies, had sold nuclear tipped M-9 missiles to Pakistan. Less than a year later, in 1994, Great Wall was allowed to buy into the Iridium satellite project run by Motorola. The PLA share included launching Iridium satellites on Chinese rockets and a host of other advanced space technologies including satellite telemetry stations, and encrypted satellite control systems. According to Henry Sokolski, Executive Director at the Nonproliferation Policy Education Center, the Iridium sale "helped China master the technology needed to develop its own multiple independently targetable re-entry vehicles for the new solid rocket intercontinental ballistic missile it is trying to derive from SS-25 missile technology with the Russians". In short, China can now effectively double the number of H-bombs it can deliver on America thanks to Motorola. What is the difference between twenty thermonuclear bombs and forty? The difference works out to about 100 million dead....."
WorldNetDaily 5/4/99 Charles Smith "... Iridium is not the only venture that Great Wall shares with Motorola. Great Wall has joined with Chinese billionaire Li Ka-Shing and Motorola to provide CDMA mobile phone networks to China. American CDMA technology, according to several documents from the Commerce Dept. and the State Dept., is the preferred cell phone of the Chinese Army signals branch. "CDMA or Code Division Multiple Access, is an advanced technology that permits high-volume communications in a small area, with limited interference from other traffic. It was originally designed for military communications applications in rear areas. Motorola will deploy 30 of its SC2450 base stations and an EMX 2500 E large capacity switch for the CDMA network". In Feb. 1999, the Clinton China-Gate scandal shot-down $500 million worth of satellites for the Chinese Army. APMT, the reported buyer of the Hughes satellites, is half owned by COSTIND, the same Chinese Army led by General Ding in 1995..... According to another Commerce document, PLA profits are split between the PLA local unit and the General Logistics Division (GLD) of the Chinese Central Command. "Some of the money is used for training, as well as to improve the living standards of the troops, including barracks construction and repair... other funds are used for more corrupt purposes, such as paying for lavish meals, expensive foreign luxury automobiles, and Swiss bank accounts". Some of the money from the PLA also made it into the DNC and Clinton's campaign bank account. Clinton took their money. Clinton turned a blind eye while American nuclear weapon secrets were stolen. Clinton knows the trade imbalance is filling the pockets of corrupt red warlords and financing the Chinese Army. Clinton sold the Chinese Army a vast array of technology, the weapons of nuclear war that now target America. ...."
New York Times 5/5/99 Gary Milhollin Jordan Richie "...In the decade we studied, American companies were also licensed to sell China a great deal of noncomputer equipment that could be used for weaponry. This included $241 million worth of machinery for making special semiconductors that can go into missiles, torpedoes, smart munitions, fuses and secure communications equipment; $131 million worth of high-speed oscilloscopes, which can record data from nuclear weapon tests, help design nuclear weapon firing circuits and develop missile guidance systems; $111 million worth of high-accuracy machine tools that can produce the precision parts needed for nuclear weapons and long-range missiles, and $5.4 million worth of vibration-testing equipment, which can enable nuclear weapons and missiles to withstand shock, impact and rapid acceleration...."
Koenig's International News 5/18/99 Charles Smith "...According to a 1997 report forced from the U.S. Commerce Dept. by a Federal lawsuit, "The most troubling potential transfer to China is Rockwell's proposed joint venture deal with the Shanghai Broadcast Equipment Factory and the Shanghai Avionics Corporation, the latter of which is a key enterprise of the Aviation Industries of China." "Rockwell Collins Navigation and Communications Equipment Company, Ltd.," states the 1997 report. "Will design, develop, and build Global Positioning System (GPS) navigation receivers systems for the Chinese market." "These components have serious dual-use applications, since the acquisition of reliable GPS data can enhance, to varying degrees, the capacity of militaries to field highly accurate cruise and ballistic missiles, such as those used to intimidate Taiwan during March 1996." Clearly, Clinton officials were aware of the military affects of the Rockwell/Shanghai venture. Furthermore, the Clinton administration also knew the geo-political impact of the GPS military sale to the Chinese Air Force. For example, the report noted the diplomatic effects on Taiwan of the GPS sale. "More accurate GPS systems would enhance the PLA's ability to carry out attacks against Taiwan's military and industrial facilities," states the report. "Potentially reducing the ability of the Taiwanese military to defend itself against PRC coercive diplomacy." However, the most chilling conclusion was reserved for the effects on U.S. military forces, especially U.S. Naval Forces. "The use of GPS to enhance the accuracy of long-range Chinese cruise missiles, coupled with long-range sensors, would raise serious concerns for the U.S. Seventh Fleet in the Pacific, and possibly circumscribe their ability to provide an effective deterrent in a crisis over Taiwan." Furthermore, the Chinese may have obtained the "long-range sensors" from the Clinton administration as well...."
Koenig's International News 5/18/99 Charles Smith "...Another Commerce Dept. document shows that in 1996, Loral Defense Systems (then an arm of Loral Aerospace) actively solicited Commerce Secretary Brown to intervene in getting approval from the White House to sell advanced radar technology to China. Loral wanted very badly to sell Synthetic Aperture Radar (SAR) to China. SAR is a sophisticated ground-looking radar essential to the newly deployed Joint Surveillance Target Attack Radar System (JSTARS) used by the U.S. military to track ground-based vehicular movement on the battlefield. SAR radars also equip the USAF F-15 Strike Eagle and the Predator unmanned aerial reconnaissance vehicle. A letter discovered in the previously unreleased files of Ron Brown shows that Loral Defense Systems President, Jerald A. Lindfelt, wrote Brown in March of 1996. Lindfelt sought Brown's help in the export of SAR technology to the Beijing Institute of Remote Sensing. According to the Defense Department, the Chinese "Institute of Remote Sensing" is actually a front for the Chinese Army missile guidance design laboratories. The Institute of Remote Sensing is "a developer of precision guidance systems for surface-to-air missiles." …"
Koenig's International News 5/18/99 Charles Smith "... Loral's 1996 appeal also included a direct request for Ron Brown to over rule the Department of Defense, the State Department and even Brown's own Commerce Department, which had all previously denied SAR radar exports to China. "We've worked hard trying to resolve these problems with the Department of State, the Department of Commerce and the Defense Technology Security Administration (DTSA)," Loral's Lindfelt wrote to Brown. "But someone in these organizations always manages to block our participation... Over the years we have found that this type of obstacle often comes from lower levels of management rather than by people willing to look at the bigger picture. Could you help us by identifying someone in the Commerce Department high enough in the organization to help us resolve these issues and open this marketplace..."
Capitol Hill Blue DOUG THOMPSON 5/25/99 "..."The Congressman is not prepared to publicly indict the President for treason. That is a very serious charge," said one aide. "The report that the public will see is, without a doubt, a pointed example of how the White House put political considerations above national security, but it does not attempt to assess blame on any single source." For example, while the report says the Clinton administration relaxed restrictions on high-end computer sales to China in 1996, and 600 have since been sold, it also argues that US officials have no effective way to determine whether computers sold for commercial purposes are diverted to military uses. However, high-performance computers legally purchased from US companies have been secretly used by Chinese military institutes and organizations involved in research and development of nuclear weapons, missiles, satellites, spacecraft, submarines, aircraft, military systems, command and control, communications and microwave and laser sensors....."
Capitol Hill Blue 5/25/99 "...In addition: High-performance (super)computers have been sold to China, in some cases to facilities that conduct military research. China is using the computers - in violation of export agreements - in the development of nuclear weapons, missiles, satellites, spacecraft, submarines, aircraft, military systems, command and control systems, communications, and microwave and laser sensors.... China knows how to miniaturize warheads and deploy several at a time from a single missile. It is technically "on par" with the United States, but China has not built or tested these weapons yet. That begins this fall...."
5/27/99 Curt Weldon (R-PA) "...That even after the US Government learned of the diversion of the W-88 nuclear warhead design in late 1995 into 1996, the Clinton Administration continued to liberalize export controls on such sensitive technologies as computers, encryption, machine tools, telecommunications, stealth technologies, space launch technologies, satellites, the array of hot section technologies to improve the performance and life of Jet engines, and high temperature furnaces essential for the production of components for missiles and nuclear weapons...."
5/27/99 Curt Weldon (R-PA) "...That the cumulative impact of these targeted technologies now permit China to: Develop reliable Intercontinental Ballistic Missiles with insights into MIRVing that ICBM force. Miniaturize nuclear warheads. Implement a command and control structure for its growing ICBM force. Develop an integrated command, control, communications, computer and intelligence encrypted network to enable better military command and control over vast areas, even beyond China itself...."
WorldNetDaily 6/1/99 Charles Smith "...The Cox report also details for the first time the long ignored sea leg of China's strategic arsenal. "The JL-2 (Julang 2, or Great Wave 2) is a submarine-launched version of the (Dong Feng, or East Wind) DF-31. It is believed to have an even longer range, and will be carried on the PLA Navy's Type 094-class submarine. Sixteen JL-2 missiles will be carried on each submarine." What does the Great Wave 2 mean to the U.S. homeland? The Cox report noted "The JL-2's 7,500 mile range will allow it to be launched from the PRC's territorial waters and to strike targets throughout the United States." On May 27, 1999, the South China Morning Post reported that the People's Liberation Navy (PLN) had begun preparations to test the Great Wave 2 (JL-2). PLN officials reported that the JL-2 is scheduled to be deployed on the nuclear submarine Xia by 2000. The sub-launched missile is slated to carry a single 2.5-Megaton, thermonuclear warhead, or three 90-Kiloton warheads. "If the JL-2 were to employ a shroud to protect its warhead as do the majority of submarine-launched ballistic missiles today," states the Cox report. "This would be the first use of a shroud or fairing on a PRC missile."
WorldNetDaily 6/1/99 Charles Smith "….The JL-2 explains why the Chinese were so interested in American space contractor, Hughes, upgrading PLA rockets with "nose-cone" or "shroud" technology. The Cox report details Chinese Lt. Gen. Shen Rougjun and his penetration of Hughes through his son, Shen Jun. In May 1994, Shen, was second in command at COSTIND -- the Chinese Commission for Science, Technology and Industry for National Defense. Shen served underneath the PLA spy-master, Gen. Ding Henggao. In 1994, COSTIND Gen. Shen attended several business meetings with Hughes. During a 1994 visit, Shen's son, Shen Jun, attended a business lunch with his father and Frank Taormina of Hughes. Taormina later assisted Shen Jun in obtaining a job at Hughes. The Cox report details "son" Shen played a significant role in the interaction between his PLA general-father and the highest of Hughes executives, including CEO Michael Armstrong. In 1994, Hughes executives were scrambling to avoid a major expense. Hughes helped PLA engineers after the failure of a PLA Long March rocket carrying a Hughes-built satellite. Hughes, anxious not to see a hike in their satellite insurance rates, eagerly pinned the failure on the PLA nose-cone "shroud" design and not on their satellite. The help included Hughes proprietary software for nose-cone design and analysis derived from years of ballistic missile tests in America. Although, Shen Jun was hired at Hughes in August of 1994, according to the Cox report, "a division of Space Systems/Loral was also considering hiring Shen for a position that would have allowed him access to classified information." In August 1994, Lt. Gen. Shen also met and consummated a series of satellite deals with Bernard Schwartz, the CEO of Loral. The Beijing meeting was arranged by President Clinton and included Commerce Secretary Ron Brown. The technology obtained from Loral is also detailed by the Cox report, including rocket guidance and encrypted satellite telemetry systems...."
WorldNetDaily 6/1/99 Charles Smith "...While the close working relationship between PLA Gen. Ding, Secretary Brown and Defense Secretary Perry may be missing from the Cox report -- it has not been missed in federal court. In a WorldNetDaily exclusive, this reporter has obtained two previously unreleased letters from Secretary of Defense William Perry. The letters were forced from the U.S. Commerce Department by Federal Judge Robert Payne who ordered them to be released to the public in 1999. One Jan. 31, 1995 letter is addressed to Ron Brown and the other letter is addressed to Gen. Ding Henggao. "Dear Ron," wrote Perry in his 1995 letter to Secretary Brown. "I recently received a letter from General Ding Henggao, the Minister of the Chinese Commission for Science Technology and Industry for National Defense (COSTIND). As you know, General Ding and I head the Sino-American Joint Defense Conversion Commission that was established during my visit to the PRC this past October (1994)." I am most appreciative, Ron," wrote Defense Secretary Perry. "Of the support that the Department of Commerce is providing for this effort. Unlike our defense conversion projects with Russia, Ukraine, and other states in the former Soviet Union, there are no funds earmarked for our activities with China. Hence, we need to rely on already established channels and create informal ones to accomplish the task at hand."
WorldNetDaily 6/1/99 Charles Smith "...Perry's second letter of Jan. 31, 1995 is addressed directly to General Ding Henggao. "Dear General Ding," wrote Perry. "I have asked our Secretary of Commerce, Mr. Ronald Brown, for the support of his Department to ensure U.S. businesses are apprised of the opportunities that have been offered." "As you know, we have been working to develop a plan for air traffic control cooperation that meets the expectations of COSTIND, as well as the People's Liberation Army Air Force," wrote Perry to Gen. Ding. "I am confident that at the second meeting of the Joint Defense Conversion Commission, we will be able to receive reports detailing significant progress in all of our endeavors." In fact, Perry wrote his letter to the Chinese spy-master with the warmest of affections reserved for an old friend. "Best wishes in the coming year," wrote Perry. "And I look forward to our next meeting." The "informal channels" to "fund" the PLA operations required by Perry and the PLA placed Ron Brown in direct contact with Chinese military officers during the last few months of his life…"
WorldNetDaily 6/1/99 Charles Smith "... According to the testimony of Brown confidant, Nolinda Hill, the Commerce secretary openly worried that the deals with the PLA were bordering on treason and posed a threat to his life. According to the GAO, the "air traffic control" that meets the expectations of "the People's Liberation Army Air Force" included a Presidential waiver from Bill Clinton. According to a June 1998 report to Congress, the GAO stated that "Waivers were also granted to permit the export of encryption equipment controlled on the Munitions List. One case involved a $4.3 million communications export to China's Air Force." The PLAAF can use the equipment supplied by Clinton's waiver for offensive operations against U.S. forces in Asia. The next PLAAF bombs that fall will do so with great accuracy, due mainly to the efforts of Gen. Ding and his puppets in Washington...."
From the COX Report: Freeper Rhammm 6/7/99 "...The key organizations in the PRC's drive to acquire dual-use technology include: COSTIND, which acquires dual-use technology for PRC institutes and manufacturers by assuring foreign suppliers that the technology will be used for civil production. COSTIND uses overseas companies to target U.S. firms for acquisition of dual-use technology for the military. The Ministry of Electronics Industry...The Ministry of Post and Communications...PLA-operated import-export companies, which also import dual-use technologies for military modernization...Polytechnologies...The Aviation Industries Corporation of China (AVIC), and its subsidiary, China National Aero-Technology Import-Export Corporation (CATIC), which have sent visitors to U.S. firms to discuss manufacturing agreements for commercial systems that could be used to produce military aircraft for the PLA. AVIC is one of five PRC state-owned conglomerates that operate as "commercial businesses" under the direct control of the State Council and COSTIND. Several incidents highlight CATIC's direct role in the acquisition of controlled U.S. technology....."
Washington Times 3/16/99 Frank Gaffney, Jr. "…Clinton policies, practices and personnel that will, if uncorrected, give rise to a far more ominous problem for this country emanating from the People's Republic of China in the 21st century….(3) Personnel: … entrusting high public office to a number of individuals whose judgment, associations and/or personal conduct raise serious questions about their ability to safeguard U.S. interests. Among those sharing this dubious distinction are:…. * And William Perry, Mr. Clinton's second defense secretary who is currently serving as his special envoy for Asia. Numerous investigative reports (particularly powerful ones have been published by Kenneth Timmerman in the American Spectator and Charles Smith via the e-publication WorldNetDaily. com) have revealed that Mr. Perry has had long and troubling ties to China, including during his service in the Pentagon's top job, which have contributed to the transfer of militarily relevant telecommunications technology to the PLA…."
Washington Weekly 5/2/99 RICKI MAGNUSSEN AND MARVIN LEE "...QUESTION: Considering that Johnny Chung has identified several channels of communication between the Chinese military and president Clinton, how close do you think that Clinton is to the Chinese military? TIMPERLAKE: Very close. Here's the reason why. Johnny Chung, who is a hustler, was picked because he figured out that the administration would take money for access. By our analysis, it looks like Chinese military intelligence saw that Johnny Chung was a clever fellow who knew how to work Bill Clinton. So Lieut. Col. Liu was assigned his case officer to recruit him…. Now, I always thought that it was just about money, but it turns out that it was more than that. Apparently, the goal was to create a lot of shell companies in the import/export business and high-tech business so they could accomplish the goal of buying American high-tech equipment across the board, equipment like gyroscopes, computers and high tech communications equipment and flood them out of the country thereby overwhelming our safeguards, our Customs, the FBI and counter intelligence operations. So that was the goal and we don't know how successful she was because Chung is the only person of 122 people who has actually gone in front of the grand jury and (in our opinion) told the truth. That's a very powerful statement because the rest of them, if there were a strong law enforcement operation from the Justice Department, the conspiracy would have been broken by now and we would know how bad the damage was that was done to America. It's very apparent that the Attorney General of The United States has chosen to keep her job and sacrifice America at this point. The country is in great jeopardy, because as long as the conspiracy stands we don't know bad the damage was and we can't bring people to justice and until we bring people to justice we don't know how to rebuild the military because we don't know our total vulnerability.. ..."
Koenig's International News 5/19/99 Charles Smith "... As Lawrence DiRita, a scholar at the Heritage Foundation, reported three years ago, Galaxy officials approached several large U.S. telecommunications companies prior to 1994 in the hope of involving them in their partnership with SC&M Brooks. U.S. executives who spoke to the Galaxy representatives said that the Chinese side was counting on the influence SC&M brought to the partnership. Some of those U.S. executives, who declined to participate because of the obvious national security implications, asked out of curiosity how Galaxy intended to get U.S. government approval to transfer to China dual-use (civilian/military) technology. "In response, the Chinese spoke quite openly about the relationships they had already established with senior Democrats, mentioning Mr. Stevenson by name," DiRita explained....."
Washington Post 10/31/98 John Pomfret and Douglas Farah ".In a step toward joint operations to fight international crime, the United States and China have established a secret electronic surveillance post along China's border with Burma to eavesdrop on narcotics traffickers from the Golden Triangle, one of the world's biggest sources of heroin, Chinese and U.S. sources say. The U.S. government has also given China several dozen jeep-like Humvee vehicles for narcotics interdiction in mountainous terrain along the Burmese border. In addition, Chinese sources said, the United States has established a secret fund that Chinese officials can access to run the surveillance center and fight drug trafficking. The listening post, staffed by Chinese and U.S. agents near the Chinese border town of Ruili in southern Yunnan province, marks a significant step forward in a U.S. intelligence-sharing relationship with China that dates back to 1971. It follows on the operation in the 1980s by the CIA and its Chinese counterpart of listening posts in China's far-western Xinjiang Autonomous Region to monitor Soviet nuclear weapons tests."
Softwar.com 5/25/99 "...Feinstein's financial ties to the communist Chinese and COSCO include her husband, Richard Blum. Blum is reported to be heavily tied to the PRC through his far east investment firm, Newbridge Capitol Corp. Blum's partner at Newbridge, Peter Kwok, also served as a consultant to COSCO, and COSCO Hong Kong Holdings, a company owned by Chinese billionaire Li Ka-Shing. In 1989, Kwok helped CITIC and Li Ka-Shing raise $120 million to buy a HUGHES built communications satellite for a company also part owned by Chinese Generals. Senator Feinstein is far closer to red China than a few business ties to her husband. The Los Angles Times reported in 1997 that Blum and Feinstein have visited with communist Chinese officials three times. Blum reportedly accompanied the Senator at his own expense and met with President Jiang Zemin and other top communist party officials. In January 1996, Feinstein and Blum were honored as the first foreigners to stay at Mao Tse-tung's former residence. ..."
El Nuevo Herald 6/24/99 PABLO ALFONSO "...China is operating in Cuba a sophisticated network of electronic espionage towards the United States, which the regime of Fidel Castro in electronic his denominated ``War against Yankee Imperialism ' in agreement with sources of intelligence and documents of governmental agencies also takes advantage of to which the New Herald has had access. ``For Chinese the use of Cuba as base of electronic listening is of a tremendous importance, because means them to locate itself strategically in the rear of United States ', commented an ex- official of North American intelligence. The Chinese bases of electronic espionage have been camouflaged under the pretext of a collaboration between China and Cuba in the field of the electronics and the radio communications, whose agreements they were the past signed month of February during the visit to Havana of the Chinese minister of Defense, Chi Haotian. The main bases of Chinese listening and tracking in Cuba are located to the northeast of Santiago of Cuba in the Eastern end of the country and in the zone of Rattan field in the province of Havana, in agreement with the intelligence information. The field of antennas of Santiago of Cuba is dedicated mainly to the tracking of the communications of the North American military satellites, while in Rattan field the Chinese have mounted a complex system of interception of the telephone communications.....``This is a such delicate subject that polticians are treating it a most confidential way. ', commented the source. The Chinese bases are apart of the electronic station of espionage that Russia inherited of the missing Soviet Union in Lourdes, province of Havana, and for which Cuba receives $200 million annually.
Insidechina 6/26/99 AFP "...China is using Cuba as a base for a sophisticated spying operation targeting the United States, the Nuevo Herald daily said here Thursday. China is using its collaboration with Cuba in the field of electronics and radio telecommunications as a smokescreen for the operation, the paper said, citing US intelligence sources and official US documents. The main Chinese bases for listening and tracking are located northeast of Santiago de Cuba and in Bejucal, in the province of Havana, according to the report...."
The American Spectator 8/99 Kenneth R. Timmerman "...The Chinese Communist government got its first big break in gaining access to U.S. technology previously denied for export when former Carter administration official William Perry returned to government as deputy secretary of defense in 1993. As TAS revealed three years ago ("Peking Pentagon. Bill Perry: Too Tight with the Enemy?" April 1996), Perry personally overruled the objections of the National Security Agency (NSA) and the Joint Chiefs of Staff in approving the export of a buried fiber-optics Asynchronous Transfer Mode (ATM) telecommunications network to Hua Mei (Galaxy New Technology), and China Milky Way, front companies owned and controlled by COSTIND.... ..."The Hua Mei deal was where it all began," said a former U.S. intelligence officer who spoke to TAS on condition of anonymity for himself and his company. "When one of our clients asked us to check Hua Mei out and we discovered COSTIND was behind it, we told them there was no way they would ever get U.S. government or CoCom (Coordinating Committe on Export Controls) approval to export. The technology was extremely sensitive, and the Chinese end-user was a known government collection agency. COSTIND has always been on the watch list."
The American Spectator 8/99 Kenneth R. Timmerman "...Despite this initial reaction, the former intelligence officer met with Chinese officials in Hong Kong in October 1993 to learn more. "When I brought up the problem of export approvals, they just laughed," he recalls. "They boasted of their relationship to Perry and to John Lewis," a colleague of Perry's from Stanford who became the point man for the project once Perry joined the Clinton administration. The consultant recommended that his client decline the deal because of the sensitive nature of the technology. But that didn't deter the Chinese, who simply turned to other suppliers. In the end, Bill Perry was true to his word, and the Chinese were able to get U.S. export approval. "If they had gone ahead with their original plan, which was to wire 54 Chinese cities with this type of network and interconnect them," the former intelligence officer said, "they would have shut the NSA out of China."..."
The American Spectator 8/99 Kenneth R. Timmerman "...TAS has learned of a separate joint venture between the Riadys and China Aerospace International (CASIL), known as the Shanghai Commercial Investment Fund. Until now, U.S. government investigators were not able to tie the Riadys to CASIL, a key player in several satellite ventures involving U.S. companies. A CASIL vice president, Liu Chaoying, set up a joint venture with Johnny Chung in California known as Marswell Investment that was financed through a $300,000 wire transfer (some of which Chung donated to the DNC) from the head of Chinese military intelligence. TAS first revealed the Chung- Liu connection two years ago ("While America Sleeps," June 1997). Liu's Hong Kong company, Marswell Investment Ltd., was created in 1995 using subscriber shares from two PLA front companies, Chearfit and Timeway Ltd., which operate out of the same office as a third front company, Silver Faith Holdings, which U.S. government investigators have tied back to the Chinese Triads. Liu Chaoying controls numerous other Hong Kong front companies as well, including Cheung Tai Hong Holdings Ltd., Giant Enterprises, and CASIL Import & Export Company Ltd.
The American Spectator 8/99 Kenneth R. Timmerman "...The Lippo-CASIL connection provides new insight into what the Chinese were hoping to get from the Clinton-Gore White House: waivers of U.S. sanctions to give them access to U.S. missile and satellite technology. In April 1993 Clinton waived the Tiananmen sanctions to allow Motorola to launch up to 12 satellites in China for its Iridium global wireless communications network. As part of that deal, the Chinese got help from U.S. companies in designing a "smart dispenser" that enabled them for the first time to launch multiple satellites from a single rocket. According to a December 1996 report from the Air Force National Air Intelligence Center, first revealed by Washington Times reporter Bill Gertz, the Iridium smart dispenser "could be developed into a credible PBV (post-boost vehicle) with a few relatively minor changes." Post-boost vehicles are used to deliver multiple nuclear warheads to separate orbits, so they can strike different targets independently. Multiple warhead technology was a key priority for the Commission of Science Technology and Industry for National Defense (COSTIND) collectors, and was a capability the Chinese had previously lacked.
The American Spectator 8/99 Kenneth R. Timmerman "...In October 1997, CASIL acquired a 14.71-percent interest in Asia Pacific Telecommunications Satellite Holdings Ltd., a listed company in Hong Kong and New York. APT was founded in 1992, with investors from Hong Kong and Thailand, to own and operate a network of telecommunications satellites. The company now operates two Hughes HS 376 satellites (Apstar-1 and Apstar-1A), and one Space Systems Loral FS-1300 satellite (Apstar IIR), launched between 1994 and October 1997. "The powerful APT...has the largest synchronous satellite transponder capacity available in the Asia-Pacific region," according to a U. S. government cable from Hong Kong obtained by TAS.
The American Spectator 8/99 Kenneth R. Timmerman "...But APT served another purpose, according to a recent Pentagon report first revealed in these pages ("Red Star Over Washington," May 1999). Following the failure of the People's Liberation Army's (PLA) own network of military communications satellites in 1996, "the Chinese were desperate to find a substitute for military communications. They had no choice but to resort to the use of previously purchased U.S. satellites for their encrypted communications," the report states. Those satellites were owned and operated by APT. "This decision was just a step in the continuing process to integrate Hughes equipment for its military--a decision which goes back to at least 1992. Various munitions license applications during 1995 and 1996 reveal an export pattern of Hughes satellite-related equipment through PLA front companies. They include SCL, CESEC (China Electronic Systems Engineering Company), and Huaying," the DOD memo states. "Ironically, many of these exports did not identify these front companies as being associated with the PLA. From what we now know, Hughes employees in China were knowledgeable that they were PLA-associated entities." None of the licenses were vetted for the PLA association, the memo went on, since a military end-user would have been grounds for denying exports. ...Hughes's failure to disclose the PLA involvement in APT, and in a related cell-phone venture known as APMT, may have violated U.S. export control laws. "In seeking approval of APMT," the Pentagon report states, "Hughes provided only the Singapore address of the APMT joint venture between China and Singapore. This had the deceptive effect of attempting to disassociate the APMT project from the Chinese military and make it look benign, even though the Chinese sought configurations on the APMT satellite that would allow for eavesdropping." The Pentagon discovered that many of the Chinese technicians being trained by Hughes in California were in fact members of the PLA...."
American Spectator 8/99 Kenneth Timmerman "...Until now, U.S. government investigators were not able to tie the Riadys to CASIL [China Aerospace International known as the Shanghai Commercial Investment Fund], a key player in several satellite ventures involving U.S. companies. A CASIL vice president, Liu Chaoying, set up a joint venture with Johnny Chung in California known as Marswell Investment that was financed through a $300,000 wire transfer (some of which Chung donated to the DNC) from the head of Chinese military intelligence. TAS first revealed the Chung- Liu connection two years ago ("While America Sleeps," June 1997). Liu's Hong Kong company, Marswell Investment Ltd., was created in 1995 using subscriber shares from two PLA front companies, Chearfit and Timeway Ltd., which operate out of the same office as a third front company, Silver Faith Holdings, which U.S. government investigators have tied back to the Chinese Triads. Liu Chaoying controls numerous other Hong Kong front companies as well, including Cheung Tai Hong Holdings Ltd., Giant Enterprises, and CASIL Import & Export Company Ltd...."
American Spectator 8/99 Kenneth Timmerman "...The Lippo-CASIL connection provides new insight into what the Chinese were hoping to get from the Clinton-Gore White House: waivers of U.S. sanctions to give them access to U.S. missile and satellite technology. In April 1993 Clinton waived the Tiananmen sanctions to allow Motorola to launch up to 12 satellites in China for its Iridium global wireless communications network. As part of that deal, the Chinese got help from U.S. companies in designing a "smart dispenser" that enabled them for the first time to launch multiple satellites from a single rocket. According to a December 1996 report from the Air Force National Air Intelligence Center, first revealed by Washington Times reporter Bill Gertz, the Iridium smart dispenser "could be developed into a credible PBV (post-boost vehicle) with a few relatively minor changes." Post-boost vehicles are used to deliver multiple nuclear warheads to separate orbits, so they can strike different targets independently. Multiple warhead technology was a key priority for the Commission of Science Technology and Industry for National Defense (COSTIND) collectors, and was a capability the Chinese had previously lacked...."
American Spectator 8/99 Kenneth Timmerman "...In October 1997, CASIL acquired a 14.71-percent interest in Asia Pacific Telecommunications Satellite Holdings Ltd., a listed company in Hong Kong and New York. APT was founded in 1992, with investors from Hong Kong and Thailand, to own and operate a network of telecommunications satellites. The company now operates two Hughes HS 376 satellites (Apstar-1 and Apstar-1A), and one Space Systems Loral FS-1300 satellite (Apstar IIR), launched between 1994 and October 1997. "The powerful APT...has the largest synchronous satellite transponder capacity available in the Asia-Pacific region," according to a U. S. government cable from Hong Kong obtained by TAS.... They had no choice but to resort to the use of previously purchased U.S. satellites for their encrypted communications," the report states. Those satellites were owned and operated by APT. "This decision was just a step in the continuing process to integrate Hughes equipment for its military--a decision which goes back to at least 1992. Various munitions license applications during 1995 and 1996 reveal an export pattern of Hughes satellite-related equipment through PLA front companies. They include SCL, CESEC (China Electronic Systems Engineering Company), and Huaying," the DOD memo states. "Ironically, many of these exports did not identify these front companies as being associated with the PLA. From what we now know, Hughes employees in China were knowledgeable that they were PLA-associated entities." None of the licenses were vetted for the PLA association, the memo went on, since a military end-user would have been grounds for denying exports. Hughes's failure to disclose the PLA involvement in APT, and in a related cell-phone venture known as APMT, may have violated U.S. export control laws. "In seeking approval of APMT," the Pentagon report states, "Hughes provided only the Singapore address of the APMT joint venture between China and Singapore.. "
Wall Street Journal 7/30/99 Jamie Suchlicki "...In February, a top-level Chinese military delegation, led by Defense Minister Chi Haotian, visited Cuba. It was the first time a Chinese minister of defense had been to the island... In 1993, President Jiang Zemin visited Cuba and Fidel Castro reciprocated by visiting China in 1995. Within the past two years, Cuba and China have exchanged high-level military and civilian delegations, including visits by Raul Castro and Cuba's top generals to China and a trip to Cuba by General Dong Liang Ju, head of the Chinese Military Commission. China has become increasingly vocal in its opposition to the U.S.'s Cuba policy, particularly the embargo, and Cuba condemned last month's accidental NATO attack on the Chinese embassy as "an act of aggression, a genocidal action" by the U.S.. A U.S administration official, who asked not to be identified, says that "the U.S. is tracking very closely Chinese activities in Cuba. As closely as we can."....There can be little doubt about what Cuba wants from China: economic aid in the form of trade and investment from a partner that couldn't be less interested in human rights. ... But evidence is mounting that China's main interest in Cuba is not dissimilar to a use that attracted the Soviets to the island: It is an ideal spot for electronic eavesdropping on communications on the American mainland--in other words, a good base for spying. It also is a useful relay point for routing intelligence back home, which is what the Soviets used it for back in the Cold War days.....Intelligence sources say that the 1970s Soviet electronic facility in Lourdes, near Havana, is still operational for monitoring U.S. military and commercial communications. These sources also say that China is using and improving Cuban capabilities in this area and moving to develop its own on the island. An internal May 13, 1999 U.S. government memorandum claims that "China may have participated in the construction of a short-wave transmitting site" in Havana. The U.S. administration official I spoke with said the U.S. is aware of the rumors that China seeks to establish a signals collection facility on the island, "but we are not aware of any evidence that such a facility exists." Richard Baum, UCLA professor of political science and China expert, points out that an electronic collection facility in Cuba "would fit with Chinese electronic warfare priorities and objectives."..."
South Africa Business Day http://www.bday.co.za/index.html 5/13/98 Simon Barber "..... A special prosecutor is to probe allegations that US Labour Secretary Alexis Herman solicited campaign contributions and received a kickback to help an SA-backed satellite telephone venture win a licence from the Federal Communications Commission...... This inquiry will focus on efforts by Mobile Communications Holdings of Washington to obtain commission approval to launch its Ellipso satellite telephone system. Mobile told the commission that Vula Communications, an SA group, had made an "irrevocable commitment" of $350m to the $1,4bn project, now managed by Boeing, for African distribution rights.Vula shareholders include SA metal and communications trade unions, the SA National Civic Organisation and the National African Federated Chambers of Commerce....."
South Africa Business Day http://www.bday.co.za/index.html 5/13/98 Simon Barber "..... The commission, long reluctant to license Ellipso on the grounds that Mobile was undercapitalised, relented last year, waiving financial requirements. The probe was set in motion by a Cameroon-born business consultant, Laurent Yene. He allegedly gave Herman an envelope containing an undisclosed amount of cash while she was still head of the White House liaison office in payment for lobbying the commission on Mobile's behalf. Yene claimed Herman was involved in soliciting a $250,000 donation to the Democratic Party from Singapore executive Abdul Rahman, said to represent Mobile. Yene was a partner in a consulting firm, International Investments and Business Developments, with Vanessa Weaver, a close friend of Herman. Rahman retained the firm on behalf of Mobile. Yene said he, Weaver and Herman agreed that Herman get 10% of the firm's consulting fees for using her White House influence. Mobile denied Rahman had anything to do with its efforts to obtain a commission licence. Weaver's lawyers denied she was involved with the licensing issue. Reno said the justice department had no evidence clearly demonstrating Herman's involvement......"
10/25/99 Freeper ohmlaw98 "...Before reading the articles below, please allow me to "recap" some relevant background obtained from the public record. In may of last year, the House of Representatives passed legislation to prohibit all satellite and missile technology sales or transfers to China. If it was approved by the Senate, it may well have impacted Globalstar-China Telecom's plans for expanding phone service in China, which at the time only reached about 8 percent of the Chinese population. In September of 1998 the House and Senate compromised and backed away from a ban on exporting satellites to China that had passed in the House. But the legislation did return jurisdiction over such sales to the State Department which took effect in March of this year. But after Clinton threatened to veto any defense bill that contained this provision, the bill was modified to omit the provision to ban sales and instead only require the president to give Congress detailed reports each time a decision is made to permit the launch of a U.S. satellite atop a Chinese missile.
10/25/99 Freeper ohmlaw98 "...When the legislation took effect in March it only mandated that Defense Department monitors be present whenever U.S. satellites are launched on Chinese or Russian rockets. In a strangely shocking turn of events, the Clinton administration decided to place monitoring requirements of its own on all technical transactions as well --including those involving allies such as the Europeans and the Dutch. Under the new requirements, U.S. companies must give the Defense Department 15 days' notice of any meeting in the United States with foreign customers selling commercial telecommunications satellites, so Pentagon monitors can attend. Foreign meetings require 40 days' notice, and even overseas telephone calls require five days'notice to the Pentagon. No such monitoring is required for any foreign weapons transactions.
10/25/99 Freeper ohmlaw98 "...Why did Clinton completely reverse the playing field for the entire industry. Some think it's just dirty politics with the aim of making Republicans look bad. Chris Cox, when told of the problems encountered with the Clinton Administration's new policy, stated "If that's going on, we have an instinct for the capillary, instead of the jugular," Cox said. "Anybody can determine the difference between the Dutch and the People's Republic of China."........Now over a year later the administration is causing problems for the industry with the exception of one important player. Bernard Scwartz'z "Globalstar" is showing a 200% increase in their stock value and service in more than 100 countries. In this weeks Fortune magazine, there is a feature on Bernard Schwartz that quotes him almost bragging about his ability to influence US and foreign government officials. "It was unfair, but we gave something to get something," Schwartz admits. "We've made concessions everywhere. The Chinese also said it was against the law for them to be exclusive. Now, I don't believe that. But that's what they said, so that's what we went with. No one has ever accused me of being a soft negotiator, but sometimes you have to shape the animal differently to get to where you want to go."
10/25/99 Freeper ohmlaw98 "...Only one month prior to the legislation being passed in the House, Schwartz's Globalstar landed a lucrative contract with China Telecom (Hong Kong) Group Ltd. who agreed to invest $37.5 million to become a full partner in Globalstar L.P. China Telecom, a dominant provider of fixed and wireless services in China, along with CHINASAT (China Telecommunications Broadcast Satellite Corporation), who would retain the sole rights to provide Globalstar services in China. Both companies, formerly wholly owned by China's Government Ministry of Posts and Telecommunications (MPT), are wholly supervised by China's newly formed Ministry of Information Industry (MII). This deal paved the way for Scwartz to expand Globalstar satellite coverage from a small 8% to a majority of the Chinese, estimated around 1.2 billion people. In conclusion, while Globalstar's clout rises, other satellite companies complain about the regulatory black hole in Washington caused by Clinton "overregulation". This has allowed Schwartz and Loral to gain a stronghold on the global market and add to the list of countries relying on Globalstar service which now totals over 100...."
4/21/99 Business Wire "..... (NASDAQ:GSTRF) announced today that China Telecom (Hong Kong) Group Ltd. has agreed to invest $37.5 million to become a full partner in Globalstar L.P. China Telecom, a dominant provider of fixed and wireless services in China, along with CHINASAT (China Telecommunications Broadcast Satellite Corporation), will retain the sole rights to provide Globalstar services in China. Both companies, formerly wholly owned by China's Ministry of Posts and Telecommunications (MPT), are expected to be wholly owned andsupervised by China's newly formed Ministry of Information Industry (MII)."The addition of China Telecom as a full partner solidifies Globalstar's commitment to bringing the promise of mobile satellite communications to China's 1.2 billion people," said Bernard L.Schwartz, chairman and chief executive officer of Globalstar L.P. and of Loral Space & Communications, Globalstar's largest equity owner....."
James Surowiecki - Features/Connecting The World 10/25/99 Fortune, 10-25-1999, pp 236+. ".....But Baikonur's [Kazakhstan] forlornness and its geographical location make it a perfect place to launch rockets. That was true during the Cold War, when Sputnik was sent hurtling into orbit from Baikonur, as was the rocket that carried Yuri Gagarin, the first man in space. It's still true, and in the past year, Baikonur has launched five rockets carrying satellites for Globalstar, a company that has spent $3.5 billion and eight years trying to build a global phone system that might actually turn a profit. Unfortunately, only four of those rockets made it into space. Last September, a Ukrainian-made Zenit 2 took off from Baikonur, headed over the hills of Kazakhstan, and almost immediately vanished. (Technically speaking, the rocket didn't "blow up." Explains one Globalstar exec: "It crashed. Then it blew up.")...In the wake of the explosion, Globalstar's stock collapsed, falling 40% in one day. Since Globalstar needed 32 satellites in orbit to start operations and 48 to provide full service, the loss meant that its debut would be pushed back until who knew when. The 12 satellites that the rocket was carrying when it went down cost $100 million. All in all, says one Globalstar executive, "it was the worst day of my professional career." ........Of all the things that were ahead, there's one that Schwartz could never have foreseen: the implosion of Globalstar's competitors. Normally when your competitors take a fall it's welcome news. But in Globalstar's case, more problems than possibilities were created by the debacles at Iridium, the Motorola spinoff that spent about $5 billion to launch its 66-satellite service only to file for bankruptcy protection in early August, and at ICO, a consortium led by Hughes Electronics that planned a $4.6 billion service but followed Iridium into Chapter 11 later that month. ....."
James Surowiecki - Features/Connecting The World 10/25/99 Fortune, 10-25-1999, pp 236+. ".....Globalstar started in the late 1980s as a small operation co-owned by Loral and Qualcomm. It applied to the FCC for a license to use frequency spectrums that had just been made available. It commissioned a market-research study that suggested that a satellite phone system could be built for a reasonable cost and that there was a market for its services. But it was not a real company......... In March 1994 nine different telecom and aerospace companies invested $37.5 million apiece in the new firm: From the U.S. came cellular provider AirTouch, while from abroad came telcos Elsacom (Italy), Dacom (Korea), France Telecom, and Vodafone (with which AirTouch is now merging), as well as Alcatel (the French telecom equipment maker), Alenia (part of an Italian aerospace giant Finmeccanica), DASA (Daimler-Chrysler's aerospace division), and Hyundai (the Korean industrial conglomerate). Loral and its subsidiaries still own 45% of Globalstar and have operational control. In other words, all of Globalstar's strategic partners have an equity interest, so the common good has a chance of winning out over individual concerns. But in the end what Globalstar says goes....."
James Surowiecki - Features/Connecting The World 10/25/99 Fortune, 10-25-1999, pp 236+. ".....Similarly, no one is too thrilled about the way China Telecom became a partner. When the Chinese government telco finally came on board in April of 1998, it did so on the condition that it could buy its equity stake at the 1994 price. Since Schwartz needed a service provider in China, he assented. He also conceded to China Telecom the unique right to buy wholesale satellite service from suppliers other than Globalstar. "It was unfair, but we gave something to get something," Schwartz admits. "We've made concessions everywhere. The Chinese also said it was against the law for them to be exclusive. Now, I don't believe that. But that's what they said, so that's what we went with. No one has ever accused me of being a soft negotiator, but sometimes you have to shape the animal differently to get to where you want to go." ....."
James Surowiecki - Features/Connecting The World 10/25/99 Fortune, 10-25-1999, pp 236+. ".....There are several different technologies for wirelessly transmitting the sound of your voice. For years, Europeans have designed their systems around one called GSM (global system for mobile communications). But way back in 1991, before it had any founding partners, Schwartz committed Globalstar to a different standard, called CDMA (code division multiple access). He did so by agreeing to have Qualcomm provide all the essential telephone and satellite technology; besides manufacturing many of the phones, Qualcomm is designing and building each of the 38 gateways around the world. Qualcomm CEO Irwin Jacobs has staked his company's future on CDMA; Qualcomm pioneered it, and if it spreads, the company is guaranteed a giant revenue stream for years to come. But Jacobs' championing of CDMA as a superior system has rubbed many Europeans the wrong way. Legarde decries the "CDMA imperialists" on this side of the Atlantic and has little patience with what he calls Jacobs' insistence that "everything else is bullshit."
James Surowiecki - Features/Connecting The World 10/25/99 Fortune, 10-25-1999, pp 236+. ".....Qualcomm has also been a source of contention because it is the only Globalstar equipment manufacturer that has a cost-plus contract. That was inevitable, since back in the early 1990s there weren't any other manufacturers with equal expertise in CDMA technology. All indications are that the gateways and the phones work exactly as they're supposed to (which was not the case with Iridium when it launched). But that doesn't mean that the other partners have to be happy about it......"
James Surowiecki - Features/Connecting The World 10/25/99 Fortune, 10-25-1999, pp 236+. ".....But the real market are people who live in a semimodern world that's missing only instant communication." Schwartz thinks that the key markets for Globalstar are Mexico, Canada, Brazil, India, China, Indonesia, and Russia......Then there are the parts of Globalstar that seem just a bit too similar to Iridium. Globalstar phones will be cheaper, but they'll still start around $1,250; a high-end StarTac goes for $200. The phones are not brick-sized, but they have a giant antenna. That's a far cry from Nokia's darling cigarette-lighter phone, and with the ongoing consolidation of the international telecom business, who's to say that you won't soon be able to use that little handset anywhere in the world at any time? And although Globalstar's price-per-minute will be cheaper than Iridium's, at $1.25 to $1.50 in most places it will be much more expensive than the dime a minute Americans can get from Sprint PCS. But Schwartz is not selling Globalstar just to Sprint PCS customers. He's also selling it to people who would be Sprint PCS customers if they could be but who live or work where phone service doesn't exist. Even in the age of globalization, one assumes that anyone who lives where there are no telephones can't afford one...... Since the explosion at Baikonur, Globalstar's stock is up almost 200%, near its all-time high. Over the same 12 months, investment bankers have poured billions of dollars more into the project, even after Iridium's problems had become well known and the rest of the market for satellite financing had dried up......"
ABC 2/15/00 Reuters "…..Army-backed companies are muscling into China's red hot mobile phone market, skirting a ban on military business ventures and offering tough new competition for China Unicom ahead of its Hong Kong listing. The companies ultimately controlled by the People's Liberation Army (PLA) are jumping into the newly-opened market in U.S. standard CDMA networks, which China Unicom is counting on to challenge state giant China Telecom, analysts and company officials said on Tuesday. One of them, China Great Wall Communications, has been operating trial CDMA networks in the cities of Beijing, Shanghai, Guangzhou and Xian for several years. But now another, Hebei Century Mobile Communications Corp, has sprung up with networks in 11 cities in Hebei province that connect to Great Wall's system. The investments appear to be glaring exceptions to an 18-month drive by President Jiang Zemin to sever the bond between the military and big business. What is more, industry regulators appear to be supporting the PLA-backed expansion into telecommunications…….."
Reuters 4/6/00 "…..U.S. Commerce Secretary William Daley said he won a pledge from Chinese Premier Zhu Rongji on Thursday to try to kick-start the stalled roll-out of CDMA mobile phone technology in China. Daley raised the issue during broader talks with Chinese leaders aimed at underscoring White House determination to push through key trade legislation that supports Beijing's entry to the World Trade Organization. China agreed last year to roll out networks using CDMA (Code Division Multiple Access) cellular standard, which was pioneered by U.S. company Qualcomm Inc But the plans were held up by industry regulators in Beijing just days after Qualcomm reached a patent licensing agreement with Chinese negotiators. ``Zhu promised that he would encourage the ministry to move forward,'' Daley told reporters. Qualcomm would earn licensing royalties from a CDMA roll-out, while North American telecoms manufactures such as Motorola Corp, Lucent Technologies Inc and Nortel Networks Corp. could win meaty contracts. Daley said some people believe China is stalling the roll-out to give domestic firms a chance to catch up on the technology and compete for contracts. ….."
Washington Times 4/4/00 Bill Gertz "……. The U.S. ambassador in Beijing recently hosted a meeting of Chinese and U.S. satellite companies, including two firms now under federal investigation on charges of illegally sharing missile data with China. In addition, a spokesman for one of the companies and a U.S. Embassy spokesman gave conflicting accounts of what was discussed at the meeting. The March 16 dinner meeting at the diplomatic residence of Ambassador Joseph Prueher included the Chinese government minister in charge of the China Aerospace Science & Technology Corp. (CASC). The state-owned company runs China's missile program and has been linked by congressional investigators to illegal contributions to President Clinton's 1996 re-election campaign. A China Aerospace-related firm, China Great Wall Industries, is now a target of a federal probe, along with SpaceSystems Loral and Hughes Electronics Corp. on charges the two companies gave sensitive missile technology to the Chinese resulting from a launch failure investigation in 1996. Loral spokesman Tom Ross, a former White House National Security Council official, said the company sought the Beijing meeting specifically to discuss the suspended export license for Loral's ChinaSat 8, an advanced civilian communications satellite. ….."
WorldNetDaily.com 4/21/00 Charles Smith "…..In addition, a 1996 State Department report contradicts Clinton administration claims that advanced communications exports to China were "civilian" projects. The report states that the Chinese army was keenly interested in obtaining Loral Globalstar satellite technology and the Loral purchase was possibly being financed by Chinese billionaire, Li Ka-Shing. The 1996 Department report was written by then-Ambassador to China James Sasser, a former U.S. Senator from Tennessee. The 1996 State Department report was obtained through the Freedom of Information Act……. The 1996 report written by Sasser alleges that the Ministry of Posts and Telecommunications (MPT) and Li Ka-Shing were both directly involved with the People's Liberation Army in financing the Loral export to China. "Already, foreign companies are interested in the new PLA-backed entity that is likely to emerge over the next year," states the report. "Recent press reports indicate that Hutchison Whampoa may be involved with the PLA about possible funding options." ……… Li Ka-Shing owns Hutchison Whampoa Ltd. and is reportedly the sixth richest man in the world. Hutchison Whampoa is the shipping company awarded the contract to control the ports at both ends of the Panama Canal. ….. Li Ka-Shing has been described by intelligence sources as a "Howard Hughes" for the Chinese Military Intelligence Department, or MID. U.S. Army Southern Command documents on the Panama transfer noted that Li Ka-Shing was an "indirect" threat to the United States. ……."
WorldNetDaily.com 4/21/00 Charles Smith "…..Loral's Globalstar is not the only satellite system under fire for alleged illegal transfers to the Chinese army. The State Department recently accused Motorola's Iridium system of passing significant missile technology to China. ……. However, neither satellite system seems to be a big hit with consumers or Wall Street investors. The ill-fated Iridium satellite phone system declared bankruptcy last year and now plans to write off the entire $5 billion space-based system. The extraordinary process of de-orbiting and destroying the array of 66 satellites is under way as Iridium operations shut down. ……… "There's not room for three to five Iridium-like systems, only one or two," the article noted. "... Bernie Schwartz built the cheap one (Globalstar) and he will win." ……."
WorldNetDaily.com 4/21/00 Charles Smith "….."The addition of China Telecom as a full partner solidifies Globalstar's commitment to bringing the promise of mobile satellite communications to China's 1.2 billion people," said Schwartz in a public statement in 1998. The deal specified that Beijing's government companies would manage all Globalstar operations in China, according to Schwartz. With the world's largest population and one of the fastest-growing economies, the deal was estimated to increase Loral's revenues by $250 million annually. The telecommunications deal was the result of a meeting between Schwartz and top Chinese officials made possible by a trade mission coordinated by then-Commerce Secretary Brown in August 1994. Schwartz met with People's Liberation Army Gen. Shen Roujun. Besides construction, operation and maintenance of a Chinese telecommunications infrastructure, China Telecom lists among its specific responsibilities "emergency communication during wartime"; the construction and operation of government communications networks; ensuring security in communication; exercising "centralized control over public satellite communication" and "any duty that may be entrusted by MPT" (Ministry of Posts and Telecommunications) or the new Ministry of Information Industry. ……."
WorldNetDaily.com 4/21/00 Charles Smith "…… Despite an ongoing FBI investigation into the unauthorized transfer of advanced missile-guidance technology to China, Loral Space & Communications Corp. requested and received Clinton administration approval to sell communications satellites to Beijing in 1996, a secret National Security Council memo obtained by WorldNetDaily shows. Congressional investigators have raised concerns that the satellite technology shared with the Chinese may have allowed them to improve their capability of launching intercontinental ballistic missiles. China currently targets 13 such nuclear-tipped missiles at the United States. ………. The July 1, 1996, action memo to National Security Adviser Anthony Lake, obtained through an intelligence agency source, reveals Loral requested that President Clinton delay a pending waiver for a satellite export. "In mid-June, Globalstar's parent company, Loral requested that we temporarily delay evaluation of their request for a national interest waiver for this project," the memo explains. "The company has now asked us to resume processing of their application, and State has confirmed its support for approval of the license…….President Clinton signed the waiver for Loral later that month. Loral was then under investigation for the loss of an encryption control board from a Loral Intelsat satellite that crashed in China. The missing board prompted an investigation by the FBI.
WorldNetDaily.com 4/21/00 Charles Smith "…….According to documents obtained from the U.S. Commerce Department, Loral was aware that the exported satellite systems were developed from American military equipment. Loral documents obtained from the files of the late Commerce Secretary Ron Brown included a folder labeled "for Secy. Brown" with a page titled "Commercial Applications Of DoD Technology." The Loral document lists "Intelsat," "Cellular -- Globalstar" and "Direct Broadcast Satellite" technology along with a variety of other products developed from Department of Defense projects. ……"
WorldNetDaily 6/4/00 I J Toby Westerman "….With all the attention paid to the immigration tragicomedy involving Elian Gonzalez, little notice has gone to Cuba's move to modernize its telecommunications and computer capabilities -- or it's attempt to develop an advanced electronics industry on the island nation with China's help. Wu Jichuan, head of Beijing's Information Industry Ministry, led a delegation from China on a recent three-day visit to Cuba, according to Radio Habana Cuba, the official broadcasting service of the Cuban government. Cuban President Fidel Castro congratulated the Chinese delegation for its efforts and for China's continued "solidarity" with Havana. According to Castro, relations between the two communist nations "have never been better." ……. The Chinese delegation's visit comes at a time when Cuba seeks to end the 40-year U.S. embargo against the island. …… Cuba seeks to attract foreign investment and has pattered its own brand of economic reform based upon China's experience. In 1995, Castro visited China and stated that China's experiment with market reform was "an example" for the Cuban government. ……"
The Pittsburgh Tribune-Review 9/12/00 "…… Schwartz is chairman and chief executive officer of Loral Space & Communications Ltd. It was in 1998 that the Justice Department´s campaign finance task force recommended that he be investigated for the alleged illegal sale of missile-related technology to China. …. Mr. La Bella recommended that Schwartz and the president be the targets of the investigation. Attorney General Janet Reno rejected La Bella´s request. La Bella later was removed from office. A federal grand jury, however, continues to investigate allegations that Loral, without State Department approval, sent sensitive information to the Chinese. …… Now come revelations, from Federal Election Commission documents culled by The Washington Times, that mere months after Ms. Reno refused to investigate yet another Friend of Bill, Schwartz, in February 1999, began a series of soft money donations to the Democrats that, by this past June, totaled $657,000. Hillary Clinton, seeking a U.S. Senate seat in New York, received $45,000. Some of those soft money contributions have been paying for issue ads attacking Republican presidential nominee George W. Bush. ……… "
The Pittsburgh Tribune-Review 9/12/00 "…… There remain two outstanding questions: First, was there a quid pro quo in the 1996 dealings between President Clinton and Bernard Schwartz? Second, are the latest round of Schwartz donations another quid pro quo for a dropped investigation? …..A "yes" answer to either question clearly makes this a matter of treason….."