Treasonous Tradeoff

by William Norman Grigg

On May 15th, the New York Times disclosed that notorious Democratic fundraiser Johnny Chung was the human conduit through which Red China's People's Liberation Army (PLA) had filtered $110,000 in contributions to Bill Clinton's re-election campaign in 1996. Chung allegedly received $300,000 from Lieutenant Colonel Liu Chao-ying of the PLA. Ms. Liu is an official of the China Aerospace Corporation; through Chung, she enjoyed personal access to Mr. Clinton.

According to the Times, "At one fundraiser to which Mr. Chung gained admission for her, she was photographed with President Clinton." This occurred, noted the Times, at a time when "President Clinton was making it easier for American civilian communications satellites to be launched by Chinese rockets, a key issue for the PLA and for Ms. Liu's company, which sells missiles for the military and also has a troubled space subsidiary."

Follow the Money Trail

Ms. Liu is a textbook example of Red China's "princeling" class the wealthy offspring of the Communist Party's elite. Her father is General Liu Huaqing, who until his retirement in 1997 was vice chairman of Red China's Central Military Commission and a member of the Standing Committee of the Red Chinese politburo the Party's apex decision-making body. A graduate of the Soviet Union's Voroshilov Naval Academy, General Liu is a Leninist of the old school, and doubtless is well aware of Lenin's prophecy that the West would sell the rope with which it would be hung.

Johnny Chung's admissions, which were made to Justice Department investigators as part of his plea bargain agreement, have established a money trail running from the ruling body of Red China's Politburo directly into Bill Clinton's Oval Office. The implications of these developments were not lost on Senator Joe Biden (D-DE).
In remarks made in a television interview shortly after the New York Times story broke, Senator Biden declared that if "any political official" in the Clinton Administration knew of a correlation between illegal Chinese donations and technology transfers, "the person should be indicted and put in jail, no matter who it is. "Biden's assessment is sound regarding criminal prosecution. However, it is not necessary to document specific knowledge on the part of Mr. Clinton in order for him to be impeached on the basis of culpable neglect of our national security.

Johnny Chung's latest admissions to federal investigators came hard on the heels of the revelation that Mr. Clinton had effectively blocked a Justice Department investigation into possibly illegal technology transfers to China by Loral Space Technologies and Hughes Communications firms whose chief corporate officers were among the largest donors to the Democratic National Committee (DNC). During the 1995-96 election cycle, Loral CEO Bernard Schwartz donated $632,000 to the DNC.
In February, Mr. Clinton granted a presidential waiver to Loral, which permitted the export of a satellite to China. He did this despite a warning from the Justice Department that the waiver would imperil an ongoing criminal investigation into the earlier transfer of similar technology. Mr. Clinton had granted a similar waiver in 1996.

Prodded Into Action

The accumulating evidence of corruption perhaps even reaching the threshold of treason finally provoked Congress to action. On May 21st the House voted 342 to 69 in favor of a resolution urging the Administration to cooperate in congressional investigations into illegal fund-raising and technology transfers. "The issue of the China export license, technology transfers, and foreign efforts to influence campaigns is the only serious question I've heard in this whole Whitewater-Lewinsky thing," commented an anonymous senior House Democrat following the vote. Seeking to explain the dramatic shift in sentiments on the part of House Democrats, Representative Tim Roemer (D-IN) observed, "Many of our Democrats don't want to be part of a cover-up."

One significant illustration of the sudden political vulnerability of the President was offered by Representative Henry Waxman (D-CA), a White House surrogate in the Government Reform and Oversight Committee who had previously been a relentless obstructionist. Reacting to the May 21st vote, Waxman distanced himself from the Administration, insisting that "they need to be more cooperative."

Another indication that Mr. Clinton's supporters were edging away from him came in the form of a May 19th Washington Post house editorial endorsing a congressional investigation of the "Chinese Connection." "The investigation should obviously go to the knowledge of various administration and party officials as to what was going on and their possible knowing complicity in it," opined the Post. "After 49 visits [by Chung to the White House] and donations of hundreds of thousands of dollars, the recipients of all this attention and money may surely be presumed to know something about who their benefactor is, what he is after and where he gets his money from. And if they didn't know, did they at least wonder? And if they wondered, did they not make any effort to find out? There's a lot to be explained."

Referring to the two major strands of the scandal the laundered donations from the China Aerospace Corporation and the donations from Loral Space Technologies the Washington Post aptly summarized: "The double-barreled question at issue is whether the China company influenced American policy and whether the American contributor, in return, gained from it."

Hiding Behind Evidence

As Senator Bob Kerrey (D-NE) has pointed out, Bill Clinton is "an exceptionally good liar," and one of his distinctive gifts is the ability to discover nuances of language with which he can misdirect his audience without flatly misrepresenting demonstrable facts. Mr. Clinton has employed that dubious gift in an effort to parry accusations that his receipt of illegal campaign contributions from China influenced his policy decisions.

Addressing the key issue in an accusation of bribery the existence of a corrupt quid pro quo Mr. Clinton declared, "I don't believe you can find any evidence of the fact that I had changed government policy solely because of a contribution." But this is a typically self-serving standard. It is not necessary to prove that the illegal contributions were the sole reason for a policy decision; it is necessary only to demonstrate that they played a role of any kind in that decision and in this respect the preponderance of evidence weighs decisively against Mr. Clinton.

Michael Kelly of the Washington Post observes, "During the period of Schwartz and Liu Chao-ying's munificence, Clinton re-liberalized U.S. policy toward Chinese satellite launches." Kelly assembles the relevant facts into a devastating brief against Bill Clinton, built around "three related significant events":

1) "In 1995 Schwartz wrote Clinton urging him to shift licensing authority over Chinese satellite launches from the security-minded State Department to the Commerce Department, which promotes American business interests, not national safety. In October, Secretary of State Warren Christopher, backed by the Defense Department, the CIA, and the National Security Agency, ordered State to retain control over the launches. Commerce asked the President to overrule Christopher. In March 1996 Clinton did so, but he delayed implementation and, importantly, publication of his order until November 5, 1996 the day he was re-elected."

2) "On February 6, 1996, Clinton signed waivers for four new American satellite launches in China, despite evidence that China was still exporting nuclear and missile technology to Pakistan and Iran. One of the launches crashed, destroying a $200 million Loral satellite. A Loral-chaired commission reviewed the causes of the crash, and shared the results of its review with China, without getting the permission required before an American company may transfer missile guidance and control technology to China. A subsequent Pentagon study reportedly concluded that 'national security has been harmed,' because Loral's advice could help the Chinese military correct serious problems with its nuclear ICBMs, 13 of which the CIA says are targeted at the United States. The Justice Department opened a grand jury investigation of Loral."

3) "In February 1998, President Clinton approved a new waiver for Loral allowing the company to transfer more technological assistance to China. He did this although his Justice Department had warned the White House that granting Loral a new waiver to do essentially what it had done in 1996 would amount to ex post facto presidential dispensation of Loral's past actions, and would thereby greatly undercut Justice's case."

"It is a fact," Kelly concludes, "that Bernard Schwartz and Johnny Chung gave Bill Clinton's reelection campaign a lot of money. It is a fact that Schwartz, and also Chung's masters, got the presidential decisions they wanted. It is a fact that, in these decisions, the President overruled his State and Defense Departments on a matter of national security and his Justice Department on a matter of law enforcement."

Raising the Red Standard

In the wake of Chung's damaging disclosures, State Department spokesman James Rubin insisted that "no controlled information" regarding missile technology "has been authorized to be made available to Chinese authorities." In this fashion Rubin decanted a sophisticated falsehood worthy of Bill Clinton himself: Loral's technology transfers were unauthorized at the time they were made, but essentially authorized after the fact by Bill Clinton's February 1998 waiver. The waiver was issued despite the State Department warnings to the National Security Council that Loral's actions were "criminal, likely to be indicted, knowing and unlawful."

Rubin also protested that "the whole underlying suggestion that somehow we want to transfer technology to the Chinese is simply fatuous." Perhaps Rubin has not been informed that in late 1994, the Clinton Administration entered into an agreement with Red China's Commission on Science Technology and Industry for National Defense (COSTIND) for the specific purpose of facilitating technology transfers to Red China.
As reported in these pages more than a year ago (see "Honoring the Butcher of Beijing" in our January 20, 1997 issue), in October 1994 then-Defense Secretary William Perry signed an unprecedented agreement with COSTIND chairman Lieutenant General Ding Henggao to provide for technology transfers from the U.S. to Beijing under the rubric of the "U.S.-China Defense Conversion Commission." While the putative purpose of that Commission was to assist the Chinese in adapting military technologies for civilian use, Beijing, not surprisingly, has a different perspective, and General Ding has expatiated upon that perspective quite capably.

In the Summer 1994 issue of Chinese Military Science, General Ding declared: "Defense and commercial products are becoming more and more compatible. While we emphasize the conversion of defense technology into commercial use, we must study defense-commercial dual-purpose technology and possible transfers from commercial technology to defense use." The drive for "socialist modernization" means acquiring new high-tech capabilities for the Chinese military, noted Ding: "Defense science, technology, and industry are the major material bases on which we can realize our army modernization.... As the Gulf War clearly showed, the one who possesses high-tech superiority will have the upper hand on the battlefield. To fundamentally change the backwardness of our army's weapons we must speed up the research of new and high-tech weapons, and raise the level of modernization of our weaponry.... Therefore, we must seize the opportunity and speed up the development of our defense science, technology, and industry...."

"To make quick advances," continued Ding, "we need to be self-reliant, but at the same time we should be open wider to the outside world. In the process of our opening to the world, we should seize every favorable opportunity to import advanced technology from abroad.... We should expand our technology cooperation and exchange with foreign countries."

General Ding, who as COSTIND chairman commands China's most adept spies, also pointed out that with technology "cooperation" and "exchanges" comes "increased mutual infiltration," which primarily benefits the less-developed nation. Citing Deng Xiaoping's dictum that "science and technology are the common treasures of mankind," Ding offered a thinly veiled mandate for technology theft: "We should be good at linking imports with our own creations. Imported technology should be well digested and widely applied and used."

Battlefield Technology

General Ding published his intentions just months before inking the technology transfer agreement with Defense Secretary Perry. Some of the most crucial technologies that COSTIND would digest, apply, and use would be provided by Loral Space Technologies. "In 1994, Bernard Schwartz very much wanted to shoot his satellites into space on top of Chinese rockets," explained computer security expert Charles Smith in a report published by WorldNetDaily. "To do this Schwartz also had to get help from the Clinton Administration. The Clinton Administration arranged for Schwartz to meet a select part of the Chinese leadership."

Through Freedom of Information Act requests, Smith's consulting firm, Softwar, was able to pry loose documents outlining the contacts forged between Loral and the Red Chinese military leadership by the Clinton Administration; those documents had been buried in the files of the late Commerce Secretary Ron Brown.

Smith reported that in late 1994, "Bernard Schwartz requested that the Clinton Administration set up a meeting between himself and Shen Rong-Jun, vice minister of COSTIND." Schwartz cut a deal with COSTIND involving "the use of computer-generated secret codes to control satellites in space," thereby transferring key encryption technologies to China. This technology is so sensitive that Bill Clinton refused to sign a waiver to allow the export of a satellite to Australia because it contained an encryption control chip yet he had no similar scruples about providing this key technology to Red China.

"The military application of encryption for satellites is simple and as old as warfare," explained Smith. "The same technology can be applied to missiles, planes, tanks, and ships. On the modern battlefield you want your 'bird' to respond only to your voice. You must electronically cipher the commands whether they are to humans or between computers and missiles to prevent the other side from listening in or interfering.

To issue secure war commands worldwide you must have satellites. The Gulf War is a prime example." As noted above, General Ding and the PLA leadership drew exactly the same lessons from the Gulf War."These systems are not easy to get," continued Smith. "They cannot be obtained on the Internet nor are they available even on the black weapons market. These systems consist of radiation-hardened chips that can survive in the hostile environment of space and nuclear warfare.
These chips are not available on the open market nor produced in great quantity. Just the kind of technology COSTIND would buy for military missile communications."

Trouble Shooting for Beijing

As noted above, Loral provided other very valuable services to Red China's aerospace sector. When a Chinese Long March rocket exploded shortly after liftoff on February 15, 1996, destroying a $200 million satellite owned jointly by Loral and Hughes Electronics, the U.S. corporations deployed a technical team to conduct an accident investigation. Washington Times correspondent Bill Gertz reported: "Their analysis of the problems with the Chinese booster included numerous recommendations on how to avoid such costly mishaps in the future. The team produced a highly technical report identifying an electrical glitch in the flight-guidance system as the cause of the crash. The report also identified other weaknesses in the rocket."

Representative Dana Rorhabacher (R-CA), chairman of the House Space and Aeronautics Subcommittee, explained that the team's post-accident investigation helped the Chinese make dramatic improvements in the Long March booster, which is identical in design to China's strategic nuclear missile. "It seems what happened was a sterile, coldly calculated decision to fix [the Long March's] problems with no consideration of the national security implications to the United States," protested Rorhabacher in an April 30th speech in the House. "Chinese missiles blowing up on launch is a good thing. We should not be making their missiles better."

According to Loral officials, the Chinese-born former Loral executive who headed the launch investigation, Dr. Wah Lim, violated company policy when he turned over the 200-page assessment without notifying U.S. officials. Representative Gerald Solomon (R-NY), chairman of the House Rules Committee, is investigating a report that Lim was previously denied a high-level security clearance when he worked for Northrup Grumman on the B-2 bomber. After providing Chinese officials with the launch assessment, Lim left Loral to take a position with Hughes Electronics as vice president of technology and development. Hughes is a firm that literally celebrates its technical collaboration with Beijing: The corporation commemorates "Collaboration Day" every July 10th. The event, sponsored by the Hughes-China Technology Program, "is part of Hughes' commitment to support China electronics and communications industries," explained an October 15th press release from the corporation.

Not surprisingly, the press release noted that "Hughes executives acknowledge the encouragement and support of the Chinese government." "Hughes values the development of mutually beneficial partnerships with China and hopes to continue providing assistance, expertise, and resources to Chinese universities and institutions for the research and development of advanced technology," declared Dr. Wei-Yu Wu, director of the Hughes-China Technology Program. "There are numerous very qualified scientists and technicians in China. Hughes would like to work with these talented individuals to help them scale new heights through the launch of even more technological cooperation projects. Hughes-China Technology Collaboration Day will be held every year from now on in order to enhance exchanges and cooperation." COSTIND's General Ding himself might easily have drafted this statement.

Former Hughes chairman, C. Michael Armstrong, who is now head of AT&T, was also a major financial supporter of the DNC, a fact that appears to have had an impact on Mr. Clinton's policy decisions. The April 13th New York Times reported that in September and October 1993, Armstrong sent "two blunt letters" to Mr. Clinton. "Soon after the letters," reported the Times, "Mr. Clinton assured Mr. Armstrong that he was trying to resolve the tussle between the State Department and the Commerce Department." In 1995, Armstrong and Schwartz sent a letter to Mr. Clinton urging that Commerce be put in charge of licensing satellite exports. In March 1996, as noted above, Mr. Clinton complied with the recommendation made by his big-money donors, shifting major export licensing responsibilities to the Commerce Department.

Princeling-Quisling Axis

"Think of 'the China connection' as two-tracked," wrote syndicated columnist William Safire on May 28th. "One track is the purchase of White House influence by U.S. aerospace corporations eager to sell advanced missile technology to China. The second is the plan by China to affect Clinton policy by directing money through various fronts into the Clinton-Gore campaign." In effect, there is an entente between Red Chinese princelings and American corporate quislings and the White House has brokered the most profitable aspects of that entente at critical expense to U.S. national security.

Corporations lusting for Beijing's business have taken notice of the Clinton Administration's decimation of export controls. In a dispatch from Beijing, the May 24th Washington Post observed: "Almost nine years after the United States slapped an embargo on the sale of military technology to China after the crackdown on student-led protests in Tiananmen Square, U.S. defense contractors are doing what few thought possible: preparing for the easing of these restrictions. Even as a controversy exploded in Washington over allegations that the Clinton administration allowed American companies to pass sensitive missile technology to China, five prominent U.S. companies participated in China's first defense electronics trade show in a Beijing exhibition hall."

One Chinese-language pamphlet distributed by Motorola in its booth at the PLA-sponsored China International Defense Electronics Exhibition touted "military-use, police-use computerized command, control and communications networks"; another advertised "battlefield-deployable communications, leading the charge in information warfare." With Clintonesque brazenness Motorola spokesman Robert Edwards denied that his firm was "marketing its products to the Chinese military" as if there were any other potential Chinese customer for "military-use battlefield-deployable" communications networks. Bates Gill, a defense expert for the Monterey Institute for International Affairs, points out that the equipment being advertised by Motorola is perfectly suited to Red China's new military doctrine, which calls for integrated operations among air, naval, and ground units a capability China presently lacks.

Although none of the other American firms was as shameless as Motorola, they and their foreign counterparts are confident that the Clinton Administration will soon abandon any pretense of protecting national security in its treatment of Red China.

Chu Shulong, director of the North American Division of the China Institute of Contemporary International Relations, told the Post that the post-Tiananmen sanctions "will be an issue for the Chinese during the coming summit between Presidents Clinton and Jiang Zemin." According to Chu, "Those sanctions have been there too long and their symbolic meaning is quite negative. We want the United States to get beyond Tiananmen Square."

Beijing has hundreds of thousands of reasons to be optimistic. In its decision to buy off Bill Clinton, the Chinese Politburo invested wisely.