Technology transfers unlimited?

By Tina S. Silverman
The Washington Times, 15 June 1998

Sen. Richard Shelby, chairman of the Senate Intelligence Committee, has announced that he
intends to invite officials from the Reagan and Bush administrations to testify in the matter of
Chinese launches of U.S. satellites. This is a welcome decision in light of the Clinton
administration’s insistence that its decision to grant an export license to the Loral Corp. for a
Chinese satellite launch is consistent with prior authorizations granted by Presidents Reagan and

Mr. Shelby’s witnesses are sure to show that this was not just business as usual.

During the latter part of the Bush administration, I was responsible for coordinating the U.S.
government’s position for the launch of American commercial satellites on Chinese missiles. This
was in accordance with an agreement that had been reached in 1989 between the United States
and China. Implementation of the agreement was contingent upon the Chinese fulfilling clearly
defined obligations with respect to trade and technology transfer. Today, as the Clinton
administration implements the agreement negotiated by its Republican predecessors, serious
allegations are being raised about a potential breach of national security and exercise of political
influence that undermine the integrity of our government’s policy-making process.

Yes, the agreement to allow exports of U.S. commercial satellites for launch by the Chinese
initiated by the Republicans. The objectives were to promote reform in China by opening
international communications and trade, and to assist our own industry to remain competitive.
But the parameters with respect to balancing American commercial interests and national security
were well defined. National security was foremost in the policy calculations. Never was there
any question, as is the case today, as to whether campaign contributions by U.S. or foreign
entities would affect our internal decision-making process. And, as is the case today, there was
no Justice Department investigation underway involving the potential illegal transfer of ballistic
missile technology by a U.S. company to China overshadowing the deliberations.

Therefore, while the policy framework followed from Mr. Reagan to Mr. Bush to Mr.
the circumstances under which Mr. Clinton agreed to grant the Loral Corp. an export license are
unlike anything that had occurred previously. Any comparison should be viewed as a transparent
and cynical attempt to minimize the potential harm to national security and the damage to the
nonpolitical interagency review process used to approve such transactions.

At that time the export of commercial satellite technology was controlled by the State
and was considered a “Munitions List Item,” meaning that its export was deemed critical to
national security because of the potential military use of the technology. But in 1996, Mr.
Clinton, at the urging of U.S. industry, and over the objections of Secretary of State Warren
Christopher, transferred jurisdiction over export approval of this technology to the Commerce
Department. The allegation that this was done in response to campaign donations by the chief
executive officer of the Loral Corp., who during the 1990s has been the single largest donor to
the Democratic Party, is a concern. But of even greater concern is the allegation of campaign
contributions to the president’s reelection by agents to the People’s Republic of China. The fact is
that the transfer of this function shifted the balance of interests within the federal bureaucracy
away from the protection of sensitive technologies in favor of commercial interests.

This was highly significant in that it sent a clear signal to the Chinese government, U.S.
and our own bureaucracy that a major shift in U.S. policy had occurred. Commercial interests
would take precedence over U.S. security concerns in technology transfer decisions.

To those unfamiliar with the internal workings of the U.S. policy process, government
may appear to be monolithic. In fact, each Cabinet department functions as a special-interest
group fighting for its particular constituency. Commercial interests may be at odds with specific
diplomatic considerations, or labor constituencies or national security.

While everyone is working in the best interests of the nation, nevertheless it is from a
vantage point. The outcome is usually a compromise that will satisfy the various constituencies
and be in the national interest. This interagency review process is integral to U.S. policy process
and involves career civil servants, military personnel and policy appointees. During the Reagan
and Bush years, it was this process that determined how we implemented the launch agreement,
not the reported influence on our commander in chief of external political and foreign donors.

The Interagency Working Group dealt with Chinese compliance with those terms of the
agreement related to how China priced its launches and to China’s compliance with missile
technology controls. After recommendations from this review group, the president would make a
determination as to what was in the national interest.

Anyone in the Clinton administration involved in this interagency decision process would
have received the message that the transfer of authority for satellite technology to the Commerce
Department over the objections of the secretary of state signaled a major shift in policy direction.
Moreover, the administration has greatly diminished the effectiveness of the Defense Department’s
Technology Security Agency during its tenure, an office that was a watchdog for technology
transfer under Mr. Reagan and Mr. Bush.

While I have not been privy to the interagency debates that have taken place in the Clinton
administration, having been involved in the process myself, I find it hard to imagine that the
individual staffers responsible for making policy recommendations would not have foreseen the
direction in which their deliberations would invariably have led them, based on their own personal
job security considerations. Last Sunday night’s “60 Minutes” interview on this very issue did in
fact present two federal employees who believe they were hampered in their attempts to perform
their respective duties in the Defense and Commerce departments.

The Chinese government closely monitors the U.S., our elections and the political process.
extent to which the Chinese leadership has any real comprehension about how our democracy
functions is unclear. If the allegations of wrongdoing prove true, then the Chinese government
believed that U.S. policy was for sale. The congressional committees looking into this matter
will have to determine the extent of any wrongdoing in this matter, but as an outsider now looking
in, I have to wonder whether the government’s interagency review process has not, at least in this
matter, become nothing more than a rubber stamp for the administration’s need to please big
political contributors.

Tina S. Silverman was principal advisor on defense trade in the office of the United
Trade Representative (USTR) from 1991-1993.

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