Tag Archives: Congress

Domestic political considerations Threaten Serious Harm For U.S.

(Washington, D.C.): It is no secret that control of 107th Congress hangs in the balance as the days before the November election slip away. In their determination to secure a renewed mandate, the GOP leadership has been moving heaven and earth to enable their members to get out of Washington and onto the hustings with a record of accomplishment that will work to their individual and collective advantage.

To do so, however, Speaker Dennis Hastert and his colleagues have been in the unenviable position of having to accept terms — from raising the minimum wage to new entitlement programs to busting the budget caps — that would have been unthinkable under other circumstances. Whether their constituents will, come November, reward or punish legislators at the polls for such behavior remains to be seen.

What is far less unpredictable, however, are the repercussions of allowing this strategy to leach into the foreign policy arena: If the full House of Representatives approves an “Armenian genocide” resolution scheduled to be marked-up today by a House International Relations subcommittee, U.S. relations with Turkey will suffer serious — and possibly irreparable — harm.

Turkey: An Indispensable Ally

Turkey is one of the most strategically important nations on the planet, situated at the cross-roads of Europe, Asia and the Middle East, with important — and generally very complex — ties to each. With the Cold War’s passing and the dissolution of the Soviet Union, Turkey is surrounded by potential instability and conflict, a situation that shows no sign of change in the foreseeable future.

As former Deputy Assistant Secretary of Defense Douglas J. Feith once put it:

“When most Americans think of Turkey, they envision a map of Europe whose center is usually Switzerland. Turkey, of course, appears in the lower right-hand corner of such a map — a sort of marginal nation, seemingly at the fringes of what matters in the world. This is certainly the way Europeans view their Islamic Turkish neighbor.

“On the other hand, if one conceptualizes a map that would contain most of the countries, conflicts and potential flashpoints with which the United States is vitally concerned at the moment — and likely to be preoccupied for the foreseeable future — it would include: the Balkans; Russia; the southern Caucasus and Caspian Basin; Iran, Iraq and the rest of the Persian Gulf; Syria, Israel and the Levant; and North Africa. And what nation is at the center, both in physical and geopolitical terms, of that map? Turkey, of course.”

Turkey’s geography and its unique status as a functioning, secular democracy in an Islamic nation make it a truly indispensable ally for the United States. These factors have also made it a prime target for those in Russia, Armenia, Iran, Iraq, Syria and elsewhere opposed to Western values, determined to spread radical Islam, weaken the NATO alliance — whose eastern anchor Turkey has long constituted — and/or work against U.S. interests in the several regions in which the Turks play a pivotal role. In particular, Turkey has long been in the cross-hairs of small but ambitious, and often violent, Islamist groups — some of whom receive support from neighboring Iran and Syria.

In recent years, however, some Islamists have sought power in Turkey through non-violent means. They have formed a political faction known as the Welfare Party (RP), that won 19 percent of the vote in the municipal elections of 1994. Since then, its appeal to Islamic values and social service organizations have caused its popularity to grow to the point where, in 1997, rivalries between the secular parties prevented them from forming a governing coalition and the nation was led for the first time since Attaturk by a religious party. Had the RP been able to hold onto power — or should it be returned to it in the future — there is reason to believe that the substantial American military infrastructure in the country, which is critical to America’s capability to influence events in Iraq, among other places, and the budding relationship between Israel and Turkey could be at risk.

Saving Congressman Rogan

Unfortunately, Speaker Hastert has felt obliged to pursue a course of action that could trigger a series of events leading to just such undesirable results: He has pledged to the politically active Armenian-American community that he will bring a resolution condemning Turkey for engaging in genocide against Armenia early in the 20th Century to the House floor and secure its approval before adjournment this Fall. If he does so, there is little doubt that among the repercussions will be the alienation of the pro-U.S. government of Turkey, the undermining of support at home for its policies and a shot-in-the-arm for Turkey’s anti-Western Islamist opposition.

This is all the more regrettable insofar as it should not fall to the Congress to adjudicate the arcane and bitterly debated question of whether the undisputed murder of hundreds of thousands of Armenians was a centrally planned and systematic act by the Ottoman Turk government that would, therefore, meet the definition of genocide. Or, alternatively, was it the result of widespread but uncoordinated ethnic warfare? It is hard to believe that any of those legislators who will shortly be asked to render judgment on this matter have done their homework by, for example, familiarizing themselves with the writings of Dr. Bernard Lewis — the Princeton scholar who is universally regarded as one of the most eminent experts in the field and who has concluded that “genocide” is not a proper characterization for what befell the Armenian people nearly a century ago.

The Speaker feels impelled to take such a course out of an understandable desire to help a valued and endangered colleague, Rep. Jim Rogan of California — whose role as an impeachment manager has made his defeat this November a priority for the Clinton team and its allies. Saving Mr. Rogan takes on additional importance as the two parties battle for every single seat in a hotly contested and increasingly desperate struggle for control of the Congress.

As it happens, there are said to be more Armenians in Rep. Rogan’s district than anywhere else outside of Armenia. In the hope of garnering support from this energetic and financially well-endowed minority, the Speaker pledged during an August campaign swing on behalf of the Congressman to secure House action on the Armenians’ Number One priority — H.Res. 155 which would put the U.S. government on record as finding that: “The Armenian genocide was conceived and carried out by Ottoman Turkish Governments from 1915 to 1923, resulting in the killing of 1,500,000 Armenian men, women, and children, the deportation of more than 500,000 survivors, and practically succeeded in the elimination of the over 2,500-year Armenian presence of Armenians in their historic homeland.”

The Bottom Line

As compelling as Speaker Hastert’s considerations are for pursuing this “Armenian genocide” initiative, they risk a potentially serious — if gratuitous and unnecessary — rupture with one of its most important strategic partners, Turkey.

To make matters worse, such a rupture would come at a particularly unpropitious time. For instance, Saddam Hussein is emerging once again as a mortal threat to his neighbors and Israel. Uncertainties about the future course of pivotal Persian Gulf states like Iran and Saudi Arabia are exacerbating concerns about future oil shocks and their economic consequences. And Israel may be on the brink of a new outbreak of violence as the Palestinians prepare to liberate the rest of “Palestine” — with or without another fraudulent “peace agreement.”

A stable, secure Turkey closely tied to the West is an indispensable counterweight to these and a number of other worrisome developments. It behooves the House Republican leadership, therefore, to find ways to secure a renewed mandate without jeopardizing vital national interests.

Breaking Faith

(Washington, D.C.): Last week, the U.S. ambassador to Israel, morphed from a man who presents his well-established pro-Israeli Labor Party and pro-Arab leanings as the stuff of an “honest broker”1 into a man who has patently broken faith with Israel. On Friday, Amb. Martin Indyk declared that, when it came to the issue of Jerusalem that has confounded him and his fellow peace-processors, “There is no other solution but to share the holy city….It is not, and cannot be the exclusive preserve of one religion.”

Questions as to whether Indyk was simply free-lancing or acting upon instructions from Washington appeared to be settled when, according to the London Guardian, Khalil Jahshan of the American Committee on Jerusalem, a group that supports the Arab line on the holy city, said: “We are delighted to see a representative of the U.S. government saying publicly what we have heard privately — that there should be a settlement by which all national aspirations are accommodated.”

As it happens, Indyk’s declaration also breaches — as noted in a properly critical analysis circulated on Monday by the Zionist Organization of America — a pledge made by candidate “Bill Clinton in 1992…to recognize all of Jerusalem as Israel’s, and violates the near-unanimous congressional resolution of 1995 calling for U.S. recognition of united Jerusalem as Israel’s capital.” Unfortunately, the political landscape is littered with Mr. Clinton’s broken campaign promises and actions at odds with the law.

Clinton-Gore Embrace Post-Zionism

What sets the Indyk declaration apart is what it says about the Clinton-Gore Administration’s determination to get a “peace” agreement between Israel and the Palestinians at any price, before the President leaves office — and, ideally, before the polls close on the Vice President and Hillary Clinton’s respective campaigns. Under Messrs. Clinton and Gore, the United States has effectively abandoned its traditional support for Israel as the Jewish State and is now actively collaborating with so-called “Post-Zionist” efforts there that may well leave it neither Jewish nor a state.

To be sure, it has in Israeli Prime Minister Ehud Barak a willing collaborator in this assault on the very essence of the Zionist dream. Stung by the wholesale repudiation his government has experienced over the hash-up it has made of peace diplomacy at the hands of his country’s religious and other opposition parties, Barak has declared what amounts to a jihad or holy war on Israel’s Jewishness. His “secular revolution” calls for ending the official practice of honoring the Sabbath by suspending most commerce, El Al flights, bus service, etc. from sundown on Friday until the sun sets on Saturday.

Barak’s Secular Revolution’

Like most of Barak’s actions — and virtually all of those taken by his sponsor in Washington, Bill Clinton — the impetus for these steps and for taking them now is transparently political. By appealing to the large number of Israelis who are non-observant Jews, and to Israel’s Arabs (who are generally hostile to the Jewish character of the state whose citizens they happen to be), Barak evidently hopes to build a new political base. He clearly is calculating that, if he can just secure a peace deal, irrespective of its terms, he can fashion out of this subset of the electorate a working majority in the Knesset, and avoid the repudiation that his opponents have in mind, and history surely has in store, for him.

Barak’s secular revolution is, therefore, of a piece with and a necessary precondition for his abandonment of the position taken by every Israeli government since 1967, namely that a unified Jerusalem is Israel’s eternal capital. If Israel ceases to be the Jewish State, then it follows ineluctably that such a state’s historic attachment to the holy sites of Jerusalem need no longer preclude its government from, in Martin Indyk’s words, “sharing” them with the Palestinians. Welcome to Post- Zion.

Krauthammer’s Critique

Urged on by intense U.S. pressure and inducements, the Israeli Prime Minister has gone well beyond agreeing in principle to recognize Arab sovereignty over parts of the Old City of Jerusalem, however. As Charles Krauthammer noted in a characteristically brilliant essay circulated on September 18 by the Jewish World Review:

“[Barak also] surrendered the Jordan Valley, a strip of barrenness that buffers Israel from the Arab tank armies to the east, [even though his] own Labor Party insisted for 30 years that it could not be ceded without fatally compromising Israel’s security….[And] he conceded the principle that Israel should receive and resettle Palestinians who left their homes 52 years ago in a war started by the Arabs for the express purpose of destroying the newborn state of Israel.

If implemented, these concessions will create new “facts on the ground” that will not only further diminish the Jewish character of the State of Israel — notably by effectively accepting the principle of a “right of return” for millions of Palestinian “refugees.” They may also make it impossible to defend that state against enemies foreign and domestic.

The Bottom Line

For Bill Clinton and his political allies — notably, his hand-picked successor and First Lady — expediency demands an Israeli-Palestinian deal, no matter what the price. He is prepared to promise any amount of financial and military assistance Barak will require in order to sell such a deal at home, especially since all of those bills will come due on somebody else’s watch.

For Israel, however, the stakes are infinitely higher. What Mr. Clinton and his minions like Martin Indyk are pressing the Israelis to surrender is not only the future viability of their state but its Zionist soul. Israel cannot and must not go there, and the American people must not permit their government to compel the Jewish State to do so.




1Amb. Indyk’s previous antics are chronicled on the Center’s website. See Washington Institute’s Satloff Correctly Assails Mideast Policy Being Forged by Its Alumni, Dennis Ross and Martin Indyk (No. 97-D 185, 2 December 1997); Martin Indyk: Wrong Man, Wrong Job (No. 97-D 137, 17 September 1997); and Center Urges Senator Hank Brown to Hold Martin Indyk to Same Standards as Other Clinton Nominees: Deficient Policy Judgments Reflect on Qualifications (No. 95-P 09, 2 February 1995).

Nobody Wanted to Give Up’ — Yet That’s Just What the Peace Processors’ Should Do

(Washington, D.C.): After the White House announced at 11:00 p.m. last night that U.S. efforts to broker a “final status” agreement were ending in failure, President Clinton dramatically declared that they would continue despite his departure for the so-called “G-8” meeting in Okinawa. The reason, he said, was that “nobody wanted to give up.”

Evidently, what the President meant by “give up” was abandoning the “peace process” — a step that he and others have asserted would precipitate violence. (Such assertions represent not merely forecasts of what may happen, given widely reported Palestinian preparations for mass marches against Jewish settlements and training of young people for guerilla war. The more they are repeated by U.S. officials, as a transparent device to pressure Israel into making concessions, the more they seem to legitimate such an Arab response to the failure of the “peace process.”)

The Real Meaning of Give Up’

Unfortunately, the continuation of that process means that Israel will be obliged to continue to “give up,” making material concessions in one area after another. Worse yet, far from ensuring by so doing that the danger of violence is averted, these concessions will only set the stage for future, and possibly mortal attacks on the Jewish State. Consider the following likely outcomes:

  • The surrender of the Jordan valley: Israel’s control of this strategic area has long been understood to be essential to protecting it from land invasion from the east. Paper assurances to the effect that no foreign army would be permitted to use or occupy that area are laughable. Once the Palestinians take over the Jordan valley, their “police” forces — which are more heavily armed and numerically larger than permitted by previous agreements — can constitute a sufficiently troubling military capability to interfere with Israeli mobilization and defensive operations.
  • The loss of ninety-plus percent of the West Bank: The surrender of huge swaths of what remains of the Israeli-controlled region historically known as Judea and Samaria will entail the loss of additional strategic depth and high ground. It will also necessitate the physical (and possibly forceful) relocation of large numbers of Israeli citizens. These “settlers” responded to their country’s need to populate and cultivate those largely barren lands in order to secure and safeguard them and the adjoining Jewish State, whose geography otherwise made it difficult to defend. They will be replaced by Arabs, who will be able easily to exploit such strategic territory for rocket, mortar, artillery and other attacks on Israel.

    • These changes will represent a serious degradation of Israel’s security for which no amount of additional U.S. military assistance can compensate.

  • The legitimation of a new Palestinian state: Another authoritarian Arab state is the last thing the Middle East needs, especially one whose guiding philosophy is unreconciled to peaceful coexistence with Israel (witness the anti-Israel and anti-Jewish material in official Palestinian Authority schoolbooks and the Palestinian Authority’s maps of “Palestine” — which include all of Israel — and Arafat’s bellicose rhetoric about a continuing “jihad” against the Jews issued for his own people’s consumption). The creation of this state will destabilize Palestinian-dominated Jordan. It will also exacerbate Israel’s problems with its Arab population, some whom have already signaled a desire to detach their towns from Israel and join the new Palestine.
  • Relinquishing control over much of Israel’s aquifers: Israel is already facing a serious drought and its water resources are severely stessed. But its ability to survive physically, to say nothing of its economic health and quality of life, may be jeopardized if the Palestinians exploit control they will be granted over aquifers on the West Bank to divert water to their communities, and away from Israel’s.

  • The return of “refugees”: Israel’s security and other problems with its Arabs and its water resources will only be exacerbated, probably massively so, by capitulating to Palestinian demands for the return of even relatively small numbers of those who left the area in 1948 and 1967 — or who claim to be descendants of those who did.

  • Jerusalem: The Palestinians insistence that they once again be allowed to exercise control over East Jerusalem is said to be the last remaining sticking point of the Camp David talks. Arafat and Company are determined to declare that the city will serve as the capital of their new state. Should Israel accede to this demand — either explicitly or through some sort of sleight-of-hand (e.g., by redrawing the borders of the city and acknowledging Palestinians administrative responsibility for certain areas) — the effect will be a mortal blow to the Zionist vision that has, heretofore, impelled the creation of the Jewish State and guided its subsequent history.

The Bottom Line

In practice, the Clinton-Gore Administration’s efforts to broker a “final status” agreement between Israel and the Palestinians are less likely to produce an agreement that will result in a just and durable peace for the long-suffering people of the Middle East than it is to produce a “final solution” for the Jewish State. While discontinuing this process certainly entails risks — not least that Arafat et.al. will be emboldened by the international legitimacy they and their aspirations have been accorded through this “peace process” to engage in violent attacks against Israel — the Israelis would still be better off “giving up” on this process than finalizing an accord that will require them to “give up” in the foregoing areas.

To be sure, an Israel that retains strategic depth, settlements controlling vital high ground and secure control over its water resources is not immune to violent attack. In the absence of a Palestinian state that is able to equip a de facto army via ports and airfields under its internationally recognized control and that can reopen eastern attack corridors, however, the Arabs’ “war option” will probably remain as unexercisable for the foreseeable future as it has been since 1973. This may not be the full peace that all of Israel’s friends wish for her. But it is infinitely to be preferred to the false peace now emerging at Camp David or the peace of the dead for Israel that it could become Mr. Clinton’s most odious legacy.

Dennis Hastert’s Unnecessary, Self-Inflicted Wound: An Inappropriate Choice for Speakers’ National Security Advisor

(Washington, D.C.): What on earth was he thinking?

This is the question prompted by House Speaker Dennis Hastert’s selection, announced last week, of a new national security advisor: Nancy P. Dorn, a woman who had parlayed her stints as an official in the Reagan and Bush Administrations into a lucrative business as a registered foreign agent.

On Li Ka-Shing’s Payroll

Not just any foreign agent. One of her troubling clients was, in the words of Insight Magazine, which broke the story, “a division of a Communist Chinese company linked to Beijing’s military intelligence.”

Specifically, Ms. Dorn lobbied for Hutchison Port Holdings (HPH), a subsidiary of Hutchison Whampoa Ltd. which is, in turn, owned by Li Ka-Shing — a Hong Kong-based billionaire who reportedly enjoys an extemely close relationship to the leadership in Beijing and its security services. HPH created a stir in this country when it became known last year that Li’s subsidiary had secured under suspicious circumstances (including allegations of corrupt dealings) long-term leases for ports at both ends of the Panama Canal.

A Bill of Particulars

Concern about this ominous strategic development was intensified because it came on the heels of a string of other problems arising from the PRC’s operations in this hemisphere. A short sampler of these includes:

  • Chinese intelligence agents were found to have made illegal payments to the Clinton-Gore campaigns and secured private meetings with the President in the White House and elsewhere.
  • John Huang — an individual who had his own ties to Beijing, thanks in part to his dealings there on behalf of his Indonesian employers, the Riadys — was given an appointment as a Deputy Assistant Secretary in the Clinton Commerce Department. In that capacity, he exploited his access to secret information that might have been of interest to the PRC and frequently thereafter made suspicious use of a private fax machine provided by the Riadys.
  • The Cox Committee determined that Chinese intelligence had successfully penetrated America’s nuclear weapons complex, making off with invaluable information, including blueprints for the Nation’s most modern warheads.
  • Samuel “Sandy” Berger, Mr. Clinton’s National Security Advisor and himself a former trade lobbyist for China, had a hand in securing an appointment to the super- sensitive President’s Foreign Intelligence Advisory Board (PFIAB) for former Rep. Jane Harman, a Democrat from California. Prior to serving in Congress, including on the House Intelligence Committee, Ms. Harman also worked as a registered foreign agent for a Chinese client.
  • President Clinton personally intervened on no fewer than four separate occasions to try to secure the use of a former U.S. Navy base in Long Beach for the Chinese merchant marine, COSCO — a company on whose board Li Ka-Shing sits and that is believed to have been used by PRC operatives to bring hundreds of AK-47s, illegal aliens, drugs and other contraband into this country.
  • During a state visit to China, Mr. Clinton embraced the Communist line on Taiwan and affronted America’s regional allies by refusing to visit any of them enroute to or from the PRC.

Against this backdrop, the prospect that China was about to secure effective control over the strategic “path between the seas” in Panama was the last straw for many Americans. Their concerns were only exacerbated by President Clinton’s Freudian pronouncement on November 30, 1999 that: “I think the Chinese will in fact be bending over backwards to make sure that they run it [the Panama Canal] in a competent and able and fair manner….I would be very surprised if any adverse consequences flowed from the Chinese running the Canal.” Republicans in particular were appalled.

Ms. Fix-It

So who did Li Ka-Shing turn to in order to head off GOP efforts to reopen the bidding on the Panamanian ports in question and to limit other political fall-out — especially efforts that might have interfered with the plans he and his friends in Beijing had to expand Hutchison/China’s presence in the Bahamas and elsewhere in the hemisphere? Lobbyist Nancy Dorn.

It turns out that Ms. Dorn was also the “go-to” woman for one of China’s leading clients, the military junta that seized power in Pakistan last year. Presumably, her assignment was to keep Republicans from making too much of a ruckus about the Clinton-Gore Administration’s systematic failure to fulfill legal obligations to sanction both countries over their cooperation in the proliferation of nuclear weapons and long-range missile technology. Whether thanks to her or others, that objective was largely achieved.

Perhaps Ms. Dorn deserves credit as well for the lack of protests from the Republican congressional leadership earlier this year when Pakistan was curiously left off the State Department’s list of state sponsors of terrorism. Political considerations (namely, pay-back for contributions from Pakistani-Americans to Mrs. Clinton’s campaign) seem to have been the driving force behind this decision — a prime example of the worrying politicization of that list decried by the recent, congressionally chartered commission that examined shortcomings in U.S. policy and capabilities for dealing with the terrorist threat.

The Bottom Line

The question recurs: Why would Speaker Hastert appoint this individual, of all people, as his national security advisor, one of the few statutorily mandated, highly paid and exceedingly sensitive senior staff jobs on Capitol Hill? Why would he want at his right hand a person whose responsibility had, until last week, been to neutralize Republican opposition to behavior inimical to U.S. interests in which China and Pakistan are engaged — and to which the Clinton-Gore Administration has largely turned a blind eye? Why hire someone who would compromise the GOP’s ability legitimately to assail not only these policies but the troubling roles played by the likes of Berger, Huang and Harman?

According to Insight Magazine, Speaker Hastert has a simple answer: He has told colleagues that he thought she was a “stay-at-home mom’ with solid foreign policy and defense credentials from the Reagan and Bush Administrations.” Now that he knows better, he must return her forthwith to private life.

In a way, an even more interesting question would be why Ms. Dorn saw fit to take a significant pay cut to assume a position that may cease to be Mr. Hastert’s to fill half a year from now? The troubling answer may be that she hoped, by laundering her credentials in this way, to make herself eligible for a senior position in a future Bush Administration — one that her incarnation as a paid agent of Li Ka-Shing and Pakistan should have precluded. That prospect too should be foreclosed by prompt action to terminate her tenure as the Speaker’s national security advisor.

The Clinton-Gore Team’s Security Violation du jour : New Los Alamos Debacle Demands Top-Down Accountability

(Washington, D.C.): The revelation that hard drives containing exceedingly sensitive information about the technical and operational details of American, Russian and perhaps other foreign nuclear weapons have “gone missing” from a secure vault at the Los Alamos Nuclear Laboratory helps once again to illuminate a phenomenon the Center for Security Policy has been documenting for most of the past eight years: the Clinton-Gore Administration’s benign neglect, if not outright malfeasance, with respect to physical security, information security and personnel security matters.

Characteristically, the Administration is trying to pooh-pooh this episode, clinging desperately to the line that there is no evidence that espionage accounts for the disappearance of the two hard drives and their highly classified data and hoping that no such evidence will be forthcoming. Even so, the fact that this hardware and the information it contained is currently AWOL gives lie to repeated — and transparently fatuous — assurances made in recent months by Secretary of Energy Bill Richardson about the tight security now in place at the Nation’s nuclear laboratories.

Secretary Richardson defended the DoE on 25 January 1999 saying, “There’s no mission that’s more important to me than taking actions necessary to ensure that America’s nuclear secrets are well guarded.” More recently he claimed that “we have top-notch security right now in our national labs.”

Time for New Management at the Energy Department

It does not matter whether Secretary Richardson’s statements are the product of sheer incompetence, wishful thinking or an actual readiness to deceive the American people in the hopes of protecting his superiors (and his waning prospects to be picked as Al Gore’s running mate later this year). There can simply be no further delay in entrusting the stewardship of the U.S. nuclear weapons complex to more responsible hands.

As it happens, such a steward is waiting in the wings. Thanks to legislation that arose from congressional investigations into an earlier, major security breach at Los Alamos — allegedly involving a physicist at the lab named Wen Ho Lee — a new, semi-autonomous National Nuclear Security Administration (NNSA) has been created. President Clinton has nominated General John Gordon (USAF), who is presently the Deputy Director of Central Intelligence, to head it up.

Unfortunately, Gen. Gordon’s nomination has fallen victim to what appears to be an ongoing gambit by Secretary Richardson aimed at thwarting the intent of Congress and the spirit, if not in every case the lette, of the law. Having failed to stop the creation of the NNSA, Richardson announced that he and senior subordinates (several of whom were widely believed to be part of the security problem afflicting the nuclear weapons complex) would be “double-hatted,” (i.e., they would retain day-to-day control over a portfolio reeling from their previous misconduct).

Now, it appears, rather than acquiesce to the appointment, confirmation and installation of someone who knows something about nuclear weapons policy and programs, Secretary Richardson is working with a sympathetic Democratic Senator — Sen. Richard Bryan of Nevada — to keep Gen. Gordon from starting work.

Happily, Sen. Bryan maintains he “has no reservations about” General Gordon, finding him to be eminently qualified for the position. What is more, even the President’s Foreign Intelligence Advisory Board (PFIAB), which had been charged with conducting a postmortem on the Wen Ho Lee/Los Alamos fiasco, concluded that the Department of Energy is “incapable of reforming itself.” And given the shrill complaints being registered by Mr. Clinton and his allies to the effect that the Senate is not acting swiftly enough on his nominees, there is no compelling reason why Sen. Bryan should persist in preventing more competent management from promptly taking over the National Nuclear Security Administration.

The Bottom Line

Given the deplorable state of affairs with respect to information, personnel and physical security under the Clinton-Gore team, it is not enough to ensure that conscientious, experienced and competent people are entrusted with sensitive U.S. government posts. It is also important to send a signal that those who have demonstrated a disregard for such security considerations are not rewarded with plum positions.

In this connection, Senator Rod Grams (R-MN) is to be commended for blocking Senate action on seven career foreign service officers who have been nominated for ambassadorial posts. According to yesterday’s Washington Post, these seven nominees have a “total of 102 violations of State Department security procedures.” One has even been suspended without pay twice for violations. On 24 May, Sen. Grams publicly — and properly — ridiculed the Administration for its see-no-evil, hear-no- evil and speak-no-evil approach to security:

How can the Administration claim security is important if persistent violators are rewarded with promotions?…I thought leadership was supposed to come from the top. What kind of message does this send to junior officers when the administration’s nominees for ambassador posts have repeat security violations?

Amen.

Senior Legislators Press S.E.C.’s Levitt on PetroChina IPO — Missives from Reps. Oxley and Baucus Should be Wake-Up Call to S.E.C., U.S. Investors

(Washington, D.C.): The rising crescendo of opposition to the bid by China National
Petroleum
Company (CNPC) to penetrate the U.S. capital markets reached new heights in recent days —
i.e., at senior levels on Capitol Hill. Specifically, two chairmen of relevant House
subcommittees
in letters to the Chairman of the Securities and Exchange Commission, Arthur Levitt, Jr.,
signaled serious concerns about the multi-billion dollar Initial Public Offering CNPC’s wholly
owned subsidiary, PetroChina, is expected to offer after listing next month on the New York
Stock Exchange.

The first missive to hit the SEC chairman’s desk was sent on 7 March over the
signatures of
Representatives Michael Oxley (R-OH), Chairman of the House Commerce
Subcommittee on
Financial and Hazardous Materials — which has direct oversight over the SEC — and
Spencer
Bachus (R.-AL), Chairman of the House Banking Subcommittee on Domestic and
International
Monetary Policy. Noting that there is “considerable controversy surrounding this proposed
IPO,” the Oxley-Bachus letter laid down a clear marker for Chairman Levitt: “To ensure
that
investors have full and accurate information regarding this public offering, we request
your
assurance that all requirements under the Securities Act of 1933 have been met, in
particular
the required disclosure relating to the intended use of proceeds from the offering.”
(Emphasis
added.)

In order to amplify and reinforce the concerns that prompted the 7 March
correspondence,
Representative Bachus sent the following, more detailed communication to Chairman Levitt on
16 March. It raises questions about the lack of transparency associated with the draft
prospectus now being circulated for the PetroChina IPO — involving, among other things, both
serious omissions and potentially problematic commissions concerning the use of the proceeds
and their users. Rep. Baucus is to be commended for his call for a “thorough
investigation” by
the SEC of “the prospect that many other foreign companies utilizing the American capital
markets to finance activities that are directly opposed to vital U.S. interests…in order to ensure
that…SEC procedures …are appropriate for guarding our vital national interests.”

March 16, 2000

Arthur Levitt
Chairman
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549

Dear Mr. Levitt:

I am writing to express my serious concerns about the proposed PetroChina IPO that was
registered with the SEC on Monday, February 28, 2000. My primary concern is that there has
been insufficient disclosure of the potential risks to investors and of the intended use of the
proceeds. The use of proceeds section does not provide meaningful disclosure of the actual use
of the proceeds by PetroChina nor the extent and use of the proceeds that would accrue to CNPC.
The PetroChina filing also fails to mention the widespread reports of a divestment campaign or
the realistic possibility that future sanctions could materially affect the value of its shares.

My second concern is that there may have been violations of the proper procedures for SEC
filings based on the events that have already occurred during the processing of this proposed
IPO. As a result of these two concerns, I am requesting that you require an extended three month
period of review before the registration becomes effective and that you decline any request to
accelerate the effective date. This delay is necessary so that the SEC will have enough time to
determine whether sufficient disclosure has been provided to potential investors and that no
irregularities occurred in the registration process for the PetroChina IPO.

As you are aware, PetroChina is a subsidiary largely owned by the China National Petroleum
Corporation (CNPC), which is itself a state-owned entity controlled by the government of the
People’s Republic of China (PRC). CNPC has extensive dealings in countries that are currently
under United States sanctions, such as Sudan and Iran, and American companies or persons are
legally prohibited from direct or indirect business dealings with these countries to protect vital
U.S. national interests.

In particular, CNPC is the largest investor in one of Sudan’s most profitable enterprises, and
provides vital hard currency for Sudan’s government, the National Islamic Front (NIF). You
should be aware that oil revenues largely support and finance NIF’s egregious violations of
human rights. There is no question that oil revenues are an integral part of NIF’s genocidal war
on its own population. The Khartoum regime has waged a relentless 17-year war killing over
2,000,000 residents, who are primarily innocent civilians.

The connection between oil revenue and violations of law has been widely recognized in
Sudan
as well as other countries under U.S. sanctions. For instance, with respect to Iran in 1995,
President Clinton’s former Under Secretary of State for Policy said, “”A straight line links Iran’s
oil income and its ability to sponsor terrorism, build weapons of mass destruction, and acquire
sophisticated armaments. Any government or private company that helps Iran to expand its oil
must accept that it is contributing to this menace.” Indeed, Sudan’s government is using its oil
revenue to prosecute a vicious genocidal war against Sudanese Christians living in the southern
portion of that country, as well as sponsor acts of international terrorism.

It appears that PetroChina’s registration statement provides insufficient disclosure in several
respects. In its filing, PetroChina proposes three separate, but relatively undefined uses for the
proceeds: an unspecified amount for undisclosed “capital expenditures and investments,”
repayment of short and long-term borrowings to undisclosed “third party financial institutions,”
and “additional funds for general corporate purposes.” In addition, CNPC will receive an
undisclosed amount of funding and will use those funds to repay an unspecified amount of
“borrowings” (the underlying activities which these borrowings funded is also unknown), and to
“fund the employee retraining and severance plans established in connection with the
restructuring of the CNPC group.”

It is obvious from these proposed uses of proceeds that CNPC stands to gain substantially
from
the PetroChina IPO. A recent news article stated that CNPC would receive payments between $1
billion and $1.5 billion from PetroChina. In addition, PetroChina is assuming a large portion of
the debts formerly owned by its parent, CNPC. There is no question that this will significantly
increase CNPC’s access to financing that would otherwise be unavailable to fund its foreign
operations. Therefore, the direct transfer of funds and assumption of old CNPC debt will
significantly and materially aid CNPC in that it will now be able to use its current or future
revenues to finance its foreign operations.

Because of the substantial revenue and debt sharing between the parent and its subsidiary, it
is
essential that the investor community be fully apprised of the growing controversy surrounding
the activities of PetroChina’s parent by a coalition of human rights, religious freedom, labor, and
national security groups. There are numerous press reports about these activities that I would be
pleased to share with you.

In addition, there is a significant possibility that future sanctions could be imposed on
PetroChina (or on its parent CNPC, which would materially affect the subsidiary) similar to
those recently imposed on the joint oil venture Greater Nile Petroleum Operating Company Ltd.
(GNPOC) or Sudapet Ltd. Currently, engaging in business with GNPOC or Sudapet carries
criminal penalties for corporations and individuals, as well as the possibility of imprisonment for
up to 10 years. As you are already aware, CNPC is the largest investor and partner in GNPOC.
If these or other forms of sanctions were later extended to CNPC, there is no question that they
could materially affect the value of PetroChina stock. All potential investors should be made
aware of these possibilities and the ultimate use of the proceeds before you approve this
transaction.

A number of questions have also arisen from the process through which the IPO was created.
First, this proposed issue was originally to be a $10 billion IPO for CNPC but has been changed
several times to the current estimated $5 billion IPO for PetroChina, its newly created subsidiary.
Goldman Sachs, the IPO’s primary underwriter, submitted its registration statement for the new
PetroChina subsidiary to the SEC on Tuesday, February 29, 2000, after which the “quiet” or
“waiting period” officially began. As you are aware, while oral statements are permitted during
the waiting period, it is clearly understood that no written OR oral statements or solicitations
may be made before the registration statement is filed. Various sources have reported, however,
that Goldman Sachs may have used “research groups” or other venues to discuss information
about the IPO with potential investors. We request that you investigate whether any information
has been provided to potential American investors that would dispose them to have a more
favorable view of investing in the PetroChina offering.

Using “research groups” or other techniques to educate potential investors before filing with
the
SEC, instead of the usual “road show” after an SEC filing, would not only skirt the law, but
would also violate the spirit of proper disclosure policy. While these facts remain
unsubstantiated at this time, various press reports and additional assertions made to my staff
indicate that some disclosure may have occurred in violation of proper procedures.

Furthermore, there is no record of any preliminary filings with the SEC, despite indications
that
various draft proposals were submitted to the SEC. In addition to various press reports, some
evidence of this was obtained in the course of a congressional staff inquiry that occurred prior to
PetroChina’s February 28, 2000 filing with the SEC. Several days before the first recorded
filing with the SEC, a spokeswoman for Goldman Sachs stated that the PetroChina documents
had been filed with the SEC and that no questions could be answered because the quiet period
had already begun.

While we share your desire to have a free flow of information between SEC staff and
attorneys
preparing the IPO filings, it is important not to avoid disclosure requirements or the Freedom of
Information Act. Therefore, it would be helpful if the SEC were to clarify the proper procedures
for an “informal” waiting period during which drafts of SEC filings are reviewed by the SEC
staff and changes made before any formal filing is submitted. At the minimum, there should be
some record in the EDGAR database indicating that an initial filing has been made from the very
first moment that documents are provided to SEC staff. Requiring electronic filing for foreign
corporations in the same way that they are required for domestic filings would be a simple
solution to this problem.

One final but important concern regarding the PetroChina filing process is Goldman Sachs
ability to freely disseminate information regarding the proposed IPO abroad, while being
prohibited from doing so domestically. Given the multi-national nature of many of the IPO’s
potential corporate investors, it is virtually impossible to avoid having information provided
widely in Hong Kong reach the desks of targeted investors here in the United States.

In closing, my primary concern remains the question of whether proceeds from the
PetroChina
IPO will be used to benefit the activities of CNPC, which could compromise American national
interests and possibly circumvent U.S. laws regarding sanctions against Sudan. By way of
example, an earlier version of the proposal would have required PetroChina to pay a dividend to
CNPC of $1 billion to $1.5 billion and to CNPC’s retirement or worker retraining obligations.
PetroChina’s current registration statement indicates that an unspecified sum will be paid to
CNPC, that an unspecified amount of CNPC debt will be assumed, as well as providing for
payments to CNPC for other purposes. These facts eviscerate the assertion that a legal firewall
has been created to segregate the funds generated by the IPO for PetroChina’s purely domestic
activities. It seems likely that the billions raised will either subsidize the overseas operations of
the parent company or, due to the fungibility of money, at least indirectly finance CNPC’s
overseas operations by freeing it of debt or other obligations.

With the prospect of many other foreign companies utilizing the American capital markets to
finance activities that are directly opposed to vital U.S. national interests, it is imperative that
you investigate this matter thoroughly in order to determine those SEC procedures that are
appropriate for guarding our vital national interests.

Sincerely,

Spencer Bachus
Chairman
Monetary Policy Subcommittee

Senator Thompson Offers Leadership On The National Security Dimensions Of The U.S. Capital Markets

(Washington, D.C.): In a stirring speech to a high level gathering of policy
practitioners and
media representatives at the Heritage Foundation on 3 March, Senator Fred Thompson joined the
swelling ranks of those on Capital Hill and elsewhere who demanding answers to questions the
Casey Institute has posed over the past four years: What are the true identities and activities of
foreign firms seeking large-scale U.S. investment dollars and how are those funds to be used?
Indeed, building on the growing firestorm of national security- and human rights- related
controversy surrounding PetroChina’s bid to raise as much as $5-7 billion through an initial
public offering on the New York Stock Exchange, Senator Thompson broadened the scope of
this controversy to include a visionary look ahead at the funding efforts of known and suspected
proliferators and other security-relevant violators worldwide. Among the Senator’s important
remarks were the following:

  • “[A]nother intriguing idea was implicit in some of the finding of the Cox Committee and
    the
    Deutch Commission. The Cox Committee reported that “the (PRC) is using capital markets
    as source of central government funding for military and commercial development.”
  • “According to recent estimates , the PRC is presently involved in U.S. bond markets to the
    tune of approximately $14.5 billion. I believe that this may be an economic lever that could
    be used. We already know that we are financing some bad actors, including a notorious PRC
    arms dealer. In fact, the PRC, itself, is the largest Chinese borrower of dollars in the United
    States — some $3.2 billion in sovereign bond offerings. We have no idea what these funds
    were used for.”
  • “That is why we should also pass legislation which brings greater
    transparency to all
    foreign companies that use our markets. The SEC provides little information on these
    companies now, many of whom, in the case of China, are front companies. We need to
    require more detailed information in prospectuses regarding the specific identity and
    activities of foreign government related firms applying for entry into our capital
    markets.    “
  • “This would giver pension fund managers something to look to in order for them to develop
    their own national security criteria for investments. This would also give Congress, as part of
    an annual review, a mechanism whereby companies, or even countries, who engage in
    proliferation activities are denied access to our debt and equity markets.”
  • “This is leverage. Perhaps enough to cause China to reconsider some of
    those nuclear
    missile sales.    “

In addition to providing critical insight with respect to Senator Thompson’s
ground-breaking
pronouncements, the attached Wall Street Journal-Asia piece by Eduardo Lachica
helps break
the code on prospective links between China’s proliferation and funding activities and the
granting of permanent NTR status for that country.

Wall Street Journal Asia, 6 March 2000

China’s Conduct Is Hurting Vote In U.S. On Trade

By Eduardo Lachica

Congressional anger over China’s recent saber-rattling and arms-dealing is starting to hurt its
trade and financial prospects in the U.S.

At immediate risk is a congressional vote that would permanently grant Chinese products
low-tariff treatment, or PNTR status, just before its entry into the World Trade Organization. A
Reuters poll taken last week shortly after China renewed its threat to reclaim Taiwan by force
showed the normally free trade-leaning U.S. Senate supporting China’s PNTR status by only the
slimmest of margins.

Sen. Daniel Patrick Moynihan and other members of the Senate Finance Committee warned
that
the vote could be lost unless China reins in its truculent rhetoric and the Clinton administration
does a better job of rounding up votes in the House of Representatives.

More Opponents

House Minority Whip David Bonior counted 199 House members opposed to the bill — 19
short
of what’s needed to defeat it, but a lot more than earlier votes cast against China’s trade benefits.

Even if PNTR eventually passes, the backlash could still hurt China over the longer haul if
the
Senate succeeds in attaching national-security amendments to the bill. Sen. Fred Thompson, the
chairman of the Senate Governmental Affairs committee, said these amendments could
incorporate some elements of the Taiwan Security Enhancement Act, which the House passed by
a veto-proof margin earlier this year. Beijing strongly objects to that measure’s provision for
closer U.S.-Taiwanese defense coordination.

The Chinese may have assumed they have a “locked deal” with the Clinton administration on
PNTR since “they show no hesitancy in threatening to invade Taiwan, embarrassing our
high-level delegation and reminding us of their ability to lob an ICBM (intercontinental ballistic
missile) onto one of our cities – all practically on the eve of PNTR consideration,” Sen.
Thompson said at a briefing Friday.

The Tennessee Republican was referring to the release of a Chinese white paper on Taiwan
shortly after a visit by U.S. Deputy Secretary of State Strobe Talbott and the publication in the
Chinese press of a possible retaliatory Chinese missile strike if the U.S. were to intervene in a
Taiwan conflict.

Link to Fund Raising?

Sen. Thompson also may tie the PNTR bill to legislation requiring greater transparency for
stock
and bond offerings by Chinese and other foreign government-owned enterprises. Noting a plan
by PetroChina Co., a China National Petroleum Corp. subsidiary, to raise capital in the U.S., he
said Congress needs a mechanism that could deny “bad actors” access to the U.S. debt and equity
markets.

A number of other congressional critics are likely to oppose PetroChina’s initial public
offering
unless it can be shown that the proceeds aren’t used to prolong a civil war in Sudan or unfairly
exploit Tibet’s natural resources.

The senator said that selective capital denial may be just the right “leverage” to cause China
to
back away from its practice of selling missile technology to rogue states like Iran and Iraq. Sen.
Thompson is attracted to that formula because it could inflict pain on the intended target without
the collateral damage to U.S. importers that high tariffs would cause. The legislator also
announced his intention to toughen U.S. export-control rules so that further transfers of U.S.
missile-launching knowhow to China can be averted.

The reaction to the latest display of Chinese belligerence also spilled over into the U.S.
presidential campaign. During their Los Angeles debate last week, Republican candidates George
W. Bush and Sen. John McCain echoed the Clinton administration’s warnings against any hostile
action against Taiwan. But they stopped short of endorsing Taiwan’s request for U.S.-supplied
antimissile defense systems.

Such a transfer should be made “after a careful assessment by the Department of Defense and
the
State Department – as has been our tradition in the past,” Mr. McCain said. But he also vowed, if
elected, to develop sea-based missile defenses that can deployed in such a way as to convince the
Chinese that “the consequences of aggression against Taiwan far, far exceed anything they might
gain from committing that aggression.”

Influential Democrats Appear to Endorse the ‘AEGIS Option’ for Quickly Defending America

Unsurprisingly, the New York Times ‘buries the Lede’

(Washington, D.C.): Yesterday’s New York Times reported what can only be described as a tectonic shift in the missile defense debate: Two of the Nation’s most prominent Democrat figures on matters of national security, the ranking minority member of the Senate Foreign Relations Committee, Senator Joe Biden of Delaware, and former Clinton Secretary of Defense William Perry have apparently endorsed the idea of using sea-based missile defenses deployed aboard the Navy’s AEGIS fleet air defense ships to protect the United States against ballistic missile attack.

Characteristically,1 the Times put a very different spin on its story. It buried what should have been the “lede”– namely, the Biden-Perry endorsements of sea-based missile defenses — in a story about bipartisan calls to defer a “political” Clinton decision next summer, a decision expected to approve the deployment of a limited, ground-based missile defense system in Alaska. The article was headlined “Biden Joins G.O.P. in Call for Delay in Missile Defense Plan,” and fed the impression that there is now widespread sentiment that no need exists for prompt action on defending America.

Mirabile Dictu

The real news was very different. According to the Times, in a speech at Stanford University on 8 March, Sen. Biden “said an Aegis sea-based system with missiles based off the North Korean coast would let the United States intercept the [North Korean] missiles in their ascents….[Mr.] Perry was in the audience….In congressional testimony, [he has] favored the sea-based system off North Korea.”

If these statements accurately portray the current thinking of Messrs. Biden and Perry, they are but the latest evidence that the convergence of two forces is leading inexorably to a national decision promptly to deploy sea-based missile defenses:

  • First, the threat of missile attack is now unacceptably high. Last week, China issued an explicit threat to attack the United States with long-range, nuclear missiles if America interfered in any future PRC military action against Taiwan. North Korea is continuing to blackmail this country, now using the threat of merely testing an intercontinental ballistic to extract strategic, political and economic concessions from the Clinton-Gore Administration. Sales by both of these nations — and Russia — to other, “rogue” states is intensifying dangerous proliferation of weapons of mass destruction and their delivery systems. And

  • Second, the feasibility of providing effective, global and near-term missile defenses is no longer seriously disputed. In its 28 February editions, the Washington Post reported that the Nation’s top sailor, Chief of Naval Operations Admiral Jay Johnson, recently wrote Secretary of Defense William Cohen urging that, in light of the emerging missile threats, modified Navy Aegis fleet air defense ships should be integrated into plans for defending the United States against these dangers.

    What is more, a Pentagon study that will be provided to Congress on 15 March reportedly concludes that “There is no technical reason preventing the evolution of the Navy Theater Wide (NTW) [system] to a National Missile Defense (NMD) role….Analysis to date suggests that ship-based support for NMD is technically feasible….There are significant advantages in overall NMD system performance, readiness and effectiveness by adding Naval ships adapted to the NMD mission.”

    Even the Defense Department’s top weapons evaluator, the Director of Test and Evaluation Philip Coyle, is said to have advised Congress in a recently submitted report that “the technology to complete the NTW Block II [i.e., a version that could be optimized for global missile defense] development exists now.”

Do Biden and Perry Support a Near-term, Global Sea-based Defense?

In fairness, it is unclear from the article in the Times — and could not be determined at this writing — whether Senator Biden and Secretary Perry fully comprehend the potential enormity of their statements. After all, the junior Senator from Delaware is arguably the Senate’s most unalloyed (and, frankly, uncritical) champion of arms control. Yet, he reportedly said at Stanford that “Such a [sea-based missile defense] system would not endanger the whole fabric of arms control or threaten non-proliferation safeguards the way that a national missile defense [by which he evidently means a land-based NMD].”

This could mean one of two things: 1) Sen. Biden has reached the correct conclusion and recognizes that defending Americans against ballistic missile threats from China, North Korea and other rogue states need not “endanger the whole fabric of arms control or threaten non-proliferation safeguards.”

This conclusion does contradict, however, the notion that the Anti-Ballistic Missile (ABM) Treaty — signed in 1972 with a country that went out of business nine years ago and which explicitly bans, among other things, sea-based missile defenses of the United States — is the “cornerstone of strategic stability.” According to this thesis, America cannot be protected against ballistic missile attack from the sea or otherwise without Russia’s permission. If Senator Biden has adjusted his view on this score, the planet has not seen such a tectonic shift since the continental drift.

Alternatively, 2) Sen. Biden — and for that matter Secretary Perry — may be saying that they would support the deployment of a sea-based missile defense off the coast of North Korea provided the system so deployed was compliant with the ABM Treaty. This would mean that it would be artificially dumbed-down so as to ensure that it could be used to shoot down North Korean ballistic missiles headed to Japan or South Korea, but not to the United States. This so-called “theater” missile defense would provide protection to America’s forces and allies overseas, but not to its people and territory here at home. The absurdity of imposing such a limitation when the U.S. itself is increasingly in the cross-hairs of foreign missileers, not just targets closer at hand to them, is self-evident.

The Bottom Line

It can only be hoped that leading Democrats like Sen. Biden and Secretary Perry have, in fact, joined the growing consensus that we have no choice but to deploy sea-based missile defenses as soon possible and that this can be done without unacceptable costs in terms of “strategic stability” or our relations with Russia. If so, they should lend their voices to an effort to dissuade President Clinton not from deferring a decision to deploy anti-missile protection for the American people at the earliest possible moment. Rather, Mr. Clinton should be encouraged to do so, at once and from the sea.

Where dissuasion is needed, however, is in urging the Clinton-Gore Administration to forego any further effort to negotiate with the Russians a deal that would effectively foreclose the option of deploying sea-based missile defenses that the country requires today, to say nothing of the more comprehensive space-based, mobile land-based or multiple ground-based anti-missile systems it may require down the road.




2See the Center’s Decision Briefs entitled Much Ado About Not Much? N.Y. Times’ Latest Salvo in Attack on Missile Defense Seems Irrelevant to Present Program (No. 00-D 21, 8 March 2000); ‘There You Go Again’ Tim Weiner’s Dubious Opinions Passed Off As ‘News’ (No. 96-D 106, 29 October 1996); and All the ‘News’ that Fits the Times’ Political Agenda: Latest Assault on SDI Unfounded, Indefensible (No. 93-D 70, 18 August 1993).

Will Congress Give Clinton Political Cover on Ill-Advised Transfers of Strategic Technologies?

(Washington, D.C.): When the final net assessment is performed on the immense harm done to U.S. national security by the Clinton-Gore Administration, the cause of the most grievous, long-term damage may come as a surprise: The most serious and enduring harm may prove to have resulted from the systematic, purposeful and wholesale dismantling of U.S. export control mechanisms and multilateral arrangements that until 1992 governed the transfer of militarily relevant or “dual-use” technologies.

The question that is now arising is whether this evisceration of U.S. export controls will be attributable solely to Clinton Administration machinations? Or will certain Republican lawmakers — even some with conservative credentials — now looking to captains of industry for campaign contributions give invaluable political cover to Al Gore with respect to one of his greatest vulnerabilities?

Heavy Competition

To be sure, the Veep has a number of serious liabilities when it comes to his and Mr. Clinton’s stewardship of the national security portfolio. These include:

  • The effects of the chronic over-extension, misuse, underfunding and demoralization of the American military will take years to repair.
  • If a hostile power takes advantage of the Administration’s refusal to deploy anti-ballistic missile systems, the effect could be catastrophic. (Indeed, as was reported by the Washington Times’ National Security correspondent Bill Gertz last week, China recently threatened just such an attack over Taiwan.)
  • President Clinton’s unwillingness to block efforts by Communist Chinese and other “bad actors” bent on underwriting activities like terrorism, proliferation and threatening arms buildups by securing billions of dollars from unsuspecting investors in the U.S. capital markets.
  • The Clintonian determination to share sensitive intelligence information with potential adversaries which may mean that the next President — and perhaps one or more of his successors — will find themselves bereft of sources and methods of collecting such information that have been compromised and, therefore, seriously degraded if not neutralized altogether.

    • The Clinton-Gore Record on Export Controls

    As things stand now, the Vice President is fully and uniquely implicated in the practice of giving priority to politically influential companies’ desire for short-term profits in overseas markets, without regard for the larger national interest. This practice has jeopardized the U.S. military’s qualitative edge — the access to superior technology which allows America’s armed forces to fight and prevail even when substantially outnumbered.

    In addition, as successive reports performed or commissioned by the Congress (notably, those produced over the past two years by the House select committee chaired by Rep. Chris Cox and blue-ribbon panels chaired by former Secretary of Defense Don Rumsfeld and former CIA Director John Deutch) have documented, eased access to sophisticated American equipment and know-how is giving rise to unprecedented new threats to U.S. security from developing nations and even sub-national groups.

    Enter the E.A.A.

    Given this record, it is stupefying that the United States Senate is expected this week to consider legislation that would greatly compound the problem of performing national security-minded due diligence with respect to export controls. Were this bill — the Export Administration Act (EAA) of 2000 (S.1712) — actually to pass unchanged, moreover, the Republican-led Congress would become fully implicated in what is, arguably, the Clinton-Gore Administration’s most reprehensible act of purposeful malfeasance.

    It is noteworthy that this legislation is being brought to the Senate floor over the strenuous objections of all four authorizing committees with jurisdiction over national security matters: the Senate Armed Services, Foreign Relations, Intelligence Committees and Governmental Affairs Committees. As recently as February 29, the chairmen of these four committees (Senators John Warner, Jesse Helms, Richard Shelby and Fred Thompson, respectively), together with six other influential committee or subcommittee chairmen (Senators Jon Kyl, Pat Roberts, Jim Inhofe and Bob Smith, Connie Mack and Orrin Hatch), wrote Majority Leader Trent Lott warning that “S.1712 fails to protect U.S. national security interests” and opposing consideration of the EAA “at this time.” (See attached letter.)

    The reasons for such opposition are not hard to divine. This legislation is designed to make it exceedingly difficult — if not, as a practical matter, impossible — to impose export controls on strategically sensitive technologies. Months of behind-the-scenes negotiations by these legislators and their staff with the EAA’s proponents, primarily Senator Phil Gramm’s Banking Committee, have to date left such serious problems as the following uncorrected:

  • S.1712 would confirm in law the Clinton-Gore practice of precluding executive branch agencies responsible for national security from exercising real influence over the export control process. For instance, the Commerce Department will have, for all intents and purposes, sole authority over which technologies are subjected to tech transfer restrictions. The bill would also confer on the Banking Committee exclusive jurisdiction for areas clearly within the purview of other Senate committees charged with oversight of the defense, foreign policy and intelligence portfolios.
  • The bill unduly restricts the circumstances under which export controls can be imposed. This is done to such an extent that the next President may be hamstrung should he believe, unlike the incumbent, that the transfer of certain dual-use U.S. technology should be blocked from going to undesirable end-users.

    It would, for example, be illegal to do so if would-be exporters claim that foreign competitors can offer a comparable product. (Under S.1712, another loophole would be created if the product is not available overseas but is widely available domestically.) If the new EAA were in force, the President would be prohibited from blocking the export unless he could establish both that U.S. security would be harmed and that foreign availability can eliminated via multilateral controls in under 18 months — neither of which are likely to be demonstrable in advance.

  • In its latest iteration, S.1712 would create a new National Security Control List (NSCL). Every item currently found on the Commerce Control List (CCL) of restricted dual-use items would have to be approved by the Commerce Department before it could appear on the NSCL. In other words, Commerce could, at its sole discretion, veto any proposal to control existing, let alone new technologies.
  • Two other sections of S.1712 create worrisome loopholes: Section 204 allows the re-export of any product if the controlled U.S. content amounts to 25% or less of the value (not the strategic significance) of the product. Even worse from a non-proliferation point of view, is Section 301(c) which prohibits the control of U.S. parts or components if the item is assembled overseas.
  • S.1712 does not take into account the U.S. practice of recognizing that Israel is an adherent to the Missile Technology Control Regime (MTCR), even if Israel is not an MTCR member.

    • The Bottom Line

    In an important address to the Heritage Foundation last Friday, one of those most concerned about this defective legislation, Governmental Affairs Committee Chairman Thompson declared:

    “We need strong, principled leadership from the President and Congress on these national security matters. We can start by passing an Export Administration Act that balances trade with national security — as opposed to the current, proposed legislation that would loosen [export controls] further than has the Clinton Administration.”

    The Nation may long suffer the consequences of the Clinton-Gore team’s failure to strike such a balance. It seems equally certain that neither the “common defense” nor Republican electoral prospects will be advanced if the Senate disregards the judgment of Sen. Thompson and its other experts on national security in an effort to out-pander the Vice President for the contributions and support of high tech firms determined to sell their wares without regard for the dangers such sales might entail for the rest of us.

    United States Senate
    Washington, DC 20510

    February 29, 2000

    The Honorable Trent Lott
    Majority Leader
    Untied States Senate
    Washington, D.C. 20510

    We write to express our continuing concerns about S.1712, the “Export Administration Act.” On February 9, 2000, the chairmen of the Senate Armed Services, Foreign Relations, Intelligence and Governmental Affairs Committees wrote to you to express their concerns with S.1712 as currently drafted. Since that date, these national security committees’ staff and Senator Kyl’s staff have met repeatedly with the staff of the Banking Committee in an effort to resolve these issues. On February 22, these chairmen and Senator Kyl met with you and with Senators Phil Gramm and Michael Enzi to discuss these matters further. Most recently the Banking Committee has drafted a proposed managers’ amendment including language to provide for “carving out” certain technologies from certain other provisions of S.1712.

    We have concluded that the Banking Committee’s proposed changes to S.1712 are insufficient to allay our concerns that the legislation provides insufficient protection for United States national security interests. The proposed “carve-out” language, for example, is insufficient on it sown terms to protect important national security interests. Indeed, the Banking Committee’s proposed “carve-out” language does not represent a unified Administration position at all, but rather merely language desired by industry and some in the Department of Commerce. Moreover, the “carve-out” idea was initially proposed by the national security committee chairmen as part of a much broader package of measures designed to fix S.1712’s significant problems — measures that have been thus far rejected. Some of the national security chairmen also have jurisdictional questions about the sweeping scope of S.1712, and concerns about the bill’s failure to recognize Israel’s adherence to the Missile Technology Control Regime.

    All in all, S.1712 — even with its proposed mangers’ amendment containing “carve-out” language — fails to address the national security committee chairmen’s concerns. In no respect is this more true than in this legislation’s determination to give wholesale discretion to the Department of Commerce vis-a-vis the Defense Department and the Intelligence Community in controlling national security export controls. Particularly coming, as it does, in the wake of two years’ worth of Congressional hearings detailing a variety of export control problems — from satellite licensing scandals to export control administration problems, and high-performance computer exports to alleged abuses of Commerce Department discretion in the export control process — we believe that S.1712 fails to protect U.S. national security interests. Consequently, we object to moving S.1712 to the Senate floor at this time.

    Sincerely,

    John Warner
    Chairman
    Committee on Armed Services

    Jesse Helms
    Chairman
    Committee on Foreign Relations

    Richard Shelby
    Chairman
    Committee on Intelligence

    Fred Thompson
    Chairman
    Committee on Governmental Affairs

    Jon Kyl
    Chairman
    Subcommittee on Technology, Terrorism and Government Information
    Committee on the Judiciary

    Pat Roberts
    Chairman
    Subcommittee on Emerging Threats and Capabilities
    Committee on Armed Services

    James Inhofe
    Chairman
    Readiness and Management Support Subcommittee
    Committee on Armed Services

    Bob Smith
    Chairman
    Committee on Environment and Public Works

    Connie Mack
    Chairman
    Joint Economic Committee

    Orrin Hatch
    Chairman
    Committee on the Judiciary