May 22, 1997
The Hon. Janet Reno
Attorney General of the United States
U.S. Department of Justice
Constitution Ave. & 10th Street, NW
Washington, D.C. 20530
Dear General Reno:
We are writing to request that the Justice Department's investigation of
alleged illegal foreign campaign contributions to the Clinton campaign and
the Democratic National Committee include an investigation of the possible
link between contributions from various Asian donors and the Clinton Administration's
loosening of export controls on sensitive dual-use equipment and technology,
which has specifically benefited the military and intelligence service of
the People's Republic of China (PRC).
The PRC makes no secret of the fact that it is attempting to acquire a diverse,
highly flexible, strategically dispersed and survivable military production
capability, with force projection a key goal. The administration's pattern
of decontrol and failure to enforce existing law with regard to both export
procedures and punitive sanctions has substantially benefited the military
goals of the People's Republic of China and presented serious new challenges
to the security interests of the United States.
In our minds, there are a number of cases that raise serious questions about
whether improper outside influence was brought to bear on Administration
officials -- including the President -- and if that influence has resulted
in decisions and policies that have liberalized the transfer of defense-related
technologies, something which is clearly incompatible with the interests
of our nation.
Examples of questionable decisions:
A) Sales of sophisticated machine tools to the PRC
A U.S. company, McDonnell Douglas, was allowed to ship an almost completely
intact missile and strategic bomber factory to the PRC, despite strong opposition
from specialists at the Department of Defense and evidence that the equipment
was going to be diverted to military production facilities. Prior to the
issuance of the original export licenses, the case was discussed with concern
at the highest levels of the government, yet it was approved in the end.
News stories and a GAO report requested by the House National Security Committee
(HNSC) all show that before the equipment was shipped, U.S. officials were
aware that the conditions placed upon issuance of the export licenses were
unenforceable, and that the Chinese possibly intended to divert the equipment
they had purchased for civilian use to a military production facility.
During the period immediately before the sale -- and before the export licenses
had been approved -- McDonnell Douglas officials showed officials from CATIC
(China National Aero-Technology Import-Export Corporation) through the plant
during operating hours, allowing them to videotape classified production
lines in operation -- a violation of current export law, which was brought
to the attention of Administration officials and ignored.
Finally, once it was determined that the diversion had occurred, political
appointees at the Departments of Commerce and Defense approved new licenses
with different end-use conditions and destinations rather than expressing
displeasure with the Chinese or exercising their legal obligation to sanction
the PRC.
While aspects of this case are now under review by a grand jury in the District
of Columbia, it is imperative that this matter receive full scrutiny in
the context of the Justice Department's investigation of campaign finance
improprieties.
B) Supercomputers
The extraordinary loosening of controls on militarily-sensitive supercomputers,
which began in 1994, has resulted in the sale of 46 supercomputers rated
at 2,000 MTOPS and above to China in the last 15 months. According to a
former Under Secretary of Defense who testified before the HNSC Procurement
Subcommittee, these sales may have given the PRC more supercomputing capacity
than the entire Department of Defense. Uses for supercomputers include:
design and testing of nuclear weapons; sophisticated weather forecasting;
weapons optimization studies crucial for the efficient use of chemical and
biological weapons; aerospace design and testing; creating and breaking
codes; miniaturizing nuclear weapons; and finding objects on the ocean floor,
including submarines.
The decision to loosen U.S. controls on supercomputers was made in spite
of the opposition of a number of Defense Department staff experts, senior
military and intelligence officials, and Members of Congress. It was justified
by a report commissioned and paid for by the Department of Commerce using
outside consultants supplied by political appointees at the Department of
Defense. The contract for the report was awarded noncompetitively to a well-known
opponent of export controls. Viewed in the context of recent revelations
about Chinese efforts to influence the U.S. political scene, the significant
policy changes that have been pursued in this are bring into question the
Administration's motives for decontrol.
C) Hot Section Technology
The Administration's decision to change the jurisdiction on so-called "hot
section" technology from the Department of State, which had guarded
it jealously, to the Department of Commerce, which is in the business of
making it easier for foreign entities to purchase U.S. products and technology
also raises serious concerns. Hot section technology allows U.S. fighter
and bomber aircraft to fly for thousands of hours longer than those produced
by less sophisticated manufacturers, providing our military forces with
significant cost and readiness advantages over those of other nations. Again,
serious questions arise with respect to policy changes in light of Chinese
efforts to influence Administration actions.
D) Telecommunications
In 1994, sophisticated telecommunications technology was transferred to
a U.S.-Chinese joint venture called Hua Mei, in which the Chinese partner
is an entity controlled by the Chinese military. This particular transfer
included fiber optic communications equipment which is used for high-speed,
secure communications over long distances. Also included in the package
was advanced encryption software.
Both of these transfers have obvious and significant military application,
and, again, this transfer was accomplished despite opposition from technical
experts and the NSA and within the Pentagon.
The administration's actions in the above-mentioned cases, and others, have
resulted in a significant increase in indigenous Chinese military production
capabilities. Given China's willingness to sell weapons and technology to
the highest bidder -- including rogue nations such as Iran, Iraq, and Libya
-- these transfers could represent a profound threat to U.S. military personnel.
Moreover, the increased capabilities that China has gained portend a regional
arms race and increase the possibility of conflict in a region in which
the United States has major interests.
Under the circumstances, it flies in the face of common sense for us to
provide the PRC with the means to achieve their military and strategic goals.
The administration's decisions seem very suspect to us, and we strongly
believe they should be investigated.
In closing, we would note that this letter does not reflect a change in
our belief that a special counsel should be appointed to investigate allegations
of improper fund-raising and campaign contributions, but rather an acknowledgment
of the investigation as it presently exists.
Thank you for your consideration of this request. We look forward to your
timely response.
Sincerely,
Henry Hyde, Chairman
Committee on the Judiciary
Tille K. Fowler
Committee on National Security