NewsMax.com Wires
February 10, 2001

In an exclusive interview with United Press International, Rep. Chris Cox, R-Cal., the man who launched the investigation into U.S. defense firms providing sensitive technology to Beijing, said the current process for approving high-technology export licenses is "the worst of all possible worlds. It falls short of what is necessary to provide any national security protection. And it unnecessarily punishes exporters who pose no national security risk."

This is a change in emphasis. In 1998, Cox supported legislation that forced President Clinton to give the State Department responsibilities for reviewing and issuing export licenses for high technology items, after those functions were moved to the Commerce Department in 1992.

Cox's 1999 report on Chinese espionage and corporate technology transfer claimed that the Loral and Hughes corporations knowingly broke U.S. law by providing sensitive technical advice to the Chinese with regards to their Long March Rocket without a proper license. The same technology those companies provided on satellite launches, could have ended up making long-range Chinese missiles more accurate and reliable the report found.

Two years later, Cox's chief of staff, Dean McGrath and the general counsel who helped author the report, I. Lewis Libby, are Vice President Richard Cheney's deputy and chief of staff, respectively. Libby also serves as Cheney's national security adviser, a powerful position in a White House where Cheney is expected to have significant sway over foreign policy.

In November, the State Department announced that it would begin to process license requests again for companies wishing to sell satellites and satellite services to China, after Beijing agreed to an arms export control system. CIA Director George Tenet and the director of the Defense Intelligence Agency, Vice Adm. Thomas Wilson, told the Senate Select Committee on Intelligence Wednesday that they could not verify if China was living up to its commitments on this front. So far, three companies have applied for the licenses, including Loral, and none have been processed.

"The concern is not about the satellite," Cox said. "The satellite manufacturers are quite concerned about protecting their satellite technology, the concern is the technology transfer that occurs with mating the satellite with the rocket."

The State Department's delay in granting export licenses has hampered the industry considerably, according to companies exporting. The Satellite Industry Association this week released a report that found export controls on satellite technology have accounted for the loss of 1,000 jobs and $1.2 billion in contracts in 2000 alone.

In a congressional briefing last December on the preliminary results of the report, Clayton Mowry, the executive director of the association said, "While it is impossible to attribute all of the lost revenue and market share to new export controls, the regulations are clearly having a negative impact on the ability of America's commercial satellite companies to compete."

Indeed, Loral's January Security Exchange Commission report said the company could lose over $180 million if the State Department did not approve a license to sell the Globe Sat 8 to Beijing by Sept. 30. The company's latest request was returned without action, and Loral and State Department are now negotiating on how to proceed.

While Cox would not comment on the specific licensing battle with Loral, he did say, "There should be a streamlined regulatory system that focuses on those transactions and technologies that genuinely pose a security risk. The same rules should not be applied across the board simply because a satellite is involved."

Cox said that he thought the Bush administration should approach export controls multilaterally, meaning that unless the United States monopolized a particular technology, it should work with U.S. allies to apply a more comprehensive, international export control regime.

Incidentally, this was similar to the diplomatic approach taken under President Reagan during the cold war.

"I think a point we could all agree on is that whatever we do it would be more effective if we coordinate with our allies."

This tack is very similar to Cheney's stated preference on sanctions. Cheney has bemoaned the rise in unilateral sanctions, complaining that they are not effective if other countries use the opportunity to do business with the particular state.

The Stimson Center will release a report in March, which Cox co-authored, that examines ways to return to multilateral export controls. Cox said this paper could be a guidepost for the new administration's policy in this sensitive area.

Cox's idea for reforming export controls may, ironically, run into resistance from some of the conservatives who championed his report only two years ago.

The director of the conservative Center for Security Policy and a former Pentagon assistant secretary under Reagan, Frank Gaffney said, "If the Germans decide to sell chemical warfare capabilities to Moammar Gadhafi, I don't think we want American companies competing with them. There is clearly a point where you have to say we are not going to sell things that are not in our interest, even if our allies do."

(C) 2001 UPI All Rights Reserved.

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