Charles R. Smith
Saturday, May 26, 2001

In 1999, the Commerce Department was forced by federal court to release documents found inside the Commerce Department on COSTIND, the Chinese Commission for Science, Technology and Industry for National Defense. Sixth District Court Judge Robert Payne ordered Commerce lawyers to release all the COSTIND documents into his custody for review.

Commerce lawyers asserted that COSTIND was a civilian Chinese agency and that the documents did not have to be released. This reporter successfully argued to the court that COSTIND was a well-known unit of the Chinese army.

According to the General Accounting Office, "COSTIND oversees development of China's weapon systems and is responsible for identifying and acquiring telecommunications technology applicable for military use."

A secret Defense Intelligence Agency report revealed that COSTIND coordinates and oversees "defense related developments, production, technology, transfer and marketing."

Another secret report found inside Ron Brown's offices noted that COSTIND "is a military organization, staffed largely by active duty officers" that "supervises virtually all of China's military research, development and production."

In 1994, COSTIND commander Chinese army Gen. Ding Henggao successfully penetrated the U.S. Defense Department and the Clinton White House. During the Clinton years, Ding and COSTIND obtained a vast array of American military technology including an air defense network, supercomputers for nuclear weapons production, satellites and advanced ballistic missile designs.

New Chinese Air Defense Network

In 1994, COSTIND Lt. Gen. Madam Nie Li, Ding's wife, obtained a secure, high-speed, fiber-optic communications system from AT&T. The system was shipped directly to a COSTIND unit, where it was modified for Chinese army use and is now being duplicated for export using American-made parts.

The communications system slipped past U.S. exports laws as a joint U.S.-Chinese commercial venture called "Hua Mei." The Chinese army part of the venture was run by a newly formed company named "Galaxy New Technology."

Stanford professor John Lewis, a close friend and the paid personal consultant for Clinton Secretary of Defense William Perry, was the key board member of the project. Lewis located Adlai Stevenson III, the former Democrat senator from Illinois, to lead the American side of the joint venture.

Ding's wife, Madam Nie Li, headed the joint project as the Chinese co-chairman. In 1994, Lewis contracted AT&T to ship the secure communication system directly to a Chinese army unit using Galaxy New Technology as a front.

According to the Far Eastern Economic Review, Lewis had his friend Perry write a letter on his behalf to U.S. government officials, favoring the fiber-optic export to China.

The documents also show that Lewis worked for Stanford University, the U.S. Defense Department and the Chinese army all at the same time. In August 1994, Lewis and Secretary of Defense Perry traveled to Beijing to meet with COSTIND Gen. Ding. According to the official list of attendees, Lewis accompanied Perry as a paid "personal" consultant - all while serving on the Chinese army joint venture and working as a professor at Stanford University.

AT&T officials who sold most of the equipment and software were adamant that there was no need to check the Chinese firm because the "civilian" Madam Nie Lie led it. The so-called civilian firm was actually packed with Chinese army officers and experts.

The Hua Mei fiber-optic system is now NATO code-named "Tiger Song". In 1998, China sold a duplicate "Tiger Song" secure fiber-optic network to Iraq to serve as an air defense network. U.S. and U.K. jets recently bombed the Iraqi air defense network

Supercomputers for Nuclear Weapons

In 1995, COSTIND Lt. Gen. Huai Guomo obtained Chinese army access to top U.S. atomic bomb labs such as Los Alamos and Sandia National. Huai also obtained U.S. supercomputers for use by COSTIND nuclear weapons labs.

Huai, according to the official Clinton administration dossier, is "a career administrator in China's defense industrial complex."

Huai's credits include joining the Chinese communist party in 1953 and working in the PLA "nuclear industry." Huai reportedly "impressed" his U.S. Defense "counterparts" over the years as a "competent, professional as well as a cordial individual to work with."

COSTIND nuclear weapons engineers working for Huai obtained the computer programs and codes Los Alamos uses to simulate what happens inside an exploding nuclear warhead. The software is exactly what a designer of an advanced weapon would need.

By working directly with Ron Brown, COSTIND Gen. Huai also made it possible for the Chinese military to buy 600 supercomputers on which to run that software. Thus, the Chinese army transformed its weapons development capability from Stone Age to state of the art in a very few years.

In one case, Brown's Commerce Department approved the export of a Sun supercomputer directly to the Yuanwang Group, a company directly under COSTIND control. The Sun supercomputer was then moved to the National Defense Technical Institute in Changsha, part of the Lop Nor nuclear weapons facility, for atomic bomb design.

Advanced Missile Technology

One of the major achievements of COSTIND was the penetration of Hughes and Loral. In May 1994, COSTIND Gen. Shen Rougjun attended several business meetings with Hughes and Loral executives. During this 1994 visit to America, Shen's son, Shen Jun, attended a business lunch with his father and Frank Taormina of Hughes.

In 1994, Hughes executives were scrambling to help COSTIND after the failure of a Long March rocket carrying a Hughes built satellite. Hughes eagerly pinned the failure on the poor Chinese nose cone "shroud" design and not on the Hughes satellite. In the process, COSTIND weapons engineers obtained Hughes proprietary software for missile nose-cone design and analysis derived from years of American ballistic missile tests.

In addition, Hughes V.P. Taormina later assisted Shen Jun in obtaining a job at Hughes. Gen. Shen's son, Shen Jun, joined Hughes to become the top software engineer for all satellites sold to China. Shen inspected all the Hughes satellite control and computer software and can verify that no bugs or viruses have been planted inside satellites sold by Hughes.

Although, Shen Jun was hired at Hughes in August 1994, according to the Cox report, "a division of Space Systems/Loral was also considering hiring Shen for a position that would have allowed him access to classified information."

In August 1994, Lt. Gen. Shen also met and consummated a series of satellite deals with Bernard Schwartz, the CEO of Loral. Then-President Bill Clinton arranged the Beijing meeting.

Between October 1995 and March 1996, as Clinton mulled over whether to ignore the State, Justice and Defense Departments' reasons against granting Loral waivers to export communications satellites to China, Loral CEO Schwartz injected more than $150,000 into the DNC's coffers.

Schwartz had already given $175,000 to the DNC between January and September 1995, at which time the Loral CEO waged a campaign to have Clinton shift satellite export decision responsibility from the State Department to Ron Brown's Commerce Department.

After Clinton's decision to lift the ban in Loral's case and to allow the exportation of the company's satellites, Schwartz handed over an additional $300,000 to the DNC.

Read more on this subject in related Hot Topics:
China/Taiwan
Clinton Scandals
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