DOD Says U.S. Firms Gave China
Big Help With Its Nuke Missiles
NEW YORK (Reuters) - A classified Defense Department report has concluded that scientists from Hughes Electronics Corp. and Loral Space & Communications Ltd. turned over expertise to China that significantly improved the reliability of China's nuclear missiles, the New York Times reported Monday.
The scientists from the two companies turned over the information as part of their investigation of a Feb. 16, 1996, crash of a Chinese rocket that Loral had contracted for the launch of a $200 million satellite, the Times said, citing unnamed officials.
In addition to identifying the cause of the crash -- said to be an electrical flaw in the electronic flight-control system -- the 200-page accident assessment also discussed other sensitive aspects of the rocket's guidance and control systems, an area of weakness in China's missile programs, the Times said. The May 1997 report concluded that ``United States national security has been harmed.''
The report, whose existence has been secret, prompted a criminal investigation of the companies, the Times reported, citing unnamed officials.
The companies told the Times their employees acted properly but they declined to discuss the matter.
Criminal charges are unlikely to be brought, largely because the investigation was undermined this year when President Clinton approved Loral's export to China of the same information about guidance systems, the Times said.
Clinton acted despite strong opposition from the Justice Department, which argued that approval would undercut any criminal case, the Times said.
Loral chairman Bernard Schwartz was the largest personal donor to the Democratic Party last year, the Times said. The White House denied any political interference in the issue.

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