- A subsidiary of International Business
Machines Corp. pleaded guilty yesterday to illegally supplying a Russian
nuclear weapons facility with 17 high-speed computers and agreed to pay
$8.5 million in fines.
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- The Russian firm, IBM East Europe/Asia
Ltd., made the plea in U.S. District Court before Judge Norma Holloway
Johnson. The firm is a wholly owned subsidiary of the New York-based IBM.
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- The U.S. supercomputers were sold in
1996 and 1997 to the Arzamas-16 nuclear weapons laboratory through two
Russian front companies that acted as agents for the laboratory and who
were identified in court papers as Jet InfoSystems and Ofort.
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- Arzamas-16 is a laboratory run by the
Russian government's Federal Nuclear Center.
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- Amanda DeBusk, assistant secretary of
commerce for export enforcement, said the government is trying to get back
16 of the networked high-speed computers and has yet to locate the one
other IBM supercomputer.
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- "We are in extensive engagement
with the Russian government and are trying to get those back," she
said, noting that the matter is being pursued through diplomatic channels.
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- Miss DeBusk said a second case involving
the illegal diversion of a high-speed computer made by Silicon Graphics
Inc. that also went to Arzamas-16 is still under investigation.
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- As part of the settlement, the Justice
Department agreed not to prosecute IBM, although court papers left it less
than clear what role the company had in the diversion.
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- Such computers cannot be sold abroad
without export licenses, and sales are prohibited when the computer will
be used to help develop nuclear weapons.
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- Sixteen of the supercomputers were connected
in series at the weapons laboratory to increase overall computing power;
the 17th was a single, high-speed system, according to court documents.
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- Weapons experts said a bank of 16 IBM
RS/6000 computers like those sold to Russia perform 3.3 billion operations
per second - a computer speed measurement - exceeding the 2 billion per
second calculation speed that requires an export license.
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- Court papers said Russian nuclear weapons
officials traveled to a Japanese government facility to view the operation
of networked IBM supercomputers being offered for sale. It eventually paid
$1.5 million for the 16 networked computers and $600,000 for the single
supercomputer.
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- Critics of the Clinton administration's
decision in October 1995 to ease controls on sales of supercomputers said
the IBM case highlights the problem.
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- "The fact that the Russian nuclear
weapons complex was able to obtain these high-performance computers is
the direct result of the administration's 1995 decontrol," said a
senior Senate aide.
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- Gary Milhollin, director of the Wisconsin
Project on Nuclear Arms Control, said the IBM case "confirms that
Russia is now designing nuclear weapons with American equipment."
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- "The machines sold multiply the
computer power previously available to the Russians roughly by a factor
of 10," Mr. Milhollin said.
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- "The government is leaving up in
the air the question of whether an American company is responsible abroad
for what is done with its own products," he said. "That's disturbing."
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- IBM spokesman Rob Wilson said the corporation
had no role in the case and that a Russian national who was involved had
been dismissed from the subsidiary.
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- "We regret the involvement of our
Russian subsidiary in this case," he said. "IBM will not tolerate
any violation of its standards of business conduct. We cooperated fully
with the federal government and we're pleased that this matter was resolved."
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- The company has put new controls in place
to avoid any further illegal diversions, he said.
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- The Commerce Department rejected a license
request to sell the computers to the weapons lab in October 1997, but the
computers were transported from the Netherlands to the Russian nuclear
complex on Oct. 3, according to court papers.
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- The illegal sales were first disclosed
on Jan. 13, 1997, by Russian Atomic Energy Minister Victor Mikhailov, who
announced the weapons laboratories had acquired the supercomputers.
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