December 7, 1998

This is an initial assessment of information contained in
certain documents provided to the Department of Defense by the
Department of Commerce in July of 1998 that relate to the
conduct of a failure investigation by Hughes Space and
Communications Company in 1995, in connection with the failed
launch of an Apstar II satellite in China. The conclusions are
limited to the information that DoD derived from those
documents.  This initial assessment has been prepared in
response to requests from Congress.


The Hughes Space and Communications Company (hereinafter
referred to as "Hughes") prepared certain reports and other
documents containing the findings and supporting analyses of its
investigation of the January 1995 failure of the launch of a
China Long March 2E (LM-2E) rocket-carrying Hughes-manufactured
ASTAR II commercial communications satellite. During the course
of the investigation, Hughes provided documents to, and
conducted the investigation jointly with, Chinese nationals,
including at least the Chinese Academy of Launch Technology
(CALT), the LM-2E manufacturer, and the Chinese launch service
provider, the China Great Wall Industries Corporation (CGWIC).
Hereinafter, this assessment will refer to these entities
collectively as the "Chinese".

At various times between February and August 1995, Hughes
submitted these reports and documents to the Department of
Commerce for review and approval for release to China. Hughes
provided copies of these documents to the Chinese. The documents
indicate that some of the information contained in them was
previously imparted to the Chinese in briefings and discussions
prior to submission to Commerce. Commerce determined that the
documents only contained information already authorized for
export under the original Commerce license issued to Hughes in
February 1994. Commerce did not consult with DoD on whether the
documents contained information that should not be released to
the Chinese launch service provider or on any other aspect of
the launch failure investigation conducted by Hughes with the
Chinese. As a result, DoD did not review or monitor the
technical exchanges between Hughes and the Chinese. After
Commerce revealed the existence of these reports and other
documents during interagency preparations for June 1998
Congressional hearings on satellite exports for launch in China,
DoD asked Commerce to provide the subject documents for DoD's
review. In July 1998, Commerce provided DoD copies of documents
concerning Hughes' investigation of the APSTAR II launch
failure. A list of these documents is in the Appendix. Also in
July 1998, the Subcommittee on International Security,
Proliferation and Federal Services of the Senate Committee on
Governmental Affairs inquired whether DoD had reviewed these
materials and assessed whether U.S.  national security interests
had been harmed. Since that time, other committees of Congress
have also posed similar queries to DoD.

The Technology Security Directorate of the Defense Threat
Reduction Agency made the following assessment of these
documents on behalf of DoD, with the assistance of the National
Air Intelligence Center (NAIC).  The scope of this assessment
was limited to the Department of Commerce. For the review of the
documents provided to DoD by preparation of this assessment DoD
did not have access to all Hughes or Chinese records relating to
the launch failure investigation, including technical appendices
and briefing materials referred to in the subject documents.
Commerce advised DoD that it did not have copies of the
appendices referenced in the Hughes documents it provided DoD.
DoD understands that the Department of State is seeking
additional documentation from Hughes.

The conclusions of this assessment are based on the material
contained in the Hughes documents provided by Commerce. For ease
of reference, these materials are referred in this assessment as
"the Hughes/Apstar materials," Given the incompleteness of the
record in this matter, DoD's findings and conclusions are
necessarily preliminary in nature.


On January 26, 1995, approximately 52 seconds into flight, a
Chinese LM-2E carrying the APSTAR II (a Hughes 601 commercial
communications satellite) failed. This was the LM-2E's second
failure.  The first failure of the LM-2E in December 1992
involved an attempted launch of the Hughes OPTUS B-2 commercial
communications satellite.

Following the APSTAR II failure, there was disagreement between
Hughes and the Chinese about whether the principal cause of the
failure was the launch vehicle or the satellite. The subsequent
joint Hughes-Chinese failure investigation was apparently
intended, at least in part, to resolve this dispute.


The Hughes/Apstar materials indicate that immediately following
the launch failure, Hughes President Don Cromer established
several teams to conduct the launch failure investigation, as
described below.

The Failure Investigation Team (Failure Team): This team
consisted of twelve persons with overall responsibility for the
investigation was chartered to examine all aspects of the
failure, including the satellite and the launch vehicle. The
Failure Team was also responsible for "external interfaces,"
including with the China Academy of Launch Vehicle Technology
(CALT), the China Great Wall Industries Corporation (CGWIC), the
insurance companies, and the U.S. Government. The 38-page report
produced by this team is one of the documents Commerce provided
to DoD in July 1998 for purposes of this assessment. The report
noted that the Failure Team members also had worked on the OPTUS
B-2 failure investigation(1). The Failure Team had seven
specialty sub-teams who were assigned the following areas:
Spacecraft Debris; Material Properties; Video Analysis;
Telemetry; Coupled Loads, Structures; and Aerodynamics.

The Spacecraft Focus Team (Spacecraft Team): The Spacecraft Team
consisted of six persons who were chartered to review the work
of the Failure Team and independently assess whether and how the
satellite might have contributed to the launch failure. The
84-page report produced by this team is one of the documents
Commerce provided to DoD in July 1998 for purposes of this
assessment. However, the report provided to DoD did not include
several technical appendices referenced in the report.

The Independent Review Team (Independent Team): The Independent
Team consisted of six persons and was chartered to provide
Hughes with an independent assessment of the failure by
reviewing the work of the other teams, The team members were all
current or former aerospace experts. The chair, a retired
executive of the Aerospace Corporation, had extensive exper7ence
in launch vehicles, spacecraft and launch operations. Two of the
members were retired from Hughes. The others were retired from
or affiliated with other aerospace firms. The only documentation
of this team's work provided to DoD by Commerce was a one-page
executive summary of the team's conclusions.

International Oversight Team (International Team): In
anticipation that Hughes and the Chinese might differ, an
International Oversight Team was created to review the work of
each side. This team consisted of three persons: a chairman,
Pierre Madon (an Intelsat official whose nationality is not
noted), and representatives from the Chinese and Hughes. The
Hughes representative also served as the chair of the
Independent Team. No documents were provided to DoD concerning
the deliberations of this team. The International Oversight Team
met on three separate occasions over the April to June period
during which the results of the investigation were discussed.

As noted above, there were several sub-teams of the Failure Team
that were formed to investigate the launch failure. The specific
membership of these sub-teams is not noted in any of the reports
or documents provided to DoD. It is likely that the work of
these sub-teams was not done exclusively by members of the
Failure Team because one of the tasks of the Failure Team was to
coordinate all of Hughes' resources being devoted to the failure
analysis. The sub-teams performed separate analyses and
presented their findings to the Failure and Independent Teams. A
summary was presented to the International Oversight Team,
according to information contained in the Hughes/Apstar
materials.  However, briefing charts or other text of this
summary were not among the documents Commerce provided to DoD.
DoD believes it is also likely that these sub-teams provided
some of the principal interfaces between Hughes and the Chinese
in the preparation of individual analytical pieces of the
decision tree approach for defining the likely root cause of the
failure. This conclusion is based on information in the
Hughes/Apstar materials concerning how the sub-teams worked. In
one case, for example, Hughes reported that a sub-team worked
"beside" Chinese engineers "to review and participate in Coupled
Loads Analysis methodology." The teams apparently included
experts in a variety of engineering disciplines, although the
precise nature of the analyses performed and the composition of
skills of the team members cannot be ascertained from the
Hughes/Apstar materials reviewed by DoD.


The investigation began in late January 1995 when the Failure
Team traveled to China to view the recovered debris of both the
spacecraft and the launch vehicle. Three days of meetings were
held at the launch site between the Hughes Failure Team and the
Chinese. The Failure Team received video material and launch
vehicle telemetry from the Chinese.  This process began what
became an extended period of formal interactions between the
Failure Team and the Chinese which included at least five,
two-day joint meetings over the February-June 1995 time frame In
China and another two-day meetings over February-June 1995 time
in China and another two-day meeting in Los Angeles in April. In
addition, the International Team met three times: one day April
in Washington, D.C., two days in May in Beijing, and two days in
June in Los Angeles.

Video of the launch examined by Hughes and the Chinese early in
the investigation showed that there was a noticeable glow
observed coming from the payload fairing or shroud as the LM-2E
launch vehicle ascended. Soon thereafter, fire was visibly
streaming down the side of the LM-2E. Catastrophic failure
occurred when the stream of fire reached the LM-2E main engines.
The Chinese asserted that the glow indicated that the satellite
fuel tanks had ruptured, spilling and then igniting the
satellite fuel. Telemetry also confirmed a breakwire failure,
which Hughes interpreted as an indication of the likely loss of
fairing integrity that would indicate a Chinese launch vehicle

The fairing is part of the launch vehicle and is the shroud or
cover sitting atop the launch vehicle that houses the satellite
payload. The fairing consists of two sections or halves and a
two-section dome, It is designed and manufactured-by the launch
vehicle provider to encapsulate payloads (including, but not
limited to, satellites). The fairing must be designed as an
integral part of the launch vehicle system as determine the
success of the launch. The breakwire is a continuity wire across
the fairing which, when broken, indicates a separation of the
halves of the fairing.

According to the Hughes/Apstar materials, the disagreement
between Hughes and the Chinese focussed on two views of the
cause of the launch failure: (1) the Chinese claim that the
satellite was defective as evidenced by satellite fuel igniting;
and (2) Hughes' claim that the satellite was a contributing
factor only after the launch vehicle fairing had failed which
exposed the satellite to catastrophic conditions. Because of the
disagreement, the failure investigation undertook to examine in
a very thorough and methodical manner all of the potential
causes of the launch failure, including the two hypotheses
offered by the Chinese and Hughes.

Hughes' satellite and fairing debris analysis, much of which was
shared with the Chinese, determined that the satellite fuel
tanks had ruptured in a manner that suggested the satellite
structure had collapsed on its fuel tanks. Thus, the satellite
appeared to have experienced a significant load or stress
condition. The investigation also examined the fairing and the
loss of the breakwire telemetry signal. Upon examination of the
fairing debris, Hughes found scratches and wear on the fairing
dome that indicated the dome may have collapsed on itself. Loss
of the fairing breakwire signal could indicate a loss of fairing
integrity, either due to the fiberglass dome of the fairing or a
zipper (which holds the two halves of the fairing together)
failure. Hughes created a detailed timeline of events based on
data gathered both from visual and LM-2E telemetry. From this
timeline, it was observed that the breakwire failure came before
the fairing glow and while the spacecraft was still intact.

The Hughes/Apstar materials indicate that subsequent analysis
focussed on the loads (or static and dynamic forces or stresses)
experienced by the launch vehicle and satellite payload during
the flight, Including an examination of the fairing and
satellite structure and design. Much of the work in these areas,
especially in modeling and loads analysis, involved significant
interaction between Hughes and Chinese experts. This Included a
thorough review of the LM-2E Coupled Loads Analysis which had
been originally performed by the Chinese.

Coupled Loads Analysis simulates and assesses the interplay of
the loads on the launch vehicle during flight, including
interaction between the satellite and the launch vehicle which
are stacked one on top of the other.  This analysis is based
upon a finite element model which is a mathematical
representation of specified grid points that define the physical
body of the spacecraft. Finite element analysis is the analysis
of structural stress about the spacecraft body grid points.
Coupled Loads Analysis combines the spacecraft and launch
vehicle models for loads analysis. Information contained in the
Hughes/Apstar materials indicates that, based upon that
analysis, Hughes learned that the Chinese Coupled Loads Analysis
was deficient. Specifically, the Chinese had not performed an
analysis of the cantilevered loads from the payload stack to the
fairing and, as a consequence, had no real idea of the true
loads on the fairing arising from wind shear and buffeting.
Hughes then worked with the Chinese, presumably to correct the
Finite Elements Model of the LM-2E and performed a Coupled Loads
Analysis that more accurately characterized the loads actually
experienced by the fairing during the failed launch. Hughes also
presented the results of the analysis to show the Chinese that
the launch vehicle and satellite were designed to comfortably
withstand the flight loads, but that the oversimplified Chinese
Coupled Loads Analysis failed to account for- windshear and
buffeting loads on the fairing.

DoD assesses that a thorough Coupled Loads Analysis was central
to Hughes' effort to prove that the Chinese failed to account
for (1) the high winds aloft and buffeting, and (2) the
resultant LM-2E non-zero angle of attack (i.e., the LM-2E's
guidance System failure to compensate for the upper level
winds). These factors combined to produce stresses that exceeded
the rivet shear strength along the fairing zipper and/or
collapsed the fairing fiberglass dome. Based on the discuss, DoD
believes it is reasonable to infer that, during the close
collaboration between Hughes and Chinese engineers, Hughes
imparted to the Chinese sufficient know-how to correct the
overall deficiencies in their

The Hughes/Apstar materials reveal that during the course of the
investigation Hughes pointed out the similarity of the 1995
APSTAR II/LM-2E failure and the failure in December 1992 of the
LM-2E launch of Hughes' OPTUS B-2 satellite. Both launches
occurred during fall months and both experienced high wind shear
at about the same time during the flight. In contrast, three
successful LM-2E launches occurred during summer months when
wind shear was light.


According to the Hughes/Apstar materials, three of the
investigative teams the Failure Team, the Spacecraft Team, and
the Independent Team -- reached essentially the same
conclusions: the spacecraft was not the cause of the failure and
the launch vehicle fairing was the most probable cause.
Deficiency in Chinese design of the launch vehicle fairing was
cited as the most likely "root cause." The conclusions
highlighted numerous areas of concern focussing on improving the
launch vehicle design. This included concerns about the launch
vehicle fairing design, the rivet strength of the zipper,
weaknesses in the nose cap split line, and the shape of the
fairing (its hammer-head shape aggravates aerodynamic
buffeting). There were also concerns about certain Chinese
launch vehicle interfaces (e.g., the design of the clamp
separation band) and inadequate vent area in the launch vehicle
fairing. Problems in Chinese launch operations were also
identified in the various reports, including the lack of
detailed weather criteria for launch and flying the vehicle at a
high angle which makes the launch vehicle more vulnerable to
wind shear.

The investigation also concluded that the causes of the failure
of the LM-2E launch of Hughes' OPTUS B-2 in December 1992 and
the APSTAR II failure were identical. The documents note that
the conclusions reached in the APSTAR II failure investigation
were "more specific" than those reached in the OPTUS B-2
investigation in part because the role of wind shear and winds
aloft were better understood and more telemetry data was
available for review.

The International Oversight Team that included representation
from Hughes and the Chinese subsequently met three times for a
total of five days to consider the results of the investigation,
but "could not reach a unanimous conclusion as to the cause of
the failure."


Over the course of about five months in early 1995 following the
failure of the launch of the APSTAR II satellite in China,
Hughes conducted a broad and in-depth investigation that
involved significant technical and detailed interchanges between
Hughes and Chinese experts. The conduct of these interactions
specifically addressed a full range of possible causes for the
failure that included a comprehensive analysis of the Hughes
satellite and the Chinese launch vehicle fairing and flight
loads. The investigation's conclusions that were provided to the
Chinese were very specific and identified the need for
modifications in the Chinese launch vehicle fairing design and
launch operations. In particular, the joint investigation
provided China with details about the satellite design and some
manufacturing /inspection practices to prove that the satellite
was not responsible for the failure and that a faulty launch
vehicle fairing design was the likely root cause of the failure.
The joint investigation also provided the Chinese with insight
into U.S. diagnostic techniques for assessing defects in launch
vehicle and satellite design.

Hughes demonstrated to the Chinese how corrected Coupled Loads
Analysis and modeling supported Hughes' conclusions that the
launch vehicle fairing caused the failure. Coupled Loads
Analysis is the responsibility of the launch vehicle provider
and is a critically important process for validating the
integrity of a launch vehicle to survive in various flight
environments. In at least one instance, the documents DoD
reviewed reveal that Hughes was conscious of "government
constraints" in providing assistance to the Chinese in this
area. Much of this work during the investigation appears to have
been done in China in close collaboration with the Chinese
experts. Hughes clearly was concerned about the serious flaws in
Chinese modeling and analysis of aerodynamic loads on the launch
vehicle fairing. According to the Hughes/Apstar materials, among
the lessons Hughes said it learned was that it cannot rely
exclusively on the Chinese to perform Coupled Loads Analysis. In
this connection, the Spacecraft Team indicated that if
"politics, government constraints, or vendor issues do not
permit the analysis [by Hughes], then it would be our
recommendation that this is not a suitable launch vehicle."

The fact that Hughes was able to draw more specific conclusions
in the APSTAR II investigation than it is the OPTUS B-2 failure
investigation is likely attributable in significant part to the
lack of government restrictions on the conduct of the joint
analysis with the Chinese in the APSTAR II case. There is no
evidence in the documents reviewed by DoD that there were any
limits imposed on the APSTAR II investigation by the Commerce
Department or any other US government agency. As a consequence,
the Chinese and Hughes engaged in technical exchanges, such as
those concerning Coupled Loads Analysis and Finite Elements
Analysis, that would allow the Chinese to gain specific insight
into specific launch vehicle design and operational problems and
corrective actions -- benefits that the DoD-monitored
investigation of the Optus B-2 failure apparently did not yield.
The Optus B-2 failure analysis was conducted by Hughes under a
Department of State licenses that required DoD monitoring of
technical interactions with the Chinese.

There is no indication in the Hughes/Apstar materials that the
Chinese performed an independent investigation of the APSTAR II
launch failure of the depth and intensity of the one conducted
by and with Hughes.

The conclusions outlined in the Hughes/Apstar materials provided
to the Chinese (and reviewed by DoD for this assessment) were
sufficiently specific to inform the Chinese of the kinds of
launch vehicle design or operational changes that would make the
LM-2E (and perhaps other launch vehicles as well) more reliable.

Based on DoD's experience monitoring technical interchange
meetings and related activities in connection with foreign
launches of U.S.  commercial satellites, it its reasonable to
conclude that during the course of the five-month Hughes
investigation there were significant interactions with the
Chinese of a highly technical and specific nature that are not
reflected in the Hughes/Apstar materials reviewed by DoD. It is
likely that other documents exist that would shed additional
light on Hughes' interactions with the Chinese. This would
include information on the specific interactions at the sub-team
level, and the deliberations of the Independent Team (about
which DoD was only provided a one-page summary of conclusions)
and the International Oversight Team (about which the documents
reveal very little).

Commerce has indicated it reviewed the documents supplied by
Hughes in 1995 during the course of the investigation and which
were provided to DoD in July 1998 for use in preparing this
assessment. Commerce has stated that they determined in 1995
that the documents contained only information already authorized
for export under the original Commerce license issued in
February 1994.


The provision of technical assistance in connection with the
failure investigation to the Chinese by Hughes in the design,
engineering, and operation of the Chinese launch vehicle and the
Hughes satellite constitutes a "defense service" within the
meaning of the State Department's International Traffic in Arms
Regulations (ITAR) under the Arms Export Control Act (AECA).
This was clearly beyond the scope of Commerce export control
jurisdiction because only the Department of State is authorized
to issue licenses for defense services(3). The Commerce license
issued for APSTAR II covered only the export of the satellite
and very limited technical data. There was no reasonable basis
to conclude that a launch vehicle failure investigation of the
scope evidenced in the documents would not be subject to State
Department export control jurisdiction.

The Hughes/Apstar materials reviewed by DoD reveal that the
Chinese were provided with technical data and assistance from
Hughes' failure investigation that enabled the Chinese launch
manufacturer and launch service provider to make design and/or
operational adjustments that improved launch vehicle
reliability. They also reveal that the Chinese were provided
practical insight into a diagnostic and failure analysis
technique for identifying and isolating the, cause of a launch

[Editor's note: section classified "secret/no foreign" omitted.]

The specific benefits derived from the APSTAR II launch failure
investigation for Chinese missile programs did not likely alter
the strategic military balance between the United States and
China. However, in light of the strict standards of U.S. policy
not to assist China in improving its satellite and in
missile-related capabilities, DoD believes that the scope and
content of the launch failure investigation conducted by Hughes
with the Chinese following the January 1995 APSTAR II failure
raises national security concerns both with regard to violating
those standards and to potentially contributing to China's
missile capabilities. Therefore, the activities involved in the
failure investigation warrant further inquiry to obtain a better
understanding of the details of the technical assistance that
Hughes provided the Chinese in order to urge the precise nature
and seriousness of any impact on U.S. national security.



Derived from: NAIC memo, Nov. 12,1998

Declassify on: XI

(1) The State Department licensed the export of the OPTUS B2.
This launch of this satellite on LM-2E failed December 1992. DoD
monitored Hughes' launch failure investigation under the terms
of the State Department license.

(2) The description of events is in this section is based on the
information contained in the Hughes/Apstar materials provided to
DoD by the Department of Commerce. For the preparation of this
assessment, DoD has not independently corroborated the sequence
of events and has not conducted additional research to expand
this expand.

(3) Section 120.9 of the International Traffic in Arms
Regulations (ITAR) (22 C.F.R. Part 120.9) defines a "defense
service" to include the furnishing to foreign persons of
ITAR-controlled technical data or assistance (including
training) in the design, development, engineering, manufacture,
production, assembly, testing, repair, maintenance,
modification, operation, demilitarization, destruction
processing or use of defense articles. Defense articles include
a launch vehicle (ITAR Category IV) and a spacecraft, including
satellites (ITAR Category XV), and specially designed or
modified components, parts, attachments and associated equipment
thereof. In this connection, all defense services for satellites
and/or launch vehicles, including for compatibility,
integration, or processing data are covered by the ITAR, even
with respect to satellites subject to Commerce's license
jurisdiction, (This was the case in 1994 and 1995 when Hughes
sought export licenses for the Apstar II satellite launch and
failure analysis, and remains true today.) Commerce's
jurisdiction and licenses are limited to the APSTAR 2 satellite
and technical data given to the launch provider (form, fit,
function, mass, electrical, mechanical, dynamic/environmental,
telemetry, safety, facility, launch, access, and launch
parameters) that describe the interfaces for mating and
parameters for orbit (e.g. orbit, timing) of the satellite. See
Note 1 to ITAR Category XV.



The following is a list of the documents that the Department of
Commerce provided to the Department of Defense in July 1998.

Document #1 consists of apparently several separate documents
bound by a bulldog clip, as follows:

1.2 (pages-1-5) Hughes telecopier cover sheet, fax dated January
27, 1995, transmitting to DOC the attached "Implementation Plan
for Apstar II Launch Operations."

1.2 (pages 6-6a) Hughes telecopied news articles, fax date
January 30, 1995, re the Apstar II launch failure.

1.3 (pages 7-1 1) Minutes from 2/10/95 Meeting in Xichang
between Hughes and Chinese experts.

1.4 (pages 12-27) Hughes briefing paper titled "APSTAR 2 Failure
Presentation to CGWIC, February 13, 1995."

1.5 (page 28) Hughes briefing paper titled "Apstar 2 Failure
Investigation, March 3, 1995."

1.6 (pages 29-30) Hughes paper titled "Apstar 2 Failure
Investigation,' undated.

1.7 (pages 3 1-50) Various undated Hughes work papers containing
detailed drawings of the satellite payload configuration and the
fairing and certain interfaces and loads data and time lime

1.8 (pages 51-66) Hughes letter of May 9, 1995, to the
Department of Commerce Concerning an April 28, 1995 and March 3,
1995 meetings between Hughes and Commerce and transmitting
Failure Investigation Briefing Charts.

1.9 (page 69) Department of Commerce cable June 2, 1995, from
U.S.  embassy in Beijing stating that 'China Daily" reported in
June 1, 1995, that the APT Satellite Co. selected U.S. Space
Systems/Loral as the manufacturer of the APSTAR-IIR to replace
Hughes APSTAR-II that had been destroyed when the launch failed.

Document #2 (one page) is a Hughes letter of August 15, 1995, to
the Department of Commerce transmitting the reports of the three
investigative teams (see Documents #3,4, and 5)

Document -# 3 (38 pages): "Long March 2E / APSTAR 2 Failure
Iinvestigation -- Failure Investigation Team Final Report --
Technical Description," dated July 1995.

Document #4 (84 pages): "APSTAR 2 / LONGMARCH 2E FAILURE OF 26
REPORT," dated July 1995.

Document #5 (1 page): "Executive Summary" of conclusions of the
Independent Review Team, undated.

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