UNITED STATES DEPARTMENT OF COMMERCE The Under Secretary For Export Administration Washington, D.C. 20230 July 6, 1998 The Honorable Floyd Spence Chairman, Committee on National Security House of Representatives Washington, D.C. 20515 Dear Mr. Chairman: During the joint International Relations Committee / National Security Committee hearing on June 18, a number of members asked questions to which I agreed to respond in writing. I have the answers to all but one question and, rather than delay my answer, I wanted to respond to the Committees with the other information. Congressman Gibbons referred to three satellite waivers dated October 24, 1995, December 4, 1995, and December 8, 1995, that I recommended be signed, and he implied incorrectly that they related to the 1996 Loral launch which exploded - I would like to correct that misconception. They did not. The waiver authorizing the 1996 Loral launch was signed by President Bush on September 11, 1992. The waiver recommendations that I signed were for different satellite exports. Copies of those recommendations are attached. All three are classified and contain information subject to Section 12(c) of the Export Administration Act, and may not be included in the printed hearing report. Congressman Burton asked about the Yuchai America ease. As I stated at the hearing, I and other BXA officials discussed this case extensively with his Governmental Affairs Committee staff over a year ago; however, I committed at the hearing to review the matter. I have done so and determined that the license was properly issued. The export license application was handled through the established licensing process, a full interagency review was conducted, and the license was issued by interagency consensus. I am attaching a chronology of that case. The information contained therein is subject to the provisions of Section 12(c) of the Export Administration Act. It should not appear in the printed hearing report. Section 12(c) provides that this information may not be further disclosed unless the full Committee determines that withholding of the information is contrary to the national interest. In providing this information to you, I would underscore the importance of protecting it from further disclosure. The information provides details of U.S. exporters' business transactions. Among other concerns, release of the information could discourage exporters from participating, or being fully candid, in the export licensing process. Congresswoman Fowler asked about a March 21, 1996, license to China Electronic Systems Engineering Corp., which she believed authorized the export of ground stations. A careful search of our licensing records shows no such license being issued, nor any exports to China Systems Engineering Corp. I would also point out that in March 1996 the export of a ground station which contained encryption would have been under the jurisdiction of the State Department Congressman Hunter asked whether Hughes met with the Chinese as part of the 1995 launch failure investigation. Hughes undertook a launch failure analysis in order to satisfy insurance requirements, which it provided to the Commerce Department. Commerce determined that analysis did not contain information that exceeded the scope of the approved Commerce license. Commerce authorized release of the analysis, which subsequently was provided to a consortium of Western insurance companies and to the Chinese launch service provider. Hughes worked with the Chinese launch service provider to assemble data on the failure but has indicated it prepared the final analysis independently. In that analysis, Hughes concluded that the satellite itself was not responsible for the launch failure. The data in the analysis was not detailed design or manufacturing data for the satellite or the launch vehicle and was focused on showing that the satellite did not cause the failure. The outstanding issue is Congressman Gibbons request for a list of companies and chief executive officers of the Computer Systems Policy Project, when the group's meetings at the White House occurred, and who attended them. The Department of Commerce does not have all of this information and must obtain it from other sources. We are assembling the information and will provide it to the Committees once we have it. Sincerely, William A. Reinsch Enclosures
Folder labelled Space Luanch [sic]
Cover sheet for classified info; memo to Bettie Baca from
William Reinsch re National Interest Waiver for XXXXXX
Communication Satellite Project with attachments - 4 pages
classified documents and 10 pages unclassified documents and
Executive Secretariat Clearance Sheet
Group of documents: telephone message dated 12/12/95 from Ann
Marie Thurber; 2-page memo from Sockowitz dated 12/11/95 re OPIC
and TRW; 4-page fax dated 12/11/95 to Sockowitz from Kimberly
Farner; 1 page e-mail from Kim Farner to Sockowitz dated
12/11/95 re US- Russia launch agreement language; 3-pages
handwritten notes by Sockowitz (one page is scrap or newspaper
stapled to one of other pages) 17-page document dealing with
telecommunications satellites (Russia and Kazakhstan)
Cover sheet for classified info; memo to Bettie Baca from
William Reinsch re National Interest Waiver for XXXXXX
Communication Satellite Project w/attachments - 5 pages
classified documents and 3 pages unclassified documents
Cover sheet for classified info; memo to Bettie Baca from
William Reinsch re National Interest Waiver for XXXXXX
Communication Satellite Project with attachments - 3 pages
classified documents and 10 pages unclassified documents and
Executive Secretariat clearance Sheet
Classified transmission from National Security Council -
Message No. 2565, NSC LOG # 9508646; cover Sheet for classified
documents; 4 part of Classified Material dated 12/01/95
[double-sided]
Yellow Post-it dated 11/O5/96; Secretarial
Correspondence Clearance Form - 4 parts of Classified Material
Receipt dated 22/04/95 (double-sided) cover sheet for
classified material; folder containing memo (with classified
attachments) from William Reinsch dated 11/02/94 re Draft GAO
Report - MTCR/China and notes on 5 yellow Post-its
Folder labelled: Remote Sensing
Yellow post-it note marked "Remote Sensing" on a cover letter
from Ginger Lew to Conrad Harper with courtesy copy of Notice of
Inquiry submitted to the Office of the Federal Register
[attached by binder clip to Doc # 318]
Copy of handwritten notes referencing draft letter sent to
Ambassador McNamara by Sue Eckert attached to unsigned letter
from Eckert to McNamara, Concurrence Record dated 08/24/95,
undated letter from Iain Baird to Martha Harris, undated letter
from Iain Baird to David Tarbell, and undated copy of Final Rule
re Transfer Of Certain Remote Sensing Satellites from the U.S.
Munitions List to ECCN 9A04A on the Commerce Control List
(attached by binder clip to Doc # 317)
Cover sheet for classified documents; Secretarial correspondence
Clearance form; yellow Post-it with handwritten notes; Document
dealing with Remote Sensing with attached draft State Department
Cable
Classified Material Receipt (double-sided) Cover sheet for
classified documents; draft one page memo from Keith
Calhoun-Sengor dated O4/18/96; draft seven-page memo from Keith
Calhoun-Sengor dated 04/19/96
Cover sheet for classified documents with orange post-it
containing handwritten notes attached; 4 parts of Classified
material Receipt dated 04/17/96 (double-sided); 1 page
handwritten notes; yellow Post-it with handwritten notes draft
one page memo from Keith Calhoun-Sengor dated O4/17/96; draft
five-page memo from Keith Calhoun-Sengor dated 04/19/96
Cover sheet for classified documents; 4 parts of Classified
Material Receipt dated 04/18/96 (double-sided) Draft State
Department Cable dated 04/17/96
Cable from American Embassy Tokyo [002655] (double-sided)
End of Folder labelled: Remote Sensing
PRES. SATELLITE SYSTEM STATUS
================================================================
BUSH SPACE SYSTEMS LORAL INTELSAT 708 LONG MARCH
9/11/92 CRASHED 2/15/96
BUSH MARTIN MARIETTA ASIASAT 2 LONG MARCH 11/28/95
9/11/92
BUSH ALCATEL AFRISTAR ARIANE 4
9/11/92 SCHEDULED 9/98
BUSH STARSAT PROGRAM CANCELED
9/11/92
BUSH DFH 3-1 VARIOUS U.S. COMPANIES LONG MARCH 11/29/94
9/11/92 DFH 3-2 VARIOUS U.S. COMPANIES LONG MARCH 5/11/97
BUSH HUGHES APSTAR 1 MADE BY LORAL LONG MARCH 7/21/94
9/11/92 HUGHES APSTAR 2 MADE BY LORAL CRASHED 1/26/95
HUGHES APSTAR 1A MADE BY LORAL LONG MARCH 7/3/96
HUGHES APSTAR 2R MADE BY LORAL LONG MARCH 10/16/97
CLINTON MOTOROLA IRIDIUM 42, 44 LONG MARCH 12/8/97
7/2/93 MOTOROLA IRIDIUM 51, 61 LONG MARCH 3/25/98
MOTOROLA IRIDIUM 69, 71 LONG MARCH 5/2/98
CLINTON LOCKHEED MARTIN INTELSAT 801 ARIANE 4 2/28/97
7/2/93 LOCKHEED MARTIN INTELSAT 802 ARIANE 4 2/28/97
LOCKHEED MARTIN INTELSAT 803 ARIANE 4 2/28/97
CLINTON LOCKHEED MARTIN ECHOSTAR 1 LONG MARCH 12/28/95
7/13/94
CLINTON SPACE SYSTEMS LORAL MABUHAY/AGILA LONG MARCH 8/19/97
2/6/96
CLINTON HUGHES CHINASAT 7 LONG MARCH 8/18/98
2/6/96 LAUNCH FAILED
CLINTON LOCKHEED MARTIN CHINASTAR 1 LONG MARCH 8/19/97
2/6/96
CLINTON HUGHES APMT SCHEDULED FOR 2000
6/23/96
CLINTON SPACE SYSTEMS LORAL GLOBALSTAR RUSSIAN ZENIT & SOYUZ
7/9/96 1998 ZENIT FAILED 12
SATELLITES DESTROYED
CLINTON SISE (CHINA WITH HARRIS CORP.) SCHEDULED 10/98
11/19/96
CLINTON EURA SPACE (JOINT PRC/GERMAN/USA) SCHEDULED 7/98
11/23/96
CLINTON SPACE SYSTEMS LORAL CHINASAT 8 SCHEDULED 1998
2/18/98
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