Weapons of Mass Destruction (WMD)

HUGHES FALSELY ACCUSED OF TECHNOLOGY TRANSFER TO PRC

In recent weeks, certain newspaper articles and editorials have suggested that Hughes Electronics may have engaged in conduct that resulted in providing valuable technological assistance to the PRC in violation of American law. THESE STORIES ARE FALSE. Following are some questions and answers that will provide you with the facts.

Q: Did Hughes provide technological information to the Chinese that aided them in perfecting the reliability of their missile program?

A: No. At no time did Hughes provide technological information to the Chinese to assist their missile program.

Q: Did the Chinese request assistance from American scientists in determining what caused the 1996 failure of one of their Long March launch vehicles?

A: No. In 1996, a Long March launch vehicle carrying a communications satellite manufactured by Space Systems/Loral crashed shortly after takeoff. The Chinese promptly investigated the launch failure and notified the consortium of insurers (including some American insurance companies) that had insured the launch that the cause of the launch failure had been identified and that the next scheduled launch, which they were also insuring, was not at risk.

Q: Did a team of American scientists assist the Chinese in discovering the causes of the launch failure?

A: No. After the Chinese had come to their own conclusions as to the launch failure, the consortium of insurers demanded as a condition of insuring the next scheduled launch that an independent committee of scientists review the findings of the Chinese to assure that their conclusion as to the cause of the accident was supported by the evidence. Hughes was asked to permit two of its employees to participate on this independent review committee (IRC), which was lead by Loral.

Q: Why did Hughes employees participate on the IRC?

A: Hughes had manufactured a communications satellite for an overseas customer who had contracted with the PRC to have the satellite launched on the next scheduled Long March launch.

Q: What did the IRC members do?

A: The IRC members reviewed the data provided by the Chinese regarding the causes of the launch failure to verify that it substantiated the explanation given by the Chinese for the accident.

Q: Did the IRC members perform their own tests or provide any data to the Chinese?

A: No. All of the data reviewed by the IRC members was provided by the Chinese.

Q: Did the IRC prepare a report of its findings?

A: A preliminary report was prepared by some of the IRC members. The Hughes employees did not write any portion of this report.

Q: Was a copy of this report provided to the Chinese?

A: Although there have been reports that Loral may have provided a copy of the report to the Chinese, Hughes has no first hand information as to whether or not this occurred. The Hughes employees were given a copy of the report after it was prepared, but they did not provide copies of the report to anyone outside of Hughes.

Q: Would it be a violation of law if the report had been provided to the Chinese?

A: It is very difficult to say. The United States has a very complex set of licensing regulations that govern communications with any foreign nationals regarding technology, even when the technology in question is commonly available in published textbooks. Even if the report was given to the Chinese without a license, it would be a difficult technical issue as to whether that act violated the law.

Q: Is it true that the Department of Justice is investigating whether Hughes unlawfully provided technology to the Chinese?

A: Hughes has been informed that the Department of Justice is investigating whether the IRC preliminary report was provided to the Chinese without the appropriate license. Since Hughes did not provide the report or any restricted information to the Chinese, Hughes does not believe, and has not been informed, that it is the target of this investigation.

Q: Was there any "secret" or "classified" information contained in the report?

A: No.

Q: Is it true that Hughes is a major contributor to the Democratic party and Democratic party candidates?

A: No. Hughes does not donate money to any party or candidate. Hughes supports its employees' voluntary Political Action Committee (PAC) funded by contributions from Hughes employees. The PAC makes donations to various candidates and committees. Like most other large companies, the donations made by the Hughes PAC are fairly evenly balanced between Republican and Democratic candidates. None of the Hughes executives is a major contributor to any political candidates or committees.

Q: Did Hughes Chairman, C. Michael Armstrong, attempt to influence President Clinton to obtain favorable treatment for Hughes in connection with the sale of communication satellites to China?

A: No. Chairman Armstrong, who has since left Hughes to become chairman of another company, wrote the President regarding an inconsistency between the way the State Department and the Commerce Department were interpreting certain regulations governing satellite launches. His concern about the impact of these conflicting interpretations was shared by a number of Republican and Democratic congresspersons from Southern California, who sent a letter to the Administration expressing similar concerns.

Q: Why does Hughes launch satellites on Chinese Long March launch vehicles?

A: Hughes does not select the launch vehicle that will be used for launching its satellites. Hughes, however, does retain options on the launch vehicle for the convienence of its customers, but the decision is made by the satellite customer on which launch vehicle is used.

Q: What if Hughes simply refused to permit satellites it manufactures to be launched on a Chinese launch vehicle?

A: If Hughes did not accommodate its customers, they would purchase the satellites from other domestic and international manufacturers. The result would simply be that work otherwise done by Hughes employees would be transferred to other satellite manufacturers – most probably foreign manufacturers.

Q: Isn’t it necessary to provide the Chinese with a lot of American technology in order to launch a satellite in China?

A: No. A very limited amount of technical information is provided to the Chinese in order to modify the launch vehicle to carry an American made satellite. All such information is provided in accordance with the laws of the United States and with the express permission of the Departments of State and Defense. (View an example of U.S. regulations governing launches in China).

Q: But don’t the Chinese learn a lot of information about American technology by assisting in the launch of American satellites?

A: No. The satellite is fully manufactured in the United States and all sensitive technology is embedded beneath a metal casing before the satellite is shipped to China. Stringent controls are in place to assure that the satellite is under the control of American citizens at all times, from export to launch. For example, only American citizens are involved in the process of connecting the satellite to the launch vehicle. And all of this is done under the supervision of monitors from the Department of Defense.

Q: How did the news stories get it so wrong?

A: Unfortunately, erroneous information initially reported has been repeated again and again and often embellished. It takes a long time for the truth to catch up with an erroneous report. (View a summary of the facts surrounding the false accusations against Hughes).