DATE=10/19/1999
TYPE=CORRESPONDENT REPORT
TITLE=MCDONNELL DOUGLAS - CHINA - L-ONLY
NUMBER=2-255250
BYLINE=JON TKACH
DATELINE=WASHINGTON
INTERNET=YES
CONTENT=
VOICED AT:
INTRO: A federal grand jury has indicted U-S aerospace
giant McDonnell Douglas and one of China's largest
government-owned companies for conspiring to violate
U-S export controls. Federal prosecutors say the
companies lied when applying for export permits -
allowing sophisticated machine tools to be diverted to
a Chinese military facility. V-O-A's Jon Tkach has
more from Washington.
TEXT: The 16-count indictment wraps up a three-year
Justice Department investigation into how McDonnell-
Douglas equipment wound up at a Chinese military
factory that makes Silkworm cruise missiles.
McDonnell-Douglas sold the surplus machine tools to a
Chinese company, CATIC, (China National Aero-
Technology Import Export Corporation) in 1994. Under
the terms of the export licenses, the equipment was to
be used to produce civilian aircraft.
But U-S Attorney Wilma Lewis says McDonnell-Douglas,
in order to secure the five-million dollar sale,
knowingly concealed the fact that the Chinese company
was interested in using the tools in a military
project - not just for civilian purposes
/// LEWIS ACT ///
Moreover, even prior to filing the export
license application, CATIC had sold a portion of
the licensable equipment to a factory that was
not associated with the contract and known to be
used for military production.
/// END ACT ///
Prosecutor Lewis says this amounted to a criminal
conspiracy, which jeopardized U-S national security.
In a statement, the Boeing Company, which now owns
McDonnell Douglas, denied any wrongdoing. It added
that it was, in fact, McDonnell Douglas officials who
alerted Washington to the fact that some tools had
ended up at a Chinese military facility (Nanchang
Aircraft Corporation).
Prosecutors say McDonnell-Douglas only notified the
government after trade officials inquired about the
parts.
/// OPT /// In addition to the conspiracy counts, a
McDonnell-Douglas official and two Chinese nationals
also face charges for making false and misleading
statements to U-S trade officials. /// END OPT ///
Officials at CATIC, the Chinese company, were
unavailable for comment.
No date has been set for the trial. Guilty verdicts
could cost the companies up to 10 million dollars and
individuals named in the indictments could face up to
five years in jail. (signed)
NEB/JON/JO
19-Oct-1999 17:16 PM EDT (19-Oct-1999 2116 UTC)
NNNN
Source: Voice of America
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