Firm That Employs Bush’s Brother Stands to Benefit From China Deal : Trade: U.S. satellite export would aid communications venture of New York firm.

A company that employs President Bush’s brother, Prescott, as a consultant stands to benefit if the President clears the way for the shipment of two satellites to China by the Hughes Aircraft Co.

U.S. officials and foreign diplomats have said President Bush is expected to approve exporting the satellites within the next week or two. The action would represent one of the measures the Administration is taking in an effort to improve strained relations with China.

Asset Management, International Financing & Settlement Ltd., a New York firm for which Prescott Bush is a paid consultant, has a contract to provide communications links connecting more than 2,000 professional and university offices in China.

Company executives said Tuesday that the Hughes satellites would be “advantageous” for its project, which is a 50-50 joint venture with the Chinese government. In addition, Asset Management’s executive vice president said in an interview that the company could obtain more communications business in China if the satellites are launched.

Prescott Bush, an international businessman with extensive business contacts in Asia, did not return a telephone call Tuesday to the New York office of his firm, Prescott Bush & Co. In the past, he has denied using his younger brother’s position to help him.

There is no indication that the President’s foreign policy has been affected by his brother’s business dealings.

White House Press Secretary Marlin Fitzwater said both the President and his brother were not aware of any direct relationship between Asset Management’s business activities and Hughes Aircraft, which is supplying the satellites.

“I talked to the President, and he said he is unaware of any relationship or any activity involving Hughes Aircraft,” Fitzwater said. “Then I called Prescott, and he also was unaware of any association involving Hughes Aircraft.”

A U.S. diplomat, describing Prescott Bush’s dealings in China, said in an interview: “He was smart enough not to mention his brother’s name, and the Chinese were smart enough to make the connection.”

President Bush, who headed the U.S. mission in China in the mid-1970s, sent National Security Adviser Brent Scowcroft and Deputy Secretary of State Lawrence S. Eagleburger to Beijing last weekend. He said the mission was directed at preventing China from drifting into isolation as a result of international outrage over the June 3-4 massacre of pro-democracy demonstrators.

The overture brought a wave of criticism on Capitol Hill, where Democrats accused the President of moving too swiftly without tangible concessions from the Chinese leadership.

Last June, in response to congressional pressure, Bush imposed a series of sanctions against China, including a ban on the sale or export of equipment with possible military uses. This fall, Congress enacted a provision that specifically banned the export of satellites to China unless the President grants a waiver “in the national interest.”

Scowcroft’s trip to Beijing was the latest and most dramatic step by the Administration to ease the impact of the restrictions. If Bush approves exporting the Hughes satellites to China, it could increase the controversy in Congress.

Los Angeles-based Hughes Aircraft has been seeking final approval from the White House to sell two of its communications satellites, one to an Australian state-owned company called Aussat and the other to a Hong Kong consortium called Asiasat. Both satellites would be launched on Chinese rockets in China’s Sichuan province.

The satellites are designed to provide vital communication links across Asia and Australia and would be a boon to the joint venture between the Chinese government and Asset Management, an international financial-services company.

Company records list Prescott Bush as a member of its senior advisory board, which also includes retired Adm. Elmo R. Zumwalt, former chief of the Navy. An executive vice president of Prescott Bush & Co. also is a director of Asset Management, according to the records.

In addition to Bush’s role as an adviser, Asset Management Executive Vice President Stanley B. Scheinman said the President’s brother is a paid consultant who helps the firm in Asia, including arranging a recent $5-million investment in the company by a Japanese firm.

“He was instrumental in assisting us and introducing us to the Japanese investors,” said Scheinman.

Last September, Prescott Bush went on a business swing through Asia and spent a weekend in Beijing meeting with Chinese officials and potential investment partners. At that time, he told the Wall Street Journal that he was representing Asset Management on several projects, including the satellite-linked network inside China.

He did not mention then that Asset Management stood to gain from the pending export of satellites to China. He did say, however, that he had not benefited from his relationship with his brother.

“There’s no conflict of interest,” he said. “This is something that has been going on for years.” But he conceded, “It doesn’t hurt that my brother is the President of the United States.”

Asset Management’s joint venture with the Chinese government calls for the creation of a computer-based communications network linking 2,246 offices of scientists, physicians, engineers and other professionals within China and to the outside world, according to Richard Wall, an executive with the firm who negotiated the deal.

He said existing technology could link many offices within China, but he said a satellite is required for the vital connection to research centers and universities around the world.

Wall said that China has a domestic satellite in space that could handle the outside link. But he acknowledged that the Hughes satellites would offer a much better communications link.

“The Hughes satellites offer economies and certain efficiencies,” Wall said.

Wall and Scheinman said that Asset Management is not directly involved with the Hughes satellites, but they said the company has an indirect involvement, which they declined to discuss, that could lead to additional business in China if the satellites are launched.

“We are not directly involved, but some people we are working with are discussing needs in communication in China,” said Scheinman.

His role as a consultant to Asset Management is not Prescott Bush’s only business venture in China that could be affected by an easing of sanctions.

Through his private company, the President’s brother has been involved in at least two separate ventures in Shanghai. U.S. officials said these ventures prompted Prescott Bush to visit Shanghai and Beijing two or three times a year in the mid-to-late 1980s.