Probe Urged Into U.S. Technology Transfer to China


House Judiciary Committee Chairman Henry J. Hyde (R-Ill.) on Tuesday called on Atty. Gen. Janet Reno to investigate whether illegal Asian donations to President Clinton’s campaign caused the administration to allow the export of sensitive U.S. technology to China.

In a letter to Reno, Hyde and Rep. Tillie K. Fowler (R-Fla.) said that Justice Department officials looking into the donations scandal should also investigate “the possible link” with several recent examples of technology transfer to China.

Reno’s office had no immediate response.

The Justice Department earlier this year launched a major inquiry into the illegal donations, focusing on allegations that some of the illegal contributions Asian donors gave to members of both parties came indirectly from the Chinese government. Hyde’s letter reflects a growing suspicion among China watchers that the contributions under investigation may have persuaded Clinton to allow the export of dual-use technology that should have been barred under U.S. law.


Hyde’s letter cited several sensitive-technology transfer cases, including the administration’s highly controversial decision to permit the Chinese to acquire machinery from a McDonnell Douglas factory that builds missiles and strategic bombers in Ohio.

A federal grand jury in Washington, D.C., is investigating whether the McDonnell Douglas case violated the law.

“In our minds,” wrote Hyde and Fowler, “there are a number of cases that raise serious questions about whether improper outside influence was brought to bear on administration officials--including the president--and if that influence has resulted in decisions and policies that have liberalized the transfer of defense-related technologies, something which is clearly incompatible with the interests of our nation.”

Sources close to the Justice Department inquiry said investigators have uncovered evidence derived from intelligence intercepts from the Chinese Embassy in Washington showing that in 1995 the Beijing government devised a plan to use campaign contributions to buy influence in the United States. But the specific objective of this influence-buying scheme has never been disclosed.


Most of the illegal contributions to the Clinton campaign were raised from Asian sources by John Huang, a Chinese American who worked as a banking executive before being named to a high-level Commerce Department post and then being hired as a fund-raiser by the Democratic National Committee.

Investigators said that there is evidence suggesting some of this money came to the Democrats indirectly through a bank used by the government of China.

Although no one as yet has established a direct link between the donations and the administration’s policy on technology transfer, Hyde and Fowler noted that in a number of instances the government has been widely criticized for approving exports to China of sophisticated machinery with defense capabilities.

“The administration’s decisions seem very suspect to us,” they said, “and we strongly believe they should be investigated.”


In the McDonnell Douglas case, the General Accounting Office, an investigative arm of Congress, found that the Commerce Department approved sale of the machinery to China in 1994, even though officials had advanced warning that the Chinese intended to use the equipment for military rather than civilian purposes.

Hyde and Fowler suggested that the McDonnell Douglas decision, as well as these three cases, may have been influenced by campaign contributions to the president:

* The administration has allowed the sale of 46 supercomputers to China in the last 15 months, giving the Chinese what Pentagon officials believe to be more super-computing capacity than the U.S. Defense Department. The sales were approved over the objections of some experts in the military and in Congress.

* The administration recently decided to give the Commerce Department jurisdiction over so-called “hot section” technology, which previously resided with the State Department. Critics note that the Commerce Department, unlike the State Department, which has jealously guarded the technology, is interested in encouraging sales of it. Hot section technology allows U.S military aircraft to fly thousands of hours longer than those of other countries.


* In 1994, despite objections from technical experts within the National Aeronautics and Space Administration and the Pentagon, the administration approved the transfer of sophisticated telecommunications technology to a U.S.-Chinese joint venture called Hua Mei. This included the sale of fiber-optic communications equipment used for high-speed secure communications over long distances and advanced encryption software.

“The administration’s actions in the above-mentioned cases and others have resulted in a significant increase in indigenous Chinese military production capabilities,” Hyde and Fowler wrote.

“Given China’s willingness to sell weapons and technology to the highest bidder--including rogue nations such as Iran, Iraq and Libya--these transfers could represent a profound threat to U.S. military personnel.”

Hyde and Fowler were among a number of Republican and Democratic members of Congress who previously pleaded with Reno to appoint an independent counsel to investigate the illegal donations case.


Reno has rejected their advice, insisting that there is no evidence yet implicating either the president or any other top administration official in the case.

The two members of Congress said that their current request “does not reflect a change in our belief that a special counsel should be appointed.”

The Justice Department has assigned several dozen FBI agents to a task force investigating the donations matters.