Boeing Project Halted on U.S. Security Fears

Collaborative work on Boeing Co.’s Sea Launch rocket project in Long Beach has been halted since last month, when the State Department ordered the suspension amid fears that the company improperly disclosed sensitive information to its Russian and Ukrainian partners, the company and the government said Monday.

Boeing said it hopes to quickly resolve the concerns within the State Department, which is trying to establish whether a security lapse occurred.

A State Department official said the suspension will remain in effect until the government determines whether the company violated federal law. No specific completion date was set.

Boeing would not elaborate on the State Department’s concerns, but a spokesman said the information involved is not classified.

The State Department ordered the suspension July 27, although the company and the government did not make the matter public. Word of the security flap was outlined in a Washington Post story published over the weekend.

Boeing’s licensing troubles come as two other U.S. companies, Hughes Space & Communications and Loral Space & Communications, address government concerns about their satellite work with China and the potential for sensitive information to be transferred to that country’s military.

For the Sea Launch project, a lengthy delay could disrupt the group’s planned maiden launch, now set for the first quarter of 1999 with a Hughes-built PanAmSat satellite aboard the rocket.

Boeing is so far standing by its launch schedule. But after the suspension, 30 to 40 Russian and Ukrainian engineers left Long Beach for home. The crew had arrived last month aboard the project’s newly built Sea Launch Commander, which will operate as the launch transport and mission control vessel.

The floating launch pad--a converted oil rig--is expected to arrive in Long Beach later this month.

“The impact is that the partners in the project and the U.S. people are not permitted to meet or work together on the program, although they can continue to work independently,” said Tim Dolan, a Boeing spokesman. He said the order rules out collaborative work such as engineering, testing and integration.

“Boeing underestimated the technical complexity of the licensing issues, and we did not have adequate procedures in place,” said Dolan. “We need to come forward with the correct procedures.”

Boeing is said to have informed the government of the security flaws after an internal review. Since then, the company has added an export expert and beefed up training for Sea Launch employees, the company said.

The Sea Launch project, with its home port in Long Beach, is aimed at carrying commercial satellites into space from a floating launch pad positioned near the equator, about 1,400 miles southeast of Hawaii.

While Boeing is the project’s leader and largest investor, the Sea Launch program includes major technology and investment from partners RSC-Energia of Moscow (which also operates the Mir space station), KB Yuzhnoye/PO Yuzhmash of Ukraine and Kvaerner Maritime of Norway.

The Ukrainian partners are providing the Zenit rockets, which are renamed and redesigned intercontinental ballistic missiles. The company also is providing rockets for Globalstar, a U.S.-based consortium planning a 56-satellite communications system.

Multinational efforts--including projects such as the space station--are increasing because of the high cost of getting to space and the soaring demand for commercial communications satellites for telephone and television transmissions.

Many satellite communications companies have for years encouraged and supported rocket programs in other countries--including Russia and China--to ensure healthy competition and to spread the risk among several types of rockets.

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Associated Press contributed to this report.