Critics Assail Contents of Report on China Spying

A House investigative panel released its long-awaited report on Chinese espionage Tuesday, but some of the more explosive conclusions were immediately challenged as misleading or unsubstantiated by the administration, outside experts and even some members of the committee.

The three-volume, 1,016-page report contains alarming accusations that China has covertly used a vast network of spies, front companies and tens of thousands of students and other visitors to steal U.S. nuclear secrets and military technology.

The report quickly became a political football. Democrats blamed previous GOP administrations for ignoring Chinese spying in the 1980s, while Republicans, including several aspiring presidential candidates, excoriated the Clinton administration for lax security, political naivete and worse.

While the White House said that it did not agree will all the report’s contents, President Clinton said he agrees with most of the 38 recommendations. They include calls to tighten security at the nation’s nuclear weapon labs and the need to revive America’s satellite launch industry and verify the civilian use of high-performance computers as well as other U.S. technology that China is allowed to buy.

“Like other countries, China seeks to acquire our sensitive information and technology,” Clinton told a community empowerment conference in Edinburg, Texas. “We have a solemn obligation to protect such national security information and we have to do more to do it.”

Clinton argued that his policy of engaging China on nonproliferation, arms control and other issues has produced clear benefits to U.S. national security.

“I want to assure you and all the American people that I will work very hard with the Congress to protect our national security, to implement the recommendations and to continue our policy of engagement, because both of them are in the national interest,” Clinton said.

The debate over the Chinese threat, and whether the House committee’s conclusions are valid, erupted within minutes of the report’s release early Tuesday to hundreds of reporters who jammed a huge House caucus room.

Rep. Christopher Cox (R-Newport Beach), who chaired the committee, calmly insisted that the nine-member panel “did not engage in surmise, did not engage in opinion” in documenting their six months of closed-door hearings. “We reported only facts.”

But the panel’s ranking Democrat, Rep. Norman D. Dicks of Washington, quickly responded that the report offered “worst-case” scenarios designed to drive home the seriousness of the danger, rather than an even-handed analysis of the threat.

“I am certain that academics and experts in and out of government will challenge some of our worst-case conclusions,” Dicks said. “Let us keep this report in perspective.”

Another committee member, Rep. John M. Spratt Jr. (D-S.C.), sharply critiqued the document that he had signed. “There are, unfortunately, a number of places where the report reaches to make a point, and frankly, exaggerates,” he complained. “The committee relied heavily on a few witnesses and did not substantiate their testimony with experts at the national laboratories or interagency review.”

Spratt specifically questioned the report’s dramatic claim that China’s theft of nuclear secrets over the last 20 years has put it “on a par” with the United States.

“It is simply not accurate,” Spratt said. “I disagreed when the witness said it before our committee. I disagreed when our committee marked up the report. And I disagree now.”

So do many others. China has about 20 nuclear-tipped intercontinental ballistic missiles, developed in the 1950s, that are capable of reaching the United States, experts said. America’s current arsenal includes more than 6,000 nuclear weapons on missiles, submarines and bombers capable of reaching China.

The report also says that China has stolen design information on America’s most advanced nuclear weapons and that Chinese espionage saved Beijing “years of effort and resources in developing its new generation of modern thermonuclear warheads.”

China Nuclear Threat Studied

A recent damage assessment of Chinese espionage by the entire U.S. intelligence community was far more guarded. It could cite no evidence that China has obtained U.S. weapons design documents or blueprints and could not determine how much classified information China may have stolen, versus what it got from such open sources as newspapers and conferences.

Energy Secretary Bill Richardson cited that assessment at a news conference in which he, too, took aim at the Cox committee’s conclusions. “There is no evidence of a wholesale loss of information,” he said.

Richardson complained that the report does not give the labs credit for moving aggressively since last fall to tighten security and improve counterintelligence efforts.

“We are fixing the problem,” he said. “I can assure the American people that their nuclear secrets are now safe at the labs.”

In a statement, White House Press Secretary Joe Lockhart said:

“While we do not agree with all of the report’s analysis, the administration and the select committee share a common objective: ensuring that U.S. national secrets are protected and that our civilian technology is not diverted for military purposes.

“We found most of the recommendations constructive, and we are in the process of implementing them. In many cases, the administration had already been implementing the substance of the recommendations as a matter of policy, practice and as required by law.” One area of the report likely to spark sharp public debate is the claim that China’s military and intelligence services, plus its government-run institutes and industries, control a vast network of “front companies” in the United States to covertly obtain military technology.

The companies are not named, but the report says more than 3,000 entities may be involved. In 1997, the State Department said it could only identify two such companies doing business in America, while outside experts at the time offered estimates ranging from 12 to 30.

The bulk of China’s espionage, the report argues, is not conducted by professional agents. Instead, it said, crucial technology and information “is gathered by various nonprofessionals, including [Chinese] students, scientists, researchers and other visitors to the West.”

The report claims that some Chinese Americans are “sleeper agents,” who are allowed to emigrate but later are called into service as spies. The report further states that “almost every [Chinese] citizen allowed to go to the United States” in an official delegation “likely receives some type of [intelligence] collection requirement” from the Chinese government.

More than 80,000 Chinese nationals visited the United States in diplomatic, business, academic and other delegations in 1996 alone.

Asian American leaders complained that sensational media reports about Chinese espionage, as well as the new charges in the Cox report, could spark a backlash against Chinese and Chinese American scientists and others working in this country.

“It is dangerous to paint everybody with the same brush stroke,” warned Mark Frankel, a director at the American Assn. for the Advancement of Science in Washington.

“The kind of grandstanding generalization that all Chinese scientists must be suspicious because of the alleged actions of one or two, or possibly more of them, is a very dangerous basis on which to attempt to make public policy,” he added.

Committee members said that about 30% of the original classified report was removed for reasons of national security during nearly five months of declassification efforts. And since the original report was completed on Jan. 3, it offers outdated information on the FBI investigation into alleged espionage at the Los Alamos National Laboratory.

Committee members said that the final report also does not mention several cases where allegations were investigated and found to be untrue. Among them were published charges that China obtained secret U.S. encryption technology when it helped investigate three failed launches of U.S. satellites by Chinese rockets in the mid-1990s.

Also investigated and found to be untrue were allegations that Motorola had helped China design a platform for off-loading Iridium communications satellites that later could be adapted for nuclear warheads.

The committee began its investigation nearly a year ago. Its initial focus was on technology transfers to China, especially satellite and computer technology, and to what extent civilian sales were diverted to military use. That changed in October, when the committee first heard of espionage problems at the nation’s nuclear labs.

Panel Struggles Behind the Scenes

The committee’s five Republicans and four Democrats struggled behind the scenes before they unanimously endorsed the report last December. Members sparred over specific words, with Democrats generally trying to tone down language or add qualifiers. Republicans were eager to be as blunt as possible.

“We tried to leave our disagreements on the cutting room floor,” Cox said. But the give and take in the final push did not please everyone.

“The one thing I wasn’t happy about is we didn’t have enough time to look at the extent of the damages,” said Rep. Lucille Roybal-Allard (D-Los Angeles). “That’s one of the weaknesses of the report.”

House and Senate leaders predicted that the Cox inquiry would prompt a vigorous legislative response, but they said it could take months before Congress implements all the recommendations aimed at preventing Beijing from acquiring more U.S. military secrets.

The Cox committee recommends that Congress attack the problem on numerous fronts, from better oversight of the national nuclear weapons labs, to a crackdown on exports of high-performance computers. In all, 16 of the 38 recommendations are directed at Congress.

Before any broad-based legislation emerges, at least nine House and Senate committees are expected to examine the allegations about Chinese spying. But lawmakers in both parties recommended against making any dramatic shifts in policy based on the Cox report.

Proposal Targets Satellite Exports

A defense spending bill being debated by the Senate this week includes a proposal to tighten controls on satellite exports. The Cox report calls on the Clinton administration to “aggressively implement” the new provisions, which include a requirement that the Pentagon train a special new security force to monitor launches of U.S. satellites in foreign countries.

The report’s revelations are likely to complicate the contentious annual debate in Congress over whether to grant China most-favored-nation status--the same trade benefits enjoyed by most other nations--as well as China’s effort to win U.S. approval for membership in the Geneva-based World Trade Organization.

“China’s MFN is going to be tough,” said House Majority Leader Dick Armey (R-Texas). “It was tough last time. This doesn’t help much.”

As the day wore on, the partisan gulf appeared to widen in both houses, with each side bitterly accusing the other of finger-pointing.

“We now have no doubt that for over six years the Clinton administration has turned a blind eye while Communist China stole our most classified national security secrets,” said Rep. Tom DeLay (R-Texas), the majority whip. “The report shows conclusively that this theft of America’s secrets continues to this day.”

Senate Minority Leader Tom Daschle (D-S.D.) stressed that the only proved cases of Chinese nuclear espionage in the report occurred during the 1980s. “The [Ronald] Reagan administration did nothing,” he said. “The [George] Bush administration did nothing. This administration is the first to do something.”

Rep. Ike Skelton (D-Mo.) perhaps best captured the essence of the incendiary report. “In spite of the end of the Cold War,” he said, “the world is still a very dangerous place.”

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Lessons Learned

Among the suggestions the House panel made to prevent future espionage against the U.S. nuclear program:

Assess damage: Have the administration determine the damage done and provide regular updates on Chinese espionage.

Improve counterintelligence: Expand counterintelligence programs and congressional oversight.

Scrutinize exports: Monitor and restrict exports of computers and other technology with possible military applications.

Monitor foreign launches: Keep closer eye on foreign launches of U.S. satellites; make Defense Department responsible.

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Sources: Select Committee of the U.S. House, Times Washington Bureau, Los Angeles Times

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Decades of Spying

China has been acquiring classified information on America’s nuclear weapons program for decades, the House panel says. Key moments, according to panel documents:

‘79: China steals design information on W-70 “neutron bomb”

‘88: China tests neutron bomb

‘92: FBI puts Peter Lee under survillance for suspected espionage (1990s)

‘94: China tests series of smaller, lighter warheads (1992-96)

‘96: Additional theft of neutron bomb technology reported

‘97: Lee allegedly helps obtain technology that could threaten U.S. nuclear subs

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Times staff writers Edwin Chen, Marc Lacey, Elizabeth Shogren, Janet Hook, Nick Anderson and Robert A. Rosenblatt contributed to this story.

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The complete text of the report, video of Rep. Christopher Cox’s news conference and President Clinton’s reaction are available on The Times’ Web site:

https://www.latimes.com/coxreport

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* A BIGGER CHILL: Spying report may heighten U.S.-China mistrust. A18

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* SYSTEM FAILURE: A new system is urged for keeping secrets secure. A18