McDonnell Douglas, Chinese Plead Not Guilty

McDonnell Douglas Corp. and a Chinese government-owned company pleaded not guilty to charges they conspired to divert sophisticated machine tools to the Chinese military in violation of U.S. export laws. The pleas were entered by attorneys representing McDonnell Douglas, which was acquired by Boeing Co. in 1997, and China’s National Aero-Technology Import Export Corp., known as CATIC, during a brief court arraignment in Washington. Robert Hitt, director of McDonnell Douglas’ China program office, also pleaded not guilty and was released without bail, though he did have to turn over his passport to his lawyer and was required to give prosecutors 24 hours’ notice before traveling abroad. Two other defendants, both Chinese citizens employed by CATIC, did not appear at the hearing. U.S. District Judge Paul Friedman said he would issue arrest warrants for them. The two executives are believed to be in China. The 16-count indictment alleged that the defendants made false and misleading statements and key omissions about the export by McDonnell Douglas to the Chinese company in 1994 and 1995 of 13 pieces of state-of-the-art equipment that was supposed to be used to build commercial aircraft parts. Some of the equipment ended up at a military project in Nanchang, China, where missiles and attack aircraft are made, according to the indictment that was handed up last week.