Hughes, Boeing Face Charges in China Deals

After years of review, the State Department has taken a step toward charging Hughes Electronics Corp. and Boeing Co. for allegedly providing sensitive technology to China in the mid-1990s.

In a “charging letter” sent to the two companies, the State Department said that they had violated rules governing exports by helping China try to turn around its ailing rocket-launch program.

U.S. government officials have feared that China would use the technology for military purposes, compromising national security.

The State Department letter was filed quietly on Thursday. A Boeing spokesman confirmed its receipt Tuesday but declined to comment on the allegations.

“Negotiations are still going on” with State Department officials, said Dan Beck, spokesman for Boeing Satellite Systems in El Segundo. “Pending the negotiations and review of the charges, it would be inappropriate for us to comment at this time.”

The Hughes satellite-production unit being targeted by the State Department was purchased by Boeing in 2000 for $3.7 billion.

The exact implications of the charging letter -- whether it could lead to a fine or some other disciplinary action -- were unclear. State Department officials couldn’t be reached Tuesday.

A year ago, Loral Space & Communications Ltd. reached a settlement to pay the federal government a civil fine of $14 million over allegations that it may have violated rules that govern the transfer of satellite technology to China. Loral neither admitted nor denied wrongdoing in settling the case.

The company said at the time that one of its engineers, a member of a committee reviewing a failed satellite launch, accidentally faxed a copy of its findings to the Chinese.