- The Washington Times - Tuesday, December 20, 2011

U.S. lawmakers and Obama administration officials say France has stymied a 3½-year State Department investigation into whether a French defense contractor illegally gave U.S. satellite technology to China.

The officials also say Obama administration political appointees derailed efforts by career State Department security officials to impose sanctions on Thales Alenia Space (TAS), fearing the penalties would undermine a White House-led effort to loosen technology export controls.

The officials, who spoke on the condition of anonymity because of their access to details of the investigation, said the French government has refused to allow the company to cooperate in the probe.

Congress was alerted to the case by security officials in the administration who are concerned about apparent interference from political appointees in the State Department opposed to sanctioning the French firm.

On Monday, three senior House Republicans wrote to Secretary of State Hillary Rodham Clinton stating that the satellite exports to China appear to be illegal under U.S. trade controls.

According to administration and congressional officials, the State Department’s investigation of Thales began in May 2008 and has been stymied by the French government’s refusal to allow the company to cooperate in the probe.

China was blocked from buying U.S.-origin military goods, including satellites, in 1989 after the Chinese military’s bloody crackdown on unarmed protesters in Beijing’s Tiananmen Square.

International Traffic in Arms Regulations (ITAR) also requires export companies to obtain licenses for sales of military-related U.S. goods to China directly or via re-export from third countries.

U.S. officials are concerned that China’s military will use the technology.

China’s space program is run by the Chinese military, which is building up space communications, intelligence, navigation and targeting systems for use with its anti-ship ballistic missiles and other high-tech weapons.

The investigation was launched by the State Department’s Directorate of Defense Trade Controls after Thales offered satellites for sale, specifically the Spacebus 4000 C2, as “ITAR-free,” or freely exportable under U.S. rules.

U.S. officials, however, say the satellites sold to China contain restricted high-tech parts that require licenses before they are exported to third countries.

A State Department official confirmed the investigation.

“The department continues to look into exports of items regulated under the U.S. Munitions List to Thales Alenia Space to see if there is any definitive evidence that would contradict claims that the satellites were ‘ITAR-free,’ ” the official told The Washington Times.

State Department technology security officials “met with TAS officials as recently as this month and continue gathering information with an eye toward resolution of this matter,” the official said.

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