- The Washington Times - Monday, July 17, 2000

The Clinton administration has permitted defense and computer companies to hire hundreds of Chinese technicians to work on military-related technologies whose export is tightly controlled, according to internal documents.

Critics of the program argue that the administration is issuing too many of the licenses, given that a congressional panel and U.S. officials say communist China is waging an aggressive intelligence campaign to steal American technology.

But the Commerce Department, which issues companies a two-year license for each such employee, defends the program. Roger Majak, assistant secretary for export administration, said a prospective employee is scrutinized by the FBI, intelligence agencies and the State Department.

"The Chinese have an immigration policy that allows these people to leave, which by the way we press them to have in our human rights program," he said. "These are cases where we felt the risk was not great."

The confidential documents obtained by The Washington Times show that People's Republic of China specialists are working on export-controlled commercial technologies inside some of the nation's key defense contractors. For example, Texas Instruments employs Chinese workers on integrated-circuits programs. Intel Corp. hires them to develop semiconductors.

The Commerce Department issues the companies licenses under federal export control regulations. The firms are licensed for each hire, similar to the way the department approves the export of controlled technologies suitable for military as well as civilian uses. This is because allowing a foreign national to work on U.S.-controlled commodities has the potential to transfer the know-how to the native country. Thus, the Commerce Department calls the licensing a "deemed export."

The confidential Pentagon documents are not a compilation of all licensed foreign workers, but a "snap shot" of the program in 1999-2000, according to a Pentagon official who asked not to be named. They show that 252 Chinese citizens are seeking work or currently work at 27 companies on so-called "dual-use" technologies. The companies include Texas Instruments, Intel, Sun Microsystems Inc., Raytheon Co., Hughes Electronics and Cisco Systems.

The documents contain notations next to each foreign employee's name to explain the program's sensitivity. For example, a PRC citizen listed under Texas Instruments carriers the notation "NS, MT, NP, AT." The initials stand for technologies subjected to export control for reasons of national security, missile technology, nonproliferation of weapons and anti-terrorist.

The Pentagon official contends that licensing oversight is lax within Commerce and within other departments that also have a say in licensing. This is because, he said, it is difficult to verify a Chinese technician's resume.

"We don't know how many work on controlled technology. This represents a small fraction," said the source, referring to the documents. "Even those getting approval, the approval is without any real oversight. You have a process, but there is no information to work with."

Said Al Santoli, a House Republican aide and critic of the administration's China policies: "It's absolutely a national security disaster. Congress has not been vigorous enough on its oversight responsibilities."

The "deemed export" program is cloaked in secrecy. The Commerce Department does not release the foreign worker's name, his company or the technology involved.

Beijing has embarked on an aggressive program to modernize and build up its armed forces. It is acquiring missile, satellite and aircraft technologies through commercial deals on the one hand and intelligence theft on the other, according to government experts.

Sen. Richard C. Shelby, chairman of the Senate Select Intelligence Committee, says the United States is China's primary target.

"China increasingly challenges vital U.S. interests around the globe through its aggressive security and intelligence services," the Alabama Republican said, "employing both traditional intelligence methods as well as nontraditional methods such as open source collection, elicitation, and exploitation of scientific and commercial exchanges."

A bipartisan House commission, headed by Rep. Christopher Cox, California Republican, unanimously concluded last year that "the PRC has mounted a widespread effort to obtain U.S. military technologies by any means legal or illegal. These pervasive efforts pose a particularly significant threat to U.S. export control and counterintelligence efforts… . The PRC employs all types of people, organizations and collection operations to acquire sensitive technology; threats to national security can come from PRC scientists, students, business people or bureaucrats… ."

Robert Maginnis, a national security analyst at the Family Research Council, said China's motive is clear in placing its citizens with U.S. high-tech companies.

"It should be obvious that the Beijing government sponsors these professionals," Mr. Maginnis said. "Why else would China permit highly educated, young and motivated professionals to leave that country? The communists understand that work at U.S. high-tech firms provides ready access to valuable information."

Commerce's Mr. Majak used strong language in rebuttal.

"My reaction to that is it's a misguided concern," he said in an interview. "First of all, these activities that are licensed under our deemed export are for work on private commercial products and technologies. These are not military technologies, although some of the equipment can be used for national security. To single out Chinese employees in particular seems to me to be a racist notion. I think you need to keep in mind these licenses are very carefully analyzed on who these people are."

Mr. Majak said most "deemed export" Chinese, who enter on temporary visas, remain in this country as permanent residents or U.S. citizens. He said this tells him they are not sharing what they learn with the Beijing government.

The Cox report, however, concluded that China stole U.S. technology in the 1990s valued at millions of dollars. "The PRC used Chinese nationals hired by U.S. firms for that purpose," said the report, adding that the Clinton administration refused to let the committee make the evidence public.

The Commerce Department said it could not provide an exact count of "deemed export" employees in this country without doing an extensive data search. It said it has turned down only 1 percent or 2 percent of the 800 applications received in each of the past two years alone. Of those, about 60 percent are for PRC citizens.

The 800 applications represent more than a 100 percent increase over 1997's 300 applications.

Congressional Republicans have criticized Commerce for being too lax in approving the transfers to China of supercomputers, telecommunications equipment and satellite technology that can be used to enhance ballistic missiles. Also, the Pentagon office that weighs in on export issues often ignores national security concerns, two unnamed employees told the Cox committee.

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