- The Washington Times - Wednesday, November 26, 2003

A human rights activist the U.S. government helped free from a Chinese prison after her 2001 conviction as a spy for Taiwan pleaded guilty yesterday in federal court to illegally sending more than $1.5 million in sophisticated military equipment to China.

Gao Gao, a former American University research scholar, entered the plea in U.S. District Court in Alexandria to unlawfully exporting goods from the United States and income-tax evasion. Her husband, Xue Donghua, 41, also pleaded guilty to tax evasion.

U.S. Attorney Paul J. McNulty said Gao, who was born in China but is a permanent U.S. resident, “knowingly and willfully exported … from the United States to the People’s Republic of China” high-tech military equipment, including microprocessors that can be used in digital flight-control and weapons systems.

Gao, as president of University Laboratories and Technology Business Services, sent to China microprocessors that can be used in weapons-fire control systems, radar data processing, airborne-battle-management systems and target identification, Mr. McNulty said.

A spokesman at the Chinese Embassy in Washington declined to comment yesterday.

Gao, 43, was imprisoned in China for 166 days before she was released on medical probation to be reunited with her husband and then-5-year-old son, Andrew, in McLean. The three had been arrested in Beijing on Feb. 11, 2001, after celebrating the Chinese New Year with the couple’s parents. Xue and Andrew were released 26 days later.

On July 24, 2001, Gao was convicted in China of espionage and sentenced to 10 years in prison. A couple of days later, she was released on medical probation and returned to the United States. President Bush and Secretary of State Colin L. Powell had personally appealed for her release as a “goodwill gesture” just prior to a visit to China by Mr. Powell.

Mr. Bush said at the time he had spoken directly with Chinese President Jiang Zemin about Gao and the humane treatment of U.S. residents.

Her arrest in China had become a cause celebre for politicians and human rights activists, and in June 2001 the House passed a resolution condemning China for depriving Gao of “basic human rights.”

U.S. law-enforcement authorities declined yesterday to comment on whether the 2001 arrest in China was a ruse, increasing her credibility here and improving her access to U.S. technology.

After her return to this country, Gao worked at American University until spring 2002, when she formed her own research companies.

Mr. McNulty said that from August 1998 through 2001, one of those companies, University Laboratories and Technology Business Services, was involved in the transfer of technology to companies in China that do research and development work for the Chinese government.

That work, he said, included the development of sophisticated military equipment.

He said Gao purchased electrical components from various U.S. manufacturers and suppliers, saying the items were to be used for research and would not be exported from the United States. But, he said, she exported the equipment to China without obtaining the required Commerce Department license for export or written authorization.

Mr. McNulty also said Gao transferred money intended for the purchase and shipment of the equipment to China to personal and commercial bank accounts opened in New York and Virginia.

A total of 80 microprocessors were shipped to University Laboratories in September 2000 via an address in McLean, according to court records. The address, the records show, was Gao’s home.

Mr. McNulty said a $539,296 payment to Gao from China for the equipment in January 2001 was deposited in a bank account controlled by Gao and her mother-in-law, Yu Xia Dong. He said that 11 days later, she transferred $540,000 from that account to one controlled by her and her husband, Xue Donghua, and — that same day — moved $500,000 back to the original account.

The case was investigated by the Bureau of Immigration and Customs Enforcement and the Defense Criminal Investigative Service.

Gao faces a maximum of 37 months in prison and a fine of up to $100,000. Prosecutors said they would recommend a reduced sentence because she has agreed to cooperate in identifying others in the Chinese government seeking to export or import sensitive U.S. equipment.

In a February 2002 interview with The Washington Times, Gao said her arrest in China had given her “a new direction,” and she urged Mr. Bush to “put human rights high in your agenda” during a visit to China.

Shortly after her return to this country, naturalization services for her in front of the U.S. Capitol were abruptly canceled. No explanation was given at the time.

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