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TODAY

05/18/98- Updated 12:15 AM ET

Clinton welcomes China satellite probe

WASHINGTON - President Clinton welcomed an investigation into whether he improperly signed a waiver this year to approve exporting satellite technology to China. He said Sunday the decision was not swayed by six-figure donations in 1996 from an executive who benefited.

But the Justice Department has opened a preliminary inquiry into possible influence on the president's decision of more than $600,000 in donations to the Democratic Party by Bernard L. Schwartz, chairman of Loral Space and Communications Ltd., a government official said. The export waiver covered Loral and another company.

Speaking in Birmingham, England, where he was attending the economic summit of world leaders, Clinton said he had heard about the new allegations but insisted the money did not change the United States' China policy.

"All foreign policy decisions, we made in the interest of the American people," the president said.

"If someone tried to influence them (decisions), that is a different issue. There ought to be an investigation," he said.

India's nuclear tests, and the possibility that Pakistan and a regional nuclear arms race might follow, also are heightening congressional interest in the subject.

Investigations are gearing up in both the House and the Senate into the administration's decision to let Loral and Hughes Electronic Corp. export satellites to be launched atop Chinese rockets.

Critics claim that, along with the satellites, the two space firms gave China technology that helped it improve guidance systems of its long-range ballistic missiles, including some aimed at the United States. China and India are longtime rivals and fought a border war three decades ago.

Republicans see their investigation into the waiver as a political winner this summer. They hope to tie the contracts to big campaign donations that Schwartz and other executives of both firms made to Democrats.

Last week, it was disclosed that Democratic fund-raiser Johnny Chung, now a cooperating prosecution witness, told the Justice Department he received $300,000 from Chinese military officials for political contributions, passed $110,000 to the party and kept the rest for himself.

That admission, along with the preliminary inquiry into the satellite waiver, will only heighten the drama. Government officials say the preliminary inquiry has not yet determined whether a full-scale criminal investigation is warranted.

Now that India has dramatically proclaimed its membership in the nuclear club, the spread of advanced missile technology into the region is coming under intense scrutiny. A traditional ally of Pakistan, China is believed to be a supplier of nuclear equipment and technology.

"We have to think, what's China's response going to be?" said Sen. Richard Shelby, R-Ala., chairman of the Senate Intelligence Committee. "There's going to be an arms race, a nuclear arms race in southeast Asia."

Even before the Indian tests, Republicans were planning hearings on the China satellite sales in June, in advance of Clinton's planned trip to China.

"The Indian detonations are a predictable result of America's upgrading of China's missile technology," said Rep. Dana Rohrabacher, R-Calif, chairman of the House Science subcommittee on space and aeronautics.

Rohrabacher contends China may be sharing missile technology it got from the United States with Pakistan. "Let's be fair about it," he said in an interview. "If we help the ... Chinese develop their nuclear weapons, how can we blame the Indians for wanting to have nuclear weapons to defend themselves?"

The technology needed to put a commercial satellite in orbit is similar to that which guides long-range nuclear missiles to their targets.

A classified Pentagon report from May 1997, now being seized on by Rohrabacher and other GOP critics, concluded that scientists from Loral and Hughes "turned over expertise that significantly improved the reliability of China's nuclear missiles" at a risk to U.S. national security interests. The material was first reported in the New York Times.

"If these reports are true, China will now be able to more reliably and accurately target American cities with their nuclear armed intercontinental ballistic missiles," House Speaker Newt Gingrich and Senate Majority Leader Trent Lott said in a letter to President Clinton.

White House spokesman Mike McCurry said safeguards were incorporated in the satellite deals and national security not breached. "We're willing to make available whatever information they need to satisfy themselves that these decisions have been made on sound national security grounds," he said.

According to the Center for Responsive Politics, Loral CEO Schwartz gave $632,000 in "soft money" in the 1995-96 presidential election cycle and an additional $421,000 in the present one.

Both Loral, based in New York, and Hughes, a Los Angeles-based subsidiary of General Motors Corp., have denied wrongdoing.

The aerospace companies can save money by having other countries launch their satellites. China launched a $20 million Loral satellite on a rocket in 1996 that crashed. After that, scientists from Hughes and Loral advised China on how to improve its guidance systems for future launches. It was then, Republicans contend, that China obtained the technology needed to improve the accuracy of its nuclear missiles.

The plot thickened last February. Despite a Justice investigation, Clinton allowed Loral to launch another satellite and thus provide China with more of the type of information that is the subject of the Justice Department inquiry.

Republicans suggest Clinton's decision has undermined that investigation.

By The Associated Press



Copyright 1998 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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