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Chinese Aerospace Official Denies Giving To Dems

House blocks future satellite exports to China

BEIJING (AllPolitics, May 21) -- A Chinese aerospace official, believed by some to be a key link in the chain of funds that allegedly flowed from Chinese government officials to the Democratic Party, denied Thursday she ever gave money to any political party in the United States.

Liu Chao Ying, daughter of the former head of the People's Liberation Army, issued a statement saying she wanted to "make clear to the public and all parties concerned that at no time have I ever made any contributions or political donations of any nature whatsoever, whether directly or indirectly, to any political organizations or persons in the United States."

Also in this story:

Liu is the daughter of General Liu Huaqing, who at the time of the 1996 elections was the head of the People's Liberation Army and a key member of China's Communist Party leadership.

Controversial Democratic contributor Johnny Chung has told the FBI some of the $100,000 in donations he gave to Democratic causes came from Chinese aerospace officials with ties to the Chinese military.

In addition, Liu Chao Ying's firm, China Aerospace International Holding Limited, also issued a statement denying its employees had made contributions to the Democratic Party.

"The company has not made and to its best knowledge, none of its employees have ever made, any contributions or political donations to any political organization or persons in the Untied States for any reason or of any nature," the firm said.

China Aerospace said it had never entered into any transactions or had "any dealings" with satellite companies mentioned in United States media reports, an apparent reference to Loral Space and Communications, a major defense contractor.

Sources have told CNN Justice Department attorneys are looking into what role, if any, campaign contributions played in the White House's decision to help two U.S. space and communications companies.

The companies may have helped China improve its military missile program.

A special House committee to be chaired by Rep. Chris Cox, (R-Calif.) has been proposed to investigate possible national security violations in the sale of U.S. missile technology to China and suspected efforts by the Chinese military to influence the 1996 U.S. elections.

Investigators will look into whether the Clinton Administration gave special treatment to Loral in its dealings with China's space agency.

Loral's chief executive officer, Bernard Schwartz, is a major Democratic donor. President Bill Clinton signed a waiver allowing Schwartz's company to sell missile technology to China over the objection of the Pentagon. Loral has denied any improprieties.

A rebuke to Clinton in the House

On Wednesday, in an emphatic rebuke to President Clinton, the House voted overwhelmingly to block future satellite exports to China, even as the White House insisted Clinton had done nothing wrong in approving an export license for the Loral firm.

The White House also rejected a demand by members of Congress that the president cancel his scheduled visit to China next month until he answers questions swirling around the growing campaign cash and satellite technology controversy.

In a letter to House Speaker Newt Gingrich, White House counsel Charles Ruff said, "Press reports that the export of the communications satellite enhanced China's missile capability are erroneous."

Nonetheless, with considerable Democratic support, the House approved a series of measures to put a hold on tech exports to China and prevent Clinton from striking new deals during his visit to Beijing.

Clinton is set to depart June 25 on a state visit that includes stops in Xian, Beijing, Shanghai, Guilin and Hong Kong.

"Congress should be heard loud and clear before the president travels to China next month," said Rep. Floyd Spence (R-S.C.) chairman of the House National Security Committee.

One of the amendments seeks to bar Clinton from entering into new agreements "involving space or missile-related technology" during his Beijing visit. It was approved 417-4.

Another measure, by Rep. Duncan Hunter (R-Calif.), was approved 364-54, and would prohibit export of commercial satellites to China for any reason. "It's the prudent thing to put on the brakes until we sort out how much damage has been done," Hunter said.

Reno says Justice will 'pursue every lead'

Attorney General Janet Reno said Thursday her department will "pursue every lead we can" in its probe.

Reno

"What we have is an obligation to investigate whether a crime has been committed," Reno said during her regular weekly news briefing.

Reno noted that the independent counsel act requires a finding that there is "specific and credible" information on possible wrongdoing by high officials.

"When I find that, I will be the first to trigger it [the statute]," Reno said. "We're going to continue to pursue all leads."

Post: FBI wants to invoke independent counsel law

Meanwhile, FBI officials argued for invoking the independent counsel law at a meeting with Justice officials Wednesday, but senior Justice Department officials rejected their suggestion, The Washington Post reported Thursday.

Quoting unnamed "senior federal officials familiar with the discussions," the Post said FBI officials argued that because Clinton signed the export waivers, he might become the subject of the inquiry.

But Justice officials have concluded there are no specific allegations against the president thus far, and no need to seek appointment of an independent counsel.

The simmering campaign finance flap flared anew last week with word that Chung had told investigators he funneled money to the Democrats from Chinese military and aerospace officials. The party later returned the funds when it could not confirm their source.

A denial from Loral's Schwartz

The latest accusations are explosive -- campaign contributions leading to the sale of high-tech satellite technology to China -- and led to strong words on the House floor this week.

"Every man, woman and child in this country may have been put in jeopardy because American technology could well have been transferred to the Communist Chinese in order to perfect their nuclear weapons delivery systems," said Rep. Dana Rohrabacher.

Republicans are upset that the Clinton Administration, against the advice of the Pentagon, waived sanctions to allow American aerospace companies to participate in joint satellite ventures with the Chinese.

Schwartz, Loral's chief executive officer, gave more than $620,000 to the Democrats in 1996, more than any other single donor. But Schwartz said the contributions had nothing to do with the waivers.

"As far as the political contributions issue is concerned, this comes under the heading ... of no good deed goes unpunished," Schwartz told CNN's Lou Dobbs in an interview Wednesday. "I don't think there's anything here for me to be concerned about."

The White House denies changing policy for campaign contributions and is quick to point out that the Bush Administration also granted several waivers for satellite deals with China, including one just six months after the Tiananmen Square crackdown on political dissenters.

Back then, one of the most vocal critics of the Bush policy was then-Sen. Al Gore.

There are economic benefits for such ventures: launching satellites from China is cheaper and can usually be done much quicker than launches from the United States, where there is a backlog. But there are risks. The Chinese launches have sometimes been unreliable, exploding and leaving insurance companies to pick up the tab.

Regardless of whether the satellite waivers were granted for sound economic reasons or in exchange for campaign contributions, a secret Pentagon report later found the technology transfers to China did harm U.S. national security.

Lawmakers ask Clinton to cancel China trip

Although the White House said it's not an option, more than 150 House members have sent a letter to Clinton urging him to cancel his June trip to China.

Rep. Sue Myrick (R-N.C.) sponsored the letter and Rep. James Traficant (D-Ohio) was the only Democrat to sign the letter.

"The questions raised are so serious and grave that they require immediate answers," Myrick told reporters. "With India having exploded nuclear weapons and Pakistan now contemplating it, we now face a renewed threat of nuclear proliferation. We're learning the hard way that national security can't be taken lightly."

In the letter, the lawmakers said, "We are shocked and dismayed that you and your Administration would take any action, such as granting the satellite waivers, which would have the effect of harming national security even while interests standing to benefit are contributing to the Democratic party. The issue goes well beyond party politics, election campaigns, or questions of personal ethics."

They requested that Clinton "immediately cancel your June China trip unless and until these matters have been fully investigated by the Justice Department and the relevant Congressional committees, and the Administration's credibility in policy toward China is restored."

CNN's Jonathan Karl and Ann Curley and The Associated Press contributed to this report.
In Other News

Thursday, May 21, 1998

Chinese Aerospace Official Denies Giving To Dems
Senate Signals Disapproval Of Liability Cap For Tobacco Industry
Oregon Primary Results
Clinton Seals U.S. Approval Of NATO Expansion
Prominent Donor Testifies Before Lewinsky Grand Jury

The 'Inside Politics' Interview: Rep. Chris Cox

Moneyline Interview: Loral CEO Bernard Schwartz


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