THE PEOPLE'S REPUBLIC OF CHINA -- (BY JAMES RISEN AND ALAN C. MILLER) (Extension of Remarks - June 18, 1997)

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in the House of Representatives



Iran is developing a new short-range ballistic missile as part of a joint program with China involving rocket motors and test equipment, The Washington Times has learned.

Iranian missile technicians traveled to China early last month to watch a ground test of a 450mm-diameter rocket motor to be used in the NP-110 solid-fuel missile, according to a Pentagon intelligence report labeled `top secret.'

The missile, which would have a range of 105 miles, would be capable of hitting targets as far away as Baghdad and the United Arab Emirates, while keeping the missile launchers away from coasts, where they are vulnerable to counterattack, said Kenneth Timmerman, director of the Middle East Data Project, which tracks weapons programs in Iran.

The joint missile program also involves Iran's use or acquisition of Chinese X-ray equipment, which is used for studying missile casings and for checking whether solid fuel is in proper condition.

Disclosure of the Iran-China missile cooperation raises new questions about Clinton administration claims that China has been heeding U.S. warnings about curbing trade with Iran and other rogue states on missile and weapons technology.

John Holum, director of the U.S. Arms Control and Disarmament Agency, told reporters in November, after a visit to China, that U.S.-China collaboration on arms control and proliferation issues was `very constructive,' and said Chinese progress on restricting destabilizing arms sales was `dramatic.'

A classified CIA report in October said China had provided Iran with missile guidance components and technology.

`This is a new [category] of missiles,' Mr. Timmerman said of the NP-110. `It shows the Iranians have a very advanced and multifaceted capability to produce solid-fuel propellants.'

In written statements to Congress made public last week, Secretary of State Madeleine Albright said, `Iran's
ballistic program poses a serious threat to American servicemen and women.'

`Iran's ballistic missile program also poses a threat to America's friends and allies in the region,' she said in response to questions by Rep. Gerald B.H. Solomon, New York Republican.

The administration has been `reviewing carefully' reports of missile- and weapons-technology transfers from China to Iran but has not decided whether the sales meet legal thresholds for triggering sanctions, she said.

Iran is known to have two types of Soviet-designed Scud missiles, including systems acquired from North Korea or developed in Iran.

Less is known about its shorter-range missile programs, including systems identified variously by military experts as the Iran-130, the Mushak 120 and the Nazeat.

According to Mrs. Albright, the Iranians are `assembling' Scud-B missiles with a range of 186 miles that carry payloads of up to 2,200 pounds.

`Iran is working to produce Scud-C missiles with a range of 500 kilometers [310 miles] and a smaller payload than the Scud-B,` she told Mr. Solomon. `We also believe Iran is interested in developing even longer-range missiles.'

The secretary said that `given Iran's persistent efforts to develop a nuclear, chemical and biological capability, we are concerned that Iran may use this capability to develop weapons-of-mass-destruction warheads.'

The China Precision Engineering Institute New Technology Corp. reached agreement with an arm of Iran's Defense Industries Organization to sell gyroscopes, accelerometers and test equipment--all elements used to build and test missile-guidance systems, the CIA report said.

Other military equipment was delivered in July 1996 as part of a program to modify Iran's Chinese-made HY-2 anti-ship missiles.

Iran currently has about 200 Scud-B and Scud-C mobile missiles. The Scud-B has a range of about 186 miles and the Scud-C can hit targets about 310 miles away.

Iran also is believed by U.S. intelligence officials to be interested in buying 620-mile-range No Dong missiles from North Korea. The No Dong is said to be close to deployment.

A U.S. intelligence report last month also revealed that three Russian entities have signed contracts with Iran to help produce liquid-fueled ballistic missiles. The Russian contracts include projects for wind tunnels used in missile design, model missile manufacture and development of computer software.



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Washington: In John Huang's strange odyssey into the heart of the Clinton administration and the Democratic Party, few things remain so shrouded in intrigue as the handling of his coveted security clearances and his access to U.S. government secrets.

The former Commerce Department official and Democratic fundraiser has played a leading role in the campaign finance controversy since it erupted last fall. But now federal investigators are looking into more serious questions about whether Huang also, as a House committee chairman has charged, `committed economic espionage.'

If Huang was supplying sensitive U.S. government information to his Indonesia-based former employers or, more troubling, the Chinese government, then the Commerce Department may have been the perfect place for him to get it--because of the casual manner in which the department handled his access to top-secret materials and classified CIA briefings, according to Commerce Department records and extensive interviews.

Commerce Department officials have described Huang as a midlevel functionary cut off from policy action on Asia. But they are unable to explain why he had almost weekly one-on-one briefings from a CIA officer on the latest intelligence concerning China, Taiwan and Vietnam.

What's more, a series of stunning security breaches at the Commerce Department allowed Huang to get and maintain a top-secret clearance for 18 months, both before and after he became a government employee--a period longer than the time he actually served.

Huang's security status was of keen interest to at least one high-level Commerce Department official. Huang's boss tried to ensure
that Huang maintained his top-secret clearance even after he left the department for the Democratic National Committee.

But when Huang--in a marked departure from previous department practice--turned down an offer from his boss to be upgraded to the government's highest security clearance, Commerce Department officials showed strangely little curiosity. An upgrade from `top secret' to `sensitive compartmented information,' or `codeword' clearance, which his two immediate predecessors had, would have required Huang to undergo a much more detailed investigation of his ties to foreign nationals, including his former employer, the Jakarta-based Lippo Group.

Former department officials and others now agree that Huang's apparent reluctance to subject himself to the intense scrutiny required for code-word clearance should have raised questions.

`The ability to have access to information is the dividing line between being an insider and outsider, the dividing line between having informed judgment and not,' said a former senior Commerce Department officials. `So for somebody to decline it would have been a red flag.'

Huang, who was let go by the Democratic National Committee late last year after allegations surfaced about his involvement in the campaign finance controversy, was unavailable for comment. The Glendale resident's Washington attorneys have said they `have no doubt that he comported himself honestly at the Commerce Department.'

One of the lawyers, Ty Cobb, declined to comment on most questions concerning Huang's security clearances and the classified information he received at the Commerce Department. Regarding the top-secret briefs, Cobb said: `We look forward, when circumstances permit, to clearing up the confusion created on this issue by earlier press reports but we aren't in a position to discuss it at this time.'

Huang, a naturalized U.S. citizen, has not been charged with any crime. And the Justice Department task force investigating the campaign finance controversy and the alleged covert scheme by the Chinese government to buy political influence in the United States has not publicly discussed its investigation of Huang.

But the congressional committees investigating fund-raising abuses are looking into how the Commerce Department handled Huang's security clearances and his access to intelligence--and whether Huang exploited vulnerabilities in the government's security-clearance procedures.

The content of the intelligence briefings Huang received on Taiwan, China and Vietnam could not be learned. But, in general, he was in a position to glean internal government information about U.S. trade practices, the business practices of foreign competitors, links between foreign governments and the private sector and corrupt business practices in those countries. Such information could have been of value to companies and individuals doing business in or wanting to invest in the region, including Lippo, Huang's previous employer.

From the beginning, Commerce Department officials considered Huang a `White House hire' steered to the department because of his political connections. His former bosses at Lippo--founder Mochtar Riady and his son, James--told acquaintances that they placed Huang at the department. The Riadys, once part-owners of a bank in Little Rock, Ark., had developed close ties to President Clinton when he was governor of Arkansas.

In January 1994, Huang was approved for the job of principal deputy assistant secretary of commerce in the international economic policy office.

Although Huang did not plan to start until that July, the department awarded him an `interim top-secret' security clearance on Jan. 31, after a cursory one-day background check by the Office of Personnel Management. Security checks for permanent `top-secret' clearances normally take a month or more.

Commerce Department officials have defended Huang's interim clearance, saying that he was expected to start his new job quickly. But Huang's Feb. 28 personnel form indicated that his start date was set for July 18, 1994.

Officials stress that there is no evidence Huang attempted to use his security clearance while he was still working for Lippo in Los Angeles. They contend that his clearance remained inactive until he arrived at the Commerce Department.

But several former senior department officials said they found this troubling.

`That sort of stuns me,' one said. `At a minimum, it sounds to me that [this is] a flaw in the process.'

After Huang started work, the Commerce Department asked the Office of Personnel Management to conduct a full-field investigation of his background for a permanent top-secret clearance.

Personnel management officials said that they began the background check in August 1994, looking at 10 years of Huang's educational, professional and military records and interviewing neighbors in cities where he had lived during the previous five years. Finding no problems, final approval was granted in October.

But personnel management officials conceded that they did not conduct an overseas investigation of Huang--even though he had served in the Taiwan air force and spent much of his career working for overseas-based employers. The regulations did not require it, officials emphasized.

After Huang began work at Commerce, his boss--Charles Meissner, assistant secretary for international economic policy--sought to have him upgraded to code-word clearance. This would have given Huang access to the most sensitive materials the U.S. government has on matters such as trade negotiations with China, Taiwan and the rest of Asia.

Meissner told John Dickerson, an intelligence liaison officer at Commerce, that Huang needed the security upgrade to do his job properly. Dickerson then told Huang he would have to meet with the department's Office of Security, fill out new paperwork and undergo additional scrutiny.

Dickerson said through a Commerce Department spokeswoman that he never heard from Huang again on the matter.

Later, Meissner approached Robert Gallagher, Dickerson's boss, and asked about the status of Huang's application for code-word clearance, Gallagher said through the spokeswoman. Gallagher said through the spokeswoman. Gallagher in turn asked Huang if he had applied.

Huang said he had not and again asked Gallagher what was involved. When Gallagher told him it was more extensive process than had been required for top-secret approval, Huang declined to apply, Gallagher said.

Significantly, if Huang had applied, personnel management officials would have interviewed foreign nationals with whom he had been in business. Moreover, the entire background investigation would have been sent to the CIA's Office of Security, which could have demanded a more detailed background check, agency officials said.

`The code-word application would have triggered a higher level of scrutiny of any of his connections overseas, including business ties with foreign nationals,' said a personnel management official.

The security issues become starker given that Huang, who had hoped to help shape the administration's international economic policy, found himself largely cut out of the action on Asia almost as soon as he arrived at the department.

Part of the problem was that, before either Huang or his boss arrived, Jeffrey E. Garten, chief of the International Trade Administration, already had assigned others to handle China and other large emerging markets. Garten also quickly determined that Huang was not up to speed for such work.

`Garten had an A Team, and Huang wasn't even on the B Team.' said a Commerce Department official.

As a result, Taiwan was the only Asian country Huang had in his portfolio, and he accompanied Meissner there twice.

Nevertheless, he became an active consumer of U.S. intelligence on Asia. He received from a CIA officer 37 one-on-one, top-secret, Asia-related briefings--most concerning Taiwan or the People's Republic of China--and he attended 109 meetings at which classified intelligence information
may have been discussed, the Commerce Department acknowledges.

Huang also received at least one previously undisclosed CIA briefing on Vietnam that a senior Commerce official said he could not explain because Huang `had no policy role on Vienam at all.' Huang did not have to inform anyone about the intelligence he got from the CIA, officials added.

But Huang also had other access to classified materials. In 1994 and 1995, he attended 109 meetings at which classified information may have been discussed. He also may have received classified intelligence information at interagency meetings at the White House, Commerce Department officials said.

Huang visited the White House 93 times during Clinton's first term, Secret Service records show, seeing the president 15 times.

Meanwhile, Huang maintained contact with his former employer. According to his phone logs, he called Lippo Bank in Los Angeles 70 times during his 17 months at Commerce. He also placed 49 calls to C. Joseph Giroir, a Little Rock attorney who works closely with the Riady family, records show.

On at least one occasion. Huang called Lippo the day he received classified documents. The Lippo Group has extensive financial interests in China and minor holdings in Taiwan, and it has sought business opportunities in Vietnam.

By mid-1995, a frustrated Huang wanted to leave the Commerce Department. That Sept. 13, accompanied by James Riady and Giroir, Huang told Clinton during an Oval Office visit that he wanted to move to the Democratic National Committee to raise money for the president's reelection effort.

Also present was senior White House advisor Bruce R. Lindsay, who subsequently met with Huang before sending him to Harold M. Ickes, the top White House aide overseeing the campaign. Ickes notes show that they discussed whether the administration might `retain [Huang] as an unpaid consultant' when he moved to the national committee.

Knowledgeable sources said that Huang requested the consultant post but did not mention his desire to retain a security clearance. Lanny J. Davis, a White House special counsel, said that, `as far as Bruce Lindsay recalls, the issue of Huang's consulting status or security clearance did not come up in
the White House and was not discussed between him and anybody else at Commerce.'

Nonetheless, by December 1995, as Huang was about to move to his party job, Meissner tried to help him obtain a consultant position. But Tim Hauser, a deputy undersecretary for administration, rejected the request because he thought it improper for a Democratic Party fund-raiser to be Commerce consultant, department officials said.

Meissner persisted, sources said, and tried to make an `end run' by raising the issue with William Ginsberg, chief of staff for then-Commerce Secretary Ronald H. Brown. Ginsberg agreed with Hauser that the idea was `politically insensitive' and asked Meissner why Huang wanted to remain a Commerce consultant while working for the party, sources familiar with the conversation said. One reason, Meissner said, was so Huang could retain his security clearance.

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Meissner failed to get Huang a consulting contract. But, in one of the saga's most curious chapters, Huang did get the same top-secret security clearance given to the department's contractors after Meissner had his secretary file the paperwork.

Without running a background check on Huang or confirming that he had a consulting contract, the Pentagon's Defense Industrial Security Clearance Office granted Huang a `consultant top-secret' clearance on Dec. 12, 1995, a spokeswoman for the office said. That was nine days after Huang left the Commerce Department and a week after he started at the national committee.

The clearance remained in effect for a year--while Huang raised millions of dollars for the Democratic Party--until Dec. 9, 1996, when embarrassed Commerce officials discovered it amid the fallout from the fund-raising controversy.

Commerce officials described the episode as a bureaucratic snafu and said they found no indications that Huang used his clearance after he left the department--or that he knew he had it.

But Meissner's interest in helping Huang obtain a contractor's security clearance remains a mystery. He died along with Brown and 32 others in a plane crash in Croatia in April 1996.

`Unfortunately, the people who were most involved in this are not here now,' observed Commerce Department Press Secretary Maria Cardona.