US Planes For The Chinese
Air Force, Warships For The UAE

By Charles R. Smith

The Bush administration has decided not to tell America exactly how much business the Chinese army does inside the United States. In a recent Freedom of Information response, the Commerce Department decided not to disclose what a Chinese air force front company bought from America.
According to the Commerce Department, the undersecretary for the Bureau of Export Administration (BXA) has determined that "disclosure would not be in the national interest."
"Information about export licenses and license applications that list China United Airlines as a consignee or end-user of the items exported under the export license, are protected from disclosure," wrote Barbara Fredericks, the Commerce Department assistant general counsel, in an April letter.
However, the Commerce Department clearly was in the business of selling something to foreign militaries. The recently declassified documents show that the department was informed in 1994 that China United Airlines is actually owned by the People's Liberation Army Air Force (PLAAF).
"China United Airlines (CUA) is a commercial entity of the PLA Air Force," states a 1994 report on the Chinese military issued by Lt. Col. Dennis Blasko, former U.S. defense attaché to Beijing. Blasko's report on Chinese military industries was obtained by a lawsuit against the Commerce Department in 1999.
In addition, recently declassified documents from the Defense Intelligence Agency state that in 1995 the DIA informed the Commerce Department that China United Airlines was an enterprise "subordinate to the PLA Air Force."
Despite the clear lines of Chinese military ownership, in 2000 the Commerce Department approved the sale of 10 American-made airliners to China United. The Boeing airliners are now officially listed as part of the People's Liberation Army Air Force and are being used as military troop transports.
The Commerce Department did release information concerning China's "WTO Accession" detailing U.S. administration support for the red Chinese application to join the World Trade Organization. The department heavily blacked out the information, however, noting that the details were withheld in order to protect "the agency's decision-making process."
The newly released WTO information noted that China had signed an "aircraft agreement" requiring that "signatories agree to duty-free entry of some 250 specific products when these products are imported for civil use."
However, the Commerce Department withheld the consequences of "when these products are imported for use other than civil aircraft."
Commerce Department Arms Dealers
It should not surprise many to find that the Commerce Department is in the business of selling commercial items to foreign militaries. However, the department is not supposed to authorize any exports to foreign militaries. Despite this fact, the Commerce Department authorized the export licenses for 10 Boeing jet transports now being used for military purposes.
Even more importantly, the U.S. Commerce Department is not authorized to license military items for export. For example, missiles, warships, landing craft and fighter jets are licensed for export only by the State Department and the Defense Department.
Yet documents from the department show that the agency in charge of civilian licenses was indeed heavily involved in foreign arms sales. Documents obtained from the Commerce Department office of John Huang show that the agency pressed Arab nations to purchase U.S. weapons.
Warships for the United Arab Emirates
In 1994 Commerce Secretary Ron Brown wrote a letter addressed to Lt. General Shaykh Mohammed bin Zyed Al-Nahyyan, chief of staff of the United Arab Emirates armed forces. In the letter, Brown pressed the commander of the UAE armed forces to purchase advanced U.S.-made missile warships.
"I am confident that Newport News Shipbuilding's frigate FF-21 will be judged to be superior based on price, performance, and logistical support. The selection of U.S.-manufactured frigates will also ensure the great interoperability with U.S. naval forces stationed in the Gulf and Arabian Sea," wrote Brown.
"In this regard, the provision of two leased Oliver Hazard Perry Class frigates [FFG-7] will provide excellent substitutes while you await the delivery of your new ships," noted Brown.
The Commerce documents show exactly how far the agency went to help the UAE obtain the warships. The Bureau of Export Administration (BXA), the section of the Commerce Department that authorizes foreign sales of aircraft, computers and commercial security software to civilian end users, pressed Congress to sell the warships to the UAE navy.
"Related to this competition, is that until the new ships are constructed and delivered, the UAE Navy will require leased frigates to provide a bridge during the interim period," notes a Commerce Department advocacy document.
"The UAE has requested that the USN provide used leased Oliver Hazard Perry class [FFG-7] ships, this requires approval from Congress. BXA working with the DOD and the Department of State through our role in the review of excess defense articles [EDA] sought to expedite the FFG-7 frigate allocation process. After an extensive review of this project and intensive lobbying by BXA on the need to provide these vessels, the USG [U.S. government] approved the allocates of two FFG-7 frigates to the UAE."
Patriot Missiles for the United Arab Emirates
Yet missile frigates were not the only weapon system being pushed by the Commerce Department. Documents discovered in the offices of John Huang show that the department also sought to sell the UAE "Ten Patriot Air Defense Missile Systems."
"Raytheon is seeking to sell 10 Patriot Fire Units and 530 Patriot missiles for $1.4 billion. Raytheon in briefing to BXA staff report that this sale is the number one priority for Raytheon. The UAE is one of the few potential foreign Patriot customers that currently has the cash to pay for them. Since the U.S. Army is no longer purchasing the Patriot and new foreign contracts are lacking, this sale could have significant U.S. industrial base implications," states the Commerce Department document.
U.S. missile maker Raytheon wanted "oral and written communications from Secretary Brown to UAE Crown Prince and Armed Forces Chief of Staff supporting Patriot as critical to UAE/Arabian Gulf Air Defense."
According to the Commerce documents, Raytheon faced stiff competition for the UAE air defense contract from Russian-made SA-10 and SA-12 systems and the French-made Aster missile system.
"Raytheon reports that Russian Prime Minister Chernomyrdin and Defense Minister Grachev as well as French Defense Minister Leotard have advocated on this program," notes the Commerce document.
"The UAE currently has the Raytheon HAWK missile system so a Patriot purchase would provide interoperability and a common missile/air defense architecture. The French system is still in development and while the Russian system is reputed to be technically excellent, the support structure is very poor," notes the Commerce report.
John Huang Arms Dealer
Additional military documents found in Huang's office include details on artillery and landing-craft sales to Kuwait, attack helicopter exports to the Netherlands and Patriot missile sales to South Korea.
John Huang served as a banker for the Lippo Group, pulling in a six-figure salary while employed by the Riady family from Indonesia. Huang took a tremendous pay cut when he joined the Commerce Department.
Huang also reportedly took a half-million-dollar bonus from the Lippo Group upon his departure for his new job inside Commerce.
Huang was briefed on many of the arms sales to Kuwait, UAE and South Korea.
Immediately after such briefings, Huang would walk across the street from the Commerce Department to a firm owned by Jackson Stephens, an old Arkansas friend of President Clinton, and place long-distance calls back to Indonesia and the Lippo Group.
It is ironic indeed that convicted Chinagate figure John Huang, a man who cited his Fifth Amendment rights against self-incrimination when asked under oath if he acted as an agent for the Chinese military, was privy to so many weapons sales for U.S. allies.
Even more ironic is the fact that Raytheon requested that Huang attend its detailed briefings on South Korean missile defenses, North Korean missile capabilities and the proposed Patriot sales to South Korea. It is obvious that South Korea, which is currently considering Patriot missile purchases, will take a dim view of the details of its defenses being given to John Huang.
Pentagon Says Commerce Department Violated Law The Commerce Department has also previously been accused of illegally approving military technology sales. In December 1998, the Defense Department accused the Commerce Department of issuing licenses to the Chinese military that constituted a "defense service" within the meaning of the State Department's International Traffic in Arms Regulations under the Arms Control Act.
The Defense Department wrote, "This was clearly beyond the scope of Commerce export control jurisdiction because only the Department of State is authorized to issue licenses for defense services."
Clearly, the State Department and the Defense Department need to retake control of weapons export sales. The Commerce Department is ill-equipped to deal with commercial aircraft sales, much less take on peddling sophisticated weapons systems abroad. The Bush administration should remove the leaky and unstable agency from its role in arms exports.


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