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19 July 1998
Source: Hardcopy The New York Times, July 18, 1998, p. A9

White House Memos to President Reveal Strategy to Shift Purview Over Satellite Sales


WASHINGTON, July 17 -- Soon after Secretary of State Warren Christopher decided in 1995 against relaxing sharp controls on the shipment of American satellites to China, President Clinton's deputy national security adviser began campaigning from the White House to reverse the decision, according to White House documents released today.

The deputy national security adviser, Samuel R. Berger, argued that Mr. Christopher had failed to properly consider the interests of the White House or American businesses seeking trade with China.

Ultimately, Mr. Berger, who is now the national security adviser, organized a deal that stripped the State Department of its licensing authority over commercial satellites and turned it over to the Commerce Department, where its Secretary, Ronald H. Brown, was far more sympathetic to the satellite makers.

Mr. Clinton's decision to transfer the licensing authority is a central focus of a Congressional inquiry into whether relaxed American export controls helped China acquire militarily sensitive technology.

The 6,000 pages of documents turned over to House and Senate committees today provide new details on the thinking of senior Administration officials as they wrestled for five months in 1995 and 1996 with what has become a case study of the tensions between traditional military judgments and commercial interests in defining national security in the post-cold-war era.

A major feature of the compromise, brokered largely by Mr. Berger and his aides, was to win the support of the Pentagon by assuring the military it would have the right to review the sale of sophisticated American equipment licensed by the Commerce Department.

"Some in Congress will criticize this approach as favoring business over security," said a decision memorandum to the President, but the support of the Defense Department "should blunt such attacks." Mr. Clinton approved the memorandum on March 12,1996.

The White House allowed reporters to review less than half of the material made public today. The other half sent to Capitol Hill remains classified.

The documents provide a fuller picture of Mr. Berger, who sees himself as an arbiter between warring Cabinet secretaries but whose critics describe him as the point man for the White House's China policy. Before joining the White House, Mr. Berger was a trade lawyer whose clients included companies doing business in China.

The documents also reveal a raw portrait of the divisiveness of the China issue within the White House and other Federal agencies.

In the margin of a December 1995 document, for example, George Stephanopoulos, who was a senior adviser to Mr. Clinton at the time, scrawled a note strongly criticizing, in vulgar language, the Administration's overall policy on China.

Since the 1989 killings in Tiananmen Square, President George Bush and Mr. Clinton have had to waive sanctions barring Chinese launchings of American satellites.

Mr. Clinton's decision to reverse Mr. Christopher has been known for some time, but the documents made public today provide a glimpse into how the National Security Council designed a plan to reconcile a contentious dispute between two Cabinet Secretaries.

On Oct. 9, 1995, Mr. Christopher ended a long Government-wide review over which agency should have jurisdiction over the export of commercial satellites and jet-engine technology.

Mr. Christopher sided with the Pentagon and intelligence agencies, who told him that commercial satellites held technological secrets that could jeopardize military interests if revealed. So the Secretary initialed a classified order that kept the technologies on the so-called "munitions list," the inventory of the nation's most sensitive military and intelligence-gathering equipment.

But a month later, Mr. Berger was already mapping out a strategy to reverse Mr. Christopher's decision.

In a Nov. 17,1995, memorandum to Mr. Christopher's deputy, Strobe Talbott, Mr. Berger expressed concern that Secretary Brown would appeal the ruling to the President, and then added, "I, too, have real questions about the wisdom" of Mr. Christopher's decision.

Mr. Berger complained in the memorandum that views of the National Security Council and another White House advisory group, the National Economic Council, were not presented to Mr. Christopher.

Mr. Berger recommended that senior Administration officials meet with satellite makers to hear how Mr. Christopher's decision would affect them.

Still, by February 1996, the Defense Department's National Security Agency, the nation's code makers and code breakers, did not support the wholesale transfer of licensing authority of communications satellites to the Commerce Department.

For technology regulated by the State Department, the Pentagon has an effective veto over any export. Military officials feared they would lose that power under the Commerce Department's jurisdiction.

So Mr. Berger offered the Defense Department a deal in exchange for its support. Under the White House-brokered compromise, the Pentagon would gain the right to review all technology licensed by the Commerce Department that had either civilian or military uses. But the Pentagon still lost its veto.

The deal was closed in a series of telephone calls involving Mr. Berger, Mr. Talbott, Mr. Brown and John White, the Deputy Defense Secretary, according to documents and interviews.

A review today of the unclassified documents found no indication that Mr. Christopher was personally involved in the President's decision. But by the end, the State Department concurred with the ultimate outcome.

Attached to Mr. Clinton's decision memorandum was a longer rationale from Anthony Lake, then the national security adviser, and Laura D'Andrea Tyson, the head of the National Economic Council. "Industry should like the fact that they will deal with the more 'user-friendly' Commerce system," the memorandum said.

Staff Advice to Clinton on Export Controls

By The New York Times

WASHINGTON, July 17--Following is a memorandum for President Clinton from his staff secretary, Todd Stern, seeking a decision on export control issues, including transfer of jurisdiction over communications satellites exports to the Commerce Departmentfrom the State Department. The memorandum, released by the White House, was dated March 11, 1996, and bore Mr. Clinton's check mark of approval of the transfer. It refers to an attached memorandum by Anthony Lake, the national security adviser, and Laura D'Andrea Tyson, the head of the National Economic Council.

The attached Lake/Tyson memo seeks your approval of an interagency consensus on three export control issues, whose resolution will pave the way for a new Export Administration Act, completing your agenda for export control reform. (You have already removed outdated controls on computers, issued an executive order to streamline dual-use licensing, and led the effort to establish a post-cold-war export control regime.) The House bill, with Representative Roth leading the charge, includes provisions on these issues that would interfere with Administration discretion, but Roth is prepared to drop the provisions, provided we resolve them internally. Because Roth's markup is scheduled for Wednesday, N.S.C. is seeking your approval before you leave for Egypt.

Civil communications satellites and hot-section technology. The issue here is whether these items ("hot section" technology involves jet aircraft engines) should be licensed through the dual-use, Commerce system (traditionally favored by industry) or the munitions system (traditionally favored by those concerned about keeping a tight grip on technologies that contribute to America's military edge). Commerce, State and Defense now agree on licensing these items through the dual-use system, subject to some new control procedures. A new regulation would provide the President with broad authority to control transfers for these two sectors on national security and foreign policy grounds; and a modification to your December E.O. [executive orderl would make the initial licensing determination subject to a majority vote of the reviewing agencies. Industry should like dealing with the dual-use, Commerce system; at the same time, individual components on the munitions list, including encryption, will continue to be subject to munitions licensing, by State. Some in Congress will criticize this- approach as favoring business over security, but D.O.D.'s support should blunt such attack.

Procedures for resolving jurisdictional disputes. Tony and Laura attach a proposed procedure (Tab B) for resolving disputes over whether a product should be on the munitions or dual-use list. The proposal requires a cooperative, transparent procedure among State, Defense and Commerce with a 90-day escalation through a State-chaired process up to the President. The agencies all concur on the test of the proposal.