Halliburton -- will the scandal never end?

[techweenie]

$7,500,000 SEC fine for lying about financials (when Dick Cheney was CEO). Sounds alot like what happened to Enron, but "Kenny" Lay didn't escape.

According to a report in the paper today, it appears Hallburton is not going to be penalized by the government for financial chicanery in Iraq and Afghanistan. The Army was planning to withhold 15% until its questions were resolved -- amounting to $60 million a month. Gosh, wonder how they escaped the (temporary) fine?

This administration has so little regard for the awareness and attentiveness of the public that it doesn't even try to avoid the appearance of impropriety.

How much money is Cheney getting this year from Halliburton? How many options does he hold? I think I know just what his two-word answer would be.

[Mulholland]

Will the scandal ever start?

[techweenie]

Not on Faux News, NewsMax, Washington Times, Spectator, Free Republic, Limbaugh, Drudge, Media Research Center, AIM, TownHall, etc., etc.

But what's interesting when you talk with real people is that they are not surprised Cheney appears corrupt. Expectations are so low for the Presidency (doesn't need to be able to speak whole sentences) and the Vice Presidency (doesn't need to be ethical, or even civil) that people just shake their heads over it.

[Mulholland]

[Moneyguy1]

Interesting when people say "What other company could do it?"

When the big dam on the Colorado was proposed, there was no company big enought. Interesting how a group of construction companies got together, bid, came in under budget and ahead of schedule.

When I look a Halliburton and its various divisions, (and their current troubles) it is one company I would never recommend betting the farm on. I am not surprised if the penalties have been dropped.

As for the Vice President, he is welcome to visit my home any time he likes and he will be treated very well. Just give me time to hide the valuables.

[Porsche-O-Phile]

Funny pic, but given the mental capacity of dubya, he'd probably screw up the branding and have a donkey wandering around that everyone thought was owned by a Michigan State fan. . .

[Superman]

Indeed, the most striking thing about this administration is the boldness, the audacity. They don't care to camoflage their agenda.

BTW, I think Mr. Cheney figured out, as war secretary to Bush I, how to create the appearance of reducing military spending, making personal millions and not reducing military staff. The military used to build most of their own facilities. Cheney used the brilliant trick of contracting that out to a certain company whose name appears in the title of this thread. This moved money out of the military line in the budget document. Never mind that we're spending MUCH more now. The important things are to create the appearance of fiscal responsibility, while lining your personal pockets. Then, after that administration went away, Dick assumed the top position at Haliburton.

Some say history repeats itself. If so, then Dick (if he's still alive) will once again return to Haliburton to reap the personal income he is working so hard in his current office to accumulate.

No conflict of interest here.

Tech, why not post the whole story?


http://economictimes.indiatimes.com/articleshow/803287.cms


SEC fines Halliburton, frees Cheney

REUTERS[ THURSDAY, AUGUST 05, 2004 02:05:18 AM ]
WASHINGTON: Halliburton will pay $7.5m to settle charges that it misled investors by not disclosing a 1998 accounting change at a time when US vice-president Dick Cheney was CEO, officials said on Tuesday.


The US Securities and Exchange Commission (SEC) said it did not charge Mr Cheney in the case. The agency charged the Houston-based oil services group, as well as its former chief financial officer Gary Morris and former Controller Robert Muchmore.

The size of the penalty against Halliburton partly reflects a SEC view that company documents and information were not turned over quickly enough to SEC investigators, it said.

“The commission will not tolerate lapses by companies that serve to delay or hinder the commission’s investigative processes,” Spencer Barasch, enforcement chief in the commission’s Fort Worth, Texas office, said in a statement. Mr Cheney was chief executive officer of Halliburton from 1995 to ’00. He “provided sworn testimony and co-operated willingly and fully in the investigation”, the SEC said.

The case focused on Halliburton’s failure to disclose a change in accounting for revenue from claims against customers for construction project cost overruns, it said.

The accounting change boosted Halliburton’s pretax profits over several quarters in 1998 and 1999 by more than $120m, but investors were not informed until March ’00, the SEC said.

Washington consumer advocacy group Public Citizen said politics may have shielded Mr Cheney from being held responsible, but the SEC’s top enforcement official said the case was brought on its merits.

“The commission brought the charges it believed were warranted by the evidence,” said SEC Enforcement Director Stephen Cutler in an interview. He declined to discuss when Mr Cheney testified and what the vice-president told investigators.

The SEC found Mr Cheney was not involved in the accounting practice change, nor in the decision on whether to disclose it, said a lawyer for Mr Cheney who asked not to be named.


Halliburton and Mr Muchmore agreed to a settlement, with Muchmore paying a penalty of $50,000 and the company a penalty of $7.5m. Neither admitted nor denied wrongdoing, as is customary in SEC settlement agreements.

The enforcement action against Mr Morris is unsettled and has been filed in US District Court in Houston, the SEC said.

“We think it’s unfortunate the commission chose to file suit against Mr Morris on a matter concerning events which occurred a number of years ago ... Mr Morris intends to defend himself vigorously,” said Tim McCormick, Mr Morris’ lawyer.

As a result of the Morris litigation, a transcript of Mr Cheney’s SEC testimony may become public through the legal discovery process, said a lawyer close to the case.

Halliburton said in a statement that it is adjusting its second-quarter results to account for the settlement. It said there will be no restatement of prior financial disclosures. Its stock closed up eight cents to $31.38 per share on the New York Stock Exchange in light trading volume.

“We are pleased to bring closure to this matter,” said Halliburton chairman Dave Lesar in a statement. The SEC launched an investigation of Halliburton in late May ’02. It said in its statement that it had reviewed 340,000 documents and sworn testimony from 23 people. From 1993 to 1997, the SEC said, Halliburton explained in SEC filings that claims against customers for cost overruns on construction projects were not recognised as company income until the quarter in which they were resolved.

But in the second quarter of 1998, that practice changed and Halliburton began booking revenues based on “probable recoveries” of claims not yet resolved, the SEC said. Mr Morris and Mr Muchmore were responsible for the failure to disclose the change and helped prepare and review Halliburton statements to investors over the period, the SEC alleged.

But Mr McCormick, the lawyer for Mr Morris, said: “We believe the commission is using a rather novel theory of disclosure, which is not supported by the precedent of the time.”

Super - I guess you have evidence for your slander?

[Superman]

"The SEC found Mr Cheney was not involved in the accounting practice change, nor in the decision on whether to disclose it"

That's an interesting remark in light of the fact that Mr. Cheney was CEO at the time. I don't know about you guys, but when I am placed into a position of responsibility for a project, and that project has problems, folks seem to expect me to take responsibility.

Oh, and the record and timing of Haliburton's contracting relationship with our federal government, and the timing of Mr. Cheney's positions as war secretary under Bush I and CEO for Haliburton, are a matter of public record. And common knowledge.

Originally posted by Superman
"The SEC found Mr Cheney was not involved in the accounting practice change, nor in the decision on whether to disclose it"

That wasn't a remark. That was a finding.

[techweenie]

Hey, the SEC chose not to charge GWB for illegal insider trading in 1991, and that was a complete open-and-shut case, too.

The SEC is not free from political influences.

Originally posted by techweenie

The SEC is not free from political influences.

Agreed. Remember the Tucker Automobile Co.?

[Mulholland]

Originally posted by Porsche-O-Phile
Funny pic, but given the mental capacity of dubya, he'd probably screw up the branding and have a donkey wandering around that everyone thought was owned by a Michigan State fan. . .

It appears to me that every "Wil-E-Coyote...super genius"" Democrat that comes down the pike is full of crap, embroiled in scandal, pattern prevaricates or simply can't keep his story straight.

Give me a dumbya any day. What intrigues me to no end is how Democrats are so petty that they focus in on the 0.5% faux paus that Bush has uttered (ignoring the other 99.5% of fabulous speeches and press conferences) and paint him stupid....It really is tired and disingenuous (as every Republican that seeks office is immediately -- in a kindergarten type of way -- labeled stupid).

You know, Hitler was a genius, like all geniuses a socialist...He was wrong, socialists are wrong....That is really all you need to know.

[SteveStromberg]

Just rember Bill Clinton And Janet Reno are responible for allowing 9-11 to happen. They resstricted the FBI and CIA from talking to each other.
Bill Clinton made sure the Chicoms got plans for the ICBM's
Bill Clinton and Wesley Clarke Murder 4000+ Serbians and destroyed
the Ecosystem of the Danube. Why becaues he got caught Not having sex with Monica.
TW why do you support the party that has sold us out to the Chicoms and Commited war Crimes against the most deicated supporters of the USA during WW2.

As I have said before the truth in advertsing lawshould force the Dems to Change their name to The Communist party Of America.
TW why do you hate America so much?

[SteveStromberg]

A Proper Sense Of Proportion
By Christopher Adamo (10/13/2003)

Does the term “W-88” ring a bell with anyone? Only a few years ago, the W-88 was the most sophisticated warhead in America's nuclear arsenal... a distinction it may still hold. But on Bill Clinton's watch, plans for the W-88 somehow fell into the hands of the Communist Chinese.

A breach in national security of this magnitude has not occurred since the days of Julius and Ethel Rosenberg. Yet throughout the unfolding of events indicating a cataclysmic hemorrhage in American technological secrets during the Clinton years, the mainstream media responded with yawns of indifference.

Nor was the W-88 leak the only major compromise of critically sensitive information. Under the headship of Energy Secretary Hazel O'Leary, the security apparatus of the Los Alamos scientific laboratory became a “politically correct” joke, despite the fact that it is where the nation's most secretive state-of-the-art weapons research is conducted and archived. Fearing that workers at the lab who held lower security clearances might somehow feel inferior to those with higher classifications, she restructured the lab's system of color-coded badges so all were identical in color and appearance, thus negating the ability to identify individuals who should not be allowed access to highly classified material.

Under her headship, as well as that of her successor, Bill Richardson, Chinese penetration of American security was determined to be absolute. Computer hard-drives were “lost” on numerous occasions, followed by phony announcements of relief once they were “recovered,” on one occasion behind a copy machine. Hard-drives can themselves be easily copied, and the information on them transferred in an extremely short period of time. Thus, the retrieval of a missing hard-drive in no way suggests that the security violation has been corrected. Yet again, the major American media dozed in its apathy.

Of course Chinese warheads, no matter how sophisticated, are no serious threat to America unless they can be “delivered” to its shores. But the Chinese needn’t fear this obstacle for long, since Clinton Commerce Secretary Ron Brown was quick to come to their rescue. Assuming control over technical data relating to commercial space operations, he authorized the transfer of critical missile and rocket technology from Loral Space systems, under the chairmanship of Clinton crony Bernard Schwarz, to the Chinese. In this manner the Chinese were rendered fully capable of constructing and operating intercontinental ballistic missiles to carry their new and improved nuclear warheads to American soil.

In defense of this enormous breach of American technology, the Clinton Administration responded with the bogus claim that such information was only being used for “civilian purposes.” Yet anyone with even a cursory knowledge of space science knows that the technology required to launch a satellite is essentially identical to that needed to deliver nuclear warheads. Only the targeting information in the vehicle's computer needs to be altered to direct it from an orbital objective to a ballistic path. Prior to the Saturn-class boosters of the Apollo program, every major space launch vehicle in NASA's inventory was a ballistic missile, modified only insofar as how its payload was attached. Certainly, the Clintons knew this as well.

During the Clinton presidency, the flow of vital American technological information out of the country was only ever exceeded by the flow of illegal foreign campaign contributions (primarily from the Communist Chinese) into the campaign coffers of the Democrat party. Yet to revelations of such enormity, the media rarely responded with anything but the briefest and mildest degree curiosity.

It is against this backdrop that the recent scandals, so loudly decried by Democrat operatives and their collaborators in the media, show themselves to be far more the result of political opportunism than any mortal threat to national security. While, as a result of breaches throughout the '90's, American cities are now vulnerable to Chinese warheads and the missiles needed to carry them, those shrill Democrats on Capitol Hill, accompanied by their friends the network anchors, seek to create the impression that America is only imperiled as a result of sixteen words spoken by the President in his State of the Union Speech, and the fact that columnist Robert Novak gained access to the identity of a CIA agent whose name was already on pubic record as a result of her husband's personal biography.

Though any breach of security represents a problem requiring correction, it bears repeating that selective “outrage” is merely hypocrisy. By such displays, Democrats and their liberal media cohorts are proving this once again.

[SteveStromberg]

DOWNSIDE LEGACY AT TWO DEGREES OF PRESIDENT CLINTON
SECTION: STATUS OF US INTELLIGENCE
SUBSECTION: GIVE-AWAYS
Revised 7/21/99



EXCEPTIONAL TECHNOLOGY FOR CHINA

Encryption expert Charles Smith (Softwar) pointed out that neither Reagan nor Bush authorized the transfer of encrypted satellite control systems to China. He also pointed out that in 1994, Hughes was denied a license to export a satellite to Australia because it contained a single encrypted control chip; but Clinton allowed this sort of sensitive technical information to be placed in both the Loral satellite which was launched by the booster that crashed in Southern China in 1996 (with the result that the control chip is missing) and a Motorola satellite successfully launched by the Chinese. In 1995 he pointed out that Clinton allowed Maneuvering Re-entry Vehicle (MARV) technology to be sent to China on a Hughes satellite. Within a year the Chinese had "tested" warheads using MARV technology off the coast of Taiwan. MARV gives the incoming warhead the capability to evade anti-missile defenses such as the U.S. Patriot missile. He also pointed out that Clinton authorized the shipment of Iridium satellites to China by Motorola in 1997 and 1998. The launch of multiple satellites on one rocket requires technology that can be used in Multiple Independently targeted Re-entry Vehicles (MIRV), that enable multiple warheads to be carried on a single missile.

Disputing the assumption that the Chinese cannot make military use of civilian satellite technology, the New York Times reported on 6/13/98 that "For the past two years, China's military has relied on American-made satellites sold for civilian purposes to transmit messages to its far-flung army garrisons, according to highly classified intelligence reports.Administration officials said it was impossible to prevent China's army from using American-made satellites sold abroad." The article went on the say that Hughes expected the government to vet its customers.

To a joint hearing on National Security and International Relations, John D. Holum, acting undersecretary of state for arms control, called U.S. space commerce with China a "carrot" to encourage its leaders to slow or halt their sales of missiles to nations such as Iran and Pakistan. In a 1997 memo by Holum, "There's been no evidence to date that this [trade] policy is having any effect.. Carrots have gotten us nothing." Holum addressed the difference in his position by pointing out that in 1997 he was head of the Arms Control and Disarmament Agency but now he is also is an undersecretary of state.

General Accounting Office 6/19/98: China could use even the limited military deliveries from the US since the Tiananmen Square arms embargo to improve its military capabilities. President Clinton has issued waivers of military items valued at $36.3 million and licensing of commercial military exports worth about $313 million. US government exports between 1990 and 1997 include four Mk. 46 Mod 2 torpedoes for test and evaluation purposes, avionics for the F-8 fighter, and four AN/TPQ-37 Firefinder counter-artillery radar systems. Commercial exports include satellites and related equipment and Munitions List equipment for inclusion in civil products.

7/9/98 Tom Raum AP "China has obtained weapons-capable technology from the United States that goes far beyond that of satellite exports, Congress was told Thursday by the former director of the Pentagon agency that oversees technology security. ``The export-control system is falling apart'' under the present jurisdiction of the Commerce Department, Stephen Bryen, director of the Defense Technology Security Administration during the Reagan administration, told a hearing by the Senate Armed Services Committee. In particular, he cited Commerce Department approval of exports to China of supercomputers,machine tools, jet engines and high-tech furnaces. ``China has been able to get technology that was forbidden to the Soviet Union,'' he said."

[SteveStromberg]

Prepared Testimony of Dr. Stephen Bryen for Armed Services Committee US Senate 7/9/98 ".Export controls played an important role in countering the military build-up of the Soviet Union, particularly from the mid 1970's until the late 1980's, by denying the Soviets technology to enhance the qualitative capability of their weapons systems. Today the export control system is in disarray. Most of the key components of the program have disintegrated. A vast array of sensitive goods and technology has been decontrolled, making it easy for potential adversaries and hostile countries and groups to acquire technology they can leverage against us. Even the remaining controls appear to be administered loosely, and the quality of review seems to be slipshod. Critical elements of the export control program, particularly end-user checks and verification, have been scuttled to accommodate customers, especially China, the only country that will not allow post shipment checks, and the only country to get away with denying US authorities this access.China has been able to get technology that was forbidden to the Soviet Union.."

Softwar 7/98 ".In 1994, just prior to traveling with Brown, Mr. Schwartz had his LORAL staff prepare a shopping list for the Chinese and Ron Brown. This list, complete with very big pictures, would make LORAL's large ticket items easier to understand and digest at Ron Brown's (executive) level. However, the same list would also make anyone familiar with military equipment go bananas. On that day Ron Brown stopped being Secretary of Commerce and started his new career as an international arms dealer. The items LORAL carried to the meeting with Ron Brown resemble a JANE'S Defense catalog of high tech weapons. Some of the Loral suggested "red" ticket items up for sale included "Airborne Reconnaissance Cameras, Weapon Delivery, Target Acquisition, Missile Guidance, Shipboard Target Acquisition, Radar Warning, Missile Warning, RF Jamming, IR Jamming..." and so on. Please note - Anything that starts with "weapon", "missile" or "target acquisition" does NOT qualify as a civilian application. The result of the 1994 China trade trip? Today, China is using Loral satellites to perform all weather bombing using a "western" based navigation system in their modified Russian SU-27 FLANKER jet fighters. These navigation aids were originally sold to China under the condition they would be used on "civilian" airliners. Of course, now that the satellites are under PRC control, their civilian operation has been shifted slightly. The SU-27s are made in Russia (soon to be copied by license in China) and they are not going to complain about the navigation gear being tuned to Schwartz's satellites. Thus, the next bombs to fall in anger from a PLA warplane will come courtesy (and with great accuracy) via the USA. Another US, high-tech, upgrade for the benefit of China's Generals and Commissars is their new secure military communication system. China is now using US built secure encoding systems to protect their military satellite and global communications. This 21st century system is a decades leap forward for the Chinese, who previously depended on former Soviet built analog scramblers to protect their highest military orders. The great leap forward for the PRC did not come at the end of years of costly R&D followed by careful deployment. Instead, the Princes in Beijing can now issue nuclear launch code orders using C4 (Command, Control, Communications, and Computers) systems that rival the best in the free west. Basically, this is because their system was built in the free west. .Additional proof of who authorized the military exports to China comes not from a SOFTWAR FOIA but from a recently published GAO report on US weapons exports to China. The GAO published a report on May 7, NSAID-98-171, which states "According to State (Department) officials, since 1990, 11 Presidential waivers have been issued removing export restrictions on 21 satellite projects. Presidential waivers were also granted to permit the export of encryption equipment controlled on the Munitions List". Thus, Bill Clinton determined it was in our national interest to arm Red China. He wrote the waivers. He authorized the sales... He took the donations.

Softwar 9/1/98 Charles Smith ".Anewly released document obtained from the Defense Department, using the Freedom of Information act, shows that DoD joined the White House in a coordinated defense of the export to China. The document, a 1996 response letter from the deputy secretary of Defense to National Security Committee Chairman Floyd Spence, R-SC, also provides a detailed view of the Chinese military C4 (Command, Communications, Computers and Control) system. In 1994 SCM/Brooks Communications purchased large quantities of secure communications gear for sale to a so called "civilian" Chinese firm, New Galaxy Technology, including real time, encrypted, fiber-optic video systems. AT&T officials who sold most of the equipment to SCM/Brooks were adamant that there was no need to check the Chinese firm, New Galaxy, since it was obviously led by a civilian, Ms. Nie Lie. However, Nie Lie was the wife of Chinese Army General Ding Henggao. In 1994, General Ding Henggao was director of the Chinese Commission of Science, Technology, and Industry for National Defense or COSTIND. COSTIND, according to the GAO "oversees development of China's weapon systems and is responsible for identifying and acquiring telecommunications technology applicable for military use." One member of New Galaxy management, according to the Defense document, was Director and President "Mr. Deng Changru." Yet, Mr. Deng Changru was then also Lt. Colonel Deng Changru of the People's Liberation Army, head of the PLA Communications corps. Another Chinese Army officer in the New Galaxy staff is co-General Manager "Mr. Xie Zhichao" who is really Lt. Colonel Xie Zhichao, Director of the COSTIND Electronics Design Bureau. In 1994, despite the red stars and green uniforms, New Galaxy was certified as a civilian company by the Brown-led Commerce Department. New Commerce Department export regulations did not require a pre-sale check on end use with civilian companies. So the deal was completed and the People's Liberation Army obtained an encrypted C4 system from America. And where was the U.S. military watchdog on this? According to the Deputy of Defense, the export was of no concern because "the PLA already has its own, extensive and very modern communications infrastructure that incorporates very advanced technologies, including fiber optic systems and a nation-wide microwave system". Again, what the Clinton DoD left out is that the German built fiber optic system sold to China never worked and was abandoned in 1994."

[SteveStromberg]

DAWN (Pakistan) 9/2/98 "Pakistan will learn little from the Tomahawk cruise missile found unexploded in Pakistan territory after the Aug 20 US attack on Afghanistan, defence and US Navy officials here say..Many experts, however, believe Pakistan could allow Chinese missile experts to inspect the Tomahawk and they could provide Pakistan the capability to do some reverse engineering. This engineering capability could be used in improving both Chinese and Pakistani missiles, their engines and other systems, including any chances of improvising the 'Ghauri' long-range missile, said to be built on North Korean technology.."

New York Times Jeff Gerth 10/19/98 ".The Pentagon was traditionally the strongest voice against technology exports, and Clinton made several appointments calculated to change the culture. William J. Perry, an executive at a Silicon Valley company who was vocally opposed to the existing system of export controls, was named Deputy Defense Secretary and then Defense Secretary. John M. Deutch, a professor with similar views, was named to a senior post at the Pentagon, and then became Director of Central Intelligence. ."One reason I ran for President was to tailor export controls to the realization of a post-cold war world," Clinton wrote.. According to a 1995 estimate, more than $1.9 billion in annual trade with China had been removed from Federal scrutiny. A ban remains in effect on the sale to China of the most militarily potent technologies, like ballistic missiles, spy satellites and advanced fighter aircraft. Beijing buys those weapons from Russia, Europe and Israel. "China has benefited more than any other country from U.S. decontrols on certain dual-use commodities enacted in late 1993 and early 1994," one Commerce Department document says. "There has been a 60 percent decrease in the number of individual export licenses required for trade with China (from 2,229 in 1993 to only 925 in 1994)." The rules shifted much of the burden for controlling exports to the companies making the deals..By 1995, the Pentagon was urging Congress to look more closely at export policy. Military officials noted that the effect of technology was cumulative, and that while individual sales might appear benign, a combination of cutting-edge acquisitions would allow an adversary to build much better bombs or radars. President Clinton, documents show, was moving in the opposite direction.."

U.S Department of Commerce Press Release (via The American Cause) 1/28/99 Eugene Cotilli, Susan Hofer, U. S. Dept. of Commerce, Bureau of Export Administration ".U.S. high technology firms investing in the Chinese market are under increasing pressure to transfer commercial technologies and know-how as a condition of market access and investment approval in the People's Republic of China, the Commerce Department's Bureau of Export Administration (BXA) said in a report released today. "Technology transfer is both mandated in Chinese regulations or industrial policies (with which U.S. companies wishing to invest in China must comply) and used as a deal-maker or sweetener by U.S. firms seeking joint venture contracts in China," the report said... The report concludes that the massive size of China's market makes it extremely difficult for U.S. and other foreign companies to ignore its commercial potential. As long as China is demanding technology transfers as a condition of doing business, and other countries are encouraging -- and in some cases actively participating in -- technology transfer schemes with Chinese entities, Chinese leverage in dealings with U.S. companies is enormous. The Bureau of Export Administration, through authorities delegated under the Defense Production Act and other statutes, has a mandate to study the US defense industrial and technology base and to develop and administer programs to ensure the continued economic health and competitiveness of industries that support U.S. national security.."

James Kynge 3/25/99 "…China is planning to offer a key trade concession to Washington by opening its domestic market to the US mobile phone standard CDMA, raising the prospect of billions of dollars in exports for American companies. An announcement of Beijing's plans to allow the nationwide provision of CDMA (Code division multiple access) systems is expected around the time that Zhu Rongji, the Chinese premier, visits the US in April. A Chinese telecoms official cautioned, however, that the announcement could be withheld if Mr Zhu encountered hostility in Washington…."



--------------------------------------------------------------------------------
James Kynge 3/25/99 "…China's plan to embrace CDMA, the mobile telephony standard created by the US company Qualcomm, could prove hugely beneficial to North American manufacturers which are developing the equipment. It could mean a significant shift in the balance of power in digital mobile communications away from Europe, where Nokia and Ericsson and Siemens are in the driving seat, and towards US manufacturers such as Lucent and Motorola….The roll-out of CDMA in China would allow Beijing to pressure US manufacturers to transfer their third generation technology - CDMA 2000 - in the same way as the Europeans are doing, a Chinese telecoms official said. This might convince Beijing to opt for a standard compatible either to US mobile phones, or to both European and US technologies."The Americans would be wise to transfer their CDMA-2000 technology. It can only help them in the Chinese market," the official said…."

[SteveStromberg]

Dean Calbreath 3/17/99 "… When China Telecom wants to lay phone lines in the Chinese countryside, it can tap an entire army of laborers to do the job. Literally. The young soldiers of the People's Liberation Army often are ordered to pick up shovels so they can lay fiber-optic lines for the telephone company's voice and data networks…The army's involvement in telecommunications goes beyond digging ditches. An army-backed company has entered a partnership with San Diego-based Qualcomm and other U.S. companies to help bring CDMA phones to China. Trading companies set up by the army have bought satellite communications equipment from Radyne ComStream and AT&T, among others. The army itself
runs several phone-equipment factories and telecom networks in southern China…… Much of the investigation has focused on such hot-button topics as rocket technology and multiple warheads, but sources on Capitol Hill say telecommunications is becoming an item of major concern. The chief fear: that the Chinese are using U.S.-made fiber-optic lines, cellular phones, satellite dishes and encryption technology to build a network impervious to jamming or interference….."We're creating a situation in which a strategic surprise will happen and we won't be able to read the other side's mail," says Peter Leitner, a trade specialist with the Defense Technology Security Administration at the
Pentagon. "We won't be able to prepare for the other side's actions, dissuade them from happening or, perhaps, pre-empt them. And that makes the world a more dangerous place."….Hua Mei's principal partner is a company controlled by the Chinese army. The chairwoman of Hua Mei is Nie Li, the wife of Gen. Ding Henggao, chief of the Chinese ministry responsible for developing technology for the
military. Hua Mei's vice chairman, Xie Zhiehao, is a lieutenant colonel in the PLA who heads ministry's electronics bureau. Several other board members are military officers or have direct ties to the military.
"Such a high degree of involvement in Hua Mei could indicate a strong military interest in the company," said the U.S. General Accounting Office in 1997. The Chinese army had reason to be interested. According to the GAO, the type of equipment AT&T was exporting had numerous military applications, including intelligence-sharing. It also enhanced the army's command and control capabilities. Katherine Schinasi, the GAO official who directed the Hua Mei investigation, does not fault AT&T for failing to notice the Chinese army's involvement in the company….. One of ComStream's biggest recent exports was a $6.2 million shipment of VSAT satellite receivers in July 1997 to China National Instruments Import and Export, which said it would use the equipment to expand China's communications infrastructure. At the time, National Instruments was a purchasing arm of the Chinese army. Mike Lee, director of Asia-Pacific sales at ComStream, says he was not aware that National Instruments is owned by the PLA. He declined to say whether National Instruments is still a customer….. The manager of Leitner's office, Michael Maloof, raised concerns about VSAT and other high-tech exports in November during Rep. Cox's hearings on technology transfers to China….. "The problem is that no one's doing an assessment of what it will mean when all these technologies are put together. Many of these technologies were
created for military use, so it shouldn't be a surprise that the Chinese would want to use them that way." ….Leitner says that even the most innocuous-sounding exports could be used by the Chinese military. Qualcomm, for instance, is testing its Omni-Tracs system to improve truck communications in southern China, under a deal struck last May with the Guangdong South Satellite Telecommunication Service. With Omni-Tracs, a small satellite dish is installed behind the cab of a truck. Not only does the dish allow the driver to engage in two-way satellite communications, but it also works as a global-positioning system, allowing the trucking company to know where its vehicles are at all times….."