SELL THEM ANYTHING

And influence policy he has. Over the past five and a half years, Wallerstein and his allies in the administration have forsaken national- security concerns while gutting export restrictions on supercomputers, machine tools with military applications, and missile and telecommunications technology. The effect: A small number of high-technology firms have boosted their overseas sales — and the U.S. government has cooperated in placing extremely sensitive technology useful for waging war in the hands of governments that can’t be trusted. To cite just one example, in recent years U.S. companies have sold to China and Russia high-performance supercomputers at least 10 times more powerful than any these countries have had in their possession before. Supercomputers can serve many functions, but it is widely believed that these are being used in the design and production of nuclear arms.

It wasn’t supposed to be this way. In 1992, presidential candidate Bill Clinton zinged George Bush repeatedly for coddling the Chinese and selling arms to Saddam Hussein. His running mate also had a purist rhetorical record on proliferation. In an October 1991 Senate speech, Al Gore declared, “We do not have to recognize the sovereign right of all governments to acquire weapons of mass destruction if they happen to have the talent and money to waste on that process.” He ended the same speech with a call to expose “the corporations that are selling this technology of mass death . . . those whose greed could take humanity to the gates of hell and beyond.”

But the laxity that Clinton and Gore excoriated as candidates pales beside the anything-goes regime they have implemented in office. Gary Milhollin, head of the Wisconsin Project and one of Washington’s leading arms-control authorities, estimates that since the end of the Cold War there’s been a tenfold drop in the number and value of high-technology items whose export the United States controls. Last year, just 0.6 percent of all U.S. exports were subject to export controls, and the Clinton administration approved a whopping 95 percent of the applications it received for export licenses. William Reinsch, top export official at the Commerce Department, neatly conveyed the administration’s mindset when he boasted in congressional testimony recently that “yesterday’s adversaries are today’s customers.”

Why this about-face? The end of the Cold War, coupled with technological advances, made some loosening inevitable in the 1990s. But the liberalization that has taken place goes further. It is part of Bill Clinton’s relentless effort, first as a candidate, then as president, to cultivate a mutually supportive relationship with U.S. businesses. Throughout the Reagan and Bush years, American companies agitated for decontrol of exports. But it was Clinton who delivered it for them — just as he abandoned the hard line of his campaign and embraced unimpeded trade with China. So ardent has been the administration’s courting of business that its top appointees seem to give little heed to the very real implications for national security.

Under the banner of “commercial diplomacy,” Ron Brown’s gung-ho Commerce Department led the way. But in a significant departure from past administrations, the Defense Department — traditionally vigilant in the area of strategic exports — has become an enthusiastic partner in the peddling of American goods. That is the work of Wallerstein and a few other senior Pentagon appointees.

The pace of export liberalization and the manner in which it has been conducted have left some career Pentagon officials disgusted. Peter Leitner, for example, has worked at the Defense Technology Security Administration — the agency that oversees export controls for the Department of Defense — for 11 years, and during the past five years he’s worked alongside Wallerstein. In June he took the extraordinary step of criticizing his employer — the Clinton administration — in testimony before the congressional Joint Economic Committee: “The greatest single point of failure in maintaining a credible export-control system,” Leitner said,

was the neutering of the Defense Department’s traditional role as the conservative anchor of the process. This action was carried out very quickly by freezing DOD’s key staff out of the chain of command and isolating them from the decision-making process within DOD. DOD abandoned its traditional role and instructed DOD employees to side with the Commerce Department and isolate the State Department and ACDA [the Arms Control and Disarmament Agency] on many issues. This bizarre role change finds the State Department at times in the farcical position of being the lone agency making the national security case and opposing liberalization positions from DOD.

Mitch Wallerstein embodies the Pentagon’s proexport mentality — not least in that, having opened the floodgates, he refuses to acknowledge that American products may have ended up in the wrong hands. He told a Senate hearing in June, “We have no immediate evidence to suggest that the exports to China . . . have been inimical to U.S. national-security interests.” This begs the question of what are, in Wallerstein’s view, the United States’s national-security interests. Even the Commerce Department has acknowledged that sensitive American exports such as supercomputers and aviation technology have gone to the Chinese military, and the CIA concluded in a recently declassified study that during the second half of 1996, China was ” the most significant supplier of weapons-of-mass-destruction-related goods and technology to foreign countries.”

Wallerstein has hardly been alone in seeking to dismantle America’s export- control regulations. The Clinton administration’s former defense secretary, William Perry, had a history of opposing export controls dating back to his days in the Carter administration. In his 1993 confirmation hearings, he said controlling dual-use technology — technology with both civilian and military applications — was a “hopeless task” that “only interferes with a company’s ability to succeed internationally.” Other key members of the Pentagon’s pro- liberalization cabal have included Ashton Carter, deputy assistant secretary of defense for international-security affairs in Clinton’s first term, and David Tarbell, a Pentagon veteran who heads the Defense Technology Security Administration.

A sterling illustration of this group’s influence came in 1994, when McDonnell Douglas applied for permission to sell machine tools to a Chinese government agency. The Chinese had told McDonnell Douglas officials they wanted the machine tools in order to build 40 commercial airplanes known as Trunkliners. But upon reviewing the applications, many Defense Department officials became convinced the machine tools were destined for the Chinese military. (Even Wallerstein acknowledged in congressional testimony that ” machine tools are, first of all, an item which is absolutely essential to other military systems.”) A Defense Intelligence Agency analysis said the amount of material McDonnell Douglas proposed to sell was well above what China needed to build the 40 aircraft. A separate analysis by the Defense Technology Security Administration (partially reprinted in John Fialka’s new book, War By Other Means) noted China’s habit of selling missile systems to Iran and Pakistan and said it would be impossible for the United States to prevent the McDonnell Douglas machine tools from being used by China’s military. These sentiments were echoed by officials in the Navy, the Air Force, and the Joint Chiefs of Staff.

Other discrepancies in China’s account of what it would do with the machine tools were revealed, but Clinton appointees continued to push for the sale. Staffers at the Defense Technology Security Administration never had any doubt the applications would be approved. In fact, Wallerstein, Perry, and the Pentagon’s other liberalization advocates strongly supported the McDonnell Douglas sale, and Commerce approved the licenses in September 1994.

It didn’t take long to see why so many Pentagon officials had been opposed. Just six months after the export licenses were approved, McDonnell Douglas discovered its machine tools were being diverted from the intended commercial aircraft facility to another where fighter aircraft and cruise missiles were produced for the People’s Liberation Army. A November 1996 General Accounting Office assessment notes that once McDonnell Douglas reported the diversion in April 1995, it took seven months for the Commerce Department to begin an investigation. Commerce and the Customs Service are currently investigating under the direction of the Justice Department, and a grand jury is pondering the matter. Yet there is no indication that the episode has altered the administration’s seeno-evil posture.

Another example of Wallerstein and other top Pentagon officials’ seemingly blind commitment to their policy came in the now-controversial case of supercomputers. Easing controls on supercomputer exports was a longtime goal of the liberalizers, who argued that with the spread of technology the controls were useless and adversely affected American companies. This group got a big boost in 1992 when a number of prominent Silicon Valley executives, who opposed the Bush administration’s relatively strict standards for granting export licenses, organized in favor of Bill Clinton’s candidacy.

Once Clinton was elected, it didn’t take long for the climate to change. In September 1993, shortly after hosting a White House lunch for Edward McCracken, chief executive officer of Silicon Graphics, Clinton wrote McCracken a letter spelling out the reforms he was considering. They included liberalizing computer and telecommunications controls, reducing processing times, expanding distribution licenses, and eliminating unilateral U.S. export controls. “One reason I ran for president,” Clinton wrote, “was to tailor export controls to the realities of a post-Cold War world.”

On September 29, 1993, Clinton announced a massive liberalization of export controls on supercomputers, but that wasn’t enough for some in the administration. Shortly after the announcement, the Pentagon set out to determine how much further liberalization could go, and Wallerstein had the study assigned to an outside consultant named Seymour Goodman.

Hiring Goodman to perform the study telegraphed the administration’s intentions, since Goodman had regularly agitated for liberalization on panels convened by the National Academy of Sciences. By contrast, the Pentagon’s technical experts had little sympathy for liberalization. The arrangement with Goodman was both a means of circumventing these inhouse skeptics and an instance of the cronyism infecting the Pentagon. Wallerstein knew Goodman from the National Academy of Sciences, and Perry knew him from their work together at Stanford University’s Center for International Security and Arms Control.

As it turned out, the administration deemed Goodman’s initial conclusions excessively timid. Wallerstein, Tarbell, and Ken Flamm, deputy assistant secretary of defense for economic security, rejected a draft in the summer of 1995. Pentagon sources told me all copies were ordered confiscated and Goodman was instructed to recommend policy changes that would leave even fewer U.S. supercomputers subject to export licensing.

Goodman did as he was told — and in the process made some of those participating in the study unhappy. A confidential Energy Department analysis charged that the revised recommendations were ill advised and had been arrived at through dubious methodology. “The impact of the decontrol levels,” said the Energy memo,

will be to permanently mortgage U.S. technological superiority, which is absolutely essential to the successful projection of U.S. power now and in the future. The report’s authors never mention what military uses potential adversaries can use these HSC’s [high-speed computers] for. Nor do they assess the impact upon U.S. military power or on future defense spending requirements that such availability may portend.

Goodman acknowledged in his revised study that “time constraints were such that we were not able to do a comprehensive review.” He urged “a more comprehensive examination” of the question as soon as possible. But those cautions didn’t stop Clinton from announcing sweeping changes in October 1995. To the delight of the high-tech industry, U.S. companies received wide new latitude to export supercomputers. Most striking, the old standard for determining whether an item could be exported — whether it was already available in foreign markets — was jettisoned. As recommended in the Goodman study, U.S. companies can now export any product expected to be available in foreign markets within two years. Another provision in Clinton’s announcement decrees — amazingly — that American companies must seek government permission to export supercomputers to a list of countries including China and Russia only if they believe the machines are actually destined for military use.

It hasn’t taken long for the adverse consequences of these policy shifts to appear. Earlier this year, McCracken’s Silicon Graphics acknowledged selling four supercomputers to one of Russia’s two premier nuclear-weapons design laboratories, Chelyabinsk-70. Silicon Graphics officials didn’t seek a license for the export because they claim to have thought Chelyabinsk-70 intended to use the computers for environmental and ecological purposes. And then at a June congressional hearing, Commerce’s William Reinsch made the startling announcement that 47 supercomputers had been sold to China over the previous 15 months. Stephen Bryen, who oversaw export controls in the Reagan Pentagon, notes that this transfer of technology is “unprecedented” in U.S. history. Bryen speculates that it gives China more supercomputers than are currently available to the Department of Defense and all the national laboratories put together. In fact, there is no reason to assume that these 47 are all the U.S. supercomputers that have made their way to China; given the laxity of reporting requirements, experts say there could be hundreds more that are capable of being easily upgraded.

Yet even in the face of this evidence, the administration shows no sign of recognizing the danger of its export policies. Secretary of State Madeleine Albright did protest, in a June 30 meeting with China’s foreign minister, Qian Qichen, that an American supercomputer had been diverted to a Chinese military facility. But more revealing is the White House’s opposition to an amendment to the Defense Department authorization bill that would place new demands on American companies looking to export supercomputers to countries like China and Russia. The proposal, cosponsored by Rep. Floyd Spence, the conservative chairman of the National Security Committee, and Rep. Ron Dellums, a liberal Democrat, is a small step toward restoring some integrity to the exportcontrol process. But when Senate Republican Thad Cochran introduced a more stringent proposal a few months ago, the White House worked hand in glove with the computer industry to fight it, and it received only 27 votes.

As a result of the Clinton administration’s virtual abandonment of nationalsecurity curbs on U.S. exports, the United States has joined China and Russia as a leading contributor to the global proliferation of weapons- making technology. Yet not only does the administration oppose the Spence/Dellums amendment, it also has asked Seymour Goodman to conduct still another study of supercomputer liberalization — under the supervision of none other than Mitch Wallerstein. Thus, the lingering question isn’t whether the study will recommend further liberalization, but only how reckless its recommendations will be and how much damage they will do to U.S. security.

One has to wonder what sort of disaster it will take for the White House to rethink its aversion to export controls. Seven years ago it took Iraq’s invasion of Kuwait before the Bush administration cut off Saddam Hussein. In the 1930s it took Hitler’s invasion of Poland before British prime minister Neville Chamberlain stopped selling high-performance airplane engines to Nazi Germany. “Trade, like religion, should recognize no frontiers,” Chamberlain fatuously pronounced. Mitch Wallerstein and other Clinton administration officials might want to contemplate the consequences of those words as they arm unreliable nations in their quest to please American business.

Matthew Rees is a staff writer for THE WEEKLY STANDARD.