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Loral's Bernard Schwartz with President Clinton during a June 1997 Democratic fund-raiser in Washington. (AP File Photo)

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China Denies Contribution Charges (Washington Post, May 20)

Loral Denies Benefits in Return for Donations (Washington Post, May 19)

Loral Company Statement


Gingrich to Create Special Panel to Probe China Technology Deal

By Juliet Eilperin
Washington Post Staff Writer
Wednesday, May 20, 1998; Page A04

House Speaker Newt Gingrich (R-Ga.) announced yesterday that he would create a select committee to probe allegations that China illegally obtained missile technology from a U.S. company that received favorable treatment from the administration.

Rep. Christopher Cox (Calif.), who is a member of the House GOP leadership and vice chairman of the Government Reform and Oversight Committee, will head the eight-member panel composed of five Republicans and three Democrats.

"This has nothing to do with campaign finance. This has to do with national security," Gingrich said. "This is a profoundly deeper question than any other question that has arisen with this administration."

The Justice Department is investigating allegations that Loral Space and Communications and Hughes Electronics Corp. helped improve China's missile guidance systems by analyzing a failed 1996 satellite launch in China. In addition, the department's campaign finance task force is deciding whether to open a criminal probe of the White House's decision this year to grant Loral a waiver for another satellite launch in China.

Republicans questioned whether the administration granted the waiver because Loral's CEO, Bernard Schwartz, was the party's largest single donor in the 1996 election.

Gingrich also said he wanted the panel to look into whether the administration was influenced by donations that Democratic fund-raiser Johnny Chung has alleged came from a Chinese military officer.

Minority Leader Richard A. Gephardt (D-Mo.) declined to respond to the speaker's plan because he has not received a formal proposal from Gingrich. Last week, however, Gephardt said, "I don't think that it is good to run the Congress setting up special committees every time some new problem comes along."

Gingrich questioned why Democrats, who have repeatedly criticized the campaign finance probe being conducted by House Government Reform and Oversight Committee Chairman Dan Burton (R-Ind.), would oppose this new panel. "They said they didn't want the current chairman, so now they don't want any chairman?" he said. "I think the country would be very curious as to why the Democrats would not want to know if the Chinese were getting American military secrets, if the White House was overruling the State Department and the Justice Department, and if the Chinese military was trying to financially influence the American political system."

Rep. Henry A. Waxman (D-Calif.), ranking minority member on the Government Reform panel, said he was not opposed to a select committee and noted he was among 100 Democrats who asked Gingrich a year ago to form a bicameral panel on campaign finance. But he questioned whether the GOP would hold a fair investigation on the administration's dealings with Loral. "The conclusions that some Republicans seem to be reaching would be tantamount to treason, but they don't have the evidence to reach that conclusion," he said. "It seems to me they want a select committee to find the facts to reach that conclusion."

Republicans said they needed to create a special panel to bring together all the committees -- National Security, International Relations, Intelligence, Government Reform and Commerce -- that have jurisdiction over questions concerning granting of waivers to U.S. companies launching satellites abroad and possible transfer of missile technology.

Cox, who emphasized that much of the information associated with the case would be classified, said, "When you have a heavy dose of national security and intelligence, it's important to keep it a reasonably close and a cooperative group." Gingrich said that the House would vote on establishing the committee early next month and that he hoped it could begin operating in mid-June. He added that the administration, which has yet to hand over documents to the relevant committees, would have to start providing information in order to ease Republicans' concerns over Clinton's scheduled trip to China next month. "I believe the president has to cooperate if he has any hope of going to China this summer," Gingrich said.

Throughout the day, GOP leaders emphasized that they saw a special committee as a way of changing how they would investigate the White House. "The whole issue is reframed, and what we want to do is make sure we get the national security focus on it," said Majority Leader Richard K. Armey (R-Tex.).

Republicans also pressed the issue of illegal Chinese donations on the House floor, passing a resolution, expressing the sense of the Congress that Burton's committee grant immunity to four witnesses. Committee Democrats have twice blocked granting immunity in a party-line vote.

© Copyright 1998 The Washington Post Company

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