By John Mintz
Washington Post Staff Writer
Wednesday, July 8, 1998; Page A24

No one -- at least in the United States -- knows exactly what happened when a Chinese Long March rocket carrying a U.S. satellite exploded seconds after takeoff in February 1996. But the Clinton administration and its critics each have a theory.

Congressional Republicans say that Chinese officials may have retrieved American encryption devices from the debris, compromising classified U.S. communications codes. Administration and industry officials say chances are extremely remote that the Chinese found the sensitive gear. "The most likely explanation is the devices were destroyed in the wreckage," a senior administration official said.

The differing views are at the core of the controversy over whether the crash of the Loral Space & Communications Ltd. satellite resulted in the Chinese acquiring classified information. In May, Congress voted 364-54 to bar future launches of U.S. spacecraft on Chinese rockets, asserting that the space deals could help China improve its ballistic missiles. The launches' critics cite the possible loss of the encryption chips as evidence that lofting American satellites in China is risky.

At a Senate Governmental Affairs committee hearing today, administration officials are expected to repeat their view that the sensitive devices were destroyed in the crash. But they say that even if the Chinese did recover the microprocessor chips, it's unlikely they learned anything. "The National Security Agency doesn't consider it a big deal," the administration official said.

"Any loss of the chips . . . would have had only minimal impact on national security," the NSA said in a statement last month, in part because the 20-year-old chips could have worked to encrypt or decrypt signals, controlling the spacecraft's movement in space, beamed only to or from that particular satellite.

The agency also said it has made routine upgrades since the accident to the algorithms or sets of instructions governing U.S. satellite cryptographic gear, so even if the Chinese found a device, it "cannot be employed to gain access to or control" other satellites.

Within a day after the February 1996 accident, a U.S. search team that thoroughly inspected the debris-strewn hillside in southern China where the crash occurred concluded there was "slim to no chance" the Chinese found the two American cryptographic chips, informed industry executives said.

Rep. Curt Weldon (R-Pa.) and other critics of U.S. satellite policy point out that Chinese officials didn't allow U.S. engineers and a Pentagon official to inspect the field of debris for five hours. Weldon is a member of a special House committee, chaired by Rep. Christopher Cox (R-Calif.)

Industry officials involved in the launch said even after the delay, an official of the Pentagon's Defense Technology Security Administration [DTSA] didn't want to leave the spectator bunker because of dangerous, burning rocket propellant still in the air.

A U.S. inspection team -- consisting of representatives from DTSA, Loral, and Intelsat, the communications consortium that had planned to use the satellite -- later found pieces amounting to only one-third of the satellite. "The rest was in twisted clumps," an industry executive said.

The encryption chips were only two among the more than 1,000 computer chips built into about 100 circuit boards that were to control the satellite's communications and its movement in space. Those circuit boards resemble trays that, in turn, are slipped into the approximately 10 file cabinet-size rectangular metal boxes, called command processor units, installed in the satellite.

The U.S. team found bits of 12 of the 100 trays, including three mostly intact trays. These were sent to Loral's satellite factory in Palo Alto, Calif., in a large tub for further review.

Chinese searchers could not have known which were the encryption chips and which were among the satellite's hundreds of other chips because they are indistinguishable, industry and government officials said. Only Loral employees in California could tell the chips apart by comparing company records with code numbers on the half-melted hardware.

"There's no way the Chinese could tell an encryption chip from another chip, so why did they leave them on the ground?" the administration official said. "They'd have stolen all the chips if they wanted the encryption chip."