State Department accuses Boeing, Hughes of export violations

Wednesday, January 1st 2003, 12:00 am

By: News On 6

WASHINGTON (AP) _ The State Department is accusing two leading aerospace companies of illegally providing rocket technology to China that could be used for intercontinental missiles.

Hughes Electronics Corp. and Boeing Satellite Systems Inc. are accused of illegally giving technical data to China following failed launches by China of rockets carrying American satellites in 1995 and 1996.

In a letter filed Dec. 26, the State Department says the companies committed 123 violations of the Arms Control Export Act and the International Traffic in Arms Regulations.

If the violations are upheld through the department's administrative appeals procedures, the companies could face restrictions on selling technologies overseas. They also could face fines of $500,000 per charge, though it is not clear if each violation would constitute a separate charge.

``The number and substance of charges reflect the seriousness of the violations,'' said Lou Fintor, a State Department spokesman. ``There are many similarities between a space launch vehicle and an intercontinental ballistic missile.''

Officials of the companies could not be immediately reached for comment.

The Washington Post, which first reported the charges in its Wednesday editions, quoted a Hughes Electronics spokesman, Robert Marsocci, as saying the company believes it did nothing wrong and that it is negotiating with the State Department.

The Post also reported that the Justice Department had conducted a criminal investigation of the two companies and a third, Loral Space & Communications Ltd., but decided not to file charges.

Loral reached a civil settlement with the State Department in January, agreeing to pay a $20 million fine, of which $6 million would be used to create procedures to insure it wouldn't violate export regulations in the future.

``We can note that unlike Loral, Hughes and Boeing have both failed to recognize the seriousness of the violations and have been unprepared to take steps to resolve the matter and to ensure no recurrence of violations in the future,'' Fintor said.