Loral got no special treatment from White House, CEO asserts Republicans determined to press investigation of technology to China

May 25, 1998|By LOS ANGELES TIMES

WASHINGTON -- Bernard L. Schwartz, a major Democratic campaign donor, said yesterday that he never sought special treatment from President Clinton for his satellite company now under investigation for possible unlawful assistance to China.

"I've never sought favor nor gotten favor," said Schwartz, chairman and chief executive officer of Loral Space and Communications, on ABC's "This Week with Sam Donaldson and Cokie Roberts."

His denials did not deter two congressional Republicans from pledging to lead separate Senate and House investigations into why the Clinton administration allowed Loral to launch a satellite in China -- a special waiver that may have inadvertently helped China improve its nuclear capabilities.

Framing the issue as a question of whether U.S. national security may have been compromised in exchange for campaign donations, Sen. Richard C. Shelby, an Alabama Republican, and Rep. Christopher Cox, a California Republican, signaled in separate television interviews that they intend to conduct the investigations in a calm and bipartisan manner.

The White House has come under fire for having approved the transfer of satellite technology to China, particularly Loral's request earlier this year to mount a civilian commercial satellite on a Chinese rocket. It is not unusual for U.S. businesses to use foreign rockets, including those of China, to put satellites in orbit, but questions have been raised in this case about the possibility that Beijing gained militarily useful information from the venture.

Questions were also raised because Schwartz is a longtime Democratic donor who, in the 1996 election cycle alone, gave more than $600,000 to the party, making him the largest individual giver.

Further fueling the controversy are administration documents showing that Justice Department officials had warned the White House that a waiver to Loral would harm a department investigation of the company involving previous technology transfers to China.

But Samuel R. Berger, the president's national security adviser, speaking on CBS' "Face the Nation," said yesterday that such waivers go back to the Reagan and Bush administrations.

"Political considerations had nothing whatsoever to do with the decisions made. We made the best decision that we knew how in the national interest," Berger said.

Schwartz said insinuations of a quid pro quo are "just untrue." Although he has given more than $1 million to the Democratic National Committee, Schwartz noted that he also has given more than $10 million over the years to hospitals and schools.

"If the implication is that I would take a stand that was harmful to this country for my business interests, that's absolutely outrageous," he said.

"I have never spoken to the president of the United States about my business. I never once raised any issue that would be favorable to us and I have never sought favor nor gotten favor," Schwartz added.

As a part of his investigation, Shelby, who heads the Senate Select Committee on Intelligence, said he intends to find out where the heads of the CIA and the National Security Agency stood on the Loral waiver.

"Where were they? Were they asleep somewhere?" Shelby said. "I believe that, when it comes to national security, that there should be a real scrutiny of whatever we sell in the world."

Shelby and Cox, who was named by House Speaker Newt Gingrich to lead a House investigation, also urged Clinton to postpone his June trip to China. The plea was strongly endorsed by Gingrich, who spoke on CNN's "Late Edition" via satellite from Israel.

Gingrich called the president's trip "very inappropriate" in light of the unfolding controversy, and said its timing would be "very, very inauspicious."

Cox vowed on NBC's "Meet the Press" to lead a "very collegial" investigation.

Pub Date: 5/25/98

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