Lockheed Martin charged with arms export violations

Improper contacts with Chinese alleged


WASHINGTON -- The State Department has charged the Lockheed Martin Corp. with 30 violations of arms export laws in connection with its help in evaluating problems in Chinese-made satellite technology in 1994.

The claims, which expose the aerospace company to a possible penalty of $15 million, were detailed in a letter sent to Lockheed Martin on Tuesday by the Office of Defense Trade Controls, the State Department entity that supervises the export of military-related goods and services.

At issue are 1994 communications by Lockheed Martin rocket specialists about Chinese-made kick motors, the rocket-motor technology used to lift satellites into final orbit. At the time, Chinese kick motors had suffered multiple failures, the letter said.

Lockheed Martin's specialists went to China in January 1994 for discussions with a state-owned Chinese rocket company and later prepared a report for Lockheed's customer, a Hong Kong satellite company that was planning to use the kick motor in a 1995 satellite launching, the letter said.

The State Department has accused the company of violating the terms of its export license by discussing the motors and passing on the report to its Hong Kong client without the department's written approval.

The letter was provided to the New York Times by Lockheed officials, who said they intended to contest the accusations.

If the case is not settled, it will be heard by an administrative law judge.

The Lockheed officials said the company had offered to resolve the case by paying a fine of several million dollars, but the State Department rejected the offer.

State Department spokesman James P. Rubin said the department viewed the matter as serious, in part because "any assistance to Chinese technical capabilities in space launch has the potential to be applied to missile development."

The activities under scrutiny occurred in a different era for both the company and the government. The help concerning kick motors was provided by Martin Marietta before it merged with Lockheed. At the time, the Clinton administration was encouraging more commercial interchange between U.S. satellite makers and their Chinese counterparts.

But Congress tightened the rules following disclosures in 1998 that Loral Space and Communications was under criminal investigation for helping Chinese rocket makers solve problems in 1996 with rocket and missile-related technology. Loral has denied wrongdoing.

Government officials said that the information transferred in 1996 by Loral officials to a Chinese aerospace company raised more concerns than Martin Marietta's report in 1994 to its Hong Kong client.

Lockheed officials said they did not believe the 1994 activities were being reviewed by the Justice Department.

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