By John Mintz
Washington Post Staff Writer
Thursday, June 11, 1998; Page A10

Months after denouncing President George Bush in 1992 for coddling "familiar tyrants" in Beijing, newly inaugurated President Clinton endorsed his predecessor's policy in 1993 by approving deals with China to launch U.S.-made satellites. Clinton took the action, the first of many favored by U.S. companies, despite evidence that China had sold ballistic missile parts to Pakistan, declassified White House documents show.

Clinton said Tuesday that his now controversial approval in February of a satellite deal with China by Loral Space & Communications Ltd. was "pretty routine," and the National Security Council papers released this week suggest that is true. The president has waved through every satellite export to China that was ever presented to him after aides laid out the national security risks and explained the number of U.S. jobs the deals would help create, the documents show.

In a series of public hearings starting this week, congressional Republicans are seeking to expand their field of attack from a single case – the February export waiver Clinton gave to Loral, whose chief executive is a big Democratic Party donor – to a wider assault on Clinton's China export policies.

The Senate Foreign Relations Committee, which begins a set of four hearings today, and the Senate Governmental Affairs Committee, which opens hearings next week, want to explore whether Clinton is guilty of the very sins he accused Bush of in 1992 – giving short shrift to China's alleged violations of human rights and international arms control rules, and scrambling to avoid declaring sanctions against Beijing for missile export violations.

"The Clinton administration regards space commerce with China as the golden-haired child of U.S.-China relations, and sees sanctions as strangling that child with piano wire," a Foreign Relations Committee staff member said. "This administration doesn't want to see relations with China damaged."

The papers the NSC made available to The Washington Post focus on all eight attempts by U.S. companies from 1993 to 1996 to persuade Clinton to grant waivers of U.S.-China trade restrictions to allow American satellites to be launched on Chinese rockets, an inexpensive alternative to launches in this country or Europe. As Bush had done before him, Clinton signed every waiver application, declaring the exports were in the "national interest."

"I see a lot of continuity between the Bush and Clinton approaches in these documents," a senior Clinton administration official said. "Both have tried to use these satellite exports to give China incentives to honor their commitments" in international agreements such as the Missile Technology Control Regime. China is not an MTCR member but has agreed to abide by its major provisions.

The NSC documents contain no mention of political donations or party affiliation, although they do recount domestic political considerations raised by Clinton's advisers. Republicans have suggested that Clinton's motive for granting launch approval to Loral this year was that its CEO is Bernard Schwartz, the Democrats' biggest individual donor in 1995-6. The waiver was discouraged by the Justice Department because of an investigation into Loral for allegedly violating technology transfer laws after a previous launch.

But the Clinton administration was just as enthusiastic in giving a green light to Motorola Inc. and Martin Marietta Corp. (now Lockheed Martin Corp.), traditionally GOP-leaning companies.

The first decision described in the documents involved waivers in 1993 for the launch of communications satellites made by Motorola and Lockheed Martin. Memos by NSC staff members said that Motorola's network would create 4,500 jobs and that the economic arguments for the deal "should be persuasive."

But the NSC staff members noted that the State Department was concerned about granting the waiver because of evidence China had sold components of nuclear-capable M-11 ballistic missiles to Pakistan. Spies reported that the missiles were delivered, but U.S. satellites never found irrefutable proof that the government demanded before it would stop the export of U.S. satellites to China in retaliation.

The NSC staff memos told superiors it would be "awkward" if Clinton agreed to allow the China Aerospace Corp. to launch the U.S. satellites, then hit China with sanctions after finding that the Chinese firm had sold missiles to Pakistan.

Treasury Secretary Robert E. Rubin and then-national security adviser Anthony Lake told Clinton in a July 1993 memo that "we must balance U.S. competitiveness concerns against a strong but not yet conclusive case for sanctioning China" based on existing evidence of missile sales to Pakistan.

"There are risks in granting these waivers," Lake and Rubin added. "Doing so only a month after forging a hard-won consensus with Congress on China [on most-favored nation or MFN trading status] might be seen as a backsliding" on Clinton's oath to demand Chinese compliance with weapons export rules. And "the Chinese could take the waivers as a sign we believe they have not violated MTCR."

But the Rubin-Lake memo added: "There is urgency to this decision. Unless you grant the waivers by 7/5, the U.S. contract for [the Motorola project] will be lost and the supplier will pay a non-performance penalty of $45 million."

Finally, they advised: "In terms of our economic and non-proliferation interests, we believe we should approve the waivers now. Since the satellites will not be exported until 1995 at the earliest, there is ample time to sanction China and prevent the exports from taking place" if necessary.

Clinton signed the export waiver the next day, July 2, 1993. The State Department imposed sanctions on China because of the M-11 sales a month later, stalling the satellite exports for a time, and the sanctions were lifted in 1994.

A Lake memo to Clinton about a Hughes Electronics Corp. communications satellite for China noted that the United States "has an interest in developing China's communications infrastructure and promoting access to the people and ideas of democratic societies."

But Hughes's attempt to get the White House to speed approval of this deal failed. A staff memo to Lake in June 1996 said that Hughes faced a deadline within days. "Hughes CEO [Michael] Armstrong is in China until Weds, 6/19. If possible, it would be highly desirable to get a decision on the waiver when Armstrong is still in China." But the waiver was not ready for Clinton to sign until July.

Staff writer Walter Pincus contributed to this report.