Wisconsin Project on Nuclear Arms Control

Testimony: Selling US Supercomputers

April 15, 1997April 3, 2017 By Gary Milhollin

Testimony of Gary Milhollin

Professor, University of Wisconsin Law School and
Director, Wisconsin Project on Nuclear Arms Control

Before the House Committee on National Security
Subcommittee on Military Procurement

April 15, 1997

I am pleased to appear before this distinguished Subcommittee to discuss the sale of American supercomputers to foreign entities that develop nuclear weapons. I am a member of the University of Wisconsin law faculty, and I direct a research project here in Washington that is devoted to tracking and inhibiting the spread of nuclear weapons to additional countries.

The Subcommittee has asked me to describe the sales that have happened recently, and to assess their impact on U.S. national security.

The sales and their impact

This past January, Viktor Mikhailov, Russia’s Minister of Atomic Energy, shocked the United States government by announcing that his ministry had managed to buy powerful American supercomputers for Russia’s nuclear weapon laboratories.

It turned out that Silicon Graphics, Inc., a computer firm headquartered in Mountain View, California, had shipped supercomputers to Chelyabinsk-70, the second most famous nuclear weapon laboratory in Russia, without obtaining the required U.S. export licenses. Chelyabinsk claims to have developed the world’s most powerful hydrogen bomb and is roughly equivalent to our Lawrence Livermore National Laboratory. The computers were delivered in the autumn of 1996, at virtually the same time that the White House was turning down requests from IBM and Hewlett Packard to sell computers of equal power to Chelyabinsk.

The White House decision came after a long interagency debate. Virtually all of the concerned agencies–the Departments of Energy, State and Defense–opposed the exports by IBM and Hewlett Packard. So it was a considerable shock to have such a broad decision on U.S. policy overturned by the act of a single exporter, especially one who didn’t comply with the law.

Silicon Graphics sold four machines to the Russians, all from its “Power Challenge Deskside” product line. Two were configured with eight microprocessors each and the other two with four microprocessors. By adding additional processors, which are not controlled for export, each computer could be made to operate at 4.4 billion operations per second. According to a Silicon Graphics vice-president, Silicon Graphics also shipped upgrades to the computers in January. Thus, each machine was at least four times more powerful than anything the Russians had before, and according to Mr. Mikhailov, ten times more powerful.

With them, Russia will be able to design nuclear warheads cheaper and faster through simulations and will be able to design more accurate long-range missiles. Mr. Mikhailov has declared to the press that Moscow is still designing new nuclear weapons. Russia will obey the new test ban treaty, he said, but will now design its warheads with simulated explosions–using computers from Silicon Graphics. “Like the United States, we have great expertise in this area,” he boasted. In effect, Russia will continue the nuclear arms race on computers made in America.

Russia could also use the machines to do encryption, or to design advanced conventional weapons. Because the machines were shipped without an export license, and are located at a site that is mostly closed to the outside world, Russia can put them to any use it wants.

Only an innocent mistake?

Silicon Graphics claims that it only made an innocent mistake and that it had no idea what Chelyabinsk was up to. Anybody who believes that believes in fairy tales.

Chelyabinsk-70 has been designing nuclear weapons for forty years. In 1992 it was officially declared a Federal Nuclear Center by President Boris Yeltsin. In May 1995, the Commerce Department’s Bureau of Export Administration published The Russian Defense Business Directory, a guide to acquaint American exporters with Russia’s military sites. The guide listed Chelyabinsk-70’s “product line” as the “development of nuclear weapons.” Its civilian line was listed as “N\A.” The guide stated that Chelyabinsk-70 “has…expertise in the entire development of nuclear weapons, including nuclear physics, hydrodynamics, [and] mathematical modeling….” This was the clearest notice possible to exporters that Chelyabinsk was a nuclear weapon design site.

In a memorandum dated January 15, 1997, which Silicon Graphics sent to the Commerce Department, Silicon Graphics admitted that it sold the computers to the “All-Russian Scientific Research Institute for Technical Physics (VNIITF),” which is the official name for Chelyabinsk-70. The memo proves without a doubt that Silicon Graphics knew where the computers were going at the time of sale.

Silicon Graphics personnel have admitted to me, in telephone conversations, that Silicon Graphics does a lot of business in Russia. Silicon Graphics has a sales office in Moscow with Russian personnel. It is simply incredible that these Russians would not know the market for supercomputing in Russia, and not know what Chelyabinsk had been doing for forty years.

It is also incredible that Silicon Graphics did not notice that its biggest competitors, Hewlett Packard and IBM, had applied for export licenses to sell to the same buyer. IBM applied after reading about Hewlett Packard’s application in the New York Times. But according to Silicon Graphics, not only do its employees not read the Commerce Department’s guides to foreign markets, they don’t even read about their competitors in the newspapers.

The deal has all the earmarks of a deliberate violation of the law. But whether it was deliberate or not, it was clearly illegal.

Under the U.S. Export Administration Regulations, an American company needs an export license to ship any computer operating above two billion operations per second to a “tier three” country. These countries include China, India, Israel, Pakistan and Russia. There is an exception, which Silicon Graphics has claimed in this case, called the “CTP exception.” It provides that a computer that performs between two and seven billion operations per second can be sold without a license to an end-user that is not a nuclear, chemical/biological, missile or military site. Chelyabinsk-70 is both a nuclear site and a military site, so the exception fails on two counts.

If an exporter claims the CTP exception, the exporter must be sure that the end-user qualifies for it. The burden is on the exporter to find out enough about the buyer to determine whether the exception can be used. Silicon Graphics admits that it didn’t find out. Its defense is that it didn’t ask enough questions. But that is no defense when you have an obligation to ask enough questions. Silicon Graphics either knew that Chelyabinsk was a nuclear and military site, or it didn’t bother to find out. Either way, Silicon Graphics broke the law.

I have discussed this view of the export control regulations with career-level experts at the Commerce, Defense and Energy Departments. They all agree that it is correct, and that it is the basis upon which they presently administer export controls.

I urge this Subcommittee to ask the Commerce and Energy Department representatives who are here today to affirm that the burden was on Silicon Graphics to be sure the exception applied. In addition, the Subcommittee should ask them to affirm that Chelyabinsk-70 is a nuclear and military site, and that it does not qualify for the exception.

Helping China too

To make matters worse, Silicon Graphics has acknowledged selling an even more powerful supercomputer to the Chinese Academy of Sciences, which helps develop China’s long-range missiles.

Joseph Dinucci, head of corporate marketing for Silicon Graphics, told me on February 21 that his company had shipped the computer to China last spring, also without an export license. The computer sold to China was about twice as powerful as the ones sold to Russia. It performs approximately six billion operations per second.

Under Commerce Department regulations, computers performing more than two billion operations per second cannot be shipped to nuclear, chemical/biological, missile or military sites in Russia or China without a Commerce Department export license.

Mr. Dinucci said that Silicon Graphics was “very comfortable” with the sale, which he said was “well executed” and did not require an export license. Mr. Dinucci did not say why the sale did not require a license, but the only exception to the license requirement is for buyers that do not conduct nuclear, chemical/biological, missile or military activities. But according to Chinese government publications, the Chinese Academy of Sciences oversees institutes that perform missile and military research as well as research related to nuclear weapons.

In the 1970s, the Academy helped develop the flight computer for the DF-5 intercontinental missile, which can target U.S. cities with nuclear warheads. The Academy’s Mechanics Institute has also developed advanced rocket propellant, developed hydrogen- and oxygen-fueled rockets, and helped develop the shield for the warhead of China’s first ICBM. Its Shanghai Institute of Silicate successfully developed the carbon/quartz material used to shield the tip of the reentry vehicle from the heat created by the earth’s atmosphere.

The Academy’s Institute of Electronics has built synthetic aperture radar useful in military mapping and surveillance, and its Acoustic Institute has developed a guidance system for the Yu-3 torpedo, together with sonar for nuclear and conventional submarines.

In the nuclear field, the Academy has developed separation membranes to enrich uranium by gaseous diffusion, and its Institute of Mechanics has studied the effects of underground nuclear weapon tests and ways to protect against nuclear explosions. It has also studied the stability of plasma in controlled nuclear fusion. Its Institute of Electronics has developed various kinds of lasers used in atomic isotope separation.

According to information published by Silicon Graphics, its “Power Challenge XL” model was sold to the Academy with sixteen processors and is now the “most powerful SMP supercomputer in China.” According to information I have received from industry sources, the most powerful computers previously sold to China operated at approximately 1.5 billion operations per second. If this information is accurate, the Silicon Graphics machine is roughly four times more powerful than anything China had before.

The new computer, which was financed by a loan from the World Bank, has become the centerpiece of the Academy’s new Computer Network Information Center, where, according to Silicon Graphics, it provides China “computational power previously unknown.” According to information published by the Academy, the computer is now available to “all the major scientific and technological institutes across China.”

This means that any Chinese organization that is designing nuclear weapons or long-range missiles has access to it. In effect, Chinese weapon designers can use the Silicon Graphics machines to design lighter nuclear warheads to fit on longer-range and more accurate missiles capable of reaching U.S. cities. This is a giant loss for U.S. security.

Silicon Graphics has also announced plans to expand the Academy’s supercomputer to a full 36 processor configuration, which would more than double its existing power and allow it to operate at above thirteen billion operations per second. The Subcommittee should ask the government today whether that expansion has taken place, and if so, whether it was licensed, and if not, whether it will be licensed in the future.

A disaster waiting to happen

The Commerce Department shares the blame for allowing these sales to happen. Early last year, the administration’s nuclear experts asked the Commerce Department to send American computer makers a list of the sensitive nuclear sites in Russia and China. The experts wanted to put the companies on notice, so they wouldn’t unwittingly sell high-power machines to these places. The experts wanted to head off exactly the kind of claim that Silicon Graphics is now making. But Commerce refused to publish a list, saying it was against U.S. policy to name such sites in friendly countries.

Why was there a danger of unwitting sales? Because, to please exporters and especially Silicon Valley, Commerce has abruptly slashed export controls on strategic technology to a tenth of what they were in 1992. In 1992, no computer performing more than 12.5 million operations per second could go to Russia or China without an export license. Now, computers up to seven billion operations per second can go without a license, providing the sale is not to a nuclear, chemical/biological, missile or military site.

This has resulted in what the Commerce Department calls an “honor” system. The exporter can ship a powerful supercomputer to a proliferant country without telling anybody, as long as the exporter decides that the computer is going to a safe location. In fact, this is really a “dishonor” system, in which the exporter makes more money if it closes its eyes and holds its nose.

The best proof that this system doesn’t work is what Silicon Graphics has done. It has outfitted nuclear and military sites in Russia and China, and has probably done the same in India and Pakistan, all under this “honor” system, and all without telling anybody. If Mr. Mikhailov hadn’t bragged to the press about getting his supercomputers, we probably wouldn’t know about these sales even today.

The Subcommittee should ask Silicon Graphics to make public all of its sales to China, to Russia, and to all other tier three countries during the past two years. The data should cover all computers performing above two billion operations per second. With this information, the Subcommittee and the public can evaluate how this “honor” system works. It can also evaluate how the sales have affected U.S. national security.

What should happen next?

I have five recommendations.

First, the Subcommittee should urge the Commerce Department to cut off the kind of sales that Silicon Graphics has just made. The “honor system” is broken. It needs to be fixed. To fix it, the Commerce Department should immediately notify U.S. computer makers that they must apply for an export license for any computer operating at more than two billion operations per second shipped to a tier three country. This would stop companies like Silicon Graphics from exporting to known bomb makers while claiming not to know what the bomb makers are doing. If the Commerce Department thinks this change would be an administrative burden, it should furnish data on how many inquiries would be likely to result. Because the Commerce Department is only processing one tenth as many cases now as it did before the end of the cold war, there should still be sufficient staff to do the job.

Second, the Subcommittee should ask the Commerce Department not to approve any additional computer sales to tier three countries without first forwarding the applications to this Subcommittee for oversight review. The Subcommittee should be given fifteen working days to review the applications. Mr. Mikhailov has announced that in 1997, he expects to buy even more powerful American supercomputers, ones that will perform 100 billion operations per second. And Silicon Graphics has announced that it will upgrade the supercomputer at the Chinese Academy of Sciences. The Subcommittee should oversee the Commerce Department’s review of such sales.

Third, the Subcommittee should require the Commerce Department to keep the Subcommittee informed of the progress of the Commerce Department’s investigation and of its deliberations on penalties. Given the grave consequences of the Silicon Graphics sales, the Commerce Department should consider suspending Silicon Graphics export privileges for six months to a year. That would get industry’s attention, and show that our export control laws still mean something. The Subcommittee should also consider barring Silicon Graphics from U.S. defense contracts.

Fourth, the Congress should oppose any further cuts in export controls on computers. The defects of the present system have been created by the headlong desire to slash controls without considering the strategic cost. We are now suffering the consequences of this wrong-headed policy, and it is time for Congress to reverse it.

And fifth, the Subcommittee should examine the way the current export controls on computers were arrived at. The controls are based on a seriously flawed study commissioned without competitive bidding by the Commerce and Defense Departments. It is obvious from the study that its recommendations for decontrol are not supported by its findings. The Subcommittee should ask to see all the drafts of this study, and all the comments on the drafts by other federal agencies. The drafts and the comments make it plain that the current controls are devoid of any scientific basis. They are simply the product of a political desire to put trade above national security. Recently, the Commerce and Defense Departments have commissioned a follow-on study by the same consultants, with the objective of decontrolling computer exports even further. The Subcommittee should exercise its oversight powers immediately before another flawed study is produced.

Appendix AAttached as Appendix A is an advertisement by Silicon Graphics, Inc. for one of its powerful new workstations. The advertisement, which shows pictures of Napoleon Bonaparte and Genghis Khan, says: “Napoleon worshiped it. Genghis Khan killed for it. Now you can buy it.”

In the text, the advertisement says: “With a tool like this there could be yet another person looking to dominate the world.”

The question this advertisement raises is whether Silicon Graphics has a responsible attitude toward the possible use of its products.

Appendix BThere is now pending before the U.S. Department of Commerce an application by Silicon Graphics to increase the power of a high-speed computer that Silicon Graphics exported to Hong Kong in December 1996 (Case No. D236990).

U.S. exporters are now required to obtain an export license before shipping a computer to Hong Kong if the computer operates above 10,000 MTOPS (million theoretical operations per second). The limit for mainland China is 2,000 MTOPS.

The computer that Silicon Graphics shipped to Hong Kong in December was configured to operate at 8,840 MTOPS, which allowed it to be sold without a license because its speed was just under the licensing threshold. Silicon Graphics almost immediately applied for permission to upgrade the computer to 11,770 MTOPS, which must have been its intended speed from the beginning. The computer is located att he Chinese University of Hong Kong’s High Performance Computing Center, and will be available to its various departments of Physics, Chemistry and Engineering.

On July 1, 1997, Hong Kong will become part of mainland China, and therefore the computer will be at the service of the Chinese government in Beijing.

The Commerce Department should be required to state whether it intends to approve the export license application, and if so, what will be done to prevent the computer from falling into the hands of the mainland Chinese government.

Appendix CIn response to testimony given at this hearing by the Department of Energy, I would like to make the following comments on the extent to which the Silicon Graphics computers exported to Chelyabinsk-70 have increased the computing power available to Russia’s nuclear weapon designers:

First, Mr. Viktor Mikhailov, Russia’s Minister of Atomic Energy, declared to the press in Moscow in January 1997 that the Silicon Graphics machines increased the computing power available to Russia’s nuclear weapon designers by a factor of ten.

Second, the increase in computing power cited by the Department of Energy’s testimony is an estimate. It was a low estimate chosen from among several other higher estimates that were made by experts within DOE. Some of the higher estimates judged that Russia’s computing speed had increased by a factor of thirty to a factor of one hundred.

Third, the method that DOE used to arrive at its estimate is not credible. It assumes that virtually all the available personal computers at Chelyabinsk-70 using Pentium processors would be taken off designers’ desks and be hooked up in parallel with the most advanced software available. This is not a realistic scenario, and it does not compare the speed of the Silicon Graphics computers to the computers that Chelyabinsk was actually using before the export occurred. If such a comparison were made, the increase would be at least a factor of ten.

Fourth, DOE has a conflict of interest that should disqualify it from making an impartial estimate. Silicon Graphics is furnishing an important part of the computer power that DOE is using to maintain the U.S. nuclear weapon stockpile without underground testing. DOE officials in charge of Defense Programs have expressed the fear that if Silicon Graphics should suffer the penalty of being barred from the stockpile maintenance program, the program could be disrupted.

Testimony: China’s Role in the Spread of Weapons of Mass Destruction

April 10, 1997April 4, 2017 By Gary Milhollin

Testimony of Gary Milhollin

Professor, University of Wisconsin Law School and
Director, Wisconsin Project on Nuclear Arms Control

Before the Senate Committee on Governmental Affairs
Subcommittee on International Security, Proliferation and Federal Services

April 10, 1997

I am pleased to appear today before this distinguished Subcommittee, which has asked me to discuss China’s role in the spread of weapons of mass destruction. I have been asked to respond to two questions: First, how effective is our present “engagement” policy toward China; second, is the executive branch implementing the U.S. law concerning sanctions?

I think that the evidence is now clear on both questions. The administration’s engagement policy has run out of gas–it is no longer achieving anything significant. The process is essentially dead. Since 1994, our ambassadors have gone to China, they have held out engagement rings, and the Chinese have shut the door in their faces. This happened most recently to Mr. Einhorn last month, whose trip produced nothing. The Chinese are now refusing even to talk to us seriously about the impact of their missile and chemical exports. There is no longer any dialogue on these points. The State Department has a policy of engaging the Chinese, but the Chinese do not have a policy of engaging the State Department.

Nor is the administration complying with the sanctions law. Last fall, the executive branch finished a number of studies on China’s missile and chemical exports to Iran and Pakistan. The studies contained the legal and factual analysis necessary to apply sanctions, but they have lain dormant since then. The State Department has chosen not to complete the administrative process because if it did, it would have to apply sanctions and give up its engagement policy. The sanctions law is not achieving either deterrence or punishment, as Congress intended.

Today, China’s exports are the most serious proliferation threat in the world, and China has held that title for the past decade and a half. Since 1980, China has supplied billions of dollars’ worth of nuclear and missile technology to South Asia, South Africa, South America and the Middle East. It has done so in the teeth of U.S. protests, and despite repeated promises to stop. The exports are still going on, and while they do, they make it impossible for the United States and the West to halt the spread of weapons of mass destruction–a trend that endangers everyone.

Missiles

Chinese companies were caught selling Pakistan M-11 missile components in 1991. The M-11 is an accurate, solid-fuel missile that can carry a nuclear warhead about 300 kilometers. In June 1991, the Bush administration sanctioned the two offending Chinese sellers and Pakistan’s space agency, SUPARCO. The sanctions were supposed to last for at least two years, but they were waived less than a year later, in March 1992, when China promised to abide by the guidelines of the Missile Technology Control Regime, a multinational agreement to restrict missile sales.

But by December 1992, China had shipped roughly two dozen M-11 missiles to Pakistan. It had been a mistake to waive the sanctions.

In August 1993, the Clinton administration applied sanctions again for two years, after determining that the Chinese had violated the U.S. missile sanctions law a second time. But in October 1994, the United States lifted the sanctions early again, when China pledged once more to stop its missile sales and comply with the Missile Technology Control Regime.

But since 1994, the stream of missile exports has continued. U.S. satellites and human intelligence have watched missile technicians travel back and forth between Beijing and Islamabad and have watched steady transfers of missile-related equipment. When I queried U.S. officials last week, they said that China’s missile exports have continued up until the present moment, unabated.

In fact, our officials have learned that they were duped in 1992 and 1994. What we thought China was promising is not what China was really promising. Our officials now realize that China interprets its promises in 1992 and 1994 so narrowly as to make them practically meaningless. That is how the Chinese have justified their continuing missile exports. Because of this interpretation, China should no longer be considered as complying with the Missile Technology Control Regime.

In addition to its sales to Pakistan, China has also sold Saudi Arabia medium-range, nuclear-capable missiles, sold Syria components needed to improve Syria’s missile arsenal, sold Iran missile guidance components, and sold Pakistan complete M-11 missiles.

I have attached a table to my testimony that shows China’s mass destruction exports since 1980.

In its latest venture, China is helping Pakistan build a plant to produce M-11 missiles in Pakistan. U.S. officials said last week that activity at the plant is “very high.” If the Chinese continue to help at their present rate, the plant could be ready for missile production within a year.

This activity, combined with the State Department’s refusal to apply sanctions, means that the State Department is now giving a green light to one of the most dangerous missile plants in the world.

Poison gas

In addition to missiles, China has been selling the means to make poison gas. In 1995 I discovered, and wrote in the New York Times, that the United States had caught China exporting poison gas ingredients to Iran, and that the sales had been going on for at least three years. The State Department sanctioned the front companies that handled the paperwork, but did nothing to the Chinese sellers for fear of hurting U.S. trade relations.

China’s poison gas shipments have only become worse since then. In 1996, the press reported that China was sending entire factories for making poison gas to Iran, including special glass-lined vessels for mixing precursor chemicals. The shipments also included 400 tons of chemicals useful for making nerve agents.

The result is that by now, in 1997, China has been outfitting Iran with ingredients and equipment to make poison gas for at least five years. When I spoke to U.S. officials last week, I asked them whether there was any change in China’s export behavior on poison gas. They said that the poison gas sales had continued to the present time, unabated.

There is no reason to think that this pattern will change as long as the United States follows its current policy. If anything, China’s position seems to be hardening. China is now saying, explicitly, that it will not even talk to us about missile and chemical proliferation unless we are willing, at the same time, to discuss restraints on our arms sales to Taiwan. The arms sales, of course, are caused by China’s threat to Taiwan. And to make matters worse, the Chinese are beginning to complain about our policy of providing theater missile defenses to countries like Japan that might be vulnerable to Chinese missile attacks. The Chinese say that this is another form of missile proliferation.

Nuclear weapons

China has also been the leading proliferator of nuclear weapons in the world. China gave Pakistan nearly everything it needed to make its first atomic bomb. In the early 1980s, China gave Pakistan a tested nuclear weapon design and enough high-enriched uranium to fuel it. This has to be one of the most egregious acts of nuclear proliferation in history. Then, China helped Pakistan produce high-enriched uranium with gas centrifuges. Now, it is helping Pakistan build a reactor to produce plutonium and tritium for nuclear weapons, and helping Pakistan increase the number of its centrifuges so it can boost its production of high-enriched uranium.

In January of 1984, Chinese Premier Zhao Ziyang made his famous White House toast saying, “we do not engage in nuclear proliferation ourselves, nor do we help other countries to develop nuclear weapons.” The United States relied on that promise in making its agreement for nuclear cooperation with China in 1985. But we caught the Chinese breaking the promise immediately afterward, so the agreement never came into effect. China’s habit of making and breaking promises is not new.

China’s most recent export was of specialized ring magnets, which are used in the suspension bearings of gas centrifuge rotors. The sale was revealed in early 1996. The magnets were shipped directly to a secret nuclear weapon production site in Pakistan, and were sent without requiring international inspection. The seller was a subsidiary of the China National Nuclear Corporation, an arm of the Chinese government. In my opinion, this export violated China’s pledge under the Nuclear Nonproliferation Treaty, which it joined in 1992. Article III of the Treaty forbids the sale of such items without requiring international inspection. The sale also violated China’s pledge under the Article I of the Treaty not to help other countries make nuclear weapons. Yet, the State Department has not sanctioned China for this sale, or even complained about it publicly.

Iran is the next candidate for China’s nuclear help. China has agreed to sell Iran a 25 to 30 megawatt nuclear reactor, which is an ideal size for making a few nuclear weapons per year. And China has also agreed to sell Iran a plant to produce uranium hexaflouride from uranium concentrate.

The hexaflouride plant is essential to enrich uranium for use in atomic bombs. Bombs fueled by enriched uranium have become the holy grail of developing countries trying to join the nuclear club. Such bombs are easier to make than those fueled by plutonium because uranium is easier to work with, less toxic, and easier to detonate with confidence that a substantial nuclear yield will result. Iraq was close to making a uranium bomb when the Gulf War began. The first bomb ever dropped was a uranium bomb. The United States released it over Hiroshima without having to test it.

There is no peaceful use for enriched uranium in Iran. Enriched uranium is used to fuel reactors, but the only reactors in Iran that could use such fuel are being supplied by Russia, which is also supplying their fuel. The conclusion has to be that Iran wants to use this plant to make atomic bombs. The fact that China is even considering this deal shows that China is quite ready to put nuclear weapon-making capability into the hands of what the United States regards as a terrorist nation.

These two sales have not been finalized. In effect, they are being held over our heads like swords. If we don’t start cooperating more with China in the nuclear area, then China can simply complete these two dangerous export deals with Iran. This is fairly close to nuclear blackmail.

To sum up, I think the conclusion has to be that our engagement policy has failed and has been failing for some years. The policy is not producing any change in China’s behavior, and is not even producing engagement. The negotiation process is effectively dead. The Chinese are not even talking to us about their exports. We are just watching the shipments go out, without any hope of stopping them. All our present policy has produced is a new missile factory in Pakistan, an upgraded nuclear weapon factory in Pakistan, new chemical weapon plants in Iran, and possibly a nuclear weapon factory in Iran.

When you are losing the game, it is time for a new strategy. We need to replace our current strategy with a strategy based on linkage. We should link our cooperation with China to its export behavior. We will cooperate with China if and when China becomes a responsible member of the world community.

Sanctions

The Subcommittee has asked me specifically to discuss sanctions. It is clear that the administration is not implementing the present U.S. sanctions law. The missile sanctions law does not require evidence that an entire missile or missile components have been shipped. The law says that sanctions are to be applied whenever a foreign company “conspires or attempts to engage in” the export of missile technology to a country like Pakistan.

As I have said, the executive branch has done a legal study to determine what this language means. That study has been completed for more than a year. There has also been a factual documentation of the conspiracy. The factual study has been completed for at least six months. These studies covered China’s missile exports to both Iran and Pakistan. Thus, there is no longer any legal or factual basis for not applying missile sanctions to China as Congress intended.

The State Department has admitted this fact by implication. The State Department is no longer saying that there is “not enough evidence” to apply sanctions to China. It is now saying that it has “not yet made a determination” to apply sanctions, which is quite different. In effect, the State Department is saying that it has not applied sanctions because it has chosen not to complete the administrative process.

The sanctions law does not allow this kind of discretion. The executive branch has an obligation to weigh the evidence and apply the law in good faith. Otherwise, the law is meaningless. As things stand now, the State Department has nullified the sanctions law by refusing to carry out the administrative process that allows the law to take effect.

The status of chemical sanctions against China is similar to the status of missile sanctions. Chemical sanctions apply to any foreign person who knowingly and materially contributes to the development of a chemical weapon in a country like Iran. The evidence of China’s poison gas-related exports to Iran during the past five years is overwhelming, and the sales are still going on. The case is clear. All the analysis and documentation has been finished. The State Department is simply standing in the courthouse door, preventing justice from being done, in the same way it is doing for missile sanctions.

For nuclear-related transfers, the law is more complex. Under Section 821 of the Nuclear Proliferation Prevention Act of 1994, if the seller knowingly and materially helps a country like Pakistan obtain enriched uranium, then the seller cannot sell anything to the United States Government. In addition, under the Export-Import Bank Act, if the seller is a country, the country is not eligible for U.S. Export-Import Bank financing.

The transfer of the ring magnets to Pakistan was done by an arm of the Chinese government, and thus with the knowledge of Chinese government officials. The administration said that it did not impose sanctions because it was unclear whether high Chinese officials knew about the sale. But at least mid-level Chinese officials knew, so it is difficult to see why the Chinese government was not held responsible. Governments are routinely held liable for the actions of their agencies and employees. Indeed, governments, like corporations, can only act through their employees. This seems to be another case where the State Department was unwilling to implement the law.

Conclusion

We are following essentially the same policy toward China now that we followed toward Iraq before the Gulf War. When Iraq was caught smuggling nuclear weapon triggers out of the United States before the Gulf War, that act violated Iraq’s pledge under the Nuclear Nonproliferation Treaty not to try to make nuclear weapons. But the United States was silent. Rather than apply sanctions, or even complain publicly about Iraq’s violation, the State Department chose “constructive engagement.” It would be better to maintain our influence with Saddam Hussein through trade, the State Department said. By selling Saddam what he wanted, and by not complaining about his behavior, we would bring him into the mainstream of nations. Sanctions would only isolate Saddam, hurt American exporters and allow the Europeans and the Japanese to get all the petrodollars.

We now know what that policy produced. If Saddam had not been foolish enough to invade Kuwait, we would be facing a nuclear-armed Iraq today. And the Iraqi bomb would have been built with exports from America and its allies. To stop Saddam’s bomb, American pilots had to risk their lives to destroy factories full of equipment that the West had provided.

The lesson is that you should not make a rogue stronger while he is still a rogue. And, you don’t stop a rogue from being a rogue by treating him like a non-rogue. The message we gave Saddam Hussein was that nothing bad would happen to him as long as he bought our products. We followed a policy of “constructive engagement” and of “de-linkage.” We are giving China the same message now.

The numerous high-level visits to China by U.S. officials over the past year have produced nothing. In recognition of that, we are not even making non-proliferation a big issue in our high-level meetings. The Chinese understand this message very well. They know that even if they supply weapons of mass destruction around the world, they won’t face any penalty from us. We are acting like a paper tiger, and being treated like one. Until we put some teeth into our sanctions policy, we will just rub our gums together.

History shows that sanctions work. The only time we have managed to get any progress on proliferation out of China is when we either applied sanctions or threatened to apply them. In the face of sanctions the Chinese have an incentive to talk to us. An example is intellectual property rights. In 1994, when we threatened to impose 100 percent tariffs on more than a billion dollars’ worth of Chinese imports if China didn’t stop looting our inventions, the Chinese backed down. So far, the Clinton administration has done more to protect Hollywood videos than to stop the spread of weapons of mass destruction.

When we get serious about proliferation, the Chinese will get serious. Now, there is nothing to talk about because the Chinese don’t see any risks. If we really want to engage the Chinese, we have to show that we are willing to punish them when they break the rules. So far, we haven’t done that.

Recommendations

1. The Subcommittee should require the State Department to provide all the legal and factual analysis that has been done by the executive branch on the sanctions issue concerning China. The Subcommittee should also require the State Department to explain why it has chosen not to complete the administrative process on sanctions.

2. The Subcommittee should consider strengthening existing sanctions laws to accomplish the following:

a. Prohibit the export of U.S. commodities controlled for non-proliferation reasons for one year to all Chinese government-controlled companies if any Chinese government-controlled company contributes to proliferation through its exports. If the Chinese government is willing to proliferate, China should not be able to import American technology that could contribute to proliferation. Except for sales to Iran and Iraq, present law is confined to punishing only the company making the export, which is not a sufficient deterrent.

b. Prohibit the import into the United States of any product produced by a foreign entity whose exports contribute to nuclear arms proliferation. This would bring the nuclear sanctions law up to the level of the chemical/biological and missile sanction laws.

3. The Subcommittee should obtain and review the U.S. export licenses approved for China by the Departments of Commerce and State during the past five years. The Subcommittee would discover that both the Commerce and State Departments have allowed sensitive U.S. technology to go to the very Chinese companies that are making mass destruction exports to Pakistan. Some of the munitions exports to these companies were authorized by express Presidential waivers. Congressional oversight of our exports to China is long overdue.

Russia’s Nuclear Labs Get U.S. Supercomputers

March 1, 1997March 27, 2017

The Commerce Department is now investigating the first sale of American supercomputers to the Russian nuclear weapon laboratories. The machines will enhance Russia’s ability to design nuclear warheads and were shipped without an export license, which has raised questions about the deal’s legality.

Silicon Graphics, Inc., the California computer giant, shipped four powerful supercomputers last September to Chelyabinsk-70, the center that developed most of Russia’s nuclear warheads, including the world’s most powerful hydrogen bomb. At virtually the same time as the Silicon Graphics sale, the White House turned down requests for export licenses from Hewlett Packard and IBM, who had orders for similar computers from the same laboratory.

Each of the Silicon Graphics machines can operate at 4.4 billion operations per second, making them at least four and possibly ten times more powerful than anything previously available to the Russians. U.S. officials expressed shock at the sale, and stated that they were concerned that Russia will use the machines to design warheads cheaper and faster through simulations, and to make more accurate missiles to deliver them. “It boggles the mind that Silicon Graphics would do this,” said an official at the Department of Energy, who spoke on condition of anonymity.

Edward McCracken, Silicon Graphics’ CEO, was among a select group of Republican executives from Silicon Valley who announced their support for President Clinton last August. McCracken then became a candidate for Secretary of Commerce.

Mr. Roger Grossel, export manager for Hewlett Packard in Washington, also expressed shock that Silicon Graphics would make the sale without a license. “For that type of buyer, we would file an application,” he says. “We are not talking about PCs here.” Experts at the Commerce, Defense and Energy Departments also stated that the Silicon Graphics computers–because of their speed–needed an export license to go to Chelyabinsk.

According to a January 15 memorandum from Silicon Graphics to the Commerce Department, a copy of which was obtained by the Risk Report, the four machines were from Silicon Graphics’ “Power Challenge Deskside” product line. Two were configured with eight microprocessors each and the other two with four microprocessors. By adding additional processors, all could be made to operate at 4.4 billion operations per second. The memorandum claimed that the machines were exempt from licensing under Commerce Department regulations. It also said that the machines were sold with the understanding that they would be used for “modelling of earth water pollution caused by extension of radioactive substance.”

When queried about the sale, Bill Kelly, a Silicon Graphics vice president, told the Risk Report that Silicon Graphics shipped the machines through its non-exclusive Moscow distributor, Catalyst Silicon Solutions (CSS), a Canadian firm. Kelly also said that Silicon Graphics did not apply for an export license because Silicon Graphics did not know that Chelyabinsk was a nuclear site. However in 1995, in a guide to acquaint American exporters with Russia’s military sites, the Commerce Department listed Chelyabinsk’s “product line” as “development of nuclear weapons.” Its civilian line was listed as “N\A.” Since opening in 1955, Chelyabinsk has been one of the two best-known Russian laboratories for designing nuclear warheads. Kelly also said that Silicon Graphics had shipped upgrades to the computers in early January, 1997.

Viktor Mikhailov, Russia’s Minister of Atomic Energy, announced to the press in January that in addition to the Silicon Graphics machines, his ministry had also imported an IBM RS-6000-SP supercomputer, apparently for Arzamas-16, Russia’s other main nuclear weapon design laboratory. According to U.S. officials, computers in this series are capable of speeds comparable to the Silicon Graphics machines. U.S. officials also said that the government had not determined how the IBM machine had found its way to Arzamas, and IBM’s Washington office disclaimed any knowledge of a sale by IBM of an RS-6000-SP to Russia.

Mikhailov also announced that Moscow is still designing new nuclear weapons. Russia will obey the new test ban treaty, he said, but will now design its warheads with simulated explosions–using computers from Silicon Graphics. “Like the United States, we have great expertise in this area,” he boasted.

Chinese Missile Site Gets U.S. Supercomputer

March 1, 1997March 24, 2017

Silicon Graphics Inc., the California firm that recently admitted shipping a powerful supercomputer to a Russian nuclear weapon laboratory without the required export license, has acknowledged selling an even more powerful supercomputer to the Chinese Academy of Sciences, which helps develop China’s long-range missiles.

Joseph Dinucci, head of corporate marketing for Silicon Graphics, told the Risk Report on February 21 that his company had shipped the computer to China last spring, also without an export license. The computer sold to China was about twice as powerful as the one sold to Russia. China and Russia are subject to the same U.S. export rules for supercomputers.

The U.S. Customs Service, the U.S. Commerce Department and the U.S. Justice Department are investigating the Russian sale, which appears to be illegal, and are likely to add the China sale to their inquiry. Under Commerce Department regulations, computers performing more than two billion operations per second cannot be shipped to nuclear, chemical/biological, missile or military sites in Russia or China without a Commerce Department export license. The computer sold to China performs approximately six billion operations per second.

According to Chinese government publications, the Chinese Academy of Sciences oversees institutes that perform missile and military research as well as research related to nuclear weapons.

In the 1970s, the Academy helped develop the flight computer for the DF-5 intercontinental nuclear missile, which can reach U.S. cities. The Academy’s Mechanics Institute has also developed advanced rocket propellant, hydrogen- and oxygen-fueled rockets, and participated in the extensive research necessary to effectively shield the warhead of China’s first ICBM from the heat created by reentry into the earth’s atmosphere. Its Shanghai Institute of Silicate successfully developed the carbon/quartz material used to shield the tip of the reentry vehicle.

The Academy’s Institute of Electronics has built synthetic aperture radar useful in military mapping and surveillance and its Acoustic Institute has developed a guidance system for the Yu-3 torpedo, together with sound-speed and sound-ray tracking instruments and scouting sonar for nuclear submarines and integrated sonar for conventional torpedo submarines.

In the nuclear field, the Academy has developed separation membranes to enrich uranium by gaseous diffusion, and its Institute of Mechanics has studied the effects of underground nuclear weapon tests, together with ways to protect against nuclear explosions. It has also studied the stability of plasma in controlled nuclear fusion. Its Institute of Electronics has developed dye, carbon dioxide, and copper vapor lasers used in atomic isotope separation.

According to information published by Silicon Graphics, its “Power Challenge XL” model was sold to the Academy with sixteen processors and is now the “most powerful SMP supercomputer in China.” The purchasewas financed with a loan from the World Bank. The computer has become the centerpiece of the Academy’s new Computer Network Information Center, where, according to Silicon Graphics, it provides China “computational power previously unknown.” According to information published by the Academy, the computer is now available to “all the major scientific and technological institutes across China.”

Syria Missile Development

March 1, 1997April 5, 2017

Today, Syria has one of the largest arsenals of surface-to-surface missiles in the Middle East, including hundreds of Scud missiles that can carry nuclear or chemical payloads to targets throughout Israel. Last year, Israel’s leading newspaper, Yediot Aharonot, reported that an Israel Defense Forces document predicts that by the end of the millennium Syria will have nearly 80 surface-to-surface missile launchers and roughly 1,000 missiles, including Scud-Bs, Scud-Cs, SS-21s and FROG-7s.

Though the Israeli estimate may inflate Syria’s missile prowess, Israel does have reason to worry. U.S. officials believe that Syria has an advanced chemical and biological weapon program. In any future conflict, Israel must plan for Syrian missiles to be tipped with poison gas. “The Syrians see their missiles and chemical weapons as a strategic counterweight to what they perceive as Israel’s nuclear weapon capability.” There is also the possibility that Syrian missiles could strike Israel’s nuclear reactor near Dimona.

Damascus is determined to acquire or build its own missiles that can reach all of Israel and also threaten the capitals of Turkey and Iraq. “The Syrians want the capability to produce ballistic missiles locally,” a U.S. official tells the Risk Report, “but so far their ambition has exceeded their grasp.” With its weak industrial base and stagnant economy, Syria must rely on imports from North Korea to build liquid-fuel Scud missiles, and imports from China to develop larger, more accurate solid-fuel missiles that could fly 600 kilometers. Another official who analyzes missile proliferation concurs: “Syria has a fairly rudimentary infrastructure. It’s not as good as Egypt or Iran, but they are certainly ahead of Libya.” U.S. analysts say that there is a shortage of qualified engineers and missile technicians in the Syrian military.

Throughout the 1970s and ’80s, Syria relied heavily on the Soviet Union for missile supplies and training. But since the end of the Cold War, Damascus has turned to North Korea and China to buy missiles and the factories to produce them in Syria. U.S. officials tell the Risk Report that Damascus is now ready to mass-produce Scud-Bs that fly 300 kilometers.

Soviet FROG-7

When Syria’s President Hafez al-Assad assumed power in November 1970, he immediately began to strengthen military relations with the Soviet Union. One of the immediate results was the purchase of Syria’s first surface-to-surface missile, the FROG-7 (Free Rocket Over Ground). Within a year, Syrian technicians were invited to the Soviet Union to train on the FROG system. The FROG is an unguided, solid fuel missile with a maximum range of about 70 kilometers. It can be fired from mobile launchers and can be equipped with either a high explosive or a tactical nuclear warhead weighing 450 kilograms.

According to a 1985 study by Joseph Bermudez for the U.S. Marine Corps, the Soviet Union first shipped a half dozen transporter erector launchers (TELs) and a half dozen reload vehicles in 1972. By early 1973, an additional six TELs and six reload vehicles were sent. And by the October 1973 Arab-Israeli war, the Syrians had assumed complete operational control of the missiles.

Bermudez reported that during the 1973 war, Syria launched FROG missiles at the Ramat David air base in Northern Israel, Megiddo Airfield, Izhak ben Yaakov Airfield, and Northern Command Headquarters (in the mountains near Zefat). The missiles carried high explosive warheads, operated at maximum range, and missed virtually all their targets. Only one or two FROGs hit the Ramat David air base. The others hit civilian settlements around the air base, including Nahalal, Gevat, Yif’at, Migdal Ha’Emeq and Kefar Barukh. Syria first deployed the missiles just 3,000 meters from the Israeli border, but withdrew them to hardened positions in the mountains around Damascus after Israel’s counter attack on October 11-12. In all, Syria fired about 25 FROG-7s, of which only two or three caused any significant military damage (two are believed to have been duds, and two or three others flew off course and landed in Jordan).

Soviet Scud-B

The FROG’s poor performance led Syria to start looking for better missiles. Within a year, Moscow had agreed to replace the FROGs Syria had used in combat, and also agreed to provide Scud missiles. In 1974, a group of Syrian officers went to the Soviet Union for Scud training, and by the beginning of 1976, the Soviets had shipped a dozen Scud launchers and their support equipment.

The Soviet Scud-B is a single-stage missile that is liquid-fueled, inertially guided, and can carry a 770-860-kilogram payload up to 300 kilometers. The Soviets intended it to deliver nuclear warheads, which explains its low accuracy (CEP–circular error probable, a measure of missile accuracy–is 930 meters when fired to its full range).

It is uncertain how many Scud-Bs the Syrians now have. Syria has passed on some of the Scud-B missiles it got from the Soviet Union to Iran. The number of operational TELS in Syria is also uncertain. Intelligence analysts say it is difficult to distinguish TELs (both with and without missiles) from reload vehicles (both with and without missiles) and replacement missiles. The Middle East Military Balance, an annual survey of military capabilities published by Israel’s Jaffee Center for Strategic Studies at Tel Aviv University, estimates that as of 1994 Syria had 18 FROG-7 launchers, 18 Scud-B launchers and 7 or 8 Scud-C launchers. The TELs, along with their missiles, are reportedly stored in caverns in the mountains outside Damascus. It can take 24 hours to prepare a Scud for launch, and up to 60 minutes reaction time after it arrives at its presurveyed launch site.

Soviet SS-21

When Syria was defeated during the June 1982 fighting with Israel in Lebanon, Damascus blamed Soviet weaponry. Within a year, the Soviets had agreed to supply Syria with the SS-21, the first delivery of this missile outside Warsaw Pact countries. The missiles were shipped in October 1983. The mobile, single-stage, solid-fuel SS-21 “Scarab” can deliver nuclear, chemical or conventional payloads up to 120 kilometers. It is relatively accurate, with a CEP of approximately 300 meters, making it more accurate than the FROG-7. The SS-21’s flight time is between 3-7 minutes and its launcher can be reloaded in 15 minutes.

In 1988, Syria asked the Soviet Union for its more capable and longer-range, solid-fuel SS-23 “Spider” missile, which the Soviets had designed to replace the 1960s-vintage Scud. The SS-23 was designed to fly 500 kilometers, is more accurate than the Scud, and has a shorter refire time. Under the INF Treaty signed by Moscow in December 1988, however, the Soviet Union agreed to eliminate its SS-23 missile and not to transfer it to other countries.

North Korean Scuds

After Damascus was turned down on the SS-23, it went looking elsewhere for supplies and found a willing partner in North Korea. Press reports, citing Israeli intelligence, say the Syrians began discussing a missile deal with North Korea in late 1989, but that the financial package could not be worked out until an influx of hard currency made it possible. Operation Desert Storm provided the needed windfall. In exchange for its participation in the coalition against Iraq, Damascus received about $1 billion in aid from Saudi Arabia and other oil-rich gulf states.

Since 1991, Syria has reportedly contracted to buy more than 150 Scud-Cs from North Korea. The Scud-C is a liquid-fuel missile that was first tested by North Korea in 1991 and can fly approximately 500 kilometers. In 1991, North Korea delivered two dozen Scud missiles and 20 mobile launchers to Syria, and in March 1992 shipped some unknown quantity of Scuds, including Scud-Cs and missile components, to Syria through Iran. In August 1992, Israeli intelligence reported that Syria had tested two missiles believed to be North Korean-made Scud-Cs.

By April 1993, a report in Jane’s Intelligence Review estimated that Syria “currently possesses about 250 Scud-B and C missiles (including up to 60 Scud-Cs and about 24 -36 transporter erector launchers).” And in August 1993, Israeli Prime Minister Yitzhak Rabin accused North Korea of shipping more Scuds to Syria that summer. Rabin said that Russian planes had delivered the missiles. In December 1993, Clinton Administration officials confirmed that a private Russian airline company had transported special truck chassis that are frequently used as mobile missile launchers from North Korea to Syria. The U.S. had asked Moscow not to allow the planes to fly, but was rebuffed.

In mid-1994 and again in the summer of 1996, Syria flight-tested missiles believed to be North Korean-made Scud-Cs. Although U.S. intelligence will not reveal the exact number of Scuds Syria now has in its arsenal, U.S. Assistant Secretary of State for Intelligence and Research Toby T. Gati confirmed in his February 1997 testimony before the U.S. Senate Select Committee on Intelligence that Syria had acquired “500-kilometer Scud-Cs from North Korea.”

Israeli and Western officials also report that Syria is now building its own Scud-C missile factory with North Korean help. One senior U.S. official tells the Risk Report that he is “confident that there has been no Scud-C production yet, and it is not as clear whether they have completed any Scud-Bs through they probably will soon.”

U.S. sanctions

The United States has penalized both Syria and North Korea for their missile trade. Under U.S. law, the President can impose sanctions when he determines that an organization has sold missiles or missile-related equipment or technology to a buyer that does not adhere to the Missile Technology Control Regime (MTCR), an effort by more than 30 countries to curb missile-related exports. U.S. sanctions can apply to a foreign exporter or importer acting wholly outside the United States. By definition, U.S. penalties apply to all subunits of a penalized entity.

In July 1992, the U.S. State Department imposed two-year sanctions against Syria’s Scientific Research Center (CERS) and Syria’s Ministry of Defense for engaging in “missile proliferation activities.” Sanctions were also imposed against North Korea’s Lyongaksan Machineries and the Equipment Export Corporation and Changgwang Credit Corporation and Iran’s Ministry of Defense Armed Forces Logistics.

Chinese M-9

Over the years, Syria has been looking for a missile that can fly far enough to target military sites and cities throughout Israel but would not have to be launched close to the Israel-Syria border, where it would be vulnerable to preemptive air strikes.

In 1988, Damascus thought it had found the perfect candidate–China’s M-9 (Dong Feng-15) missile that can fly 600 kilometers. The M-9 is China’s first indigenously built, single-stage, solid-fuel, land-based missile. It was first tested in 1989, and can fly farther and is more accurate than North Korea’s Scud-C. Because it uses solid fuel, it also can be launched faster.

In July 1988, the Los Angeles Times first reported that China had agreed to sell its M-9 missile to Syria. Citing a U.S. official, the report said that China would supply an unspecified number of the missiles to Syria by 1990. To date, however, there have been no reports of deliveries.

U.S. officials tell the Risk Report that Beijing has agreed not to export its M-series missiles. One official responsible for tracking missile sales says: “There is a firm belief that there is no longer any contract for the M-9.” But it is unclear whether Beijing thinks it has made a promise. In June 1991, a Chinese Foreign Ministry spokesman categorically denied that China had supplied any missiles to Syria, but refused to answer questions about the possibility of future sales. The following month, Chinese premier Li Peng, speaking at a press conference, stated that “I can definitely say that China had not sold any [ballistic] missiles to Syria.”

Because of U.S. pressure, Beijing may not be shipping finished M-9 missiles to Syria, but Chinese companies continue to ship missile-related components and production technology. In January 1992, U.S. officials said China had delivered ingredients for making solid fuel missiles. The New York Times reported that Beijing had shipped 30 tons of chemicals (ammonium perchlorate) used to make solid-fuel missile propellant and had plans to ship an additional 60 tons. Subsequent press reports indicated that two missile plants were under construction in Syria: one in Hama and a second in Aleppo. One of the reports said the plants were designed to produce missile propellant–one for liquid fuel and one for solid fuel. Scud missiles are liquidfueled; the Chinese M-9 is solid-fueled.

Syria is also cooperating with Iran on solid fuel technology, according to U.S. intelligence. In November 1996, the Washington Times reported that according to a secret Central Intelligence Agency (CIA) report entitled “Arms Transfers to State Sponsors of Terrorism,” Iran’s Defense Industries Organization (DIO) sold Syria equipment to develop solid propellant rocket motors. Iran and Syria were also said to be cooperating on a program to convert Syrian Scud-Bs to longer range Scud-Cs.

A U.S. official is skeptical about Syria building its own solid fuel missiles. “They can only do a knock-off program, copying others’ missiles. I can see them building Scuds as long as they can import key components such as guidance packages,” he tells the Risk Report. The official points out that Syria has no systems integration capability to handle missile modifications and that it will be easiest for Syria just to assemble or copy North Korean or Chinese missiles exactly as they are.

Rein In Technology Exports

February 26, 1997April 3, 2017 By Gary Milhollin

Los Angeles Times
February 26, 1997, p. A11

POLICY: Silicon Graphics’ sales abroad of supercomputers came just in time to continue the nuclear arms race.

It should come as no surprise that Russian scientists are now designing nuclear weapons with powerful American supercomputers. When California-based Silicon Graphics improperly outfitted one of Russia’s nuclear laboratories last fall, it was the inevitable result of the Clinton administration’s penchant for putting export earnings above national security.

The Silicon Graphics computers are about 10 times more powerful than anything the Russians had before. They will enable Russia to design nuclear warheads cheaper and faster through computer simulations and to make long-range missiles more accurate. Whoever succeeds Boris Yeltsin will appreciate the help.

To make matters worse, the head of marketing at Silicon Graphics told me last week that the company sold even more powerful supercomputers to the Chinese Academy of Sciences last March. That august body helps develop long-range Chinese nuclear missiles such as the DF-5, which is aimed at American cities.

The Commerce Department is probing the Russian sale–which appears to be illegal–and will probably probe the Chinese one, but Commerce is primarily to blame for allowing them to happen.

Early last year, the administration’s nuclear experts asked Commerce to send American computer makers a list of the sensitive nuclear sites in Russia and China. The experts wanted to put the companies on notice, so they wouldn’t unwittingly sell high-power machines to these places. Commerce refused, saying that it was against U.S. policy to name such sites in friendly countries.

Why was there a danger of unwitting sales? Because to please Silicon Valley, Commerce had slashed export controls on strategic technology to one-tenth of what they were under the Bush administration. Under Bush, no computer performing more than 12.5 million operations per second could go to Russia or China without an export license. Now, computers up to 7 billion operations per second can go without a license if the sale is not to a nuclear, chemical, missile or military site.

Claiming ignorance, Silicon Graphics made the Russian and Chinese sales without an export license. “It boggles the mind that Silicon Graphics would do this,” said an official at the Department of Energy.

At virtually the same time that the Silicon Graphics computers were being sold, the White House, under media pressure, was turning down requests for export licenses from Hewlett Packard and IBM, which had orders for similar machines from the same scientists. Why? Because the scientists work at Chelyabinsk-70, the center that has developed most of Russia’s nuclear warheads, including the world’s most powerful hydrogen bomb.

Officials at the Commerce, Defense and Energy departments say that the four Silicon Graphics computers–each performing more than 4 billion operations per second–needed an export license to go to Chelyabinsk.

But Edward McCracken, Silicon Graphics’ chief executive officer, told me that the company didn’t know what Chelyabinsk was up to. That’s ridiculous. Since opening in 1955, it has been one of the two best-known Russian laboratories for designing nuclear warheads. And in 1995, in a guide to acquaint American exporters with Russia’s military sites, the Commerce Department plainly listed Chelyabinsk’s “product line” as “development of nuclear weapons.” Moreover, U.S. export laws oblige an exporter to investigate a buyer before making a sale.

As for the Russians, they got the computers just in time to continue the arms race. Russia’s minister of atomic energy, Viktor Mikhailov, told the press recently that Moscow will obey the new test ban treaty, but will now design its warheads with simulated explosions, using the computers from Silicon Graphics. “Like the United States, we have great expertise in this area,” Mikhailov boasted.

If Silicon Graphics can rewire Russia’s and China’s bomb makers without anyone knowing, it can do the same for scores of other nuclear and missile sites in India and Pakistan. All four nations are under the same computer export rules as Russia.

And there is the fact that McCracken was an influential campaign supporter of President Clinton’s in 1992 and 1996. He helped lead the industry drive to slash computer export controls and was also a candidate for secretary of Commerce. McCracken’s company seems to be violating the very rules he helped create.

By touting trade as the supreme foreign policy goal, President Clinton has given the impression that anything goes if it brings in a buck. Congress must reverse that impression by demanding a full public account of the computer sales to Russia and China. And the Commerce Department, in addition to giving computer makers a list of off-limit nuclear sites, should make an example out of Silicon Graphics by yanking its export privileges for six months to a year. That would get industry’s attention. It also would show that the Clinton administration cares more about the spread of the bomb than about its campaign supporters in Silicon Valley.

Iran: Missile Development

January 1, 1997March 30, 2017

Step by step, Iran is mastering the art of missile production. With help from North Korea, Iran has learned to build its own version of the Soviet Scud-B missile, which can deliver nuclear or chemical warheads up to 300 kilometers, and may soon begin producing the more powerful Scud-C, which can fly up to 600 kilometers. If Iran continues on its present course, it could field a missile capable of reaching Israel within the next few years.

North Korea is Iran’s primary source of missile technology. Since 1985, Pyongyang has sold Tehran hundreds of Scud missiles and the factories to build them. Twice in the past four years, the U.S. State Department has penalized North Korean exporters and the Iranian buyers by imposing trade sanctions.

China is Iran’s second most important missile supplier. China has helped Iran develop solid fuel rockets and improve missile accuracy. In June 1996, a Congressional hearing cited U.S. intelligence findings that China had “delivered dozens, perhaps hundreds of missile guidance systems and computerized tools to Iran.” If the Clinton Administration determines that China, like North Korea, has knowingly helped Iran build Scud-size missiles, then Washington must decide whether to punish the Chinese sellers in the same way it has punished the North Koreans.

Early missile ambitions

Iran’s determination to acquire and produce ballistic missiles grew out of its war with Iraq in the 1980s. Tehran found itself ill-prepared to retaliate against Iraq’s missile attacks on Iranian cities. Tehran decided that for its own protection, it had to achieve self-reliance in military, and especially missile production. “Iran wants its own stuff now, to be no longer dependent on outsiders for weapon supplies,” says a U.S. official who tracks missile proliferation.

One of Iran’s earliest steps toward self-reliance was to produce the “Mushak” short-range surface-to-surface missile. A U.S. official compares this primitive solid fuel missile to the unguided Soviet Frog missile and to the Pakistani Haft-1 missile, which flies about 80 kilometers. The first Mushak, also known as the Iran-130, was test-fired in early 1988, and is designed to fly to a maximum range of 130 kilometers. By March 1988, five Mushak missiles had been fired at Iraq during the War of the Cities. And by August 1988, Tehran had test-fired a 160-kilometer-range Mushak and announced that mass production would soon follow. Iran claims that the Mushak was designed and produced without foreign help, but Chinese assistance is suspected.

Scud-B

During the Iran-Iraq War, the then-head of Iran’s Parliament, Hojatolislam Hashemi Rafsanjani, took steps to strengthen Iran’s missile program. In 1985, Rafsanjani led a high-level delegation to Libya, Syria, North Korea and China. As a result of the trip, Iran obtained Scud missiles from Libya and North Korea, and later acquired rocket components and know-how from both North Korea and China.

Iran’s first batch of Scuds came from Libya in 1985. These single-stage, Soviet-made missiles are liquid-fueled and can fly about 280-300 kilometers when carrying a 770-1,000 kilogram warhead. Before long, Iran had depleted its small supply. It then turned to North Korea in search of a new supplier. Tehran offered to help finance Pyongyang’s missile effort in exchange for technology transfer and an option to buy North Korean missiles as soon as they became available.

The first batch of North Korean Scuds arrived in July 1987, even before they were available to North Korea’s own army. Over the next seven months, Iran imported 90-100 missiles, most of which were promptly used in combat: According to the U.S. Defense Department, Iran fired nearly 100 Scuds at Iraq between 1985 and 1988.

After the war ended, Tehran began expanding its capabilities. By late 1990, Tehran had negotiated to buy North Korea’s newest missile offering, the Scud-C, with a range of 500 kilometers. According to press reports, Iran ordered an additional 200 Scud-Bs and Scud-Cs from North Korea in 1991.

After filling its immediate need for finished missiles, Iran moved quickly to set up a Scud factory of its own. “Iran’s relationship with North Korea follows the usual pattern,” says a U.S. State Department official, “you first buy entire missiles and the kits to assemble missiles, and then you learn to make them on your own–designs and blueprints come with the package” According to the official, North Koreans worked on the ground in Iran to walk Iranian scientists through the basic steps of Scud production. In 1993, Iranian Minister of Defense Akbar Torkan announced that “our technological capability is such that if we require similar missiles [to the Scud-B] then we can manufacture them ourselves.”

Scud-C

Iran is now poised to mass-produce extended-range Scud-Cs, though U.S. officials doubt that any missiles have been produced yet. The liquid-fuel Scud-C has an estimated range of more than 500 kilometers when carrying an 700-kilogram warhead. The missile is longer and wider than the Scud-B, which suggests that the fuel tanks have been lengthened and widened to increase the amount of propellant the missile can carry.

In 1991, U.S. intelligence had tracked several shipments of North Korean Scud-Cs to Iran. In 1992, the U.S. State Department imposed two-year trade sanctions against the Iranian Ministry of Defense and Armed Forces Logistics for engaging in “missile technology proliferation activities” with North Korea. Under U.S. law, Washington can penalize any foreign company or person who engages in the export of Scud-size missiles or the transfer of equipment or technology that “contributes to the design, development or production or missiles” in a country such as Iran.

In early 1993, an additional shipment of Scud-Cs along with several launching pads was reported by the Israeli media, and according to U.S. intelligence, Pyongyang continues to supply Scud production technology to Iran. On May 24, 1996, Washington once again penalized a North Korean seller (Changgwang Sinyong Corporation a/k/a/ Korea Mining and Development Trading Bureau) and an Iranian buyer (Ministry of Defense and Armed Forces Logistics). The Middle East Military Balance, an annual survey of military capabilities published by Israel’s Jaffee Center for Strategic Studies at Tel Aviv University, estimates that as of 1994 Iran had 300 Scud-B missiles and 100 Scud-Cs.

Nodong

The question now is whether international pressure can prevent North Korea from selling Iran an even longer-range missile, the Nodong-I. The 1,000 kilometer-range Nodong would allow Iran to reach targets in Israel, Saudi Arabia and Turkey.

The liquid-fuel Nodong is derived from Scud technology, and shares the Scud’s weaknesses. “It still has no tremendous guidance capability and a poor CEP [circular error probable, a measure of accuracy],” says a U.S. official. The Nodong was first test-fired by North Korea over the Sea of Japan in May 1993. Because the Sea of Japan is too small to accommodate a full range test of the Nodong, U.S. officials surmise that future testing may take place in Iran, where there is sufficient room. “Iran has never tested missiles to the 700 or 1,000 range,” one U.S. official tells the Risk Report, “but it is true that Iran is less restricted geographically for such tests and it could be surmised that North Korea might use Iran as a test range.”

U.S. officials believe that the Nodong may be nearly ready for serial production, but progress has been slowed because North Korea has had to postpone or cancel a number of test launches during the past two years. Both financial and technical constraints have been cited as the reason. In November 1996, Pyongyang was preparing to test the Nodong again, but American pressure “helped put a stop to that,” says a U.S. official.

True to its pursuit of self-reliance, Iran would like to produce its own Nodongs. According to U.S. officials, Iran has not yet received completed Nodong missiles, but Japanese TV reported in April 1994 that North Korea had agreed to construct a Nodong missile production plant in Iran. And former CIA (Central Intelligence Agency) Director James Woolsey said in 1993 that he believed Iran would be able to manufacture Nodong missiles by the year 2000.

China’s role

If Iran succeeds in building larger and more accurate missiles, China will deserve much of the credit. For years, Beijing has been a major supplier of battlefield and cruise missiles to Iran. In 1987, Iran purchased Chinese Silkworm anti-ship missiles, which were sent via North Korea so Beijing could deny responsibility for the exports. Since then, Iran has advanced beyond the Silkworm by acquiring the new C-802, an anti-ship missile that is more accurate and reliable than the Silkworm and can fly about 120 kilometers. During the Iran-Iraq war, Tehran fired at least 10 coastal-based Chinese missiles at Kuwait, one of which hit a U.S.-flagged oil tanker. Iran has also acquired 20 Chinese CSS-8 surface-to-surface missiles, which can carry a 190 kilogram warhead up to 150 kilometers.

In 1988, the press reported that China had signed an agreement to supply Iran with technology and equipment needed to produce Chinese “M-series” missiles, with ranges up to 900 kilometers. Hard evidence of transfers of finished missiles is lacking, and U.S. officials claim that Washington has convinced China not to export its M-9 and M-11 missiles to Iran. A U.S. official tells the Risk Report: “We have effectively got China out of the transfer of complete missile systems.”

That does not mean Iran has stopped buying missile components from China. In fact, Chinese missile-related exports to Iran seem to be increasing. In 1990, Tehran and Beijing signed a 10 year agreement for scientific cooperation and the transfer of military technology. In April 1992, it was reported that Iran was shopping for missile guidance systems.

In November 1996, the Washington Times reported that according to a secret Central Intelligence Agency report entitled “Arms Transfers to State Sponsors of Terrorism,” China had supplied Iran with technology and components for an advanced radar system. The report also said that the “China Precision Engineering Institute” agreed in August 1996 to supply gyroscopes, accelerometers and test equipment–all useful for missile guidance–to an arm of Iran’s Defense Industries Organization (DIO).

Under U.S. law, Washington can impose two-year trade sanctions against Chinese exporters if their exports make a “knowing contribution” to Iran’s development of Scud-size missiles. Asked whether Washington will penalize the Chinese sellers and the Iranian buyers, a U.S. official replied: “We have no good indication of what the Iranians are doing with Chinese materials and equipment, and what Iran chooses to do with Chinese technology is quite material.” To penalize an exporter, Washington must determine that the exporter helped build missiles that can fly at least 300 kilometers.

Lynn Davis, U.S. Under Secretary of State for Arms Control and International Security Affairs, told Congress in June 1996 that “we keep under continuing review the evidence to see whether any of these activities trigger U.S. sanctions.” She also said the State Department is “now addressing whether the transfer of Chinese built C-802 cruise missiles is sanctionable under the Iran-Iraq Arms Non-Proliferation Act of 1992.” The Act provides for the imposition of sanctions when a foreign person or country transfers goods or technology “so as to contribute knowingly and materially to the efforts by Iran or Iraq … to acquire destabilizing numbers and types of … advanced conventional weapons.” U.S. officials express doubt that Washington will penalize Beijing anytime soon for any of its missile-related sales to Iran. As one official puts it: “China is a very tough case because of its special relationship with the United States, and it seems that China is increasingly immune from sanctions.”

As Washington debates what to do about China and North Korea’s missile trade with Iran, Tehran continues its march toward its goal of mass-producing larger missiles. “The Iranians are smart and determined people,” a U.S. official warns: “At some point they will be as competent as the North Koreans, and then we will have to worry about Iranian missile sales. That’s what’s especially dastardly about these transfers–they are creating a new source of supply.”

India Missile Update 1996 – Agni on Hold; More Prithvi Tests

January 1, 1997March 27, 2017

The Indian Government announced on December 5, 1996 that it would suspend development of its most powerful missile, the two-stage, intermediate-range, nuclear-capable “Agni” (meaning “fire” in Hindi).

According to a Government report released in Parliament the same day, the Agni is a “re-entry technology demonstration project” which has been successfully completed and “does not envision the development of a missile system.” However, the report made clear that any future decision to manufacture and deploy the missile “can be taken at an appropriate time consistent with the prevailing threat perception….”

The decision to suspend the program rejected the views of the Indian Parliamentary Standing Committee on Defense, which recommended that the government decide “to go for serial production of this strategic missile for induction into the Armed Forces.”

The decision responded to a formal request made in August by Dr. A. J. P. Kalam, director of India’s Defense Research and Development Organization (Defence Research and Development Organization) (DRDO), to begin operational testing of the Agni. The December 5 announcement also came on the heels of a visit by Chinese President Jiang Zemin to India, raising the possibility that the suspension was taken in exchange for concessions from Beijing. During Jiang’s visit, the two leaders signed an agreement to pull back troops from a disputed Himalayan border where they fought a brief war in 1962.

The 21-meter long, 19-ton Agni missile has a range of 2,400 kilometers and could reach Beijing and Shanghai if fired from the easternmost regions of India. It was successfully tested for the third, and possibly last time in February 1994, when it traveled 1,400 kilometers before splashing down in the Bay of Bengal.

Following the December 5 announcement, DRDO officials said on December 22 that they planned to conduct the second test of the shorter-range nuclear-capable Prithvi-II missile within a few weeks. Officials said the test was being conducted to check modifications made to the missile’s ground support systems. The mobile-launched Prithvi-II can carry a 450 kilogram warhead 250 kilometers. The range is an improvement over the Prithvi-I, which can carry a 500-1,000 kilogram payload 150-250 kilometers.

The Prithvi-II was first tested by the DRDO in January 1996. It flew 250 kilometers and reportedly landed accurately at a pre-determined point in the Bay of Bengal. Production of Prithvi-I missiles is presently underway at Bharat Dynamics in Hyderabad, and the missiles are slated to be delivered to the Indian Air Force’s 333rd Missile Group stationed at Secunderabad. Approximately 15-20 missiles have reportedly been completed so far.

Iran: Shopping for Missile Technology

January 1, 1997March 30, 2017

Although Iran has launched an aggressive effort to build long-range missiles, its success will depend almost entirely upon imports. According to a 1996 Pentagon study that ranks countries’ military capabilities, Iran is unable to produce essential items such as radar, sensors, computers and specialized electronics on its own. Iran also lacks the ability to make solid fuel rocket propellant, guidance components, and design and testing equipment.

To make up for this lack of wherewithal at home, Iran has also launched an aggressive shopping campaign. “Iran doesn’t like being dependent on outsiders for weapon supplies,” says a U.S. official. To improve the navigation and guidance of its Scud missiles, which have poor accuracy, Iran is looking to buy inertial navigational systems and their components, which include gyroscopes, accelerometers, and radar systems. Iran now gets much of this equipment from China. In late 1996, Tehran and Beijing were negotiating a $4.5 billion arms deal, which reportedly included the supply of Chinese multiple rocket launchers, missiles and missile launchers.

U.S. officials tell the Risk Report that Iranians are also shopping for missile components in the former Soviet Union. “We have no sense at the moment that a significant contribution is being made to Iran,” says one official, “but Iranians are in Russia looking for missile technology, that much is true.”

When unable to buy things legally, Tehran has been willing to smuggle sensitive products out of the United States and Europe. In 1988, Iran tried to import 286,000 pounds of ammonium perchlorate, an oxidizer used in solid-rocket fuel, from the United States. The American seller first shipped the cargo to Western Europe, where it was seized by Dutch police on its way to Iran.

In 1991, two businessmen who owned and managed a California company called Ray Amiri Computer Consultants were arrested for exporting to Iran restricted American equipment without a license. One of the men, a U.S. citizen of Iranian descent, was sentenced to a year in prison. The other, an Iranian citizen and permanent resident of the United States, fled to Iran while on bail. Their exports included oscilloscopes, logic analyzers and pulse generators, which were exported to the Iranian Ministry of Defense, the Iran Telecommunications Research Center and the Iran Telecommunications Manufacturing Company. The equipment was useful for developing missile guidance systems and monitoring nuclear weapons tests.

In 1993, U.S. federal agents arrested an Iranian citizen, Reza Zandian, and an American, Charles Reeger, for attempting to illegally export one of IBM’s most powerful computers, the ES-9000, to Iran. The pair apparently operated through two small companies in southern California: Lucach Corporation/Computerworld and Iran Business Machines. Commerce Department officials were quoted by the press as saying that the ES-9000 would have been used for Iranian weapon development.

Because of the U.S. embargo against Iran, it is now illegal for U.S. persons to export most goods to Iran or to conduct business with Iranian companies. U.S. exports to Iran have fallen drastically during the past eighteen months. Nonetheless, Iranians continue to shop for American products. “Like most proliferators, Iran is opportunistic,” a U.S. official says. “It will get as much stuff as possible and then see where the pieces fit best.”

U.S. and European customs officials warn that the United Arab Emirates, and Dubai in particular, has become a favorite diversion point for hot cargoes to Iran. The German Ministry of Economics has warned German companies that Iran is increasingly using Dubai to obtain high technology, particularly electronic equipment. They say Iranians operating in Dubai have created a number of front companies which exist only as mailing addresses. [See related article: “Dubai is a Growing Diversion Risk, German Officials Say,” Volume 2, Number 4 (July-August 1996).] When selling sensitive goods to the United Arab Emirates, exporters must pay close attention to the nationalities of the buyers. They may have an UAE address, but most of them are not UAE companies. And most shipments to Dubai, and to the Emirate’s Jebel Ali Free Zone, are re-exported. If an American company knows its product will end up in Iran, the export is illegal.

India Cancels Nuclear Test; Empties Test Site

January 1, 1997March 27, 2017

India has removed essential diagnostic equipment from its nuclear test site at Pokharan (Pokhran), U.S. intelligence officials say, indicating that the Indian government has abandoned its plan to conduct a nuclear weapon test.

As recently as October 1996, reconnaissance photos of the Pokharan (Pokhran) site revealed what U.S. officials believed were final preparations for India’s second nuclear test. India conducted its first test in 1974. India had positioned trailers containing diagnostic equipment at the site and had run cables down a shaft to pick up signals from an underground nuclear test chamber.

By mid-December, however, the trailers had been withdrawn. Intelligence officials now say that they have concluded, based on information in addition to the reconnaissance photographs, that the Indian government has made a political decision not to carry out a test. The officials believe that India was motivated by fear of the possible international reaction. “When you tiptoe up to the brink and look over, you don’t always like what you see,” one official said.

U.S. law mandates stiff penalties against a “non-nuclear weapon state”–India is so defined–that “detonates a nuclear explosive device.” The law would cut off U.S. foreign aid, U.S. bank loans to the Indian government, federal financing of U.S. exports to India (a credit line of around $150 million per year), and would require the United States to vote against India’s loans at the World Bank, now averaging two billion dollars per year. The law would also bar India from receiving sensitive dual-use nuclear, missile and chemical technology, which India needs to modernize its industry and armed forces.

In explaining India’s decision, U.S. officials also cited the large amount of financial assistance that India receives from Japan, assistance that could have been jeopardized by a nuclear test. When asked whether the United States had encouraged Japan to use the assistance as a lever against India, one official said, “that would be a logical step.”

India’s decision appears to have avoided a retaliatory test by Pakistan. Pakistani officials have told the press that Pakistan would be compelled to test if India did. And a U.S. official, who asked not to be identified, told the Risk Report that Pakistani scientists have already taken the steps necessary to detonate a bomb quickly following an Indian test. A Pakistani nuclear test would subject Pakistan to the same sanctions as India under U.S. law.

India’s decision could also have been influenced by its recent defeats in the United Nations. On September 10, the General Assembly adopted a comprehensive test ban by a vote of 158 to 3. Only India, Libya and Bhutan, a country whose foreign policy India controls, voted against it. And on October 23, Japan defeated India by more than a three-to-one margin in an election to fill a non-permanent seat on the U.N. Security Council. A large number of developing nations chose Japan in what an Indian newspaper called “a battle between India’s principles and Japan’s moneybags.” These successive rejections, said a U.S. official, showed India that it would risk becoming a pariah state if it went through with a nuclear test.

India is believed to have approximately 20 to 50 first-generation atomic bombs in its nuclear arsenal, compared to approximately a dozen for Pakistan. India’s bombs are assumed to be fueled by plutonium produced in reactors based on Canadian designs and operated with material imported from China, Norway, the former Soviet Union and the United States.

Testimony of Gary Milhollin

Testimony of Gary Milhollin

Los Angeles Times February 26, 1997, p. A11

Los Angeles Times
February 26, 1997, p. A11