The Virtual Lawyer - The Hangman and the Rope

Posted June 1 1999

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The Hangman and the Rope

China stuff dominates the news these days. Allegations are flying to the effect that we have, as classic capitalists, sold our enemies the rope with which to hang us. The allegations are particularly fierce when it comes to "dual use" technologies that have both civilian and military applications. A couple of years ago, I would have pooh-poohed the notion that we were giving away the store. In light of recent revelations about the sale of sensitive technologies, however, I am not so sure. It is a fact that this administration has shifted control of a lot of good stuff from the national security folks to the commerce folk. The late commerce secretary, Ron Brown, pushed hard for the change, as did executives from the computer industries. A primarily issue involves the export of encryption technology (see "Snufflin' Along" in the last issue). With the politics in mind, just how has the shift occurred and who are the government players?

Military Stuff

The Arms Export Control Act ("AECA") governs export of all military weaponry and related services. Under AECA, the Office of Defense Trade Controls oversees a "Munitions List" consisting of defense "articles" and "services" that are inherently military in design and character. If you happen to have an F-16 that you want to export, apply directly to ODTC. The list specifically includes certain "firmware" and "software" that are military-based. No items on the list can be exported or re-exported without approval of ODTC. Under this scheme, there are no generally available licenses for exporters. Everything is a special case and must be cleared by ODTC. That is, until Ron Brown and the administration lobbied for change. During 1995 and 1996, key technologies were moved off the munitions list and pushed over to Commerce. Supercomputers, encryption (both hardware and software) and certain ballistic missile and satellite technologies are the biggies that now attract everyone's attention.

Dual Uses

It doesn't take a genius to figure out that not every product need be designed specifically for the military to have strategic uses. Obviously, many commercially-designed products could be pressed without difficulty into military or defense-related service. In response to this dilemma, Congress created the Export Administration Act to control export of "goods" and "technical data" having such a "dual use." Under the Act, the Bureau of Export Administration imposes export controls through the Export Administration Regulations, which are written by bureaucrats who take their cues from the administration that happens to be around at the time. This is because the bureaucracies are under the control of the executive branch.

How 'Bout a Waiver?

Certain technologies, like encryption and satellites, are particularly sensitive. Even though they might be off the munitions list, certain presidential waivers have been necessary to move these goods off shore. Loral, for example, obtained permission from the president to launch a military
communications satellite on a Chinese booster. Now, the Chinese were not, as part of the deal, supposed to be able to so much as see the satellite prior to launch. When the booster crashed, however, the Chinese were, of course, the first to the crash site. They conveniently barred Loral employees from the site until they had given the place the once-over. When the Loral guys showed up, they were unable to locate the black box containing the hardware encryption devices used to protect the data stream. The Chinese, of course, deny anything untoward. Loral, ever helpful, then assisted the Chinese in trouble-shooting their booster so that such accidents wouldn't happen again. Funny thing, though: some say that Loral's hints and helps can be used by the Chinese to plant the Big One on LA or Kansas City. This same sort of willy-nilly trafficking has also been going on with such items as supercomputers, which can be used for decryption or (pshaw!) modeling nuclear detonations. Do you have the same queasy feeling I do?

When All is Said

Lincoln's first Secretary of War was a guy named Simon Cameron, a man so wholly corrupt it was said that he would sell everything he could lay his hands on except a red-hot stove. His appointment was a tribute to political expediency that Lincoln eventually rectified by the replacing him with the incorruptible Edwin Stanton. Not that history always repeats itself, mind you, but I do wonder sometimes about the integrity of the current export process, if not the people involved. Check that - I wonder about the people, too.

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