Score one for the good guys. The takeover bid of U.S. computer communications maker 3Com by a Chinese military related company has failed.
3Com announced that the bid was being withdrawn after it failed to answer national security questions issued by a government review committee.
The takeover raised serious questions about allowing a Chinese army related firm to do business in the U.S. and even buy out a Pentagon contractor. The Chinese company, Huawei, was directly linked by several intelligence reports to supplying air defense and communications networks to Saddam Hussein and the Taliban.
What is more troublesome is the bid nearly succeeded. At first the deal was not going to be reviewed for national security concerns and it was simply rubber-stamped by the Bush administration. However, news of the takeover prompted action, forcing a review but this was after the deal had already been OKed by the highest levels.
The Bush administration had trouble dealing with the takeover bid. Secretary of Defense Robert Gates revealed that he was completely in the dark about the deal. The admission by Gates echoed similar confessions by the Pentagon top brass that they also were unaware of the buyout.
The Defense Department and the U.S. intelligence agencies were surprised by the proposed deal and had to scramble in order to get it reviewed for national security reasons.
The failure at the Defense Department is attributed to the Defense Technology Security Agency or DTSA. During the Clinton years, DTSA was a strong advocate of checking all export deals with China. In fact, aggressive DTSA efforts were documented by the Loral Corporation for holding up the sale of advanced radars to the Chinese military. Today, DTSA is a headless giant unable to do its job.
The Pentagon has not appointed an active director to run DTSA and the length of time the position has been vacant suggests little sense of urgency to do so. Leaderless, DTSA was caught unaware of the deal and was unable to provide warning to senior Defense Department officials.
The current "acting" head of DTSA, Mrs. Beth M. McCormick, actually served during the Clinton administration under Defense Secretary William Perry. This fact alone should raise alarm bells.
Perry is directly linked to the export of the advanced communications systems that ended up in the Iraqi desert.
In 1994, Chinese Gen. Ding Henggao met with Perry to arrange a deal for advanced — secure — fiber-optic communications electronics. Ding was able to set his wife, Madam General Nie, up as head of a false corporation that obtained advanced U.S. fiber-optic systems. Madam Nie's company was allegedly staffed entirely by Chinese army officers who specialized in exploiting communications and electronics.
In fact, documents obtained from the Department of Defense using the Freedom of Information Act (FOIA) show that Perry's personal (paid) adviser was also paid by the Chinese army while serving on the U.S. Defense Policy Board and working for Perry as a contractor.
The Chinese agent assigned to Perry, Hua Di, called himself the "match-maker" in the fiber-optic deal. Hua Di was a former Chinese missile scienctist who defected to the U.S. after the Tianamen Square massacre. Di worked closely with Perry and his associates in the Chinese army, including a PLA general assigned to Ding Henggao.
Immediately after the exports took place, Hua Di defected back to China and has not been heard from since. A cover story has been issued, claiming that Di was arrested by the Chinese government and may have died from cancer but no one can tell because he has not been seen since for nearly a decade.
The fiber-optic export was so controversial that the General Accounting Office wrote an entire report on how it would be exploited by the Chinese military. The 1994 export deal led to a flood of systems sold to Chinese army front companies. The Clinton administration was responsible for exporting the U.S. made communications and computer equipment to Huawei that ended up in Saddam's air defense network and in the hands of the Taliban.
Huawei, according to a report from the Rand Corporation, is run by a former Chinese air force general. Huawei obtained advanced fiber-optic electronics from the U.S. during the Clinton administration and then resold the equipment to Saddam Hussein for use as an air defense network. Huawei was caught in the act by the CIA, which documented its find in the Iraq Survey Group Final Report.
The Huawei network installed for Saddam allowed the Iraqi air defense network to shoot down U.S. and allied aircraft. Despite repeated bombings by the allies, the network continued to function literally until Saddam was overthrown.
Even after Saddam was overthrown, Defense Department officials knew full well of Huawei's involvement with the Iraqi dictator. A May 2004 report issued by the Department of Defense noted that Huawei was "a Chinese company that operated in Iraq under Saddam Hussein."
The Clinton administration unleashed the computer and communications exports to China in 1994 despite repeated protests from Defense officials and even a report by the General Accounting Office warning that such exports could be used for military purposes.
An ex-Clinton official, now running the agency charged to oversee these exports, messed up and the whole affair ended up dying after a real national security review took place. Expect the Chinese to try again. Huawei is not banned from the U.S. and an-ex Clinton official is the watchdog in charge of prevented any similar occurrences.
It is unlikely you will hear Hillary Clinton making any effort to comment on the Huawei deal. You will not hear about William Perry, his paid consultant or the Chinese double agent Hua Di in the mass media. Much too intellectual for the average Joe to understand that U.S. soldiers died because someone wanted to make a profit.
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