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1 July 1999. Thanks to Peter Leitner.

See related news release on Department of Defense harassment of Dr. Leitner: http://jya.com/dod-harass.htm

### Testimony of

### Dr. Peter M. Leitner

### before the Committee on Government Reform
of the United States House of Representatives

### June 24, 1999
10:00 a.m.

### REPRISALS & RETALIATION: SPEAKING TRUTH
TO POWER ON CHINA

Mr. Chairman, members of the committee, I would like to express my appreciation for your collective concern over the mistreatment of career civil servants for "speaking truth to power" concerning the systematic pillaging of the U.S. defense industrial base and our nation's most precious military and nuclear secrets by the People's Republic of China. Appearing before you today is both an honor and a rather dubious distinction. To be victimized by my own government - particularly the Defense Department - for consistently putting the near- and long-term national security of the United States ahead of all other considerations is something that I still find astounding to this day.

I believe that a deadly combination of corruption, greed, careerism, indolence, and possibly darker motives have brought us to this sad turning point in the nature of the military threats to the United States and along the Chinese periphery - extending from the Central Asian republics through the Indian Ocean and along the Pacific Rim.

### History of Reprisals

My particular story revolves around my documenting evolving military threats to the United States spurred by reckless transfers of advanced Western technology, -- technology capable of allowing potential military rivals such as the PRC to leapfrog generations of technological development and trillions of dollars of expenditures and to field advanced weapons systems faster than our experts have predicted. I have been systematically penalized for my initiative and efforts. From 1986 to 1990 I was consistently praised by DoD officials for my effectiveness in documenting and persuasively defending American technology security interests around the world in international negotiations. At that time I was DoD's principal CoCom negotiator and head of the DoD team on such issues as machine tools and manufacturing technology, advanced materials, and, for a time, computers. In addition, I served as chairman of a Paris-based military study group on advanced materials for weapons systems that turned out 15 reports and as the head of the U.S. team to another group on defense production technology and test equipment.

But all that changed in 1990, shortly after I received a Special Act Award for preparing the Under Secretary and Assistant Secretary for Policy to effectively argue in favor of rigorous machine tool controls. That was when I authored the memo and charts included as Attachment A. That memo pointed out dangerous flaws in the methodology DoD was using in determining which technology to drop from international export control lists. For the mere act of composing this message to my chain of command I was summarily recalled from Paris at 5 a.m. and told to abandon my technical team in France and get on the next flight home. There I was confronted by the first in a series of DTSA managers who place their personal interests and career advancement ahead of all else. I was told, "You are to be placed in a position of least trust in this organization licensing." A remarkable statement as export licensing is the legislative raison d'etre for the organization.

After being banished into licensing, I began to detect a disturbing pattern of Indian acquisition of U.S. and British parts and components for India's attempts to build a so-called indigenous supercomputer. I wrote a paper on this issue (U.S./India Relationship: What Are the Ground Rules?) that received the support of the Defense Intelligence Agency and numerous technical experts. In response, I was barred from looking at licenses involving India. After these two incidents, my performance appraisal dropped from "outstanding" to an entire level lower. My supervisor at the time told me he was ordered by the Director and Deputy Director not to give me an outstanding rating. He then advised me that he would lower my "Written Communication" category because "after all, it was your memos that resulted in all of this." Earlier that year I had been told I would be given a quality step increase as a result of my outstanding performance. This was quickly scrapped, and I was denied that $2,600 pay raise.

This was to be the first in a series of retaliatory financial sanctions, which, in my reckoning, has cost my family between $75,000 and $100,000 to date and over the course of my lifetime certainly much more. This loss of income punishes not only me but also my wife and four children.

In May 1991, I authored a technical paper entitled "Garrett Engines to the PRC: Enabling Its Long-range Cruise Missile Program." The controversy generated by this paper ran well into 1992 and eventually stopped a potentially disastrous technology transfer from taking place. The new administration was fighting tooth and nail to approve the transfer of cruise missile manufacturing technology to the PRC. I was internally vilified and later penalized even though the Air Force, CIA, and Arms Control and Disarmament Agency came around to support my position. While the technology transfer was prevented and the potential threat to the United States mitigated I was nonetheless punished for having been right.

In 1994, I wrote a technical paper called "McDonnell Douglas Machine Tool Sales to the PRC: Implications for U.S. Policy" and refused a direct order to change my denial of the transfer of the Columbus, Ohio, B-1 Bomber/MX Missile/C-17 plant to China. This incident was the subject of a recent 60 Minutes broadcast. Later that year I co-authored a study entitled "Transferring Stealth Technology to the PRC: Three Pieces to the Chinese Puzzle." This paper revealed how the PRC was targeting U.S. companies for technology acquisition with surgical precision. In 1995, I took the initiative and prepared a policy paper called "Nuclear Safety, Strategic Technologies, and Weapons Proliferation: A New Approach." This was an attempt to reduce Indian access to nuclear weapons-related technologies while assisting India on the civilian nuclear safety issue. Prepared and circulated fully three years before the most recent round of nuclear weapons tests in the Thar Desert, neither the paper nor the initiative was acted upon by DTSA management despite strong support for many elements of the approach internally and externally.

Late in 1995 a series of events heralded a new round of internal retaliation against me. First was the publication of my book "Decontrolling Strategic Technology, 19901992: Creating the Strategic Threats of the 21" Century." This was followed, in early 1996, by my paper on "Dual-use Exports and Naval Nuclear Propulsion: Denying Exports to Brazil"; third was my active opposition (Non-Nuclear, Militarily Critical Uses of Oscilloscopes) to a DoE-led effort to decontrol oscilloscopes and remove them from the Nuclear Suppliers Group list of proliferation-related technologies. The reaction of DTSA management, after desperate attempts to prevent publication of my book, was to artificially lower my performance appraisal and insert all manner of political language into my Civil Service rating. I appealed the rating and while the score was raised somewhat, the political language was allowed to stand and I was again penalized financially. At one point, DTSA attempted to insert a criteria stating that my licensing decisions had to meet with the approval of my supervisor at least 90 percent of the time.

Examples of the political characterizations inserted into my Civil Service performance appraisal as criticisms include:

- "Dr. Leitner is an advocate of tightening export controls."

- ". . . he veers to the right as much as possible."

- "Some of his denial recommendations push the envelope towards tighter control."

- "He is my most conservative/cautious licensing officer."

In 1997, reprisals began to intensify with the publication of my second book, "Reforming the Law of the Sea Treaty: Opportunities Missed, Precedents Set, and U.S. Sovereignty Threatened," and my being invited to appear before the Joint Economic Committee to discuss Chinese economic espionage and strategic technology transfer. Just before the hearing was to convene, DTSA management held a "Directors" meeting where it was announced that "no DTSA employees will be permitted to attend that hearing and if any apply for annual leave for that purpose it will be denied." When I circulated the JEC announcement of the time and place of the hearing to my co-workers on the office E-mail system attempts were made to somehow construe this as a "security violation." My testimony was entitled "Feeding the Dragon: Technology Transfer and the Growing Chinese Threat."

Two articles published in 1997, "Ethics, National Security, and Bureaucratic Realities: North, Knight, and Designated Liars" and "Supercomputers, Test Ban Treaties, and the Virtual Bomb," were met with immediate hostility within DoD. The first looks at people who lie to Congress - the designated liar for their agency. The second reveals the nuclear proliferation dangers and suspect agenda of the administration in decontrolling supercomputers - a mistake about to be compounded as we speak. In June 1997, Mr. James Cole and I authored a study entitled Minimum Requirements to Produce Machine Tools Capable of Manufacturing Weapons of Mass Destruction.

It was in December 1997 that a campaign to further isolate me began - this time to confiscate my office computers, a laptop and a desktop. It began with an outright lie that the information management staff wanted the laptop assigned to me returned. Then my desktop unit was removed as well. I was told verbally and in writing by the information management staff that they never asked for the return of the computers and that they would only declare the machines excess and get rid of them. They also said that DTSA management was afraid that I might use the computers to write testimony, books, or articles critical of DTSA actions or policies. Therefore, DTSA management reasoned, take the computers away and I will no longer be able to write or testify.

About this time, I began to see and issue denials for a large number of export license applications originating with the DoE-sponsored national laboratories - particularly Los Alamos, Sandia, Livermore, and Oak Ridge. These licenses were intended to facilitate the transfer of a variety of high-tech equipment with direct application to nuclear weapons development and testing to the most dangerous entities within the Russian nuclear weapons design, test, and manufacturing complex. I objected then, and continue to object today, to these so-called Lab-to-Lab transfers because there was no evidence of a security plan to protect U.S. technologies from being used against us, there was no evidence that the Department of Energy exercised any credible level of control over these activities, and after meeting with lab officials it was apparent to me that the labs had become entrepreneurial and were creating programs not so much to resolve the fictional "loose nukes" problem as to keep themselves employed and avoid layoffs. Some of these programs go by the titles Materials Protection, Control, and Accounting Program, Initiatives for Proliferation Prevention, Nuclear Cities Program, MAGO program (assisting the Russians to refine and miniaturize an Electro-Magnetic Pulse weapon), etc. Given my knowledge of how badly managed DoE's nuclear stockpile program was, I found it amazing that DoE was holding itself up as the paragon of virtue in these areas. My concerns were strongly validated by the Cox/Dicks Committee and the President's Foreign Intelligence Advisory Board. In the meantime, I was lectured by my supervisor that "the Russians are our friends" and I have "no business standing in the way of these DoE run programs." I refused to alter my denial recommendations and virtually all of my denials were overturned by DTSA management. GAO later confirmed that more than 50 percent of the tax dollars going into many of these programs were spent in the United States on overhead and little if any results can be shown regarding lessening the nuclear threat facing the United States. For these efforts I was again given a poor performance evaluation and penalized financially. The following is representative of the denial positions I recommended on such cases;

> DOD POSITION: 20 NOVEMBER 1996

> DENY

> Per Section 10g of the EAA and Sections 770.1 and 778.3 of the EAR DoD is recommending denial of this application. End-user is an unsafeguarded nuclear facility and this device is capable of making a material contribution to proliferation projects of concern.

> DoD will either deny or return without action any cases which fall within this lab-to-lab framework which are not accompanied by a narrative describing how and why a particular item was selected, a national security impact assessment, a description of how it fits into the program it is to support, and specific points of contact at the lab sponsoring the transaction. In addition, DoE should provide a copy of their security plan covering each of the agreements.

> DoE involvement in a materials accounting project notwithstanding, the end-user is a facility of great concern both for weaponization and naval propulsion reasons. As the commodity and the device it will power will be under the control of the Russian end-user there will be virtually no accountability for its eventual end-use. In addition, the portable nature of the equipment makes it quite suitable for maintaining strategic weapons and propulsion systems in the field, which would help to improve the operational readiness of Russian nuclear and naval forces.

> This and related cases raise serious concerns as to whether the verification inspection, inventory, monitoring programs -- of which there appear to be scores -- are out of control. In every case which has crossed my desk the U.S. side of the agreement is some sort of private contractor operating on behalf of the USG. More often than not it is a contractor-run national lab which is negotiating and committing the United States to fairly open-ended programs of assistance and technology transfer. The export control process is then faced with license applications to transfer specific technologies directly to the some of the most sensitive areas of the Former Soviet Union (FSU) nuclear weapons complex where they will simply be turned over for permanent unverifiable use in facilities of greatest strategic concern.

> The justification given for approval is that the U.S. contractor says it is needed to support the program all indications are that the various cooperative programs with the FSU initiated over the past few years are basically lab-to-lab agreements which have some, but very limited, direct USG oversight. Instead, day-to-day functioning of these agreements is left to the contractors to decide what technology is (or is not) relevant, required, or even desirable to transfer to the FSU. Whether national security concerns are factored in is not evident in any of the applications for export licenses submitted for approval. Unfortunately, contractors are given to focus upon the achievement of milestones and satisfying their clients, in this case DoE and Russia. With such a focus, quibbling over specific capabilities regarding a piece of equipment is not something that will be given attention. Yet it is precisely this sort of micro-evaluation which is at the heart of the export control process and must be performed for the system to function. There is no sign that such analysis is being performed at present in regard to these Lab-to-Lab agreements.

> In almost every such case, licensing analysts are rubberstamping approvals based upon the simple test of whether "it looks reasonable and appears to fit within the lab-to-lab agreement." One cannot even tell whether the FSU requested specific equipment or if the U.S. side recommended it; or whether the FSU rejected a recommended piece of hardware and insisted on a much more advanced device capable of performing tasks beyond those called for under the scope of the program. This was certainly the case with the super computers bound for Arzamas and Chelyabinsk, and not required by the lab-to-lab agreement which was being cited as cover for this unjustified export.

> Other USG agencies are deferring to DoE on these cases and incorrectly assuming a degree of control and analysis which doesn't appear to be present. There is no evidence that real analysis or oversight is actually being performed. Instead we are all being asked to "believe" that the technology being transferred is the minimum required to perform the task cited and that there is little to no risk to U.S. security.

In 1997, I witnessed the intentional orchestration by the administration of a series of events resulting in the false certification to Congress that China is not a nuclear proliferant. This provided the Chinese legal access to many nuclear technologies to complement that which the committee so clearly demonstrated they were engaged in stealing. During that year, I witnessed the development of the twisted logic that since the PRC lost out in a head-to-head competition with Russia to sell Iran a nuclear reactor complex it can be construed as being forthcoming on proliferation issues. The fact that the Chinese withdrew their offer to provide Iran a nuclear reprocessing plant only after they lost the contract was interpreted by the administration as an opportunity to "sell" China to Congress.

In April 1998, I again appeared before the Joint Economic Committee to discuss continuing problems with the growing strategic threat from China. Next I was subpoenaed to appear before the Senate Governmental Affairs Committee in June where I testified about the intentional systematic failure of the export control process, as structured by this administration, to protect America's precious military technology advantage. My Senate testimony resulted in an investigation by the Inspectors General of the management of the export control process by the Defense, Commerce, State, Treasury, and Energy Departments and the CIA. In August I was called before the Cox/Dicks Committee where I testified on the PRC threat and worked very closely with that staff - providing over 18 inches of documents and hours of follow-on interviews with staff. Ever since these testimonies I have been subjected to, in staccato fashion, one adverse harassing act after another. The most prominent of these are: further lowering of my performance rating, attempts to isolate me from attending meetings concerning nuclear exports -- particularly when the IG's were visiting the interagency meetings pursuant to the Senate inspection request, a trumped-up letter of reprimand, sick leave harassment, a falsified charge of a security violation, and implied threats to charge me with insubordination or defiance of authority. In fact, the DoD IG found that of the 16 DTSA licensing officers I am the only one not to receive a bonus, or an outstanding or superior rating, this in spite of the fact that I am the only person to have authored any technical or policy analyses or to have stood up for DoD's national security mission in the face of interagency obstructionism. All of this happened since my Cox/Dicks testimony. These actions were deemed so serious that Senator Thompson twice wrote to the Pentagon, including to Secretary Cohen, expressing concern for his witnesses. In addition, the Office of Special Counsel has accepted my case for a full investigation of political reprisals and illegal retaliation.

### Dangers Facing Civil Servants Today

The politicization of the career Civil Service is an extraordinarily dangerous and insidious process that has been more radically advanced during the past six years than at any time since the enactment of the Hatch Act. Today's hearing is a microcosm of an insidious process aimed at co-opting, by-passing, or eliminating unbiased professionals from the policymaking/implementation process. Without a nonpartisan professional civil service this nation will be subjected to wild mood swings and radical policy changes that will wreak havoc pursuant to the particular agenda of, not a particular elected government per se, but the armies of non-elected appointees who are often the advocates of extremist positions. The professional career Civil Service is, in a manner of speaking, a dampening force, or, the Ritalin the body politic, which prevents dangerous and intemperate initiatives from getting out of control.

Unfortunately, the present administration has so weakened and abused the structure of the career civil service that legions of sycophants, carpetbaggers, and plain old crooks have supplanted civil servants in many key positions. DoD routinely engages in two questionable personnel practices: the militarization of DoD's civil service by allowing widespread conversions of military personnel to civilian positions, and the inappropriate, possibly illegal, use of the Intergovernmental Personnel Act to directly appoint individuals without competition and avoid ceilings on political appointments. In many cases, particularly within the Defense Threat Reduction Agency, civil servants with decades of expertise in strategic weapons programs were shoved aside and demoted from key positions while DoE lab employees were brought in to fill their posts. These lab employees/IPA Fellows are then given a strong voice in which programs are pursued and which research facilities are awarded applied/or basic research contracts. This is featherbedding at its worst - allowing an eventual beneficiary of a program to determine how and where money is to be spent - yet this is how DTRA is structured. Even the head of the organization is not a civil servant but an IPA Fellow from Lawrence Livermore National Lab, one of DoE's problem children.

Between downsizing, contracting out, military rehires, and the abuse of the IPA program the fundamental relationship and connectedness of government to the general population is being radically altered. It is a mistake to assume that the military personnel who are being allowed to "jump the line" today, and unfairly receive government jobs (25 percent of DTSA's "civilian" staff are retirees previously assigned there) ahead of the tens of thousands losing their jobs due to base closures and downsizing, are the same as the WWII, Korean, or Vietnam War citizen soldiers. Today's military retirees, particularly the officer corps, are careerists with a much more tenuous connection to civil values and norms than previous generations of draftees. All veterans are not the same. In fact, the proximity of career civil servants to the American people is clearly receding. The shrinking pool of nonpartisan professionals is instead being replaced by contractors, IPAs, political appointees, and others who are motivated more by profit than the spirit of dedicated public service. Whose interests are advanced or protected in this situation good government, the American people, or special interests?

The overwhelming inclination of many career military people who are dropped into a civilian policy setting, is to find, or invent, an S.O.P. (Standard Operating Procedure) manual that will tell them what to do every step of the way. Often the ambiguity of civilian policy issues imparts an air of desperation to those accustomed to a more rigid, defined, routine existence. Questioning authority, or pointing out inconsistencies/contradictions in policy implementation is an activity many find hard to cope with. For instance, when I made an issue out of the Israeli Arrow missile program having changed to the point that U.S. assistance may be in violation of our commitments under the international Missile Technology Control Regime (MTCR), I was castigated for even raising the issue. Never mind that that the MTCR is one of the cornerstones of U.S. non-proliferation policy or that the U.S. publicly accuses other nations of violations (i.e., the PRC/Pakistan M-11 transfers). Instead of engaging in a productive discussion I was told:

> Since the Arrow program had the support of the Congress and is executed through a GOI-USG MOU, I fail to see how any individual with your tenure in export controls could propose such a position.

I would like to call upon members of the civil service oversight committees to investigate the developments I have just described and prepare a legislative remedy to ensure that the congressional vision of the character of the career civil service and its importance to a free and open society is mirrored by reality. In the meantime Congress should act swiftly to ensure that the pay cap on "double-dipping" by retired military personnel be kept firmly in place. Removing the dual-compensation ceiling will only exacerbate the problems I have outlined above.

### Failure of the Inspector General

It has been almost exactly one year to the day (June 28, 1998) that I gave sworn testimony before the Senate Governmental Affairs Committee on the sad state of the export control process. It was one year prior to that testimony when Michael Maloof and I went up to the DoD Inspector General's Office to request a formal investigation of technology transfer to China and the national security threats it was creating. As part of our request we described the internal mismanagement of the export control process by DTSA managers and retaliatory acts they were engaged in for those who offer unpopular opinions or positions on issues concerning China. We were quite surprised when an IG Division Director said he was not interested in what we had to say and bluntly asked us to leave.

Is it any wonder that almost ten months after Senator Thompson directed the IG's of the Defense, Commerce, State, Energy, and Treasury Departments and the CIA to undertake an extensive review of the export licensing process that the DoD report is very weak? It does not reflect many of the issues brought up by DoD personnel. Should I be surprised that of the six IG's directed to follow up on the concerns I expressed to the Committee only one, the DoD IG, even attempted to contact me? While I spent many hours speaking to the DoD IG, the reams of evidence I presented were minimized or shrugged off with statements like "That is beyond the scope of our audit." While I have extensive notes highlighting the fatal weaknesses in the DoD report I think that the point can be better made by paraphrasing from the Air Force's preliminary review of the draft report, which excoriated the IG for rampant failure to utilize evidence provided, downplaying major issues, and ignoring corroborating material provided by not only the Air Force, but the Army, Navy, and NSA as well.

In part, the Air Force stated:

> The audit report based on word usage, semantics, and omission of significant and relevant documentation substantially misrepresented the documented facts, submitted by the Air Force. The seriousness of congressional testimony and the related congressional concerns that prompted this audit are downplayed when compared with the facts reported by Air Force and which are in documented OUSD databases, files and directives.

> Those questions and requests from the DoD IG, on behalf of Congress took approximately 325 hours to perform research and answer specific requests for the Congressional inquiry. Approximately 194 specific questions were answered. Thirty-three typed pages were prepared with approximately 74 specifically detailed attachments. Over 124 historical records were reviewed and an additional 9,896 e-mails were individually reviewed and evaluated for the DoD IG. Air Force examined over 16 linear feet of Air Force records in order to answer the DoD IG questions.

> This documentation revealed: the unauthorized release of classified futuristic space technology to foreign countries which negatively impacted both U.S. military and U.S. industry interests; the Defense Intelligence Agency's non-review of over 99% of all submitted munitions licenses; intimidation and related acts against export licensing officers; and the alteration and deletion of not only submitted positions of agencies but also the deletion of the coordinated office.

> Only one reference could be found to an Air Force input. That input was in regard to training and that was semantically in error.

> The DoD IG downplayed and failed to reference the potential compromise of numerous advance Air Force systems, directly related to actions by DTRA. The DoD IG never provided to Air Force specific documents that they requested our comments on, despite repeated requests by Air Force. The fact that the DoD IG promised to provide such information, on several occasions, yet elected to finalize a report to Congress purporting a collective DoD response is disturbing.

It is amazing how much time and effort is spent on attempts to "break" or "contain" me rather than monitor, analyze, and protect our national security. I cannot begin to count the number of times I have been asked "How do you put up with that treatment? How do you manage to survive in that environment?" Of course, the correct question should be; why are people with such mean and self-serving agendas allowed to flourish, even be rewarded, for engaging in such ruthless and destructive behavior?

As with the case of the 6 IG's, where only one deigned to contact me regarding the concerns I expressed to the Senate, why is it that at no time over these past 9 years has even one DoD official in my chain of command called me in to hear and perhaps even address the issues I raised? Even though DoD officialdom has been summoned to testify in open hearings, and respond to my congressional testimony, I have yet to be called or invited to speak with anyone inside the Defense Department. Rather than address the issues, DoD's hierarchy appears more comfortable with targeting me for their minions to exact punishment and penalties with the apparent goal of destroying my career. I am well aware that every move I make is being intentionally misconstrued by several henchmen within my organization as part of some next step in the retaliation process.

### A DoD That Won't Say No

The Defense Department was the leader in successful efforts to decontrol exports of supercomputers capable of processing vast quantities of complex information, and it supplied funding and other forms of assistance to contractors hired to justify preconceived policy initiatives in this regard. In a strategic context, such computer systems typically figure in weapons development laboratories, nuclear weapon simulation and modeling facilities, ICBM warhead design activities, and a host of other critical military applications. DoD's leadership harked right back to the role played by the new DoD chain of command in decades-long efforts to reform [read scrap] the export control system centered at the National Academy of Sciences.

Was it any wonder that DoD officials were unhappy when the Congress mandated, in Section 1211 (a) of the National Defense Authorization Act for Fiscal Year 1998, that Commerce was required to forward to the Defense Department all computer license applications for systems exceeding a certain level of performance? This new authority was an unwanted gift to some in DoD who led the charge to decontrol the very computers Congress addressed in the law. The White House immediately sought to neutralize this congressionally mandated requirement by requiring the signature of an under secretary in order to object to such an export (see Attachment D). The Commerce Department narrowed the window even more by refusing to recognize the right of DoD officials to delegate authority internally.

As we meet today, the administration appears poised to announce yet another round of unilateral supercomputer decontrols. This time many fear that administration excesses will extend well above the current unjustifiable 7,000 MTOPS level, probably to 20,000. In 1995, "President Clinton [unilaterally] decontrolled computers up to 2,000 MTOPS [from the previous CoCom ceiling of 260 MTOPS] for all users and up to 7,000 MTOPS for civilian use in countries such as Russia" and China. This will enhance proliferators' ability to pursue design, modeling, prototyping, and development work across the entire spectrum of weapons of mass destruction. The weapons design establishments of Russia and the People's Republic of China stand to reap the greatest benefit from further decontrol.

### Technology Security vs. Balance of Trade

These philosophies are, of course, diametrically opposed. Technology sold to a potential adversary that can be used to close the technical gap between its military systems and ours diminishes our national security. Any short-term gain in our economy would, with this result, represent at best a Pyrrhic victory. The flip side to the argument is that by engagement our economy is improved. This provides incentives for increased R&D to maintain the technical gap. The biggest beneficiary in such a cycle would be the defense industry, which would be called upon to save us from our own trade policy.

The National Science and Technology Council Committee for National Security listed three conclusions in its Phase 1 Progress report briefing (28 April 1997):

> 1. Government controls over controlled technology are effective within legal and regulatory guidelines, but license decisions are generally made based on narrow evaluation factors and so do not include analysis of multidimensional and long-term effects.

> 2. The government does not have a comprehensive understanding of the effects on U.S. national security interests of the international flow of both controlled and uncontrolled technology.

> 3. Collecting and analyzing sufficient data to develop a comprehensive understanding of the international flow of both controlled and uncontrolled technology and its effects on U.S. national interests to determine if adjustments to policy are called for would be a major undertaking.

Controlled technology is being redefined as uncontrolled technology at an unprecedented rate and is being exported despite the fact that the government does not have a comprehensive understanding of the effects on national interests. While claims of "regulatory effectiveness" are made relative to controlled technology (again, which is being nearly defined out of existence), the government has no clue concerning multidimensional and long-term effects. Why? -- it would be a major undertaking and would almost certainly expose the recklessness of current export control policy.

The export control system works only when there is a strong degree of creative tension between agencies. This natural adversarial approach ensures full and open debate. In addition, it is vital that higher echelons be regular participants in the process, and this is achieved only through escalation of issues to their level. Pre-emptive surrender because one does not want to involve higher authorities or because one is afraid that escalation may be misinterpreted as a personal failure to resolve issues does a great disservice to the agency's mission, the process, and this nation's physical security. DoD's consistent pattern of weak or no opposition, capitulation, and failure to escalate issues is the single greatest factor in the loss of tension from the system and its consequent failure to execute its mission.

### Cumulative Impact

Tragically, nowhere in this government are analyses being performed to assess the overall strategic and military impact of the technology decontrols I described in my testimony before the Joint Economic Committee on June 17, 1997, and April 28, 1998. Nor are any analyses being performed on the impact of the day-to-day technology releases being made by the dysfunctional export licensing process. Yet, it is precisely at the "big picture" level where the overall degradation of our national security will be revealed. Without such assessments the government will continue to blunder along endangering the lives of our citizens unnecessarily. I was surprised when the Commerce Department's IG concluded in response to Senator Thompson's question:

> The current dual-use licensing process does not take into account the cumulative effect of technology transfers. While individual technology sales may appear benign, combining technology sales over a long period of time may allow U.S. adversaries to build weapons of mass destruction or other capabilities that could threaten our national security.

On three separate occasions I formally recommended the creation of a modeling, simulation, and research branch which would be dedicated to conducting such cumulative and tactical impact assessments. To date, the only cumulative impact analyses created within DTSA are those which I undertook independently and for which I was routinely subjected to reprisal. It is notable that the Commerce Department has recognized the importance of such an effort while DoD still ignores the issue. Perhaps the reason lies in the following passage from a 1993 memo from DoD's former DUSD for Counterproliferation to his boss the ASD for Nuclear Strategy and Counterproliferation. In describing the role of DTSA in DoD's pecking order, he stated:

> . . . it helped to assure that the [Assistant Secretary] and the [Under Secretary] were insulated from most (but not all) of the mind-numbing, arcane details of the world of export controls . . .

Perhaps, some day, DoD will be blessed with a leadership possessing the intellectual curiosity, capacity, and attention span necessary to effectively protect America's national security equities in this "arcane" but vital field. In the meantime, however, the special interest juggernaut continues its steamroller tactics in attempting to "mow down" whatever is left of the export control process. Like the two-minute warning in a football game, the remaining 18 months of the present administration will witness a renewed assault on the concept of national security export controls. The upcoming supercomputer decontrol decision, new DoD initiatives to back itself out of the munitions licensing business, and an internal move to speed up export licenses for some of the key players in the China space launch fiasco -- the event that gave birth to the Cox/Dicks Committee -- are only the first in what promises to be a desperate push to completely gut the process. The increasingly politicized and compliant bureaucracy cannot be relied upon to restore balance to the system. Only detailed and vigorous congressional oversight is capable of preventing these excesses and their dangerous legacy from undermining our children's future.

[Attachment A]

OFFICE OF THE SECRETARY OF DEFENSE

WASHINGTON, D.C. 20301

May 30, 1990

MEMORANDUM FOR DUSD/TSP

SUBJECT: Strategic consequences of JCS-led CoCom decontrol exercise

It has come to my attention that during the course of the ongoing massive revision of the CoCom embargo list responsible DoD/JCS officials appeared to have overlooked the overall strategic consequences of their recommendations. As such an arms-length review is essential to any policy decision regarding the final list for deletion I have taken the liberty of correlating those items proposed for release or drastic decontrol against known Soviet weapons systems.

To date I have completed a review of the SU-27, the most advanced supersonic tactical fighter in the Soviet inventory and one known to have already benefited from stolen Western technology. The results of my analysis reveal that the net result of the decontrol measures proposed by DoD would provide the Soviets a generational leap forward in tactical military capabilities which would provide them with rough equivalency with our own Advanced Tactical Fighter (ATF/ATA) currently under development at a cost of billions of taxpayers dollars.

In addition, improvements in missile technology which would enable the Soviets to develop highly maneuverable air-to-air, air-t0ground and surface-to-air missiles as well as smart stand-off control technologies represent a series of Gap-Closers of the first magnitude.

These improvements are displayed on the attached chart. As shown, there is virtually no mechanical, electronic, material or sensor system which is not impacted by teh Dod proposals. The cumulative impact of the JCS recommendations must be addressed and specific items must be withdrawn from consideration for decontrol. The alternative is the release of next-generation military aviation capabilities to the Soviet Union even as the U.S. taxpayer is being asked to fund the development of similar capabilities to U.S. forces.

Please forward the attached analysis to JCS for review and formal response as soon as possible.

Peter M. Leitner
Senior Strategic Trade Advisor

[Attachment B]

[Attachment C]

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INSPECTOR GENERAL
DEPARTMENT OF DEFENSE

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DEFENSE TECHNOLOGY

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SECURITY ADMINISTRATION

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INSPECTION REPORT

92-INS-08 B

[Apparently excerpts]

B. Personnel SECTION II - ISSUES AND RECOMMENDATIONS

employment...for the purpose of improving or injuring the prospects of any particular person for employment." We found, however, that DTSA military officers who separate from their Service are routinely preselected for civilian positions within the DTSA. For example:

Preselecting Military Officers

- The March 13, 1990 "DTSA Personnel Status Report," an internal DTSA document, named a military officer [Thomas Daniel] who would soon retire (August 1, 1990). The report listed required action as "(u)pon retirement, employ as a civilian, he will have to compete." The status of the action was listed as "initiate paperwork to hire him as a civilian, but do not give up military billet. On hold until Oct [1990]." The retired officer was subsequently hired by the DTSA on April 8, 1991, as a GM-15, Foreign Affairs Specialist.

- The DTSA announced 8 position for a GM-130-15, Foreign Affairs Specialist, on March 13, 1991. The intention was to "civilianize" a position being vacated by a military officer soon to retire. The announcement closed on March 27, 1991. On March 29, 1991, the Deputy Secretary of Defense announced a hiring freeze that prevented the position from being filled. A "Certificate of Eligibles" (a list of qualified candidates) was never issued by the WHS. The Director, DTSA, sought the assistance of the USD(P) in obtaining an exception to the freeze in a July 8, 1991 memorandum. The Director stated "...[the military officer]..., who has managed the program from the outset, applied for this position. When we were informed that no selection could be made for the position because of the freeze, we applied for an exception to the freeze.... That request was returned without action.... This leaves us with two alternatives -- either get an exception to the freeze to allow...[the military officer]...to compete for the civilian position or transfer program management to the Air Force, which has the requisite technical and physical security expertise" [emphasis in original. The matter is still unresolved.

- The Military Assistant to the DUSD(TSP) [Jim Woody] retired on July 1, 1991. He had previously been selected as a GM-15, Munitions Control Specialist, for the Senior Assistant position in the Trade Security Policy Directorate. He began his new duties the day he retired. His nominal supervisor, the Director of the Trade Security Policy Directorate, told us that the Senior Assistant position was not tenable as a full-time position. He further related that he had not requested a Senior Assistant, but was told by the Director, DTSA, to find the officer a job. Despite the fact that the officer was occupying an unnecessary position, the Director, DTSA, submitted him for a $2,985 performance award. To do so, the former officer's civil service rating period was extended for 30 days so that his appraisal covered the 90 days required by the OPM.

Under the current Director, DTSA (who arrived on October 23, 1989), 5 of 9 new hires (56 percent) have been military officers assigned to the DTSA who have separated from their Service.

Noncompetitive Promotions

In addition to the preceding merit selection irregularities, we noted this extensive use of noncompetitive promotions during our inspection of the DTSA. Noncompetitive promotions result when duties are added to positions with no known promotion potential. The statistics available indicate that the preponderance of promotions within the DTSA are noncompetitive and far exceed OPM averages. The following chart shows the 1986-1991 DTSA competitive, career ladder, and noncompetitive promotions, as well as the OPM FY 1989 (the last year available) summary data: [bar chart omitted]

[Attachment D]

OFFICE OF THE UNDER SECRETARY OF DEFENSE

WASHINGTON. D C 20301-2000

MEMORANDUM FOR THE RECORD

SUBJECT: INDIA CASE [elided] 4/19/91

On 2/27/91 I approved with conditions case [elided] (attached) to the Center for the Development of Advanced Computing (CDAC) in Pune, India. I imposed the following conditions for approval on the case:

> Subject to review by SNEC and State as CDAC is deeply involved in development of an indigenous supercomputer. If approved then the following conditions apply: MOU 2B assurances as well as additional government assurances that these commodities will not be used in support of supercomputer R&D activities including software design, computational fluid dynamics, launch vehicle dynamics, ASW related signal processing or computational mathematics. All software in object code only. No embargoed application software.

These conditions were imposed because CDAC's main purpose in life is the development and production of a "homegrown" Indian supercomputer (See accompanying CDAC annual report). As the policy of the USG is to exact certain safeguards as a condition of exporting supercomputers to various countries, including: limited access, tight security, no reexport, control over remote access, no third country national access, no prohibited weapons development activities, etc., it appears that providing Indian supercomputer R&D facilities with equipment to facilitate the development of their own supercomputer which will not be subject to any safeguards is a fundamental non-sequitur. As a result, I requested special assurances that the [elided] Workstations requested for export will not be used for such purposes. Absent such assurances the license should be denied.

The other software items being restricted relate to missile, hypersonics, anti-submarine warfare and other advanced military developments which not only appear to be beyond the scope of the US/India relationship but also involve technologies cited by the Secretary of Defense, for several years in his Critical Technologies Plan, as among the "crown-jewels" of present and future U.S. military production capabilities.

On 4/18/91 I spoke with the India Desk Officer in the State Department's Bureau of Near East Affairs. He strongly disagreed with the DoD conditions in Spite of my pointing out what I described as a fundamental inconsistency in regard to India. He stated that obtaining such conditions would entail new negotiations and nowhere was there sentiment for such an undertaking. I reiterated the fundamental concerns over restricting the sale of a commodity (in this case supercomputers) versus assisting India to produce their own version of the commodity to which no conditions would apply regarding resale/reexport or end-use. He responded by saying "I don't want to address that and I will send it back to Commerce for escalation to the ACEP." With that the conversation was ended.

Peter M. Leitner
Foreign Affairs Specialist

Attachments:

1. 1988 - 1990 CDAC Activity Report
2. Case [elided]

[Attachment E]

April 1, 1992

MEMORANDUM FOR THE RECORD

SUBJECT: Ethical problems with Case [elided]

This memo is to excuse myself from any further actions regarding the above cited case. My reasons are based upon several ethical problems in assisting the approval, with what I am convinced are ineffective and misleading conditions, of an inherently strategic machine tool to the Peoples Republic of China.

Considerable research has pointed to the fact that this machine tool is a key element in the production of cruise missile engines, Apache and Blackhawk helicopter engines and in a variety of other military gas turbine engines such as the M1A1 and various warplanes. In fact, the majority of those machine tools have been sold to US aerospace related companies. Some have been delivered to DoE facilities for Black Programs as well.

I am deeply troubled by the fact that unsubstantiated claims made by [elided] that they will go out of business if this sale is rejected have not been investigated. In any event, the contributions Chinese ownership of this machine may have in helping them "close the gap" in critical subassembly and component manufacture for such power projection areas as cruise missiles, manned bombers and helicopters has been relegated to minor stature vis-a-vis perceived political pressure for approval as manifested in one phone call from a Senator. In addition, the fact that this case will serve as a precedent for approvals with placebo-like conditions for similar classers of strategic machine tools has likewise been brushed off.

As it is my understanding that my role in the export licensing process is to provide a strategic assessment of the appropriateness of a particular export and recommend a particular course of action, it is inappropriate to distort such analysis with economic, financial or balance of trade considerations. Other fora exist to provide that overlay within the decision-making system.

I am hereby excusing myself from further action on this case including the authoring of what have been described as "fig-leaf" conditions to justify an approval. This memo is being put in written form per the request of the Branch Chief, Dual Use Licensing.

Peter M Leitner
Foreign Affairs Specialist

[Attachment f]

June 4, 1992

MEMORANDUM FOR PETER SULLIVAN
THROUGH: P. Carellas

SUBJECT: CASE [elided] -- Gas Turbine Engines to PRC Navy

DoD appears about to embark upon a new, high order, level of support for the military of a proscribed nation -- the PRC. The issue facing OSD and the Services is whether to provide direct support which would result in the enhancement of the military power projection capabilities of the PRC through the export of sensitive dual-use technologies, in this case gas turbine engine production data via Chines test programs.

In addition, the USG appears to be in violation of CoCom regulations for the issuance of export licenses for technical data transfers to the PRC for the six years preceding the present application.

Chuck Craig attempted to point this out to you on Tuesday in our meeting concerning the present case. If this case goes to CoCom it is highly likely that various delegations will ask reasonable questions concerning the proposed test regime. Chief among these questions will be: Why were the technical data licenses not forwarded to CoCom as required under CoCom procedures? The Allies will be quick to point out that the technical data packages embodied In the earlier U.S. issued licenses were indeed subject to CoCom controls. They will conclude that the licenses were issued in violation of CoCom agreements and serve to unfairly advantage a U.S. company.

The Allies would be correct in coming to such conclusions based upon the CoCom regs in effect at the time of the licences being issued.

Please note that the type of technology licensed appears to be precisely that embargoed by CoCom as described in the attachments to this memo. In attempting to answer these questions the United States will be in a position similar to France during the Forrest-Line scandal. As you will recall, those machine tools were licensed for export to China in violation of CoCom regs and French Law and resulted in the arrest of several people. It was the French, in retaliation for pressure from the United States over this scandal, who identified the Ingersol 11-axis tape laying machine exported to the USSR under a US license without going to CoCom.

In addition, we now are seeing the French attempting to use the ill-advised US approval of the [elided] case as a hostage to their request to export production technology for 5-axis machine tools to the PRC. DoD needs to step back from its current rush to be everyone's friend and consider the undermining and erosive nature of decisions to approve cases such as the current United Technologies/ PLA Navy arrangement.

Attached please find the pertinent regulations governing the exportability of technical data which led to the current license.

Peter M Leitner
DTSA

[Omitted: News article from Investor Business Daily June 3, 1999, "Los Alamos Storing Export Data: CDs of Navy Weapons Blueprints May Be At risk," 2 pages]

[Omitted: Congressional subpoena, dated June 17, 1999, for Peter Leitner to appear before the House Government Reform Committee on June 24, 1999, 1 page.]

[End]

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