Ignoring alarms

Tuesday, May 4, 1999

On a cold December day in 1995, alarm bells went off at the headquarters of the supersecret National Security Agency. The National Security Agency, located inside an Army base at Fort Meade, Maryland, is the United States intelligence community's ears around the world, picking up millions of communications, ranging from coded military radio conversations to the cell phone discussions of weapons dealers in Kazakhstan.

The December intercept picked up by National Security Agency listeners got the immediate attention of Vice Admiral J. Michael McConnell, the agency's director and the former intelligence chief on the Joint Staff. In 1995 he had become the nation's premier electronic spymaster known as the DIRNSA, the intelligence community's name for Director, National Security Agency. The intercept that crossed his desk that day revealed that in December 1994 China had completed a $70,000 deal with Pakistan to sell five thousand custom-made ring magnets produced by the China Nuclear Energy Industry Corporation (CNEIC), an arm of the Chinese government's China National Nuclear Corporation. The intelligence report noted how the ring magnets could be used to produce fuel for nuclear weapons.

The National Security Agency immediately sent out the cable under Admiral McConnell's title to the head of the CIA's Non-Proliferation Center, and to senior officials at the Pentagon, White House, and State Department, notifying them of the shipment. It was labeled "Top Secret" with several code words following it, including "Gamma," the highest classification. It also contained the notice, "Warning: this report contains Gamma Commint of an extremely sensitive nature."

The intelligence report created a furor within the administration over whether China had helped Pakistan to upgrade its ability to make nuclear weapons fuel for its nuclear arsenal, estimated to be about ten to fifteen unassembled nuclear devices. At the State Department, Robert Einhorn, deputy assistant secretary of state for political-military affairs, recognized the problem immediately. He had been assigned the task of looking into how a complex set of laws passed by Congress, aimed at putting teeth into U.S. policies to halt the spread of weapons of mass destruction, might apply to various international weapons activities. The ring magnets triggered a provision of American law related to U.S. business loans. Einhorn called the U.S. Export-Import Bank and notified officials there about the intelligence reports that could trigger the 1994 Nuclear Proliferation Prevention Act. The act requires the secretary of state to notify the bank if any nation is caught assisting foreign nuclear weapons development. The State Department said the bank could be required to hold up all new loan guarantees for projects sought by American businesses in China becaus e of the ring magnets deal.

The Commerce Department, headed by former Democratic National Committee Chairman Ron Brown, was soon leading the charge to block sanctions. Sanctions against China had been imposed in 1993 for selling M-11 missile components but were lifted after Brown and the chairman of satellite maker Hughes Electronics, C. Michael Armstrong, fought to have them nullified. They were removed in 1994. Armstrong wrote a tersely worded letter to Clinton on October 29, 1993, highlighting his support for the president's economic package, for his legislation in California, and for loosening export controls. "I am respectfully requesting your involvement to resolve the China sanctions," Armstrong wrote, noting that he had spoken to a Chinese official who informed him Beijing was "positive" about the idea.

But when Secretary of State Warren Christopher told the Chinese that the United States needed to see "some sign of movement" that China was curbing weapons proliferation, a National Security Council memorandum reported, "The Chinese were not forthcoming." The memorandum said that Armstrong and Hughes "lobbied aggressively" to allow satellites from the company to be sold to China. In 1995 Clinton named Armstrong to the influential Export Council, where he worked hard against national security trade controls. The council produced a lengthy paper that argued against imposing sanctions on foreign trading partners that engaged in illicit weapons sales.

Bill Gertz is national security correspondent for The Washington Times and the author of a new book, "Betrayal: How the Clinton administration undermined American security from which the above is excerpted.