Time: Sun May 18 06:56:13 1997
by primenet.com (8.8.5/8.8.5) with ESMTP id GAA16993;
Sun, 18 May 1997 06:51:34 -0700 (MST)
by usr04.primenet.com (8.8.5/8.8.5) with SMTP id GAA19827;
Sun, 18 May 1997 06:51:23 -0700 (MST)
Date: Sun, 18 May 1997 06:51:22 -0700
To: (Recipient list suppressed)
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: SNET: Chinese penetrate the Clipper Chip? (fwd)
<snip>
>
>To All:
>
>This piece is kind of long. I know that. However, it is well worth
>reading because it comes close to outlining the actions of our current
>administration.
>
>Our action on this is necessary. If we all do our own unique thing . . .
>well, perhaps we can make life just a little less pleasant, and less
>profitable, for the communist spys. It's worth a try, and it could be fun,
>too.
>
>This posting, by the way, is going to about thirty others who, like you,
>can do something about this problem if they choose to act. And, if all
>choose to act in their own way, the problem will be handled on a variety of
>fronts.
>
>Regards,
>Doug Fiedor
>===============================================
>
>Why Red China Targeted the Clinton White House
>By Timothy W. Maier
>Insight Magazine, May 26, 1997
>
>
> Beijing's leaders have set their sights on
>American encryption and satellite technologies that,
>once obtained, could kill vital U.S. intelligence
>operations worldwide. The covert plot was launched
>in 1992 -- the same year Chinese operatives signed a
>military intelligence agreement to share secrets with
>Russia.
> Red Chinese spies are among us. Their infiltration
>is so deep, say U.S. intelligence experts, that the prime
>targets appear to be America's supersecret encryption
>and satellite technologies. Once obtained, their
>possession by Beijing could provide access to the most
>sensitive U.S. military secrets and wreck American
>intelligence-gathering worldwide. Interviews with
>Russian and U.S. intelligence specialists indicate that
>China also has plotted covertly to acquire top U.S.
>computer technology to disrupt U.S. intelligence
>operations and prevent American spies from monitoring
>Red Chinese activities.
> The current problem involves Bill Clinton's
>Chinese friendships, fund-raising and what some consider
>the president's contempt for security. But it began much
>earlier.
> In the 1970s, under the leadership of then-
>Secretary of State Henry Kissinger, the United States
>became a willing partner of Beijing by providing computer
>technology for Chinese missiles, ostensibly for defense
>against a Beijing-feared Russian invasion. Senior U.S.
>intelligence sources say those missiles now are pointed
>at Los Angeles, Hawaii or Alaska. In the meantime,
>Kissinger has become a multimillionaire trade partner
>for American firms conducting business in China. And,
>as Premier Li Peng publicly has stated, "Chinese will
>never forget the contributions made by Kissinger" (see
>"Lion Dancing With Wolves," April 21).
> Two decades later the policy of building up the
>Red China military continues. Insight has learned that
>a covert operation run by the CIA and National Security
>Council, or NSC, last year resulted in providing Beijing
>with missile hardware and software including programming
>and targeting capabilities and guidance systems,
>according to sources familiar with that operation. The
>NSC supposedly arranged the deal to set up a
>disinformation campaign in which future U.S. data might
>be used to disrupt Chinese intelligence, the sources say.
>"This was real-time data -- gone -- maybe 10, 20, 30 billion
>dollars' worth of technology," one source says. "The
>thought was that we had to give away some good stuff for
>them to take the bad stuff."
> A 1995 General Accounting Office, or GAO,
>report ordered by the Pentagon and State Department and
>critical of exports to China portrays the United States
>as being a blind trading partner of China. The
>unclassified report shows that the United States approved
>67 export licenses to China for military-industrial
>products between 1990 and 1993, including $530 million
>of missile-related technology. "The Department of
>Justice is concerned the Department of Commerce might
>not be identifying or seeking interagency concurrence on
>all potential missile technology export-license
>applications," the report declares.
> According to William Triplett II, former chief
>Republican counsel to the Senate Foreign Relations
>Committee, the British and French were furious when
>Clinton dismantled the Coordinating Committee for
>Multilateral Export Controls , or COCOM -- an
>international arrangement to prevent export of military
>high-tech. That decision, he says, secured the export to
>Russia and China this year of supercomputers capable
>of building sophisticated nuclear-guidance systems.
>California-based Silicon Graphics, now under federal
>investigation for illegal exporting, sold the
>supercomputers to the China Academy of Sciences and to
>a Russian nuclear-weapons lab, claiming the sales were
>based on an understanding that the technology would be
>used for environmental purposes. The company says it
>now feels terrible about these sales.
> Insight also has learned that Chinese agents
>have formed a secret partnership with Russian military
>intelligence, according to intelligence specialists
>working closely with the FBI. Intercepting signals
>from satellites and breaking into private and government
>computer systems are part of the purpose of this joint
>agreement secretly signed in 1992, says a former high-
>ranking Russian military intelligence agent who was
>stationed in Beijing and has spoken exclusively to
>Insight. "They shared sensitive information with the
>goal of destroying the United States," the agent says,
>noting that the U.S. Navy port facilities at Long Beach,
>Calif., recently signed over to the China Ocean Shipping
>Co. pending civil litigation, are to be used as a joint
>Chinese-Russian intelligence operation.
> The FBI learned of a major Chinese espionage
>plot to influence the elections last year and launched an
>investigation. The ex-Russian agent says China's
>political leaders initiated the operation after meeting
>to discuss how best to penetrate the U.S. government.
>"It was a political group decision," the source observes.
> What's surprising, says a former NSC staffer,
>is the reaction in the administration when the FBI
>reported the Chinese plot to influence the elections.
>"We have the smoking guns that the Chinese are trying
>to direct covert actions against the U.S., and nothing is
>done," the former staffer says. "Any other time it would
>have meant the expulsion of the Chinese ambassador."
> The ex-Russian intelligence agent's allegation
>of Chinese penetration has been confirmed by Randolph
>Quon, a former Hong Kong investment banker for two
>decades. Quon is close to several of the Chinese
>princelings -- the sons and nephews of China's ruling
>leaders who head the major Red Chinese trading companies.
>He says China had a "guan-zi," or connection to get
>access, for its U.S. political operation. "Li Peng was
>told the Lippo Group had a back channel to the White
>House, to Bill Clinton," Quon says, through "deal-maker"
>John Huang, the former Commerce official and ex-vice
>president of the Indonesia-based Lippo Group, which had
>estensive joint ventures with Chinese power companies.
>All utility companies in China are operated by the
>People's Liberation Army, or PLA, say defense-intelligence
>specialists.
> Quon claims 20 members of the Communist
>Party undertook a "strategic-information warfare campaign
>in the U.S." Part of that plan, he says, was taking
>control of Lippo -- a company that worked to form a
>strong relationship with China for economic and military
>opportunities. Four days after Clinton's 1992 victory
>the Lippo Group sold 15 percent, and then later 50
>percent, of its interest in the Hong Kong Chinese Bank
>to China Resources [Holdings] Co., a Chinese military
>front company for spy operations, according to U.S.
>defense intelligence agents.
> There were a number of objectives to these
>moves, but espionage headed the list. The key was
>encryption. A former NSC expert on intelligence
>encryption says China needs encryption technology
>badly and target the United States to get it. "The
>Chinese are into information warfare -- the ability to
>use computers to collect intelligence and conceivably to
>damage the U.S.," says the NSC staffer who served under
>Reagan. "It would cause real trouble for the U.S. if
>they obtained U.S. encryption technology. It will be a
>hit against the quality of American intelligence
>operations."
> How vulnerable are U.S. defense computers?
>An unclassified GAO report ordered in 1996 by the
>Senate Governmental Affairs Committee warns there
>were 250,000 hacker attacks in 1995, of which 65 percent
>were successful penetrations. In addition, it says, 120
>countries are capable of breaking into 2.1 million U.S.
>defense computers. Two Dutch hackers successfully
>tapped into computers during the Persian Gulf War and
>learned the precise locations of troop deployments. They
>then attempted to sell the classified information to
>Saddam Hussein, who turned it down because he thought it
>was a U.S. trick, according to the report. "At a minimum,
>these attacks are a multimillion-dollar nuisance to
>defense," the GAO report states. "At worst, they are a
>serious threat to national security."
> Senior U.S. intelligence officials say the
>Chinese waited patiently for an opportunity to strike and
>found vulnerability in a White House that seemed more
>concerned with filling a depleted Democratic National
>Committee war chest than with national security. Clinton
>denies security has suffered under his tenure, and Vice
>President Al Gore says he did nothing wrong in granting
>access to big-buck donors, but claims he won't "do it
>again."
> Sven Kramer, who long served the NSC at
>the White House under Republican and Democratic
>presidents, says he is disgusted with the cavalier
>actions of an administration that critics say put a
>dialing-for-dollars campaign ahead of national security.
>Kramer asserts he finds it difficult to believe that the
>United States would surrender key ports in Long Beach and
>at either end of the Panama Canal to a PLA-led shipping
>company called COSCO. He cites the "foolishness of the
>intelligence community" for not blowing the whistle on
>these operations.
> He is not alone. Bipartisan former intelligence
>officials, who asked not to be identified, trace this
>national-security breakdown to Clinton's out-of-control
>fund-raising campaign. They cite the selling of White
>House access to drug dealers and heads of Chinese gun-
>smuggling companies, as well as presidential one-on-ones
>with sons and daughters of the highest commanders in the
>PLA. They note that security clearances were overlooked
>and access to the president and high administration
>policy wonks was granted without so much as a FBI
>background check even for White House coffee-klatsch
>guests.
> Remember that in 1992 American voters elected
>Clinton as one who viewed the rulers of China as the
>"butchers of Beijing." Former Time journalists Ross
>Munro and Richard Bernstein write in their book, Coming
>Conflict with China, that the Chinese realized they needed
>to turn Clinton around and looked for ways to do so. The
>Chinese call it "zou-hou-men," which translates as back
>door. "The phrase expresses the realistically cynical view
>that qualifications, skill and lower prices mean less in
>China than the ability to skirt the official rules and to
>slip into the Palace of Power via the rear entrance," the
>authors write.
> One way to skirt the process was to get American
>businesses to do the lobbying for China's "most favored
>nation," of MFN, trading status and to get big donors to
>persuade Clinton to support MFN. China expert Orville
>Schell, dean of the graduate school of journalism at the
>University of California at Berkeley, says the Chinese
>attempt to influence policy may have been a clumsy effort
>to establish a beachhead, but that the influence peddling
>most likely was done to get American business on their
>side.
> "I would not be looking for a suitcase of money
>to a senator and congress," Schell says. "Now there may
>be some of that. But what is really going on is China is
>doing a more indirect approach -- they are buying and
>selling more joint ventures. China's leaders know it's
>who you know. They know the real influence is with
>American business because they know businesses can exert
>pressure."
> But for China to influence Clinton it needed a back
>door to the White House to push Beijing's agenda -- or
>risk losing billions if MFN were rejected. The door was
>there. Enter John Huang, that former vice president of
>the Lippo Group, whose whereabouts now are unknown.
>Although he was granted top-secret clearance on Jan. 31,
>1994, Huang officially didn't begin work as deputy
>assistant secretary of Commerce for international
>economic policy until July 18, 1994.
> Senate investigators characterize Huang as a
>"human vacuum cleaner" who sifted through an enormous
>amount of classified information dealing with China as if
>he knew his opportunity to do so would be short-lived.
>During his 18 months at the Commerce Department, Huang
>was privy to at least 109 intelligence briefings -- 70 in
>1994 and 39 in 1995, according to recently released
>records from Commerce. The numbers are a far cry from
>the 37 classified briefings initially admitted by Commerce,
>and this has Senate investigators extremely upset. "We
>could have been plugging up holes" and controlling the
>damage, says an angry investigator. "The FBI is now doing
>a damage assessment."
> Other former senior intelligence officers in both
>NSC and the National Security Agency, or NSA, say it
>would have been extremely unusual for Huang, who served
>in the Taiwan air force, to have been cleared for such
>access with a background check. "That's only done with
>congressmen," says a former senior NSA official.
> Senate investigators say they are concerned about
>Huang meeting with a Chinese Embassy official inside his
>Commerce office 30 minutes after being briefed by John
>Dickerson, head of the CIA's office of intelligence
>liaison at Commerce. Records also show Huang placed
>at least six telephone calls to Lippo shortly after
>intelligence briefings. Alarmed intelligence sources say
>Huang's top-secret clearance would have allowed him to
>see hundreds of classified documents in addition to
>attending briefings.
> Huang's clearance was not pulled until Dec. 9,
>1996, nearly a year after he left Commerce to join the
>DNC fund-raising campaign as a finance vice chairman,
>Commerce records show. It is yet to be revealed whether
>he attended classified meetings while at the DNC.
> "What this says is that Huang's security clearance
>was waived," former NSC staffer Kramer says. "That's is
>rare and far too generous of the president. The president
>can waive security if it is considered urgent in order to
>go on a trip or be involved rapidly in a project."
>Records show Huang was not planning any trips.
> Commerce claims the clearance was needed for
>an International Trade Administration security briefing
>but acknowledges no records exist to show the briefing
>ever occurred. That raises the question: What was Huang
>secretly involved in? Of utmost concern is whether he was
>briefed on a top-secret project dubbed "Clipper Chip."
>This "bug-on-the-chip" project, as some intelligence
>officials call it, began in 1987 inside the NSA to help
>the Fort Meade, Md., spy agency snoop on its enemies
>and protect secrets in a joint partnership with federal
>law-enforcement agencies.
> Initially the Clipper Chip was an electronic
>device used to secure telephones, but after years of
>research the Son of Clipper was developed. It was to be
>placed inside every American-built computer of fax
>machine to protect it from hackers. The chip also
>permitted wire-tapping through unique keys that unlock
>communications encrypted with the chip. The keeper of
>the keys, according to the plan crafted at the Clinton
>White House, would be the FBI and Commerce. In a
>storm of controversy loud warnings of invasion of privacy
>came from the private communications sector -- with the
>exception of AT&T, which installed the chip. The
>Clipper Chip was killed last year for commercial use,
>though it remained in federal computers until giving way
>to a new system in March 1997.
> NSA records show Clipper Chip meetings were
>held with NSA, NSC, CIA, FBI and Commerce officials,
>as well as with former Associate Attorney General and
>convicted Whitewater attorney Webster Hubbell and former
>Deputy White House Counsel Vince Foster, two months
>before Foster died in 1993. Investigators still are
>trying to determine if Huang attended any of these
>briefings.
> Commerce spokeswoman Brenda Dolan insists
>that "John Huang has nothing to do with the Clipper Chip,
>nor should he have. He worked in the international trade
>administration. He did not work in export of the Clipper
>Chip." But Senate sources tell Insight that Huang
>attended weekly CIA and China meetings at which such
>technology may have been discussed. His top-secret
>classification would have allowed him to view Clipper
>Chip documents if he chose, according to intelligence and
>Senate sources.
> The NSA, one of the strongest supporters of the
>chip, warns of enemies obtaining it. In a partially
>unclassified document labeled "Secret Introduction," the
>NSA says the "use of strong cryptographic products by
>the myriad of criminal and hostile intelligence agents
>poses an extremely serious and unacceptable threat to
>effective law enforcement, the public safety and national
>security."
> Dorothy E. Denning, professor of computer science
>at Georgetown University and author of Cryptography and
>Data Security, supports the use of the chip for law-
>enforcement activities. FBI statistics indicate
>authorized wiretaps have led to the conviction of 20,000
>felons resulting in $296 million in fines, $756 million
>in court-ordered restitution and $1.8 billion saved in
>potential economic loss.
> Denning claims it nearly is impossible to crack
>the Clipper systems. "You have to penetrate and you
>would have to get in the building, then you would have
>to get in the safe and then the computer keys," she says.
> "It's not realistic and even if you have the keys it's not
>useful unless you have the right equipment."
> The safe room holding the keys is what Charlie
>Smith, president of Virginia-based Softwar Co. and a
>critic of Clipper, calls the "Mission Impossible" room,
>with the big mainframe computer, stacks of classified
>data, secret radio frequencies and wired alarm systems.
>"It's a highly classified library with guards," Smith
>says. "The clipper or key recovery as it is currently
>being called was supposed to protect government secrets.
>Instead, they have built an electronic version of Pearl
>Harbor and put it neatly in one little row where one guy
>can walk in and then walk out with it."
> There also are others involved in Clinton fund-
>raising to whom congressional committees are anxious
>to pose questions about interest in secret U.S.
>technology. Ira Sockowitz, a Clinton administration
>lawyer, admitted during a deposition with Judicial Watch,
>a Washington-based watchdog group pursuing the Clipper
>documents in relation to Huang's activities at Commerce,
>that he walked out of the Commerce Department with CIA,
>NSC and NSA classified files on encryption or decoding
>software, spy satellites, China, Russia and other
>countries. Sockowitz, who had a top-secret clearance,
>was appointed by Clinton to serve as a special legal
>counsel in Commerce. He says he simply was transferring
>the files to his new post at the Small Business
>Administration, where he became deputy administrator in
>the spring of 1996. The records removed contain some
>2,800 pages, including a classified report called "A
>Study of the International Market for Computer Software
>With Encryption."
> Sockowitz, now a Washington consultant, claims
>he never met Huang, although the two men worked together
>on the Asian Pacific American Working Group -- the
>principal unit in the DNC responsible for raising about
>$7 million in campaign contributions in the Asian
>communities during 1996 -- much of it returned because
>of questionable origins.
> How spooky does it get? An odd link to this
>story is that the NSA chose Arkansas-based Systematics
>on Sept. 14, 1990, to construct the "Mission Impossible"
>room called the Secured Compartmentalized Information
>Facility, or SCIF, in Fort Gillem, Ga., according to an
>unclassified NSA memo. At that time Systematics was run
>by Jackson Stephens who, along with Mochtar Riady and
>James Riady controlled Lippo's Worthen bank, which gave
>Clinton a multimillion-dollar loan to get through the
>1992 presidential election. The same Lippo Group, which
>later dumped Worthen, is linked to China Resources, a
>front for Chinese military-intelligence operations, say
>U.S. defense intelligence sources.
> The concern of the U.S. intelligence community
>is whether Chinese agents penetrated the SCIF. An NSA
>staffer notes that the Chinese once managed to bug the
>Russian Embassy in Beijing, and that if they built the
>SCIF "they could do a lot of things there."
> That brings the story back to Huang, who worked
>with the Riadys at Worthen Bank and appears to have
>formed another intriguing friendship with PLA arms dealer
>and White House coffee-klatsch guest Wang Jun. China's
>Far Eastern Economic Review reported in April that Wang
>admitted to Beijing's political leaders that he had paid
>Huang $30,000 for reasons unexplained. One Senate
>investigator says this could be the "smoking gun" that
>ties Huang to the PLA. If so , it may help prove that
>the spies among us walked away with U.S. national secrets
>of incalculable value -- and tie the operation directly
>to the Clinton team.
>
>
>
>
>-> Send "subscribe snetnews " to majordomo@world.std.com
>-> Posted by: kalliste@aci.net (J. Orlin Grabbe)
>
>
>
========================================================================
Paul Andrew, Mitchell, B.A., M.S. : Counselor at Law, federal witness
email: [address in tool bar] : Eudora Pro 3.0.1 on Intel 586 CPU
web site: http://www.supremelaw.com : library & law school registration
ship to: c/o 2509 N. Campbell, #1776 : this is free speech, at its best
Tucson, Arizona state : state zone, not the federal zone
Postal Zone 85719/tdc : USPS delays first class w/o this
========================================================================
Return to Table of Contents for
Supreme Law School: E-mail