Edition: U.S. / Global

A Secret U.S. Device Missing After '96 China Rocket Crash

Published: June 24, 1998

A secret encoded circuit board containing sensitive technology was missing from the wreckage of an American satellite aboard a Chinese rocket that exploded in 1996, and American officials said today that they suspected that the Chinese authorities took it.

The disclosure of the missing circuit board, which tells an orbiting satellite which way to point to receive and transmit signals to and from Earth, was made today at an unusual joint hearing of two House committees, National Security and International Relations.

If China did steal the circuit board, it would be a violation of a technology agreement that Beijing and Washington last amended in 1993 to prevent the transfer of militarily sensitive American technology.

In raising that possibility, the disclosure today opened a new front in Congress's inquiry into whether sensitive space technology was transferred to China by American aerospace corporations using Chinese rockets to launch their satellites.

Representative Curt Weldon, Republican of Pennsylvania, said the missing circuit board would be a main focus of a special select committee the House created last week to investigate the wide-ranging accusations involving China. The control box containing the circuit board was recovered at the crash site, he said, but the board was gone.

''We better call the Chinese on this issue,'' Mr. Weldon said. ''That is a very serious concern.''

On Feb. 15, 1996, United States military monitors at a command post in southern China watched the Chinese rocket streak toward space carrying a $200 million American communications satellite made by Loral Space and Communications and Hughes Electronics,

But 22 seconds after liftoff, the Long March rocket exploded, showering debris and burning fuel on a nearby Chinese village, where by American accounts as many as 200 civilians were killed.

For five hours, United States officials said, Chinese officials barred them from the crash site, purportedly for their own safety. When the Americans finally reached the area and opened the battered but intact control box of the satellite, a secret encoded circuit board was missing.

Now Congressional investigators are asking whether there could be any explanation for the loss of the board, other than that the Chinese took it.

At today's hearing, Mr. Weldon quoted a statement he said was given to him by the National Security Agency that warned: ''If the encryption board were reversed-engineered, the knowledge gained could be used to strengthen adversaries' knowledge'' of the devices the United States uses to safeguard its communications systems.

A senior Defense Department official said tonight that he was not aware that the Government had demanded that the Chinese account for the missing encoded card. ''We're not 100 percent sure they filched this encryption card,'' the official said. ''It may have just fallen out, but we have to assume they do have it.''

At the hearing, lawmakers also disclosed that the Justice Department has begun an investigation of a second failed China missile launching that involved an American satellite. This second inquiry is centered on the possibility that an American aerospace corporation shared sensitive information with the Chinese without Government supervision.

Today's revelation also adds a new dynamic to a Justice Department inquiry into the matter. Federal investigators are trying to determine whether Hughes and Loral divulged sensitive technology to Chinese rocket scientists during an analysis of the February failed 1996 launching.

The State Department oversees exports of the encoded boards as militarily sensitive technology. But when the same components are embedded in a satellite, the whole unit falls under the export controls of the Commerce Department. A Government auditor told a Senate inquiry this month that the Commerce Department rules were looser than the State Department rules.

Government officials insist that United States satellites launched on Chinese rockets are protected with armed American guards around the clock. But the Commerce rules provide little protection against sensitive technology being released in accidents like the February 1996 explosion.

William A. Reinsch, an Under Secretary of Commerce for export administration, told a House hearing last Thursday that ''there would not have been any effect on national security'' if Chinese engineers illegally obtained the encoded device.

But the Defense Department said in a statement it provided to Mr. Weldon that the impact of the ''loss of the chips'' on national security would be minimal, rather than nonexistent.

In addition, Mr. Weldon said, the National Security Agency, the Government's code makers and code breakers, said that it had changed the encoded algorithms in satellite circuit boards after the failed 1996 launching.

''If there was only 'minimal impact' to national security, why did the N.S.A. change the algorithms?'' Mr. Weldon asked today's witnesses from the State, Defense and Commerce departments, who included Mr. Reinsch.

The Administration officials said they were not prepared to answer that question.

Today's hearing also provided new details into the Justice Department's investigation of the role of American satellite makers in helping China's troubled rocket program.