-Caveat Lector-

Justice Department Probes CIA For Possible Leaks

Copyright � 1998 Nando Media
Copyright � 1998 The Associated Press

WASHINGTON (December 5, 1998 7:39 p.m. EST
http://www.nandotimes.com) -- The Justice Department is conducting an
obstruction-of-justice probe of CIA officials who passed along to a satellite
contractor sensitive information about a Senate investigation into
technology transfers to China.

Government officials reached late Friday said the criminal investigation
centers on information passed by the intelligence agency to Hughes
Electronics Corp., maker of both commercial and spy satellite systems.

At issue is whether that information compromised a Senate Intelligence
Committee investigation into allegations that Hughes and other U.S.
companies violated federal export laws by sharing restricted technology
with China as part of commercial satellite export deals.

There is no dispute that the CIA passed information on to Hughes -- the
CIA has acknowledged as much to both the Senate committee and
the Justice Department. The question being examined by the department is
whether the CIA broke the law in doing so.

"The CIA is cooperating fully with the investigation," said an agency
spokesman.

The probe was first reported in today's editions of The Washington Post
and the New York Times .

U.S. officials familiar with the investigation said it focused on two incidents
in which information connected with the Senate investigation was
passed by CIA officials to counterparts at Hughes.

The CIA told Hughes officials that one of the agency's analysts, Ronald
Pandolfi, had told Senate investigators that he had concluded as early
as 1995 that Hughes had become too aggressive in marketing technology
to China.

CIA officials also advised Hughes that some company officials might be
called before the Senate panel. The agency further sought to make
available to Senate investigators the names of Hughes executives who
were familiar with the technology transfers to China and could give
their version of the disagreements with Pandolfi.

When the CIA informed the panel it had told Hughes that company officials
might have to testify, committee staffers and some senators were
furious, according to officials familiar with the case.

Several CIA officials, including general counsel Robert McNamara, are
scheduled to testify before a federal grand jury investigating the CIA's
role in the Hughes case.

The potential case against the CIA appears to boil down to one of
interpretation. Some on the intelligence committee argue that the CIA may
have obstructed justice by revealing to Hughes information about the
committee investigation.

The CIA, according to U.S. officials familiar with the case, argues that the
information passed on to Hughes was shared in the normal course
of business and that the committee was informed of the information sharing.

"At worst, this could be viewed as a miscommunication among government
agencies," said one U.S. official who spoke on condition of
anonymity.

Several investigations -- both by the Justice Department and Congress --
have focused on concerns that China received valuable information
useful in improving ballistic missiles from U.S. contractors who were
ostensibly working with China on commercial satellite projects.

By JOHN DIAMOND, Associated Press Writer


------------------------------------------------------------------------
Steve Wingate
California Director
SKYWATCH INTERNATIONAL

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