McDonnell Douglas Executive Cleared in China Export Case


                 Sunday, July 16, 2000

                 WASHINGTON (AP) - A federal judge dismissed an
                 indictment against a McDonnell Douglas Corp.
                 executive who was charged in a broader case that
                 accused the aircraft company of trying to
                 circumvent U.S. export controls and ship
                 sophisticated machine tools to China for use in
                 military production.

                 U.S. District Judge Paul L. Friedman, in a ruling
                 Friday, threw out the case against Robert Hitt, who
                 directed the company's China program office,
                 because it exceeded the five-year statute of
                 limitations.

                 Hitt was charged in only one of the 16 counts
                 against McDonnell Douglas and a Chinese
                 government-owned company, the China National
                 Aero-Technology Import Export Corp., or CATIC.

                 The case involved McDonnell Douglas' sale in 1994
                 of 19 surplus machine tools to the Chinese company
                 for $5 million. The U.S. government licensed the
                 export of the tools only for use in a joint
                 Chinese-McDonnell Douglas program to build 40
                 McDonnell Douglas civilian airliners in China.

                 Six of the sophisticated machine tools were
                 diverted, in violation of license restrictions, to
                 the Nanchang Aircraft Corp., where China makes
                 Silkworm cruise missiles and A-5 attack aircraft.

                 Hitt had argued that the indictment involved
                 allegations about incidences occurring on Sept. 14,
                 1994 - more than five years before the Oct. 19,
                 1999, charges were handed down.

                 The government had disputed this view, saying that
                 the conspiracy had a broader goal that was not
                 achieved until later - bringing it within the scope
                 of the statute of limitations.

                 The judge agreed with Hitt's view, dismissing the
                 indictment.

                 Hitt's lawyer, Dan Marmalefsky told The Los Angeles
                 Times that Hitt, who still works for McDonnell
                 Douglas, was relieved.

                 ``He can once again devote his full energies to his
                 work,'' Marmalefsky.

                 The lawyer told the newspaper that the charges
                 against the other defendants remained intact
                 because their lawyers agreed to waive the statute
                 of limitations even before the grand jury issued
                 indictments in the case.

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