-Caveat Lector-
Chinese Firm Settles Charges
Fines to Be Paid Over Export Law Violations in Aerospace Deal
By Bill Miller
Washington Post Staff Writer
Saturday, May 12, 2001; Page A02
A Chinese-run company agreed yesterday to pay $2.3 million in fines and
penalties to settle criminal and administrative charges stemming from a
business deal in which aerospace equipment purchased from McDonnell
Douglas Corp. wound up in a Chinese military plant.
Prosecutors said the case marks the first time that a Chinese state-run
company has waived sovereign immunity and been convicted of a crime
against the United States. Although the U.S. investigation began more
than five years ago, its resolution comes against the backdrop of
worsening U.S.-Chinese relations and amid a spate of allegations that
Chinese firms are engaged in industrial espionage.
TAL Industries Inc. -- a California-based subsidiary of the China
National Aero-Technology Import and Export Corp. (CATIC), a
government-owned defense firm that is the Chinese military's main
purchasing arm -- entered a plea of no contest to a charge of felony
violation of U.S. export laws.
By making such a plea, the firm did not admit guilt but also did not
contest the prosecution's evidence. As part of its plea agreement in
U.S. District Court, the firm agreed to pay a $1 million fine and to
spend five years on probation. Judge Paul L. Friedman entered a
finding of guilty.
In a related move, TAL Industries agreed to pay $1.3 million in
penalties to settle administrative proceedings before the Commerce
Department; and it will give up its U.S. export privileges for 10
years.
Criminal charges remain pending against McDonnell Douglas and its
subsidiary, Douglas Aircraft Co.
The allegations stemmed from McDonnell Douglas's 1994 sale to CATIC of
$5.4 million in sophisticated machining equipment used to manufacture
aircraft parts. In export licensing applications submitted to the
Commerce Department, McDonnell Douglas and CATIC had stated that the
equipment would be used in Beijing in a joint venture with CATIC to
produce commercial equipment.
But six machine tools instead wound up in Nanchang in a military
facility that makes Silkworm missiles.
Prosecutors said TAL Industries falsely certified the details on the
export application, which they said was a criminal violation of the
Export Administration Act.
In court yesterday, Zhao Runqui, president of TAL Industries, insisted
that the equipment was to be used for building U.S.-designed civilian
aircraft, not for military purposes. He said any "technical mistakes"
that were made stemmed from miscommunication.
"TAL never intended to violate any U.S. laws or regulations," he said.
"We have always maintained that this is a commercial, not a criminal,
matter."
McDonnell Douglas officials have said that they learned in early 1995
where the equipment had actually gone and promptly notified the Commerce
Department. The equipment was not in use and was subsequently moved to
a civilian manufacturing location in China.
The plea agreement calls upon TAL Industries to make its employees
available for authenticating business records at future trials and
administrative proceedings.
Although TAL Industries forfeited its export privileges for a decade,
CATIC and two other affiliated companies face no such restrictions. But
if they violate export laws, they will forfeit export privileges for
five years, officials said. Prosecutors agreed to drop the criminal
charges against CATIC and the two affiliates.
Rick Fuller, a spokesman for Boeing Co., which bought McDonnell Douglas
in 1997, maintained that yesterday's plea "does not implicate McDonnell
Douglas in any wrongdoing. . . . McDonnell Douglas remains confident
that this matter will be resolved with the finding that neither the
company nor any of its employees engaged in any wrongdoing."
On Tuesday, the D.C. Circuit of the U.S. Court of Appeals upheld
Friedman's decision to dismiss a conspiracy charge against Robert Hitt,
a Douglas Aircraft official, after finding that a five-year statute of
limitations had expired.
=================================================================
Kadosh, Kadosh, Kadosh, YHVH, TZEVAOT
FROM THE DESK OF:
*Michael Spitzer* <[EMAIL PROTECTED]>
The Best Way To Destroy Enemies Is To Change Them To Friends
=================================================================
<A HREF="http://www.ctrl.org/";>www.ctrl.org</A>
DECLARATION & DISCLAIMER
==========
CTRL is a discussion & informational exchange list. Proselytizing propagandic
screeds are unwelcomed. Substance—not soap-boxing—please! These are
sordid matters and 'conspiracy theory'—with its many half-truths, mis-
directions and outright frauds—is used politically by different groups with
major and minor effects spread throughout the spectrum of time and thought.
That being said, CTRLgives no endorsement to the validity of posts, and
always suggests to readers; be wary of what you read. CTRL gives no
credence to Holocaust denial and nazi's need not apply.
Let us please be civil and as always, Caveat Lector.
========================================================================
Archives Available at:
http://peach.ease.lsoft.com/archives/ctrl.html
<A HREF="http://peach.ease.lsoft.com/archives/ctrl.html";>Archives of
[EMAIL PROTECTED]</A>
http:[EMAIL PROTECTED]/
<A HREF="http:[EMAIL PROTECTED]/";>ctrl</A>
========================================================================
To subscribe to Conspiracy Theory Research List[CTRL] send email:
SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email:
SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
