Clinton’s Gift to Silicon Valley, And China

A little-noticed White House regulation change urged by Silicon Valley will allow the Chinese military to buy some of the most powerful U.S. computers without a government license or security review.

The move, announced by President Clinton on Aug. 3 and applauded by Vice President Al Gore, is drawing fire from security experts who say the computers could help foreign militaries develop nuclear weapons more quickly, and from a congressman who charges the White House is compromising national security for political profit.

The new regulations, scheduled to take effect in February, will relax U.S. government oversight on exports of ultra-powerful high-performance computers, or HPCs, to nearly all countries around the globe.

Security experts are particularly worried because the regulations reduce special oversight on computer exports to the the militaries of approximately 50 nations the United States has designated security concerns, including China, Russia, Pakistan and India, so-called Tier III countries.

Under the new rules, militaries in those countries would be allowed to buy, without a U.S. government license and 10-day multi-agency security review, systems with processing speeds as fast as 28,000 million theoretical operations per second (MTOPS), made by manufacturers like IBM, Silicon Graphics and Cray Inc.

A joint Commerce-Defense Department study has found nuclear blasts can be simulated with computers between 10,457 and 21,125 MTOPS.

The average desktop computer might measure around 1,000 MTOPS.

In its Aug. 3 announcement, the White House said the new regulations “promote national security” while they “ease unnecessary regulatory burdens on both government and industry.”

Industry Advocacy

The new regulations are the fifth and most aggressive relaxation of national security controls on high-performance computer exports since Clinton took office in 1993. Like changes before, they were made at the urging of America’s top computer companies — specifically, the chief executive officers of IBM Corp., Unisys Corp, Hewlett-Packard Co. and NCR Corp., at a June 8 meeting with Clinton administration officials.

The CEOs left that meeting “very encouraged,” according to a statement from the Computer Coalition for Responsible Exports, an organization representing the industry.

Following Clinton’s announcement, Unisys CEO and CCRE Co-Chair Lawrence Weinbach congratulated the administration. “The president’s decision makes U.S. computer manufacturers more competitive in the worldwide marketplace.”

Democratic presidential candidate Gore issued a statement also applauding the decision, saying it would “increase the ability of U.S. high-tech companies to compete and win in global markets.”

Silicon Valley Support

Rep. Curt Weldon, R-Pa., a frequent critic of the administration’s technology export policies, believes the changes are a reckless move to bolster campaign support from America’s prosperous computer sector.

“It’s another example of this administration’s wanton efforts to not worry about our security because they’re more concerned about favoring companies and enterprises, in this case involving China, which will benefit from this technology,” he says.

“None of it’s justified strategically,” says Peter Leitner, a strategic trade adviser at the Department of Defense, who has been critical in the past of administration and Pentagon technology export policies. “They’re in the pocket of Silicon Valley and they’re trying to do whatever they can to get whatever they can out the door before they leave office.”

America’s computer manufacturers must be satisfied with something the administration has been doing. The computer equipment and services industry has been the fourth largest contributing business sector to the Democratic National Committee this election cycle, donating $3.2 million from Jan. 1, 1999, to July 1, 2000, according to the Center for Responsive Politics.

The industry contributed $1.9 million to the Republican National Committee, making it the ninth largest contributor during that period, according to the center.

That time frame, it turns out, coincides with some of the administration’s most radical decontrols.

In January this year, the computing performance level requiring a license and security review for Tier III militaries was increased by the White House from 2,000 to 6,500 MTOPS. This month, it was raised again to 12,500. The latest decontrol will raise the limit to 28,000.

“Only a short time ago the Chinese were having trouble getting licenses for computers over 3,000 or 4,000 for military applications,” says Gary Milhollin, director of the Wisconsin Project on Nuclear Arms Control.

“If this were to happen 20 or 30 years ago, presidential candidates or incumbents would have to do what Richard Nixon did, which was resign in shame. Today, it’s more or less anything goes, and it’s outrageous,” says Weldon.

Security Concerns

Milhollin and other security experts are concerned it will become easier for countries of concern to purchase advanced computers they can use to more quickly and secretly develop and test nuclear weapons, ballistic missiles and other arms.

Previous government licensing reviews, according to Milhollin, blocked Digital Equipment Corp. from selling a high-performance computer to China’s Harbin Institute of Technology, which makes components for China’s long-range nuclear missiles, and an IBM deal with China’s Northwest Polytechnical University, which develops engines and guidance systems for large rockets.

Advanced high-performance computers can help China more quickly develop miniaturized nuclear warheads that will fit on cruise missiles or can be grouped on larger missiles, says Steven Bryen, a former director of the Pentagon’s technology control office.

“No one would argue that if you didn’t sell them a supercomputer they wouldn’t eventually be able to do it,” he says, “but high-performance computers will allow them to do so much quicker.”

More capable computers also could help countries more quickly develop techniques for foiling a future anti-ballistic missile system, says Leitner, who has testified several times on Capitol Hill against the administration’s export policies.

“Here [the administration is] trying to prematurely push a National Missile Defense system. And they’re concerned that other guy might develop better warheads with decoys and be able to simulate what we’re going to do,” says Leitner. “So why the hell are we giving them the computer horsepower to do that?”


The White House and computer industry representatives justify reducing the oversight not because security concerns have changed, but rather, by arguing hardware up to 28,000 MTOPS will soon be available commercially and therefore become too widespread to be controllable.

The new threshold represents “a realistic and enforceable control level,” said the White House statement, in light of “advances in basic computing technologies, and the problems inherent in trying to control commodity level items the administration has determined that widespread commercial availability.”

CCRE Co-Chair Daniel Hoydysh told a congressional committee in May the U.S. company Intel will soon be selling commercially a powerful new microprocessor, the Itanium, four of which can be linked to make a 23,700 MTOPS Internet business computer.

“At least five foreign firms [NEC, Siemens, Hitachi, Fujitsu, and Bull] have already indicated that they intend to market computer systems with the Itanium,” he said.


Congress’s nonpartisan watchdog agency, the General Accounting Office, says the White House has made its judgments about widespread availability based on industry projections, not on actual sales.

Furthermore, GAO Associate Director Harold Johnson noted at the May congressional hearing those projections were based on expected sales of U.S. computer technology — the very technology that would be controlled if the export regulations remained unchanged.

“It sounds to me like a self-fulfilling prophecy,” said Sen. Fred Thompson, R-Tenn, chairman of the Senate Government Affairs Committe.

Raising further question about the White House’s judgment of uncontrollability, Johnson noted U.S. companies and their subsidiaries are the main sources of supply for the most advanced high-performance computer technology around the world.

The GAO also concluded the administration has not presented a good analysis on how its new regulations might affect U.S. national security.

“The executive branch has not clearly articulated the specific national security interests to be protected in controlling the export of computers at various performance levels, nor has it stated how countries of military concern could benefit from using such computers,” said Johnson.

The relaxed restrictions will promote security, the White House asserts, because they would free up more government resources to stop proliferation of other technologies and because more money for U.S. computer companies would mean a stronger tech sector.

“The administration’s policy also recognizes the importance to our national security of maintaining a strong and vibrant industrial and technology base,” said Gore.

A Problem With Definition

Nearly all agree — the administration and its critics alike — that U.S. computer export regulations need to be tailored to distinguish between desktops, systems designed for business, and other parallel processors that could be used for military purposes.

The MTOPS criteria currently used applies to all computers. So, when an MTOPS limit is raised ostensibly to allow sales of new desktop or business computers, the higher threshold also makes available systems that could be used to design advanced aircraft or nuclear weapons.

Complicating the challenge, however, is the fact that systems designed for business can be used for military work.

The administration has for some time been considering tailoring the regulations to reflect distinctions between the different capabilities of computers.

“That’s still an open question,” says Eugene Cottilli, a spokesman for the Commerce Department’s Bureau of Export Administration, responsible for controlling HPC exports.

In the mean time, Milhollin says higher MTOPS levels will allow Tier III militaries to access the most advanced computer systems that can help them design and test weapons.

“It means the Chinese military can advance cheaper, faster and better with U.S. equipment.”