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List:       isn
Subject:    [ISN] Encryption Missing after US/China Accident
From:       mea culpa <jericho () dimensional ! com>
Date:       1998-05-21 1:01:52
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Forwarded From: drudge@drudgereport.com
XXXXX DRUDGE REPORT XXXXX 12:32:55 EDT WED MAY 20 1998 XXXXX


**Exclusive**

One major issue that made Defense and State Department types nervous about
the launching of U.S satellites from Chinese rockets was how to protect
encryption equipment that is built into a satellite and electronically
interprets commands from ground controllers who manipulate the bird once it
is in orbit.  

"Similar devices are used to communicate with American spy satellites, and
the Pentagon and intelligence agencies worried that anyone who could crack
the code could take control of the satellites themselves," NEW YORK TIMES
hotshot Jeff Gerth reported last week.

Commerce and Clinton types argued that encryption equipment would be
embedded into the satellite and the device would not present a military risk
-- the Chinese would be unable to get their hands on the encryption because
American military officials "watch the satellites with care when they are in
Chinese hands." 

National Security Adviser Sandy Berger, live from Botswana, told CNN's Wolf
Blitzer last weekend:  When U.S. satellites are launched from Chinese
rockets "they are put in a black box under DOD [Department of Defense]
supervision.  They're taken to China. They're put on top of the missile, and
they're blown up to the sky. So there is no technology transfer."

Blitzer, who most always comes to the table with nothing more than press
clippings and an attitude to conform, failed to raise a nightmare scenario
with Berger:  What if a Chinese booster failed to blow a satellite up to the
sky and encryption somehow became exposed?  

Events surrounding the Feb. 15, 1996 explosion of a Chinese rocket carrying
a $200 million U.S.A. LORAL satellite seconds after liftoff at the Xichang
Satellite Launch Center in Sichuan Province in southern China -- events that
are now at the center of a secret federal grand jury probe -- may be such a
nightmare, the DRUDGE REPORT has learned.

A veteran employee of LORAL SPACE AND COMMUNICATIONS has described to the
DRUDGE REPORT just what went down during a LORAL review of the 1996 failure.

"The most interesting aspect of the accident was this: engineers who
reviewed the recovered payload debris noticed something special that was
missing: encryption hardware."

The LORAL source, who worked at LORAL's satellite manufacturing facility
when the Chinese launches began, continues:  "I spoke to one of our
engineers about a year after the explosion, he is like many at LORAL,
retired military officers from the black programs of our military.  His
assumption was that the Chinese kept the encryption IC board with the intent
of reverse engineering its function and that espionage was China's intent."

The Pentagon press office refused comment on this report.

-o-
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