Dangerous Satellite Technology Transfers: Launching A Solution
Mr. Chairman, members of the committee, I want to thank you for inviting me to testify today on how best to prevent the further transfer of sensitive satellite technology to nations such as China. I have been concerned about this issue for over a decade starting with the Pentagon's agreement in the late l980s to let China launch U.S. satellites. As Deputy for Nonproliferation Policy, I signed out the Pentagon's first objections to loosening controls over such transfers in l991. I published the first analyses of the control challenges posed by this trade in l994 and was asked early in l995 to assist the House National Security Committee in its consideration of proposals to shift virtually all jurisdiction over commercial satellites from State to the Commerce Department.
As someone who has long been critical of loosening controls over satellite transfers to countries such as China, I have a different message for you today: If Congress is serious about stemming the flow of satellite technology to nations like China, it will have to focus well beyond the half-measures of control and instead restrict certain U.S. satellite transfers and supply American space firms with the incentives needed to get them back to launching satellites from the U.S. Indeed, merely, tightening controls or reversing the jurisdiction over commercial satellites to Commerce, will, at best, only result in troublesome satellite technology transfers being flagged after they have occurred and may encourage officials even to hide such information.
Some of these recommendations may appear untimely. Indeed, given the mounting urgency of crises other than the Loral-Hughes satellite controversy, it's tempting now simply to dispose of the matter. Certainly, among the Administration's critics, there is a agreed fix: And that is to have Congress pass legislation that would force the White House to admit it erred when it decided to move most satellite technology from State to looser Commerce Department controls.
Politically, passing such legislation now is tempting. The President is weak: He may no longer be able to block such a move. But upon reflection, this approach should be seen as both incomplete and arguably misguided. Why? First, it glosses over the national security threat continued satellite technology transfers to nations such as China poses. This threat is hardly diminishing. Indeed, what's most worrisome about Iran's current missile efforts is that the Russian and Chinese assistance it enjoys may also have helped North Korea. Pyongyang, after all, also is supporting Tehran's missile program. More important, the staged rocket North Korea just fired (with Pakistani and Iranian scientists present) is strikingly similar to the rocket Pyongyang is perfecting with China and Russia in Iran. China and Russia, meanwhile, are developing more advanced long-range missiles of their own.
All of this confronts us with a disturbing, unanswered question: How could transferring satellite technology under even tight controls to the firms and countries engaged in these projects be seen as anything but an endorsement of their proliferation? Some have cheerfully suggested that sanctioning these entities might be a solution. But, the truth is, neither the Executive nor Congress has ever been much inclined actually to impose such penalties and most recently have expressed interest in making their application even less likely. Without the will to curtail the growing trade in space technology with countries like China, any Congressional enthusiasm simply to increase State monitoring of this commerce risks conveying acquiescence or assent to the proliferation our government opposes.
Second, however politically convenient it might be to reinstate State satellite controls and to argue that this will stem dangerous technology seepage, the sad truth is that the most celebrated of the leakage to date, occurred when the State Department was in charge. As I've highlighted in Chart I, State satellite technology controls are more like Commerce controls than not. Indeed, what's striking isn't how much tougher State controls are than Commerce controls -- which they are -- but rather how profoundly deficient both are in monitoring unannounced meetings or data exchanges, e-mails, faxes, telephone calls or third party nationals not covered by U.S. laws -- methods, all of which are easy conduits for the transfer of U.S. satellite technology.
Thus, it was only after Loral inappropriately faxed their accident analysis to the Chinese and told State it had done so that State took action. With the Boeing Sea Launch Project this summer it was much the same: Only when Boeing and Nichols Research notified State that they had held unannounced meetings with their Russian and Ukrainian counterparts -- meetings that required unsecured licenses -- did State put a hold on the project. Then there is the case of Asiasat II. Here, State officials still do not know what foreign nationals involved in the project may have conveyed to the Chinese. Asked if foreign customers and American contractors could attend a Chinese satellite kick-motor demonstration, State consented but never monitored what transpired.
Could State controls be improved? Certainly. Yet, if all of the recommendations I and others have made for tightening them were adopted, it would still only help our government inventory illicit transfers after they had occurred. This can best be seen by examining Chart 2, which highlights how State and Commerce satellite controls have performed. There's no question but that if Congress did all it could to strengthened State controls, it could improve the monitoring of data exchanges and the continuity of such monitoring. Still, even the best of controls could not assure contractor compliance in any but a few straightforward cases -- i.e., where it was absolutely clear what should and should not be transferred and in which the contractor's cost for complying was low. Why? Because with fast-changing, complex fields like satellite integration, the success of any controls -- under either State or Commerce -- depends on the good faith and word of the contractors themselves. As such, regulations will always be spring-loaded to fail against parties -- such as, the Chinese, Russian, Ukrainian and American contractors -- who are eager to avoid launch failures and know that if they are fined, it will only cost them a small fraction of what a successful launch program is worth.
If Congress is serious about reducing the risks of damaging satellite technology transfers, then, simply shifting or promoting more controls is not the answer. Instead, Congress must first clearly identify and bar what's both uncontrollable and objectionable -- dual-use satellite technology transfers to nations that compromise our national security. This could mean a total embargo on dual-use satellite exports to nations such as China -- as the House proposed in June -- or, as I have proposed, a limited ban on the transfer new satellite models not previously launched. At the very least, it requires an honest appraisal of which nations we can tolerate diverting our dual-use satellite technology to military purposes. Which ever ones we can't tolerate, we should cut back increasing the number or quality of our satellite transfers to.
This brings me to my final and most important point. Any effort to deprive industry of foreign launch options must be balanced. Launch denials are only tenable, if Congress assures industry the programs and incentives to afford it timely, competitive launch alternatives based in the U.S. This is worth doing if only to regain the strong launch mobilization base the U.S. once enjoyed. Twenty years ago, the U.S. made nearly all of the world's commercial satellites and launched most of them. Today, the U.S. still makes nearly 80 percent (and 100 percent of the satellites the world wants most) but launches little over 30 percent of them from the U.S.
Why are U.S. firms launching overseas? Not because foreign launches produce more U.S. jobs or because U.S. firms can't sell their one-of-kind, leading-edge satellites without allowing the customer to launch them No, the real reasons (see Chart 3) are simpler: U.S. launch sites are too expensive, too heavily regulated, less inclined to do quick launches for busy firms, more prone to excessive insurance liabilities for small, innovative launch companies, and legally prohibited from serving U.S. businesses developing potentially far cheaper, reusable rockets.
Is the fix for these problems simple? No. It took us nearly three decades of defective NASA and U.S. commercial space policies and programs, over regulation, and inattention to get where we are now; it may take more than a few years to dig ourselves out. Still, if Democrats and Republicans are serious about resolving the current controversy and truly want to make our commercial space industry not only profitable, but safe, bringing it back to the U.S., rather than trying to control it to countries like China, is the only way out.