Magazine article Insight on the News

Satellite Maker Pays $14 Million to Avoid Criminal Charges. (News Alert!)

Magazine article Insight on the News

Satellite Maker Pays $14 Million to Avoid Criminal Charges. (News Alert!)

Article excerpt

Loral Space & Communications Ltd., a U.S. satellite maker under an FBI probe for providing missile technology to Communist China, cut a deal with the federal government to avoid criminal charges.

In a prepared statement, Loral announced the settlement Jan. 9 and said it will pay $14 million to the State Department under the condition it does not have to admit to any wrongdoing. Loral's deal emerges after a lengthy probe partly due to intimate political ties between its chairman, Bernard L. Schwartz, and Bill Clinton. Schwartz was the single-largest donor for Clinton's re-election campaign.

"We historically have had an excellent security record and are committed to vigorous compliance with export-control laws," Schwartz said in the admission. "The company has instituted an extensive new training program, significantly expanded staff and greatly improved oversight in the area of export control."

The FBI began the probe after a report in the New York Times and a series of stories by INSIGHT outlined damage that Loral caused by providing technology and a professional launch review that improved the accuracy and reliability of China's nuclear missiles. The assistance provided by Loral allowed China greatly to improve its space-launch systems, which officials claim are similar to the boosters used in long-range nuclear missiles, according to a 1998 classified intelligence report.

Calling it a "sweetheart deal" Larry Klayman, chairman of Judicial Watch, a conservative watchdog group that has sued Schwartz, Clinton and Al Gore over alleged bribes for export licenses, was vividly upset about the backdoor agreement. …

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