One Billion Customers - James McGregor [95]
When the Clinton administration left office, the rabid hatred of the president that had propelled the investigations dissipated. Prosecutors wanted to clean up the messy export control cases. Charges against CATIC were settled in May 2001, with the Chinese company pleading no contest to export law violations and paying a fine of $2.3 million. In November 2001, all criminal charges against McDonnell Douglas were dismissed. The government acknowledged that the company had engaged in no wrongdoing and had made no false statements to the government. To settle separate civil charges, the company agreed to pay a fine of $2.1 million for its liability for acts and statements by the Chinese.
No criminal charges were filed against Loral or Hughes. In January 2002, Loral paid $14 million as part of a civil settlement with the government. The company didn’t admit any wrongdoing, but did agree to spend $6 million to strengthen its compliance with export laws. Hughes in March 2003 agreed to pay $32 million in penalties to settle civil charges. The company expressed “regret for not having obtained licenses that should have been obtained.”
To reach the settlements in both the McDonnell Douglas and Hughes cases, the government had to negotiate with Boeing, which now owned them both. The airplane giant had purchased McDonnell Douglas in August 1997 and later closed down the MD-82 and MD-90 lines because they were direct competitors to the Boeing 737. The company offered to honor the agreement with China for forty of the MD-90s, but the Chinese demurred. They didn’t want to purchase an out-of-production airplane. Only two of the MD-90s were produced in China. At the Shanghai coproduction facility, the Chinese began working to build their own Trunkliner aircraft using technology from Brazil. In 2002, Boeing celebrated its thirtieth year of doing business with China by announcing that more than three thousand Boeing airplanes were flying with parts made in China. The company also estimated that the China market would be good for another 2,300 planes over the next two decades.
Boeing had purchased the space and communications business from Hughes Electronics (a subsidiary of General Motors since 1985) in January 2000 for $3.75 billion. At the time, the company had a backlog of orders for thirty-six satellites valued at $4 billion. During the late 1990s dotcom boom, however, fiber optic cables were strung across the world and the market for satellites collapsed not long after the purchase of Hughes. The U.S. machine tool industry suffered, as well, as Japanese and European companies supplanted American dominance of the industry.
Sorry About That
The FBI arrested Wen Ho Lee in December 1999, nine months after the Cox committee’s allegations were leaked to the press. He was charged with fifty-nine counts of mishandling classified information and violating secrecy provisions of the Atomic Energy Act. He was put in solitary confinement and forced to wear leg shackles during exercise period. The resulting paranoia about Chinese spies made life miserable for the huge numbers of ethnic Chinese scientists and researchers at U.S. universities, government research institutes, and in private companies. Representative Cox and other Republicans involved in the investigation that had triggered the anti-Chinese racism in the United States did little to quell the furor because the specter of widespread Chinese spying made Clinton look bad.
The case against Wen Ho Lee began to crumble in August 2000 when the FBI’s chief investigator admitted that he had provided inaccurate testimony about Lee in hearings. Embarrassed prosecutors scrambled to negotiate a settlement. On September 13, Lee walked free after pleading guilty to one felony charge of copying files from a classified computer to unclassified computer tapes. The simple fact was Lee had taken some work home with him. Lee agreed to drop a racial discrimination suit he had filed against the government. In accepting Lee’s plea, U.S. District Judge James Parker