Satellites, Security, and Scandal: Understanding the Politics of Export Control

In the pre-dawn hours of 15 February 1996, a Chinese rocket carrying an Intelsat communications satellite tilted off its launch tower during take-off, flew into a hillside village a few miles from Xichang, China, and exploded with a force comparable to 20 tons of TNT. The surviving villagers, jolted out of their sleep by the explosion, soon discovered that more than a hundred of their neighbors had been killed or injured, and that much of their village was destroyed. The People's Republic of China (PRC) tried to cover up the extent of the tragedy, initially claiming that only six people had died. The world learned the truth soon enough. But in the United States, at least, the villagers were quickly forgotten, bit players in a scandal that would soon take the spotlight: An American satellite was destroyed in that blast, and Space Systems/Loral, the company that had built it, was accused of damaging U.S. national security by cooperating illegally with China's launch-failure investigators assistance, some Americans claimed, that the PRC could use to improve its spy satellites and nuclear missiles. It wasn't the first such accusation. Chinese Long March rockets carrying American-made commercial satellites had exploded twice before, in 1992 and 1995; in both of those cases, the satellites had been manufactured by Hughes Space & Communications. In all three launch failures, the satellite makers investigated the causes and, at the urging of the launch-insurance industry, shared technical information with Chinese engineers to help them correct the problems so future launches could be insured. In the late 1990s and early 2000s, Loral, Hughes, and Boeing Space Systems (whose parent company, Boeing, acquired Hughes's satellite business in 2000) were investigated by U.S. export officials, found to have shared their engineers' expertise in missile-launch technology with the PRC, and fined tens of millions of dollars for providing unlicensed defense services in violation of U.S. ex-port control laws (see Appendix A: Company backgrounds). During this same period, Boeing was charged with similar violations related to Sea Launch, its satellite-launch joint venture with Russian, Ukrainian, and Norwegian companies