Subject: 911 -- Condoleezza, while at Hoover Inst. assisted Clinton Defense Sec. Wm. Perry in successful Chinese PLA penetration of Pentagon/military

Wednesday, Jan. 24, 2001

The Chinese Army Spy and Condoleezza Rice
By: Charles R. Smith

Condoleezza Rice, national security adviser to President Bush, has
recently granted an interview to virtually every reporter but me. Perhaps
it is because I keep asking her questions about the Chinese spy in her

Rice has impeccable credentials. She worked for the elder George Bush in
the White House, handling Russian issues. She is a distinguished fellow
at the Hoover Institution and former provost of Stanford University. Rice
is very close to former Clinton Secretary of Defense William Perry. Rice
worked with Perry and the Clinton administration during her term at
Stanford. The Clinton White House once mentioned her as being on the
short list for secretary of state.

Yet it is her years at Stanford working with Perry that have rendered
Rice silent. While working at Stanford, she became involved in the most
successful Chinese army penetration of the Clinton Defense Department.
She will not answer questions about her relationship with Chinese spy Hua

Hua Di was born into a family of prominent Communist officials. He
studied missiles in Russia and worked for the Chinese army missile
program for 24 years. In 1984, he went to work for the China
International Trust and Investment Co. (CITIC), a firm then part-owned by
the Chinese army.

Hua defected to the United States in 1989 after the Tiananmen Square
crackdown on student democracy demonstrators. He went to work as a
researcher at Stanford's Center for International Security and Arms
Control. There he met Rice and the Stanford Center co-directors, former
Secretary of Defense William Perry and political science professor John

In 1994, Hua used his contacts at Stanford, in Beijing and inside the
Clinton Defense Department with then-Secretary Perry to obtain a secure
fiber-optic communication system for the Chinese army. In 1994, Hua
contacted an old friend in the Chinese army then working for Gen. Ding
Henggao, a close friend of Perry.

In fact, Perry and Ding's relationship spans three administrations. Perry
reportedly met Gen. Ding in the late 1970s during the Carter
administration. By 1994, Perry ran the U.S. Defense Department, and Ding
had risen to command the Chinese army military research bureau COSTIND,
or the Commission on Science Technology and Industry for National
Defense. COSTIND, according to the General Accounting Office, "oversees
development of China's weapon systems and is responsible for identifying
and acquiring telecommunications technology applicable for military use."

Hua Di teamed in 1994 with Stanford Dr. John Lewis, Secretary of Defense
Perry, and Gen. Ding of the Chinese Army to buy an advanced AT&T
fiber-optic communications system for "civilian" use inside China. The
communications system slipped past U.S. exports laws as a joint
U.S.-Chinese commercial venture called Hua Mei. The Chinese part of the
venture was run by a newly formed firm named Galaxy New Technology.

Hua Di described himself as the "matchmaker" between the Chinese Army and
Lewis during an interview for the Far Eastern Economic Review. Hua
arranged for Gen. Ding's wife, Madam Nie Li, to head the joint project as
the Chinese co-chairman.

Stanford's Lewis, himself a board member of the project, located Adlai
Stevenson III, the former Democrat senator from Illinois, to lead the
American side. According to the Far Eastern Economic Review, Lewis had
Defense Secretary Perry write a personal letter on his behalf to U.S.
government officials, favoring the export to China.

With Perry's blessing, Hua Di and Lewis contracted AT&T to ship the
secure communication systems directly to a Chinese Army unit using Galaxy
New Technology as a front. AT&T officials who sold most of the equipment
and software were adamant that there was no need to check the Chinese
firm since the "civilian" Madam Nie Lie led it.

Yet, the so-called "civilian" firm was actually packed with Chinese army
officers and experts. Madam Nie Lie was not only the wife of Gen. Ding
Henggao; she was actually Lt. Gen. Nie Lie of the Chinese Army.

Another member of New Galaxy Technology, according to a Defense
Department document, was Director and President "Mr. Deng Changru." Deng
is also known as Lt. Col. Deng Changru of the People's Liberation Army,
head of the PLA communications corps. Still another Chinese army officer
on the Galaxy New Technology staff was Co-General Manager "Mr. Xie
Zhichao," better known in military circles as Lt. Col. Xie Zhichao,
director of the Chinese Army Electronics Design Bureau.

In fact, the evidence shows that Lewis worked not only for Stanford and
the Chinese army during this time period. Documents obtained from the
Department of Defense using the Freedom of Information Act (FOIA) show
that he also worked for the U.S. Defense Department.

In August 1994, Lewis and Secretary of Defense Perry traveled to Beijing
to meet with Gen. Ding Henggao. According to the official list of
attendees, Lewis accompanied Perry as his "personal" consultant. Lewis,
then a paid consultant of the U.S. Defense Department, met in Beijing
with Ding, who was also then Lewis's partner inside a joint U.S. Chinese
"commercial venture" for military communications systems.

In 1997, Stanford professor Lewis was charged with using university
funding and equipment to set up the deal with Galaxy New Technology.
Stanford Provost Condoleeza Rice announced that Lewis faced an
investigation because he had used iniversity stationery and his office to
run the joint U.S-Chinese business. In the 1997 investigation, Rice
issued a statement to the university press.

"We'll follow what is a normal process under these circumstances," said
Rice in the 1997 interview. "Similar issues arise quite frequently. It's
not all that unusual that issues arise concerning conflict of interest."

Yet, no formal charges were filed, and Rice quietly dropped the
investigation against Lewis and Hua Di. To this day, Ms. Rice will not
answer why she stopped the investigation.

The General Accounting Office also documented the New Galaxy Technology
scandal (GAO report GAO/NSIAD-97-5). According to the GAO, the scandal
involved the "transfer of broadband telecommunications equipment to Hua
Mei, a joint venture between SCM Brooks Telecommunications, a U.S.
limited partnership, and Galaxy New Technology, a Chinese company
primarily owned by an agency of the Chinese military."

In 1997, Rep. Henry Hyde pressed Attorney General Janet Reno to
investigate the Galaxy New Technology scandal in a letter outlining his
concerns. According to Hyde, "in 1994, sophisticated telecommunications
technology was transferred to a U.S.-Chinese joint venture called HUA
MEI, in which the Chinese partner is an entity controlled by the Chinese
military. This particular transfer included fiber-optic communications
equipment, which is used for high-speed, secure communications over long
distances. Also included in the package was advanced encryption

By the end of 1997 the scandal was drawing too much heat for Hua Di to
remain in the United States. In an article curiously released in October
1998, the New York Times announced that Hua Di had returned to China in
December 1997.

According to the New York Times, Hua met with Chinese security officials
in late 1997 and was assured that he would not be prosecuted. On Dec. 31,
1997, he returned to China. On Jan. 6, 1998, he was arrested and charged
with passing state secrets to U.S. officials. In 1999, according to the
official Chinese news service, Chinese defector and missile scientist Hua
Di was sentenced in a people's court to 15 years for passing state
secrets to the United States.

The end of this story is not very pretty. Stanford officials, including
Rice and Lewis, have openly appealed to the Chinese government for Hua's
release. Rice also continues to defend Hua.

Rice stated in a New York Times interview that Lewis "provided evidence
to the fact that the source materials for publications written by him and
Mr. Hua were provided by approved Chinese authorities or already were
available through the Stanford University library."

Yet, Rice will not talk about Hua Di and the Galaxy New Technology deal.
There was more than profit for Hua and the Chinese Army company packed
with electronics experts. The secure fiber optic communication system
delivered by Hua to his People's Liberation Army general buddies was
modified in 1998 and now serves as a secure air-defense system exported
to Iraq.

The current Iraqi air defense network, NATO code-named "Tiger Song," is
made of U.S. and French fiber optic parts modified and re-exported by the
People's Liberation Army. Tiger Song is based on the original secure AT&T
system obtained by Hua Di in 1994. Iraqi missiles guided by Tiger Song
have repeatedly attacked U.S. fighter jets.

According to an August 2000 Washington Times interview, Rice asserted,
"China is not a threat."

Tiger Song is considered a lethal threat to American and allied armed
forces. Such sweet irony that we now face our own weapons and they are
not a threat.

Still, all seems to be well between Beijing and Bush. Condoleeza Rice is
national security adviser to the president, and the Chinese Army again
has a "matchmaker" inside the White House. Just don't ask her about
Chinese army spy Hua Di.