12 July 1997

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July 11, 1997, The New York Times, p. A9:

Export Limits on Computers Rejected

By Jeff Gerth

Washington -- After heavy lobbying by the computer industry and the
Clinton administration, the Senate on Thursday rejected a proposal to
tighten control of the sale of U.S. supercomputers to China and Russia and 
instead voted for further study of the issue. 

The question of whether to tighten supercomputer export controls will now be
resolved in a conference with the House of Representatives, which last month
overwhelmingly passed a measure requiring a license for sales of some computers
to countries such as China and Russia. The different Senate and House measures
are attached to the Defense Authorization Act. 

In 1995, the Clinton administration greatly relaxed export controls for 
supercomputers, transferring to the companies the responsibility for screening 
buyers to insure that they were not diverting technology to military uses. 

The normally arcane subject of export controls became a lively debate earlier 
this year when it was disclosed that Chinese and Russian nuclear weapon 
facilities had acquired U.S. supercomputers without federal licenses. 

This led to criminal investigations, diplomatic protests, legislative action and
industry reaction. IBM, for example, mobilized a lobbying effort that ranged from
low-level employees around the country to its chairman and chief executive officer,
Louis Gerstner, who called senators such as Republican leader Trent Lott of
Mississippi, according to a company spokesman. 

The Senate originally considered an amendment similar to the one that passed the
House, shifting responsibility back to the federal government by requiring 
licenses for sales of certain computers to dozens of countries, including Russia 
and China. 

But in a vote of 72-17 Thursday, opponents backed a substitute amendment that
retains the current system but calls for a study of the national security 
implications of the issue by the General Accounting Office, an arm of Congress. 

Sen. Rod Grams, R-Minn., argued "it is not possible to effectively control" exports
of mid-level computers and doing so so would be "handing the mid-level computer
business to Japan and other allies." 

Defense Secretary William Cohen wrote a letter supporting the Grams proposal.
And administration officials in Madrid for the NATO summit meeting kept tabs this
week on the debate, making phone calls to Congress, officials said. 

But Clinton administration arguments also helped buttress the position of those
Senators who wanted to reinstitute tighter controls. 

For example, one backer of tighter controls, Sen. Richard Durbin, D-Ill., said the
possibility of lost business was overstated, since the Pentagon and the Department
of Commerce had told the Senators that "the only country likely to step in was
Japan" if licensing requirements were reimposed and "they have more restrictive
controls than the United States."

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