Loral, Qualcomm, and the Beijing Money Connection

Loral Space and Communications is a Manhattan-based aerospace company at the center of a growing Washington scandal about whether its chairman, a loyal Democrat who gave $1.3 million in donations to President Bill Clinton and his party, got special favors in return. Among other things, congressional Republicans charge that the Clinton administration wrongly allowed the company to transfer satellite and rocket guidance secrets to the Chinese government. According to the allegations, the information from Loral may have allowed the Chinese to better target their intercontinental ballistic missiles on the U.S. In response, last week the House voted overwhelmingly to ban future exports of satellite technology to China.

"Something terrible has happened," gop congressman Dana Rohrbacher said on the House floor last week. "Every man, woman, and child may very well have been jeopardized."

For his part, Loral chairman Bernard Leon Schwartz denied that his money had bought undue influence. "I've never sought favor nor gotten favor," he said on television over the weekend.

Besides the president, Loral also has close ties to the politicians of San Diego, where it has joined with cellular phone pioneer Qualcomm to build what is supposed to become a worldwide cell phone and data transmission network based around a series of small satellites now being lofted into orbit. Called Globalstar, the plan calls for 48 satellites orbiting at an altitude of 736 miles by next year. One of Loral's and Qualcomm's key partners in the venture is China Telecom of Hong Kong, controlled by the Chinese government's Ministry of Information Industry, which last month anted up $37.5 million for its slice of the Globalstar pie. Last month Loral itself upped its interest in the Globalstar venture to 42 percent.

All of which is making life a bit more complicated for San Diego's Republican congressmen, each one a former cold warrior who in the post-Cold War Era have been cozying up to an assortment of heretofore strange bedfellows, including Loral's Schwartz. Campaign filings from the Federal Elections Commission show that Duke Cunningham, Ron Packard, Brian Bilbray, and Duncan Hunter -- all Republican congressmen from San Diego County -- have received sizable contributions from Loral's political action committee, as well as significant support from Qualcomm, Loral's partner.

Making things even stickier for Cunningham and Packard is the fact that nearly five years ago they joined their Democratic colleague Bob Filner and 12 other congressmen in signing a letter calling for the end of a temporary ban on Chinese satellite launchings. The favor was for Los Angeles-based Hughes Electronics, which was lobbying to launch its satellite on Chinese rockets.

In light of the Chinese money connection controversy swirling around Bill Clinton, perhaps most intriguing is the fact that eight American employees of the Globalstar venture with the Chinese are listed as contributing as much as $1500 each to the Loral Spacecom "Civic Responsibility Fund." That's the political action committee that made the donations to Cunningham and his congressional colleagues from San Diego. Globalstar employees listed as donors to the fund include Joel E. Schindall of Poway, who gave $700 last August, and Megan L. Fitzgerald of San Carlos, who contributed $1500 on the same date.

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