The Loral Controversy

a) In 1995, Clinton donor and Loral Chairman Bernard Schwartz wrote to the president, advocating that the supervision of satellite exports to China shift from the security-minded State Department to the business-friendly Commerce Department. (In March 1996, Clinton complied with Schwartz's request over the objections of the State Department, Pentagon, and CIA.)

b) After a Chinese rocket carrying a Loral satellite crashed in February 1996, Loral provided the Chinese with a report assessing the crash. It is alleged that Loral's report detailed problems with the rocket's guidance system--information that could improve the accuracy of nuclear missiles. (A Pentagon report said Loral damaged "national security." The Justice Department is investigating whether this transfer of technology violated the terms of Loral's export license.)

c) Last February, the administration granted another export waiver to Loral, despite the Justice Department's opposition. (Justice's fear: Clinton's waiver will be perceived by a grand jury as absolving Loral's misdeeds.)