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Statement of Chairman Jim Saxton
Joint Economic Committee
June 17, 1997

Economic Espionage, Technology Transfers and National Security




      Ladies and gentleman, good morning. Thank you all for being here.

      The Joint Economic Committee sits in a very unique position and I would suggest an ideal position to evaluate past policy and to evaluate those policies' impact on our economy, particularly, in the context of the legislative intent of the authors of the policies.

      The areas of concern that I have learned of occurred across several administrations in both the areas of high technology transfer and economic espionage. My goal is to shed light on these problems.

      I am sure that those responsible for these policies formulated them with the best of intentions. However, those intentions may not have manifested themselves as expected in this new and changing reality of a former Soviet Union, an emerging Asia and a struggling, unstable Third World.

      I am pleased to welcome to the committee an extremely knowledgeable group of panelists.

      Dr. Peter Leitner is the author of a new book entitled "Decontrolling Technology: Creating the Military Threat for the 21st Century." I would like to make it clear that Dr. Leitner will testify as the author of that book and not in his official capacity as a Foreign Trade Advisor for the Department of Defense. Additionally, Dr. Leitner is the author of the book "Law of the Sea Treaty" which also highlights concerns about mandated high technology transfer. Dr. Leitner's professional background also includes serving as a senior licensing officer for U.S. exports to various proscribed countries including China, Libya, Iraq, former Warsaw Pact countries, Iran, and India. Dr. Leitner is currently DoD's representative to the interagency Subcommittee on Nuclear Export Controls.

      Our second panelist is Lt. Gen. Robert Schweitzer (Ret). General Schweitzer retired from the United States Army after 36 years of service with assignments including: Director of Strategy, Plans and Policy; Deputy Chief of Staff for Operations and Plans; National Security Defense Group Director; and the Chief of the Policy Branch of SHAPE in Belgium. General Schweitzer has received numerous awards and decorations including the Army Distinguished Service Cross, the Defense Distinguished Service Medal, the Army Distinguished Service Medal, three Silver Stars, two Defense Superior Service Medal, two Legion of Merits, the Distinguished Flying Cross, the Soldiers Medal, the Bronze Star with Valor device (three additional awards), Air Medal with Valor device (20 additional awards), seven Purple Hearts, and two Army Commendation Medals.

      General Schweitzer will testify today about the proliferation of a devastating new weapon developed by the former Soviet Union and is currently in enhanced development today in Russia, with previous systems being sold by Russia. The weapon is the Radio Frequency Weapon on Electromagnetic Pulse weapon used, among other things to cripple computer capability. It has only been in the last few weeks that the information has been declassified about EMI. Previously, only those with the highest security clearance even knew about this weapon system in any detail.

      Our third panelist is Mr. John Fialka. Mr. Fialka is a well-known and respected reporter for the Wall Street Journal. Mr. Fialka is the author of "War by Other Means," an important but disturbing book on high tech transfer and Foreign Intelligence Services conducting espionage in the United States. After a brief stint at the National Petroleum Refiners Association, Mr. Fialka began his journalism career at the Baltimore Sun and then moved on to the Washington Star. In 1981, Mr. Fialka moved to the Wall Street Journal and has worked both in the London bureau and in his current position in Washington. Mr. Fialka has been awarded numerous honors from such organizations as the American Bar Association, the National Science Writers Association, the National Headliner, and Worth Bingham. Additionally, Mr. Fialka is the author of the book "Hotel Warriors" which is an analysis of the press coverage of the Persian Gulf War.

      Our final panelist is Kennneth Flamm. Mr. Flamm has been a Senior Fellow in the Foreign Policy Studies program at the Brookings Institute since 1995, a position he also held from 1987 to 1993. From 1993 to 1995, Mr. Flamm served as Principal Deputy Assistant Secretary of Defense for Economic Security and Special Assistant to the Deputy Secretary of Defense fro Dual Use technology Policy. At Brookings, Mr. Flamm has focused much of his research on international competition in high technology industries.

      Let me add on final note. The people of our country owe a collective debt of gratitude to the men and women who serve this country in our law enforcement and intelligence services, and especially those dedicated Asian Americans without which the security of this country could not be guaranteed. Over 20 countries conduct espionage against the United States. Let me make it perfectly clear that the criminal actions of a few do not reflect the character, honesty, and loyalty of ethnic Americans - without whom these spies would not be apprehended.

      I look forward to the enlightening testimony of each of our panelists.