It is known that China obtained advanced cryptography from theUS under the Clinton administration. The first known instanceof such an export is the Hua Mei contract which was approvedunder a special (one and only) license in 1994. The approvalcame after Commerce Secretary Ron Brown visited China in late1993. This deal allowed a company owned by the Chinese militaryto purchase secure, real-time, atm-fiber optic systems completewith video and audio links. That deal was well documented bythe GAO which noted that the Chinese would divert thistechnology directly into their military. You can find the GAOreport on export of advanced communications to China at my web site(http://www.us.net/softwar)or at the GAO web site (Export Controls: Sale of TelecommunicationsEquipment to China, 11/13/96, GAO/NSIAD-97-5).
However, lesser known, is a deal for advanced encryptiontechnology cut between RSA Inc. and the Chinese government. RSAis the largest crypto technology company in the US and a majorDefense contractor. The deal "officially" began in 1995 whenRSA Chairman James Bidzos visited Beijing at the invitation ofthe communist government. In February of 1996 RSA Data Securitysigned a distribution and development agreement with theComputing Center of the Ministry of Foreign Trade and EconomicCooperation (MOFTEC) of the People's Republic of China and theChinese Academy of Sciences Graduate School's Laboratory ofInformation Security (LOIS). That deal, of course, was approvedby the US Commerce Department.
Yet, RSA CEO Bidzos was also engaged with Commerce andadministration officials who wanted to purchase the patentsowned by RSA. More or less the government wanted to BUY therights to the RSA code systems. I once estimated that deal tobe worth over a billion dollars but was quickly rebuffed by manyas exaggerating the figure. However, recent evidence obtainedby Freedom of Information (FOIA) requests has shown that RSA wasindeed in the midst of a very hot deal called PKP or Public KeyPartners. This hot deal would require special actions by theClinton administration before going into effect but it couldalso yield billions of dollars in return.
hoteles en Lovaina There are a few outside of the Clinton circle who know of thePKP deal. The banks had to know because they were going to footthe bill. In fact, CITICORP wrote to the Commerce Departmentand complained about PKP. The government had granted PKP anexclusive license/patent that required a 1% to 5% royalty on allbanking hardware and software. To illustrated how much that isworth please note that another bank, Manufacturers Trust,estimated their annual computer budget was $400 million dollarsin 1993. In addition, the government grant included the rightto charge a fee per transaction, a scheme that would take in apercentage of the trillions of dollars electronicallytransferred world wide. If you think charging a buck each timeyou use your ATM card is bad - just think about charging a pennyper dollar for every electronic transaction!
How important was this to the government? Mr. Bidzos claimsthat the Clinton administration was so hot to buy him out thatthey hustled him to the White House. I use the word "hustle"with all due respect because Bidzos claims that Vice PresidentAl Gore personally tried to convince him to sell. This authorsubmitted an FOIA request to the Vice President's office toobtain documentation of that meeting but the FOIA request wasDENIED by Al Gore. In addition, I have made several attemps tocontact Mr. Bidzos. Again, no reply.
Kos cheap hotels Yet, there is more evidence of the attempt to buy out RSA. Thisevidence is being hidden by the Commerce Department. Ginger Lewof the Commerce Department also met with Bidzos several times,trying to purchase the RSA patents. In August of 1996, IraSockowitz, Ginger Lew's assistant, walked out of the CommerceDepartment with a load of secret material on RSA. IraSockowitz, a former DNC fund-raiser, was personally nominatedto his post by Bill Clinton. However, much like other ClintonCommerce employees, it seems Ira did a "no-no". Ira Sockowitzwalked out of the Commerce Department with two boxes of secretmaterials ranging from CIA reports, NSA reports, Department ofState cables, and sensitive material from Russia and France.
hotel rates Sorrento Still, the lion's share of secrets taken by Sockowitz are oncryptography and money. To be precise, how much money did theowners of cryptography have. Sockowitz took a LEXUS scan ofJames Bidzos, a LEXUS scan of Robert Fougner (a partner in thePKP deal), and a LEXUS scan of RSA Inc. Robert Fougner, the PKP"partner" of James Bidzos, donated his first $1,000 to the DNCexactly five days after Ira Sockowitz did the LEXUS scan.
1. if by land, 2 if by sea. Paul Revere - encryption 1775
Charles R. Smith
SOFTWAR
http://www.us.net/softwar
Posted here August 2, 1997
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