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Report CIA Sat On Cable Alleging Chinese Bribes

Thursday December 24 2:41 AM ET

Report CIA Sat On Cable Alleging Chinese Bribes

NEW YORK (Reuters) - CIA officers in China said in a secret cable sent to headquarters in March 1996 that a consultant to American aerospace companies tried to bribe Chinese officials to gain lucrative contracts, two U.S. newspapers reported Thursday.

Both The New York Times and the Wall Street Journal reported that the CIA failed to turn the cable over to the Justice Department promptly. The CIA told the newspapers the failure to pass the cable on to the Justice Department was an oversight being reviewed by the CIA's inspector general.

The cable surfaced this year after congressional committees began examining whether the Clinton administration had compromised national security in its zeal to promote high technology exports to China, officials told the Times.

U.S. law bars companies or individuals from paying bribes overseas to secure contracts. The CIA is sharing information about potential criminal activity with the Justice Department.

The consultant named in the cable was Bansang Lee, a Chinese-American who worked for Hughes Space & Communications, a subsidiary of Hughes Electronics Corp. and Loral Space & Communications Ltd., the Times said. Hughes Electronics is a unit of General Motors Corp.

The Wall Street Journal reported that Lee was questioned twice in recent months by investigators looking into allegations that Loral and Hughes gave China assistance and data to improve its rockets.

The Times said it is not clear whether the cable specified on whose behalf Lee would have been making any payments to Chinese officials, or what kind of officials these were. Nor was it clear whose money the CIA believed it was, or how much money passed hands, the newspaper reported.

Lee's lawyer, Brian O'Neill, told the Times his client ``has never made any unlawful or improper payments of any kind to any Chinese official.''

Spokesmen for Hughes and Loral deny any wrongdoing but declined to discuss Lee's activities with the Times.