Levin, McCain concerned about U.S.-China aerospace partnerships

Concerned about a broader pattern of wrongdoing, the two senior members of the Senate Armed Services Committee sent Defense Secretary Leon Panetta a letter yesterday asking the Pentagon to look into temporarily suspending United Technologies Corporation’s (UTC) subsidiary, Pratt & Whitney Canada (P&WC), from bidding on U.S. military contracts after the company pled guilty to ...

Photo via airforceworld.com
Photo via airforceworld.com
Photo via airforceworld.com

Concerned about a broader pattern of wrongdoing, the two senior members of the Senate Armed Services Committee sent Defense Secretary Leon Panetta a letter yesterday asking the Pentagon to look into temporarily suspending United Technologies Corporation's (UTC) subsidiary, Pratt & Whitney Canada (P&WC), from bidding on U.S. military contracts after the company pled guilty to providing China with sensitive military technology.

On June 28, PW&C reached a deal with the Justice Department, in which it admitted violating the Arms Export Control Act (AECA) by giving the Chinese access to critical software used to control 10 helicopter engines it sold China in 2001 and 2002. The software used in the engines was designed for U.S. military helicopters, and Senators Carl Levin (D-Mich.) and John McCain (R-Az.) say it can be used to help China build its "first modern attack helicopter."

Additional charges against U.S.-based UTC and several of its subsidiaries were deferred since the company has agreed to pay a $75 million fine, implement "remedial measures," and be monitored for the next two years to ensure it doesn't violate either AECA or the International Traffic in Arms Regulations, according to the U.S. State Department.

Concerned about a broader pattern of wrongdoing, the two senior members of the Senate Armed Services Committee sent Defense Secretary Leon Panetta a letter yesterday asking the Pentagon to look into temporarily suspending United Technologies Corporation’s (UTC) subsidiary, Pratt & Whitney Canada (P&WC), from bidding on U.S. military contracts after the company pled guilty to providing China with sensitive military technology.

On June 28, PW&C reached a deal with the Justice Department, in which it admitted violating the Arms Export Control Act (AECA) by giving the Chinese access to critical software used to control 10 helicopter engines it sold China in 2001 and 2002. The software used in the engines was designed for U.S. military helicopters, and Senators Carl Levin (D-Mich.) and John McCain (R-Az.) say it can be used to help China build its "first modern attack helicopter."

Additional charges against U.S.-based UTC and several of its subsidiaries were deferred since the company has agreed to pay a $75 million fine, implement "remedial measures," and be monitored for the next two years to ensure it doesn’t violate either AECA or the International Traffic in Arms Regulations, according to the U.S. State Department.

In addition to these penalties, the State Department has partially banned P&WC from exporting engines containing U.S.-made technology. The only exceptions are for programs with the U.S. government, U.S. allies in Operation Enduring Freedom, and NATO members or "major non-NATO" allies.

This is not enough to satisfy the senators, who said in their letter that these violations suggest the "possibility of systemic deficiencies with the oversight and enforcement of export controls" among U.S. aerospace companies.

"The nature of these export control violations and the length of time during which they occurred raise the concern that they may have caused significant harm to our national security," they write in the letter. "We therefore, ask that you provide the Committee with a full assessment of the extent of the harm caused to national security by all of these violations."

The senators’ letter comes as one of the defense industry’s chief lobbying groups, the Aerospace Industries Association, is pushing, with some success, to alter U.S. arms export laws by removing "burdensome and unnecessary restrictions" on "technologies with low or no military or intelligence sensitivity."

This is not the first time western defense companies have raised lawmakers’ ire by dealing with China. Several months ago Rep. Randy Forbes (R-Va.) wrote a letter to Defense Secretary Leon Panetta, calling for the Pentagon to review GE’s partnership with China’s state-owned aircraft maker, AVIC, which is developing avionics for a commercial airliner.

"Continued improvements in China’s civil aviation capabilities enhance Chinese military aviation capabilities because of the close integration of China’s commercial and military aviation sectors," said Forbes’ letter, quoting the 2011 edition of the U.S.-China Economic Security Review Commission’s annual report to Congress, which details the national security implications of trade between the two countries. "They [the commission] also state that, ‘as part of its indigenous innovation policy, China incentivizes foreign companies to transfer technology in exchange for market access’."

Other U.S.-based aerospace companies that are legally supplying China with aviation technology include Honeywell and Rockwell Collins, which are providing the cockpit suites for China’s MA700 regional turboprop and MA600 turboprop, respectively. Both planes are made by AVIC. Honeywell and Rockwell have not come under the same criticism as GE, which is developing avionics for a brand new Chinese jet.

Naval War College professor Andrew Erickson has argued that while some of the partnerships between U.S. aerospace firms and their Chinese counterparts may be legal, they risk supplying "the Chinese aerospace industry a 100 piece puzzle with 90 of the pieces already assembled,"

"Enough is left out so that the exporting companies can comply with the letter of the export control laws, but in reality, a rising military power is potentially being given relatively low-cost recipes for building the jet engines needed to power key military power projection platforms including tankers, AWACS, maritime patrol aircraft, transport aircraft, and potentially, subsonic bombers armed with standoff weapons systems," he wrote.

John Reed is a national security reporter for Foreign Policy. He comes to FP after editing Military.com’s publication Defense Tech and working as the associate editor of DoDBuzz. Between 2007 and 2010, he covered major trends in military aviation and the defense industry around the world for Defense News and Inside the Air Force. Before moving to Washington in August 2007, Reed worked in corporate sales and business development for a Swedish IT firm, The Meltwater Group in Mountain View CA, and Philadelphia, PA. Prior to that, he worked as a reporter at the Tracy Press and the Scotts Valley Press-Banner newspapers in California. His first story as a professional reporter involved chasing escaped emus around California’s central valley with Mexican cowboys armed with lassos and local police armed with shotguns. Luckily for the giant birds, the cowboys caught them first and the emus were ok. A New England native, Reed graduated from the University of New Hampshire with a dual degree in international affairs and history.

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