DOJ INDICTS MCDONNELL DOUGLAS, CATIC FOR ILLEGAL EXPORTS TO CHINA

   The U.S. Department of Justice has issued a 16-count criminal indictment against McDonnell Douglas and the China National Aero-Technology Import and Export Corp. for a deal which shipped machine tools to China five years ago.
   The case is the result of a four-year investigation by Justice, Customs
and Export Administration into a shipment of 13 pieces of equipment to
build planes. The equipment was used at McDonnell Douglas’ Columbus, Ohio plant to machine parts for B-1 bombers and MX and Titan missiles for the United States.
   Although McDonnell Douglas (now Boeing) had the proper export licenses from the Export Administration, six of the pieces were illegally diverted to a Chinese military aircraft factory in Nanchang.
   Also named in the indictment were three CATIC affiliates: CATIC/Supply in Beijing, CATIC (USA) and TAL Industries, both in El Monte, Calif.; two Chinese nationals employed by CATIC, Hu Boru and Yan Liren; Douglas Aircraft Co., a subsidiary of McDonnell Douglas; and Robert J. Hitt, who was director of the China Program Office for Douglas Aircraft.
   If convicted, the companies face a maximum fine of $10 million, while
the individual defendants face a maximum of five years in prison an
$250,000 in fines.
   "This is a very import case that demonstrates our commitment to
enforcing export controls that help to protect our national security," said
Commerce Secretary William M. Daley.
   Boeing denied the charges. "It is unfortunate that the prosecutors have
apparently not taken the time to learn the facts and gain a full
understanding of a rather complicated matter," the company said.