REPORT: ENCRYPTION MISSING AFTER US/CHINA ACCIDENT
**Exclusive**
One major issue that made Defense and State Department types nervous about the launching of U.S satellites from Chinese rockets was how to protect encryption equipment that is built into a satellite and electronically interprets commands from ground controllers who manipulate the bird once it is in orbit.
"Similar devices are used to communicate with American spy satellites, and the Pentagon and intelligence agencies worried that anyone who could crack the code could take control of the satellites themselves," NEW YORK TIMES hotshot Jeff Gerth reported last week.
Commerce and Clinton types argued that encryption equipment would be embedded into the satellite and the device would not present a military risk -- the Chinese would be unable to get their hands on the encryption because American military officials "watch the satellites with care when they are in Chinese hands."
National Security Adviser Sandy Berger, live from Botswana, told CNN's Wolf Blitzer last weekend: When U.S. satellites are launched from Chinese rockets "they are put in a black box under DOD [Department of Defense] supervision. They're taken to China. They're put on top of the missile, and they're blown up to the sky. So there is no technology transfer."
Blitzer, who most always comes to the table with nothing more than press clippings and an attitude to conform, failed to raise a nightmare scenario with Berger: What if a Chinese booster failed to blow a satellite up to the sky and encryption somehow became exposed?
Events surrounding the Feb. 15, 1996 explosion of a Chinese rocket carrying a $200 million U.S.A. LORAL satellite seconds after liftoff at the Xichang Satellite Launch Center in Sichuan Province in southern China -- events that are now at the center of a secret federal grand jury probe -- may be such a nightmare, the DRUDGE REPORT has learned.
A veteran employee of LORAL SPACE AND COMMUNICATIONS has described to the DRUDGE REPORT just what went down during a LORAL review of the 1996 failure.
"The most interesting aspect of the accident was this: engineers who reviewed the recovered payload debris noticed something special that was missing: encryption hardware."
The LORAL source, who worked at LORAL's satellite manufacturing facility when the Chinese launches began, continues: "I spoke to one of our engineers about a year after the explosion, he is like many at LORAL, retired military officers from the black programs of our military. His assumption was that the Chinese kept the encryption IC board with the intent of reverse engineering its function and that espionage was China's intent."
Another theory has the encryption IC board simply burning up during the rocket blast.
The Pentagon press office refused comment on this report.
WED MAY 13 1998
STARR ZEROING IN ON OVAL OFFICE VIDEO SURVEILLANCE
**Exclusive**
For security reasons the Secret Service monitors, via closed circuit television, most areas of the White House, including the Oval Office.
President Clinton was somewhat reminded of this... recently.
According to case intelligence in the ongoing Lewinsky matter, prosecutor Kenneth Starr has subpoenaed all video recordings of the security closed circuit monitoring of the Oval Office from 11/13/95 through 1/16/98...
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