Boeing's Little Satellite Deal with China

Few of you are old enough to remember the Chinese getting involved in some contracts in 2000 that allowed them to figure out why some of their kick orbital rocket motors, which put satellites in orbit once they get close to the right velocity.  Lockheed Martin was involved in that one and they squirmed a lot, by my recollection, paid a fine and denied doing anything wrong.  Nobody in the missile business thought this was a good thing.  There was always the belief that Lockheed gave the technology to China knowing they shouldn't have, but the Clinton Administration let them off the hook through this deal. 

Now comes the Boeing deal with China.  The Wall Street Journal describes part of that story this way:  "The court filing was part of litigation against defendants including a China Orient unit that corporate records show provided financing for a satellite that Global IP was buying from Boeing. Under U.S. export laws, American companies are effectively barred from selling satellites to China." 

The SEC is now looking into the mess of money and company control that was built around Global IP.   A company, China Orient unit that corporate records show provided financing for a satellite that Global IP was buying from Boeing, is also being investigated.  Yes, it is confusing, and that is the Chinese way.  The more layers of companies and cut-outs, the better.  Boeing is said to have been apprised of the financing, though there may be second thoughts about how much advising they got, now the SEC is involved. 

Big corporate aerospace companies have no business getting into the kind of deals described in both of these investigations.  They know better;  they wink;  they nod;  they use the rationalization that it is "just business" and not anything against the US interests.  They need to get kicked really hard by SEC to get them to pay attention.  They will be more careful, though they may not stop the behavior unless the kick is well directed.  These are our defense contractors and they have rules they are supposed to be following.  They know what those rules are and they think they are above them.  Time after time, they decide what is best for the country on the basis of what is best for their bottom line or schedule.  The kick needs to come from the core and land in a place that hurts.  Fine them too.