U.S. GOVERNMENT PRINTING OFFICE

72–196 cc WASHINGTON : 2001

S. Hrg. 107–28

HIGH PERFORMANCE COMPUTER EXPORT

CONTROLS

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

MARCH 15, 2001

Printed for the use of the Committee on Governmental Affairs

(

For sale by the Superintendent of Documents, Congressional Sales Office

U.S. Government Printing Office, Washington, DC 20402

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COMMITTEE ON GOVERNMENTAL AFFAIRS

FRED THOMPSON, Tennessee, Chairman

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

GEORGE V. VOINOVICH, Ohio

PETE V. DOMENICI, New Mexico

THAD COCHRAN, Mississippi

JUDD GREGG, New Hampshire

ROBERT F. BENNETT, Utah

JOSEPH I. LIEBERMAN, Connecticut

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

THOMAS R. CARPER, Delaware

JEAN CARNAHAN, Missouri

HANNAH S. SISTARE, Staff Director and Counsel

MARK T. ESPER, Professional Staff Member

JOYCE A. RECHTSCHAFFEN, Democratic Staff Director and Counsel

LAURIE RUBENSTEIN, Democratic Chief Counsel

DARLA D. CASSELL, Chief Clerk

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C O N T E N T S

Page

Opening statements:

Senator Thompson ............................................................................................ 1

Senator Bennett ................................................................................................ 5

Senator Collins ................................................................................................. 6

WITNESSES

THURSDAY, MARCH 15, 2001

Susan S. Westin, Ph.D., Managing Director, accompanied by Stephen M.

Lord, Assistant Director, and Jeffrey D. Phillips, International Security

Analyst, International Affairs and Trade Division, U.S. General Accounting

Office:

Testimony .......................................................................................................... 9

Prepared statement .......................................................................................... 23

Questions for the Record submitted by Senator Thompson with responses

from Ms. Westin ............................................................................................ 37

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HIGH PERFORMANCE COMPUTER EXPORT

CONTROLS

THURSDAY, MARCH 15, 2001

U.S. SENATE, COMMITTEE ON GOVERNMENTAL AFFAIRS, Washington, DC.

The Committee met, pursuant to notice, at 9:35 a.m., in room

SD–342, Dirksen Senate Office Building, Hon. Fred Thompson,

Chairman of the Committee, presiding.

Present: Senators Thompson, Collins and Bennett.

OPENING STATEMENT OF SENATOR THOMPSON

Chairman THOMPSON. Good morning. The Committee will come

to order, please. I would welcome everyone to the hearing this

morning, of the Committee on Governmental Affairs, to assess recent changes to our export control policy with regard to high-performance computers. I will have a statement that I will make a

part of the record, and Senator Bennett, you or any others, if you

have any statements, we will make those a part of the record.

I think, rather than read my statement, I will just briefly state

the reason why we are here this morning and a little bit of the

background. It seems to me like there are two or three very important things that are converging here. One is our increased concern

about proliferation. We can hardly pick up the paper nowadays

without reading about a new agreement between Russia and Iran,

something Iraq is doing, or something North Korea has done, and

wondering whether or not they will stop.

Most serious commentators on the subject say that the proliferation of weapons of mass destruction is the biggest threat that this

country faces. More and more, it has become obvious that a couple

of the main sources for these items, some of which are dual-use

items, some of which are missile parts, some of which have to do

with nuclear technology, some of which have to do with nuclear

power plants, all of that, bits and pieces and parts, some of which

we know, a lot of which we probably do not know, are coming from

China and Russia. We get our biannual intelligence reports that remind us time and time again, year after year, that proliferation is

a very big problem; that the world’s greatest suppliers of the rogue

nations are China and Russia.

Another phenomenon that has taken place is our appreciation for

the fact that high-performance computers are dual-use items, and

can play a part in this problem. The Cox Report pointed out that

it was possible, first of all, that high-performance computers have

many military applications, that it is possible that these computers

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have been diverted for unauthorized uses by other countries, which

could include the following, and they list several things here: Upgrading and maintaining nuclear and chemical weapons; equipping

mobile forces with high-technology weapons; building a modern

fleet of combat aircraft and submarines; conducting anti-submarine

warfare; developing a reliable, accurate ballistic cruise missile

force; improving command and control communications; and that

there have been instances where the People’s Republic of China

has used high-performance computers for nuclear weapons applications, nuclear weapons design, using them to improve and maintain their nuclear weapons, and on and on and on.

Recognizing the proliferation problem, and recognizing the sensitivity of high-performance computers as one of the things that

could be used in the proliferation activity, and recognizing that one

of our major new trading partners, China, was doing things with

them for the inherent activity of improving their nuclear stockpile

and so forth. This was troublesome to us, and that their side activity of handing off technology and other things to rogue nations. As

a result, Congress, in 1998, as a part of the Defense Authorization

Act, said that when we as a Nation—the Department of Commerce

particularly—that when you look at these high-performance computer export situations, that Congress needs to be involved in the

process.

We use MTOPS levels in this country, and without getting into

too much detail, it has to do with the computing power of these machines. And we have had a regime in this country for some time

now that related our export policies with regard to these high-performance computers to that MTOPS capability. That has come

under question now and we will be talking about that today, but

that has been our policy; the idea being that the greater the

MTOPS level, the greater the power of the machine and the more

likely it would be for China, for example, to utilize this capability— for example, their nuclear weapons production enhancement.

Without testing, it is very important to nuclear weapons countries, for example, to be able to simulate tests, improve their stockpile, maintain their stockpile. We do that. They do that. High-performance computers assist you in doing that; many applications

that the Cox Report and others have pointed this out. So, an additional phenomenon to add to this story is that we have greatly liberalized our export policy with regard to high-performance computers over the last few years.

Again, we will get into a discussion of whether or not that is wise

or not, but there is no question that that has happened. Within 1

year, the MTOPS level went from 2,000 to 85,000 under President

Clinton’s directives. So, backing up a bit, in 1998, Congress, looking at all this, says that when you raise those MTOPS levels, you

need to make an assessment as to what this is doing to national

security, if anything. You need to make an assessment as to the

foreign availability of these things. You need to make an assessment and report to Congress as to the military applications of high

performance computers at the increased level.

In other words, I might have an opinion on whether MTOPS is

a smart way to go. You might have a different opinion. But let’s

really do an assessment as to the significance of what it is that we

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are about to do. Well, we now have kicked in at the 85,000 level.

Under President Clinton’s directives, we no longer have the notification requirement that we had before. We have abrogated a notice

requirement that used to kick in at below the MTOPS level.

Even though you might not need a license to export a high-performance computer, at least we want to know; we want to be able

to have an audit trail at a lower level, and that was the way we

operated up until just recently. The MTOPS levels kicked in. The

notice requirement will kick in shortly. So now we are at the

85,000 level with no notice requirement for any computer exports

less than the 85,000 MTOPS level. So we are saying at that level,

Mr. Exporter, we not only do not need you to have a license, we

do not need to know what you are doing for our audit purposes or

whatever.

And this is at a time, incidentally, and the Cox Report points

this out, that our post-shipment verification situation is virtually

nil. I think for a long period of time we had one post-shipment

verification of a Chinese supercomputer. Then, there have been

some more since then, but they would not even let us in there to

check for a long period of time. That is the background of what we

are doing here. With that, the President makes his report. The

2001 law required that the GAO take a look at the President’s report and to give Congress an opportunity to look—a very brief opportunity, I might add—quickly look and see what the GAO says

about the President’s report in order for Congress to have a chance

to act if it wanted to.

That is what we are about here today. The President has made

his report. It is obvious that the President’s report does not make

an assessment as to all of the military applications that we know

are out there, and it is clear that the President’s report has not

made an adequate determination or assessment in terms of the national security implications of what has just been done. That is

what this is about, within the context of a much broader debate

that we have had going on for some time now and will continue,

I’m sure. It is the assessment of the President’s report in compliance or lack of compliance with the 1998 Defense Authorization

Act, which required the President—you have got the right, Mr.

President—to raise these MTOPS levels. You have got the right to

cut off the notice below the 85,000 level, if you want to, but tell

Congress what the significance of that is, so we are not flying

blind.

My conclusion is that we are still flying blind, and that we do

not have anyone in this Nation who has made an independent, unbiased assessment of the significance of our greatly liberalized export policy with regard to dual-use items and, in particular, highperformance computers. My colleague, Senator Bennett, here, will

eloquently point out that the genie is out of the bottle and everybody has got everything, etc. He may be right, but we have 100

folks around here with 100 different opinions about that. What I

am interested in is having professionals, having folks who know

this stuff to take a look at it and make a determination and recommendation to us as to whether or not MTOPS are outmoded. If

so, what does that mean, that we abandon everything? I think

clearly not.

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There is a lot of potential other things that we can do. Nobody

has taken a look at them. So, we continue, because nothing is exploding at the moment, we continue to go down the same path

blindly, each of us, with our various opinions as the extent of which

we ought to control or decontrol, or regulate or deregulate, with industry pounding on our doors every day, trying to liberalize export

controls further, arguing that there is no need to try to control anything, ever, anymore, anywhere. We are talking about Tier 3 countries here. If really you cannot control anything anymore, why control Tier 4 countries? Why not go ahead and send computers to

Syria and Libya, if, in fact, there is nothing we can do at any

stage? So those are the issues that we have here today.

[The prepared statement of Chairman Thompson follows:]

PREPARED STATEMENT OF SENATOR THOMPSON

Good Morning. Today, the Governmental Affairs Committee is holding a hearing

on the recent changes to our export control policy with regard to high performance

computers. These changes were made by former President Clinton in January 2001,

before he left office.

High-Performance Computers (or HPCs) represent a special challenge for our export control regime, because in many ways they are the King of ‘‘dual-use’’ technologies—that is, technologies that are subject to national security export controls

because they are easily usable for important civilian purposes as well as dangerous

military ones. High performance computers are particularly sensitive because they

are enabling technologies that have important applications to national security.

HPCs can be used to design more powerful nuclear weapons, more capable ballistic

missiles, quieter submarines, and high performance jet aircraft. Computers are critical to our intelligence agencies. They are used in cryptology, reconnaissance satellites, and electronic eavesdropping. High performance computers are also key to

modern warfare. They are used in precision-guided munitions, theater missile defense, battle management, and information superiority. In short, computers are the

technical keystone of our national security apparatus; they are also important to our

potential adversaries.

Given the military importance of high performance computers, and reports at the

time that foreign entities had illegally acquired U.S.-made HPCs for military purposes, the Congress inserted language into the FY 1998 National Defense Authorization Act that was designed to strengthen HPC export controls. Among other

things, this legislation required the administration to provide a report to the Congress on three factors when proposing a modification of the export control notification thresholds for high performance computers. First, the report is to address the

availability of high performance computers from other countries. Second, it is to address all potential uses of military significance at the new control thresholds. And

third, the report is to assess the impact of such uses on U.S. national security interests. It is important to note that the purpose of the law was not to fetter international trade or hurt the computer industry, but to ensure that the government

conducted a thorough assessment of the risks and reasons underlying any change

to our HPC export control policies.

Two years later, the Cox Committee stated in its July 1999 report that the Peoples’ Republic of China was diverting U.S.-built HPCs for unlawful military applications. Specifically, it was using American-made computers to design, model, test,

and maintain advanced nuclear weapons. The committee clearly stated that ‘‘The illegal diversion of HPCs for the benefit of the PRC military is facilitated by the lack

of effective post-sale verifications of the locations and purposes for which the computers are being used. HPC diversion for PRC military use is also facilitated by the

steady relaxation of U.S. export controls over sales of HPCs.’’ The committee added

that U.S.-origin HPCs had been obtained by PRC organizations involved in the research and development of missiles, satellites, spacecraft, submarines, and military

aircraft, to name a few.

Despite this report and others, the Clinton Administration further relaxed export

controls on high performance computers. In January 2000, the licensing threshold

for HPCs was set at 2,000 MTOPS. Over the course of a year additional changes

were made—including removing distinctions between civilian and military endusers—culminating in the January 2001 decision to raise the licensing level to

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85,000 MTOPS—over a 40-fold increase in a 12-month period! These changes, and

others, were made to our HPC export control policies without conducting a thorough

national security risk assessment. I might add that a risk assessment not only

would have been the responsible and prudent thing to do, it was required by law.

It also appears that the Clinton Administration couldn’t justify these changes on

economic and commercial grounds. HPCs of similar capability are not ‘‘foreign available’’ despite industry claims that they are ‘‘widely available.’’ Additionally, while

the administration and industry cited computer ‘‘clustering’’ and other techniques

as making computer controls ineffective, we will hear otherwise today from the General Accounting Office. Even the Cox Committee reported 2 years ago that ‘‘while

the PRC might attempt to perform some HPC functions by other means, these computer work-arounds remain difficult and imperfect.’’ Surprisingly, however, little money appears to be at stake in the decisions over

HPC export controls to China and other Tier 3 countries. Let me be clear. HPCs

can be sold license-free to most countries in the world. With regard to Tier 3 countries—China, India, the former Soviet Union, all of the Middle East, Vietnam, and

most of Eastern Europe—computers under 85,000 MTOPS can be sold license-free.

Computers over 85,000 MTOPS require a license, but even then, over 90% are approved for sale. HPCs cannot be exported to any of the rogue states. In short, given

that sales to tier 3 countries represent less than 10% of all HPC sales abroad, and

HPC sales don’t appear critical to the economic health of most U.S. computer companies, it is hard to justify the national security risks simply to sell a few hundred

more of them to China and other ‘‘high risk’’ destinations. It is even more difficult

to believe the computer industry’s argument that the U.S. military will be harmed

if U.S. firms can’t reinvest these marginal profits gained from Tier 3 sales back into

R&D programs that might produce military-ready ‘‘off the shelf’’ technology. According to this line of reasoning, the United States must jeopardize its national security

in order to improve its national security. This makes little sense.

The bottom line is that the computer industry is not concerned about current

sales because these sales are not as significant as we were led to believe; however,

the industry is concerned about future sales. Any government efforts to regulate the

sale of HPCs on national security grounds is summarily and automatically rejected.

The problem with this approach is that our country faces serious threats today. Despite the fact that the Cox Committee identified several alternative methods to safeguard U.S.-made HPCs, the bipartisan Deutch Commission made several recommendations to strengthen our export control regime, and the GAO recently listed

nearly a dozen alternatives to the current MTOPS metric, we can’t seem to find any

consensus within the government or private sector that export controls on computer

hardware are either needed or effective. I strongly disagree.

Given sufficient political will, ingenuity, and leadership, I am confident that we

can find a system that accommodates commerce while protecting our national security. The first step in that process, however, is finding an honest broker that can

conduct the research, present the facts, outline the costs and benefits, and analyze

the risks to our national security and economic prosperity of each policy option. I

am confident we will hear from such an honest broker today when we hear from

the GAO.

The Committee has been closely involved with nonproliferation policy and export

control issues for many years. In legislation passed by the Congress last year at my

urging, the General Accounting Office was tasked to assess the President’s compliance with the reporting requirements outlined in the FY 98 NDAA, and to evaluate

the adequacy of the stated justification for any proposed changes to HPC export controls. This hearing, therefore, will ask the GAO to report on its findings pursuant

to these taskings.

I look forward to hearing today, therefore, from our witnesses, who can shed some

much-needed light on the complex, yet critical, issue of high performance computer

export controls.

Senator THOMPSON. Senator Bennett.

OPENING STATEMENT OF SENATOR BENNETT

Senator BENNETT. Thank you, Mr. Chairman.

Chairman THOMPSON. Would you like to state your own case?

Senator BENNETT. Well, my case is not that much different from

yours. The only other item that I would put on the record before

we hear from the witnesses is that other countries have been involved in the manufacture of these same devices. Particularly,

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when you get into the issue of MTOPS, which are a function of the

speed and excellence of individual chips—there are individual chips

being manufactured in France, Japan, Germany, and, interestingly,

China itself, that have the same computing power of some of the

chips that we previously sought to control.

Part of the problem facing American manufacturers is that if we

restrict them from exporting into the world, on the basis that some

of their products can be used by these rogue countries, we also cut

them out of competing in the world in benign areas, with other

countries who have the ability to manufacture the same level of capability that we have. The Chinese will use their own chips, instead of ours, to do some of the things that we might not want

them to do. Then, with that same manufacturing capability, come

into our markets, take our markets away from us, and we have,

therefore, accomplished little or nothing in terms of our concern.

Aside from putting that statement into the record, Mr. Chairman, I agree with you completely that the proliferation of weapons

of mass destruction is the most serious challenge we face in the

world today, in terms of our national security, and I welcome your

initiative in getting the GAO involved in doing an analysis and

study of this. As I said, we may not be quite as far apart as you

might think or as we may have appeared to be in the past.

Chairman THOMPSON. Thank you very much.

Senator Collins, do you have an opening comment.

OPENING STATEMENT OF SENATOR COLLINS

Senator COLLINS. Thank you very much, Mr. Chairman. I first

want to thank you for holding this hearing on this very important

issue on which you have been a real leader in the Senate.

It is often observed that we live today in the information economy, one in which our individual and collective economic success

depends increasingly upon the ability of computer systems to store

and retrieve data, to control sophisticated manufacturing processes,

to perform complex mathematical calculations, and to connect us

together, seamlessly, without regard to the bounds of geography.

Ever faster computer processing power is, in many respects, the

backbone of this information economy. As a result, the health of

our computer industry, which currently leads the world, should be

of very great concern to all of us. At the same time, however, we

cannot forget that the very processing speed that makes computers

so useful in the private sector also makes them crucial enabling

technologies for advanced military developments.

The atomic bomb was designed by scientists using slide rules,

and it only took a comparatively primitive computer to design the

first Stealth bomber. The sophisticated weapons systems of tomorrow and the complex command and control schemes into which

they will all be fitted, however, require state-of-the-art technology.

For countries seriously attempting to take advantage of what many

military theorists have described as the information-driven revolution in military affairs now underway, acquiring more and better

high-performance computers is an absolute necessity. We encourage such developments in potential adversary countries only at our

great peril. High-performance computers are, thus, the classic dualVerDate 11-MAY-2000 10:49 Jun 14, 2001 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6601 72196.TXT SAFFAIRS PsN: SAFFAIRS
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use technology. They are, indeed, useful for numerous legitimate

purposes, but they can be very dangerous in the wrong hands.

The same computing power that can model complex atmospheric

weather patterns on a continental scale, for example, might be just

as useful in modeling critical aspects of a nuclear explosion, perhaps thus helping a country improve its nuclear stockpile or develop sophisticated nuclear weapons without telltale test explosions.

This is the source of the real tension in national security export

control law. To be sure, export control restrictions can do real harm

to high-tech, highly competitive sectors of our economy, by making

overseas sales slower, more difficult and less certain, ceding ground

to our foreign competitors. At the same time, however, it is imperative that our understandable eagerness to promote commercial

sales not lead us to permit American companies to help arm actual

or potential foreign adversaries.

That is why today’s topic is so interesting. We saw the actions

taken by the previous administration, which I am describing in

some detail in my statement, and which I would ask be put within

the record in the interest of time. This is clearly a significant issue

and it is one that Chairman Thompson has been closely involved

with for some time. As a Member of this Committee myself and as

a new Member of the Committee on Armed Services, I feel strongly

that we can strike an appropriate balance.

So, with that, Mr. Chairman, I would ask that the remainder of

my statement be included in the record and I look forward to the

hearing today.

[The prepared statement of Senator Collins follows:]

PREPARED STATEMENT OF SENATOR COLLINS

It is often observed that we live today in an ‘‘Information Economy,’’ one in which

our individual and collective economic success depends increasingly upon the ability

of computer systems to store and retrieve data, to control sophisticated manufacturing processes, to perform complex mathematical calculations, and to connect us

seamlessly together without regard to the bounds of geography. Ever-faster computer processing power is in many respects the backbone of this information economy. As a result, the health of our computer industry—which currently leads the

world—should thus be of very great concern to all of us.

At the same time, however, we cannot forget that the very processing speed that

makes computers so useful in the private sector also makes them crucial ‘‘enabling

technologies’’ for advanced military developments. The atom bomb was designed by

scientists using slide rules, and it took only comparatively primitive computers to

design the first Stealth bomber. The sophisticated weapons systems of tomorrow

and the complex command-and-control schemes into which they will be fitted, however, require the state of the art. For countries seriously attempting to take advantage of what many military theorists describe as the information-driven ‘‘Revolution

in Military Affairs’’ now getting underway, acquiring more and better high-performance computers is an absolute necessity. We encourage such developments in potential adversary countries only at our great peril.

High-performance computers are thus the classic ‘‘dual-use’’ technology: They are

useful for innumerable legitimate purposes, but they can be very dangerous in the

wrong hands. The same computing power that can model complex atmospheric

weather patterns on a continental scale, for example, might be just as useful in

modeling crucial aspects of a nuclear explosion—perhaps thus helping a country improve its nuclear stockpile or develop sophisticated thermonuclear weapons without

tell-tale test explosions.

This is the source of the real tension behind national security export control law.

To be sure, export control restrictions can do real harm to high-tech, highly-competitive sectors of our economy by making overseas sales slower, more difficult, and less

certain—ceding ground to our foreign competitors. At the same time, however, it is

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imperative that our eagerness to promote commercial sales not lead us to permit

American companies to help arm actual or potential foreign adversaries.

This is why today’s topic is so interesting. On several occasions, the previous administration saw fit to dramatically loosen the export control restrictions that govern sales of high-performance computers to so-called ‘‘Tier 3’’ countries such as Russia and the People’s Republic of China. Last year, in fact, the Clinton Administration eliminated the distinction between ‘‘civilian’’ and ‘‘military’’ end-users for Tier

3 computer sales—with the effect that military research laboratories and intelligence agencies in these countries can now freely buy American computers at the

same high performance level at which we permit license-free sales for less dangerous end-user such as banks or hospitals. Moreover, the performance level of computers available without any export license at all has steadily been raised in lockstep not with the actual availability of such equipment from foreign competitors but

rather with the American computer industry’s anticipated marketing strategy for

ever more powerful processors.

Less than 2 years ago an export license was required in order to sell computers

to military end-users in a country such as Russia or China at performance levels

of more than 2,000 Million Theoretical Operations Per Second (MTOPS). This, I

should emphasize, did not mean that sales above that level were barred—merely

that in order to sell such a computer to such an end-user, one had to obtain permission from the U.S. Government, which reserved the right to object on national security grounds. As of January this year, however, the export license threshold level

stood at 28,000 MTOPS. With President Clinton’s last minute decision on January

18, 2001 to implement yet another loosening of export controls, this level is rising

to 85,000 MTOPS. That amounts to more than a 40-fold increase in less than 2

years! Some of these changes, moreover, have been made over the objection of our

allies and in violation of our government’s commitment to observe export licensing

levels agreed upon by the multilateral Wassenaar Arrangement headquartered in

Vienna.

These have been remarkable changes. But have the previous administration’s dramatic relaxation of computer export controls managed to strike an appropriate balance between commerce and security? Disturbingly, it is remarkably hard to tell.

The unanimously-adopted Cox Report of 2 years ago discussed some of these issues

in one of its chapters, warning of the many military uses to which the PRC is putting high-performance computers purchased from the United States. Press accounts

have also reported the appearance of U.S. machines in Russian nuclear weapons design laboratories—an occurrence about which the head of Russia’s weapons program

actually boasted publicly. Remarkably, however, a thorough assessment of the national security implications of specific decisions to loosen computer export controls

has never been done.

This is very troubling. Despite repeated GAO studies and Congressional hearings

highlighting this fact and urging corrective action, not one of the previous administration’s repeated relaxations of computer export control thresholds was accompanied by a serious analysis of the national security implications of the change. Fortunately, Congress saw fit last year to require such a national security assessment

by GAO. Our witnesses today will present us with the GAO’s findings pursuant to

this Congressional requirement.

According to conference report language adopted late last year, Congress expects

that GAO will provide an assessment of the adequacy of the stated justifications for

a change in computer export license threshold levels, as well as an evaluation of

this change’s likely impact upon our national security and foreign policy interests,

the security of our friends and allies, upon multilateral regimes such as Wassenaar,

and upon our nonproliferation policy. That is quite a tall order, but I have great

faith in our experts who join us from GAO today. This is apparently the first time

such factors have ever formally been assessed in connection with a change to computer licensing rules, so I am pleased that this Committee is providing this opportunity for them to testify.

This is clearly a significant issue, and one with which Chairman Thompson has

been closely involved for some time. As a Member of this Committee for some time,

and as a new Member of the Armed Services Committee, I feel that it is possible

to strike an appropriate balance between commerce and security. Today’s hearing

will contribute to these debates in important ways, and should help ensure that

these national security issues receive the attention they deserve. I look forward to

hearing the testimony of our witnesses.

Thank you, Mr. Chairman.

Chairman THOMPSON. Without objection, it will be made a part

of the record. Thank you very much, Senator.

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1The prepared statement of Ms. Westin appears in the Appendix on page 23.

At this time I would like to recognize our panel. We are pleased

to have three witnesses with us today from the General Accounting

Office, Dr. Susan Westin, Managing Director of International Affairs and Trade Division. She will present the GAO’s findings with

regard to former President Clinton’s January 2001 changes to the

United States high-performance computer export control policy.

Dr. Westin will be joined by Steve Lord, Assistant Director of the

International Affairs and Trade Division, and Jeff Phillips, a senior

analyst also in the International Affairs and Trade Division. I

would like to read the resumes of all you folks. It would be extremely impressive, I assure you, if you have not already read

them, but unless you insist, we will just skip those and just say

that you are, obviously, highly qualified in these very technical,

complex areas. We thank you for being with us today.

Dr. Westin, would you please proceed with your testimony?

TESTIMONY OF SUSAN S. WESTIN,1 Ph.D., MANAGING DIRECTOR, ACCOMPANIED BY STEPHEN M. LORD, ASSISTANT DIRECTOR, AND JEFFREY D. PHILLIPS, INTERNATIONAL SECURITY ANALYST, INTERNATIONAL AFFAIRS AND TRADE DIVISION, U.S. GENERAL ACCOUNTING OFFICE

Ms. WESTIN. Yes, thank you, Senator. Mr. Chairman, I ask that

my entire written statement be put into the hearing record, but I

will just summarize my remarks.

Chairman THOMPSON. Without objection.

Ms. WESTIN. I am pleased to be here today to discuss export control issues for high-performance computers. As you know, export

controls continue to be a contentious part of our national security

debate. Over the past several years, there has been continuing congressional concern over the rationale for revising these controls,

and their effect on our national security.

U.S. policy with respect to the export of high-performance computers seeks to balance the national interest in promoting economic

growth in trade against the essential national security requirement

to prevent the proliferation of technologies related to weapons of

mass destruction, missiles, and advanced conventional weapons.

The United States has long controlled the export of high-performance computers to sensitive destinations, such as Russia and

China. Recent technological advancements in computing power

have been rapid. The regulations for high-performance computer

control thresholds are currently based on a computer’s composite

theoretical performance, as measured in millions of theoretical operations per second, or MTOPS.

We recently reported that the growing ability of other countries

to cluster lower performance computers has made the current computer export control system ineffective in limiting countries of concern from obtaining high-performance computing capabilities for

military applications. In that report, we also reported that MTOPS

is an outdated and invalid means for determining whether individual high-performance computers should be licensed for export.

On January 10, 2001, President Clinton announced a significant

relaxation in export control licensing and notification thresholds for

10

high-performance computers, and a proposal to eliminate almost all

controls on exports of computer hardware. Today, I will first discuss our evaluation of the President’s justification for changing the

computer control thresholds. I will then turn to our evaluation of

the support of the President’s policy proposal to shift the emphasis

of controls from hardware to software controls. Finally, I will discuss some of the implications of these changes.

The main message of my testimony this morning is that the inadequate justification for the relaxation of export controls for highperformance computers demonstrates the need for a comprehensive

study of export controls. As we have previously recommended, a

panel of experts is needed to conduct a comprehensive assessment

of available options to address weaknesses of computer export controls, as well as to determine what U.S. countermeasures might be

necessary to respond to computer-related enhancements of military

or proliferation capabilities in sensitive countries.

Turning to the first point, the President’s January 2001 changes

in the export control thresholds for high-performance computer exports are not adequately justified. While the President’s report recognizes that high-performance computing capabilities will become

increasingly available to other countries through computer clustering, the report fails to address all militarily significant uses for

computers at the new thresholds, and assess the national security

impact of such uses as required by law. The inadequacies of the

President’s report are further compounded by continued use of a

flawed measure, MTOPS, for assessing computer performance.

Second, the President’s policy proposal for relaxed U.S. computer

controls also is not adequately supported. Although the new policy

was based on a conclusion that computer hardware exports can no

longer be controlled, the Executive Branch has failed to adequately

assess alternative control options. In addition, the new policy

would focus more attention on using new software controls to protect U.S. national security interests, even though such controls

have yet to be identified and developed.

Finally, we identified several implications of the changes to the

control thresholds and the proposed change in U.S. computer export control policy related to increased risk for U.S. national security. I would like to emphasize three of these implications. The first

implication is that the inadequacies of the President’s justifications

again demonstrate the need for a comprehensive study of the

issues involved. In our December 2000 report on high-performance

computers, we recommended that Executive Branch agencies comprehensively assess ways of addressing the shortcomings of computer export controls, including the development of new performance measures and of countering the negative effects on U.S. national security of increased availability of high-performance computing. Although the Departments of Defense and Commerce did

not agree with this recommendation, we believe this recommended

course of action is still valid. Without such a comprehensive study,

the United States will not be prepared to fully assess and mitigate

the risks that it may face by revising U.S. high-performance export

controls.

The second implication is that the new rules effectively eliminate

prior U.S. Government review of any computer exports below the

11

licensing threshold to sensitive countries. The National Defense

Authorization Act of 1998 requires computer exporters to notify the

Commerce Department in advance of any proposed high-performance computer exports to sensitive countries, such as China, Russia

and India that pose a concern for military or proliferation reasons.

Since the threshold for notifications was set lower than the

threshold for licensing, it served as a tripwire for triggering advanced U.S. Government review of exports to potentially sensitive

end-users. Under this procedure, exporters must apply for a license

if any Executive Branch agency in the licensing process objects to

a proposed computer export. Next week, the threshold for notification takes effect at 85,000 MTOPS. This will be the first time that

the notification threshold is the same as the licensing threshold for

computer exports to sensitive countries.

In the past, the notification threshold lower than the licensing

threshold allowed the U.S. Government to deny or defer some exports, or make other exports conditional on additional safeguards.

There were over 3,700 notifications of intent to export computers

between February 1998 and September 2000. Of the 204 notifications that required subsequent license applications, 165 were not

approved, while the remaining 39 were approved with conditions.

Reasons for non-approval included concerns over end-users.

Admittedly, only a small percentage of the notifications were not

approved for licenses to export. Commerce and Defense officials

point to this small percentage as evidence that the notification

process has not been useful. However, we are not able to assess the

significance of the non-approved licenses, in part because of lack of

the national security analysis of the impact of these exports to sensitive countries.

The third implication is the U.S. Government will have to rely

more heavily on computer vendors to know your customers, and assess their intentions to use computers for proliferation purposes.

Past evidence has shown this reliance may be misplaced. In summary, we recognize the need for U.S. policy on the export of sensitive technology to balance economic and trade interests against

national security interest. However, the justification for relaxing

the export controls did not address all computer uses of military

significance, to which high-performance computers could be applied

at the new thresholds, and did not assess the national security impact of such uses. The lack of justification makes it difficult to determine if the appropriate balance between economic interest and

national security interests has been achieved.

Mr. Chairman, Members of this Committee, this concludes my

prepared remarks. My colleagues and I will be pleased to respond

to any questions you may have.

Chairman THOMPSON. Thank you, Dr. Westin. I appreciate that

very much and I especially appreciate GAO’s attention to this in

a short period of time. The legislative framework that we set up

for your getting involved and doing this was short, and our review

period is short. In fact, I think we have to act by tomorrow as a

Congress, and I think the whole process is very deficient in my

mind, but it is what it is, and you are doing your part and we are

trying to do ours.

12

Let me see if I can basically summarize your testimony and see

if I am accurate. First, is that with regard to three basic requirements under the 1998 Defense Authorization Act, that two of those

requirements were not fulfilled, or were deficient in the President’s

report; that is, the requirement to assess the military applications

and the other requirement to assess the national security implications. Is that basically correct?

Ms. WESTIN. That is right, the justifications that were to be included, according to the NDAA, were not there.

Chairman THOMPSON. All right. Also, next week will be the first

time that the notification level is the same as the license level at

85,000 MTOPS. Is that correct?

Ms. WESTIN. That is right.

Chairman THOMPSON. And you point out the significance of that,

in that in times past notification has been lower, and we have been

able, as a country, to catch some, presumably, that should not be

approved that, otherwise, would have been approved had it not

been for a lower notification level. You mentioned 165, I believe, licenses were denied that otherwise, presumably, would have been

approved.

Ms. WESTIN. Yes, Senator, 165 were not approved. I think it is

12 that were outright denied and the others were returned without

action.

Chairman THOMPSON. Sometimes I think that is done for national security purposes and people do not want to talk about, in

too much detail, why they are doing what they are doing. They just

do not get their license. You also say that you believe that the

MTOPS metric is no longer very useful in making these determinations, primarily, as I take it, because of the clustering capability

that countries have now. Is that basically correct? I know I am

paraphrasing.

Ms. WESTIN. That is basically right, that it is an outdated measure.

Chairman THOMPSON. It is an outdated measure. I am also correct, though, in concluding that you are not suggesting that, therefore, we should have no measure, or that we should have no control; are you?

Ms. WESTIN. No, definitely, that is not part of our conclusion,

nor, Senator, are we concluding that 85,000 MTOPS is an appropriate level or not an appropriate level. Our analysis was to look

at the justifications that were behind changing these export control

levels.

Chairman THOMPSON. Justification in these two important categories simply are not there. We are continuing to liberalize our export policy without the knowledge of the national security impact

it might have, or without an assessment as to all of the military

applications that such a raising of MTOPS-level licensing might

have.

Ms. WESTIN. That is right.

Chairman THOMPSON. I think it is important to remind ourselves, too, that when we are talking about 85,000 MTOPS, that

does not mean anybody is cut off at 85,000. That just means that

when you get below 85,000, you do not even have to have a license,

but when you get to the 85,000 and above, 90-something percent

13

of the license applications—I think that is correct—are approved.

The Cox Report suggested several alternative ways of measuring

these computers, in terms of their significance. The Deutch report

had several possible suggestions. Your report in December of last

year had almost a dozen possible suggestions as to different ways

that we could possibly control or have a control regime, which

would really keep the stuff we wanted out of the bad guys’ hands,

or potential bad guys, in terms of end-users—I am not talking

about countries necessarily—that there were options out there, but

that nobody has really sat down and gone through and made a determination as to which one of these might be viable and which

ones might not be; is that correct?

Ms. WESTIN. That is right, and we include ourselves in that, Senator. GAO did not do that.

Chairman THOMPSON. Nobody has done that. We are flying blind,

essentially, with regard to that. Some of those suggested possibilities are hardware-type solutions, counting of processors instead of

MTOPS, things of that nature; but suffice it to say, there are a variety of suggestions out there from Cox to Deutch to GAO, things

that are on the table, that knowledgeable people have said, ‘‘We

might ought to take a look at this. This might work.’’ All kinds of ideas are out there. None of us are wed forever to

the MTOPS criteria or anything else. We just know that whatever

the criteria is, it is becoming more and more liberal. It went from

2,000 MTOPS to 85,000 MTOPS in 1 year. The notice requirement

has been liberalized, shall we say, or there is less and less notice,

less time for Congress—Congress used to have 6 months to review

this. Now we have 60 days.

Ms. WESTIN. 60 days.

Chairman THOMPSON. Everything is being pushed toward more

high-performance computers out the door to Russia and China. As

I said, we might conclude, someday, that we might as well do that

and we might as well go ahead to give them to Iran and Iraq, while

we are at it, but we were not there yet, because nobody, including

the President, even though the law required it, has made a national security assessment or an assessment of all the military applications that might have significance in terms of the MTOPS

level being raised. Is that essentially correct, a summary?

Ms. WESTIN. Yes, that is a good summary, Senator.

Chairman THOMPSON. I noticed here in your September 1998 report on export controls, national security issues and foreign availability for high-performance computer exports, GAO has done a lot

of good work in this area. It is unfortunately under the radar

screen. Nobody pays a whole lot of attention to it now, except the

people in the business, but it is very important and one of the

things that you have looked at is how we stand in comparison to

other countries.

I noticed here on page four, it said, ‘‘Based on EAA’s description

of foreign availability, we found that subsidiaries of U.S. companies

dominate overseas sales of high-performance computers.’’ According

to U.S. high-performance computer exporters, there were no instances where U.S. companies had lost sales to foreign high-performance computer vendors in Tier 3 countries. We also obtained

information on the capability of certain Tier 3 countries to build

14

their own high-performance computers, and found it to be limited.

Tier 3 countries are not as capable of producing machines of comparable quantity and of comparable quality and power as major

high-performance computer supply countries.

I think that one of the issues we are going to have to deal with

as a Congress is that even acknowledging the world is a smaller

place, and many of the technological genies are certainly out of the

bottle, is there anything to be derived from still trying to keep certain things out of the hands of certain people for certain lengths

of time, with a full concession that maybe eventually everybody

will have everything? If not, why not send it to Saddam Hussein

right now and make the profit off of it and put it back into our system, so that we can strengthen our own system over here? Obviously, nobody would advocate that. Where I think we come to is

that there is something to be said for certain reasonable restrictions that comport with reality, but that, if nothing else, slows

down this process that, among other things, has caused us to conclude we need a national missile defense system. That is the debate

we are having here and I think you have made an important contribution to it. Thank you.

Senator Bennett.

Senator BENNETT. Thank you, Mr. Chairman.

Thank you, Dr. Westin. I agree, absolutely, there must be careful

study of this, further study of it. The primary challenge in this

world is how rapidly it is changing. A report that comes out is obsolete almost as fast as the product that it examines. Let me share

with you and the Committee a press release that came out on the

1st of February, so it is 45 days old now, a company I had never

heard of until this was called to my attention, called Juno Online

Services. Are you familiar with that? Are any of you familiar with

that?

Ms. WESTIN. Yes, I have my chief scientist here and he is familiar with that.

Senator BENNETT. Here is what it says, and is pretty staggering

in its implications: ‘‘Preliminary studies recently completed by the

company suggest that if the computers of all of Juno’s active free

subscriber base were simultaneously working on a single computational problem, they would together represent the world’s fastest

supercomputer and might approach or break the petahertz barrier.’’

I have never heard of the petahertz barrier, but things keep coming

at us in this world all the time—that is a hypothetical effective

processor speed in the order of a billion megahertz.

Then you go on in the press release, and this is fascinating to

contemplate, it says, ‘‘Applications will run as screen savers on the

computers of participating subscribers when their machines would

otherwise be idle, performing calculations when the computer is on,

but not in use.’’ Now, I have a screen saver on my computer that

shows the beautiful scenery of the State of Utah and changes every

few seconds from one magnificent vista to the next, but that is obviously not taxing the computer very much to put those pictures up

there. So, apparently, if I am connected with Juno, while my screen

saver is on, they will get in and use the computing power to work

on this problem. It says Juno’s free, basic service may ultimately

be required to make their unused computing power available to the

15

project as a condition for using that service. In other words, if you

subscribe to Juno, you have to say while we have our screen saver

up, you have access to the computing power in our computer, and

Juno has enough subscribers that altogether, they would represent

computing power greater than the world’s existing supercomputer,

the biggest supercomputer. This is an idea that is 45 days old as

far as the public is concerned.

I bring this up to illustrate how rapidly everything is changing.

This is a circumstance that was not in the debate when the Congress met in the year 2000. We did not have any concept—at least

I did not have any concept—I do not know about my colleagues, but

I did not have any kind of concept that this kind of connection

could even be conceived of, let alone discussed in early 2001 as a

legitimate situation. Whether or not Saddam Hussein would somehow plug into this and take advantage of it, without anything

being exported at all, no physical box ever shows up in Iraq, he just

makes an electronic connection with a subscriber somewhere, and

then makes use of it, is a further demonstration of how badly we

need the study that you are talking about, and it needs to be an

ongoing study; that the conclusions arrived at by July of this year

will be obsolete by October of this year.

Maybe that is an issue, Mr. Chairman, we should raise with

Condoleeza Rice as an ongoing thing in the National Security

Council. I have talked to her about the whole issue of critical infrastructure protection, because I think that the next war will not be

fought with kinetic weapons. It will be fought with computers. If

I were somebody who wished this country ill, I would not try to

take on the U.S. military, because I would lose. Instead, I would

hire the best hackers I could find, and say let’s find a way to get

into the telephone system and shut down the Fed wire, so that the

American economy comes to its knees overnight, because no checks

can clear, no money can pass and so on.

I think that is where the next war is being fought, and I was delighted that Condoleeza Rice not only understood that, but she had

thought very deeply about it and was ahead of me. That is all a

little humbling, for a Senator, to have somebody come to your office, and you are going to raise an issue, and have that individual

know more about the issue than you do.

I think your recommendation here is a very sound one and we

clearly need to pay attention to it, and the only amendment I

would add is the one I have suggested, that it not just be a single

date and the report issued and then you go onto other things; that

we find some way that this is an ongoing assessment, because the

Juno announcement demonstrates how rapidly moving and changing everything is all of the time. Now, if you have any comment

or reaction to that, I would be happy to hear it.

Ms. WESTIN. Senator, I was going to say that I think you really

have given an excellent example that does back our recommendation, because our recommendation for this expert panel is really

twofold; to address any weaknesses in export control measures—

but I think what your example was pointing to—to make a determination of what U.S. countermeasures are necessary to deal with

these weaknesses.

16

It may very well be that advances in technology are occurring so

quickly that there is not going to be a good measure for controlling

the export of computers, which is why I think the second part of

the recommendation, as I have said, is equally important, to determine what countermeasures are we going to take. It all does hinge

on having an analysis of the military uses of high-performance

computers, and what impact these uses have on our national security interest.

Senator BENNETT. The only other comment I would make, Mr.

Chairman, that I would like the panel’s reaction to, when Dr.

Hamre testified in a hearing on the Export Controls Act, he was

no longer the Deputy Secretary of Defense, but testified in his position as the President of CSIS, but he talked about his own transition on this issue, how, as an official of the Department of Defense,

he was firmly opposed to export of any of these items. And then

he said he woke up one night and realized that what is happening

around the world, in terms of other countries developing these capabilities, could mean a situation where the United States might

be dependent on a foreign manufacturer, because the foreign manufacturer would have access to markets that the American manufacturer would not.

He said I began to change my position pretty clearly because I

did not want to run the risk of American manufacturers falling behind foreign manufacturers, so that we might eventually, at DOD,

have to turn to a foreign source. Would you comment on that or

give us your reactions to that?

Mr. PHILLIPS. That is a legitimate concern. There is another

trend, a market trend, that in some ways contradicts that. In the

computer area the trend has been toward DOD acquiring more

mass-market commercially available components and systems, and

relying less and less on specially designed, specially built computers. As a result, it may be that at some point DOD will be relying on foreign suppliers, at any rate, because those commercially

available mass-market systems that they are getting will become

more and more available from everybody.

The idea that by keeping the U.S. computer industry competitive

overseas is going to allow money to come back and be reinvested

in R&D, may well be true. But the kind of high-end, state-of-theart systems that DOD used to be getting from the more traditional

computer companies, like Cray and Silicon Graphics, it is moving

away from, into the more commercially available lower-end systems

and linking those together.

Senator BENNETT. Yes, because where the competition is coming

is in the lower-end, where you are seeing French machines and

Japanese machines competing with the Americans, and it is not a

question of the money coming back to fund R&D. It is a question

of the company drying up because they cannot get market share.

Mr. PHILLIPS. Well, at this point, based on the last work that we

did, the market share situation still fairly well favors the United

States.

Senator BENNETT. That is true, and Dr. Hamre wants to keep it

that way.

Chairman THOMPSON. I might add, do you have any figures on

the high-performance computer sales to Tier 3 countries?

17

Mr. PHILLIPS. We do not have any updated numbers on those,

but——

Senator BENNETT. From any source, if I might add, Mr. Chairman, not just American sales, but any sales.

Mr. PHILLIPS. I will start with U.S. sales. You can think of them

as a sort of inverted pyramid. The vast majority of U.S. sales has

been to the European countries—and of course, in the United

States—to the Tier 1 countries, then to the Tier 2 countries, Tier

3 sales as a relative proportion of overall sales, has been very, very

small. I think we talked about five or six percent as of a few years

ago. Tier 3 has been a growing market, but I think those ratios are

still fairly constant.

As far as overseas suppliers, the Japanese are usually considered

our next biggest competitors, and we have an arrangement with

them where they are supposed to report to us any sales of their

high-performance computers to Tier 3 countries. We have been told

by the State Department that they have received no reports in the

past several years, perhaps as many as 5 years, of sales to Tier 3

countries.

Senator BENNETT. Thank you, Mr. Chairman. My time has expired.

Chairman THOMPSON. Senator Collins.

Senator COLLINS. Thank you, Mr. Chairman.

Dr. Westin, like the Chairman, I am very troubled by the fact

that the GAO found that the Clinton Administration failed to conduct a serious national security analysis before making the decision

to loosen national security export controls upon high-performance

computers. Does the GAO know why the administration failed to

conduct the kind of in-depth review that many in Congress urged

be conducted?

Ms. WESTIN. Senator, if the officials from the Defense Department and Commerce Department were here, I am sure they would

tell you they disagree with us. They would say that the justification

was adequate in the President’s report. We look at what was written in the law, and the law says for the second and third requirements, the President’s report should include a list of all the militarily significant uses of high-performance computers, and conduct

an analysis of the impact on national security of all of these uses.

That was clearly not there.

In the written statement, we have given a few examples of things

we would have expected to be included in having a national security impact of those examples.

Senator COLLINS. Just for the record, GAO’s finding is that the

Clinton Administration failed to comply with the legal requirement

to conduct a thorough review of the national security implications;

is that correct?

Ms. WESTIN. Yes.

Senator COLLINS. Could you give us some idea of what kinds of

military uses computers at the 85,000 MTOPS level could be put

to, for those of us who are not as expert in this area as the Senator

from Utah? For example, could they be used in nuclear weapons

design? Are they powerful enough to process radar or other sensor

information from multiple sources, in order to help a country build

up its air defense system against stealth aircraft? Could you give

18

us some idea of what the potential military uses of computers at

that level could be, Mr. Phillips?

Mr. PHILLIPS. There are several—again, we can base this in part

on the studies that DOD and Commerce commissioned in 1995 and

1998, which did have a list of about 194 known militarily significant applications at that time. At about 85,000 MTOPS or so, they

talk about global ocean modeling and weather forecasting. They

talk about on-board data processing for UAVs (Unmanned Aerial

Vehicles).

There are physics simulations, three-dimensional modeling,

three-dimensional simulations of submarines, submarine modeling.

There are a number of things on that list which we understand,

has grown since then in militarily useful applications. So there are

a lot more than what are on that list at different levels.

Senator COLLINS. With regard to the examples that I gave of

probably helping to develop nuclear weapons design, probably the

answer to that is yes; is that fair?

Mr. PHILLIPS. Nuclear weapons design, typically, can be done at

fairly low levels. We reported in 1998, based on Department of Energy information, that a country like China could use computers as

low as, I believe, 6,000 or 7,000 MTOPS, to help design new nuclear warhead designs.

Senator COLLINS. So, at 85,000 MTOPS, we are talking about

very powerful computers, then.

Mr. PHILLIPS. Right, and the kinds of uses that would lend itself

to are stockpile stewardship uses, that the United States is trying

to be able to simulate without nuclear weapons testing.

Senator COLLINS. Does the GAO know how the Clinton Administration arrived at the 85,000 MTOPS level, Mr. Lord?

Mr. LORD. Sure. The Department of Defense officials we met

with indicated they extrapolated—or they projected through the

end of this year what they thought the foreign availability was

going to be. So, basically by December of this year, according to

their calculations, Tier 3 countries would be able to achieve that

capability. They had some modeling. We have not looked at their

assumptions in great detail, but that was their analysis at the Department of Defense—with clustering, they could achieve that capability. So, they have a unit over there who performed those calculations.

Senator COLLINS. As I recall, there was previous GAO testimony

before this Committee that suggested that the levels were set, not

by ascertaining what was actually available from foreign computer

makers, but rather according to what new processors U.S. manufacturers might hope to be able to market, but did not currently

market at the time the decision was announced. Mr. Phillips, is

that accurate?

Mr. PHILLIPS. That is correct. The process, until this last goaround, was that the administration would contact the vendors and

identify, within about a 6-month period, what their production

schedules would be for the next state-of-the-art processors. Then

they would base their projections on the MTOPS levels of those

processors and different configurations.

Senator COLLINS. So, in some ways, this is a prospective——

19

Mr. PHILLIPS. Right, they have intended it to be that way. Their

reasoning has been they wanted the export control system to not

lag behind the technical capabilities that the companies could

achieve.

Senator COLLINS. Dr. Westin, the United States helped to build,

and concurrently participates in, a multilateral export control regime that is called Wassenaar. As I understand it, under that multilateral system, there is a requirement for export license controls

on high-performance computers; is that correct?

Ms. WESTIN. To the Tier 3 countries, right.

Senator COLLINS. To the Tier 3 countries.

Ms. WESTIN. I will let Jeff clarify that.

Mr. PHILLIPS. They do not normally have tiers of countries in

Wassenaar. It is not a system where there is a requirement, per

se. Wassenaar attempts to have common standards, common guidelines, common control lists among its members, but it is left to the

national discretion of the countries to put into their own laws and

regulations the standards that Wassenaar agrees to.

Senator COLLINS. Given those common controls and that cooperative regime, I am curious whether the United States consulted with

the members of Wassenaar, for example, with our NATO allies or

with the Japanese, before announcing that decontrol measure in

January 2001. Do you know whether there was consultation?

Mr. PHILLIPS. We have talked to the State Department about

that. I am not quite sure of the sequence, whether they were consulted ahead of time or were told that this is the decision we are

about to make. They did notify in December 2000 at a regular session of Wassenaar, at which the United States was convincing

Wassenaar to go along with the more recent U.S. changes. Levels

were changed in August to 28,000 MTOPS. Either late December

or January, the State Department made it known to Wassenaar

that the U.S. was going to raise the levels up to 85,000 MTOPS.

Senator COLLINS. So it went from 28,000 MTOPS to 85,000

MTOPS in a period of 6 months or so.

Mr. PHILLIPS. Less than 6 months.

Senator COLLINS. Less than 6 months. Are you aware of reports

that there was friction with our allies, who adhered to the regime

because of the United States moving unilaterally in this area?

Mr. PHILLIPS. Yes, we have heard things—and this is sort of secondhand information—but the State Department officials have told

us that there was some concern among the members of Wassenaar.

I cannot say it was because they did not want, necessarily, the levels to change, but at least they were concerned because the levels

had recently changed and, now, in such a short time, were being

changed again to a rather high level.

Senator COLLINS. Thank you very much. I very much appreciate

GAO’s excellent work in this area. Thank you, Mr. Chairman.

Chairman THOMPSON. Thank you very much, Senator Collins.

Let me add to that report, Senator Collins, if I may. Some of us

went over and talked to our Wassenaar allies last year, about this

very thing, and I can add to your assessment. You are getting your

information from the State Department. It sounds like they have

been pretty candid with you, and I just want to back that up. Folks

that we talked to over there were pretty consistent in being conVerDate 11-MAY-2000 10:49 Jun 14, 2001 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6601 72196.TXT SAFFAIRS PsN: SAFFAIRS
20

cerned that the United States, after having so many of us complain

about our efforts to get us out of COCOM, and how that Wassenaar

was not tight enough, and there were no under-cutting rules or

anything like that. It was much too loose.

Here we are, in their eyes, always pushing the envelope in terms

of high-performance computers, and I think we are doing it strictly

to get a competitive advantage. I can verify that the ones we talked

to were not pleased with it at all and they think we are quite hypocritical in complaining to want to have control of sensitive items

and have a multilateral approach to it on the one hand and continue to push the envelope past where they are willing or capable,

I guess, of going on the other hand.

Let me get back to another point, and maybe we can take advantage of your expertise while we have you here, in more of a technical area. It seems to me from what I have read, from the work

that the GAO has done and others, that the computing power of

these high-performance computers obviously is very important. If

you string that power together, you get more power. But there are

two things that seems to me like we need to say about that.

First, is that clustering at the 70,000 MTOPS level does not give

you the same situation or the capability as having a high-performance computer at the 70,000 MTOPS level, because clustering is

more difficult to operate. It is more difficult to maintain. The power

is not exactly the same. The application is different. Is that a correct assessment?

Ms. WESTIN. Yes, as I understand it, Senator, not all applications

will run the same on a high-performance computer that is 70,000

MTOPS, as opposed to a system where the computers have been

clustered to achieve the 70,000 MTOPS level.

Chairman THOMPSON. As a matter-of-fact, is it not true that, as

far as we can determine, the clustering ceiling, as best we can determine, is at about the 70,000 MTOPS level capability?

Mr. PHILLIPS. Yes, that is with the caveat that is using massmarket commercially available components. That is how we have

tried to address the question. There are higher levels, sometimes

considerably higher levels of performance you can achieve through

clusters, that have been achieved. But that higher level sometimes

is reached using items that would be controlled by export controls

or would be proprietarily controlled.

Chairman THOMPSON. All right. So, if they are able to get—a

clustering country is able to get a higher MTOPS level computer,

they can cluster more?

Mr. PHILLIPS. That is possible.

Chairman THOMPSON. We are at the 70,000 MTOPS cluster level

with the caveat, and we are about to decontrol altogether at the

85,000 MTOPS level. We are decontrolling at a level higher than

what we believe they can cluster at right now.

Mr. PHILLIPS. That is correct. The projections we have seen from

the Defense Department are based on projections of availability in

the last quarter of 2001, not now.

Chairman THOMPSON. The second thing it seems to me we can

say about this is that while the power—and this is used in layman’s terms, but hopefully, one of the things we can do is help the

general public understand this better, and I am a heck of a lot closVerDate 11-MAY-2000 10:49 Jun 14, 2001 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6601 72196.TXT SAFFAIRS PsN: SAFFAIRS
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er to the general public than I am an expert on this stuff. While

the computing power is very important and stringing it together is

very important, and is evidently unlimited, it seems to me like

there is a big difference between that and a military application,

for example—that how you use that state of facts that has just

been described, in terms of application, in terms of your ability to

maintain it, in terms of your ability to repair it—the software that

you use—it seems to me, from all I can tell, that there is an awful

lot of stuff that goes into an ultimate ability to have, say, a battlefield application other than just the raw power of the computer; is

that not correct? Could you elaborate on that somewhat?

Mr. PHILLIPS. Again, depending on the application, sometimes

you want enhanced graphics capability, sometimes you want enhanced communications capability. If you are dealing with realtime or near real-time command and control communications capabilities, clearly, you need to have real-time or near real-time computing. You have to have that processing done when you need it,

as opposed to research and development projects, which is what

most high-performance computers have traditionally been used for.

There is flexibility in R&D in waiting longer for your results with

a clustered system than you might otherwise have needed with a

vendor-supplied system.

Chairman THOMPSON. In terms of all of that, the applications

and so forth, can anyone in Tier 3 or Tier 4 countries touch the

United States in terms of that ability right now?

Mr. PHILLIPS. We have not done any recent work on that, but

traditionally their computing capabilities have been lower, sometimes considerably lower, than the U.S. capabilities.

Chairman THOMPSON. You are talking about not just the power

of the MTOPS power, but all of the applications and all of that we

have been talking about. You made another distinction, and that

is in terms of the usefulness of, say, using clusters and things of

that nature; that if you are in an R&D application, that timing is

not that important. You can wait longer for more results and so

forth. But if you are in a battlefield application, you have got to

have results pretty quickly. So when—it is not just if you get the

capability; it is when you get the capability might be very important. Is that a correct assessment?

Mr. PHILLIPS. That is right.

Chairman THOMPSON. Senator Bennett, do you have anything?

Senator BENNETT. Mr. Chairman, I have nothing further, but I

appreciate the panel and your expertise, and I think, Mr. Chairman, you were on the right track again on this last series of questions, because it is not just the box. You can have the box and it

can have all of this capability, and if you do not have the intellectual capability to program it properly or use it properly, you are

going to be in real trouble.

The only other comment that I would make—that comes to me

as I sit here and listen to this. I remember my interview with General Horner, who was the head of the Air Force war in the Gulf

War, and then became the Commanding General of the Space Command, he told me something that I think applies here, that I found

fascinating. He said the Gulf War was the first war fought from

space. All of the command and control was done from space. They

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used satellites to direct tanks. He said we so filled up all of the

military satellites that we had to go out and lease space on commercial satellites, because we did not have enough space. Then

with a grin he said one of the commercial satellites we leased was

leasing the other half of its capability to Saddam Hussein. I think

that is kind of a precursor of what we are going to be seeing here.

Again, back to Juno. They may end up—somebody comes in and

says they want to buy ‘‘X’’ amount of time and they turn out to be

buying it for and on behalf of somebody else, but the main protection we have in America is not just the ability to produce a better

box, but all of the other things, Mr. Chairman, that you were going

through that have an impact on how the box is used. Again, I am

grateful to the panel and for the expertise.

Chairman THOMPSON. Thank you, Senator, for your expertise. I

think you are right, implicitly, in what you have always said, and

that is that among the important things, probably the most important thing has to do with our ability to run faster as a Nation, that

the world does not stand still, and we have to continue to run faster and outstrip the other guys. The question here is whether or not

we want to assist them to run faster, too, even though they are

going to be behind us or whether or not we can do some things that

might slow them down a bit.

I hope this has not been a session to beat up on the prior administration. I am hopeful that we can look forward from here, and

that the current administration, can, over a period of time, when

they are able to get all the people in that they need to get—I can

only imagine what they are going through over there in trying to

get their people confirmed and so forth—will take these issues into

consideration and conduct a thorough national security risk assessment. Get some people together, take a little time, start from

scratch. If MTOPS needs to go, let it go, but look and see what else

is available. Instead of concentrating on the hardware, maybe concentrate on the software. Maybe there are other things that we can

do, or if we are just to throw up our hands and decontrol everything to everybody, let us do it on top of the table and quit claiming

that we have an expert control system, when really we do not have

any system at all, because whatever we can manufacture, we are

going to exceed that MTOPS level under the assumption everybody

is going to get it.

At least we can do it honestly and after having made an assessment, and I believe that they will do that and that is basically, I

think, all we can ask.

Thank you very much for being with us. The Committee is adjourned.

[Whereupon, at 10:52 a.m., the Committee was adjourned.]

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