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Spies have Silicon Valley spooked

"We've got to make sure we don't throw the Constitution out the window in the name of national security."

Lupe Martinez, the lawyer representing an alleged Chinese spy

The case of a Chinese businessman charged with illegally shipping missile guidance technology to China's military has intensified concerns about foreign espionage in Silicon Valley.

Qing Chang-jiang, who will be arraigned today, is at least the fourth Chinese-born person indicted since October on charges involving the shipment of equipment or trade secrets to China from the nerve center of the US technology industry. Prosecutors worry that Jiang may have been illegally exporting technology to China since 1998, when he bought one of the world's fastest computers from a federal weapons lab.

Although it never left the US, the sale was a major embarrassment for Sandia National Laboratories.

Jiang, 51, was arrested Jan. 10 for allegedly shipping three microwave amplifiers to the Hebei Far-East Harris Company in Shijianzhuang, China, without a license. At the same address is the 54th Research Institute, a Chinese military agency, prosecutors say.

Most exports to the agency are outlawed; the US government says it poses an ``unacceptable risk of diversion to developing weapons of mass destruction.''

Jiang purchased a total of nine amplifiers from a division of L-3 Communications, a major supplier of intelligence, surveillance and reconnaissance equipment, according to the indictment. The amplifiers improve the quality of long-distance calls -- and can make intercontinental ballistic missiles more accurate.

Jiang told federal agents he had withdrawn his export license application and returned the equipment. But three of the amplifiers were already in China, prosecutors say.

Jiang is president and the sole US employee of EHI Group USA Inc/Araj Electronics, which he ran from his condominium. Held without bail, he faces up to 10 years in prison and a US$250,000 fine if convicted.

His lawyer, Lupe Martinez, denied that Jiang was part of an organized effort to get US technology.

Martinez said prosecutors exaggerated the danger posed by the Chinese citizen, who has lived in the US legally since 1995 and has a wife and son in China.

"We've got to make sure we don't throw the Constitution out the window in the name of national security," Martinez said.

A spokesman for the Chinese Consulate in San Francisco said his government has no relationship with Jiang. A China expert at the American Foreign Policy Council was skeptical.

"They have hundreds of people and little companies operating like this, basically getting our technology through means that are legal if they're US companies, then illegally transferring them through Hong Kong or Macau," said Santoli.

Jiang bought the Intel Paragon XPS computer in 1998.

After scientists deemed it obsolete, the US$10 million Paragon was disassembled. The drives and disks that had been used for classified computing were removed. The rest was offered on the open market and purchased by EHI Group USA for US$30,800. Jiang contacted Intel Corp and asked how to replace the missing parts.

Concerned the machine would be used in China, Intel notified the laboratory. Inspectors found the Paragon, still wrapped in plastic in Jiang's warehouse, and bought it back for US$88,888.
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