Richard N. Perle Aided Maker of Satellites

WASHINGTON, March 28 — While he led an influential Pentagon advisory board, Richard N. Perle advised a major American satellite maker, Loral Space and Communications, as it faced government accusations that it improperly transferred rocket technology to China, administration officials said today.

Officials at the State Department said that the senior official considering how to resolve the rocket matter, Assistant Secretary Lincoln P. Bloomfield Jr., was contacted by Mr. Perle once or twice in the second half of 2001 on behalf of the company. At the time, Mr. Bloomfield, who heads the State Department's bureau of political-military affairs, and other officials were investigating accusations that Loral turned over expertise that significantly improved the reliability of China's nuclear missiles.

"We have an office, our political-military office, led by Assistant Secretary Linc Bloomfield, who did receive queries from Mr. Perle," Secretary of State Colin L. Powell said in response to a question during an interview today. "And quite appropriate, since Richard was, I guess, authorized for Loral to ask. In conducting our regular business I know that Linc and members of Linc's staff did have conversations with Richard Perle. We would do that with anybody who is authorized to call and ask of such matters."

Mr. Perle said this afternoon that he was retained by Loral seven months before his appointment by Defense Secretary Donald H. Rumsfeld to head the Defense Policy Board and was given a one-time retainer at the outset of his work.

"I was retained by Loral in January 2001 to assist the company in assessing its dispute with the government concerning transfers of technology to the Chinese, to recommend approaches to settling that dispute including new security arrangements to assure against any further technology leakage," he said. "At no time did I urge any government official to settle the case."

He said any conversations he may have had with Mr. Bloomfield or his staff "related to the licensing" of other Loral satellites for the Chinese and that he was "not compensated by the company in connection with that activity."

Mr. Perle declined to say how much he was paid by Loral. He said he did not file a lobbying disclosure statement because he did no lobbying on behalf of Loral.

After criticism of his business deals, Mr. Perle announced on Thursday that he would resign as chairman of the Defense Policy Board but would remain on the board. In July 2001, he was appointed to head the board, a group of influential advisers that meets regularly with the defense secretary and other top officials, has access to classified information and plays an important role in shaping military policy.

Several Democratic lawmakers have called on Mr. Perle to step down from the board in light of his business relationships. Mr. Perle has told friends that he sees the criticism as being motivated by opponents of his strong view about the need to go to war in Iraq.

The case against Loral, which originated in 1997 with a Pentagon finding that Loral and Hughes Electronics had improperly turned over technical information to the Chinese, was settled in January 2002. Loral, without admitting or denying that it had violated the law, agreed to pay a $20 million penalty, the largest settlement of a technology transfer case at the time.

The government accused Loral of providing Chinese officials with confidential materials from an American panel that investigated the February 1996 crash of a Loral satellite, which was built for Intelsat, the international consortium, and was launched by a Chinese Long March rocket.

The inquiry into Loral and other companies resulted in restrictions that have prevented the industry from seeking new business with China.

The Defense Department declined to say what Mr. Rumsfeld knew about Mr. Perle's work for Loral. In a statement on Thursday accepting Mr. Perle's resignation, Mr. Rumsfeld said that he had known Mr. Perle for many years "and know him to be a man of integrity and honor."

Jeanette Clonan, a spokeswoman at Loral, said last week that she would ask Bernard L. Schwartz, the company's chairman and chief executive, about Mr. Perle's role in the case. Since then, Ms. Clonan has not replied to daily messages, including one today, left at her office, seeking comment. Other people involved in the case have said Mr. Perle was retained on the instructions of Mr. Schwartz, who came under criticism by some Republicans during the Clinton administration for being one of the largest political donors to Democrats.

Mr. Schwartz retained a prominent team to defend the company in the investigation. Among those who worked on the matter were Douglas J. Feith, who is now under secretary of defense for policy. Mr. Feith is also an old friend and former colleague of Mr. Perle. When Mr. Perle was an assistant defense secretary in the Reagan administration, Mr. Feith was his special counsel.

The Loral matter is the second instance in which Mr. Perle was doing business on behalf of an American company encountering government difficulties over ties to China. Mr. Perle had been retained by Global Crossing, the communications giant, to overcome Defense Department opposition to its proposal to be sold to a venture led by Hutchison Whampoa, the conglomerate controlled by the Hong Kong billionaire Li Ka-shing.



Copyright 2003 The New York Times Company