Boeing Rocket Project Suspended

Boeing is trying to convince federal investigators that it has corrected problems that allowed possibly sensitive information to be disclosed to Russian and Ukrainian engineers working on the Sea Launch commercial rocket program.

The State Department suspended work on Sea Launch pending a review to determine whether the disclosures violated federal law, a department official said Monday, speaking on the condition of anonymity.

The material in question was not classified data, Boeing Co. spokesman Dick Dalton said. He declined to elaborate on the nature of the information and would not say how it was conveyed.

"Boeing underestimated the technical complexity of licensing issues and did not have adequate procedures in place to deal with these issues," he said.

The suspension was imposed July 27 but not disclosed at the time. It was prompted by Boeing's admission to the State Department that it failed to obtain the required U.S. government permission before sharing the information with its partners, RSC-Energia of Moscow and the Ukrainian company KB Yuzhnoye/PO.

The company has added export specialists to its Sea Launch management program and provided additional training to other employees to prevent future disclosures, Dalton said.

The suspension prompted the exodus from Long Beach, Calif., of 30 to 40 Ukrainian and Russian engineers who had been working on the project, which had planned to launch its first communications satellite in early 1999.

The first launch, a Hughes Space and Communications satellite, originally was scheduled for late 1998. But it was postponed to allow Hughes to modify the payload to avert the kind of problems that caused widespread service outages for pager services when a PanAmSat communications satellite wobbled out of position in May.

Boeing has a 40 percent stake in Sea Launch, and is overall project manager, but the technology primarily is that of other nations. The $500 million program, which has contracts for 18 launches, will use a modified version of the Soviet SS-18 intercontinental ballistic missile to boost satellites into space from a platform positioned at the equator.

Boeing's troubles with the State Department follow disclosures in May that Hughes and another satellite manufacturer, Loral Space & Communications, may have given China information that could make its intercontinental ballistic missiles more accurate.

Those companies have been accused of disclosing the information after helping the Chinese investigate why a Chinese rocket exploded during a launch to carry a commercial satellite into orbit.

Boeing does not believe the Sea Launch suspension was prompted by concerns over Hughes and Loral, Dalton said.

Written By Michael White