Hi Mike, very interesting story on the front page of today's New York Times, the Clinton Administration discovered a Chinese-American scientist was giving nuclear secrets to the Chinese government, and rather than stopping him, tried to cover it up. Excerpts only, but the article is long. Available free on NY Times web site, but you have to register to use it.
nytimes.com
China Stole Nuclear Secrets From Los Alamos, U.S. Officials Say
By JAMES RISEN and JEFF GERTH
WASHINGTON -- Working with nuclear secrets stolen from a U.S. government laboratory, China has made a leap in the development of nuclear weapons: the miniaturization of its bombs, according to administration officials. Until recently, China's nuclear weapons designs were a generation behind those of the United States, largely because Beijing was unable to produce small warheads that could be launched from a single missile at multiple targets and form the backbone of a modern nuclear force. But by the mid-1990s, China had built and tested such small bombs, a breakthrough that officials say was accelerated by the theft of U.S. nuclear secrets from Los Alamos National Laboratory in New Mexico. The espionage is believed to have occurred in the mid-1980s, officials said. But it was not detected until 1995, when American experts analyzing Chinese nuclear test results found similarities to America's most advanced miniature warhead, the W-88. By the next year, government investigators had identified a suspect, an American scientist at Los Alamos laboratory, where the atomic bomb was first developed. The investigators also concluded that Beijing was continuing to steal secrets from the government's major nuclear weapons laboratories, which had been increasingly opened to foreign visitors since the end of the Cold War. The White House was told of the full extent of China's spying in the summer of 1997, on the eve of the first U.S.-Chinese summit meeting in eight years -- a meeting intended to dramatize the success of President Clinton's efforts to improve relations with Beijing.
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"This conflicted with their China policy," said a U.S. official, who like many others in this article spoke on condition of anonymity. "It undercut the administration's efforts to have a strategic partnership with the Chinese."
The White House denies the assertions. "The idea that we tried to cover up or downplay these allegations to limit the damage to United States-Chinese relations is absolutely wrong," said Gary Samore, the senior National Security Council official who handled the issue.
Yet a reconstruction by The New York Times reveals that throughout the government, the response to the nuclear theft was marked by delays, inaction and skepticism -- even though senior intelligence officials regarded it as one of the most damaging spy cases in recent history.
Initially, the FBI did not aggressively pursue the criminal investigation of lab theft, U.S. officials said. Now, nearly three years later, no arrests have been made.
Only in the last several weeks, after prodding from Congress and the secretary of energy, have government officials administered lie detector tests to the main suspect, a Los Alamos computer scientist who is Chinese-American. The suspect failed a test in February, according to senior administration officials.
At the Energy Department, officials waited more than a year to act on the FBI's 1997 recommendations to improve security at the weapons laboratories and restrict the suspect's access to classified information, officials said.
The department's chief of intelligence, who raised the first alarm about the case, was ordered last year by senior officials not to tell Congress about his findings because critics might use them to attack the administration's China policies, officials said.
And at the White House, senior aides to Clinton fostered a skeptical view of the evidence of Chinese espionage and its significance.
White House officials, for example, said they determined on learning of it that the Chinese spying would have no bearing on the administration's dealings with China, which included the increased exports of satellites and other militarily useful items. They continued to advocate looser controls over sales of supercomputers and other equipment, even as intelligence analysts documented the scope of China's espionage.
Samore, the Security Council official, did not accept the Energy Department's conclusion that China's nuclear advances stemmed largely from the theft of U.S. secrets.
In 1997, as Clinton prepared to meet with President Jiang Zemin of China, he asked the CIA for a quick alternative analysis of the issue. The agency found that China had stolen secrets from Los Alamos but differed with the Energy Department over the significance of the spying.
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China's technical advance allows it to make mobile missiles, ballistic missiles with multiple warheads and small warheads for submarines -- the main elements of a modern nuclear force.
While White House officials question whether China will actually deploy a more advanced nuclear force soon, they acknowledge that Beijing has made plans to do so.
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After Frederico Pena became energy secretary in early 1997, a previously approved counterintelligence program was quietly placed on the back burner for more than a year, officials said.
In April 1997, the FBI issued a classified report on the labs that recommended, among other things, reinstating background checks on visitors to Los Alamos and Sandia, officials said. The Energy Department and the labs ignored the FBI recommendation for 17 months. An Energy Department spokeswoman was unable to explain the delay.
Another official said, "We couldn't get an order requiring the labs to report to counterintelligence officials when the Chinese were present. All those requirements had been waived."
In early 1997, with the FBI's investigation making scant progress and the Energy Department's counterintelligence program in limbo, Trulock and other intelligence officials began to see new evidence that the Chinese had other, ongoing spy operations at the weapons labs.
But Trulock was unable to quickly inform senior U.S. officials about the new evidence. He asked to speak directly with Pena, the energy secretary, but had to wait four months for an appointment.
In an interview, Pena said he did not know why Trulock was kept waiting until July but recalled that he "brought some very important issues to my attention and that's what we need in the government."
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The administration was also moving to strengthen its strategic and commercial links with China. Clinton had already eased the commercial sale of supercomputers and satellite technology to China, and now he wanted to cement a nuclear cooperation agreement at the upcoming summit, enabling American companies to sell China new commercial nuclear reactors.
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The analysts agreed that there had been a serious compromise of sensitive technology through espionage at the weapons labs, but were far less conclusive about the extent of the damage. The CIA argued that China's sudden advance in nuclear design could be traced in part to other causes, including the ingenuity of Beijing's scientists.
"The areas of agreement between DOE and CIA were that China definitely benefited from access to U.S. nuclear weapons information that was obtained from open sources, conversations with DOE scientists in the U.S. and China, and espionage," said a U.S. official.
"The disagreement is in the area of specific nuclear weapons designs. Trulock's briefing was based on a worst-case scenario, which CIA believes was not supported by available intelligence. CIA thinks the Chinese have benefited from a variety of sources, including from the Russians and their own indigenous efforts."
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The FBI inquiry was stalled. At a September 1997 meeting between FBI and Energy Department officials, Freeh concluded that the bureau did not have enough evidence to arrest the suspect, according to officials.
The crime was believed to have occurred more than a decade earlier. Investigators did not then have sufficient evidence to obtain a secret wiretap on the suspect, making it difficult to build a strong criminal case, according to U.S. officials. FBI officials say that Chinese spy activities are far more difficult to investigate than the more traditional espionage operations of the former Soviet Union.
But even if the bureau couldn't build a case, the Energy Department could still take some action against someone holding a U.S. security clearance. Freeh told DOE officials that there was no longer an investigative reason to allow the suspect to remain in his sensitive position, officials said. In espionage cases, the FBI often wants suspects left alone by their employers for fear of tipping them off prematurely.
But the suspect was allowed to keep his job and retain his security clearances for more than a year after the meeting with Freeh, according to U.S. officials.
In late 1997, the NSC did begin to draft a new counterintelligence plan for the weapons labs, and Clinton signed the order mandating the new measures in February 1998. In April, a former FBI counterintelligence agent, Ed Curran, was named to run a more vigorous counterintelligence office at Energy Department headquarters.
The administration explained aspects of the case to aides working for the House and Senate intelligence committees beginning in 1996. But few in Congress grasped the magnitude of what had happened.
In July 1998, the House Intelligence Committee requested an update on the case, officials said. Trulock forwarded the request in a memo to, and in conversations with, Elizabeth Moler, then acting energy secretary. Ms. Moler ordered him not to brief the House panel for fear that the information would be used to attack the president's China policy, according to an account he later gave congressional investigators. Ms. Moler, now a Washington lawyer, says she does not remember the request to allow Trulock to brief Congress and denies delaying the process.
In October, Ms. Moler, then deputy secretary, stopped Trulock from delivering written testimony on espionage activities in the labs to a closed session of the House National Security Committee.
Ms. Moler told Trulock to rewrite his testimony to limit it to the announced subject of the hearing, foreign visitors to the labs, an Energy Department spokeswoman said. The issue came up nonetheless when committee members asked follow-up questions, Energy Department officials said.
Key lawmakers began to learn about the extent of the Chinese theft of U.S. nuclear secrets late in 1998, when a select committee investigating the transfers of sensitive U.S. technology to China, chaired by Rep. Christopher Cox, R-Calif., heard from Trulock.
Administration officials say that Congress was adequately informed, but leading Democrats and Republicans disagree. Rep. Norman Dicks, D-Wash., the ranking minority member on the House Intelligence Committee and also a member of the Cox committee, said that he and Rep. Porter Goss, R-Fla., chairman of the House intelligence panel, were not adequately informed.
"Porter Goss and I were not properly briefed about the dimensions of the problem," he said, adding: "It was compartmentalized and disseminated over the years in dribs and drabs so that the full extent of the problem was not known until the Cox committee."
Last fall, midway through the Cox panel's inquiry, a new secretary of energy, Bill Richardson, arrived on the job.
After being briefed by Trulock, Richardson quickly reinstated background checks on all foreign visitors, a move recommended 17 months earlier by the FBI. He also doubled the counterintelligence budget and placed more former FBI counterintelligence experts at the labs.
But Richardson also became concerned about what the Cox panel was finding out.
So in October he cornered Berger at a high-level meeting and urged him to put someone in charge of coordinating the administration's dealings with the Cox committee.
Berger turned again to Samore, officials said.
By December, Dicks, in his role as the ranking Democratic member of the Cox panel, was growing impatient with the administration's slow response to ongoing requests from the committee and its inaction on the Los Alamos spy case. Dicks told Richardson, a former colleague in the House, that he needed to take action, Richardson recalled.
Dicks' complaints helped prompt Richardson to call Freeh twice in one day in December about the inquiry, an official said.
The suspect was given a polygraph, or lie-detector test, in December, by the Energy Department. Unsatisfied, the FBI administered a second test in February, and officials said the suspect was found to be deceptive. It is not known what questions prompted the purportedly deceptive answers.
As the FBI investigation intensified, the Cox Committee completed a 700-page secret report which found that China's theft of US secrets had harmed U.S. national security -- saving the Chinese untold time and money in nuclear weapons research.
After hearing from both the CIA and Energy Department analysts, the bi-partisan panel unanimously came down on the side of Trulock's assessment, officials said.
Now, the CIA and other agencies, at the request of the Cox Committee, are conducting a new, more thorough damage assessment of the case, even as the debate continues to rage throughout the intelligence community over whether Trulock has overstated the damage from Chinese espionage.
Meanwhile, Trulock has been moved from head of DOE's intelligence office to acting deputy. While Richardson and other Energy Department officials praise Trulock's work and deny he has been mistreated, some in Congress suspect he has been demoted for helping the Cox Committee.
Redmond, the CIA's former counterintelligence chief, who made his name by unmasking Soviet mole Aldrich Ames at the CIA, has no doubts about the significance of what Trulock uncovered.
He said: "This was far more damaging to the national security than Aldrich Ames."
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