China: Suspected Acquisition of U.S. Nuclear Weapon Secrets
Released: 2006-02-01T00:00:00

Challenges to U.S. Security

Congressional Concerns and Policy Issues

In early 1999, Congress heightened concerns about security over nuclear weapon data at theU.S. nuclear weapon laboratories (Lawrence Livermore, Los Alamos, and Sandia) after public newsreports said that the People's Republic of China (PRC) may have acquired the design of the W88nuclear warhead in the 1980s. This case was the third publicly reported case involving China'ssuspected compromise of U.S. nuclear weapon secrets.

In April 1999, President Clinton stated that the PRC had fewer than two dozen long-rangenuclear weapons, compared to 6,000 in the U.S. arsenal. Nevertheless, some were concerned thatChina was developing a new DF-31 solid-fuel, mobile intercontinental ballistic missile (ICBM), witha range of about 5,000 miles, reportedly with a smaller warhead (700 kg; 1,500 lb.) than the currentDF-5A ICBMs. In addition, China reportedly had programs to develop a next-generation JL-2submarine-launched ballistic missile (SLBM) and a longer-range ICBM. (1)

This controversy about the W-88 warhead raised policy issues about whether U.S. securitywas further threatened by the PRC's suspected use of U.S. nuclear weapon secrets in its developmentof smaller nuclear warheads and new ICBMs, as well as whether the Administration's response tothe security problem was effective or mishandled and whether it fairly used or abused itsinvestigative and prosecuting authority. The case also raised questions about the roles of the mediaand Congress.

Public Cases of Alleged Security Compromises

Suspicions about PRC attempts to acquire secrets from U.S. nuclear weapon labs werelongstanding, including congressional concerns discussed below. A 1994 book on PRC intelligencecited the head of counterintelligence at the Federal Bureau of Intelligence (FBI) in Los Angeles assaying that the PRC had tried to recruit people at Los Alamos and Lawrence Livermore labs. (2) In the three publicly reportedcases that occurred in the late 1970s to 1980s, China may have conducted clandestine operations atthe labs or benefitted from voluntary disclosures or lapses in security. However, in these cases, thereported suspects were U.S. scientists working at the labs who were born in Taiwan. A fourth case,reported by the media in April 1999, suggested that China sought more neutron bomb data in 1995. However, it was uncertain whether this reported incident involved any of the Department of Energy(DOE)'s nuclear weapon labs. In April 2003, a retired FBI agent and former head of the FBI'scounter-China efforts in Los Angeles, James Smith, and his informant and reported lover, KatrinaLeung, were arrested in connection with allegedly passing secrets to China.

"Tiger Trap". In the first public case, the pressreported in 1990 that China had stolen data on the neutron bomb from the Lawrence Livermore labsometime in the late 1970s to early 1980s, and the FBI began an investigation perhaps in 1986. Thiscase, code-named "Tiger Trap," reportedly remained open as of 2000 (3) and became tied to later cases. The PRC allegedly used U.S. secrets about the W70 neutron warhead to make an experimentalneutron bomb that was tested in 1988 and also passed the information to Pakistan. The U.S. scientistinvolved was fired after being investigated for two years, but, because of insufficient evidence, wasnever charged with a crime. (4) In late 2000, the suspect's name was publicly reported to beGwo-Bao Min. (5) Sayinghe was unaware of the FBI's investigation at the time, the suspect in the third case, Wen Ho Lee,made a call to this person in 1982.

"Royal Tourist". The second case came to lightwhen a U.S. scientist, Peter H. Lee, admitted on December 8, 1997, in a plea bargain that, during atrip to China in January 1985, he gave PRC nuclear scientists classified information about his workat Los Alamos on using lasers to simulate thermonuclear explosions and problems in U.S.simulations of nuclear weapon testing. He also admitted failure to disclose his lectures in China inMay 1997 on his work on sensitive satellite radar imaging to track submarines at TRW, Inc.(developed at Lawrence Livermore lab). Lee disclosed the information on anti-submarine warfareat the Institute of Applied Physics and Computational Mathematics (IAPCM), a PRC nuclear weaponfacility. Lee was not charged with espionage, in part because the information on the laser device wasdeclassified by Energy Secretary Hazel O'Leary in 1993 and the Navy did not want open discussionof the sensitive radar technology. Lee's attorney, James Henderson, said that Lee was not a spy butdid make mistakes. He reportedly explained that he was trying to help PRC scientists and boost hisown reputation in China. After a seven-year investigation by the FBI that began in 1990(code-named "Royal Tourist"), Lee was sentenced in March 1998 to one year at a halfway house. This case was briefed to National Security Advisor Sandy Berger by DOE intelligence officials inJuly 1997 and included in a classified counterintelligence report completed in November 1998 thatreportedly was sent to the White House. (6) At hearings in 2000, Senator Specter criticized the prosecution ofthis case.

"Kindred Spirit"/"Fall Out". The third casebecame public as a result of a comprehensive investigation into technology transfers to Chinaconducted in 1998 by the bipartisan House Select Committee on U.S. National Security andMilitary/Commercial Concerns with China (led by Representative Chris Cox and commonly calledthe "Cox Committee"). The press first reported in January 1999 that U.S. intelligence discoveredin 1995 that secrets about the W88, the most advanced miniature nuclear warhead (deployed on theTrident II SLBM), may have leaked from Los Alamos National Laboratory to China between 1984and 1988. U.S. intelligence reportedly was handed a secret PRC document from 1988 containingdesigns similar to that of the W88. The discovery prompted an FBI investigation (code-named"Kindred Spirit") that began in September 1995. (7)

Suspicions that China may have acquired W88 data also led analysts to reexamine a seriesof nuclear explosions detonated by China prior to its announcement of a moratorium on nucleartesting (in July 1996) and new willingness to sign the Comprehensive Test Ban Treaty (CTBT) (inSeptember 1996). After China became the last of the five declared nuclear weapon states to begina moratorium, there were suspicions that China took the step, not just because of arms control, butbecause it had reached its goals in nuclear weapon modernization or achieved the capability tosimulate nuclear explosions. Some speculated that China received test data from Russia orFrance. (8)

Separate from the W88 case, however, the investigation resulted in the criminal investigationand indictment in 1999 of Los Alamos scientist Wen Ho Lee (9) for mishandling defenseinformation and questions about whether Taiwan was involved.

Meanwhile, apparently reassessing "Kindred Spirit" and finding it to have been too narrowlyfocused on one lab (Los Alamos) and one suspect (Lee), the FBI in April 1999 reportedly started anexpanded investigation (code-named "Fall-out"). In October 2000, it was reported that theinvestigation had shifted significantly to examine the Pentagon and its facilities and contractors, afterintelligence agencies concluded that PRC espionage acquired more classified U.S. missiletechnology, including that on the heat shield, than nuclear weapon secrets. (10)

Neutron Bomb Data in 1990s. In a fourth casereported in April 1999, there were allegations that PRC espionage directed at U.S. nuclear weapondesigns continued into the 1990s. U.S. intelligence reportedly learned in early 1996 from one of itsspies that China sought in 1995 to acquire more U.S. information on the neutron bomb design thatit obtained sometime in the late 1970s to 1980s from Livermore. Some speculated that China mayhave sought more data, because its 1988 test of a neutron bomb was not successful. Intelligenceconcerns reportedly led to: a criminal investigation by the FBI and a report from the FBI to DOE onMarch 27, 1996; a briefing in April 1996 for Sandy Berger (then Deputy National Security Advisor)on concerns about PRC acquisition of neutron bomb and W88 data; and an analysis of the neutronbomb case completed at DOE in July 1996 (that raised the possible involvement of Wen Ho Lee, thesuspect in the W88 case). However, the government reportedly had no evidence that China was ableto improve its neutron bomb nor that any of the nuclear weapon labs was involved in this case. (11)

Katrina Leung, James Smith, and WilliamCleveland. In a publicly known fifth case, on April 9, 2003, in Los Angeles,authorities arrested a retired FBI agent who directed the FBI's counter-China efforts in Los Angelesuntil 2000, James J. Smith, and his informant and mistress, a Chinese-American businesswomannamed Katrina M. Leung, for involvement in allegedly mishandling national defense information-- some classified -- related to China. Justice officials reportedly found in Leung's house: a 1994telephone directory for the FBI's Los Angeles office; a telephone list related to the "Royal Tourist"case on Peter Lee; a Secret FBI memorandum dated June 12, 1997, on fugitives from China; and a1994 directory of FBI legal attaches. Their case involved a complicated, 20-year history thatreportedly included: their affair; Leung's role as a source for the FBI (given the code-name "ParlorMaid" and paid $1.7 million in total for information about China); and the role of another FBI agentwho was based in San Francisco, had his own relationship with Leung until 1999, and warned Smithin 1991 about Leung's alleged contacts with China's Ministry of State Security (MSS). (12)

On April 11, 2003, the press reported that the ex-FBI agent in San Francisco was namedWilliam Cleveland Jr. and that he was a counter-intelligence official at the Lawrence LivermoreNational Laboratory after retiring from the FBI in 1993 until he resigned from the lab on April10. (13) LawrenceLivermore stated that it had no information from the FBI indicating that any classified informationfrom the lab was "compromised." Nevertheless, the lab had placed its employee on "investigatoryleave;" denied him all access to the lab; took possession of his equipment; and suspended his securityclearance. (14) In additionto Cleveland's purported warnings to Smith about Leung, FBI officials in charge ofcounter-intelligence met in Washington in 1991 on the alleged double roles played by Leung. (15) As a result of the criminalinvestigation of Leung and Smith, the FBI launched a damage assessment of any compromises inthe FBI's counter-intelligence cases on China since 1991 (including "Tiger Trap," "Royal Tourist,"and "Kindred Spirit"). Meanwhile, Lawrence Livermore, the FBI, and DOE's National NuclearSecurity Administration began an investigation into any security problems because of Cleveland'srelationship with Leung and his position as the lead FBI agent in the "Tiger Trap" case in the 1980s(which Leung allegedly revealed to China in 1990). (16) Still, Larry Albert, an FBI counter-intelligence agent in LosAngeles said in May 2003 that there was no evidence of security compromises beyond the chargesagainst Leung and Smith. (17)

On May 7, 2003, Smith, Leung's handler, was charged with concealing their romanticrelationship and knowledge of her separate contacts with PRC intelligence (as a possible "doubleagent") as well as gross negligence in handling documents relating to national defense. He was notcharged with espionage. The next day, Leung was indicted on charges of unauthorized copying andpossession of national security documents, and not charged with espionage or passing thosedocuments to PRC intelligence. The documents allegedly included transcripts of interceptedconversations in 1990-1991 between Leung (code-named "Luo") and a PRC intelligence agent(code-named "Mao"). (18)

On May 12, 2004, Smith pleaded guilty to concealing his affair with Leung and agreed tocooperate with the investigation of Leung. Other charges were dropped, and Smith was allowed tokeep his FBI pension. (19) However, the plea agreement included a stipulation to keep Smith from sharing information withLeung and her attorneys, which a federal judge criticized as obstructing the defendant's access towitnesses when she dismissed the criminal charges against Leung in January 2005. (20) However, federalauthorities continued investigating Leung until December 16, 2005, when she pleaded guilty to twolesser felonies of making false statements to the FBI and violating tax laws in her 2000 income taxreturn. With no jail sentence, she agreed to three years of probation, 100 hours of communityservice, a $10,000 fine, and FBI debriefings for 18 months. (21)

Damage Assessments on the W88

Concerning the serious case of China's suspected acquisition of the W88 data that becamepublic in early 1999, there were concerns about China's modernization of its nuclear-armed ballisticmissile force and implications for U.S. national security. This modernization for the military, thePeople's Liberation Army (PLA), reportedly has included efforts to develop a miniaturized nuclearwarhead and more reliable and mobile missiles, possibly with multiple independently targetablereentry vehicles (MIRVs). China reportedly deployed over 100 nuclear warheads, with morewarheads in storage and a stockpile of fissile material. (22) Of particular concern were about 20 DF-5A strategic, long-rangeICBMs (13,000 km.; 8,000+ mi.) that could reach the United States. China has developed a newDF-31 solid-fuel, mobile ICBM, with a range of about 5,000 miles, reportedly with a smallerwarhead (700 kg; 1,500 lb.) than the DF-5A ICBMs. In addition, China has pursued programs todevelop a next-generation JL-2 SLBM and a longer-range ICBM. (23)

President on U.S. Superiority

On April 7, 1999, President Clinton presented a public assessment that in the U.S.-Chinastrategic balance, U.S. nuclear forces still maintained decisive superiority over China's relativelylimited strategic nuclear forces. He declared,

Now, we have known since the early 1980s that Chinahas nuclear armed missiles capable of reaching the United States. Our defense posture has and willcontinue to take account of that reality. In part, because of our engagement, China has, at best, onlymarginally increased its deployed nuclear threat in the last 15 years. By signing the ComprehensiveTest Ban Treaty, China has accepted constraints on its ability to modernize its arsenal at a time whenthe nuclear balance remains overwhelmingly in our favor. China has fewer than two dozenlong-range nuclear weapons today; we have over 6,000. (24)

Intelligence Community's Damage Assessment

At the end of 1998, the House Select Committee on China chaired by Congressman Coxapproved a report that urged, among other recommendations, that "the appropriate Executivedepartments and agencies should conduct a comprehensive damage assessment of the strategicimplications of the security breaches that have taken place" by China at the nuclear weaponlabs. (25) The IntelligenceCommunity assessed the difficult question of how much PRC nuclear weapon designs might havebenefitted if China obtained the W88 data. On this question, National Security Advisor Bergeracknowledged in March 1999, soon after the news reports, that "there's no question they benefittedfrom this." (26)

Director of Central Intelligence (DCI) George Tenet further announced on March 15, 1999,that after an interagency team completed a damage assessment by the end of March, an independentpanel led by retired Admiral David Jeremiah would review the findings. The damage assessmentof the Intelligence Community was completed by the end of March, and the panel reviewed thatassessment and made recommendations for changes by early April. Some said that an independentreview was needed to give the assessment greater credibility against any charges of politicizationintended to protect the policy of engagement toward China and other policies. Some reportssuggested that, in August 1997 (as the White house prepared for President Clinton's first summitwith China), NSC official Gary Samore had requested an alternative assessment from the CIA thatdownplayed DOE's conclusion that successful PRC espionage was primarily responsible for the leaksat Los Alamos. (27)

The DCI briefed the final assessment to the appropriate congressional committees and theWhite House on April 21, 1999. Robert Walpole, the National Intelligence Officer for Strategic andNuclear Programs, led the damage assessment, which was prepared by the CIA, DOE, Departmentof Defense, the Defense Intelligence Agency, the National Security Agency, the State Department'sBureau of Intelligence and Research, the FBI, the National Counterintelligence Center, and nuclearweapon experts from Los Alamos, Livermore, and Sandia labs. (28) After being briefed on theIntelligence Community's damage assessment on April 21, 1999, President Clinton said that he askedthe National Counterintelligence Policy Board to assess potential vulnerabilities at nuclear weaponinstitutions other than the national labs. (29)

According to the unclassified key findings released by the DCI, the Intelligence Community'sdamage assessment, with concurrence by the independent panel, confirmed that "China obtained byespionage classified U.S. nuclear weapons information that probably accelerated its program todevelop future nuclear weapons." That successful PRC espionage effort, which dated back to at leastthe late 1970s, benefitted PRC nuclear weapon design program by allowing China to "focussuccessfully down critical paths and avoid less promising approaches to nuclear weapon designs." Furthermore, the assessment found that China obtained "basic design information on several modernU.S. nuclear reentry vehicles, including the Trident II" that delivers the W88 warhead as well as "avariety of U.S. weapon design concepts and weaponization features, including those of the neutronbomb." The information on U.S. nuclear weapons made an "important contribution" to PRC effortsto maintain a second strike capability and develop future nuclear weapon designs. However, it wasuncertain whether China obtained documentation or blueprints, and China also benefitted frominformation obtained from a wide variety of sources, including open sources (unclassifiedinformation) and China's own efforts. The assessment also stated that the PRC has not demonstratedany "apparent modernization" of the deployed strategic force or any new nuclear weaponsdeployment. (China has not conducted nuclear tests since July 1996.) The assessment alsoconfirmed that China has had the "technical capability" to develop a MIRV system for the currentlydeployed ICBM, but has not deployed a MIRV system. Nonetheless, U.S. intelligence reported that"U.S. information acquired by the Chinese could help them develop a MIRV for a future mobilemissile."

On the continuing need for effective counterintelligence and intelligence, the assessmentconfirmed that the PRC currently was using "aggressive collection efforts" directed at U.S. nuclearweapon secrets in order to fill significant gaps in China's programs. Adding further to questionsabout possible politicization and erosion of expertise in the Intelligence Community, the independentreview panel warned that the Intelligence Community had "too little depth." The panel also addedthat multiple countries "have gained access to classified U.S. information on a variety of subjects fordecades, through espionage, leaks, or other venues," and such losses were "much more significant"in the current context of diminished U.S. research efforts intended to ensure a "protective edge" overthose countries using U.S. information.

Cox Committee's Report

Findings. According to its declassified reportreleased in May 1999, (30) the Cox Committee reported that, since the late 1970s and "almost certainly" continuing to thepresent, the PRC has pursued intelligence collection that included not only espionage, but alsoreviews of unclassified publications and interaction with U.S. scientists at the DOE's nationallaboratories, including Los Alamos, Lawrence Livermore, Oak Ridge, and Sandia. China has"stolen" classified information on the most advanced U.S. thermonuclear weapons, giving the PRCdesign information on thermonuclear weapons "on a par with our own." The information includedclassified information on seven warheads, including "every currently deployed thermonuclearwarhead in the U.S. ballistic missile arsenal;" on the neutron bomb; and on "a number of" reentryvehicles of U.S. missiles. The PRC acquired information on seven U.S. nuclear warheads, includingthe W88, the most advanced, miniature U.S. nuclear warhead deployed on the Trident D-5submarine-launched ballistic missile (SLBM):

W88: deployed on the Trident D-5 SLBM

W87: deployed on the Peacekeeper ICBM

W78: deployed on the Minuteman III ICBM

W76: deployed on the Trident C-4 SLBM

W70: previously deployed on the Lance short-range ballistic missile (SRBM)

W62: deployed on the Minuteman III ICBM

W56: previously deployed on the Minuteman II ICBM.

The committee focused on potential implications for U.S. national security, judging "that thePRC will exploit elements of the U.S. design information on the PRC's next generation ofthermonuclear weapons." China successfully tested smaller thermonuclear warheads in 1992 to1996, (31) prior to its July1996 announcement of a nuclear testing moratorium and its September 1996 signing of theComprehensive Test Ban Treaty (CTBT). The committee reported that information lost from theDOE labs accelerated PRC nuclear weapon modernization and "helped the PRC in its efforts tofabricate and successfully test its next generation of nuclear weapons designs. These warheads givethe PRC small, modern thermonuclear warheads roughly equivalent to current U.S. warhead yields." The PRC "could begin serial production" of such weapons during the next decade in connection withthe development of its next generation of solid-fuel mobile ICBMs, including the DF-31 that "maybe tested in 1999" and "could be deployed as soon as 2002." Although the PRC already hasdeployed nuclear-armed ICBMs, "with stolen U.S. technology, the PRC has leaped, in a handful ofyears, from 1950s-era strategic nuclear capabilities to the more modern thermonuclear weaponsdesigns." Regarding whether the PRC's nuclear program continued to require testing, the committeejudged that if the PRC successfully steals U.S. nuclear test codes, computer models, and data, anduses them with the U.S. high performance computers, or supercomputers, already imported, the PRC"could diminish its need for further nuclear testing to evaluate weapons and proposed designchanges."

As for the strategic balance, the report noted that "the United States retains an overwhelmingqualitative and quantitative advantage in deployed strategic nuclear forces" over the PRC's up to twodozen CSS-4 ICBMs. Nonetheless, the report stated that "in a crisis in which the United Statesconfronts the PRC's conventional and nuclear forces at the regional level, a modernized PRCstrategic nuclear ballistic missile force would pose a credible direct threat against the United States."

On the question of whether having smaller nuclear warheads would facilitate PRCdevelopment of multiple independently targetable reentry vehicles (MIRVs) for its nuclear missileforce, the committee reported that it had "no information on whether the PRC currently intends todevelop and deploy" MIRVs.

A complicating factor was that, as the committee revealed, the CIA obtained, in 1995someplace outside of the PRC, a secret PRC document containing "design information" on the W88and "technical information" on another five U.S. thermonuclear warheads from a "walk-in" directedby PRC intelligence. The "walk-in" volunteered various materials to the CIA and to Taiwan,according to Representative Cox. (32) There were questions about the credibility and motivation of the"walk-in" who provided documents showing PRC possession of U.S. nuclear weapon secrets. As theCox report noted, "there is speculation as to the PRC's motives for advertising to the United Statesthe state of its nuclear weapons development." PRC intelligence could have sought to raise thecredibility of the "walk-in;" increase the credibility of China's nuclear arsenal as a deterrent to U.S.intervention in a regional crisis; trigger a disruptive "spy hunt" in the United States; or raisesuspicions of PRC students working in the United States to bring them back to China. (33) Also, China could havemade a major blunder or had another unknown objective. In addition, a rival of the PRC could haveplanted the documents in Taiwan, (34) or the "walk-in" could have sold them in self-interest. In anycase, as the Cox Committee's report said, PRC nuclear tests conducted from 1992 to 1996 hadalready raised suspicions in U.S. intelligence that China had stolen U.S. nuclear weapon information,and the information provided by the "walk-in" in 1995 "definitely confirmed" those suspicions.

Prather Report. A report by a nuclear physicistGordon Prather, released by Jack Kemp on July 8, 1999, questioned the Cox Report's findings aboutPRC espionage, but criticized the Clinton Administration (particularly former Energy SecretaryHazel O'Leary) for its policies. Prather cited three policies as responsible for security problems atthe labs: support for the CTBT; a "reckless policy" of unprecedented "openness" that declassifiedmuch nuclear weapon information, so that spying was unnecessary; and engaging the PRC nuclearweapon establishment with the DOE's lab-to-lab exchanges. (35)

China Confirmed Its Neutron Bomb. On July 15,1999, the PRC government issued a response denying the Cox Committee's charges that China stoleU.S. secrets. In the report was a short paragraph acknowledging that China had the neutron bomb. The statement said China mastered "in succession the neutron bomb technology and nuclear weaponminiaturization technology." In addition, "since China has already possessed atom bomb andH-bomb technologies, it is quite logical and natural for it to master the neutron bomb technologythrough its own efforts over a reasonable period of time." (36)

PFIAB (Rudman) Report

For a parallel review, on March 18, 1999, President Clinton appointed former SenatorWarren Rudman, head of the President's Foreign Intelligence Advisory Board (PFIAB), to undertakea review of how the government handled security challenges at the labs over the last 20 years. ThePFIAB's special investigative panel, with four members, reviewed over 700 documents andinterviewed over 100 witnesses -- who apparently had concerns about reprisals and asked that theynot be named. On June 15, 1999, the PFIAB issued an unprecedented unclassified report, withfindings and recommendations for both the Executive and Legislative Branches. (37) These findings andrecommendations are summarized below.

Findings.

Twenty years after the creation of DOE, most of its security problems "stillexist today."

The national labs "have been and will continue to be a major target of foreignintelligence services, friendly as well as hostile."

"Organizational disarray, managerial neglect, and a culture of arrogance -- bothat DOE headquarters and the labs themselves -- conspired to create an espionage scandal waitingto happen."

"Increasingly nimble, discreet, and transparent in their spying methods, theChinese services have become very proficient in the art of seemingly innocuous elicitations ofinformation. This modus operandi has proved very effective against unwitting and ill-prepared DOEpersonnel."

"Both Congressional and Executive Branch leaders have resorted tosimplification and hyperbole in the past few months. The panel found neither the dramatic damageassessments nor the categorical reassurances of the Department's advocates to be whollysubstantiated."

"We concur with and encourage many of Secretary Richardson's recentinitiatives to address the security problems..."

Energy Secretary Richardson "overstated the case when he asserts, as he didseveral weeks ago, that 'Americans can be reassured: our nation's nuclear secrets are, today, safe andsecure'."

While intelligence officials at DOE and the Cox Committee "made substantialand constructive contributions to understanding and resolving security problems at DOE," . . . "weconcur on balance with the damage assessment of the espionage losses conducted by the Directorof Central Intelligence. We also concur with the findings of the independent review of thatassessment by Admiral David Jeremiah and his panel."

"On one end of the spectrum is the view that the Chinese have acquired verylittle classified information and can do little with it. On the other end is the view that the Chinesehave nearly duplicated the W88 warhead. . . . None of these extreme views holds water. . . The mostaccurate assessment . . . is presented in the April 1999 Intelligence Community DamageAssessment."

"Despite widely publicized assertions of wholesale losses of nuclear weaponstechnology from specific laboratories to particular nations, the factual record in the majority of casesregarding the DOE weapons laboratories supports plausible inferences -- but not irrefutable proof-- about the source and scope of espionage and the channels through which recipient nations receivedinformation."

"Particularly egregious have been the failures to enforce cyber-securitymeasures. . ."

"Never before has the panel found an agency with the bureaucratic insolenceto dispute, delay, and resist implementation of a Presidential directive on security, as DOE'sbureaucracy tried to do" to PDD-61 in February 1998.

DOE is a "dysfunctional bureaucracy that has proven it is incapable ofreforming itself."

Recommendations.

"Reorganization is clearly warranted." Two alternative solutions for a newAgency for Nuclear Stewardship (ANS) to be established by statute:

1. A new semi-autonomous agency with DOE (similar to theNational Security Agency (NSA), Defense Advanced ResearchProjects Agency (DARPA) or the National Oceanographic andAtmospheric Administration (NOAA)) reporting directly to theSecretary of Energy.

2. An independent agency (similar to the National Aeronautics andSpace Administration (NASA)) reporting directly to the President.

"The labs should never be subordinated to the Department ofDefense."

"DOE cannot be fixed with a single legislative act. . . Congress and theexecutive branch . . . should be prepared to monitor the progress of the Department's reforms foryears to come."

"The Foreign Visitors' and Assignments Program has been and should continueto be a valuable contribution to the scientific and technological progress of thenation."

"Abolish the Office of Energy Intelligence."

"Congress should abolish its current oversight system for national weaponslabs" with about 15 competing committees. The report recommended a new Joint Committee forCongressional Oversight of ANS/Labs.

Stanford's Critique

In December 1999, four scholars at Stanford University's Center for International Securityand Cooperation issued their critique of the Cox Committee's unclassified report. (38) In the section on nuclearweapons, W. K. H. Panofsky found that the Cox Committee's report "makes largely unsupportedallegations about theft of nuclear weapons information, but the impact of losses is either greatlyoverstated or not stated at all." Further, the author wrote that "there is no way to judge the extent,should China field a new generation of thermonuclear weapons, of the benefit derived from publiclyavailable knowledge, indigenous design efforts, and clandestinely obtained information." Panofskyalso doubted the Cox Committee's assertion that stolen U.S. nuclear secrets gave the PRC designinformation on thermonuclear weapons on par with our own.

The Senate Intelligence Committee's staff director, Nicholas Rostow, (formerly the deputystaff director of and counsel to the Cox Committee) issued a response to the critique by the groupat Stanford. (39) Hemaintained that the Cox Committee report "is valuable" and "factually accurate." He explained that"the important findings of the Select Committee are almost all based on classified information." Heassessed the critique as "an attempt to foster debate and to reiterate the authors' views on U.S.relations with the People's Republic of China."

Stillman's Unpublished Book

In May 2001, the press began to report on an unpublished book by Danny Stillman, a formerscientist at Los Alamos, who decided to sue the government to allow him to publish a manuscriptabout his experience in exchanges between U.S. and PRC nuclear weapons scientists in the1990s. (40) Stillmanargued that China's nuclear weapons program accomplished important advances on its own, withoutresorting to espionage. According to Stillman, PRC scientists argued that, contrary to the CoxCommittee's report, China started research on miniaturized warheads in the 1970s, but developmentfailed because of the lack of supercomputers, until a nuclear weapon test on September 25, 1992. Stillman and others reportedly alleged that the government was blocking the publication of his book, Inside China's Nuclear Weapons Program , because of political reasons, rather than securityconcerns, because Stillman offered information contrary to charges against China. AlthoughStillman submitted his writings for government review in January 2000, as of June 2003, hisattorney, Mark Zaid, told CRS that the lawsuit was continuing.

Congressional Action

Congress has voiced long-standing concerns about security at the nuclear weapon labs. Someattention focused on the foreign visitor program, which was reportedly not the primary concern inthe public cases involving alleged leaks by U.S. scientists to China. In 1988, Senator John Glenn,chairman of the Senate Governmental Affairs Committee, held a hearing, and the GeneralAccounting Office (GAO) presented a report on the extent to which foreign nationals work at thenuclear weapon labs and the effectiveness of security checks there. Senator Glenn also said that backin October 1979, his committee began to examine access by foreign visitors to mistakenlydeclassified documents at the public library at the Los Alamos lab. (41)

Later, the House National Security Committee requested in May 1996 that the GAO againstudy controls over foreign visitors at the labs. (42) In October 1998, Congressman Hunter held a hearing on DOE'sforeign visitor program. (43)

The National Defense Authorization Act for FY1997 ( P.L. 104-201 ) prohibited DOE fromusing funds for cooperative activities with China related to nuclear weapons or nuclear weaponstechnology, including stockpile stewardship, safety, and use control. (Stockpile stewardship relatesto the evaluation of nuclear weapons without testing.) The National Defense Authorization Act forFY1998 ( P.L. 105-85 ) banned the DOE's use of funds for activities with China in cooperativestockpile stewardship, and similar legislation for FY1999 ( P.L. 105-261 ) made the ban permanent.

Investigations

Prompted by reports that missile technology was transferred to China in connection withsatellite exports,the Senate Intelligence Committee, in 1998, carried out an investigation andissued its unclassified report on May 7, 1999. (44) On March 25, 1999, Senator Shelby, the committee's chair,announced that it voted unanimously to begin an investigation into whether China obtained U.S.nuclear weapon secrets and how the Administration dealt with counter-intelligence at the labs. (45) On January 27, 2000, thecommittee's staff director, Nicholas Rostow, said that the committee would independently confirmthat the DOE improved security at the labs. (46)

In the House, the Cox Committee, in the last half of 1998, examined broader technologytransfers to China, including possible leaks of missile and nuclear weapon-related know-how. Thebipartisan committee unanimously approved a classified report, with 38 recommendations, onDecember 30, 1998 and, after working with the Clinton Administration, issued a declassified versionon May 25, 1999. (See section on Damage Assessment below.)

The Senate Governmental Affairs Committee conducted 13 hours of closed hearings toreview the investigatory steps of the Departments of Energy and Justice, and the FBI. It issued abipartisan report on August 5, 1999, under the names of both Chairman Fred Thompson and RankingMinority Member Joseph Lieberman. The committee did not take a position on whether the W88or other nuclear weapons were compromised, but concluded that the federal government's handlingof the investigation since 1995 consisted of "investigatory missteps, institutional and personalmiscommunications, and ... legal and policy misunderstandings and mistakes at all levels ofgovernment." The Senators said that "the DOE, FBI, and DOJ must all share the blame for ourgovernment's poor performance in handling this matter." (47)

On October 26, 1999, Senator Specter, under the jurisdiction of the Senate JudiciarySubcommittee on Administrative Oversight and the Courts, held the first hearing in his investigationinto the Justice Department's handling of the PRC nuclear espionage investigation, satellite exports,campaign finance, Waco, and other issues. (See also Hearings below.) Senator Specter criticizedthe Department's prosecution of Peter H. Lee in 1997, which resulted in a plea bargain. Defenders argued that the information involved was declassified, and the defendant was not a spy and did notpass nuclear weapon secrets. (48) On March 8, 2000, Senator Specter issued a report critical of theinvestigation of Wen Ho Lee. (49)

Hearings

In the 106th Congress, open and closed hearings on the question of suspected PRC acquisitionof U.S. nuclear weapon secrets, first reported by news media in January 1999, included these 53hearings held by the following panels:

Senate Armed Services, and Energy and Natural Resources, March 16, 1999;

House Appropriations Subcom. on Commerce, Justice, State, and Judiciary, March

17, 1999;

Senate Select Intelligence, March 17, 1999;

Senate Armed Services, March 25, 1999;

Senate Armed Services, April 12, 1999;

Senate Energy and Natural Resources (closed), April 14, 1999;

House Armed Services Subcom. on Military Procurement, April 15, 1999;

House Commerce Subcom. on Oversight and Investigations, April 20, 1999;

Senate Energy and Natural Resources, April 28, 1999;

Senate Intelligence (closed), April 29, 1999;

Senate Energy and Natural Resources, May 5, 1999;

Senate Judiciary, May 5, 1999;

House Commerce, May 5, 1999;

Senate Energy and Natural Resources, May 12, 1999;

Senate Intelligence (closed), May 12, 1999;

Senate Intelligence (closed), May 19, 1999;

Senate Energy and Natural Resources, May 20, 1999;

Senate Energy (closed), May 20, 1999;

Senate Government Affairs (closed), May 20, 1999;

House Science, May 20, 1999;

House International Relations Subcom. on Asia and Pacific, May 26, 1999;

Senate Governmental Affairs Subcom. on International Security, Proliferation, and

Federal Services, May 26, 1999;

House Intelligence (closed), June 8, 1999;

Senate Judiciary (closed), June 8, 1999; (50)

Senate Governmental Affairs (closed), June 9, 1999;

Senate Intelligence, June 9, 1999;

Senate Governmental Affairs, June 10, 1999;

Senate Banking, Housing, and Urban Affairs, June 10, 1999;

Senate Armed Services, Energy, Governmental Affairs, and Intelligence, June 22,

1999;

House Commerce, June 22, 1999;

Senate Armed Services, June 23, 1999;

House Armed Services, June 24, 1999;

House Government Reform, June 24, 1999;

House Science, June 29, 1999;

Senate Intelligence (closed), June 30, 1999;

House Commerce, July 13, 1999;

House Armed Services, July 14, 1999;

Senate Energy and Natural Resources, July 16, 1999;

House Commerce, July 20, 1999;

Congressional Asian Pacific American Caucus (briefing), on October 5, 1999;

Senate Governmental Affairs and Energy, October 19, 1999;

House Armed Services Subcom. on Military Procurement, October 20, 1999;

Senate Judiciary Subcom. on Administrative Oversight and the Courts, October 26,

1999;

House Commerce Subcom. on Oversight and Investigations, October 26, 1999;

House Armed Services Subcom. on Military Procurement, November 10, 1999;

Senate Judiciary Subcom. on Administrative Oversight and the Courts (closed),

December 16, 1999;

Senate Judiciary Subcom. on Administrative Oversight and the Courts, March 29,

2000;

Senate Judiciary Subcom. on Administrative Oversight and the Courts, April 5, 2000;

Senate Judiciary Subcom. on Administrative Oversight and the Courts, April 12,

2000;

Senate Judiciary and Select Intelligence, September 26, 2000;

Senate Intelligence (closed), September 26, 2000;

Senate Judiciary Subcom. on Administration Oversight and the Courts, September

27, 2000;

Senate Judiciary Subcom. on Administration Oversight and the Courts, October 3,

2000.

Major Legislation

Moratorium on Foreign Visits. Some Membersexpressed concerns about foreign visitors to the national labs, but the Administration said thatforeign visitors did not compromise U.S. nuclear weapon secrets. Representative Ryun introduced H.R. 1348 on March 25, 1999, to prohibit foreign nationals from countries on the DOE'sSensitive Countries List (51) from visiting the nuclear weapon labs, unless the Secretary ofEnergy notifies Congress ten days before waiving the prohibition. Senator Shelby introduced similarlegislation ( S. 887 ) on April 27, 1999.

On May 27, 1999, the Senate agreed by voice vote to Senator Lott's amendment to theNational Defense Authorization Act for FY2000 ( S. 1059 ). The amendment sought toimprove the monitoring of satellite exports and strengthen safeguards, security, andcounterintelligence at DOE facilities. (52) On June 9, 1999, Representative Cox introduced anamendment (53) to theHouse's version ( H.R. 1401 ). The amendment consisted of 27 sections, with 25 sectionsrequiring reports or other actions, or amending the law; a section simply providing a short title; anda section providing a definition of "national laboratory." The sections or subsections of the Coxamendment addressed fully or partially 21 of the 38 recommendations of the Cox Committee. TheHouse agreed to the Cox amendment by 428-0 on that day and passed H.R. 1401 on June10, 1999. Meanwhile, Representative Ryun's amendment (to impose a two-year moratorium onforeign visitors from sensitive countries to the national labs) failed by 159-266 on June 9, 1999. Section 3146 of the FY2000 National Defense Authorization Act ( P.L. 106-65 ), enacted on October5, 1999, required background checks on foreign visitors and imposed a moratorium on visits to thenational labs by foreign nationals of countries on the Sensitive Countries List, until DOE's Directorof Counterintelligence, the Director of the FBI, and the DCI issue certifications about securitymeasures for the foreign visitors program. The Secretary of Energy, though, may waive the ban ona case-by-case basis. Secretary Richardson said on December 2, 1999, that he would begin to issuesuch waivers for foreign scientists, in order to "restore the proper balance between security andscience." (54)

National Nuclear Security Administration(NNSA). (55) In May 1999, Senators Kyl, Murkowski, and Domenici draftedan amendment to the Defense Authorization bill ( S. 1059 ) to create a new agency withinDOE, but Senate leaders removed the language on May 27 after Secretary Richardson threatened torecommend a Presidential veto. (56) The Administration, represented by Richardson, opposed theSenators' proposal, saying it would undermine his authority and create a new "fiefdom." (57) A critic of the proposalwrote that "DOE is indeed a dysfunctional bureaucracy, but the labs are not better. Making the labsmore autonomous is the wrong way to go." (58) Other opponents said that the labs needed to retain openness inorder to advance scientific research important to national security.

On the other side, the President's Foreign Intelligence Advisory Board (PFIAB), chaired byformer Senate Warren Rudman, recommended, on June 15, 1999, a new Agency for NuclearStewardship (ANS) and argued that semi-autonomous or independent "organizations like NASA[National Aeronautics and Space Administration] and DARPA [Defense Advanced ResearchProjects Agency] have advanced scientific and technological progress while maintaining arespectable record of security." (59) Secretary Richardson agreed with the PFIAB that DOE'sorganizational structure required serious change but expressed "strong reservations" about therecommendation for a semi-independent or independent agency. (60)

On June 7,1999, Representative Thornberry introduced H.R. 2032 to establisha Nuclear Security Administration in the Department of Energy. Some Members also looked atintroducing language to reorganize DOE in the Senate Intelligence Authorization bill for FY2000( S. 1009 ).

On July 7, 1999, however, Secretary Richardson agreed to the proposal to set up a new ANS,as long as it would be a semi-autonomous agency within DOE, under his control, and not a fullyautonomous agency. (61) By a vote of 96-1, the Senate on July 21, 1999, approved an amendment ( S.Amdt. 1258 ,Kyl) to the Senate-passed FY2000 Intelligence Authorization Act ( H.R. 1555 ) to createthe ANS. Richardson praised the bill, saying it was "a good start" in codifying reforms at DOE. (62) The ANS would be aseparately organized agency within the DOE, under the direction of the Energy Secretary, to beheaded by the Under Secretary for Nuclear Stewardship who shall also serve as director of the ANS. Democratic Senators Bingaman and Levin sought changes to the amendment, including explicitauthority for the Energy Secretary to continue to use the field offices (63) and to controlcounterintelligence and security operations. The House's options included agreeing to the Senate'splan or opting for another option, including leaving the organization of DOE unchanged, creatingan independent agency outside of DOE, and changing the contractual arrangements for running thelabs (under the University of California (UC), for example). Some asserted that UC, whose contracthad not been subject to competitive bidding since 1943, provided "marginal" oversight of and"political protection" for some DOE labs. (64) (UC has operated the Lawrence Livermore and Los Alamos labs,while Lockheed Martin Corporation has run Sandia.)

Then, the House Armed Services Committee argued that it had jurisdiction over nuclearweapons and that the FY2000 National Defense Authorization Act ( S. 1059 ; P.L.106-65 ) ought to legislate organizational changes at DOE. (65) Conferees adopted H.Rept.106-301 on August 6, 1999, to create a National Nuclear Security Administration (NNSA) withinDOE, effective March 1, 2000.

However, the Administration and some Democrats on the Senate Armed Services Committeeobjected to what they argued would undermine the Energy Secretary's authority. Senator Levin saidthat "the final product on DOE reorganization appears to go beyond creation of a new, separatelyorganized entity within DOE, which I support." He said that the Energy Secretary would have directcontrol over the administrator of NNSA, but not its employees. Representative Thornberrycontended that the secretary would have no restraints on his authority over the newadministrator. (66)

Richardson initially wanted to recommend that President Clinton veto the bill, as itsprovision on DOE reorganization differed from the Senate-passed intelligence authorization act hesupported in July 1999. Richardson objected to the conference report because, he says, it wouldundermine his authority; blur the lines of responsibility in security, counterintelligence, environment,safety and health; and direct budgetary proposals be made directly to Congress. (67) In addition to someDemocrats in Congress, 46 state attorneys general also urged a Presidential veto. (68)

After the House and Senate passed S. 1059 in September 1999, Richardsonannounced on September 26, 1999, that he would not oppose the bill. He said, "I believe we caninterpret the provisions so there are clear lines of responsibility and the secretary is in charge and weprotect our national security." (69)

Concerns about Compliance with the Law. Uponsigning the FY2000 National Defense Authorization Act into law ( P.L. 106-65 ) on October 5, 1999,President Clinton raised concerns in Congress when he criticized the DOE reorganization (Title 32)as "the most troubling" part of the act and said that legislative action to "remedy the deficiencies"would help in the process of nominating the new Under Secretary for Nuclear Security to head theNNSA. "Until further notice," the President directed the Secretary of Energy to act as the UnderSecretary for Nuclear Security and to direct all personnel of the NNSA. (70)

At a Senate Armed Services Committee hearing two days later, Senator Domenici chargedthat the Administration was trying to circumvent the new law. (71) Representative Spence,chairman of the House Armed Services Committee, wrote to the President that his order wouldundermine congressional intent. (72) On October 19, 1999, the Senate Government Affairs, andEnergy and Natural Resources Committees held a joint hearing to warn Secretary Richardson againstfailure to implement the law to establish the NNSA. Richardson assured Members that he wouldcomply with the law but urged Congress to use the Intelligence Authorization Act ( H.R. 1555 ) to correct what he saw as deficiencies in the Defense Authorization Act. Some Members saidit was premature to allege noncompliance, since the effective date was specified as March 1, 2000. In November 1999, the House and Senate passed H.R. 1555 without provisions on securityat the DOE labs.

A CRS legal memorandum for Representative Thornberry (that was made public) agreed thatPresident Clinton's statement and directions raised legal and constitutional issues on the question ofthe Administration's compliance with the law creating the NNSA. (73)

On January 7, 2000, Secretary Richardson submitted DOE's plan for implementation oflegislation to establish the NNSA on March 1, 2000 and named a committee to search for the firstUnder Secretary for Nuclear Security to serve as the head of NNSA. (74)

However, Richardson's plan raised questions about the semi-autonomous status of the NNSA,calling for some DOE officials to "serve concurrently" in some functions, including nuclear securityand counter-intelligence. He cited reasons such as "program continuity," "shortness of time forimplementation," and the "scheduled change in executive branch administration next January." Fieldmanagers at some field operations would also "serve concurrently in dual positions."

Indeed, a special panel of the House Armed Services Committee, with RepresentativesThornberry, Tauscher, Hunter, Graham, Ryun, Gibbons, Sisisky, and Spratt, reviewed DOE'simplementation plan and cited some "serious flaws." (75) While the panel was encouraged by DOE's responses, itcriticized the plan for "dual-hatting" DOE and NNSA officials; continuing the confused andinadequate lines of authority (e.g., with no changes in the field office structure); emphasizing DOEauthority; lacking improvements to NNSA programming and budgeting; lacking specificity andcomprehensiveness; and reflecting little outside consultation. The panel's report concluded that theimplementation plan, if carried out, would "violate key provisions of the law." However,Representative Spratt offered his dissenting views. While he agreed that the implementation planfell short of the legal requirements, he objected that the panel's report was too conclusive and lackeda critical review of the law that created NNSA and whether it is workable.

Concerns About Racial Profiling. In other action,Members of Congress expressed concerns about possible racial profiling used in the investigationof Wen Ho Lee and ramifications of this case on Americans of Asian Pacific heritage. The House,on November 2, 1999, passed H.Con.Res. 124 , introduced by Representative Wu toexpress the sense of Congress that the Attorney General, Secretary of Energy, and the Commissionerof the Equal Employment Opportunity Commission should enforce security at the labs andinvestigate allegations of discrimination. On August 5, 1999, Senator Feinstein introduced S.Con.Res. 53 , condemning prejudice against individuals of Asian and Pacific Islandancestry, which the Senate passed on July 27, 2000. (See also Racial Profiling and SelectiveProsecution below.)

CTBT. The Senate, led by Republican Members,voted (51-48) to reject the Comprehensive Test Ban Treaty (CTBT) on October 13, 1999, becauseof reservations about the implications for U.S. national security. Some supporters of the CTBTargued that the treaty was one way to impede the PRC's nuclear weapon modernization, even if itacquired U.S. secrets, because Beijing needed to test, while blueprints and computer codes were notenough. Democratic Senator Byron Dorgan and Republican Senator Arlen Specter wrote inSeptember 1999 that "most Americans have heard that China may have obtained secret informationabout U.S. nuclear weapon designs. What they haven't heard is that China may not be able to domuch with that information -- if the U.S. Senate does the right thing." (76)

Administration's Actions

Response to Security Concerns

Concerns Since 1995. The ClintonAdministration acknowledged that improvements to security measures were required at the nuclearweapon labs and said that it took a number of corrective actions in response to indications in 1995that China may have obtained secrets about the W88 in the 1980s. Officials said that, by mid-1996,DOE had reported to the FBI, National Security Council (NSC), and Intelligence Committees inCongress that there were serious concerns about China. Prompted by information from DOE andthe CIA, the FBI had begun an investigation in September 1995. On April 7, 1997, the FBIcompleted an assessment of "great vulnerability" due to inadequate counterintelligence at the labsand reported those findings and 16 recommendations to DOE as well as the Senate IntelligenceCommittee. (77)

Presidential Decision Directive-61. FormerEnergy Secretary Federico Pena defended DOE policies during his tenure from March 1997 to June1998, saying that the department took a number of actions to strengthen security, including briefingthe FBI, CIA, the Departments of Justice and Defense, and the NSC. In July 1997, DOE officialsbriefed the White House on its review of two decades of PRC efforts to acquire U.S. nuclear weaponsecrets. A special working group of the National Counterintelligence Policy Board recommendedways to tighten lab security in September 1997, and, in February 1998, the White House issuedPresidential Decision Directive (PDD-61) (78) to strengthen counterintelligence at the labs. In October 1997,FBI Director Louis Freeh and DCI George Tenet briefed Pena. In March 1998, Freeh and Tenetbriefed lab directors on weaknesses in counterintelligence efforts. DOE established an Office ofCounterintelligence, headed by a former FBI counterintelligence official, Edward Curran, on April1, 1998. Curran, on July 1, 1998, submitted a report to the Secretary of Energy, with 46recommendations for strengthening counterintelligence in response to PDD-61. The Secretary had30 days to respond to the National Security Advisor, but Richardson did not become Secretary untilSeptember 1998. He issued an action plan on November 13, 1998. (79)

Energy Secretary Richardson testified on March 16, 1999, that after he took over DOE inSeptember 1998, he ordered some corrective measures. He said those steps included a requirementfor employees with access to classified information to take polygraphs, making DOE the only agencybesides the CIA to have the requirement; the hiring of counterintelligence professionals at thenuclear weapon labs; repeated doubling of DOE's counterintelligence budget ($7.6 million inFY1998, $15.6 million in FY1999, and a request for $31.2 million in FY2000); and a requirementfor background checks on foreign visitors to the labs. Richardson also reported that DOEimplemented about 80 percent of the measures directed by PDD-61 and expected to achieve fullimplementation by the end of March 1999. (80)

Wen Ho Lee as Sole Suspect. For 20 years, WenHo Lee worked at the Los Alamos National Laboratory in the Applied Physics Division (also calledthe X Division) as a physicist specializing in hydrodynamics to develop the computer codes thatsimulate the detonation of thermonuclear explosions. Lee wrote in his 2001 book that DOE gavehim a polygraph test on December 23, 1998, the day he returned from a trip to Taiwan because ofa family emergency. (81) During the polygraph, Lee recalled an incident in June 1988 during a lab-approved visit to a nuclearweapons facility in China (the Institute of Applied Physics and Computational Mathematics), whentwo of China's nuclear weapons scientists (Zheng Shaotong and Hu Side) visited Lee in his hotelroom and asked him a question about explosive detonation points in a nuclear warhead. Lee wrotethat he responded that he did not know the answer and was not interested in discussing the subject. Lee acknowledged during the polygraph that he was giving a full account at that time and had notreported the incident in his earlier trip report, because of fear of getting into trouble. After the test,the examiners told Lee that he passed the polygraph.

Nevertheless, DOE suspended Lee's access to the X Division and transferred him to theTheoretical Division (T Division) that was responsible for unclassified research. Lee wrote in hisbook that he still tried to access his office in the X Division to continue work on a scientific paperfor publication, including an attempt on Christmas eve. Then, on January 10, 1999, the FBIinterrogated Lee at his home.

As was later reported, the FBI's field office in Albuquerque, New Mexico, wrote a memo,dated November 19, 1998, to headquarters, recommending that investigators look into 10 otherpeople who had been named as potential suspects in DOE's administrative probe. The field officewrote another memo to headquarters on January 22, 1999, questioning whether Lee was the primesuspect in the W88 case, in part because he passed the December 1998 polygraph test. (82) Lee wrote in his book thatthe local office recommended that the FBI close the investigation on him and the acting director ofthe T Division, Dan Butler, informed Lee on February 4, 1999, that he could go back to the XDivision.

But on February 8, 1999, an FBI agent, Carol Covert, asked to question Lee. Then, the FBIgave Lee another polygraph test on February 10, 1999, and told him he failed the test, according toLee's account.

In his book, Lee wrote that the FBI searched his office in the T Division on March 5 andfound that he had copied some files from the X Division onto a directory on the green, opencomputer system. Lee noted that he protected his files under three levels of passwords and that thefiles were not classified, but were categorized as "Protected As Restricted Data" (PARD). Accordingto Lee, he downloaded the files as backup files to protect them in case the lab changed the computeroperating system again or the system crashed again. He did not hide the files, gave them obviousfilenames, and recorded the files in a notebook he clearly labeled "How to Download Files." Leeacknowledged that "it was a security violation for me to make classified tapes outside the fence andto leave the PARD files on the green, open system." But he added that he left the files there "asanother backup, for my convenience, not for any espionage purpose." (83) Lee maintained that after he was fired, the files were classified Secret or Confidential, and he did not steal them.

Some Administration officials reportedly said that none of the legacy codes that Lee hadtransferred to an unclassified computer appeared to have been accessed by unauthorized people. Some said that lab employees wanted to transfer codes to unclassified computers with a betterediting program. (84)

Later, there were allegations that on numerous times in 1994, someone at the University ofCalifornia at Los Angeles (UCLA) used Wen Ho Lee's password to access Los Alamos' computersystem via the Internet. Lee's daughter, Alberta, who was majoring in mathematics at UCLA,testified that she accessed the more powerful computer systems at Los Alamos and also at theMassachusetts Institute of Technology to play a computer game called "Dungeons andDragons." (85)

On March 5, 1999, the FBI interrogated Lee again. On March 7, FBI agents told Lee that theFBI "reinterpreted" the polygraph that DOE gave him on December 23, 1998, and determined he hadfailed, rather than passed, as he was told at the time.

Lee's case was further complicated by the FBI's reportedly aggressive tactics. A later reportsaid that Lee initially did not comprehend the severity of the government's investigation of him andthat he was wholly naive and unprepared for the FBI's intensified interrogation that began on March5, 1999. Robert Vrooman, then head of counterintelligence at Los Alamos, was listening in anotherroom. He said that he and the agents came away convinced Lee was not a spy. However, someoneat the FBI then ordered two agents, Carol Covert and John Podenko, to conduct the "hostileinterview" of Lee on March 7, telling him falsely that he had failed the polygraph in December 1998(when Lee had actually scored highly for honesty), threatened him with arrest, "electrocution," andnever seeing his children again, and demanded that he sign a confession of "espionage" with apotential death penalty, all without the counsel of a lawyer. According to Vrooman, Covert was"distraught" after that aggressive interview, because she did not believe Lee was guilty, took threemonths sick leave, and transferred out of the Sante Fe office. (86)

Lee maintained his innocence throughout the interrogation. Some said that the FBI wasunfair and biased in misleading Lee, but others said the aggressive tactics were accepted practicein law-enforcement in trying to elicit confessions. At a hearing in late December 1999, theprosecution conceded that Lee did pass the DOE's polygraph but said that he failed the polygraphgiven by the FBI in February 1999. (87) Moreover, according to a report, the FBI changed the results ofLee's DOE polygraph, which showed a high degree of truthfulness. Weeks after Lee had passed thattest, DOE changed the finding to "incomplete" instead, and the FBI later said that Lee failed thetest. (88)

On March 8, Los Alamos fired Wen Ho Lee for "a pattern of disregard for security policies,procedures, and applicable DOE Orders" and "inability to maintain classified informationsecurely." (89) (DOE laterchanged Lee's status to retired and began to pay him a pension. (90) ) After Lee was fired, theFBI also searched his home with a warrant on April 10, 1999.

Around this time in early 1999, the New York Times , Wall Street Journal , and WashingtonPost reported on alleged spying by China at the Los Alamos lab. Congress was concerned about theinvestigation. (91)

When he was fired from Los Alamos on March 8, 1999, the government's only suspect wasidentified publicly as Wen Ho Lee. Secretary Richardson said he fired Lee, because the W88 casebecame public and Lee allegedly failed a polygraph test in February 1999. (92) Richardson also allegedthat Lee failed to notify officials about certain contacts with people in the PRC, to properly safeguardclassified material, and to cooperate on security matters.

However, FBI Director Louis Freeh said on March 17, 1999, that this case was "an activeinvestigation. We've not made charges against anybody, so nobody should be accused of anything." The Cox Committee's unclassified report released in May 1999 was careful not to name any suspects.

Answering to Congress. On March 17, 1999,appearing before the Senate Intelligence Committee, Secretary Richardson announced seveninitiatives to strengthen counterintelligence at DOE, in addition to PDD-61. Those steps were to

improve security of cyber-information systems, including electronicmail;

improve security of documents containing weapon designdata;

review the foreign visitors' program (to be led by former DCI JohnDeutch);

direct the deputy secretary and undersecretary to monitor the program tostrengthen counterintelligence;

review all investigative files in the Office ofCounterintelligence;

report annually to Congress on the counterintelligence and foreign visitors'programs;

begin an internal review to examine allegations that a top official blockednotification to Congress. (93)

Furthermore, on April 2, 1999, Secretary Richardson ordered the nuclear weapon labs tosuspend scientific work on computers that contain nuclear weapon secrets. This step was taken toprevent the possibility that sensitive data would be copied from secure computers and sentelectronically through unclassified computers. Richardson acknowledged potential problems, sayingthat "our computer security has been lax, and I want to strengthen it, and the only way to do that isto stand down." The suspension was ordered in part because Lee was an expert in the computersystems, and an internal review showed that security measures at Los Alamos and Livermore labswere "marginal," while Sandia received a "satisfactory" rating. (94) In September 1999,Richardson reported that Los Alamos improved its security and received a "satisfactory" rating,while Livermore and Sandia got "marginal" ratings. (95)

On May 11, 1999, Energy Secretary Richardson announced further reforms of DOE toincrease control over the nuclear weapon labs, including the appointment of a "security czar" whowould report directly to the Secretary. One month later, Richardson named retired Air Force GeneralEugene Habiger, former Commander in Chief of the U.S. Strategic Command, as the Director of anew Office of Security and Emergency Operations. (96) Richardson also planned to consolidate security funds in DOEunder one $800 million budget and an additional $50 million over two years to improvecomputer-related security. Also, there would be greater controls over floppy disk drives that couldtransfer files out of the classified computer systems, and DOE would require electronic "banners"on government computers warning users that their computers were subject to monitoring. (97) DOE originally requested$2 million for computer security but increased the request to $35 million after the PRC espionagecase came to light. However, Congress in September 1999 did not approve the additional requestin a conference committee on energy appropriations, and an unnamed Member said the committeewanted to see management reform before approving a large funding increase. (98) In December 1999,Habiger complained that Congress did not provide all the funds he needs to improve security at thelabs, but Representative Cox countered that Habiger had not provided Congress with a detailed planfor how the additional millions would be used. (99)

The first official to lose his job as a result of the Los Alamos controversy was Victor Reis,the Assistant Energy Secretary in charge of defense programs since 1993, who resigned on June 25,1999. (100) Testifyingbefore the House Armed Services Committee on July 14, 1999, Reis acknowledged that he had"some responsibility" for the security problems and he "could have pressed harder" to strengthensecurity, but asserted that many other officials at DOE and FBI share the blame. (101)

In July 1999, DOE instituted a new policy to require DOE employees with security clearancesto report any "close and continuing contacts" with foreigners from the sensitive countries on DOE'slist. (102) Also in July,Richardson issued revised procedures to more closely monitor visits and assignments of foreignnationals to DOE's facilities, as part of implementing PDD-61. Lab directors no longer had authorityto grant waivers of DOE security requirements, and only the Secretary had authority to approvewaivers. Richardson also derided discrimination against Americans of Asian Pacific heritage, sayingthat the new order only affected foreign citizens, not Americans. (103)

On August 12, 1999, Richardson announced the results of an internal DOE inquiry by theinspector general and ordered that three individuals be disciplined. (See Law Enforcement vs.Security below.)

In October 1999, Richardson decided to narrow the scope of controversial polygraph tests,originally considered for over 5,000 lab employees, so that about 1,000 people working in the mostsensitive areas, primarily at the three nuclear weapon laboratories, would be tested. They includednuclear weapon designers, security and counterintelligence officials, employees at nuclear weaponproduction plants, and political appointees at DOE headquarters. (104) In December 1999,Richardson narrowed the number to about 800 employees who would have to take the lie-detectortest. (105)

On December 10, 1999, as directed by Attorney General Reno, the Justice Departmentarrested and indicted Lee for mishandling classified information -- but not for passing secrets to anyforeign government. (See Indictment of Wen Ho Lee.)

On January 7, 2000, Secretary Richardson presented his plan to establish the new NNSA. (See section on the NNSA above.)

Richardson, on January 19, 2000, received the report and recommendations from the TaskForce Against Racial Profiling that he had established in June 1999. (See Racial Profiling andSelective Prosecution below.)

On January 25, 2000, Secretary Richardson said that security and counter-intelligence hadbeen dramatically improved, including training for 700 computer systems administrators incyber-security. DOE security czar, Eugene Habiger, said that it was now almost impossible for labemployees to transfer nuclear secrets from classified to unclassified computer systems. (106) With the tighteningof security, however, there were concerns that the tense environment at the labs hurt their scientificmission. (107)

The NNSA began operations as of March 1, 2000. Secretary Richardson directed that about2,000 DOE employees be realigned to be employees of NNSA. (108)

On May 3, 2000, President Clinton nominated U.S. Air Force General John A. Gordon,Deputy Director of Central Intelligence since November 1997, to be the first Under Secretary forNuclear Security and administrator of NNSA, a decision announced by Secretary Richardson onMarch 2, 2000. (109) The Senate confirmed the nomination (by 97-0) on June 14, 2000. Richardson swore in Gordon onJune 28, 2000.

Issues about the Response

Timeliness and Responsiveness. Critics arguedthat the Clinton Administration was slow to respond to concerns about China and the labs and thatDOE officials resisted reforms for years. They said that in November 1996, Charles Curtis(Undersecretary and then Deputy Secretary of Energy from February 1994 to April 1997) orderednew security measures (called the Curtis Plan) (110) , but those steps -- including requiring background checksagain for all foreign visitors -- were not carried out by the labs nor followed up by DOE officials. They also voiced concerns about related developments reported in the press, specifically that in April1997, the FBI recommended changes at the labs, including reinstating background checks on foreignvisitors, but the DOE did not implement improvements in counterintelligence until after BillRichardson became Secretary of Energy (in August 1998). In the spring of 1997, DOE had selectedthe suspect to head a program to update the computer programming used in the stockpile stewardshipprogram that evaluates the performance of nuclear weapons without testing, and he hired a PRCcitizen to assist him. (111) Moreover, some critics questioned why the President did notissue PDD-61 until February 1998, although the suspicions that China obtained W88 data arose in1995 and the FBI made recommendations to tighten counterintelligence measures in April1997. (112)

The President's Foreign Intelligence Advisory Board (PFIAB), led by former SenatorRudman, reported in June 1999 that "the speed and sweep of the [Clinton] Administration's ongoingresponse does not absolve it of its responsibility in years past," and "there is some evidence to raisequestions about whether its actions came later than they should have." The PFIAB also noted that"the track record of previous administrations' responses to DOE's problems is mixed." (113)

The PFIAB noted that PDD-61 was issued on February 11, 1998, and after SecretaryRichardson was sworn in on August 18, he submitted the action plan to the NSC on November 13. However, the DOE's completed implementation plan was delivered to Secretary Richardson onFebruary 3, 1999 and issued to the labs on March 4. The board said that "we find unacceptable themore than four months that elapsed before DOE advised the National Security Advisor on the actionstaken and specific remedies developed to implement the Presidential directive, particularly one socrucial." PFIAB further declared that "the fact that the Secretary's implementation plan was notissued to the labs until more than a year after the PDD was issued tells us DOE is still unconvincedof Presidential authority [PFIAB's emphasis]."

On July 2, 1999, House Commerce Committee chairman Tom Bliley and Representative FredUpton, chairman of the Oversight and Investigations Subcommittee, issued a joint statement one dayafter receiving a classified briefing on DOE's May 1999 inspection of security measures at LawrenceLivermore. They said that the briefing had been "delayed repeatedly by Secretary Richardsonwithout any legitimate basis." They stated that the inspection found "serious deficiencies" in theareas of computer security, foreign visitor controls and clearances, and protection of nuclearmaterials. They also questioned why DOE managers failed to detect deficiencies on their own. (114)

Law Enforcement vs. Security. Some critics hadadditional concerns that the Administration did not act promptly enough or investigated aggressivelyenough to protect national security, since the prime suspect identified by DOE and the FBI in theW88 case, though not charged with any crime, remained employed at Los Alamos until March 8,1999. The PFIAB's report stated in June 1999 that "there does not exist today a systematic processto ensure that the competing interests of law enforcement and national security are appropriatelybalanced."

Although criminal investigations usually require leaving the suspects in place to obtainevidence and assess damage, the suspect was only required to take polygraph tests in December 1998(conducted by DOE) and in February 1999 (given by the FBI). DOE did not remove him fromaccess to highly sensitive information in the X Division until December 1998 (115) and did not dismiss himuntil March 8, 1999 (116) , even though the Director of the FBI had informed DOEofficials in a meeting on August 12, 1997, that there was not sufficient evidence to warrant keepingthe investigation a secret and that denying the suspect continued access to sensitive information maybe more important than the FBI's stalled case. (117) In congressional testimony on March 16, 1999, EnergySecretary Richardson confirmed that the FBI began its investigation in 1995, and he asserted thatDOE and the FBI worked "extremely cooperatively." Yet, Secretary Richardson acknowledgedconcerns when he decided to begin an investigation at DOE to determine how the prime suspectretained his access to classified information and his job. (118)

On August 12, 1999, Richardson announced the results of the internal DOE inquiry by theInspector General into the espionage investigation. Richardson declared, "there was a totalbreakdown in the system and there's plenty of blame to go around." (119) He said that "theespionage suspect should have had his job assignment changed to limit his access to classifiedinformation much sooner than it was, and cooperation with the FBI should have been stronger." Healso announced that of the 19 DOE officials identified by the Inspector General as bearing someresponsibility for counterintelligence and security, three employees would be disciplined. Newsreports identified those three individuals as Sig Hecker, former director of Los Alamos from 1986to 1997 who was still employed as a scientist; Robert Vrooman, former head of counterintelligenceat Los Alamos serving as a consultant; and Terry Craig, a former counterintelligence team leaderworking at a different part of the lab. In addition, former secretary Federico Pena, former deputysecretary Elizabeth Moler, and former deputy secretary Victor Reis reportedly would have beensubject to disciplinary action if still employed by DOE. (120)

Wiretaps and Computer Monitoring. Some criticsalso raised questions about the FBI's case, since it had not conducted electronic surveillance of thesuspect or searched his office and home computers earlier in the investigation. Although thegovernment already considered Lee its only suspect, FBI agents did not begin to intensivelyinterrogate him until March 5, 1999 (121) and look at his government computers in his office that day. They did not search his home until later in April 1999. (122) Some questioned the Department of Justice's role in notsupporting the FBI's requests to electronically monitor him through wiretaps. The FBI said that theJustice Department's Office of Intelligence Policy and Review (OIPR) denied the FBI's applicationsfor electronic surveillance, or wiretaps, of the suspect in August 1997 and in December 1998,because there was insufficient evidence that the suspected espionage activity was current. Becausethe OIPR did not approve the applications, they did not reach the court established under theauthority of the Foreign Intelligence Surveillance Act (FISA).

On May 24, 1999, Reno said that the Justice Department did not authorize intrusions in thelives of American citizens "when, as in this case, the standards of the Constitution and the ForeignIntelligence Surveillance Act (FISA) have not been met." She further explained that "although I wasnot apprised of the details of the case at the time the decision was made, I have reviewed the decisionof the OIPR and fully support it." Also, contrary to some reports, the 1997 request for FISAcoverage "did not contain a request to search any computer." (123) At a closed hearingof the Senate Judiciary Committee on June 8, 1999, Attorney General Janet Reno explained that "theFISA application was legally insufficient to establish probable cause." (124) Among the reasons,she said the request focused on the Lees, while "the elimination of other logical suspects, having thesame access and opportunity, did not occur."

The PFIAB said that "the Department of Justice may be applying the FISA in a manner thatis too restrictive, particularly in light of the evolution of a very sophisticated counterintelligencethreat and the ongoing revolution in information systems." The board also questioned "why the FBI'sFISA request did not include a request to monitor or search the subject's workplace computersystems."

However, there were competing concerns about protection of civil liberties. As the Washington Post stated, "the Lee case, for example, has been cited as evidence of the need to relaxcivil liberties protections to make surveillance easier in national security cases. This is a dreadfulidea." The Post also cautioned that Lee was "entitled to a presumption of innocence that he has nottypically received in public discussions of the matter." (125)

Some expressed concerns that the lack of monitoring over the prime suspect's computer usehad grave consequences for securing secrets of U.S. nuclear weapons. Additional reports revealedthat Secretary Richardson shut down the lab computers on April 2, 1999, because investigatorsdiscovered after obtaining permission to check his computer in March 1999 that he had carried outa possibly significant compromise of computer security affecting nuclear weapons. Critics wereconcerned that the FBI discovered that the suspect had transferred enormous volumes of filescontaining millions of lines of highly secret computer codes on nuclear weapon designs (called"legacy codes") from a classified computer to an unclassified computer at Los Alamos. Moreover,they cited as a problem that someone who improperly used a password may have subsequentlyaccessed the files in the unclassified computer. (126) They thought it suspicious that Lee tried to delete some of theclassified files. (127) The FBI said that it was not able to obtain a search warrant to search the computer at Los Alamosearlier, because the labs did not place "banners" warning employees that the computers were outsidethe protection of privacy rights and subject to government monitoring. However, in May 1999, areport said that Lee, in 1995, had indeed signed a routine waiver giving Los Alamos the right to audithis computer use. (128)

Speaking publicly for the first time in his own defense, Wen Ho Lee declared in a televisioninterview on August 1, 1999, that he was innocent of wrongdoing, that he did not disclose nuclearsecrets to China or any unauthorized person, and that he transferred the files on weapon data to anunclassified computer to protect the information, which was "common practice" at the labs. Lee alsosaid that he had been made a "scapegoat" in the investigation even though he devoted "the best timeof my life to this country," because he was the only Asian American working in the X Division, thegroup in charge of weapon design at Los Alamos. (129) Others at the lab also described the transfer of computer filesbetween classified and unclassified computers at the labs to have been common practice, particularlyafter the computer network at Los Alamos split into two networks in December 1994. (130)

On August 5, 1999, Senators Thompson and Lieberman of the Governmental AffairsCommittee reported on a bipartisan basis how DOE, FBI, and DOJ may have mishandled theinvestigation, particularly in communications among them. (131)

In announcing the results of an inquiry by DOE's Inspector General, Richardson confirmedon August 12, 1999, that Lee had signed a computer privacy waiver in April 1995, but acounterintelligence official failed to adequately search lab records and missed the waiver. Thus, theFBI did not know about the waiver until May 1999. Richardson recommended disciplinary actionagainst the official. (132)

On March 8, 2000, Senator Specter, as part of his investigation under the jurisdiction of theSenate Judiciary Subcommittee on Administrative Oversight and the Courts, issued a report criticalof the investigation of Wen Ho Lee. The report criticized the FBI's and DOE's investigations as"inept." It also criticized the Department of Justice and Attorney General Janet Reno for notforwarding the FBI's request for a warrant to the FISA court, despite "ample, if not overwhelming,information to justify the warrant." (133)

However, Senator Charles Grassley, chairman of the subcommittee, criticized the FBI for nottelling Congress through most of 1999 that the bureau had found that Lee was not the prime suspectin the espionage case at Los Alamos. Senator Grassley said that he, along with Senators Specter andTorricelli, had asked the General Accounting Office to examine whether a senior FBI official(believed to be Neil Gallagher, head of the National Security Division) had withheld documents fromCongress in 1999. (The FBI then asked that the investigation be suspended after Wen Ho Lee'sindictment.) Senator Grassley sent a letter to Senator Specter that disputed his report, saying thatthe evidence against Lee was weak. (134)

Scope of Investigation. The scope of theinvestigation was another issue. Reports said that the investigation in the W88 espionage case(originally code-named "Kindred Spirit") prematurely narrowed in on one lab (Los Alamos) and onesuspect (Wen Ho Lee). In June 1999, the PFIAB's report criticized the Administration's investigationas focusing too narrowly "on only one warhead, the W88, only one category of potential sources --bomb designers at the national labs -- and on only a four-year window of opportunity." Theinvestigation, the PFIAB said, "should have been pursued in a more comprehensive manner." (135) The FBI reportedlyhad just one or two agents assigned to the case in 1996, increased the number of agents to three orfour in 1997, and assigned 40 agents by mid-1999. (136)

Acknowledging concerns about how the W88 case was handled, Attorney General Reno saidon May 6, 1999, that the Justice Department would establish a panel of FBI agents and federalprosecutors to conduct an internal review of the investigation of Wen Ho Lee. (137) Then, on September23, 1999, Attorney General Janet Reno and FBI Director Louis Freeh announced that the governmenthad expanded its investigation to conduct a more thorough examination of evidence and possiblealternative sources of information, including military facilities and defense contractors. (138) The FBI reportedlybegan this expanded espionage investigation in April 1999 and gave it the code-name"Fall-out." (139)

Significantly, a report said that as early as January 1999, two months before Wen Ho Lee'sarrest, the FBI doubted that he was the source of the PRC's information on the W88 nuclear warhead. The FBI's field office in Albuquerque, NM, wrote a memo to headquarters on January 22, 1999,questioning whether Lee was the prime suspect in the W88 case (code-named "Kindred Spirit"), inpart because he passed the December 1998 polygraph test. An earlier memo, written on November19, 1998, from the Albuquerque office to FBI headquarters had stated that investigators would lookinto 10 other people who had been named as potential suspects in DOE's administrative probe. However, Senator Arlen Specter, at whose hearing the documents emerged, dismissed those doubtsabout Lee being the prime suspect, saying that FBI agents were "thrown off" course by the 1998polygraph. (140)

By November 1999, the FBI reportedly obtained new evidence that China acquiredinformation about U.S. nuclear weapons from a facility that assembles those weapons. The evidenceapparently stemmed from errors in the PRC intelligence document said to contain a description ofthe W88 warhead. The errors were then traced to one of the "integrators" of the weapons, possiblyincluding Sandia National Lab, Lockheed Martin Corporation (which runs Sandia), and theNavy. (141)

On May 16, 2000, Attorney General Janet Reno reportedly was briefed on the classified,four-volume report of the Justice Department's internal review of its handling of the originalinvestigation. The review by federal prosecutor Randy Bellows reportedly said that the FBImishandled the espionage probe, in part because of internal turf wars, by not acting sooner, notcommitting enough resources sooner, and prematurely focusing on Wen Ho Lee as the only primesuspect. The report was said to state that the government could have discovered Lee's downloadingof computer files years earlier, since he had signed a privacy waiver and a court order was notrequired. (142) FBIagents acknowledged multiple mistakes in the investigation of Wen Ho Lee. (143) New details aboutBellows' report emerged in August 2001, when the Washington Post said that the report containedextensive criticisms of the FBI, its field office in Albuquerque, DOE, and the Justice Department'sOIPR. Bellows found that DOE made "misleading representations" about Wen Ho Lee in a 1995report that prompted the FBI's investigation and that the FBI spent "years investigating the wrongcrime." (144)

In October 2000, it was reported that the investigation had shifted significantly to examinethe Pentagon and its facilities and contractors, after intelligence agencies concluded that PRCespionage acquired more classified U.S. missile technology, including that on the heat shield, thannuclear weapon secrets. Difficulties in translating 13,000 pages of secret PRC documents resultedin this delayed finding. The Pentagon then decided to hire 450 counter-intelligence experts. (145)

Indictment of Wen Ho Lee. Former Los Alamosscientist Wen Ho Lee's criminal case was a result of, but did not solve, the government'sinvestigation of whether the PRC obtained W88 secrets by espionage (the original probe called"Kindred Spirit" and the expanded investigation called "Fall-out"). By November 1999, the JusticeDepartment reportedly was not planning to charge Lee with espionage, because there was noevidence that he passed nuclear weapon secrets to China or another country. (146) On December 4, 1999,the top law-enforcement, security, and DOE officials held a meeting at the White House on whetherto indict the prime suspect. Attorney General Janet Reno, National Security Advisor Sandy Berger,Energy Secretary Bill Richardson, FBI Director Louis Freeh, DCI George Tenet, and U.S. AttorneyJohn Kelly attended. (147)

By December 1999, the FBI completed the specific investigation that focused on Lee'stransfers of computer files, which were discovered just before he was fired in March 1999, afterwhich, FBI agents later searched his home in April 1999. The case was presented to a federal grandjury in Albuquerque, N.M. On December 10, 1999, as directed by Attorney General Reno, theJustice Department arrested and indicted Lee for allegedly "mishandling classified information" --but not for passing secrets to any foreign government(s). (148) Lee was charged with violations of the Atomic Energy Act,including unlawful acquisition and removal of Restricted Data, (149) that carry a maximumpenalty of life imprisonment. (150) The charges included the "intent to injure the United States"or "to secure an advantage to any foreign nation." Furthermore, Lee was charged with violations ofthe Federal Espionage Act, including unlawful gathering and retention of national defenseinformation, that carry a maximum penalty of imprisonment for ten years. (151)

Specifically, the 59-count indictment alleged that Lee knowingly downloaded and removedfrom Los Alamos extensive "classified files" relating to the design, manufacture, and testing ofnuclear weapons. The investigation, which included holding over 1,000 interviews and searchingmore than 1,000,000 computer files, found that Lee transferred files to 10 portable computer tapesand that seven of the tapes were unaccounted for. The government charged that Lee, in 1993 and1994, transferred Restricted Data on nuclear weapon research, design, construction, and testing fromthe classified computer system to an unsecure computer at Los Alamos, and then later downloadedthe files to nine tapes. As recently as 1997, Lee allegedly downloaded current nuclear weapondesign codes and other data directly to a 10th tape. These simulation codes are used to comparecomputer calculations with actual nuclear test data.

Four hours before the indictment, Lee's lawyer faxed a letter to the U.S. Attorney, saying thatLee wanted to take another polygraph and to provide "credible and verifiable" information to showthat "at no time did he mishandle those tapes in question and to confirm that he did not provide thosetapes to any third party." (152)

At a hearing in Albuquerque, N.M., on December 13, 1999, Wen Ho Lee pleaded not guiltyto the charges. Without elaboration, his defense attorneys maintained that the seven tapes had beendestroyed and that there was no evidence that Lee had the tapes or had disclosed or attempted todisclose the tapes. Lee was ordered to be held in jail without bail, until his trial, despite hisattorneys' offer to post $100,000 bond and place Lee on electronic surveillance at his home. (153) Lee was then held insolitary confinement, placed in shackles for a significant time period, and denied outdoor exercise. Lee's trial was set to begin on November 6, 2000.

Meanwhile, on December 20, 1999, Wen Ho Lee and his wife filed a lawsuit against theDepartments of Energy and Justice and the FBI for alleged violations of the Privacy Act of 1974. The Lees charged that, since at least early 1999, the government made numerous intentional,unauthorized disclosures about them, causing them to be unfairly and inaccurately portrayed in themedia as PRC "spies." (154) (After being freed under a plea agreement in September 2000,Lee's lawyers indicated that he intended to continue the civil lawsuit. (155) )

In April 2000, Lee's attorney revealed that, in 1999, only after Lee was fired, the governmentre-assigned a higher security classification to the computer files that Lee was charged withdownloading. At the time that Lee downloaded the files, they were not classified information, butconsidered "Protect As Restricted Data (PARD)," a category of security assigned to voluminous andchanging scientific data, not a security classification of Secret or Confidential, as the indictmentcharged. Both sides were said to agree that the government had changed this classification after thedownloading, as shown in the prosecution's evidence. While Lee's defense attorney argued that theindictment was "deceptive," the Justice Department contended that Lee took the "crown jewels" ofU.S. nuclear weapon secrets. Lee's lawyers also found that PARD's security ranking was five on ascale of nine, the highest being secret restricted data. (156) (In October 2001, the government set up a new category ofclassification for nuclear weapons design data, called Sigma 16.) (157)

Lee's defense team requested, in May 2000, that the prosecution name the foreign nation(s)that Lee allegedly sought to help, saying that it was unfair of the government not to name thecountries in charging Lee. (158) The federal judge in New Mexico then ordered theprosecution to disclose the foreign nation(s) by July 5, 2000. (159) On that date, the U.S.Attorney filed a document that named eight foreign governments that Lee may have sought to helpin downloading the nuclear data. Those places named were: the PRC, Taiwan, Australia, France,Germany, Hong Kong, Singapore, and Switzerland, places (except for the PRC) where Lee allegedlyhad expressed an interest in applying for work in 1993, when he supposedly feared losing his job atLos Alamos. (160) Inhis 2001 book, however, Lee wrote that he did not download backup copies of his files onto tapesbecause he might have to find a new job. He made the tapes to protect his files with backup copies,particularly by keeping his codes safe in a version that could be reconstructed if necessary. (161)

Another issue for the Administration and the prosecution was how much of the classifiedinformation to release publicly as evidence. Secretary Richardson was responsible for part of thedecision, based on recommendations from his new security czar. (162) On August 1, 2000,U.S. District Judge James Parker ruled in favor of Lee's defense, requiring that the governmentpublicly explain to a jury the nuclear secrets Lee allegedly downloaded, including any flaws in thetapes (which would not help any possible recipients of the information). (163)

In August 2000, a dramatic turn of public events began, favoring Lee's defense and hisrelease. At a hearing to secure release for Lee on August 16-18, 2000, a top nuclear weapons expert,John Richter, countered the prosecution's case, testifying that 99 percent of the information that Leedownloaded were publicly available. Also according to Richter, even if a foreign governmentobtained the information, there would be no "deleterious effect" on U.S. national security, becauseother governments cannot build the sophisticated U.S. nuclear warheads based on computersimulation codes downloaded by Lee. Richter testified that the "crown jewels" of U.S. nuclearweapons secrets were not the simulation codes that Lee downloaded, but the data from over 1,000nuclear tests. Richter also said that he wanted Lee acquitted and that a foreign power could use thecodes to help design nuclear weapons but not a complete design. At the same hearing, Lee's defenseattorneys also argued that FBI Special Agent Robert Messemer gave false testimony about Lee'salleged deception at the first hearing on his bail in December 1999. Messemer admitted that he gaveinaccurate testimony (as an "honest mistake") and that Lee did not lie to a colleague (Kuok-MeeLing) about writing a "resume," but Messemer argued that the error was not meant to mislead thecourt. (164)

The hearing produced a major victory for Lee's defense on August 24, 2000, when U.S.District Judge James Parker reversed his decision from eight months earlier and ruled that Lee maybe released on bail to be kept under strict supervision at home. Judge Parker's ruled that thegovernment's argument to keep Lee in jail "no longer has the requisite clarity and persuasivecharacter." (165) Family, neighbors, and friends planned a reception for Lee but had to repeatedly postpone it.

After a hearing on August 29, 2000, on the conditions of Lee's release, the judge ruled thatLee can be released on $1 million bail and with tight restrictions at home, with a three-day stay forthe prosecution to search his house, consult with the Justice Department, and prepare for a possibleappeal. The restraints would include electronic monitoring of Lee, surveillance of his phone callsand mail, and restrictions on visitors, including his daughter and son. However, the governmentargued, unsuccessfully, that restrictions should also cover Lee's communications with his wife,Sylvia. (166) Lee'sfamily and friends offered over $2 million in their own assets for Lee's bail.

In an opinion dated August 31, 2000, Judge Parker discussed at length new revelations in thecase that warranted his granting of release on bail after over eight months. He said, "while the natureof the offenses is still serious and of grave concern, new light has been cast on the circumstancesunder which Dr. Lee took the information, making them seem somewhat less troubling than theyappeared to be in December." He noted, among many points, that top weapons designers testifiedthat the information Lee downloaded was less sensitive than previously described; that FBI AgentRobert Messemer "testified falsely or inaccurately" in December 1999 about Lee; that thegovernment had an alternative, less sinister theory that Lee sought to enhance prospects foremployment abroad; that the government never presented direct evidence that Lee intended to harmthe United States; that family, friends, and colleagues supported Lee's character; and that what thegovernment had described as the "crown jewels" of the U.S. nuclear weapons program "no longeris so clearly deserving of that label." (167)

Meanwhile, several groups of scientists wrote to express concerns about what theyconsidered unfair treatment of Lee. For example, on August 31, 2000, the National Academy ofSciences, National Academy of Engineering, and the Institute of Medicine wrote to Attorney GeneralJanet Reno expressing concerns that Lee "appears to be a victim of unjust treatment" and "thehandling of his case reflects poorly on the U.S. justice system." (168)

Then, very shortly before Lee's scheduled release on bail on September 1, 2000, the 10th U.S.Circuit Court of Appeals ordered a temporary stay of Lee's release, pending a hearing. Soon after,the U.S. Attorney filed a formal request, saying that Lee's release would pose "an unprecedented riskof danger to national security." (169)

Lee's Plea Agreement. Then, on September 10,2000, the prosecution and defense revealed that they had negotiated a plea agreement, under whichLee would plead guilty to one felony count of unlawful retention of national defense information,help the government to verify that he destroyed the seven tapes (as he maintained), and thegovernment would drop the other 58 counts and free Lee (with sentencing to the nine months healready served in jail). U.S. Attorney General Janet Reno and FBI Director Louis Freeh reportedlyapproved the plea agreement, which had been negotiated over the previous several weeks. (170) At times citing theJudge's rulings, Lee's defense, some reporters, and critics said that the prosecution's case hadcrumbled and represented a gross injustice that threatened the rights of all Americans because ofpolitics. However, the prosecution and Clinton Administration officials argued that Lee'sdownloading of files was unlawful and finding out what happened to the computer tapes was moreimportant than proceeding to trial.

After three days of delays, the prosecution and defense reached final agreement on the plea. On September 13, 2000, Wen Ho Lee pleaded guilty to one felony count of unauthorized possessionof defense information (downloading files to tapes using an unsecure computer). The judgesentenced Lee to 278 days in jail (the nine months Lee already endured) and freed him. Lee agreedto answer questions for 10 days over three weeks starting on September 26, 2000. The governmentretained the options of prosecuting Lee, giving him another polygraph test, and nullifying the pleaagreement if the government suspected Lee of lying. Both sides agreed to withdraw pendingmotions, including that of the defense on selective prosecution.

In a dramatic conclusion to the case, Judge Parker noted "the fact that [Lee] lost valuablerights as a citizen" and apologized to Lee for the "unfair manner [he was] held in custody." Parkersaid that he found it "most perplexing" that the government now "suddenly agreed" to Lee's release,despite its earlier warnings of risks to national security. The judge blamed the Executive Branch,particularly top officials of the Departments of Energy and Justice, saying they "embarrassed ourentire nation and each of us who is a citizen of it." (171) As a result of the Judge's remarks, Attorney General Renolaunched two internal reviews of the prosecution of Lee. (172)

Moreover, President Clinton criticized the pre-trail detention of Lee, saying "I always hadreservations about the claims that were being made denying him bail." (173) (See also Role of theWhite House below.)

In response, U.S. Attorney Norman Bay argued that the case was about "a man whomishandled huge amounts of nuclear data and got caught doing it." He added that justice was servedbecause Lee must "tell us what he did with the tapes ... something he refused to do for approximatelythe past 18 months." (174) Attorney General Reno said that the agreement was "in thebest interest of our national security in that it gives us our best chance to find out what happened tothe tapes." (175) FBIDirector Louis Freeh stated that it was four weeks before the plea agreement -- even before the lastbail hearings -- that the plea bargaining began and that "determining what happened to the tapes hasalways been paramount to prosecution." (176)

Later, it was revealed that the delay in the plea agreement resulted from Lee's disclosure onSeptember 11, 2000 that he had made copies of some or all of the tapes and revisions to theagreement to cover information about the copies. (177)

As part of his plea agreement, Lee (by now considered by DOE to be retired, not fired),agreed to answer questions for up to 10 days about what happened to the tapes. The questioningbegan on October 17, 2000. (178) On November 7, Lee agreed to 13 more hours of questioningover two days, beginning on December 11, 2000. (179) Meanwhile, in late November and early December 2000, FBIagents searched a public landfill in New Mexico, trying to find the tapes that Lee said he threw awayin January 1999, but they reportedly could not locate them. (180)

In early 2001, the New York Times published an extensive review of its own reporting onWen Ho Lee's case, in response to criticisms of its reporting of Lee. The New York Times concludedthat its review "showed how, in constructing a narrative to fit their unnerving suspicions,investigators took fragmentary, often ambiguous evidence about Dr. Lee's behavior and Chineseatomic espionage and wove it into a grander case that eventually collapsed of its own lightweight." (181)

In a speech given in May 2001, Senator Shelby, chairman of the Senate IntelligenceCommittee, discussed alleged "espionage against the Department of Energy and U.S. nuclearweapons programs" by China and stated that "extensive investigations into the compromise of U.S.nuclear weapons information have failed to resolve all the key questions." Still, he said, "that therewas espionage, there is no doubt. ... What is not yet known is how, and from whom, the Chinese gotthis information." He also defended the case against Lee, saying that "while the investigation andprosecution of Wen Ho Lee that emerged from the W88 investigation have been widely criticized,we should not lose sight of the facts. Dr. Lee illegally, purposefully, downloaded and removed fromLos Alamos massive amounts of classified nuclear weapons information..." (182)

Sylvia Lee and Cooperation with the FBI. Anumber of other issues complicated the case on Wen Ho Lee. One issue was the relationshipbetween the FBI and the suspect and his wife, Sylvia Lee. Contrary to earlier reports that a trip theLees took to China in the 1985 was suspicious because Mrs. Lee, a secretary, was the one invited tospeak, she reportedly had been informing on PRC visitors for the FBI from 1985 to 1991 and LosAlamos had encouraged her to attend the conference. (183) The press reported in July 2000 that Sylvia Lee reported onvisiting PRC scientists for the CIA in the 1980s, and Wen Ho Lee also met with the CIA officer whoworked with his wife before the Lees visited the PRC in 1986. (184)

In addition, Wen Ho Lee helped the FBI in the "Tiger Trap" case and passed a polygraph in1984. Lee helped the FBI after he had made an intercepted call, in 1982, to another scientist atLawrence Livermore lab who was under suspicion of espionage. In his book, Lee wrote that hecalled the scientist after reading a newspaper article about his dismissal from Livermore for trips toChina and Taiwan. Because the fired scientist was also born in Taiwan, like Lee, and Lee wasplanning a lab-approved visit to Taiwan, he wanted to find out the nature of the troubles and avoidthem. (185)

DCI John Deutch's Case and Pardon. Anotherissue complicating Lee's case was the government's decision not to prosecute former DCI JohnDeutch. There was a debate about whether Deutch's case was analogous to Lee's. Some said thatthe treatment of Lee was unfair and there was a double-standard, but others argued that the twopeople had different alleged intentions. The CIA investigated Deutch (DCI in 1995-1996) forrepeatedly mishandling classified information and moving many classified intelligence files to hisunsecured personal computers in his house, computers used to access the Internet and thusvulnerable to attacks. The files reportedly included 17,000 pages of documents, including TopSecret materials and files about presidentially-approved covert action. Further, the CIA was said tohave reported that Deutch may have tampered with evidence allegedly showing his improperhandling of classified files, including, on December 20, 1996, trying to delete over 1,000 classifiedfiles stored on one of four portable memory cards. Additional reports disclosed that the CIA'sinspector general's classified report concluded that top CIA officials impeded the agency'sinvestigation of Deutch, possibly to allow the time limit on appointing an independent counsel tolapse, and that DCI George Tenet set up a special panel to examine those findings.

The CIA's investigation of Deutch began in December 1996, when he was leaving office. The CIA did not notify the Justice Department until early 1998. The Senate Intelligence Committeewas notified of the case in June 1998. The Justice Department decided in April 1999 not toprosecute, apparently without any FBI investigation and before the CIA inspector general issued itsreport. After the inspector general's report was completed in July 1999, the current DCI, in August1999, suspended Deutch's security clearance indefinitely. According to the CIA's announcement,the inspector general concluded that while no evidence was found that national security informationwas lost, "the potential for damage to U.S. security existed." The Senate Intelligence Committeereceived a copy of the inspector general's report in late August 1999. (186)

On February 18, 2000, the CIA's inspector general released an unclassified report of itsinvestigation into Deutch's case. (187) The report found, among other findings, that Deutch hadprocessed classified information on unsecure computers that were connected to the Internet and thuswere "vulnerable to attacks by unauthorized persons." Moreover the information concerned covertaction, Top Secret communications intelligence, and the National Reconnaissance Program budget. The report concluded that despite Deutch's knowledge of prohibitions against processing classifiedinformation on unclassified computers, he "processed a large volume of highly classified informationon these unclassified computers, taking no steps to restrict unauthorized access to the informationand thereby placing national security information at risk." The report also criticized "anomalies" inthe way senior CIA officials responded to the problem.

Reportedly concerned about the appearance of unfairness in comparisons between the casesinvolving Wen Ho Lee and John Deutch, Attorney General Janet Reno announced on February 24,2000, that her department would review Deutch's case. (188) Then, by May 2000, the Justice Department and the FBI begana criminal investigation of whether Deutch had mishandled classified information -- in a reversal ofReno's 1999 decision not to prosecute. (189) By August 2000, the former prosecutor whom Reno asked toreview the case, Paul Coffey, reportedly decided to recommend that the Justice Departmentprosecute Deutch, but Reno was to make the final decision. (190) By September 2000,the Senate Intelligence Committee met in closed session with DCI Tenet on Deutch's case, andCoffey reportedly considered a recommendation to charge a misdemeanor against Deutch for takingclassified information home without authorization. (191)

At the beginning of 2001, as the Clinton Administration neared its end, John Deutchreportedly negotiated an agreement with the Justice Department to plead guilty to a misdemeanor. However, on January 20, 2001, President Clinton pardoned Deutch, preempting the plea agreementthat he had signed the night before and surprising Special Prosecutor Paul Coffey and DCI GeorgeTenet. Deutch reportedly faced a $5,000 fine and no prison time. The chairmen of the House andSenate Intelligence Committees, Representative Porter Goss and Senator Richard Shelby, criticizedthe pardon for sending the wrong message. Senator Shelby also lamented that "Deutch essentiallywalked away from what is one of the most egregious cases of mishandling of classified informationthat I have ever seen short of espionage." (192)

In an August 2001 report, the Senate Intelligence Committee said that it began its owninquiry into Deutch's case in February 2000. The report said that "the Committee confirmed that Mr.Deutch's unclassified computers contained summaries of sensitive U.S. policy discussions,references to numerous classified intelligence relationships with foreign entities, highly classifiedmemoranda to the President and documents imported from classified systems." It stated that Deutchdisplayed a "reckless disregard for the most basic security practices required of thousands ofgovernment employees throughout the CIA and other agencies of the Intelligence Community." (193)

Notra Trulock. The resignation of Notra Trulock,DOE's primary investigator, in August 1999 was another complication in the investigation. As the Washington Post wrote, "Mr. Trulock may well have stated the overall problem in terms moredramatic than the evidence clearly supported. And his single-mindedness with respect to LosAlamos and Mr. Lee in particular -- which is alleged by some detractors to have been related to Mr.Lee's ethnicity -- also may have closed off significant investigative leads." (194) In turn, Trulockblamed the FBI for mishandling and delaying the W88 case. (195)

Racial Profiling and Selective Prosecution. Therewere concerns that, in rightfully protecting national security, racial profiling and selectiveprosecution were used in law-enforcement and that Lee, as an American entitled to a presumptionof innocence, was unfairly targeted as the prime suspect in a narrow investigation and in mediareports because of his Chinese ethnicity (even though he was born in Taiwan). (196) Aside from theimplications of these issues for Lee's case, these issues raised questions about the effectiveness ofthe government's approach in countering PRC espionage in general and in investigating the W88case in particular.

In his public statement on "60 Minutes" on August 1, 1999, Lee said he believed he wasbeing made a scapegoat by investigators, because he was the only Asian American working onnuclear weapon designs in the sensitive X Division at Los Alamos in the past 18 years. Ed Curran,head of counterintelligence at DOE, was quoted on the same show as expressing concern that "sinceWen Ho Lee has not been proven guilty of anything and thus must be presumed innocent, thesurfacing of his name has been devastating to his family and to his life."

The National Asian Pacific American Legal Consortium wrote a letter to SecretaryRichardson on August 5, 1999, denouncing his accusation that Lee used the "race card" andexpressing concerns about racial profiling. On August 10, 1999, the Committee of 100, anorganization comprised of prominent Americans of Chinese descent, sent a letter to Attorney GeneralReno and Secretary of Energy Richardson expressing concerns about "selective investigation" basedon Lee's ethnicity. The letter said, "Dr. Lee and the nation deserve a case made on the merits of athorough and professional investigation, not a racist witchhunt." The Coalition of Asian PacificAmerican Federal Employee Organizations (CAPAFEO) presented a position paper to PresidentClinton on September 30, 1999, which urged the Administration "to take strong and effectivemeasures to protect the rights and civil liberties of Americans of Asian descent by vigorouslyenforcing our nation's laws which prohibit discrimination based on race of national origin." Thegroup wrote that "while law enforcement and counter-intelligence agencies must be ever vigilant,in their zeal, they must also be careful to safeguard the civil and employment rights of allAmericans." (197)

In August 1999, Robert Vrooman, former head of counterintelligence at Los Alamos,publicly said that Wen Ho Lee was targeted because he is an American of Chinese descent and thatthe case against "was built on thin air." Vrooman issued his comments after Secretary Richardsonrecommended disciplinary action against him and two other former Los Alamos officials for allegedmishandling of the counterintelligence investigation. Vrooman said that "Lee's ethnicity was a majorfactor" in targeting him, while "a lot of Caucasians" were not investigated. Vrooman also said thata detailed description of the W88 warhead was distributed to 548 recipients throughout thegovernment, military, and defense companies, so the information could have leaked from manysources. (198) Twoothers who were involved in the investigation, Charles Washington and Michael Soukup, also saidthat Lee was singled out as a suspect because of his ethnicity, not because of evidence. (199)

As published in Lee's 2001 book, Vrooman earlier had written a letter to Senator ConradBurns on May 11, 1999. Vrooman wrote that "the single distinguishing feature of the[administration inquiry done by Mr. Trulock's staff at DOE] that identified Lee was the completelack of evidence that he committed espionage. ... Ethnicity was a crucial component in identifyingLee as a suspect. Caucasians with the same background as Lee were ignored." (200)

A news report said that Notra Trulock, who wrote the administrative inquiry and led theinvestigation until the summer of 1996, had compiled a list of 70 people at Los Alamos who visitedChina and then narrowed the list to 12 people. He said he give the list to the FBI, which theneliminated the other 11 suspects, leaving Wen Ho Lee as the prime suspect. The initial list of 70people included those with no access to classified or weapons information and who traveled to Chinaon non-work related trips. One Caucasian scientist, however, who was a specialist in the same fieldas Lee (hydrodynamics), worked on classified information, and went to China on a professional trip,was not among the 12. Further, Robert Vrooman said that there were 15 people who conductednuclear weapons research and visited China, but were not on the list of 12 suspects. (201)

Notra Trulock, who headed the counterintelligence investigation at DOE, insisted that "racewas never a factor." (202) The DOE investigator who focused on Lee, Daniel Bruno,said on November 1, 2000, that Lee was the prime suspect because of his behavior, not because ofhis ethnicity. (203)

Senators Thompson and Lieberman, whose Governmental Affairs Committee reviewed theinvestigation, wrote on August 26, 1999, that "the evidence we have seen and heard provides nobasis for the claim that the initial DOE-FBI inquiry focused upon the Lees because of their race. Only much later in the process, once Mr. Lee had already been identified as the chief suspect, didthe investigation consider the Lees' ethnicity -- and then only because, according to FBIcounterintelligence experts, Beijing's intelligence actively tries to recruit Chinese American scientistsworking in sensitive U.S. facilities." (204) One of these experts, Paul Moore, who headed the FBI'scounterintelligence efforts against China from 1978 to 1998, wrote publicly that "Chinese Americansare subjected to oppressive ethnic intelligence profiling" by China and that "China's espionagemethodology, not a particular spy, is the main threat." He stressed the PRC's "unconventional"espionage by saying that "China doesn't so much try to steal secrets as to try to induce foreignvisitors to give them away by manipulating them into certain situations." (205)

Others argued that even if the PRC targets ethnically Chinese people, the government shouldnot target Americans of Chinese heritage as a group, nor would such targeting be effective to counterPRC espionage. The policy director of Chinese for Affirmative Action and an associate professorof law at Howard University wrote that Lee's case "raised disturbing allegations that the governmentuses a racial profile when investigating espionage" and argued that "law enforcement based on racialprofiling is also ineffective." (206) Former Ambassador to China James Lilley wrote, "the factthat China tries to recruit spies doesn't mean that Chinese-Americans as a group should besuspect." (207) In hisstatement in support of Wen Ho Lee's motion for discovery of materials related to selectiveprosecution, Charles Washington, a former Acting Director of Counterintelligence at DOE, declaredthat he was not aware of any "empirical data that would support a claim that Chinese-Americans aremore likely to commit espionage than other Americans." (208)

Members of Congress expressed concern about possible racial profiling used in theinvestigation of Wen Ho Lee and ramifications of this case on Americans of Asian Pacific heritage. In May 1999, Representative Wu introduced H.Con.Res. 124 to express the sense ofCongress relating to the allegations of espionage and illegal campaign financing that brought intoquestion the loyalty and probity of Americans of Asian ancestry. Among other provisions, theresolution called upon the Attorney General, Secretary of Energy, and the Commissioner of theEqual Employment Opportunity Commission to vigorously enforce the security of America'snational laboratories and investigate all allegations of discrimination in public or private workplaces. The House passed H.Con.Res. 124 with the bipartisan support of 75 cosponsors, onNovember 2, 1999. Moreover, on August 5, 1999, Senator Feinstein introduced S.Con.Res. 53 to condemn prejudice against individuals of Asian and Pacific Islandancestry in the United States. The Senate passed the resolution on July 27, 2000. The CongressionalAsian Pacific Caucus held a briefing on October 5, 1999, at which Secretary Richardson and otherstestified. Chairman Robert Underwood said in his opening statement that "suspicions about aChinese American connection to espionage have formed without evidence and with potential damageto innocent individuals." (209)

Energy Secretary Richardson declared that "while U.S. national security is a top priority atthe labs, I am also concerned that Asian Pacific Americans as a group are finding their loyalty andpatriotism questioned in the wake of recent espionage allegations. This behavior is unacceptable andI will not tolerate it." (210) In June 1999, Richardson established a Task Force AgainstRacial Profiling, and he received its report and recommendations on January 19, 2000. (211) The task forceincluded 19 government employees, contractors, and U.S. Civil Rights Commissioner Yvonne Lee. In their visits to various DOE sites, they found that "an atmosphere of distrust and suspicion wascommon." Such a hostile work environment for Americans of Asian heritage resulted from themedia exploitation of the espionage and related allegations, and from managers and co-workersquestioning the loyalty and patriotism of some employees based on race. The task force made anumber of recommendations for using leadership, building trust, improving communication, andmaking assessments.

In 1999, the Equal Employment Opportunity Commission (EEOC) began an investigationinto whether the Livermore and Los Alamos labs discriminated against Americans of Asian Pacificheritage. (212)

In August 2000, supporting their selective prosecution motion filed in June 2000, Lee'sdefense attorneys had statements from two former senior DOE counter-intelligence officials, RobertVrooman and Charles Washington, contending that Lee was a victim of racial profiling and selectiveprosecution, including in the probe led by Notra Trulock. Finding relevance to Lee's contention thathe was singled out for investigation and prosecution because of his ethnicity, Judge James Parker,on August 25, 2000, ordered the government to hand over documents, sought by the defense, to himby September 15, 2000, for his review and decision as to whether they should be given to the defenseattorneys. (213) However, on September 13, 2000, when the government and Wen Ho Lee reached a plea agreement,they also agreed to withdraw pending motions. Responding to charges of selective prosecution afterLee's release, U.S. Attorney Norman Bay, who is an American of Asian heritage, said that "Mr. Leewas not prosecuted because of his race, he was prosecuted because of what he did. He compiled hisown personal library of nuclear secrets ... This is a case about a man who mishandled huge amountsof nuclear data and got caught doing it." (214)

In May 2001, racial profiling at DOE even targeted a Member of Congress. Security at DOEprevented Representative David Wu from entering DOE headquarters to speak in commemorationof the Asian Pacific American Heritage Month, even after Wu responded to repeated questioningabout his citizenship and presented his congressional identification. Representative Cox wrote aprotest letter to Energy Secretary Spencer Abraham and pointed out that upon using the sameentrance to the building recently, he was not asked any questions about citizenship. Cox also wrotethat "particularly in light of President Bush's initiatives to stamp out racial profiling, I urge you totake swift action to professionalize the DOE bureaucracy so that such an embarrassment to theDepartment never occurs again." (215) Representative Lucille Roybal-Allard stated that Members ofthe House were "appalled" about this incident and noted that DOE security also denied entry to Wu'sAsian American staffer, although he, too, presented his congressional identification card. (216) On June 26, 2001, theCommittee on Appropriations issued a report ( H.Rept. 107-112 ) to accompany the FY2002 energyappropriations bill, in which the committee expressed concern about DOE using citizenship as asecurity screening tool. The report noted the "recent alarming incident" in which "admittance toDOE headquarters was refused to a Chinese-American Member of Congress."

Partly released in August 2001, a review of the Justice Department's handling of Wen HoLee's case (as ordered by Attorney General Janet Reno in May 1999) concluded in May 2000 thatwhile the investigation suffered many flaws, "racism was not one of them." The report by federalprosecutor Randy Bellows reportedly said that "recent allegations of racial bias in the selection ofWen Ho and Sylvia Lee are without merit." Still, the report found that "Wen Ho and Sylvia Leeshould never have been the sole suspects" and that DOE "converted the [initial probe] from a broadidentification of potential suspects to a virtual indictment of Lee" while the FBI later ignored otherleads. (217) In responseto that internal review, the Organization of Chinese Americans countered that "it is hard to believethe claim that discrimination based on race and national origin is not a problem at the Departmentof Energy" and called for an independent review. (218)

Taiwan. There was a theory, that if Wen Ho Leeprovided U.S. nuclear weapon information to a third-party, it was not to the PRC, but to Taiwan,where he was born. (219) In 1998, after having allegedly downloaded files to portablecomputer tapes in 1993, 1994, and 1997, Lee reportedly worked in Taiwan as a consultant to theChung Shan Institute of Science and Technology, a vast military research and developmentorganization. During a visit to Taiwan in December 1998, Lee was said to have dialed up the maincomputer at Los Alamos and used his password to access the classified nuclear files he haddownloaded. Lee's trips to Taiwan were approved at Los Alamos, reported the Washington Post atthe end of 1999. (220) On July 5, 2000, as discussed above, the U.S. Attorney filed a document that named eight foreigngovernments that Lee may have sought to help in downloading the nuclear data. Those places namedwere: the PRC, Taiwan, Australia, France, Germany, Hong Kong, Singapore, and Switzerland,places (except for the PRC) where Lee allegedly had an interest in applying for work in 1993, whenhe supposedly feared losing his job at Los Alamos. (221)

Despite these earlier reports, investigators told the Washington Post after interrogations inNovember and December 2000 that there were "new questions" about Lee's contacts with Taiwan,that they did not know until the questioning that Lee, in 1998, reportedly received $5,000 from theChung Shan Institute for consulting work over six weeks and reportedly failed to report the fee tothe Los Alamos lab. (222) In his book, Lee maintained that the Los Alamos lab "knewabout and approved my consulting work, which was commonly done by lab scientists." Lee alsowrote that his bank account in Taiwan was set up to help his sister and never contained more than$3,000. (223)

China's Own Research. Further complicating thecase was the debate over the relative importance of the PRC's own modernization efforts as opposedto foreign technology acquisitions. Some said that the investigation overstated the importance ofPRC espionage. (224) Harold Agnew, former director of Los Alamos who oversaw the design of the W88 warhead decadesago, wrote a letter to the Wall Street Journal in May 1999. He argued that "those who are screamingthe loudest in Washington have little knowledge or understanding with regard to the issues at hand. The Chinese nuclear establishment, most of whom have studied in the West, are extremelycompetent." He added that "being able to actually use information from any of the nationallaboratories' codes requires a great deal more knowledge than following a cake recipe. It's evenquestionable as to whether the Chinese computers are compatible with the weapon codes at ournational laboratories. ... The design of the W88 ... is actually quite old. ... Having a computerprintout as I remember them would give the general idea, but actually being able to manufacture thetotal system from a computer code is a different matter. No national would ever stockpile any devicebased on another nation's computer codes." (225)

As discussed above, in May 2001, the press began to report on an unpublished book byDanny Stillman, a former scientist at Los Alamos, who decided to sue the government to allow himto publish a manuscript about his experience in exchanges between U.S. and PRC nuclear weaponsscientists in the 1990s. (226) Stillman argued that China's nuclear weapons programaccomplished important advances on its own, without resorting to espionage. He began to seekgovernment approval to publish his book in January 2000.

Notification to Congress. The chair and rankingDemocrat of the House Intelligence Committee, Representatives Goss and Dicks, said that they werenot sufficiently informed of the problems at the labs and the information that was provided was"underplayed." (227) In addition, the Cox Committee's bipartisan report, approved in December 1998, urged Congress toinsist on notification by the Administration, citing "the fact that the heads of Executive departmentsand agencies of the Intelligence Community failed adequately to comply with congressionalnotification requirements of the National Security Act." The Clinton Administration argued that itfulfilled its responsibilities to keep appropriate committees informed. (228)

Representative Hunter, chairman of the House National Security Subcommittee on MilitaryProcurement, stated that Elizabeth Moler, then Deputy Secretary of Energy, failed to testify aboutthe W88 case in an October 6, 1998 hearing that included a closed session. (229) On April 15, 1999,Representative Hunter held a hearing to examine whether Moler (by then a lawyer outsidegovernment) failed to provide accurate and complete testimony in the closed session of the October1998 hearing and whether she instructed Notra Trulock, Acting Deputy Director of DOE's Office ofIntelligence, to withhold critical information, including the W88 case, from Congress. Trulocktestified that Moler edited his written testimony to remove references to "successful espionage" atthe U.S. labs, even though the information was cleared by the CIA for notification to Congress, andthus did not provide the subcommittee with a full picture of the threat against the United States. Moler stated that she did not provide certain information, because the questions were directed atTrulock and he failed to fully disclose information; that the subject of the hearing was on the foreignvisitors' program (which was not involved in the espionage cases); that some information was highlyclassified; and that damaging information about PRC espionage would "unfairly impugn" importantDOE exchange programs. (230)

Furthermore, Trulock told the Senate Armed Services Committee on April 12, 1999, that hisconcerns were "ignored," "minimized," and sometimes "ridiculed" especially by lab officials and thatsenior DOE officials "refused to authorize intelligence" for several months before he could brief thenSecretary Pena in July 1997. Trulock also charged that Moler denied him approval to respond toCongressman Goss' July 1998 request to brief the House Intelligence Committee on the W88 case. According to Trulock, DOE officials, including Moler, stated concerns about negative impacts onthe credibility of the labs and lab-to-lab programs with China and Russia. In response to SenatorLevin's statement that the FBI did brief the Intelligence Committees 19 times from 1996 to 1999 onalleged espionage at the labs, Trulock stated that DOE briefed the Senate Intelligence Committeein July 1996 and the House Intelligence Committee in August 1996, but did not participate in theother 17 briefings. After 1996, Trulock said, he did not return to brief Congress until his testimonyto the Cox Committee in September 1998. (231)

As pointed out by Senator Levin, the Administration said that it provided numerous briefingsto the Intelligence Committees about the cases involving China and the labs. Moler denied that sheprevented Trulock from briefing Representative Goss and argued that she took allegations of PRCespionage at DOE seriously. On the question of whether the Administration was trying to preventthe W88 case from interfering with the policy of engagement with China, Trulock acknowledged thatGary Samore, an NSC official in charge of nonproliferation policy, did encourage DOE to proceedwith "counterintelligence efforts in order to protect sensitive information at the laboratories." (232)

The House Government Reform Committee held a hearing on June 24, 1999, on its concernsabout firings, demotions, and harassment of "whistle-blowers," officials at the Energy and DefenseDepartments who expressed concerns to Congress about security problems. On July 2, 1999,Chairman Dan Burton wrote a letter to Defense Secretary Cohen criticizing an alleged gag order atthe Defense Threat Reduction Agency (DTRA) against employees speaking to committee staff. (233)

Energy Secretary Richardson recognized the allegation that Moler sought to deny informationto Congress, when he announced an internal inquiry as one of seven initiatives announced on March17, 1999. In August 1999, Richardson announced the results of the internal probe by DOE'sInspector General, which investigated the question of obstructing briefings to former Secretary Penaand Congress. However, the report failed to "establish with any certainty that any Departmentalofficial, knowingly or intentionally, improperly delayed, prohibited, or interfered with briefings toMr. Pena or to the congressional intelligence committees." (234) Notra Trulock, wholed the investigation at DOE, criticized the Inspector General's report as "a whitewash" and resignedas acting deputy director of intelligence to work at TRW Inc., a defense contractor. He expressedfrustration that he had been removed from further involvement in the espionage investigation, called"Kindred Spirit," and that the internal DOE report failed to support his assertions of politicalinterference. (235)

On March 8, 2000, Senator Specter, as part of his investigation under the jurisdiction of theSenate Judiciary Subcommittee on Administrative Oversight and the Courts, issued a report criticalof the investigations of Wen Ho Lee. The report criticized the FBI's and DOE's investigations as"inept." It also criticized the Department of Justice and Attorney General Janet Reno for notforwarding the FBI's request for a warrant to the FISA court, despite "ample, if not overwhelming,information to justify the warrant." (236) However, Senator Charles Grassley, chairman of thesubcommittee, criticized the FBI for not telling Congress through most of 1999 that the Bureau hadfound that Lee was not the prime suspect in the espionage case at Los Alamos. Senator Grassley saidthat he, along with Senators Specter and Torricelli, asked the GAO to examine whether a senior FBIofficial (believed to be Neil Gallagher, head of the National Security Division) had withhelddocuments from Congress in 1999. Senator Grassley sent a letter to Senator Specter that disputedhis report, saying that the evidence against Lee was weak. (237)

Role of the White House. Some raised questionsabout how seriously National Security Advisor Sandy Berger took concerns about PRC espionageat the labs and the timing of when he informed President Clinton about the W88 case as well as theneutron bomb case. Some Members called for Berger to resign over the suspected compromise tonational security. There were reportedly discrepancies between various accounts of when thePresident was briefed by the NSC about the alleged espionage cases and whether the President knewabout suspected PRC espionage continuing into the 1990s. The President said on March 19, 1999,that "to the best of my knowledge, no one has said anything to me about any espionage whichoccurred by the Chinese against the labs, during my presidency." (238) After the New YorkTimes reported on April 8, 1999, that China sought additional neutron bomb data in 1995, however,President Clinton explained his earlier statement as a response to a question specifically aboutalleged PRC espionage at the labs, which were apparently not linked to the neutron bomb case. (239)

In 1998, Berger reportedly told the Cox Committee that President Clinton was informed earlythat year. In May 1999, Berger said that he briefed the President in July 1997, after DOE briefed theNSC. (240) The pressreported that intelligence and DOE officials briefed Berger as early as April 1996 on the W88 andthe neutron bomb cases. Berger said that, in 1996, the reports to him were "preliminary" and that"the FBI hadn't even begun its investigation" and there was no suspect. Berger further argued thatafter a second briefing in 1997 that was "far more extensive"and suggested that "there was apotentially greater problem with respect to Chinese acquisition of sensitive information," he did briefthe President. Berger also explained that the President did not raise the issue of PRC espionage atthe October 1997 summit with PRC President Jiang Zemin because of the need to protect the secrecyof an ongoing investigation. (241) Yet, FBI Director Freeh testified in March 1999 that the FBIbegan its case (concerning the W88 data) in September 1995 and that, in August 1997, he told DOEofficials that the stalled case was not as important as the protection of information. (242)

The PFIAB said in June 1999 that "although the current National Security Advisor wasbriefed on counterintelligence concerns by DOE officials in April of 1996, we are not convinced thatthe briefing provided a sufficient basis to require initiation of a broad Presidential directive at thattime. We are convinced, however, that the July 1997 briefing, which we are persuaded was muchmore comprehensive, was sufficient to warrant aggressive White House action."

Also, the PFIAB revealed that the White House knew about PRC espionage at the nuclearweapon labs earlier than 1996. In discussing the track record of the Clinton Administration, thereport noted briefly that, in 1995, after DOE officials met with the FBI on suspected PRC espionageof U.S. nuclear weapon data, an analysis group was formed at DOE to review the PRC nuclearweapon program, and senior DOE, CIA, and White House officials discussed options. The PFIABalso noted in its chronology that, in July 1995, senior DOE officials discussed with senior CIA, FBI,and White House officials in several meetings that there was the possibility that China may haveclassified U.S. nuclear design information. Former White House Chief of Staff Leon Panettareportedly said that he was informed by then Energy Secretary Hazel O'Leary in July 1995. Afterwards, Panetta reportedly requested DCI John Deutch to work with the NSC on the matter. Deutch briefed National Security Advisor Anthony Lake in November 1995. The senior officialsreportedly did not brief President Clinton in 1995. (243) Sandy Berger was the Deputy National Security Advisor atthat time.

Right before the indictment of Wen Ho Lee, on December 4, 1999, top law-enforcement,security, and DOE officials held a meeting at the White House on whether to indict. AttorneyGeneral Janet Reno, National Security Advisor Sandy Berger, Energy Secretary Bill Richardson, FBIDirector Louis Freeh, DCI George Tenet, and U.S. Attorney John Kelly attended. (244)

After Wen Ho Lee was freed after nine months in jail under a plea bargain in September2000, President Clinton criticized the pre-trail detention of Lee, saying:

I always had reservations about the claims that werebeing made denying him bail. And let me say -- I think I speak for everyone in the White House --we took those claims on good faith by the people in the government that were making them, and acouple days after they made the claim that this man could not possibly be let out of jail on bailbecause he would be such a danger -- of flight, or such a danger to America's security -- all of asudden they reach a plea agreement which will, if anything, make his alleged defense look modestcompared to the claims that were made against him. So the whole thing was quite troubling to me,and I think it's very difficult to reconcile the two positions, that one day he's a terrible risk to nationalsecurity, and the next day they're making a plea agreement for an offense far more modest than whathad been alleged. (245)

Export Controls. Some critics linked thecontroversy over lab security with the Administration's export control policy toward China. Theycited the export of high performance computers, or supercomputers, to China. (246) The Department ofCommerce reported to Congress in January 1999 that 191 such computers were exported to Chinain 1998, for which only three end-use checks were conducted. (247) There were alsoconcerns, investigated by Congress in 1998, that exports of U.S. satellites resulted in transfers ofmissile technology to China. (248) Some argued that the Administration's export control policiesallowed dual-use exports "of great strategic value" to China that resulted in greater damage to U.S.national security than the leaks of nuclear weapon data. (249) President Clinton, nonetheless, said that his Administrationwas determined to prevent diversions of sensitive technology to China and placed controls onexports to China that are "tougher than those applied to any other major exporting country in theworld." (250)

Nuclear Cooperation with China. Somequestioned whether it was appropriate for the Administration to have expanded nuclear ties withChina, including exchanges between the two nuclear weapon establishments, while it had suspicionsabout security compromises. At the 1997 U.S.-China summit, President Clinton promised to issuecertifications (signed in January 1998) to implement the 1985 nuclear cooperation agreement, andduring congressional review, the Administration did not discuss problems at the labs. (251) At the 1998 U.S.-PRCsummit in Beijing, DOE signed a governmental agreement on peaceful nuclear cooperation,including exchanges at the labs. (252) The Administration argued that lab-to-lab exchanges were notthe cause of the alleged security problems.

Concerns About Partisanship. Still others urgedpolicy-makers to move beyond any partisan debates to urgently upgrade U.S. security at the labs,assess the potential damage from China's reported compromise of U.S. secrets, and take correctiveaction. They also cautioned against partisan attacks in this case that might damage broader andlonger-term U.S.-China relations that are in U.S. interests, such as efforts on trade and weaponnonproliferation. They pointed out that, as FBI Director Freeh confirmed, "great vulnerability" tointelligence compromises of security at the nuclear weapon labs has been identified since 1988, tenyears prior to PDD-61. Freeh said, "unfortunately, this situation has been well documented for overten years." Those concerns about counterintelligence at DOE included a hearing held by SenatorJohn Glenn in 1988 and studies by the FBI, CIA, and GAO since then. (253)

Implications for U.S. Policy

Counterintelligence(254)

The Los Alamos controversy led to several reassessments and to consideration ofintelligence-related legislation. (255) As discussed above, the Intelligence Community undertookan assessment of potential damage to national security from possible leaks of nuclear weaponssecrets. DCI Tenet asked a group of outside experts headed by retired Admiral David Jeremiah,former Vice Chairman of the Joint Chiefs of Staff, to review the in-house effort, and they concurredwith its judgments.

Efforts to formalize the government's counterintelligence efforts began after the arrest ofAldrich Ames, the CIA official convicted of espionage. A Presidential Directive was signed in May1994 placing the policy and coordinating machinery of counterintelligence in the hands of the NSCand created a National Counterintelligence Policy Board composed of representatives of the principallaw enforcement and intelligence agencies, reporting to the National Security Advisor. The Boardwas subsequently given a statutory charter in the FY1995 Intelligence Authorization Act ( P.L.103-359 ).

A major goal in establishing the Counterintelligence Policy Board was coordination of CIAand FBI efforts with a focus on counterintelligence at intelligence agencies; concerns about DOElaboratories were not publicly discussed in 1994. It was generally agreed that coordination amonglaw enforcement and intelligence agencies improved significantly. As a result, however, of concernsdating from at least 1995 that China may have acquired sensitive information from Los Alamos,PDD-61 was issued in February 1998, mandating a stronger counterintelligence program within DOElaboratories. According to Energy Secretary Richardson, writing in March 1999, steps taken inresponse to PDD-61 included new counterintelligence professionals based at the laboratories, adoubling of the budget for counterintelligence, a new screening and approval process for foreignscientists seeking access to the laboratories, and more extensive security reviews -- including the useof polygraphs -- for scientists working in sensitive programs. (256)

Nuclear Nonproliferation and Lab Exchanges

In addition to questions about counterintelligence and modernization of PRC weapondesigns, there were policy implications posed by China possibly passing U.S. nuclear weapon secretsto other countries. As discussed above, in the late 1970s to 1980s, the PRC reportedly acquired U.S.data on the neutron bomb from Livermore and passed it to Pakistan. The United States and othercountries have been concerned about PRC nuclear weapon proliferation, especially in Pakistan andIran. (257) AdvancedU.S. warheads have features of value to would-be nuclear weapon states. These features mightpermit a nation to develop more efficient warheads, in which case it could build more bombs withits supply of uranium or plutonium. They might solve engineering problems or suggest productionshortcuts. If China passed U.S. nuclear weapon information to another country, it could developand deploy a more potent nuclear force faster.

The CIA's damage assessment, that was briefed to Congress and the Administration on April21, 1999, cited a greater concern for nuclear proliferation. It acknowledged that China could passU.S. nuclear weapon secrets to other countries, although it was not known whether China had doneso. The assessment cautioned that, now that the PRC has more modern U.S. nuclear weaponinformation, it "might be less concerned about sharing [its] older technology." (258)

India or another country concerned about the advancement of PRC nuclear weapons mightpursue further development of nuclear weapons and the missiles to deliver them in response toreports that China may have acquired designs for the W88. Citing security concerns about China,India conducted several nuclear tests in May 1998 and has not signed the CTBT.

Citing concerns about nuclear proliferation, Members looked at curtailing the U.S.-Chinalab-to-lab program that the Clinton Administration initiated in July 1994 and formalized in a June1998 official agreement. Leading a delegation to the Los Alamos National Lab, Senator Shelby,Chairman of the Intelligence Committee, said on April 12, 1999, that a "tourniquet" was needed tobe placed on the "hemorrhaging" of bomb secrets to foreign countries. (259) If there were securitygaps at the labs stemming from foreign exchanges, Congress had a role in ensuring that adequatecounterintelligence measures were in place. (See Legislation above.)

The Intelligence Community's April 1999 damage assessment stated concerns, highlightedby some, about PRC "technical advances" based on contact with scientists from the United Statesand other countries, among a variety of sources of information. (Other countries may includeRussia.) The review panel's note on the damage assessment also warned of the dangers of exchangesbetween U.S. and PRC or Russian nuclear weapon specialists, urging that a separate net assessmentbe done on such formal and informal contacts. Yet, the panel also noted that "the value of thesecontacts to the U.S., including to address issues of concern -- safety, command and control, andproliferation -- should not be lost in our concern about protecting secrets."

Another report on PRC espionage included warnings about exchanges at the labs. Accordinga 1999 report by the CIA and FBI, "PRC scientists, through mutually beneficial scientific exchangeprograms, gather [science and technology] information through U.S. national laboratories." (260)

China's nuclear weapon facilities have included the China Academy of Engineering Physics(CAEP), also known as the Ninth Academy, at Mianyang, Sichuan province; Institute of AppliedPhysics and Computational Mathematics (IAPCM), in Beijing; High Power Laser Laboratory, inShanghai; and Northwest Institute of Nuclear Technology (NINT), near Xian. (261) China's nuclearweapon installations were reorganized as part of changes in the defense industrial sector in 1998 thatincluded the civilianization of the Commission of Science, Technology, and Industry for NationalDefense (COSTIND) solely under the State Council. PRC nuclear weapon facilities then becamepartly subordinated to the People's Liberation Army (PLA)'s General Equipment Department thatwas set up in April 1998 to centralize and improve control over research and development,production, and deployment of weapons.

Placing restrictions on the foreign visitor program, however, entailed implications for U.S.policy on arms control and nonproliferation. The Administration argued that foreign exchanges havenot compromised U.S. security and have not involved weapon secrets. Moreover, contacts withforeign nuclear scientists have allowed U.S. nuclear weapon labs to learn about the secretive nuclearweapon establishment in China -- especially as it was undergoing changes. In October 1998, JohnBrowne, Director of Los Alamos, testified that "access to classified information by foreign nationalsis not allowed" in DOE's foreign visitor program. (262) The Administration said that engagement of PRC and otherscientists have fostered support for arms control and nonproliferation objectives as well as advancedU.S. interests in making sure that foreign nuclear powers have sufficient control over nuclearmaterials to prevent leaks to rogue states. (263) The former Director of Los Alamos argued that "any contactwith China's nuclear weapons establishment needed to be clearly focused to avoid aiding theirweapons program. Hence, the Department of Energy authorized only small, restricted interactionson nuclear materials protection and verification technologies for arms control treaties. Theseactivities were and still are clearly in our national security interest." (264) Testifying before theCox Committee in October 1998, C. Paul Robinson, director of Sandia, stated that "the lab-to-labprogram with China has been beneficial in several ways. It provides the United States with perhapsits only window on the Chinese nuclear weapons program. . . Moreover, the program has helpedpromote the establishment of an arms control program in China." (265)

U.S.-China Relations

The disclosures about suspected PRC espionage at the U.S. labs further complicated theAdministration's policy of engagement with China. Vice President Gore said on March 9, 1999, that"having a relationship with [China] within which we can try to affect their behavior and improvehuman rights, eliminate unfair trade practices, and bring about the kinds of changes that will leadto further democratization in China, these things are in our interest." (266) On March 11, 1999,President Clinton first defended his policy against charges of laxity in dealing with China andasserted that engagement "has paid dividends" for U.S. interests in weapon nonproliferation, Korea,and the Asian financial crisis. He also argued against an "isolated no-contact" relationship withBeijing. (267) In amajor speech on China policy on the eve of PRC Premier Zhu Rongji's visit, President Clinton againexplained that seeking to resolve differences with China cannot be achieved "by confronting Chinaor trying to contain her," but through a "policy of principled, purposeful engagement with China'sleaders and China's people." (268)

Some critics charged that the W88 case showed that engagement did not adequately protectU.S. national security interests, and a more confrontational policy -- some called containment --should be pursued. They said that the credibility of the White House on China policy had beenfurther eroded and that engagement had brought more harm than benefits to U.S. interests. SenatorHelms wrote on July 8, 1999, that the Cox Report presented "damning disclosures on the ClintonAdministration's `engagement' policy toward Beijing" and urged a "fundamental reassessment"ofU.S. policy toward China. (269)

Still other critics pointed out that PRC espionage and China's military had and will continueto challenge U.S. interests and the question was not whether the United States needed to remainengaged with China -- as the President said, but how that long-standing policy of engagement wascarried out. According to them, engagement -- but with a tougher approach -- remained the mostappropriate policy. For example, James Lilley, former ambassador and CIA station chief in China,argued that while both PRC spying and American spying will continue, exposing PRC espionage"should not derail our relationship with China." (270)

Concerns over PRC nuclear espionage spurred even some supporters of engagement tocriticize the Clinton White House's pursuit of what it called a "constructive strategic partnership"with China. (271) Henry Kissinger, credited in part with the opening to China, wrote that "a sustainable Sino-Americanrelationship requires something beyond presidential invocations of 'engagement' that imply thatcontact between the two societies will automatically remove all latent tensions, or of a 'strategicpartnership' whose content is never defined." (272)

Besides the immediate concerns about lab-to-lab exchanges, the W88 case also hadramifications for other aspects of the relationship with China. In March 1999, RepresentativesGilman and Rohrabacher wrote letters to Defense Secretary William Cohen questioning exchangeswith the PLA. (273) The Pentagon has pursued military-to-military ties with the PLA as a means to deter PLAprovocations, increase mutual understanding, and expand relations with important leaders in China. Some observers were also concerned that a worsened political atmosphere would affect traderelations, including assessments about China's entry into the World Trade Organization (WTO).