Cheap Internet Startup

Gregory Alan Bolcer (
Sat, 06 Mar 1999 08:51:51 -0800

Modernization, miniaturization, mobilization, and submarinization.
Sounds like a cheap Internet startup story. The Rosenberg, Ames, and
Mr. X. triumvarite. Front page of the NY Times give a sordid tale
of modern day espionage, W-88 super explosive space modulators, and
clever Chinese secret agents that walk in the front door of a national
lab, take what they need and walk out.

Sounds pretty easy.


China Stole Nuclear Secrets From Los Alamos,
U.S. Officials Say

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Join a Discussion on Weapons of Mass Destruction


[W]ASHINGTON -- Working with nuclear secrets stolen from a U.S.
government laboratory, China has made a leap in the development of
nuclear weapons: the miniaturization of its bombs, according to administration

Until recently, China's nuclear weapons designs were a generation behind those
of the United States, largely because Beijing was unable to produce small
warheads that could be launched from a single missile at multiple targets and
form the backbone of a modern nuclear force.

But by the mid-1990s, China had built and tested such small bombs, a
breakthrough that officials say was accelerated by the theft of U.S. nuclear
secrets from Los Alamos National Laboratory in New Mexico.

The espionage is believed to have occurred in the mid-1980s, officials said. But
it was not detected until 1995, when American experts analyzing Chinese
nuclear test results found similarities to America's most advanced miniature
warhead, the W-88.

By the next year, government investigators had identified a suspect, an American
scientist at Los Alamos laboratory, where the atomic bomb was first developed.
The investigators also concluded that Beijing was continuing to steal secrets
the government's major nuclear weapons laboratories, which had been
increasingly opened to foreign visitors since the end of the Cold War.

The White House was told of the full extent of China's spying in the summer of
1997, on the eve of the first U.S.-Chinese summit meeting in eight years -- a
meeting intended to dramatize the success of President Clinton's efforts to
improve relations with Beijing.

White House officials say they took the allegations seriously; as proof of this
cite Clinton's ordering the labs within six months to improve security.

But some U.S. officials assert that the White House sought to minimize the
espionage issue for policy reasons.

"This conflicted with their China policy," said a U.S. official, who like many
others in this article spoke on condition of anonymity. "It undercut the
administration's efforts to have a strategic partnership with the Chinese."

The White House denies the assertions. "The idea that we tried to cover up or
downplay these allegations to limit the damage to United States-Chinese
relations is absolutely wrong," said Gary Samore, the senior National Security
Council official who handled the issue.

Yet a reconstruction by The New York Times reveals that throughout the
government, the response to the nuclear theft was marked by delays, inaction
and skepticism -- even though senior intelligence officials regarded it as one
the most damaging spy cases in recent history.

Initially, the FBI did not aggressively pursue the criminal investigation of lab
U.S. officials said. Now, nearly three years later, no arrests have been made.

Only in the last several weeks, after prodding from Congress and the secretary
of energy, have government officials administered lie detector tests to the main
suspect, a Los Alamos computer scientist who is Chinese-American. The
suspect failed a test in February, according to senior administration officials.

At the Energy Department, officials waited more than a year to act on the FBI's
1997 recommendations to improve security at the weapons laboratories and
restrict the suspect's access to classified information, officials said.

The department's chief of intelligence, who raised the first alarm about the
was ordered last year by senior officials not to tell Congress about his
because critics might use them to attack the administration's China policies,
officials said.

And at the White House, senior aides to Clinton fostered a skeptical view of the
evidence of Chinese espionage and its significance.

White House officials, for example, said they determined on learning of it that
Chinese spying would have no bearing on the administration's dealings with
China, which included the increased exports of satellites and other militarily
useful items. They continued to advocate looser controls over sales of
supercomputers and other equipment, even as intelligence analysts documented
the scope of China's espionage.

Samore, the Security Council official, did not accept the Energy Department's
conclusion that China's nuclear advances stemmed largely from the theft of U.S.

In 1997, as Clinton prepared to meet with President Jiang Zemin of China, he
asked the CIA for a quick alternative analysis of the issue. The agency found
that China had stolen secrets from Los Alamos but differed with the Energy
Department over the significance of the spying.

In personal terms, the handling of this case is very much the story of the
Department intelligence official who first raised questions about the Los Alamos
case, Notra Trulock.

Trulock became a secret star witness before a select congressional committee
last fall. In a unanimous report that remains secret, the bipartisan panel
his conclusions about Chinese espionage, officials said. Taking issue with the
White House's view, the panel saw clear implications in the espionage case for
U.S.-China policy, and has now made dozens of policy-related
recommendations, officials said.

A debate still rages within the government over whether Trulock was right about
the significance of the Los Alamos nuclear theft. But even senior administration
officials who do not think so credit Trulock with forcing them to confront the
realities of Chinese atomic espionage.

China's technical advance allows it to make mobile missiles, ballistic missiles
multiple warheads and small warheads for submarines -- the main elements of a
modern nuclear force.

While White House officials question whether China will actually deploy a more
advanced nuclear force soon, they acknowledge that Beijing has made plans to
do so.

In early 1996 Trulock traveled to CIA headquarters to tell officials there of
evidence his team had gathered on the apparent Chinese theft of U.S. nuclear

As Trulock gathered his charts and drawings and wrapped up his top-secret
briefing, the agency's chief spy hunter, Paul Redmond, sat stunned.

At the dawn of the Atomic Age, a Soviet spy ring that included Julius Rosenberg
had stolen the first nuclear secrets out of Los Alamos. Now, at the end of the
Cold War, the Chinese seemed to have succeeded in penetrating the same
weapons lab.

"This is going to be just as bad as the Rosenbergs," Redmond recalled saying.

The evidence that so alarmed him had surfaced a year earlier. Senior nuclear
weapons experts at Los Alamos, poring over data from the most recent Chinese
underground nuclear tests, had detected eerie similarities between the latest
Chinese and U.S. bomb designs.

From what they could tell, Beijing was testing a smaller and more lethal nuclear
device configured remarkably like the W-88, the most modern, miniaturized
warhead in the U.S. arsenal. In April 1995, they brought their findings to

Officials declined to detail the evidence uncovered by the Los Alamos
who have access to a wide range of classified intelligence data and seismic and
other measurements.

But just as the scientists were piecing it together, they were handed an
intelligence windfall from Beijing.

In June 1995, they were told, a Chinese official gave CIA analysts what
appeared to be a 1988 Chinese government document describing the country's
nuclear weapons program. The document, a senior official said, specifically
mentioned the W-88 and described some of the warhead's key design features.

The Los Alamos laboratory, where the W-88 had been designed, quickly
emerged as the most likely source of the leak.

One of three national weapons labs owned by the Department of Energy, Los
Alamos, 35 miles outside Sante Fe, N.M., was established in 1943 during the
Manhattan Project. Trulock and his team knew just how vulnerable Los Alamos
was to modern espionage.

The three labs had long resisted FBI and congressional pressure to tighten their
security policies. Energy officials acknowledge that there have long been
problems at the labs.

Los Alamos and Sandia National Laboratories, also in New Mexico, had in
1994 been granted waivers from an Energy Department policy that visiting
foreign scientists be subjected to background checks.

Lab officials resented the intrusions caused by counterintelligence measures,
arguing that restrictions on foreign visitors would clash with the labs' new
mandate to help Russia and other nations safeguard their nuclear stockpiles.

The Clinton administration was also using increased access to the laboratories
support its policy of engagement with China, as had been done under previous,
Republican administrations.

In December 1996, for example, China's defense minister, Gen. Chi Haotian,
visited Sandia on a Pentagon-sponsored trip. Energy Department officials were
not told in advance, and they later complained that Chi and his delegation had
not received proper clearances, officials said.

Still, there is no evidence in this case that foreign visitors were involved in
theft of information.

In late 1995 and early 1996, Trulock and his team took their findings to the
A team of FBI and Energy Department officials traveled to the three weapons
labs and pored over travel and work records of lab scientists who had access to
the relevant technology.

By February the team had narrowed its focus to five possible suspects, including
a computer scientist working in the nuclear weapons area at Los Alamos,
officials said.

This suspect "stuck out like a sore thumb," said one official. In 1985, for
example, the suspect's wife was invited to address a Chinese conference on
sophisticated computer topics even though she was only a secretary at Los
Alamos. Her husband, the real expert, accompanied her, a U.S. official said.

By April 1996, the Energy Department decided to brief the White House. A
group of senior officials including Trulock sat down with Sandy Berger, then
Clinton's deputy national security adviser, to tell him that China appeared to
acquired the W-88 and that a spy for China might still be at Los Alamos.

"I was first made aware of this in 1996," Berger, now national security adviser,
said in an interview.

By June the FBI formally opened a criminal investigation into the theft of the
W-88 design. But the inquiry made little progress over the rest of the year.
When Energy Department officials asked about the inquiry at the end of 1996,
they came away convinced that the bureau had assigned few resources to the

A senior bureau official acknowledged that his agency was aware of the Energy
Department's criticism but pointed out that it was difficult to investigate the
without alerting the suspects.

The bureau maintained tight control over the case. The CIA counterintelligence
office, for one, was not kept informed of its status, according to Redmond, who
has since retired.

Energy Department officials were also being stymied in their efforts to address
security problems at the laboratories.

After Frederico Pena became energy secretary in early 1997, a previously
approved counterintelligence program was quietly placed on the back burner for
more than a year, officials said.

In April 1997, the FBI issued a classified report on the labs that recommended,
among other things, reinstating background checks on visitors to Los Alamos
and Sandia, officials said. The Energy Department and the labs ignored the FBI
recommendation for 17 months. An Energy Department spokeswoman was
unable to explain the delay.

Another official said, "We couldn't get an order requiring the labs to report to
counterintelligence officials when the Chinese were present. All those
requirements had been waived."

In early 1997, with the FBI's investigation making scant progress and the Energy
Department's counterintelligence program in limbo, Trulock and other
intelligence officials began to see new evidence that the Chinese had other,
ongoing spy operations at the weapons labs.

But Trulock was unable to quickly inform senior U.S. officials about the new
evidence. He asked to speak directly with Pena, the energy secretary, but had to
wait four months for an appointment.

In an interview, Pena said he did not know why Trulock was kept waiting until
July but recalled that he "brought some very important issues to my attention
that's what we need in the government."

Pena immediately sent Trulock back to the White House -- and to Berger.

"In July 1997 Sandy was briefed fully by the DOE on China's full access to
nuclear weapons designs, a much broader pattern" said one White House

Officials said Berger was told that there was evidence of several other Chinese
espionage operations that were still under way inside the weapons labs.

That news, several officials said, raised the importance of the issue. The
suspected Chinese thefts were no longer just ancient history, problems that had
happened on another administration's watch.

Berger quickly briefed Clinton on what he had learned and kept him updated
over the next few months, a White House official said.

As Trulock spread the alarm, his warnings were reinforced by CIA Director
George Tenet and FBI Director Louis Freeh, who met with Pena to discuss the
lax security at the labs that summer.

"I was very shocked by it, and I went to work on shifting the balance in favor
security," Pena said. He and his aides began to meet with White House officials
to prepare a presidential order on lab security.

The FBI assigned more agents to the W-88 investigation, gathering new and
more troubling evidence about the prime suspect.

According to officials, the agents learned that the suspect had traveled to Hong
Kong without reporting the trip as required by government regulations. In Hong
Kong, officials said, the FBI found records showing that the scientist had
obtained $700 from the American Express office. Investigators suspect he used
it to buy an airline ticket to Shanghai, inside the People's Republic of China.

With Berger now paying close attention, the White House became deeply
involved in evaluating the seriousness of the thefts and solving the
counterintelligence problems at the laboratories.

Trulock's new findings came at a crucial moment in U.S.-China relations.
Congress was examining the role of foreign money in the 1996 campaign, amid
charges that Beijing had secretly funneled money into Democratic coffers.

The administration was also moving to strengthen its strategic and commercial
links with China. Clinton had already eased the commercial sale of
supercomputers and satellite technology to China, and now he wanted to cement
a nuclear cooperation agreement at the upcoming summit, enabling American
companies to sell China new commercial nuclear reactors.

In August 1997, Berger flew to Beijing to prepare for the October summit. He
assigned Samore, a senior NSC aide in charge of proliferation issues, to assess
the damage from the Los Alamos spy case.

After receiving a briefing from Trulock in August, Samore asked the CIA's
directorate of intelligence to get a second opinion on how China had developed
its smaller nuclear warheads. It was, an NSC aide said, "a quick study done at
our request."

The analysts agreed that there had been a serious compromise of sensitive
technology through espionage at the weapons labs, but were far less conclusive
about the extent of the damage. The CIA argued that China's sudden advance in
nuclear design could be traced in part to other causes, including the ingenuity
Beijing's scientists.

"The areas of agreement between DOE and CIA were that China definitely
benefited from access to U.S. nuclear weapons information that was obtained
from open sources, conversations with DOE scientists in the U.S. and China,
and espionage," said a U.S. official.

"The disagreement is in the area of specific nuclear weapons designs. Trulock's
briefing was based on a worst-case scenario, which CIA believes was not
supported by available intelligence. CIA thinks the Chinese have benefited from
a variety of sources, including from the Russians and their own indigenous

Samore assembled the competing teams of CIA and DOE analysts in
mid-October for a meeting in his White House office that turned into a tense

The CIA report noted that China and Russia were cooperating on nuclear
issues, indicating that this was another possible explanation of Beijing's

Trulock said this was a misreading of the evidence, which included intercepted
communications between Russian and Chinese experts. The Russians were
offering advice on how to measure the success of nuclear tests, not design
secrets. In fact, Trulock argued, the Russian measurement techniques were used
to help the Chinese analyze the performance of a weapon that Los Alamos
experts believed was based on a U.S. design.

"At the meeting, Notra Trulock said that he thought the CIA was underplaying
the effect that successful Chinese espionage operations in the weapons labs had
had on the Chinese nuclear weapons program," said one official.

Relying on the CIA report, Samore told Berger in late September that the
picture was less conclusive than Trulock was arguing. Officials said he began to
relay that view before hearing Trulock's rebuttal of the CIA study at the

Samore told Berger "there isn't enough information to resolve the debate, there
no definitive answer, but in any event this clearly illustrates weaknesses in
counterintelligence capability," said one official familiar with Samore's

CIA officials strenuously deny that the agency's analysts intended to downplay
Trulock's findings.

The FBI inquiry was stalled. At a September 1997 meeting between FBI and
Energy Department officials, Freeh concluded that the bureau did not have
enough evidence to arrest the suspect, according to officials.

The crime was believed to have occurred more than a decade earlier.
Investigators did not then have sufficient evidence to obtain a secret wiretap
the suspect, making it difficult to build a strong criminal case, according to
officials. FBI officials say that Chinese spy activities are far more difficult
investigate than the more traditional espionage operations of the former Soviet

But even if the bureau couldn't build a case, the Energy Department could still
take some action against someone holding a U.S. security clearance. Freeh told
DOE officials that there was no longer an investigative reason to allow the
suspect to remain in his sensitive position, officials said. In espionage cases,
FBI often wants suspects left alone by their employers for fear of tipping them
off prematurely.

But the suspect was allowed to keep his job and retain his security clearances
for more than a year after the meeting with Freeh, according to U.S. officials.

In late 1997, the NSC did begin to draft a new counterintelligence plan for the
weapons labs, and Clinton signed the order mandating the new measures in
February 1998. In April, a former FBI counterintelligence agent, Ed Curran,
was named to run a more vigorous counterintelligence office at Energy
Department headquarters.

The administration explained aspects of the case to aides working for the House
and Senate intelligence committees beginning in 1996. But few in Congress
grasped the magnitude of what had happened.

In July 1998, the House Intelligence Committee requested an update on the
case, officials said. Trulock forwarded the request in a memo to, and in
conversations with, Elizabeth Moler, then acting energy secretary. Ms. Moler
ordered him not to brief the House panel for fear that the information would be
used to attack the president's China policy, according to an account he later
gave congressional investigators. Ms. Moler, now a Washington lawyer, says
she does not remember the request to allow Trulock to brief Congress and
denies delaying the process.

In October, Ms. Moler, then deputy secretary, stopped Trulock from delivering
written testimony on espionage activities in the labs to a closed session of the
House National Security Committee.

Ms. Moler told Trulock to rewrite his testimony to limit it to the announced
subject of the hearing, foreign visitors to the labs, an Energy Department
spokeswoman said. The issue came up nonetheless when committee members
asked follow-up questions, Energy Department officials said.

Key lawmakers began to learn about the extent of the Chinese theft of U.S.
nuclear secrets late in 1998, when a select committee investigating the
of sensitive U.S. technology to China, chaired by Rep. Christopher Cox,
R-Calif., heard from Trulock.

Administration officials say that Congress was adequately informed, but leading
Democrats and Republicans disagree. Rep. Norman Dicks, D-Wash., the
ranking minority member on the House Intelligence Committee and also a
member of the Cox committee, said that he and Rep. Porter Goss, R-Fla.,
chairman of the House intelligence panel, were not adequately informed.

"Porter Goss and I were not properly briefed about the dimensions of the
problem," he said, adding: "It was compartmentalized and disseminated over the
years in dribs and drabs so that the full extent of the problem was not known
until the Cox committee."

Last fall, midway through the Cox panel's inquiry, a new secretary of energy,
Richardson, arrived on the job.

After being briefed by Trulock, Richardson quickly reinstated background
checks on all foreign visitors, a move recommended 17 months earlier by the
FBI. He also doubled the counterintelligence budget and placed more former
FBI counterintelligence experts at the labs.

But Richardson also became concerned about what the Cox panel was finding

So in October he cornered Berger at a high-level meeting and urged him to put
someone in charge of coordinating the administration's dealings with the Cox

Berger turned again to Samore, officials said.

By December, Dicks, in his role as the ranking Democratic member of the Cox
panel, was growing impatient with the administration's slow response to ongoing
requests from the committee and its inaction on the Los Alamos spy case. Dicks
told Richardson, a former colleague in the House, that he needed to take action,
Richardson recalled.

Dicks' complaints helped prompt Richardson to call Freeh twice in one day in
December about the inquiry, an official said.

The suspect was given a polygraph, or lie-detector test, in December, by the
Energy Department. Unsatisfied, the FBI administered a second test in
February, and officials said the suspect was found to be deceptive. It is not
known what questions prompted the purportedly deceptive answers.

As the FBI investigation intensified, the Cox Committee completed a 700-page
secret report which found that China's theft of US secrets had harmed U.S.
national security -- saving the Chinese untold time and money in nuclear
weapons research.

After hearing from both the CIA and Energy Department analysts, the
bi-partisan panel unanimously came down on the side of Trulock's assessment,
officials said.

Now, the CIA and other agencies, at the request of the Cox Committee, are
conducting a new, more thorough damage assessment of the case, even as the
debate continues to rage throughout the intelligence community over whether
Trulock has overstated the damage from Chinese espionage.

Meanwhile, Trulock has been moved from head of DOE's intelligence office to
acting deputy. While Richardson and other Energy Department officials praise
Trulock's work and deny he has been mistreated, some in Congress suspect he
has been demoted for helping the Cox Committee.

Redmond, the CIA's former counterintelligence chief, who made his name by
unmasking Soviet mole Aldrich Ames at the CIA, has no doubts about the
significance of what Trulock uncovered.

He said: "This was far more damaging to the national security than Aldrich