Posted on 07/16/2002 9:05:53 PM PDT by pttttt
Chinese Espionage and the Department of Energy
By Frederick Wettering
From July 1994 to July 1996 I was detailed by CIA's Operations Directorate to the Counterintelligence Office at DOE (and for a time served as its deputy head). The following is my analysis of the recent counterintelligence problems caused by Chinese intelligence targeting of our three major national laboratories (Los Alamos, Lawrence Livermore, Sandia) responsible for advanced weapons research and nuclear weapons.
Two Quotes: There are two quotes that directly bear on this problem. First, during his historic visit to Washington on 31 January 1979, Deng Shao-ping stated to the entire Carter Cabinet "We want your most up-to-date technology-not even that of the early 70s (but the very latest), do you understand?" [1] What Deng underscored is what was decided by the Plenum of the Chinese Communist Party Central Committee in December, 1978, the so-called "Four Moderns" Program, which mandated acquiring Western technology to make China economically and militarily a great power.
The second quote is from President Clinton on 12 February 1994. "I, William J. Clinton...find that the proliferation of nuclear, biological, and chemical weapons and of the means to deliver them constitutes an extraordinary threat to the national security, foreign policy and economy of the United States, and hereby declare a national emergency to deal with that threat." [2]
The first of these quotes authorized a massive Chinese intelligence effort aimed at, among other high-tech targets, the DOE weapons labs. The second was seized as the overriding Clinton Administration (and the Clinton DOE) policy of safeguarding Russian and Chinese nuclear materials. Counterintelligence concerns were superseded by this policy.
Organization Problems: DOE Secretary O'Leary's office was on the seventh (top) floor of the Forrestal Building on Independence Avenue. The office of Ken Baker, Assistant Secretary of Nonproliferation and National Security (NN) (who oversaw the Office of Energy Intelligence, which took over the Counterintelligence (CI) Office in early 1994) was on the sixth floor. The Office of Intelligence was in the basement as was the CI office. The Office of Security was 20 miles away in Germantown. The Director of Security, a 70 year old retired general to whom the CI office had reported prior to 1994, was not in favor with the Clinton-appointed leadership and thus was tucked away in a closet-sized office in the back of the Forrestal Building, light-years away from contact with anyone. As Henry Kissinger said, propinquity to power is everything.
The DOE CI budget (the smallest part of the National Foreign Intelligence Program-the overall Intelligence Community budget), was minuscule, then about $2 million, and did not go up until 1996. CI professionals had absolutely no input into the budget process. A senior Congressional intelligence committee staffer told me that this figure could have easily been increased but DOE never asked.
DOE had a strict chain of command policy. The CI Chief reported to the head of the Intelligence Office and he to the Assistant Secretary who in turn reported to the Under Secretary. None of the principals at DOE chose to risk going out of channels to the White House or Congress with CI concerns, according to Intelligence Head Trulock's recent testimony before the Cox Committee, and Trulock claims he was denied permission to do so. His account rings very true to me.
Personnel Problems: The DOE CI Office had a very small cadre of reasonably talented, mostly ex-AFOSI (Air Force counterintelligence) investigators and analysts. There was a major problem about the leadership of the office during my two years, not resolved until late 1996. Frankly, the previous head had retired in place, as had some of the field CI people, and was unwilling to buck the system in any way for fear of his job. Despite this, the CI office had firmly identified the problems and in several ways attempted to work around laboratory nonfeasance and lack of any management support. To their great credit, once it became known there likely had been a major espionage leak, this tiny office, together with a very talented field man who was retired FBI, within weeks identified appropriate suspects and passed them on to the FBI (as DOE CI is required to do by law).
Lab-Headquarters Problems: DOE was one of the first bureaucracies to privatize. All 35 national labs are run by contractors who publicly bid for the privilege. Los Alamos and Lawrence Livermore are run by the University of California and Sandia by Lockheed-Martin. Lab CI is provided by the contractors, who designate one or two CI officers. They are theoretically responsible to a regional DOE CI officer and also the CI Headquarters. In fact the labs were autonomous. Both the regional DOE and contract CI officers had other duties heaped on them and were of varying levels of competence and CI experience. One such officer told me that his instructions were first and foremost not to disrupt exchange programs or nonproliferation work. Since the CI office within DOE Headquarters had absolutely no clout, it had no ability to enforce DOE regulations, such as those concerning reporting foreign visitors.
Political Correctness: As noted by the Clinton quote, non-proliferation was in. This was compounded by the fact that several of Secretary O'Leary's senior staff came from various anti-nuclear weapons organizations. As a result, there was a rush to give the Russian and Chinese computers, sensors, and other technology to help safeguard their nukes. Exchanges between nuclear scientists and labs were encouraged. Direct e-mail links between labs and scientists were set up. There was no CI governor on this runaway train. The labs had been supporting exchanges with Chinese nuclear materials experts long before Clinton, however. Exchanges began seriously in 1980-81, then were ended by us in 1989. They were purposefully resuscitated in 1994, when Los Alamos head Sig Hecker led a big lab delegation to the Chinese Academy of Engineering Physics (CAEP) in Mianyang, Szechuan, China, which houses some of the Chinese bomb builders as well as weapons testing.[3]
At the same time DOE began a major program with the Russian Ministry of Atomic Energy to help secure Russian nuclear materials. This was followed by a return visit by the Chinese and further exchanges in subsequent years. In addition, DOE CI statistics indicate that about 50 percent of the PHDs working at the labs are foreign employees. They were all theoretically assigned to "unclassified areas" but freely were allowed to socialize with DOE weapons makers and occasionally to visit secure areas under escort.
Carryover Problems: The DOE exchange program with China began in 1981 and the Reagan and Bush Administrations cast a blind eye on lab security and encouraged contacts with China, especially those leading to U.S. exports. The 1989 Tien An Min Massacre ended these until 1994 when the Clinton Administration renewed them. Nick Eftimiades, in his important book on Chinese intelligence operations, quotes a senior FBI official who noted how the Chinese had made recruitment attempts at two of the weapons labs and that security at the labs was lax during the 1980s. [4]
Not only did Clinton appointees not fix these problems, they continued to deteriorate. In 1996 and 1997, the Government Accounting Office published critical reports on poor DOE security and counterintelligence practices (these GAO investigators received the full support of DOE CI officers, who hoped that this channel might produce some corrective pressure). The 1996 GAO Report, for example, notes the following shortcomings between 1994-1996: background checks were conducted on only 16 percent of the almost 6,000 "criteria country" visitors (including almost 1500 Chinese); a considerable increase in foreign visitors to the labs, including long-term assignments (up to two years); DOE delegation of much of the authority to approve visits to the labs; escorting procedures for sensitive areas were lax; classified material was left unsecured in the presence of visitors; foreign visitors have open and long term access to personnel with detailed knowledge and expertise of sensitive programs; visitors did gain access to technologies under government restriction but not classified; after-hours access of facilities by foreign visitors; and accidental release of classified information. [5]
DOE Attitudes: Counterintelligence suffered from a number of prevalent attitudes held by both DOE and contractor personnel. Most relevant of these were:
Bureaucratic irrelevance: The CI office had no bureaucratic clout and thus could be safely ignored.
Lab vs. Headquarters: Lab management generally resisted direction or even guidance from DOE Headquarters, especially in security and counterintelligence matters.
Libertarian attitudes: All DOE personnel, but especially lab scientists, had a full share of the libertarian, hands-off-me attitude so prevalent in our modern society and resisted the notion that holding top secret clearances somehow required some modest curtailment of their "rights." Resisting both entreaties and directives to report foreign travel, foreign contacts, review e-mail sent abroad, curtailing information posted on personal web pages, were some of the matters in which these altitudes manifested themselves to the detriment of good security and counterintelligence practices.
Sloth: Laxity in safeguarding classified materials, escorting foreign visitors vigilantly and other basic security practices is a common problem experienced by counterintelligence and security personnel everywhere and DOE and the labs were no exception.
Naivete: Both DOE and lab personnel simply could not believe they could be targets of foreign intelligence services and that their "friendly" foreign contact might be working for a foreign service. DOE and lab travelers abroad were particularly vulnerable as a result of this naivete, refusing to believe that their rooms may be bugged, luggage and laptops searched, that their foreign contacts noted and their friendly guide/interpreter may be a hostile security service employee. Our travelers showed ignorance of and vulnerability to the intelligence technique of elicitation ; inadvertently revealing secrets through cleverly directed conversation and mood manipulation. The Chinese, among others, are past masters at elicitation. A very commonly held attitude at all levels of DOE was manifested in the often expressed statement, "the cold war is over"; implying that the need for security and counterintelligence vigilance was over.
Chinese Intelligence Methodology: The Chinese Government receives a vast amount of intelligence, as well as unclassified information, from Chinese students, businessmen, and civil servants who visit and have dealings with the West. However, the MSS and PLA obtain information primarily by elicitation from innocent Westerners and from recruited informants who were of Chinese heritage. [6] The former were often Western businessmen, government officials, or scientists invited to China where they were wined and dined. In the latter category, people of Chinese decent who had access to information of interest were usually heavily (and more-or-less openly) cultivated and invited to China or Hong Kong where they were assessed, developed and recruited such travel was legal if reported to DOE, a program not rigorously enforced. DOE CI had no control over this travel program and had to make extraordinary efforts to get the names of travelers. The case of DOE Los Alamos scientist Peter Lee, recently successfully prosecuted for passing secret weapons information to the Chinese, mirrors this methodology. [7] The more famous case of Larry Wu-tai Chin also reflects this targeting of ethnic Chinese with interesting access, recruiting them and meeting them infrequently in safe areas outside the USA. [8] A third method was "bag jobs" on foreign visitors, copying their papers, computer files, and other items of possible intelligence value. To illustrate how profitable this can be, in 1993, visiting Deputy Assistant Secretary of Defense Mitchell Wallerstein left his briefcase filled with top secret reports unattended in his Beijing hotel room where it is believed they were copied.[9]
Other Factors: CI officers all over town were disheartened by the fact that it was career-dangerous to warn of ethnic recruiting. A CI officer had his career destroyed at Hughes when he circulated a memo noting that Taiwan intelligence elicits from scientists of Taiwan ancestry.[10] And most of us recall the poor DoD security officer who wrote a memo on Israeli espionage use of ethnic targeting, which brought on the wrath of the Anti-Defamation League of B'nai Brith who demanded that the author be punished.[11] The punishment of CBS anchorwoman Connie Chung was severe. On May 19,1994, she accurately reported on national television that among the tens of thousands of Chinese students, visitors, and immigrants arriving in the US every year were a handful of intelligence recruits who someday could be activated to steal America's military and technology secrets, whether they want to or not.[12] CBS, after receiving extensive protests from Asian-American groups such as the Committee of 100, the Organization of Chinese Americans, and the Asian Pacific American Bar Association, as well as the Chinese Government, issued a "clarification" in effect undercutting the report. Chung shortly thereafter lost her job.
The Good News: Despite all these handicaps, we quickly identified likely suspects which led to one conviction so far. The former DOE Intelligence chief, Notra Trulock, acted promptly and courageously when he became apprized of the problem. However, DOE management did not want to hear this news and especially didn't want Congress to hear of this, as evidenced by his recent testimony.[13] Also, the belated but still welcome reforms enacted in 1998 have gone a long way towards addressing the problems described.[14]
The Bad News: My former colleague (and boss) Paul Redmond (who assigned me to DOE ) described the matter as a bigger disaster than Fuchs. While the guilt of the latest suspect has yet to be legally established, in my opinion the collective loss to PRC intelligence from their elicitation efforts and recruitment of Americans of Chinese ethnicity probably exceeds the dimension of national security damage from Klaus Fuchs, Ted Hall, and David Greenglass.
Postscript: This piece did not cover the sins of omission and commission by the FBI and Department of Justice. These and a host of relevant matters have surfaced in the daily press in bits and pieces over the last several months in the press, in the Cox Report, and in the PFIAB (Rudman) Report.[15] This essay was written prior to the release of both the PFIAB and Cox Committee reports, which, I contend, validate and largely parallel my criticisms above. I recommend both be read, although both are quite lengthy. The Cox Report is especially valuable in its description of Chinese collection programs contained in the section titled "PRC Acquisition of US Technology."[16] That section not only explains such esoteric but important policies as the PRC's "863" and "Super 863" Programs, but also contains a very valuable description of the PRC intelligence services and coordinating and tasking super bodies, such as COSTIND. The Cox report is long on description and weak on prescription. The PFIAB report is more valuable in terms of proposing changes, although depressingly accurate in describing DOE and Lab ongoing resistance to the belated reforms of the Clinton Administration. Former Los Alamos Lab Director Sig Hecker got a slap on the wrist in the form of a letter of reprimand. His contract with Los Alamos as an annuitant was not affected. I have taken bets that most Los Alamos scientists will never face a CI polygraph or be disciplined seriously for security lapses. (See a 23 September Washington Post article is headlined "Lie Test Angers Lab Scientists," followed by a 26 September Washington Post piece entitled "Senators Challenge Energy Polygraph Plan," for evidence for my pessimism.) For these and other reasons I personally believe that real reform requires dissolution of DOE and the placing of the weapons labs under the Defense Department. As for the case of Wen Ho Lee, in my opinion the FBI investigation was delayed too long before the FBI got serious, and the Justice Department turndown of an FBI request to surrepitiously search Lee's residence was incomprehensible to the point of malfeasance (as was the Bureau's failure to pursue the matter further).
ENDNOTES: 1. Quoted in "U.S. Warmed Up To China During Cold War Years", by Jim Mann, Los Angeles Times, 13 June 1994; 2. Quoted in "The Missile Business," A.M. Rosenthal, The New York Times, 10 April 1998; 3. Sig Hecker,"China II and Updates," Los Alamos Newsbulletin, 10/24/94; 4. Nick Eftimiades, Chinese Intelligence Operations, Naval Institute Press,1994, pp.16,28-29; 5. Bernice Steinhardt, "DOE Security: Information on Foreign Visitors to the Weapons Laboratories," T-RCED-96-260, September 26,1996, General Accounting Office; 6. The best book on Chinese intelligence is that of Nick Eftimiades (see footnote 4). See also Roger Faligot and Remi Kauffer, The Chinese Secret Service, Morrow and Co., New York, 1987. Intelligence methodology is best adduced from the handful of cases which have been made public. In addition to Larry Chin and Peter Lee cases, see, for example, the case of Yen Men Kao (Bill Gertz, Washington Times, December 22,1993). See also Jeff Gerth and James Risen,"1998 Report Told of Lab Breaches and China Threat,"New York Times, May 2,1999, for what purports to be a (leaked) summary of a 1998 CI report on Chinese espionage against the labs. It makes fascinating reading; 7. See Tom Lowry, "Secrets At Stake: Fears of Chinese Spying Mount," USA Today, January 29,1998. See also Jeff Gerth and James Risen," Report Shows Scientist Gave US Radar Secrets to China,New York Times, May 10,1999; 8. See Norman Polmar and Thomas B. Allen, Spy Book, Random House, 1997, p.110, for a summary of the Larry Chin case; 9. Bill Gertz, "Pentagon Fears China Stole Secrets from Official's Beijing hotel Room," Washington Times, 10 December 1993; 10. Los Angeles Times, 27 July 1993. 11. "Jewish Group Protests...", Kevin Galvin, Associated Press, 29 January 96; 12. New York Times, October 23, 1994, p.36; 13. "DOE Officials Faulted in Probe," Walter Pincus, The Washington Post, 13 April 99; 14. See, for example, James Risen,"Energy Secretary Announces Program To Strengthen Lab Security,"New York Times, May 12,1999. 15. The report of the President's Foreign Intelligence Advisory Board (PFIAB), chaired by Warren Rudman, may be retrieved from the Federation of American Scientists web site; 16. The Cox Report may be found at the House web site, or at the CNN web site at
http://www.freerepublic.com/focus/chat/717449/posts
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.