In June of 1995, the CIA learned that China had stolen the crown jewels of our nuclear arsenal, including the neutron bomb and the W-88 miniaturized warhead. Later that year National Security Advisor Anthony Lake is briefed on the thefts. He is replaced on the Security Council by Sandy Berger, a former lobbyist for the Chinese government. In June of 1996, before Bill Clinton's re-election, the FBI opens a formal investigation into the theft of US nuclear weapon designs.
Proof of China's military intentions came in March of 1996, on the eve of Taiwan's first democratic elections. China used the threat of force to intimidate the island nation into electing a pro-Beijing candidate. Military maneuvers included bombing runs and launching ballistic missiles that impacted within twenty miles of Taiwan. When the US sent an aircraft carrier into the Taiwan Straits, a Chinese general threatened to "rain down nukes upon Los Angeles".
In 1997, news of the campaign finance scandal reached the press. Clinton claimed he was "appalled" to learn he had received illegal contributions from China. As the Justice Department began investigating, over one hundred suspects fled the country or refused to testify. Despite FBI recommendations and congressional protests, Janet Reno refused to appoint an independent counsel.
Then the press learned that China had stolen nuclear weapon designs from US research labs. The Clinton administration downplayed and even denied reports that any nuclear secrets were stolen, but this scandal was too big to ignore. Congress began a formal investigation by forming the Cox committee. The administration was forced to reveal the extent of China's nuclear espionage, but they insisted Clinton had no previous knowledge. Sandy Berger even swore under oath that the President was not told about nuclear thefts until 1998, three years after the fact.
The Cox Committee report was released early in 1999. It confirmed that China had stolen the neutron bomb design and the W-88 miniaturized warhead. The W-88 would allow China to field smaller, mobile missiles and carry multiple warheads on larger missiles. In addition, the Cox report proved that US companies illegally transferred "missile design information and know-how". Chief among the offenders were Loral And Hughes.
In the summer of 1999 the pro-independence leadership of Taiwan called for talks with China on a state-to-state basis. The enraged Chinese demanded Taiwan enter unification talks or face attack. A Communist Party approved newspaper published a plan to conquer Taiwan. It involved using neutron bombs against any Taiwanese resistance and a nuclear standoff with the US.
On October 1st 1999, the fiftieth anniversary of China's communist takeover, a new missile was paraded through the streets of Beijing. The DF-31 is a modern, mobile nuclear missile capable of hitting targets in the US. The rocket motor and guidance system were made possible by Loral and Hughes. The nuclear warhead is a copy of the W-88, stolen from the US.
As for Wen Ho Lee, he was a suspected Chinese spy for three years before being fired from his job at Los Alamos and arrested. Lee was charged with 59 counts of mishandling nuclear weapons data with intent to injure the United States. Rather than face a trail where nuclear secrets would be admitted as evidence, federal prosecutors accepted a plea bargain. Wen Ho Lee pleaded guilty to one count of mishandling nuclear weapons data and went home, after serving 278 days in jail.