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Disarmament Diplomacy

Issue No. 35, March 1999

Security of US Nuclear Labs: Chinese Espionage Allegations

Remarks by Senior US Official

Remarks as prepared for delivery by Gary Samore, Special Assistant to the President on Non-Proliferation and Export Controls on the National Security Council (NSC), at a special briefing meeting hosted by Carnegie Endowment for International Peace, Washington, 17 March 1999

"I'd like to review the US government response to Chinese attempts to acquire sensitive information from US nuclear weapons labs. Of course, this is not a new threat. In 1988, for example, the GAO [General Accounting Office] issued a warning that scientists from China and other sensitive countries were visiting US nuclear labs without appropriate security controls, and DOE responded by requiring background checks for all visitors from sensitive countries. In 1990, it is publicly reported that a Lawrence Livermore scientist was investigated by the FBI for providing classified information to China years earlier that made it possible for China to develop its version of the neutron bomb in 1988. In 1997, a former Los Alamos scientist plead guilty to providing nuclear weapons-related diagnostic information to China in 1985.

Investigating the Case

The latest case also occurred in the 1980s. In 1995, we learned that China had obtained sensitive US information in the mid-1980's in connection with China's efforts to modernize its nuclear weapons capability. Contrary to what has been reported in some of the media, our information provided a lead, but not a smoking gun. Although we had a rough idea when the compromise occurred, we did not know how the Chinese obtained this information or where it came from. Nor was it clear how much the Chinese obtained from the US or its significance for China's efforts.

Nonetheless, there were clearly grounds for concern that a serious compromise had occurred in the mid-1980's, and government reacted appropriately. The immediate priority was to plug the leak and prevent further damage. For more than a year, DOE, assisted by FBI, conducted an internal review to identify possible sources of the information.

By mid-1996, DOE submitted the report of this internal review to the FBI, which quickly began an investigation that continues today. The appropriate committees of Congress were briefed on this investigation shortly after it began, and they were kept regularly informed about developments in the case. Throughout this investigation, DOE and FBI have carefully coordinated actions to balance investigative priorities with national security concerns. In particular DOE kept the subject employed so that he would not be alerted to the investigation, but DOE took precautions to restrict the subject's access to sensitive information to minimize the risk of further compromise. Once the investigation became public, the subject became alerted so there was no longer any investigative reason to keep him employed, and Secretary Richardson felt there was a strong basis for dismissal. The FBI continues its investigation.

Strengthening Security at the Labs

In addition to the steps that DOE and FBI took to identify and investigate the possible source of the compromise, the 1995 information also prompted DOE and CIA to begin looking at the broader question of Chinese efforts to acquire nuclear information from the US labs and the significance of this information for China's modernization program. This is a difficult and controversial subject, which requires the intelligence community to stitch together bits and pieces of evidence and make judgments without complete or perfect information. It is particularly difficult to disentangle the significance of information China might have acquired from us from what it could have obtained from other countries or developed on its own. In this connection, we should remember that all of the nuclear-weapon States use similar techniques to minimize size and weight without sacrificing yield. These issues are currently being examined by a full intelligence community damage assessment, which is scheduled for completion by the end of March. In addition, the results of this assessment will be reviewed by an independent panel of experts headed by Admiral David Jeremiah.

Despite the uncertainties of intelligence assessments, however, the analysis conducted by DOE and presented to senior Administration in July 1997 focused attention on the underlying problem of security vulnerabilities at the US labs. As I said earlier, lab security has been a perennial concern, and previous Energy Secretaries have taken various steps to correct perceived problems, but the 1977 DOE assessment rang alarm bells that more needed to be done on a systematic and comprehensive scale.

Once senior officials were briefed on DOE's conclusions in July 1997, the Administration took dramatic steps to improve overall lab security. In August, a special working group of the National Counterintelligence Policy Board was formed to review the situation and make recommendations for improvements. In September, the Board submitted their recommendations, and the NSC worked with the appropriate agencies to turn the recommendations into a Presidential Decision Directive. In December, the draft PDD was ready for approval by the Cabinet officers, including the Secretaries of Energy, Defense, and State as well as the Attorney General, the Director of the FBI, and the Director of Central Intelligence. Finally, in February, the President approved PDD-61 on the Department of Energy Counterintelligence program.

Once PDD-61 was issued, Secretary Pena took immediate action. He established a Counterintelligence Office in DOE headquarters and recruited a highly respected FBI counterintelligence expert to head the office and develop plans to implement new security procedures. Since Secretary Richardson took over Energy in September 1998, he has vigorously continued this process. DOE has hired counterintelligence professionals to be stationed at the US labs, tightened the screening and approval procedures for foreign scientists seeking access to DOE labs, and instituted more extensive security reviews, including use of polygraphs, for DOE scientists working in sensitive programs. During this process, the DOE counterintelligence budget has doubled twice from $7.6 million in FY98 to 15.6 million in FY99 to 31.2 million in FY2000.

In short, this Administration has done more to strengthen lab security in the past year than all previous Administrations have done over the past 20 years. We did not duck this issue; we tackled it head on. The process of tightening lab security and strengthening counterintelligence capabilities is not complete, however, and we need to keep focused on this critical objective.

Engaging China

I would like to conclude with a few thoughts on the broader issue of our strategy towards China, which has become entangled with the issue of whether the Administration acted properly to investigate leaks and strengthen lab security.

Our engagement strategy towards China is premised on the expectation that China - like other countries - will seek to acquire sensitive US information and technology through clandestine means. It's our responsibility to protect ourselves from this threat. Accordingly, we have a stricter export control policy and a higher denial rate for export license applications to China than any other major exporting country:

  • We export no arms to China.
  • We export no dual use commodities for military use or police in China.
  • We limit the export of dual use technology to China for civilian use to reduce the risks of diversion.
  • We require a license for the export to China of any items on the international controls lists.
When we have discovered problems like the diversion of machine tools in 1995 and a computer in 1997, we have fixed them. When US companies have engaged in unauthorized transfers or exchanges, we have investigated and punished those found guilty. We have also strengthened controls. When President Clinton visited Beijing in June 1996, for example, China agreed to a new arrangement that allows US officials to verify the location and use of dual-use exports to China. We are also considering additional measures suggested by a House select committee led by Representatives Christopher Cox and Norm Dicks to study the issue of technology transfers to China.

At the same time that we maintain strict controls over technology transfer to China, we have a strong security interest in engaging with China. Through our efforts, China has cut off assistance to Pakistan's unsafeguarded nuclear program, terminated nuclear cooperation with Iran, stopped the export of anti-ship cruise missiles to Iran, and strengthened controls over chemical weapons-related exports. China is also cooperating with the US on key international arms control efforts such as the CTBT and CWC, and on regional proliferation concerns in South Asia and the Korean Peninsula. In that connection, I might point out that the CTBT imposes serious technical restrictions on nuclear weapons modernization.

In short, our engagement strategy works both ways. Through vigorous investigations, strong security, and strict export controls, we can protect sensitive technology and information. Through cooperation with Beijing, we can advance our critical national security objectives."

Source: Text - White House's Samore on China nuclear issue, United States Information Service, 18 March.

DOE Press Release

'Richardson Announces Seven New Initiatives To Strengthen DOE's Counterintelligence Efforts,' DOE Press Release R-99-048, 17 March 1999

"Energy Secretary Bill Richardson today announced seven new initiatives to strengthen the Department's ability to prevent the loss of sensitive information. The new counterintelligence initiatives were formally unveiled by the Secretary before the Senate Select Intelligence Committee.

'These seven new initiatives, coupled with recommendations we have already implemented, will go a long way to ensure our nation's national security by giving us the tools and resources we need to prevent the loss of sensitive information,' said Secretary Richardson. 'Today's announcement will enable the Department of Energy to have one of the strongest counterintelligence programs in government.'

The Secretary's seven new initiatives are:

  • Cyber Security - The Department is seeking an additional $8 million in next year's counterintelligence budget to institute a new cyber-information security program. This will raise the FY2000 counterintelligence budget request to $39.2 million and will enable the Department to better protect its cyber systems from outside attack and penetration and will allow the Department to analyze and screen for sensitive electronic mail that originates from its facilities.
  • Document Control - The Secretary is imposing stricter document controls at the laboratories for all Secret and Top Secret documents that contain weapon design data. These more stringent measures will enable DOE to better control and track access to sensitive information.
  • Foreign Visitors Security Review - To ensure that the Department's foreign visitors program meets the highest standards of security, the Secretary has asked the former Director of the Central Intelligence Agency, John Deutsch, to further review the security of DOE's foreign visitors and assignments program.
  • Monitoring DOE's Progress - The Secretary has asked his two top officials, the Deputy and the Undersecretary to monitor implementation of the Department's counterintelligence strengthening plan and to provide regular progress reports.
  • Reexamine Counterintelligence Files - The Department's Office of Counterintelligence will undertake an extensive review and analysis of all its investigative files. This reexamination of files, in light of recent events, will give the Office of Counterintelligence an opportunity to identify cases that may need further review and possible investigation.
  • Congressional Notification - The Department will submit to Congress an annual report on the status of DOE's counterintelligence and foreign visitors programs.
  • Internal Inquiry - The Secretary has launched an internal inquiry to look into allegations that a Department official tried to prevent the sharing of information with members of Congress.
These seven new initiatives are in addition to tougher measures instituted since February 1998 when President Clinton signed a Presidential Decision Directive (PDD-61) which directed broad systematic changes to the Energy Department's counterintelligence program. The Department has already:
  • Hired counterintelligence professionals to be based at weapons labs.
  • Doubled DOE's counterintelligence budget twice in the last two years (FY 1998 $7.6 million; FY 1999 $15.6 million; FY 2000 $31.2 million).
  • Changed the screening and the approval process for foreign scientists seeking access to DOE labs and have made the lab directors directly accountable for foreign visits.
  • Instituted more extensive security reviews - including authorizing the use of polygraphs - for DOE scientists working in sensitive programs.
  • Raised the profile and power of the Office of Counterintelligence. The director of Counterintelligence now reports directly to the Secretary of Energy - and the counterintelligence experts at the labs have direct access to the lab director and the headquarter's Office of Counterintelligence - ensuring direct and easy access to immediately raise any counterintelligence concerns."
Statement by the President

'Statement by the President,' The White House Office of the Press Secretary, 18 March 1999

"Today I have asked the President's Foreign Intelligence Advisory Board, chaired by Warren Rudman, to undertake a review of the security threat at the Department of Energy's weapons labs and the adequacy of the measures that have been taken to address it. The Board is a bipartisan, independent advisory body responsible, among other things, for assessing the quality and adequacy of our counterintelligence efforts.

I have asked the Board to address the nature of the present counterintelligence security threat, the way in which it has evolved over the last two decades and the steps we have taken to counter it, as well as to recommend any additional steps that may be needed. I have asked the Board to deliver its completed report to the Congress, and to the fullest extent possible consistent with our national security, to release an unclassified version to the public.

I am determined to do all that is necessary to protect our sensitive national security information and to prevent its diversion to foreign countries. Last year, I signed Presidential Decision Directive 61 to strengthen security and counterintelligence at the labs, and since 1995, we have increased the Department of Energy's counterintelligence budget fifteen-fold, from $2 to $31 million."

© 1999 The Acronym Institute.

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