What went wrong at the Energy Department that allowed the nation's nuclear laboratories to become susceptible to spying? A lot, said one critic. "Communications breakdown." "Lack of accountability." And: "The lack of a proper security structure within DOE. Just period. Whoever figured it out must've been smoking dope or drunk."
Such talk is nothing new for Energy, the sprawling $17 billion-a-year agency whose network of national laboratories designed, built, and still maintains the nation's nuclear weapons arsenal. Since its creation in 1977, the department has been criticized as an abidingly and irresponsibly irrational organization.
But all the quotations above came from a surprising source, the Energy Secretary himself, Bill Richardson.
In interviews with National Journal, Richardson and several senior aides attacked the institutional structure of the department, which they blame for allowing foreign espionage to fester: "The organization was just malformed," said Victor H. Reis, assistant secretary for Defense Programs. "Things fell through the cracks because there were so many cracks."
Today, Energy's leaders say they have reformed the malformed and filled in the cracks. Since February 1998, the department has dramatically upgraded the counterintelligence apparatus that protects its secrets, begun to centralize the scattered security units that protect its facilities, and instituted a new chain of command that cuts through a tangle of overlapping authorities.
The message: We didn't make the mess, we inherited it-and now we're fixing it. "I was told when I came here, don't touch the management problems, they're insurmountable," said Richardson. "I'm dealing with them, and I'm disciplining people. Nobody ever did this."
Perhaps. "This isn't anything new!" protested James D. Watkins, the Navy nuclear admiral who headed the Energy Department from 1989-92. "He's doing the same thing I did." But, Watkins said, his own reforms first ran into resistance from the entrenched "fiefdoms" of the diverse department and then were "undone by [Hazel R.] O'Leary"-President Clinton's first Energy Secretary: "The overall management scheme evaporated the minute I left."
O'Leary told National Journal, "I have no quarrel with what Secretary Richardson has done, [but] it is not an organization chart that gets the job done."
O'Leary is right. The test for Richardson's reforms cannot be how good they look on paper. He'll have to figure out how to discipline a department whose core asset is the intellectual independence of its laboratories. Richardson must strike a fine balance between protecting science and smothering it. Much rides on Richardson's performance, including Richardson's own future. The Secretary is often mentioned as a potential vice presidential running mate for Al Gore in campaign 2000; if he is at all badly tarred in the Chinese espionage issue, he can forget about that dream.
Counterintelligence
At the center of the tension between science and security stands Energy's new chief of counterintelligence, veteran FBI spy-catcher Edward J. Curran-who reports directly to Richardson and has direct access to FBI Director Louis J. Freeh and CIA chief George J. Tenet. Said Curran, "I was sent here because the intelligence community was very concerned." A former intelligence agency official put it more bluntly: "Security has always been atrocious. . . . The labs had a terrible reputation."
To begin turning around the security lapses at the labs, President Clinton, in February 1998, issued Presidential Decision Directive 61 (PDD-61), which ordered Energy to reorganize its counterintelligence apparatus and commissioned Curran to do a comprehensive study. Curran's study added more details to an already-disturbing picture that had emerged over the past dozen years, much of it from General Accounting Office reports. Since 1988, the GAO has repeatedly reported serious security flaws in the department's foreign visitors program, under which foreign scientists visited the labs. The visitors are supposed to engage only in strictly peaceful research, carefully quarantined from classified weapons work-a distinction easier to draw in theory than in practice.
In 1997, the GAO warned that two of the three main weapons labs, Los Alamos and Sandia, both in New Mexico, had obtained waivers (recently revoked) exempting them even from the basic requirement to run "indices checks" on visitors: not full background investigations, but simple cross-references with intelligence agency databases for any suspicious information. Only 5 percent of visitors from "sensitive" countries were checked at all. As a result, said Curran, in many cases "the lab director didn't have a clue who was at his site."
Nor was the problem only at home: When lab scientists went abroad-when suspected spy Wen Ho Lee went to China in the 1980s, for example-they were often poorly briefed on the potential for security losses in their destination countries. "We would send scientists from the labs over to have private meetings with the Chinese nuclear weapons scientists," said the former intelligence agency official, "[and] there wasn't any significant intelligence briefing that went on that said, look out."
A former weapons scientist recalled colleagues laughing out loud at the required pre-trip training film, which featured a ludicrously sultry Soviet seductress-and which was still shown as late as 1995. Nor was follow-up after the trips any better: Despite a requirement to list potentially compromising contacts, said the scientist, "it would be amazing if 10 per cent of the people who did foreign travel did their trip reports." Added Curran, "We had people who'd been over to Moscow many, many times [who told me], `I've never been debriefed by anybody.' "
The department responded to years of critical GAO reports with promises, but little action. In 1997, Energy's then- deputy secretary, Charles Curtis, made a serious attempt to tighten up security. But Curtis' six-point directive was never fully implemented during his time in office, and it was apparently lost entirely when he departed later in 1997. Elizabeth Moler, Acting Energy Secretary in 1998, has testified under oath that she was never briefed on or even told of Curtis' plan.
Likewise, the bureau got nowhere: "I'm the fourth FBI agent over here," said Curran. "But the structure in which they sent them over . . . was null and void. They were not able to do their job."
Before last year's presidential directive, the Energy Department's counterintelligence unit was just part of its overall Intelligence Office, which in turn belonged to the Office of Nonproliferation and National Security-putting counterintelligence three levels down from the Secretary. Likewise, at most labs, counterintelligence reported to the site security office, which in turn reported to the facilities manager-putting counterintelligence three levels down from the lab director and in the same category as night watchmen and janitors.
"The [counterintelligence] program was buried in the security structure," said Curran, echoing the Cox Report. "Security people look at many issues as `guards, gates, and guns.' Counterintelligence is not that at all. . . . They wanted to do a good job, but they didn't have the training, the background."
What Curran wants now is professional investigators reporting directly to the highest levels of authority. To that end, and to the discomfort of some scientists, he has hired fellow FBI veterans to take over new counterintelligence offices at five of the most sensitive labs.
"I don't want to demean the staff that was here," said Ken Schiffer, the FBI agent now heading counterintelligence at Los Alamos, Wen Ho Lee's old lab. "I certainly inherited a good professional staff. [But] what I am trying to do is attract individuals like myself, who have . . . a little more experience in interviews, a little more exposure to cases."
Schiffer, like his fellow lab counterintelligence directors, now reports to the director of the lab-with a second line straight to Curran, an arrangement one Energy source jokingly likened to the role of a Soviet commissar. When asked about the similarity, Curran laughed: "No. [It's simply that] I have to be informed and the lab director has to be informed." Only then can Curran be sure that this latest round of reforms will have the necessary effect. And according to the Cox Report, "the new counterintelligence program at the Department of Energy will not be even minimally effective until at least the year 2000." On that point, Curran disagrees.
Bureaucratic Boxes
The burial of counterintelligence in layers of bureaucracy is just one part of Energy's disorganization. Until recent reforms, many sections of the department did not report to the bureaus that disbursed their funds. The lines of accountability were blurred or didn't exist at all. Consider the plight of Vic Reis, who as head of Energy's Defense Programs-"DP"-largely pays for the three main weapons labs and their related field operations: "The labs didn't report to DP. The field didn't report to DP. Nothing reported to DP, except for the immediate staff . . . even though I was the assistant secretary and I was responsible," Reis recalled.
On April 21, that changed: Richardson announced that three lead bureaus at the department's Washington headquarters would actually start to oversee the activities they were funding. This simple decision reversed years of creeping confusion in Energy's organizational chart.
The confusion stemmed from the hybrid and evolutionary nature of the Energy Department. Starting with the creation of the first federal lab, Los Alamos in 1943, the government made the deliberate decision not to get into the science business directly, but rather to hire private contractors with long experience in administering research programs. The government gave contractors one clear goal-build better bombs-then gave them lots of money and got out of their way.
Over the years, the labs reported to a series of progressively larger and bureaucratically more distant supervising bodies: first the tightly focused Atomic Energy Commission; then, beginning in 1974, the more diffuse Energy Research and Development Administration; and finally, in response to the oil crisis, the sprawling Department of Energy, charged with everything from regulating nuclear power to researching electric cars and better thermal insulation.
Lab personnel worked for the private contractor, who reported to a nationwide network of Energy "field offices" staffed by federal employees, who in turn reported to an Office of Field Management in Washington.
The contractors, however, got their money not from Field Management, but from other offices in Washington-and because most labs ran several different types of programs, they got money from several different sources.
The labs and field offices received not only money from several different sources, but also directives. Conflicting and uncoordinated orders came from all directions at once.
But now, said Energy Undersecretary Ernest J. Moniz, "we have reconfigured to get responsibility and authority and accountability lined up." Under the new system, Energy divisions will get their money, their marching orders, and their oversight all from the same place. Each field office will now belong to one, and only one, of three headquarters offices: Defense Programs (Reis' outfit), Environmental Management, or Science. These three "program offices," which have always funded most field activity, will now issue the policy directives and receive the progress reports as well. While Energy officials acknowledge that the new structure resembles Watkins' lost model, they insist that better lateral communication will make the new version work.
However Richardson streamlines Energy's formal structure, his more profound problem is the informal one. Cobbled together from disparate agencies, and assaulted by abolitionists since President Reagan's election in 1980, the department long ago lost control of its many parts, and became increasingly unable to stop them from going directly to allies on Capitol Hill.
This syndrome was most pronounced, said one high-level Energy official, in "a culture of dissent and maverickness within the department among the security people." Officials who leaked reports of security lapses looked like heroes to the press and Congress, but headquarters saw them as undermining the department in order to win bigger budgets for their own independent and uncoordinated operations. "What you had," said Richardson, "was a security structure with no accountability [that was] constantly carping at the programs and at the political appointees. This is what I'm going to change."
Richardson plans to hire a senior military general as a "security czar" who would take charge of the "guards, gates, and guns," including the department's counterterrorist teams, at all of Energy's facilities.
Both the "security czar" and the new counterintelligence system fit into Richardson's pattern of asserting central control over the disparate elements of the department, especially the often- independent-minded labs. "Clearly we have to make the labs more accountable, and that's happening," said Richardson. "The fight is over, and I have won. They work for me."
Perhaps. "I don't think there's any chance that headquarters can control the labs," scoffed a former Energy official. "And do we really want to? . . . You cannot govern DOE through some kind of central, top-down control structure."
Scientific Independence
This is the central dilemma of the Energy Department: While spy-catching and security are activities amenable to centralized control, cutting-edge science is not.
"I don't want to hurt the labs-their productivity, their interactions with other nations, with other scientists," said Richardson. "We can't overreact." Added Undersecretary Moniz: "I don't believe it's true that there is a balance between security and science in the sense of a seesaw-one goes up, one goes down."
Yet an overreaction-increasing security at the expense of science-is precisely what many current and former lab scientists see in Richardson's plan. "It's a tragedy that they haven't found the balance," said the former weapons scientist.
Exhibit No. 1 is the computer standown that occurred this April, when the classified computer system at each of the three weapons labs was shut down for 12 days for security upgrades and training. "In terms of man-days, this was probably the largest" stoppage of work in department history, acknowledged Reis. "[But] we found things that really required some fixing."
Some scientists are skeptical-not only of such one-shot disruptions, but also of the new permanent security measures, such as increased lie detector testing and Curran's ubiquitous FBI agents. "A lot of the lab people were resisting the polygraph and additional intelligence folks in their labs," Richardson acknowledged. "But I said we've got to do this. We're doing it." Curran made the point stronger: "I would ask the scientists, `What have I done to you, right now, that prevents you from doing what you should be doing?' " Curran asked. "There's got to be discipline."
Just how disciplined lab scientists are with sensitive information is bitterly debated: "The folks that I had a chance to work with . . . were obviously very bright and capable people in their particular fields," said Patrick Eddington, a former CIA analyst, "[but] they're used to exchanging data. [To a scientist,] the concept of counterintelligence is foreign." The former weapons scientist agreed, calling colleagues "naive." They "want to talk to people . . . want to share."
Schiffer, the ex-FBI agent, countered that "I was pleasantly surprised at the degree of security awareness of the Los Alamos scientists and employees. You think, `I'm going to deal with a bunch of scientists who only care about science'-[but] they were more security-conscious than I was."
The issue of security also is subtler than whether scientists can keep secrets or not. While the hard core of weapons science is classified, that core is supported by a broad base of unclassified information. "The laboratories aren't the font of all computer science and all chemistry and all physics," noted Reis. So-especially now that nuclear tests are banned-the labs must supplement their own research by keeping careful watch on their academic colleagues, who may quite unwittingly discover something that can be turned to a military use. While the most important pieces of the puzzle are stamped "secret," others are scattered through the open scientific literature.
So how to stop the security leaks? Just "put a tourniquet on it," said Richard C. Shelby, R-Ala., head of the Senate Select Intelligence Committee. If the free flow of information is so fraught with peril, then cut it off. But lab scientists and Energy officials quickly forget their differences when they're confronted with such draconian proposals. "You really have to interface with the outside," said Reis. Science requires the exchange of ideas: "You can't do it in a monastery."
"Shutting down the exchange with foreign scientists ... would be a tragic mistake," agreed Robert L. Park, a former Sandia scientist who is now Washington director of the American Physical Society. "We probably learn as much as we lose in those exchanges."
"Bullshit," countered the former weapons scientist, who argued that the exchange is utterly uneven. If Americans have so much to learn from foreigners, "why do they always want to come here?"
Herbert F. York, the first director of Lawrence Livermore Laboratory, countered that "the number of Americans who go to the Russian laboratories every year is numbered in the thousands." True, "[foreigners] don't have anything worth stealing," York said, "but what we're after is their vulnerabilities. . . . If they're not very good, it's very useful for us to know that."
And sometimes giving foreign science a leg up is precisely the point. A less erratic atomic arsenal in China has long been considered in the U.S. interest, and ever since the Cold War ended, the labs have welcomed many former Soviet scientists in a conscious effort to keep them employed with peaceful work rather than building bombs for terrorists. Foreign aid and superpower muscle cannot stop nuclear proliferation on their own: "In order to get that job done," said former Energy official Kenneth N. Luongo, "you have to work with the scientists."
America's power to influence world events has always come as much from its ideas as from its wealth and weapons. The crucial balance is between preserving the free flow of the ideas and keeping the secrets of the weapons. Secretary Richardson has a delicate balance to strike-and a distinctly unwieldy bureaucratic instrument with which to strike it.
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