Undercover officials get license to buy dirty bomb materials

GAO officials used name of bogus business to win approval to buy critical equipment.

Undercover agents from the Government Accountability Office obtained a license to purchase enough radioactive materials to manufacture a dirty bomb, according to a staff report released Thursday by the Senate Homeland Security and Governmental Affairs Subcommittee on Investigations in conjunction with a hearing. GAO's findings, published in separate testimony, exposed potentially serious vulnerabilities in the licensing process.

In October 2006, GAO agents working at the request of the Senate subcommittee applied to the Nuclear Regulatory Commission for a license to purchase mechanical equipment that contained sealed amounts of radioactive materials. The agents filed the application in the name of a bogus business.

Radioactive materials play a key role in food processing, medical treatment and mining equipment. The particular materials the agency sought -- Cesium 137 and Americium 241 -- are both common in moisture and density gauges.

Under current law, any company that wants to use devices with radioactive components must get a license either from NRC or from a regulatory body in an "agreement state" -- one that is compliant with NRC regulations and has the authority to grant radioactive material licenses.

NRC approved the bogus application within four weeks and mailed the license to the company. GAO reported that the agents who carried out the scheme "did not need to leave their office in Washington," except to post letters from another state, and they gathered necessary information about the application process from NRC's Web site.

GAO agents then illegally modified the license by authorizing the bogus company to purchase greater amounts of radioactive material than permitted by the original license.

When officials faxed the false license to two machinery suppliers, neither realized the license was forged, and both offered to sell the higher amount of radioactive material to the bogus business.

GAO officials said that with more time and money, they could have amassed enough radioactive material to threaten "permanent damage to a person who handled [it], or was otherwise in contact with [it], for some hours."

The International Atomic Energy Agency, the United Nations body that regulates global nuclear safety, categorized the equipment the GAO sought to purchase as Category 3. IAEA's categories for radioactive material run from 1-5, with 1 being the most likely to cause permanent injury and 5 being the least likely to do so.

According to IAEA guidelines, any explosive manufactured from the materials GAO sought would have been unlikely to permanently injure people in the immediate vicinity. But it could have caused temporary injuries or economic disruption, and would have needed to be cleaned up in accordance with international standards.

In early June, NRC temporarily suspended its licensing program in response to GAO's concerns. "Clearly, GAO's findings have brought into question the effectiveness of our [previous] guidance and are a cause for concern," said Edward McGaffigan Jr., NRC commissioner, in a statement. McGaffigan said NRC immediately changed its licensing procedure to require on-site inspections or in-office meetings with new materials license applicants.

The agency also plans to re-examine licenses already issued and implement new security measures in the licensing process, McGaffigan said.

GAO recommended stricter standards for examining NRC license applications, periodic reviews of application examiners and stronger measures to prevent counterfeit licenses.

Both GAO and NRC's inspector general previously had raised concerns about potential security gaps in NRC's licensing system.

If examiners had performed "even a minimal amount of screening," said GAO, "they would have developed serious doubts about our application."

The GAO agents withdrew their license application in Maryland, an agreement state, after an examiner insisted on a site visit prior to granting the license.