Intelligence Report Points to Second China Nuclear Leak

April 8, 1999 - JEFF GERTH and JAMES RISEN - The New York Times

WASHINGTON -- In early 1996, the United States received a startling report from one of its Chinese spies. Officials inside China's intelligence service, the spy said, were boasting that they had just stolen secrets from the United States and had used them to improve Beijing's neutron bomb, according to American officials.

The spy had provided reliable information in the past, and officials said investigators took the report seriously.

China first built and tested a neutron warhead in the 1980s, using what American officials have said publicly was secret data stolen from Lawrence Livermore National Laboratory in California, one of America's key nuclear weapons laboratories.

But the design did not work properly. American officials say that China's 1988 test of the neutron bomb, which kills people with enhanced radiation while leaving buildings intact, was not successful.

Now, the spy was suggesting, Chinese agents had solved the problem by coming back to the United States in 1995 to steal more secrets. The spy even provided details of how the information was transferred from the United States to China, officials said.

The report prompted a federal criminal investigation, but American officials say they have found no evidence that China has produced an improved neutron bomb.

Sandy Berger, who is now the National Security Adviser, was first told of a possible new theft of neutron bomb data in 1996, according to officials who took part in the meeting or read the highly classified materials used to prepare for it.

The briefing, these officials said, came weeks after the FBI gave the Energy Department a report about the spy's information.

David Leavy, a spokesman for the National Security Council, said that Berger and another NSC official who attended the 1996 briefing do not believe the neutron bomb issue was mentioned. Leavy said that Berger did not learn of the suspicions until a more detailed briefing in July 1997.

The spy's report arrived as American intelligence agencies were examining a separate suspected Chinese espionage coup: the theft of designs of America's most modern nuclear warhead, the W-88.

The disclosure of the report about the neutron bomb is significant for several reasons.

Until now, Clinton administration officials have portrayed reports of China's nuclear spying as an old story.

In a series of public statements, administration officials have emphasized that the loss of the W-88 design occurred in the 1980s, which was while Republicans held the White House. They have suggested that there is no evidence Chinese nuclear spying continued into the Clinton administration.

They have also said that President Clinton acted quickly in response to concerns about security breaches at the nuclear weapons laboratories by issuing a Presidential order in February 1998.

Accounts by government officials about the neutron bomb case call both assertions into question.

According to the officials, the April 1996 briefing of Berger included evidence of the theft of the W-88 design, the need to increase security at the weapons laboratories and the report about the loss of neutron bomb data.

The White House said Berger did not tell the President or take any further action until more than a year later, in July 1997, when he received a more detailed briefing about the W-88 theft, the neutron bomb and the ongoing Chinese espionage.

Soon after, Leavy said, Berger told the President about the security weaknesses at the laboratories and China's spying. Asked whether he mentioned the neutron bomb case, Leavy would reply only that "he did not detail each and every allegation."

A bipartisan Congressional report on China's acquisition of United States technology includes a detailed, but still secret, account of Beijing's efforts to obtain neutron bomb secrets, including reports of efforts during the Clinton Presidency. But government officials say that the Clinton administration is resisting requests from Congress to make the more recent material public.

Leavy said the administration is cooperating with Congress to declassify as much material as possible consistent with law enforcement and intelligence requirements.

Several agencies, including the FBI, the Central Intelligence Agency and the Energy Department are continuing to examine the case.

The FBI has not identified a suspect in the case.

The April 1996 briefing came at a critical moment in U.S.-China relations. The Clinton administration's continuing effort to expand commercial and diplomatic ties with China had been upset by Beijing's test in March of missiles off the coast of Taiwan.

Berger has said the April 1996 briefing was not sufficiently detailed to prompt action.

Appearing on NBC's "Meet the Press" last month, he said the information he was told three years ago was "very general and very preliminary." In addition, he said, "we did not have a suspect" in the theft of the W-88 technology.

But other officials offered a different account of Berger's briefing. The White House said it believes the briefing occurred on April 13, 1996, but was not sure of the exact date and has no records of what was said that day.

The officials said the briefing was more detailed than Berger has described and was the culmination of a five-month inter-agency study of the W-88 theft and related issues. "It was a pretty specific briefing," one American official who was present said.

Charles Curtis, the deputy secretary of Energy, led the Energy Department's delegation at the White House briefing. The main briefer was Notra Trulock, then the Energy Department's chief of intelligence.

Trulock's briefing, officials said, specifically covered the theft of the W-88 technology and concluded that China had likely obtained data about the miniaturized warhead, officials said.

The officials said Berger was also told that investigators had identified a prime suspect in the theft and would shortly turn their information over to the FBI for a formal criminal inquiry.

Berger and Curtis agreed that the Congressional intelligence committees would be briefed on the W-88 matter following the referal to the FBI (Congress was informed that summer.)

According to the officials, the 1996 White House briefing also discussed how the stolen technology could fit into Beijing's nuclear strategy. Trulock suggested that China could use the W-88 technology as part of a plan to rely on the mobility of truck-launched missiles with small warheads to better survive nuclear attacks, officials said.

At the end of the April briefing, officials said, Trulock said there was new information that China may recently have stolen neutron bomb data. He was referring to the spy's report, which had been received by the Energy Department from the FBI on March 27, 1996, the officials said.

The neutron bomb intelligence was "hot off the press," and it was included to warn the White House of the possibility of continuing Chinese espionage, one official said.

Curtis told Trulock at the meeting to follow up the neutron bomb information with a broader inquiry into Chinese espionage efforts at the weapons labs, one official said.

The Energy Department completed an analysis of the neutron bomb case in July 1996, and it unearthed some intriguing connections. The study, officials said, raised the possibility that the chief suspect in the W-88, a computer scientist in Los Alamos, had also been involved in the transfer to China of neutron bomb secrets.

The suspect, Wen Ho Lee, was dismissed from his job last month after the Energy Department said he violated security regulations. No criminal charges have been filed against him. Officials said the FBI has investigated the Energy Department's theory but has not been able to establish that Lee has any connection to the neutron bomb case.

As they investigated further, Energy Department officials discovered that Lee had attended a classified meeting in 1992 in which solutions to the neutron bomb's design flaw were discussed, officials said.

The FBI, officials said, had also found that Lee had made at least one telephone call to the scientist at Lawrence Livermore who was suspected of having provided the Chinese with the original neutron bomb data in the late 1970s and early 1980s.

According to the FBI's informant, Chinese officials were boasting in 1995 about obtaining new data from the United States but did not specifically mention the government's weapons laboratories. American officials say the FBI has not found any evidence linking the weapons laboratories to the suspected theft of neutron bomb secrets.

Government officials said it is difficult to evaluate China's progress on developing a neutron bomb because they have not detected any testing of such a weapon since 1996, when Beijing agreed to a moratorium on tests.

The informant's report, however, was one of several pieces of intelligence pointing to the vulnerability of the laboratories to espionage.

In November 1996, shortly before he left the government, Curtis ordered a series of measures to tighten security. But the White House was apparently not notified of Curtis's directives, most of which were ignored or delayed by Energy Department officials.

In July 1997 Trulock returned to the White House to present his wider findings to Berger, who had become Clinton's National Security Adviser.

Berger, in turn, now says that that briefing prompted him to inform Clinton about China's nuclear espionage and concerns about lab security. But late last year, in a sworn reply to the select House committee chaired by Christopher Cox, a Republican from California, Berger said the President was not told about the espionage until 1998.

Asked to explain the discrepancy, Leavy said "after the Cox Committee process we've remembered more."

Clinton says he is unaware of any Chinese espionage taking place during his administration.

"To the best of my knowledge, no one has said anything to me about any espionage which occurred by the Chinese against the labs, during my Presidency," he said at a news conference last month.

Leavy declined to say whether Clinton has been briefed on the intelligence about the possible theft of neutron bomb data during his Presidency.

Two months ago, Cox and the ranking Democrat on the committee, Norm Dicks of Washington, wrote President Clinton requesting a meeting to discuss their report. Leavy said the White House was working on scheduling a meeting. The committee has completed its work but is still consulting with the administration over how much of its final report can be made public.


China conducts unsuccessful test of neutron bomb.

March 8 --
China rattles the United States by starting a week of war games and tests missiles off the coast of Taiwan.
March 27 -- Energy Department receives report from Chinese spy that China has stolen information about the neutron bomb from American nuclear weapons laboratories.
April -- Energy Department officials tell Sandy Berger, then deputy director of the National Security Council, of reports that China stole warhead designs and information about the neutron bomb.
June -- FBI tells White House aides of evidence that China planned to covertly funnel money into 1996 election campaigns.
July -- China conducts final atomic test and says it will explode no more nuclear weapons in tests.
November --

Deputy Secretary of Energy Charles Curtis orders a series of security improvements at the labs, most of which are ignored or delayed.

July --
Energy Department officials provide more detailed briefing for Berger about allegations of Chinese atomic espionage; he briefs President Clinton.

February --
President Clinton issues order to tighten security at nuclear weapons labs.

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