China Stole Nuclear Secrets From Los Alamos, U.S. Officials Say

March 6, 1999 - James Risen & Jeff Gerth - The New York Times

WASHINGTON -- Working with nuclear secrets stolen from a U.S. government laboratory, China has made a leap in the development of nuclear weapons: the miniaturization of its bombs, according to administration officials.

Until recently, China's nuclear weapons designs were a generation behind those of the United States, largely because Beijing was unable to produce small warheads that could be launched from a single missile at multiple targets and form the backbone of a modern nuclear force.

But by the mid-1990s, China had built and tested such small bombs, a breakthrough that officials say was accelerated by the theft of U.S. nuclear secrets from Los Alamos National Laboratory in New Mexico.

The espionage is believed to have occurred in the mid-1980s, officials said. But it was not detected until 1995, when American experts analyzing Chinese nuclear test results found similarities to America's most advanced miniature warhead, the W-88.

By the next year, government investigators had identified a suspect, an American scientist at Los Alamos laboratory, where the atomic bomb was first developed. The investigators also concluded that Beijing was continuing to steal secrets from the government's major nuclear weapons laboratories, which had been increasingly opened to foreign visitors since the end of the Cold War.

The White House was told of the full extent of China's spying in the summer of 1997, on the eve of the first U.S.-Chinese summit meeting in eight years -- a meeting intended to dramatize the success of President Clinton's efforts to improve relations with Beijing.

White House officials say they took the allegations seriously; as proof of this they cite Clinton's ordering the labs within six months to improve security.

But some U.S. officials assert that the White House sought to minimize the espionage issue for policy reasons.

"This conflicted with their China policy," said a U.S. official, who like many others in this article spoke on condition of anonymity. "It undercut the administration's efforts to have a strategic partnership with the Chinese."

The White House denies the assertions. "The idea that we tried to cover up or downplay these allegations to limit the damage to United States-Chinese relations is absolutely wrong," said Gary Samore, the senior National Security Council official who handled the issue.

Yet a reconstruction by The New York Times reveals that throughout the government, the response to the nuclear theft was marked by delays, inaction and skepticism -- even though senior intelligence officials regarded it as one of the most damaging spy cases in recent history.

Initially, the FBI did not aggressively pursue the criminal investigation of lab theft, U.S. officials said. Now, nearly three years later, no arrests have been made.

Only in the last several weeks, after prodding from Congress and the secretary of energy, have government officials administered lie detector tests to the main suspect, a Los Alamos computer scientist who is Chinese-American. The suspect failed a test in February, according to senior administration officials.

At the Energy Department, officials waited more than a year to act on the FBI's 1997 recommendations to improve security at the weapons laboratories and restrict the suspect's access to classified information, officials said.

The department's chief of intelligence, who raised the first alarm about the case, was ordered last year by senior officials not to tell Congress about his findings because critics might use them to attack the administration's China policies, officials said.

And at the White House, senior aides to Clinton fostered a skeptical view of the evidence of Chinese espionage and its significance.

White House officials, for example, said they determined on learning of it that the Chinese spying would have no bearing on the administration's dealings with China, which included the increased exports of satellites and other militarily useful items. They continued to advocate looser controls over sales of supercomputers and other equipment, even as intelligence analysts documented the scope of China's espionage.

Samore, the Security Council official, did not accept the Energy Department's conclusion that China's nuclear advances stemmed largely from the theft of U.S. secrets.

In 1997, as Clinton prepared to meet with President Jiang Zemin of China, he asked the CIA for a quick alternative analysis of the issue. The agency found that China had stolen secrets from Los Alamos but differed with the Energy Department over the significance of the spying.

In personal terms, the handling of this case is very much the story of the Energy Department intelligence official who first raised questions about the Los Alamos case, Notra Trulock.

Trulock became a secret star witness before a select congressional committee last fall. In a unanimous report that remains secret, the bipartisan panel embraced his conclusions about Chinese espionage, officials said. Taking issue with the White House's view, the panel saw clear implications in the espionage case for U.S.-China policy, and has now made dozens of policy-related recommendations, officials said.

A debate still rages within the government over whether Trulock was right about the significance of the Los Alamos nuclear theft. But even senior administration officials who do not think so credit Trulock with forcing them to confront the realities of Chinese atomic espionage.

China's technical advance allows it to make mobile missiles, ballistic missiles with multiple warheads and small warheads for submarines -- the main elements of a modern nuclear force.

While White House officials question whether China will actually deploy a more advanced nuclear force soon, they acknowledge that Beijing has made plans to do so.

In early 1996 Trulock traveled to CIA headquarters to tell officials there of the evidence his team had gathered on the apparent Chinese theft of U.S. nuclear designs.

As Trulock gathered his charts and drawings and wrapped up his top-secret briefing, the agency's chief spy hunter, Paul Redmond, sat stunned.

At the dawn of the Atomic Age, a Soviet spy ring that included Julius Rosenberg had stolen the first nuclear secrets out of Los Alamos. Now, at the end of the Cold War, the Chinese seemed to have succeeded in penetrating the same weapons lab.

"This is going to be just as bad as the Rosenbergs," Redmond recalled saying.

The evidence that so alarmed him had surfaced a year earlier. Senior nuclear weapons experts at Los Alamos, poring over data from the most recent Chinese underground nuclear tests, had detected eerie similarities between the latest Chinese and U.S. bomb designs.

From what they could tell, Beijing was testing a smaller and more lethal nuclear device configured remarkably like the W-88, the most modern, miniaturized warhead in the U.S. arsenal. In April 1995, they brought their findings to Trulock.

Officials declined to detail the evidence uncovered by the Los Alamos scientists, who have access to a wide range of classified intelligence data and seismic and other measurements.

But just as the scientists were piecing it together, they were handed an intelligence windfall from Beijing.

In June 1995, they were told, a Chinese official gave CIA analysts what appeared to be a 1988 Chinese government document describing the country's nuclear weapons program. The document, a senior official said, specifically mentioned the W-88 and described some of the warhead's key design features.

The Los Alamos laboratory, where the W-88 had been designed, quickly emerged as the most likely source of the leak.

One of three national weapons labs owned by the Department of Energy, Los Alamos, 35 miles outside Sante Fe, N.M., was established in 1943 during the Manhattan Project. Trulock and his team knew just how vulnerable Los Alamos was to modern espionage.

The three labs had long resisted FBI and congressional pressure to tighten their security policies. Energy officials acknowledge that there have long been security problems at the labs.

Los Alamos and Sandia National Laboratories, also in New Mexico, had in 1994 been granted waivers from an Energy Department policy that visiting foreign scientists be subjected to background checks.

Lab officials resented the intrusions caused by counterintelligence measures, arguing that restrictions on foreign visitors would clash with the labs' new mandate to help Russia and other nations safeguard their nuclear stockpiles.

The Clinton administration was also using increased access to the laboratories to support its policy of engagement with China, as had been done under previous, Republican administrations.

In December 1996, for example, China's defense minister, Gen. Chi Haotian, visited Sandia on a Pentagon-sponsored trip. Energy Department officials were not told in advance, and they later complained that Chi and his delegation had not received proper clearances, officials said.

Still, there is no evidence in this case that foreign visitors were involved in the theft of information.

In late 1995 and early 1996, Trulock and his team took their findings to the FBI. A team of FBI and Energy Department officials traveled to the three weapons labs and pored over travel and work records of lab scientists who had access to the relevant technology.

By February the team had narrowed its focus to five possible suspects, including a computer scientist working in the nuclear weapons area at Los Alamos, officials said.

This suspect "stuck out like a sore thumb," said one official. In 1985, for example, the suspect's wife was invited to address a Chinese conference on sophisticated computer topics even though she was only a secretary at Los Alamos. Her husband, the real expert, accompanied her, a U.S. official said.

By April 1996, the Energy Department decided to brief the White House. A group of senior officials including Trulock sat down with Sandy Berger, then Clinton's deputy national security adviser, to tell him that China appeared to have acquired the W-88 and that a spy for China might still be at Los Alamos.

"I was first made aware of this in 1996," Berger, now national security adviser, said in an interview.

By June the FBI formally opened a criminal investigation into the theft of the W-88 design. But the inquiry made little progress over the rest of the year. When Energy Department officials asked about the inquiry at the end of 1996, they came away convinced that the bureau had assigned few resources to the case.

A senior bureau official acknowledged that his agency was aware of the Energy Department's criticism but pointed out that it was difficult to investigate the case without alerting the suspects.

The bureau maintained tight control over the case. The CIA counterintelligence office, for one, was not kept informed of its status, according to Redmond, who has since retired.

Energy Department officials were also being stymied in their efforts to address security problems at the laboratories.

After Frederico Pena became energy secretary in early 1997, a previously approved counterintelligence program was quietly placed on the back burner for more than a year, officials said.

In April 1997, the FBI issued a classified report on the labs that recommended, among other things, reinstating background checks on visitors to Los Alamos and Sandia, officials said. The Energy Department and the labs ignored the FBI recommendation for 17 months. An Energy Department spokeswoman was unable to explain the delay.

Another official said, "We couldn't get an order requiring the labs to report to counterintelligence officials when the Chinese were present. All those requirements had been waived."

In early 1997, with the FBI's investigation making scant progress and the Energy Department's counterintelligence program in limbo, Trulock and other intelligence officials began to see new evidence that the Chinese had other, ongoing spy operations at the weapons labs.

But Trulock was unable to quickly inform senior U.S. officials about the new evidence. He asked to speak directly with Pena, the energy secretary, but had to wait four months for an appointment.

In an interview, Pena said he did not know why Trulock was kept waiting until July but recalled that he "brought some very important issues to my attention and that's what we need in the government."

Pena immediately sent Trulock back to the White House -- and to Berger.

"In July 1997 Sandy was briefed fully by the DOE on China's full access to nuclear weapons designs, a much broader pattern" said one White House official.

Officials said Berger was told that there was evidence of several other Chinese espionage operations that were still under way inside the weapons labs.

That news, several officials said, raised the importance of the issue. The suspected Chinese thefts were no longer just ancient history, problems that had happened on another administration's watch.

Berger quickly briefed Clinton on what he had learned and kept him updated over the next few months, a White House official said.

As Trulock spread the alarm, his warnings were reinforced by CIA Director George Tenet and FBI Director Louis Freeh, who met with Pena to discuss the lax security at the labs that summer.

"I was very shocked by it, and I went to work on shifting the balance in favor of security," Pena said. He and his aides began to meet with White House officials to prepare a presidential order on lab security.

The FBI assigned more agents to the W-88 investigation, gathering new and more troubling evidence about the prime suspect.

According to officials, the agents learned that the suspect had traveled to Hong Kong without reporting the trip as required by government regulations. In Hong Kong, officials said, the FBI found records showing that the scientist had obtained $700 from the American Express office. Investigators suspect he used it to buy an airline ticket to Shanghai, inside the People's Republic of China.

With Berger now paying close attention, the White House became deeply involved in evaluating the seriousness of the thefts and solving the counterintelligence problems at the laboratories.

Trulock's new findings came at a crucial moment in U.S.-China relations. Congress was examining the role of foreign money in the 1996 campaign, amid charges that Beijing had secretly funneled money into Democratic coffers.

The administration was also moving to strengthen its strategic and commercial links with China. Clinton had already eased the commercial sale of supercomputers and satellite technology to China, and now he wanted to cement a nuclear cooperation agreement at the upcoming summit, enabling American companies to sell China new commercial nuclear reactors.

In August 1997, Berger flew to Beijing to prepare for the October summit. He assigned Samore, a senior NSC aide in charge of proliferation issues, to assess the damage from the Los Alamos spy case.

After receiving a briefing from Trulock in August, Samore asked the CIA's directorate of intelligence to get a second opinion on how China had developed its smaller nuclear warheads. It was, an NSC aide said, "a quick study done at our request."

The analysts agreed that there had been a serious compromise of sensitive technology through espionage at the weapons labs, but were far less conclusive about the extent of the damage. The CIA argued that China's sudden advance in nuclear design could be traced in part to other causes, including the ingenuity of Beijing's scientists.

"The areas of agreement between DOE and CIA were that China definitely benefited from access to U.S. nuclear weapons information that was obtained from open sources, conversations with DOE scientists in the U.S. and China, and espionage," said a U.S. official.

"The disagreement is in the area of specific nuclear weapons designs. Trulock's briefing was based on a worst-case scenario, which CIA believes was not supported by available intelligence. CIA thinks the Chinese have benefited from a variety of sources, including from the Russians and their own indigenous efforts."

Samore assembled the competing teams of CIA and DOE analysts in mid-October for a meeting in his White House office that turned into a tense debate.

The CIA report noted that China and Russia were cooperating on nuclear issues, indicating that this was another possible explanation of Beijing's improved warheads.

Trulock said this was a misreading of the evidence, which included intercepted communications between Russian and Chinese experts. The Russians were offering advice on how to measure the success of nuclear tests, not design secrets. In fact, Trulock argued, the Russian measurement techniques were used to help the Chinese analyze the performance of a weapon that Los Alamos experts believed was based on a U.S. design.

"At the meeting, Notra Trulock said that he thought the CIA was underplaying the effect that successful Chinese espionage operations in the weapons labs had had on the Chinese nuclear weapons program," said one official.

Relying on the CIA report, Samore told Berger in late September that the picture was less conclusive than Trulock was arguing. Officials said he began to relay that view before hearing Trulock's rebuttal of the CIA study at the October meeting.

Samore told Berger "there isn't enough information to resolve the debate, there is no definitive answer, but in any event this clearly illustrates weaknesses in DOE's counterintelligence capability," said one official familiar with Samore's presentation.

CIA officials strenuously deny that the agency's analysts intended to downplay Trulock's findings.

The FBI inquiry was stalled. At a September 1997 meeting between FBI and Energy Department officials, Freeh concluded that the bureau did not have enough evidence to arrest the suspect, according to officials.

The crime was believed to have occurred more than a decade earlier. Investigators did not then have sufficient evidence to obtain a secret wiretap on the suspect, making it difficult to build a strong criminal case, according to U.S. officials. FBI officials say that Chinese spy activities are far more difficult to investigate than the more traditional espionage operations of the former Soviet Union.

But even if the bureau couldn't build a case, the Energy Department could still take some action against someone holding a U.S. security clearance. Freeh told DOE officials that there was no longer an investigative reason to allow the suspect to remain in his sensitive position, officials said. In espionage cases, the FBI often wants suspects left alone by their employers for fear of tipping them off prematurely.

But the suspect was allowed to keep his job and retain his security clearances for more than a year after the meeting with Freeh, according to U.S. officials.

In late 1997, the NSC did begin to draft a new counterintelligence plan for the weapons labs, and Clinton signed the order mandating the new measures in February 1998. In April, a former FBI counterintelligence agent, Ed Curran, was named to run a more vigorous counterintelligence office at Energy Department headquarters.

The administration explained aspects of the case to aides working for the House and Senate intelligence committees beginning in 1996. But few in Congress grasped the magnitude of what had happened.

In July 1998, the House Intelligence Committee requested an update on the case, officials said. Trulock forwarded the request in a memo to, and in conversations with, Elizabeth Moler, then acting energy secretary. Ms. Moler ordered him not to brief the House panel for fear that the information would be used to attack the president's China policy, according to an account he later gave congressional investigators. Ms. Moler, now a Washington lawyer, says she does not remember the request to allow Trulock to brief Congress and denies delaying the process.

In October, Ms. Moler, then deputy secretary, stopped Trulock from delivering written testimony on espionage activities in the labs to a closed session of the House National Security Committee.

Ms. Moler told Trulock to rewrite his testimony to limit it to the announced subject of the hearing, foreign visitors to the labs, an Energy Department spokeswoman said. The issue came up nonetheless when committee members asked follow-up questions, Energy Department officials said.

Key lawmakers began to learn about the extent of the Chinese theft of U.S. nuclear secrets late in 1998, when a select committee investigating the transfers of sensitive U.S. technology to China, chaired by Rep. Christopher Cox, R-Calif., heard from Trulock.

Administration officials say that Congress was adequately informed, but leading Democrats and Republicans disagree. Rep. Norman Dicks, D-Wash., the ranking minority member on the House Intelligence Committee and also a member of the Cox committee, said that he and Rep. Porter Goss, R-Fla., chairman of the House intelligence panel, were not adequately informed.

"Porter Goss and I were not properly briefed about the dimensions of the problem," he said, adding: "It was compartmentalized and disseminated over the years in dribs and drabs so that the full extent of the problem was not known until the Cox committee."

Last fall, midway through the Cox panel's inquiry, a new secretary of energy, Bill Richardson, arrived on the job.

After being briefed by Trulock, Richardson quickly reinstated background checks on all foreign visitors, a move recommended 17 months earlier by the FBI. He also doubled the counterintelligence budget and placed more former FBI counterintelligence experts at the labs.

But Richardson also became concerned about what the Cox panel was finding out.

So in October he cornered Berger at a high-level meeting and urged him to put someone in charge of coordinating the administration's dealings with the Cox committee.

Berger turned again to Samore, officials said.

By December, Dicks, in his role as the ranking Democratic member of the Cox panel, was growing impatient with the administration's slow response to ongoing requests from the committee and its inaction on the Los Alamos spy case. Dicks told Richardson, a former colleague in the House, that he needed to take action, Richardson recalled.

Dicks' complaints helped prompt Richardson to call Freeh twice in one day in December about the inquiry, an official said.

The suspect was given a polygraph, or lie-detector test, in December, by the Energy Department. Unsatisfied, the FBI administered a second test in February, and officials said the suspect was found to be deceptive. It is not known what questions prompted the purportedly deceptive answers.

As the FBI investigation intensified, the Cox Committee completed a 700-page secret report which found that China's theft of US secrets had harmed U.S. national security -- saving the Chinese untold time and money in nuclear weapons research.

After hearing from both the CIA and Energy Department analysts, the bi-partisan panel unanimously came down on the side of Trulock's assessment, officials said.

Now, the CIA and other agencies, at the request of the Cox Committee, are conducting a new, more thorough damage assessment of the case, even as the debate continues to rage throughout the intelligence community over whether Trulock has overstated the damage from Chinese espionage.

Meanwhile, Trulock has been moved from head of DOE's intelligence office to acting deputy. While Richardson and other Energy Department officials praise Trulock's work and deny he has been mistreated, some in Congress suspect he has been demoted for helping the Cox Committee.

Redmond, the CIA's former counterintelligence chief, who made his name by unmasking Soviet mole Aldrich Ames at the CIA, has no doubts about the significance of what Trulock uncovered.

He said: "This was far more damaging to the national security than Aldrich Ames."