September 23, 1999

U.S. Will Broaden Investigation of China Nuclear Secrets Case

By JAMES RISEN and DAVID JOHNSTON

ASHINGTON -- Attorney General Janet Reno and Director Louis J. Freeh of the F.B.I. have ordered Federal agents to broaden their investigation into evidence of Chinese nuclear espionage, moving far beyond the Government's earlier scrutiny of a scientist fired from Los Alamos National Laboratory, Government officials said Wednesday.

The widened inquiry ordered by Ms. Reno and Freeh will include reopening a fundamental debate of whether American nuclear secrets were stolen and, if so, where and how the theft may have occurred, law-enforcement officials said.

ESPIONAGE IN LOS ALAMOS

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Other Federal officials said the effort is a tacit acknowledgment that the initial Federal investigation at the laboratory in Los Alamos, N.M., was mishandled. The debate over the investigation has frayed relations between law-enforcement and Energy Department officials.

Federal authorities have been buffeted by complaints about the way the investigation was conducted. A Presidential review board and others have argued that the Federal Bureau of Investigation and the Energy Department focused prematurely on Wen Ho Lee, a Taiwan-born scientist dismissed from the New Mexico laboratory in March after being accused of security violations. Republicans in Congress have said that the bureau failed to move aggressively enough to investigate Lee, and have also criticized the Justice Department for rejecting the bureau's repeated requests to wiretap and electronically monitor Lee early in the inquiry.

Now, officials said, the Government will go back and conduct a broader inquiry into allegations that China obtained secret information about the design of America's most advanced nuclear warhead, the W-88.

Some United States intelligence officials now say that classified information on the W-88 that was apparently obtained by the Chinese was available at several other Government installations and at defense contractors in addition to the Los Alamos design laboratory where it originated.

As a result, the bureau will conduct a more-thorough investigation into evidence of espionage and search for alternative explanations, officials said.

The bureau was expected to investigate facilities belonging to the military and to defense contractors, trying to find another possible source of the information besides Los Alamos, officials said.

Yet officials acknowledged that the bureau does not yet have any new suspects.

It is unclear how the decision to re-open the bureau's espionage investigation will affect the Government's decision whether to prosecute Lee on charges that he mishandled classified materials, a lesser charge than espionage.

Lee has not been charged with any crime.

Government officials said that Ms. Reno and Freeh coordinated their decision to broaden the inquiry with the United States Attorney for New Mexico, John Kelly. Officials say Kelly has advocated prosecuting Lee in New Mexico over his allegedly unauthorized transfers of computer codes containing nuclear secrets from the laboratory's classified computer network into an unclassified system.

Officials from the Energy Department, the F.B.I., the Justice Department and Kelly's office met two weeks ago to reach an agreement on how much classified material would be available to prosecutors from the Energy Department for use as evidence in a possible trial.

Officials say progress has been made on the issue, but Energy Secretary Bill Richardson has not made a final decision. Ms. Reno must approve any prosecution.

Lee has denied that he spied for China, and has said that he was singled out because he is a Chinese-American.

He has acknowledged that he downloaded classified computer codes but said that he did so as a routine part of his job at Los Alamos to protect the information from computer crashes.

The Government's investigation of China's apparent theft of nuclear secrets has been under fire ever since the case became public in the spring.

Evidence that China stole classified design information from the W-88 led the Energy Department and the bureau to begin a preliminary inquiry in 1995. By June 1996, the bureau had opened a full criminal investigation.

The initial inquiry looked at six Energy Department facilities, including Los Alamos. Archivists at Los Alamos told Energy Department officials that the most important documents on the W-88 had not been distributed beyond Los Alamos in the time when investigators believed the espionage had occurred.

One of the key pieces of evidence was a Chinese Government document, dated 1988, that included classified material about the W-88 and which officials in the United States said they determined could not have come from any public source. That convinced investigators that the espionage had occurred between 1984, when the final design for the W-88 was approved, and 1988, when the Chinese document was dated.

Investigators came up with a list of about a dozen suspects who had access to the information, had traveled to China or had other contacts with Chinese scientists, and for whom security concerns had already been raised.

But the bureau quickly focused on Lee, with whom they had maintained a long and complicated relationship. Lee had previously been investigated by the bureau and had cooperated with another investigation. He had also provided information, apparently about Chinese scientists visiting Los Alamos, to the Central Intelligence Agency.

Lee was already being investigated by the bureau when the nuclear weapons inquiry began. In November 1995, the bureau suspended that investigation and instead began to look at Lee as part of the weapons case, according to an August report issued by the Republican chairman and ranking Democrat on the Senate Governmental Affairs Committee.

But the decision to focus so early in the investigation on Lee has come under criticism in recent months from within the Government, from Lee's lawyer, Mark Holscher, in Los Angeles, and from other outside critics.

Now, officials say that they have determined that the classified information included in the 1988 Chinese document had been distributed widely to other Government facilities and contractors by 1988.

Officials said today that the classified material was potentially available at hundreds of facilities by that time, underscoring the belief that investigators focused too quickly on Los Alamos.

Lee first came to the bureau's attention as early as 1982 after the Government recorded a telephone call he made to a scientist who had been dismissed from Lawrence Livermore National Laboratory in connection with an investigation of China's theft of U.S. neutron bomb secrets.

Lee came under suspicion again as a result of a 1994 incident that occurred while he was meeting with visiting Chinese nuclear weapons scientists at Los Alamos.

The bureau was told that Lee was embraced by Dr. Side Hu, a leading scientist in China's nuclear weapons program, who then made it clear to others in the meeting that Lee had been helpful to China's nuclear program.

The bureau began a counter-intelligence inquiry as a result of that incident, which was later merged into the W-88 investigation.

Senate Approves Energy Overhaul

WASHINGTON, Sept. 22 (AP) -- The Senate today approved a $288.9 billion defense bill that would overhaul the Energy Department and tighten security at nuclear weapons laboratories. The bill also contained the biggest military pay raise since the early 1980's.

Richardson, viewing the proposed reorganization as a Congressional overreaction to allegations of Chinese nuclear spying, has said he might recommend that President Clinton veto of the bill.

But other Administration officials said such a veto could be a problem, given the 4.8 percent across-the-board pay raise and other popular increases in military readiness in the bill.

In any event, margins of passage in both House and Senate were far above the two-thirds needed to override a veto. Today's vote in the Senate was 93 to 5. The House approved the measure 375 to 45.

The legislation would set up a separate, semiautonomous agency within the Energy Department -- the National Nuclear Security Administration -- to oversee the government's nuclear weapons program.

Copyright 1999 The New York Times Company