U.S. Is Said to Have Known of China Spy Link in 1995
New York, Sunday, June 27, 1999
By James Risen and Jeff Gerth
WASHINGTON -- Senior White House officials were informed that China might have stolen American nuclear secrets nearly a year earlier than the Clinton Administration originally disclosed, according to current and former United States officials.
The White House was told about China's apparent theft of American nuclear weapons technology in July 1995, soon after it was detected by the Energy Department and the Central Intelligence Agency, several officials said.
Until now, the Administration has left the impression that the White House first learned about the matter in April 1996, when Samuel R. Berger, then President Clinton's deputy national security adviser, was briefed on the case by Energy Department officials.
But interviews with current and former officials show that warnings about possible Chinese nuclear espionage received high-level attention within the Clinton Administration early in the Government's investigation of the matter.
Indeed, by late 1995, within months of first learning of the case, the Director of Central Intelligence was convinced that the evidence showed that China had stolen design information from America's most advanced nuclear warhead, and had briefed President Clinton's national security adviser on the matter.
Yet the investigation into China's apparent theft of the nuclear secrets languished, plagued for the next four years by what many officials now describe as miscommunication, bureaucratic inertia and outright bungling by several agencies.
A scientist at Los Alamos National Laboratory has been dismissed from his job for security violations in connection with the F.B.I.'s investigation of the case. But the scientist, Wen Ho Lee, the F.B.I.'s prime suspect in China's theft of nuclear secrets, has not been arrested or charged with any crime, and some United States law enforcement officials now doubt whether they will ever be able to bring espionage charges against him.
This week, the first high-level official lost his job in the fallout from the case. Victor Reis, Assistant Secretary of Energy for Defense Programs and the official overseeing the Energy Department's nuclear weapons labs, submitted his resignation to Energy Secretary Bill Richardson.
Evidence that China may have stolen nuclear secrets first came to the attention of the White House during a meeting in July 1995, when the White House Chief of Staff, Leon Panetta, was informed of the problem by Energy Secretary Hazel O'Leary, Panetta and other officials said.
She added that Energy Department officials had also been told that the C.I.A. had gathered intelligence about the possible theft, they said.
Panetta then called the C.I.A. Director, John Deutch, to find out what the agency was doing about the case, Panetta said. Deutch, who had also just received a call about the same matter from Deputy Energy Secretary Charles Curtis, told Panetta he would investigate. Panetta then told Deutch to work with the National Security Council at the White House on the case.
Upset that he had not heard about the case first from officials in his own agency, Deutch called Panetta back a day or two later and told him what the C.I.A. knew about the spy case, officials said.
A brief reference to such meetings between Energy Department, C.I.A. and White House officials in the summer of 1995 is also included in a new report on the case issued by the President's Foreign Intelligence Advisory Board.
Deutch finally briefed the national security adviser, Anthony Lake, on the case in November 1995. Lake said he did not recall the briefing, but he and White House officials said there was a record of it.
Before meeting with Lake, Deutch received a full briefing from the C.I.A. analysts, who convinced him that design information on the nuclear weapon -- known as the W-88 -- had been stolen by Beijing, officials said.
President Clinton was not told of the evidence in 1995 by Panetta, Lake, or any of the other officials who had been briefed, according to the National Security Council spokesman, David C. Leavy. Berger also did not tell President Clinton about the case following his briefing in 1996.
Berger, now the national security adviser, has said that it was not until after he received a second, more specific briefing in July 1997 that he told Clinton about security problems at the nuclear weapons laboratories. Berger did take some action after his 1996 briefing, Leavy said, including directing that Congress be secretly informed. In that meeting, he also agreed with Energy Department officials on the need to strengthen security at the weapons laboratories.
Working along two separate tracks initially unknown to each other, C.I.A. and Energy Department officials first began to unravel the case in the spring of 1995, when weapons designers from the Los Alamos laboratory told Energy Department intelligence officials that they were convinced China had stolen design information on the W-88, based on their analysis of a series of Chinese nuclear tests.
At about the same time, American officials received a package filled with Chinese government documents, which arrived by DHL express service, officials say. Officials refused to say where the package was received or how they determined the identity of the sender.
C.I.A. officials analyzing the documents quickly focused on one that included what appeared to be classified design information about American nuclear weapons, including the W-88. Dated 1988, the document also included a hand drawing of a United States nuclear warhead re-entry vehicle.
But initially, the C.I.A. did not tell the Energy Department -- or anyone else in the Government -- that it had obtained the W-88 document, officials say.
A former senior C.I.A. official said that soon after the agency realized the significance of the W-88 document, Deutch ordered him not to disseminate it to other United States intelligence agencies.
But other current United States officials familiar with the matter said that Deutch did not try to suppress the document. Instead, they said the document was not distributed immediately because it took time for the C.I.A. to translate and analyze it. Deutch refused to comment on the matter.
Nevertheless, by August 1995 Energy Department's analysts had obtained a copy, even though it would not be officially distributed throughout American intelligence agencies until that December.
By then, analysts had concluded that the document indeed included American nuclear secrets, officials say. At that time, the document did not include a caveat saying that the source of the document was believed to be a double agent.
After the analysts reported to Deutch in November, a broader review, dominated by the Energy Department, reported similar conclusions in April 1996. Berger was then briefed that same month, and the F.B.I. opened its criminal investigation on May 30, 1996.
But in late June or July 1996, the F.B.I. dropped its investigation, a senior United States official said.
The C.I.A. had just re-issued the W-88 document with a warning that the agency now believed that the source of the document was a double agent. The C.I.A.'s new assessment, coming a year after it had first received the document, led the F.B.I. to "stand down," or suspend, its investigation, the senior American official said.
The suspension of the investigation lasted for about six weeks in the summer of 1996, according to the official. It resumed after the Energy Department assured the F.B.I. that even if the source was a double agent, the document nonetheless contained accurate, classified data about the W-88 warhead, and so represented a security breach.
The C.I.A. agreed that the information in the document was accurate, and also continued its own analysis.
But while the F.B.I. re-started its investigation, it remained a low priority, F.B.I. officials now concede. Only one or two agents were assigned to the investigation in 1996, officials say.
By 1997, when the Justice Department denied the F.B.I.'s request to seek court authorization to wiretap and electronically monitor Lee, a move that has since become the subject of congressional inquiry, the F.B.I. still had only three or four agents on the case. Today, in the midst of a public furor over Chinese atomic espionage, the F.B.I. has assigned 40 agents to the investigation.