10 June 1999
Source: http://www.access.gpo.gov/su_docs/aces/fr-cont.html

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[Congressional Record: June 8, 1999 (House)]
[Page H3837-H3847]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
[DOCID:cr08jn99-96]


                 INFORMATION RELATIVE TO THE COX REPORT

  The SPEAKER pro tempore (Mrs. Biggert). Under the Speaker's announced
policy of January 6, 1999, the gentleman from Pennsylvania (Mr. Weldon)
is recognized for 60 minutes.
  Mr. WELDON of Pennsylvania. Madam Speaker, I rise tonight to continue
to provide for our colleagues in the House and for the constituents
that they represent across the country information relative to the Cox
report and the way this report is being spun by this administration.
  Madam Speaker, I had wanted to go into much of the information I am
going to share tonight in more detail yesterday, but because I had to
leave after 30 minutes, I could not go into detail last evening. I will
do so tonight.
  Madam Speaker, I want to start off this evening, as I did last night,
by saying it is not my normal course to spend every evening over a
given period of time on the floor of this House discussing the same
issue. But like eight of my colleagues, I spent almost the last year of
my life focusing on the investigation that we were asked to perform by
the leadership in both parties in this body on potential security harm
done to our country by our policies relative to China and other nations
that might benefit from technology developed here in America.
  We worked tirelessly behind closed doors, cooperating fully with the
FBI and the CIA, and with the full support of George Tenet, who heads
the CIA, in trying to determine whether or not there were damages done
to our national security, and if so, what was the extent of that
damage.
  We deliberately made a decision when we began the process last summer
that we would not go into the specifics of campaign finance activity or
what other motives would have driven policymakers to lower the
thresholds for exports, or perhaps the reasons why influence would be
allowed by Chinese nationals and others, both at the White House and to
other Federal agencies, to allow those key players to gain access to
the key decisionmakers that would benefit them in acquiring technology.

                              {time}  2145

  The nine Members that were a part of the Cox committee represent a
broad basis of views in this Congress, four Democrats and five
Republicans, very serious Members; and our goal was and the result was
a totally nonpartisan effort.
  We looked at every aspect of technology that may in fact pose
problems for us down the road: whether or not that technology had in
fact been transferred; if so, to what extent, how it was transferred,
and what the implications were for our long-term security.
  The almost 1,000-page document that we completed is, I think, very
detailed and certainly would be required reading for any American. The
problem is, most American citizens, like most Members of Congress, do
not have the time to sift through almost 1,000 pages of detailed
explanations and stories relative to various technologies that had been
transferred out of the U.S. over the past several decades.
  Therefore, because much of this is contained within the thousand-or-
so-page report, even though 30 percent of that remained classified
because the administration would not declassify the entire document,
the media, to a large extent, have chosen not to focus on the substance
of what is in the Cox committee report.
  Unfortunately, the bulk of the American media, and I say the bulk
because there are a few exceptions, people like Jeff Girth with the New
York Times, who has been doing tireless work in this area before our
report was even issued; people like Carl Cameron at Fox News, who
continues to do extensive work in this area; people like 60 Minutes,
who are right now doing research in these areas, and other network
affiliates, they are the exception. The bulk of the mainstream media
have chosen to accept the spin that has been given by this White House
to the work that we did.

[[Page H3838]]

  What I am trying to do, Madam Speaker, is to present information to
our colleagues, which they could, in turn, provide to their
constituents, of a factual basis that compliments the work that was
done by the Cox committee.
  Now, the public at large can receive copies of the Cox committee
report. It is available on the newsstand, or they can get it on the Web
site that has been established by the Cox committee itself. Many
libraries now have copies of the Cox committee three-volume series.
  Last evening, I mentioned the fact that I have now established a Web
site on the Cox report that goes beyond the information that is covered
in the Cox report and provides the visual explanation of the overview
of the problem that we dealt with in the Cox committee.
  So our colleagues, Madam Speaker, and all of their constituents can
now turn to the Internet where they can access the material I am going
to show this evening, and they can download the actual charts that I am
going to provide. In addition, smaller versions of these larger charts
have been made available to every Member of this body. All they have to
do is contact my office, send a staffer over; and be they Republican or
Democrat, they can get the charts and all the related information that
goes with the charts so they can share this information in a factual
way with their constituents.
  The Web site where our colleagues and the American people across this
country can access this information is www.house.gov/curtweldon. Any
American represented by any one of our colleagues can access this
information through that Web site.
  In fact, last evening, we had a number of contacts from throughout
the country from people who want to get additional factual information
in an investigational form, in a condensed form about what actually the
Cox report focused on.
  As I have said in a series of speeches that I have been giving both
here and around the country, Madam Speaker, the focus of the Cox
committee was not just on our laboratories. Now, if my colleagues
listen to Bill Richardson, the Secretary of Energy and the point person
that has been asked by the administration to provide the spin for the
Cox committee report, my colleagues would think that our report only
focused on our laboratories, Los Alamos, Sandia, and Lawrence Livermore
in particular. Nothing could be further from the truth, Madam Speaker.
  While it is true, the laboratory security was one part of what we
looked at, it is only one small part of the bigger picture of the way
that we loosened the controls over our technology for the past 7 years.
  The American people need to understand that this effort was well
beyond our laboratories. But as I did last night, I want to highlight
four specific actions that rebut what Secretary Richardson has been
saying around the country as the point person for this administration
as he has tried to spin the Cox committee report as though it is only
concerned with lab security.
  Now, Madam Speaker, our colleagues know full well, because they have
read the text of Mr. Richardson's speeches, that his focus has been
something along the lines of this: This administration was the
administration who uncovered the Chinese espionage in 1995 that
happened in previous administrations that were run by Republicans, and
we took aggressive action in this administration to correct those
problems.
  Secretary Richardson would have the American people believe and would
have our colleagues believe that this administration had no
responsibility whatsoever in technology being transferred to China and
that the only thing they did was that they uncovered the fact that, in
1995, they learned that China had stolen the designs for our warhead
capabilities, the W-88 and the W-87, that occurred in previous
administrations. That has been the extent of Secretary Richardson's
comments.
  He has also gone on to say, now, look, we have taken steps to correct
all of this, and today we have corrected the bulk of the problems.
  Well, I am here to rebut that, Madam Speaker. I would like to do it
in a forum where I could stand directly across from Secretary
Richardson, or even the President, and have a chance to go at it
verbally and exchange information, but it looks like that is not going
to be possible.
  The national media outlets will put Secretary Richardson on the
Sunday morning talk shows to give the White House spin, but they have
yet to give full consideration to the factual rebuttal to what
Secretary Richardson has been saying. So I am going to attempt to do
that here again on the public record tonight.
  First of all, we must remind the American people that contrary to
what Secretary Richardson has been saying, it was this administration,
under the leadership of then-Energy Secretary Hazel O'Leary in 1993
that ended the policy of color coding laboratory security credentials
at our laboratories. My understanding is that she thought having color
coded badges was to some extent discriminatory and they were not
necessary. So under her administration, acting on behalf of Bill
Clinton, we did away with that process in 1993.
  Now what did that mean? That meant, Madam Speaker, that all of those
employees at our labs that we used to be able to tell by the color of
the identifying ID system that they had on them no longer could be
done, or no longer could be checked, because we did away with that
color coding, making it much more difficult to determine where
employees could or could not work or be in a particular classified
laboratory setting.
  So under Secretary Hazel O'Leary, this administration ended the
practice of visually being able to identify what people at our labs
could or could not have access to key areas. Now, obviously that made
it much easier for unauthorized people to go into areas where they did
not have appropriate clearance.

  Now, if this policy were so acceptable and defensive, my question is,
why did this administration 2 weeks ago reinstate the policy as it
existed under President Reagan, President Bush, and even President
Carter and before that? If this policy change, which Secretary O'Leary
made on behalf of Bill Clinton in 1993 and 1994, was so critically
important and logical, why 2 weeks ago did they go back to the policy
as it was under Republican Presidents?
  Was perhaps there some new revelation that this relaxation that
occurred by the Clinton administration in 1993 and 1994 led to security
problems in our laboratories? Bill Richardson has yet to answer that
question.
  Second point, Madam Speaker, we have not heard Bill Richardson talk
about the fact that it was under Secretary Hazel O'Leary, acting on
behalf of President Clinton, that FBI background checks of people who
worked at our labs and visited our labs were put on hold.
  Now, why do we have FBI background checks? They were there to
discourage people who should not have access to our country's secrets
to get into places where those secrets were kept. That was not done
prior to 1993, Madam Speaker. That was done by this administration as a
major change in policy that opened the floodgates for people to go to
our labs, who in previous years would not have been allowed access to
those facilities.
  Bill Richardson has not dealt with that issue, because as he said,
this administration only inherited problems and did everything to
correct them.
  Third point. There was an incident involving a retired employee from
Lawrence Livermore Laboratory in the 1993 to 1995 time frame, where
that employee, former employee, was accused by the Department of Energy
of having released sensitive classified information to unauthorized
people. The Department of Energy investigated that employee. The
Oakland office of the Department of Energy saw fit, based on the
factual evidence to remove that former employee's classified status so
that he no longer, as a retiree, had access to classified information.
  The employee appealed that decision to the Secretary of Energy's
office. Hazel O'Leary herself overturned the decision of the Oakland
Department of Energy office and allowed that retiree to retain his
classified status. When that occurred, Madam Speaker, employees all
across DOE involved in sensitive security areas got the feeling that
this administration felt that giving away classified secrets was no big
deal.

[[Page H3839]]

  We lowered the threshold for the security clearance process. We
stopped the FBI background checks. Then we even had an employee who was
accused by the Department of Energy itself, and found guilty of giving
classified information. The Secretary herself overturned the Department
of Energy decision to take away his security clearance.
  Now, those people that I have talked to in the Department of Energy
who worked under Hazel O'Leary, way more than one or two people, have
said that under her leadership, there were wholesale actions to
declassify massive amounts of information, in some cases boxes and
cartons of records that no one had gone through, simply declassified,
made available for people to read in a spirit that I guess was
considered openness, even though these were, in many cases, the most
important technical secrets that this country had.
  Let me give my colleagues one particular example, Madam Speaker.
Secretary Richardson has gone around the country, and he has made the
case that when this administration found the evidence in 1995 that
China had stolen or received the design for our most capable nuclear
warheads, the W-88 and the W-87, that this administration immediately
corrected those problems so they would never occur again. Even though
Janet Reno cannot properly explain why the Justice Department turned
down requests for four wiretaps, for efforts by one of our employees at
one of our labs that we thought was a spy, Secretary Richardson has
said they took aggressive action.
  Now, that is what he said publicly. I wish he would answer this
question, because that same year, in 1995, U.S. News and World Report
published a special report entitled ``Shockwave.'' ``Shockwave'' was
printed on July the 31, 1995, distributed all across the country and
around the world. I am sure a number of these copies were sold in
China.

                              {time}  2200

  Because when I traveled to Beijing I saw copies of U.S. News and
World Report on the shelves that people could buy. The same thing in
Russia. These copies were available in North Korea, in Iran or Iraq.
This edition of U.S. News and World Report's Special Supplement were
sold wherever people would pay the price of whatever this document
cost, $3.50. What was in this special report on the last page, which I
showed last evening, was startling.
  On July 31, 1995, this administration, not the Reagan administration,
not the Bush administration, not the Carter administration, this
administration leaked the design for our W-87 warhead to U.S. News and
World Report. Not just the Chinese, the North Koreans, the Iraqis and
Iranians, anyone who would buy U.S. News and World Report on July 31,
1995 got a documented diagram of the W-87, which up until that point in
time was classified.
  Here is the color version of what the Department of Energy released
to U.S. News and World Report. This design shows in some detail the way
our most capable nuclear warhead works. It shows and explains the
process, it shows and locates the technology, the fuel, the process,
the activity, the physics of the way America's most capable warhead
would work. This was not secretly stolen by the Chinese, that this
administration maintains they found in 1995. This diagram was given to
U.S. News and World Report by this administration in 1995, and
reproduced in U.S. News and World Report.
  As I said last evening, Madam Speaker, I have been told, and I am
tracking this down right now, that there was an internal investigation
within the Department of Energy to find out who leaked this diagram,
this sensitive diagram to U.S. News and World Report. Because I have
been told, Madam Speaker, that that individual and group were told to
stop the investigation. Why? Because the assumption was that this
diagram came from Hazel O'Leary's office herself.
  Why are we not hearing Secretary Richardson talk about this, Madam
Speaker? Why is he not talking about in 1995, in July, when this
diagram for the W-87 was reproduced and sold on newsstands all over the
world to anyone who would pay the price? This was not some secret
espionage capability of the Chinese. This was the Department of Energy,
following Hazel O'Leary's desire to open up to the people of the world
our most secret information about technologies important to our
country.
  There is one additional factor that needs to be investigated, Madam
Speaker. There was an individual, or is an individual employed at the
Department of Energy who has currently been placed on what I call
political administrative leave. His name is Edward J. McCallum. He was
the one who briefed Members of Congress and their staffs about problems
with one of our nuclear facilities, Rocky Flats. When it was found out
that he had done the outrageous thing of informing Congress about
security concerns at one of our nuclear sites, what was the response of
this administration? They put him on administrative leave. Secretary
Richardson has announced that he is going to fire Mr. McCallum because
he claims he gave out classified information.
  Madam Speaker, I cannot believe this is happening in America, but
there is some added irony here. Madam Speaker, I am providing for the
Congressional Record, a document dated May 3, 1999, prepared by Mr.
McCallum which outlines the problems at Rocky Flats and what steps he
took to correct them.

                    Statement of Edward J. McCallum

       Mr. Chairman, thank you for the opportunity to speak with
     the committee today on the Department of Energy's Safeguards
     and Security Program. Over the past nine years, I have served
     as the Director of DOE's Office of Safeguards and Security.
     In this capacity, I have been responsible for the development
     and promulgation of policy that governs the protection of the
     national security assets entrusted to the department, to
     include those assets that are part of the nation's nuclear
     weapons program. I am also responsible for providing training
     and specialized technical advice and assistance to DOE field
     sites when requested. My office is also charged with
     conducting special inquiries into incidents of security
     concern to include, but not limited to, those incidents
     involving the unauthorized disclosure of classified
     information.
       As you may know the Department of Energy has placed me on
     Administrative Leave since April 19, 1999. DOE officials
     allege that I committed a security infraction by claiming
     that I disclosed classified information during a conversation
     with a whistleblower from the Rocky Flats site. Based on the
     Department's own classification procedures and guidelines
     (CG-SS-3, Chap 10, Dispersal of Radioactive Material), I
     firmly believe that these allegations are completely
     unfounded. I have been an authorized classifier in the DOE
     and it's predecessor organizations for over 25 years and
     helped develop the first classification guide in this area in
     1975. Further DOE also failed to follow its own procedures in
     investigating these issues before placing me on
     Administrative Leave. I believe this action to be an obvious
     act of retaliation against the individual and the office that
     has tried to bring an increasingly distressing message of lax
     security at the DOE Laboratories forward since 1995.
       Prior to joining the Office of Safeguards and Security I
     held several high level positions within the department's
     safeguards and security program areas. From 1988-1989 I
     served as Director, Office of Security Evaluations. In 1978 I
     joined the DOE at the Chicago Operations Office and in 1979
     became the Director of the Safeguards and Security Division.
     Prior to joining DOE I served as an officer in the U.S. Army.
     Active military service included a number of Military
     Intelligence and Special Forces assignments in Europe and
     Southeast Asia. I culminated my military duty after over
     thirty years of active and reserve service.
       In fulfilling my responsibilities as the Director, Office
     of Safeguards and Security, I have attempted to provide
     senior DOE management with the most sound, professional
     judgment possible concerning the status of security within
     the department, along with recommendations as to how best to
     rectify shortcomings. As you are no doubt aware, much of what
     I have offered over recent years has not been altogether
     positive, nor well received. The steady decline in resources
     available to the DOE safeguards and security program as well
     as a lack of priority have allowed the department's
     protection posture to deteriorate to a point where a program
     that long operated in a defense in depth mode, where no
     single point failure permitted the system to fail, can no
     longer afford such a strategy.
       The information presented in this statement is not new. It
     has been repeated consistently over the last decade in
     Departmental reports such as the Annual Reports to the
     Secretary in 1995, 1996 and 1997 by the Office of Safeguards
     and Security. External reviews such as the Report to the
     Secretary in 1991, by General James Freeze, and the Nuclear
     Command and Control Staff Report on Oversight in the DOE in
     1998 cite similar concerns. There have also been a large
     number of General Accounting Office Reports on these areas.
     However, for numerous reasons the department has not been
     able to resolve these serious and longstanding problems.

[[Page H3840]]

                           Computer Security

       One of the primary interests expressed by the Committee,
     and indeed widely covered by the media recently, is the loss
     of classified information from the computer systems at the
     National Laboratories. Indeed, we may be sitting at the
     center of the worst spy scandal in our Nation's history.
       The DOE Computer Security Program suffers from a variety of
     problems. One of the primary concerns is the protection of
     unclassified sensitive information processed by the
     Department and the relationship of these systems to the
     classified architecture. Relatively little guidance has been
     issued on how to protect sensitive but unclassified
     information. System administrators are charged with the
     responsibility for designing their own protective measures.
     Unfortunately, many of them do not have the computer security
     background or knowledge required to implement a sound
     computer security program. Attempts to issue comprehensive
     guidance by my office and the Chief Information Officer as
     early as 1995 met with significant Laboratory resistance.
     Several Laboratories complained that providing protection
     such as firewalls and passwords were unnecessarily expensive
     and a hindrance to operations. Implementation of the proposed
     Computer Security Manual in 1996 would have prevented many of
     the problems being reported today.
       Another area of great concern is the migration of
     classified information from systems approved for processing
     classified data to less secure unclassified processing
     systems. My office has noted a number of problems in this
     area to include: Failure to conduct classification reviews
     before placing information onto an unclassified processing
     system, intentionally creating unclassified data that is very
     close to classified data to ease processing, and using
     personal computers at home to process classified information.
       A variety of computer security tools and techniques, such
     as encryption devices, firewalls, and disconnect features,
     are available and their use is required; however, these
     protective measures are not always used. In some cases, this
     is due to lack of knowledge by system administrators. In
     other cases, it is due to lack of funding or priority for the
     required equipment.

                           Protective Forces

       While much of the attention of late has been directed
     toward the area of foreign visitors and the protection of
     classified information, equally serious cause for concern
     exists in other areas as well. For instance, since 1992, the
     number of protective forces at DOE sites nationwide has
     decreased by almost 40% (from 5,640 to the current number of
     approximately 3,500) while the inventory of nuclear material
     has increased by more than 30%. The number of Protective
     Force Officers has declined to the point where it is
     questionable at some facilities whether the DOE Protective
     Force could defeat an adversary. By 1996 several facilities
     were no longer capable of recapturing a nuclear asset or
     facility if it were lost to an adversary. Indeed, a number of
     sites stopped even training for this mission because
     resources had been reduced below the minimum level necessary
     to expect success. We have had some success in increasing
     these numbers of recent years so that at this time all sites
     report they can meet this minimum capability. Several sites
     are using performance tests to verify that their Protective
     Force can defeat the adversary; however, many of these tests
     are not realistic. For example, performance tests sometimes
     are not consistent in providing the adversary with the
     weaponry or explosive breaching devices used by terrorist
     groups. At times artificial ``safety constrains'' are imposed
     on exercise adversary teams that effectively neutralize their
     ability to operate. This results in ``winning'' the
     performance test, in a less than realistic scenario.
       There have been several other consequences of the reduction
     in the number of Protective Force Officers. First is a
     relatively older Protective Force (the average Protective
     Force Officer is now in his/her early 40s). Second, DOE sites
     are relying on local law enforcement agencies to handle
     serious security threats. Their ability in nuclear terrorist
     situations is questionable. Third, sites have difficulty
     increasing the tempo of security operations during high
     threat periods. Fourth, Protective Force personnel are
     displaying lower morale due to reduced training and job
     stagnation. Finally, an average annual overtime rate in our
     nuclear weapons facilities of approximately 25% has
     detrimental effects on safety, training, and response
     capabilities.

                               Exercises

       A centrally funded and well-integrated National-level
     security exercise program is critical to meet the safeguards
     and protection needs of DOE and the nation. Exercises that
     address site response and management of security crisis are
     required by regulation to be held annually at critical DOE
     facilities. However, participation by State and local law
     enforcement, regional offices of the Federal Bureau of
     Investigation (FBI) and other Federal agencies is
     inconsistent and varies considerably across the complex.
     Under Presidential Decision Directives 39 and 62, the
     Secretary of Energy is directed to conduct exercises to
     ensure the safety and security of its nuclear facilities from
     terrorism. DOE is also tasked to support the FBI in its lead
     as the Federal agency responsible for managing all domestic
     incidents involving terrorist threat or use of weapons of
     mass destruction (WMD). In addition, the recent creation of
     the Department of Justice National Domestic Preparedness
     Office, the FBI Critical Incident Response Group (CIRG),
     and other National crisis response assets, requires that
     DOE plan and practice a new and expanded role in
     supporting a security crisis response beyond the local
     site and internal Department level.
       Currently, the present DOE organizational structure
     separates exercise responsibility between Program offices and
     Safeguards and Security; this hampers the integration of
     sequential training objectives that can be monitored and
     tracked and creates confusion at the site level. More
     importantly, the majority of the funding resides at the site
     level where expenditures must vie with other program needs
     each fiscal year, often to their detriment.

                       physical security systems

       Another area of concern involves aging and deteriorating
     security systems throughout the DOE complex. Physical
     security systems are critical to ensure the adequate
     protection of Special Nuclear Material (SNM). Many facilities
     have systems ranging in age from 14 to 21 years, and are
     based on mid-70's to early-80's technology. Because of the
     obsolescence of these systems, replacement parts and services
     are increasingly expensive and hard to obtain. Expensive
     compensatory measures (i.e., protective force response) are
     required to ensure needed confidence levels of adequate
     protection. Older systems are also increasingly vulnerable to
     defeat by advanced technologies that are now readily and
     cheaply available to potential adversaries. Continual
     reductions, delays or cancellations in line-item construction
     funding increases the vulnerability risks to sites protection
     capability. Also, DOE is not realizing significant savings
     available through advancements in technology that have
     increased detection, assessment, and delay capabilities.
       Some sites are using a variety of nonstandard security
     alarm and access control systems that have not been fully
     tested to determine if they contain vulnerabilities, or if
     they meet Departmental requirements without compensatory
     measures. Such systems may have back doors or viruses, that
     allow the insider adversary to cripple the entire site
     protection system, thus leaving the site vulnerable. Some
     sites do not have qualified personnel to conduct these
     vulnerability tests and are generally unwilling to conduct
     any type of attack on the system to determine if such
     vulnerabilities can be accomplished.

                       Counterterrorism Measures

       PDD-39, The United States Policy on Counterterrorism,
     requires all governmental agencies to implement security
     measures to defend against Weapons of Mass Destruction,
     including chemical and biological weapons. The Office of
     Safeguards and Security has developed the necessary policies
     and requirements for implementing PDD-39. Field Elements,
     however, have been slow to purchase and install explosive
     detection systems, with only a limited number of sites having
     done so. Program Offices claim that there is no funding for
     such equipment.

                           personnel security

       I fear that a recent decision by the department to have
     program offices fund the cost of clearances for field
     contractor personnel will have severe repercussions. Since
     implementing this new approach at the beginning of FY 1999,
     we have already begun to see a dramatic increase in the
     backlog of background investigations. As with other security
     areas, program offices must decide upon competing interests
     when determining those areas to be funded. Unfortunately,
     security activities are relegated to a lower tier in terms of
     importance by some program offices and selected field sites.
     This appears to be the case with the funding of security
     background investigations. As the first line of defense
     against the ``insider'' threat, the adequate funding and
     timely conduct of reinvestigations is critical to ensuring
     the department maintains a protection posture commensurate
     with the level of threat.

                       Roles and responsibilities

       Operating beneath the surface of these major challenges are
     some fundamental issues that, if properly addressed, could
     provide the impetus to effect real progress. These
     challenges, for the most part, are not new, nor are their
     solutions.
       Organizational Structure: In all of the reviews of the
     safeguards and security program conducted during the last
     decade, there is a recurring theme. Simply, the Department's
     organizational structure of the Safeguards and Security
     Program is such that programmatic authority and
     responsibility are not properly aligned. The Safeguards and
     Security Program in its current structure has one
     organization developing policy, training and providing
     technical field assistance (NN), another organization
     providing funding and ``implementing guidance'' (Headquarters
     Program Offices), a third organization (Field Site) is
     responsible for implementation of policy, while a fourth (EH)
     is responsible for oversight. A fundamental change in both
     the organizational structure and funding of the Safeguards
     and Security Program is absolutely necessary before the
     Department can begin to systematically address the major
     challenges previously addressed. These organizations must be
     consolidated with policy, guidance and implementation in one
     location, with an appropriate budget to participate in the
     Department decision making.

[[Page H3841]]

       Safeguards and Security Program Funding: This is the
     central, driving issue. Budget cutbacks have adversely
     affected all of DOE. As previously alluded to, however, when
     Program Offices face funding shortfalls, there is a tendency
     to cut security programs on a pro rata basis without the
     benefit of assessing the impact these cuts would have on the
     department's protection posture. The implementation of
     virtually every security program, from the Information
     Security Program to the Protective Force Program, has
     suffered significantly as a result. I believe many of these
     cuts are shortsighted and ill advised as they eventually lead
     to security lapses. Nevertheless, my office has no authority
     to force the Program Offices to implement departmental
     security policies and requirements. Similarly, my office has
     no funds to provide to Program Offices or Field Elements to
     help pay for appropriate security measures. Without an
     adequate budget there is simply no authority.
       Security Policy and Requirements Formulation. DOE security
     policies and requirements are based upon current threat data
     and requirements identified by outside intelligence
     organizations. DOE, the Department of Defense, the Nuclear
     Regulatory Commission, the Federal Bureau of Investigation,
     and the Central Intelligence Agency meet every two years to
     evaluate current threat data and formulate an agreed upon
     threat statement that governs security programs throughout
     the U.S. Government. In addition, the Department of Energy
     internally reviews this threat statement annually. In DOE
     parlance, the resulting document is known as the Design Basis
     Threat. Program Offices are required to use the Design Basis
     Threat as the baseline for planning security measures.
     Security requirements are also levied upon the Department by
     the Office of the President, Congress, and the General
     Services Administration. For example, Presidential Decision
     Directive 39 directed all Executive Branch agencies to
     protect against terrorist attacks. This resulted in an
     increased need for explosive detection equipment, more
     frequent security patrols, and hardening of structures. In
     some cases, Program Offices have directed their field
     elements not to implement departmental security requirements.
     This is due to 2 main reasons: The program offices can't
     afford the new directive, or they simply don't agree with it.
     In other cases, they have issued interpretive guidance that
     changes the security policy or undermines the effectiveness
     of that policy. Again, the Office of Safeguards and Security
     has no authority to demand compliance with departmental
     security policies and requirements.

                            accomplishments

       I would be less than forthcoming if I failed to mention
     some positive aspects of the department's safeguards and
     security program. Let me start by saying that the program is
     staffed by hard working dedicated men and women throughout
     the country who are firmly committed to protecting the
     critical national security assets entrusted to their care.
     The responsibilities of these individuals are most demanding,
     even dangerous in some respects. Yet despite the dwindling
     resources made available to them, these individuals continue
     to perform in outstanding fashion. Where this department has
     failed is in providing these professionals the necessary
     resources to allow them to perform their responsibilities
     appropriately. The Department has also failed to provide
     protection so that individuals will bring forward problems
     and deficiencies without fearing retaliation.
       Progress has been made in some of the areas I previously
     addressed. In the area of physical security, the Department
     is working to correct identified weaknesses. Specifically,
     the Department augmented security at some field sites by
     deploying new technologies to safeguard special nuclear
     materials and weapons; worked with other agencies to train
     departmental protective forces; identified and developed more
     sophisticated detection and deterrent systems; and hired
     additional security personnel. New explosive detection
     systems are being installed at selected nuclear facilities
     and some sites are upgrading access control systems.
       In the area of information security, the Secretary recently
     directed the shut down of classified computer operations at
     three national laboratories until such time as he was assured
     that information processed on the systems is being done so
     securely. From a longer-term perspective, the department is
     requesting a dramatic increase in budget for information
     security. The additional funding will be used to help further
     secure the department's classified and unclassified computer
     networks. The improvements will help strengthen fire walls,
     develop better intrusion detection devices, and fund rapid
     response teams to work with the FBI to detect and track cyber
     intruders.
       In the area of the control, measurement and accountability
     of special nuclear materials, the Department has established
     the Fissile Materials Assurance Working Group (FMAWG) to
     assess needed areas of improvement and make recommendations.
     In this regard, the FMAWG identified unmeasured materials and
     initiated actions to resolve discrepancies. They further
     identified issues regarding the safeguarding of irradiated
     material and are promulgating policy for implementation. The
     Department is developing new technologies for tamper
     indicating devices and proposing pilot projects for field
     implementation.

                             a path forward

       All of these positive steps are good, necessary actions to
     ensure the adequacy of our protection posture. More is
     needed, however. As previously addressed, organizational
     realignment of safeguards and security activities is sorely
     needed. I understand that this is now under review by the
     department. While addressing the problems inherent in the
     current organizational structure of the Department will not
     in itself solve all of the issues contained in this report,
     it will establish the necessary framework to allow resolution
     in a more effective and lasting manner. Simple organizational
     realignment, however, by itself, will not result in the
     fundamental change in approach that is required. The
     Department should work closely with Congress to establish a
     budget line item for safeguards and security. Doing so will
     enable a more accurate accounting and control of safeguards
     and security expenditures. It will also improve the
     likelihood that policy will be issued in conjunction with the
     necessary resources to implement that policy.
       It should be apparent that attempts to have effective
     internal oversight of the DOE safeguards and security program
     have failed over a twenty-year period. While there have been
     high points and periods when oversight has been effective,
     organizational and budget pressures have played too central a
     theme for this function to remain within DOE. An organization
     like the Defense Nuclear Facilities Board should be
     established to independently review Security at DOE and the
     Laboratories. Further a direct reporting mechanism should be
     established to one or more of the Congressional Committees.
       Perhaps the biggest challenge facing the department today
     as we strive to meet our protection responsibilities is the
     attitude throughout the complex toward security. There are
     some that believe that safeguards and security is an overhead
     expense. I disagree, strongly. Safeguards & security is a
     mission-critical element. Without it, why bother creating new
     national defense technologies, if present or future foes can
     have ready access to it? To treat it as a mission-critical
     element requires a greater sense of accountability than seen
     to date. Secretary Richardson has committed to establishing
     and maintaining a sound safeguards and security program. It
     will take the commitment not only of the Secretary, however,
     but of each and every program official throughout the
     department if this mission essential element is to be
     fulfilled. It is incumbent upon senior departmental
     management to make safeguards and security a priority. It is
     too important to be relegated to a secondary status where its
     operations are viewed as ancillary. Both Congress and the
     public rightfully expect our best effort in executing this
     vital program. We should demand no less from ourselves.
                                  ____

                                         Department of Energy,

                                 Germantown, MD, January 27, 1997.

                    Memorandum for Distribution List

     From: Edward J. McCallum, Director, Office of Safeguards and
       Security.
     Subject: Status of Safeguards and Security.
       This report provides a comprehensive review of Safeguards
     and Security activities throughout the Department of Energy
     complex during 1996 and provides a candid look at the future
     of the Program. The report is structured to present a
     Departmental perspective of the Safeguards and Security
     Program to senior management and all safeguards and security
     professionals. For the first time the report also contains a
     section which summarizes safeguards and security
     participation in National Nuclear Command and Control
     activities.
       During the past year disturbing trends continued that
     resulted in additional budget reductions, further diminishing
     technical resources, reducing mission training and
     undermining our ability to protect nuclear weapons, special
     nuclear materials and other critical assets. This is
     occurring at a time of increased responsibilities resulting
     from the international transfer of nuclear materials and
     dismantling of U.S. nuclear weapons. Although traditional and
     time proven protection principles are still emphasized, it is
     becoming increasingly difficult to adequately protect our
     nation's nuclear stockpile in the face of inadequate
     resources, obsolescent systems, aging protection forces and
     funding uncertainties. This has increasingly resulted in a
     ``hollow-force'' that goes below the ``bottom line'' and
     makes it more difficult to fulfill National Security
     mandates. It is imperative that the Safeguards and Security
     downward resource spiral be immediately halted. Further,
     nuclear materials must be consolidated to reduce costs or
     additional resources must be found for protection. Adequate
     investment is essential to sustain a vital Safeguards and
     Security Program that continues to support the nation's
     security, the public health, safety and our environment.
       I am confident that the report will be a valuable tool to
     stimulate open conversation, provide constructive feedback
     and assist in addressing the continued viability of the
     Department's Safeguards and Security Program. Collectively,
     we must continue to strive to maximize the use of our
     resources necessary to ensure requisite security for the

[[Page H3842]]

     Nation's and the Department's most vital assets.
           Attachment.

                                  Central Intelligence Agency,

                                   Washington, DC, March 16, 1999.
     Dr. Ernest Moniz,
     Acting Deputy Secretary, Department of Energy, Washington, DC
       Dear Dr. Moniz: As the Central Intelligence Agency's
     representative to the Department of Energy (DOE) Security
     Management Board, I would like to convey some important
     perspectives concerning on-going discussions to reorganize
     the Department's security element. Of concern is
     consideration that is being given to further decentralize
     DOE's security management apparatus and assignment of
     security expenses to indirect costs (i.e., overhead) at the
     individual sites and Laboratories. In my judgment, and based
     on our experience at CIA, DOE should undertake such
     reorganizational and budgetary alignments advisedly.
       Using CIA's experience as an example, reorganization
     through division can be highly ineffective and inefficient.
     Shortcomings to CIA's 1994 decision to divide the Office of
     Security were quickly exposed, including: expensive
     duplication of security activities, deteriorated management
     focus over a tangential security program, elimination of a
     coherent security career service, and dilution of CIA's
     leadership role in the Community. Adding to the difficulties,
     security managers under this arrangement had limited control
     over their fiscal fate, having been placed alongside and
     beneath numerous budgetary layers.
       Director Tenet recognized these inefficiencies immediately,
     and placed me in charge of consolidating CIA's program in
     1997. In addition, he has provided security with a stronger
     voice in its fiscal future. The process to reconstitute our
     security apparatus has been challenging; but, its benefits
     have already become apparent through a stronger, more viable
     security program.
       The lessons learned after CIA decentralized its security
     organization have also been experienced by other agencies,
     several of which have chosen to reconsolidate their
     activities. With such stark examples of the shortcomings of
     decentralization in security apparatuses, I urge you to give
     strong consideration to the implications of such
     reorganization of DOE.
       Furthermore, in today's world of sophisticated
     technological threats, and given the developing review at one
     of the National Laboratories so widely publicized, I would
     further caution against leading the charge toward field
     autonomy, and anticipated the Department looking toward
     reinforcing centralized security expertise.
       When appointed to the Security Management Board a year ago
     I expected that the Department wanted the input of the
     representatives from other Agencies in security issues of
     this nature. In fact, I believed that obtaining such outside
     counsel on issues of this nature was the purpose for which
     the Board was created. Unfortunately, my experience with the
     Board indicates that it is a feckless exercise with no
     accomplishments almost fifteen months after it was
     established. I would welcome the opportunity to further
     discuss my views with you at your convenience.
           Sincerely,

                                       Raymond A. Mislock, Jr.

                                         Associate Deputy Director
     For Administration for Security.
                                  ____

              [From the Wall Street Journal, May 3, 1999]

      Congress Brings New Inquires Into Weapons Security Failures

                          (By John J. Fialka)

       Washington.--House and Senate investigators are launching
     new inquires into the Energy Department's $800 million
     security program and how it failed to stop the apparent
     compromise of many of the nation's most valuable nuclear-
     weapons secrets.
       Rep. John D. Dingell, the Michigan Democrat who led several
     of the House Commerce Committee's previous investigations in
     the 1980s and early 1990s, charged that the department runs a
     system of ``inverse reward and punishment.'' People who have
     identified lax security at the nation's defense labs have
     been punished and those who somehow finesse, ignore or abuse
     the program have been rewarded, he said.
       The panel will hold hearings this week on the latest
     example of this seeming paradox: Edward McCallum, the Energy
     Department's top internal critic of security deficiencies,
     has been put on leave and is being investigated by the
     Federal Bureau of Investigations for allegedly leaking secret
     information. At the same time, Wen Ho Lee, the former Los
     Alamos nuclear-weapons scientists who allegedly transferred
     many of the nation's most sensitive nuclear-weapons codes to
     an unprotected computer between 1983 and 1995, is described
     by the FBI as being ``unprosecutable.''
       There is no evidence that China obtained any of the codes,
     although Mr. Lee met with China's weapons experts on two
     occasions during the 1980s and Chinese scientists were among
     the most frequent visitors to the lab.
       The Commerce Committee has threatened to subpoena 13 Energy
     Department officials who know about the investigation of Mr.
     McCallum, a 25-year department veteran who, among other
     things, has complained about difficulties in trying to
     protect the secret computer system at Los Alamos. The network
     of 2,000 computers is used to store digital models of nuclear
     tests that show, moment-to-moment, how nuclear weapons work.
       Committee members have invited Mr. McCallum to testify
     along with another department veteran, Glenn Podonsky, who
     runs internal inspections for the agency. While Republicans
     are leading the charge in the various congressional
     investigations, the two witnesses and others are expected to
     tell of foul-ups and budget shortfalls that date to the
     Carter administration.
       Energy Department reports show that Mr. Podonsky, as early
     as 1994, had identified the problem that researchers could
     transfer data from the secured computer system to the
     unprotected one.
       Over the weekend, Department of Energy officials said that
     a classified report prepared by U.S. intelligence agencies in
     November showed that there had been numerous efforts to
     penetrate the weapons laboratories' unclassified computer
     system. The secret report also noted that China was among a
     number of nations the laboratories should regard as a threat.
     Still, investigators didn't examine Mr. Lee's computer until
     March and didn't close down the classified system until last
     month. The report's findings were first published in the New
     York Times.
       Brooke Anderson, a spokeswoman for Energy Secretary Bill
     Richardson, said the secretary ``is extremely concerned that
     the hearing may bring potential disclosures of classified
     information and his priority is to protect the national
     security.'' Mr. Richardson, a former member of the Commerce
     Committee, irritated its leaders after a security hearing
     last week, accusing the panel of ``exhuming the past.''
       David Tripp, Mr. McCallum's lawyer, said the information
     involved in the allegations against Mr. McCallum wasn't
     classified and that he is being punished for being ``a pain
     in the neck'' about exposing security problems. Rose
     Gottemoeller, the assistant energy secretary who removed Mr.
     McCallum from his job, denied that was the reason, calling
     Mr. McCallum ``a valued security professional'' who has made
     ``major improvements.''
       Despite substantial spending on ``gates, guards and guns,''
     one problem that had received relatively little scrutiny is
     the so-called insider threat. As the Cold War has faded, the
     threat has grown because many Americans now shun careers in
     engineering, physics and mathematics--skills in demand at the
     weapons labs. The shortage forced the labs to turn to
     foreign-born experts who had become naturalized U.S.
     citizens, such as Mr. Lee, Taiwanese whose skills included
     modeling nuclear-weapons explosions on supercomputers.
                                  ____

            [From the TelePort of: Ed McCallum, May 7, 1999]

     To: Al Santoli.
     Memo: This is draft and has not been given to DOE except
       verbally. It clearly shows there was no classified unless
       DOE wants to change the published rules./Ed

                                 draft

                                         Herndon, VA, May 6, 1999.
     Subject: Classification Analysis of Rocky Flats Transcripts
     Mr. Joseph Mahaley,
     Director, Office of Security Affairs, U.S. Department of
         Energy, Washington, DC.
       Dear Joe: Since I have not been given the opportunity to
     present my technical analysis of the classification decisions
     that I made during the subject discussions with the DOE
     contractor whistleblower, Mr. Jeff Peters, I will do so now.
     The presentation being made in this letter should have been
     part of the first step of the inquiry process described in
     DOE Manual 471.2-1B, 7a.(1), and should have been completed
     before proceeding with any inquiry. If both sides of a
     technical discussion had been laid on the table before the
     Department's classification authority, I firmly believe a
     determination would have been made at that time that the tape
     conversation and subsequently released transcripts were
     unclassified.
       To date, six authorized classifiers have assessed the
     transcripts. Two areas of the conversation have been
     identified for further review. First, reference is made to
     ``20 percentile'' and ``80 percentile'', but no further
     context is provided by either speaker. Even if the reader can
     speculate the discussion relates to protective force computer
     modeling, no specific scenario is developed, no specific
     facility (e.g. building or vault, as stated in Topic 610 of
     CG-SS-3) is identified, and no specific attack developed.
       DOE Classification Guide, CG-SS-3, Chapter 6,
     ``Vulnerabilities'', D. states clearly that information must,
     ``meaningfully aid a terrorist or other malefactor in
     targeting DOE facilities or bypassing security measures . .
     .''.
       Vulnerability is defined in Appendix A, Definitions of CG-
     SS-3, as ``an exploitable capability or an exploitable
     security weakness. . . . If the vulnerability were detected
     and exploited by an adversary, then it would reasonably be
     expected to result in a successful attack . . .''. Clearly,
     no exploitable vulnerability is discussed within the meaning
     and intent of this classification guide that has been used by
     DOE for over 25 years.
       The second area of conversation identified for review is
     the statement ``Put some HE on top of it and boost it up--you
     don't need to take it in the middle of Denver, it's going in
     the middle of Denver anyway.'' This portion of the
     conversation refers to a radiological dispersal device. CG-
     SS-3, Chapter 3, ``Malevolent Dispersal of Radioactive
     Material'', provides detailed guidance for classification in
     this area:
       Paragraph C, states that for information to be classified
     it must be,'' . . . detailed,

[[Page H3843]]

     specific information that, if not controlled, would
     significantly enhance the probability of such a dispersal''.
     Further elements of the same paragraph require elements such
     as ``Details of specialized access procedures to areas or
     equipment . . .''. ``Detailed scenarios (combining details of
     radioactive source type, size and form; container design;
     dispersal mechanism design) . . .''
       Topic 1101.1 states specifically ``Trivial or generally
     known methodology'' is Unclassified.
       Topic 1030, ``Design of credible Radiation Dispersion
     Device (RDD), states a design is ``Unclassified for
     unsophisticated designs.''
       Topic 1052 cites ``Generic description of methods that
     could be used to disperse radioactive material (e.g., fire,
     explosives)'' as Unclassified.
       Special nuclear materials discussed in the conversations
     have been publicly associated with the nuclear weapons
     program and included in Section 51 of the Atomic Energy Act
     of 1954. They are defined as ``Pure Products'' and as ``High-
     Grade Materials'' in unclassified DOE Regulations and in CG-
     SS-3.
       Further, information concerning radioactive source term and
     scenarios of worst case dispersal with consequence estimates
     are contained in great detail in Safety Analysis Reports for
     each site. These reports contain worst case scenarios for
     radiological releases. They are unclassified, published and
     available in DOE Public Reading Rooms and periodically on the
     internet.
       I know of no other issues that have been reviewed or could
     be considered even close to classified information. Further,
     I was given a 30-minute briefing on Defense Programs weapons
     design program(s) in the past. Nothing I have seen or heard
     of these programs would void or invalidate the published
     guidance in CG-SS-3.
       I firmly believe that I have not disclosed classified
     information and have not crossed any boundaries, real or
     imagined. In no case were details or specifics provided any
     reader. Speculation might cause a reader to draw conclusions
     that are completely external to these illegally recorded
     conversations. The transcripts have been reviewed by a number
     of authorized classifiers and all have reached the conclusion
     that the conversation does not contain classified information
     and in no way crossed any prohibited boundaries.
       I believe I have seen a rush to judgment on this
     classification issue and subsequent actions that violate the
     procedures published in DOE classification guidance and DOE
     Manuals relative to the investigation of a potential
     compromise. If the basic elements of ``due process'' had been
     followed this would have only been a technical discussion
     with possible clarified technical guidance provided by one
     side or the other. In closing, if Defense Programs believes
     these elements are so sensitive, then why weren't adequate
     physical protections immediately put in place to allay their
     concerns?
           Sincerely,
                                  ____

                                         Department of Energy,

                                 Germantown, MD, February 3, 1999.
     Memorandum for Joseph S. Mahaley, Director, Office of
       Security Affairs
     From: Edward J. McCallum, Director, Office of Safeguards and
       Security
     Subject: Hagengruber Study.
       I have completed my initial review of the subject document
     and offer the following impressions. These thoughts are not
     intended to be all inclusive, nor do they address all of the
     facts that I find questionable. In this regard, I have
     directed the Office of Safeguards and Security (OSS) Program
     staff to conduct a thorough review of the entire report with
     respect to its factual accuracy. Upon completion of this
     review, detailed comments regarding factual inaccuracies will
     be forwarded. Beyond the factual accuracy of some of the
     items found in the report, however, it is evident that this
     study not only misses the mark of the task assigned, but if
     left unchallenged could serve to damage the Department's
     standing in the security and intelligence community at large.
       In reading the report, I am struck by the elementary
     understanding it portrays of the Safeguards and Security
     (S&S) Program, specifically as it relates to the national
     level directives that provide much of the foundation for many
     of the areas called into question. There is no mention of the
     Presidential Decision Directives (PDD) or the requirements
     contained therein governing federal agencies and their
     policies toward counterterrorism, explosives detection,
     radiological sabotage, and chemical/biological weapons
     defense. In fact the assertions offered are in direct
     contradiction to President Clinton's policy on
     Counterterrorism promulgated in PDD-39. For a study that
     spent the better part of a year examining the Department's
     S&S Program, I find this glaring omission of national
     policies to be alarming. Furthermore, it conveys a lack of
     understanding of the environment in which the Department
     operates that consequently diminishes the value of any
     findings or recommendations.
       Beyond the lack of depth of understanding of S&S Program
     requirements, however, I find the team failed to answer the
     only question that was posed to them. Specifically, whether
     current--DOE practices ensure that Special Nuclear Material
     (SNM) and Nuclear Weapons are adequately protected against
     Raidological Dispersal Device (RDD) and Improvised Nuclear
     Device (IND) threats. The short statements in the report that
     we need to change policies to require a higher standard of
     protection of SNM is gratuitous and provides no new
     information. The single graphic depicting greater quantities
     of explosives relative to SNM types was recognized long ago
     when the Atomic Energy Commission began this program, and
     again in 1988 when the graded safeguards table for SNM
     protection was established. I was disappointed to find that
     the validation of specific time lines of existing guidelines
     currently in the Secretary's office awaiting completion of
     this study were completely avoided.
       Equally disappointing is the amount of effort and detail
     directed at the management and organizational issues that
     have been previously reported in numerous studies to include
     your Report to the Secretary of October 1997 and the OSS
     Annual Report to the Secretary of January 1997. That the
     fragmented and divisive S&S structure is difficult to manage
     is well acknowledged and has been addressed repeatedly by DOE
     through reorganization and restructuring (e.g., SAI 26).
     There is no new information here, and the recommendations
     offered are confusing and inconsistent with one another. The
     solution as I understand it would further decentralize
     authority and responsibility to field sites thereby
     recreating the exact same environment as existed in
     Counterintelligence prior to the issuance of PDD 61.
       The report wades through a plethora of symptoms and offers
     the often repeated Laboratory rhetoric to limit Headquarters
     involvement and trust the contractor to carry out the
     government's mission. Trust is not the question, execution
     is. As you know, cost is an essential element of risk
     management. The House of Representatives, Committee on
     Commerce, Oversight and Investigations Subcommittee
     challenged the DOE on the oversight of its contractor's S&S
     programs throughout the 1980's and early 1990's. Senator
     Glenn asked the same questions in Senate, Government Affairs
     Committee hearings. These facts are either unknown or ignored
     by the report team. I have yet to hear an allegation that DOE
     provides too much oversight of our contractors except from
     the Labs. Consequently, the suggestion that S&S should be
     funded through a site's overhead budget is simply
     irresponsible. It is unclear to me how this would be the
     preferred method of funding. Such a move would further remove
     the Department's control over this critical area. It is
     precisely this approach to safeguards and security as an
     ``overhead'' function that has led to many of our
     difficulties. It further underscores the lack of
     understanding of the mission essential element of safeguards
     and security as it relates to the Department's overall
     mission. It is precisely this type of thinking that Admiral
     Crowe's January 1999 report on the embassy bombings in
     Nairobi and Dar Es Salaam warns against. In his cover letter
     to Secretary Albright he expresses concern about the ``. . .
     relative low priority accorded security concerns throughout
     the US government--by the Department, other agencies in
     general, and on the part of many employees both in Washington
     and in the field.'' Admiral Crowe goes on to advise that,
     ``Saving lives and adequately addressing our security
     vulnerabilities on a sustained basis must be given higher
     priority by all those involved if we are to prevent such
     tragedies in the future.''
       Again, this lack of understanding leads to another
     distrubing assertion found in the report. Specifically that:
     ``Safeguards and security is not a mission of DOE. Rather,
     safeguards and security is the responsibility of the DOE and
     contractor management at individual sites.'' Such a statement
     is contrary to Department of Energy's Strategic Plan of
     September 1997. Under the Strategic Plan's National Security
     Strategic Goal is the objective to ``ensure the vitality of
     DOE's national security enterprise.'' In support of this
     objective is a strategy to ``ensure the protection of nuclear
     materials, sensitive information and facilities.'' The fact
     that safeguards and security is found in the Strategic Plan
     as well as in the Secretary's Performance Agreement with the
     President clearly raises its level of import to more than ``a
     requirement of operation.''
       A final point worthy of note is the complete lack of
     understanding of the Department's Design Basis Threat (DBT)
     process. The FBI, CIA, DOE, and the military services as well
     as the Nuclear Command and Control Staff have developed the
     existing Design Basis Threat over a number of years. It has
     been extensively reviewed and supporting studies issued by
     the DIA. Sandia, as well as our other Labs, have been asked
     to comment and participate in the development process. To
     describe the process and approach as flawed further
     underscores the superficial nature and questionable analysis
     found in the report.
       Perhaps most distressing is the lack of balance in its
     approach to the critical safeguards and security issues
     facing the Department. Rather, what is provided is a very
     parochial Defense Programs/Laboratory view that ignores not
     only the external drivers found in national level policies,
     but a total lack of understanding of specific procedures
     implementing these policies. Suffice to say, I am strongly
     opposed to the continued funding of Phases II and III of this
     effort. If Phase I is any indication of the quality of effort
     that might be expected, any further funding in this regard
     would be imprudent at best. Nonetheless, if the program is
     continued, I strongly suggest we manage the direction and
     quality of the next phase.
       As stated in this and other studies, successful resolution
     of the issues facing this

[[Page H3844]]

     Department relative to safeguards and security will require a
     concentrated effort on the part of all interested parties to
     include the Office of Defense Programs and the National
     Laboratories. What concerns me is that critical information
     concerning these issues is missing from this study. While
     such an omission may serve certain short term interests, it
     is not in the best interest of the Department or the nation.
     As an agency, we must endorse and implement two significant
     objectives concerning our protection strategy: (1) to protect
     our nation's critical assets from those who would cause our
     nation harm, and (2) to protect the forces that secure our
     facilities from unnecessary vulnerability. To do any less is
     to undermine our national security responsibility, which is
     without question, a core mission of this Department.

  Mr. WELDON of Pennsylvania. Madam Speaker, Mr. McCallum has been
punished and has been placed on administrative leave and may lose his
job. Guess who now sits on the corporate board of directors, being
paid, overseeing the operation of that same facility? You guessed it,
Madam Speaker. Hazel O'Leary. Hazel O'Leary now sits on the board of
directors of the company that oversees the Rocky Flats facility that
Mr. McCallum attempted to bring to the attention of the Congress was
being protected in a woefully inadequate way. What is the response of
this administration? To make him the scapegoat.
  It is a shame that he did not precede Notra Trulock, because as many
of my colleagues know, it was Notra Trulock who began to blow the
whistle on this administration for not paying attention in 1995 to
security breaches that were occurring in the Department of Energy. But
Notra Trulock lucked out. Because when the administration realized that
what Notra Trulock was saying was true, they could not go after him.
They gave Notra Trulock a $10,000 bonus and now Notra Trulock is on
national media programs and talks about how the administration has
gotten its act together.
  It is a shame that Mr. McCallum did not precede Notra Trulock.
Perhaps he would have gotten the $10,000 raise for being the whistle-
blower. I can tell my colleagues, Madam Speaker, I am not going to sit
by, and neither are a number of our colleagues, and see an innocent
individual doing his job professionally be railroaded out of his
position because this administration is embarrassed over the policies
of their lack of control and decontrol in security measures involving
our national laboratories, our Department of Energy facilities, our
defense installations, and our military and other technology.
  The American people, Madam Speaker, can now read the statement of Mr.
McCallum for themselves in tomorrow's Congressional Record. The
American people also now, Madam Speaker, can read information I
provided last evening giving the big picture of the China connection. I
want to review that again today in some more detail.
  As a member of the Cox committee, I had the opportunity, over the 7
months that we worked aggressively on this project, to meet a number of
senior and very capable intelligence officers and people within our
intelligence establishment who are absolutely frustrated by what they
see occurring in this administration on security issues. When we
completed the Cox Commission report, I knew that the American people
would not sit through and read, for the most part, a document that is
almost a thousand pages in length. Very difficult to understand.
  So working with this group of people, and I would add for the record,
who are today currently employees of this administration, so I cannot
name them because they will be given the same treatment as Mr. McCallum
has been given, these people have given me the information that I am
providing to our colleagues and to the American people.
  This chart, Madam Speaker, for the first time, even though it looks
like a hodgepodge of blocks, it can be pulled down on the Internet
site, as I have said earlier, and this site is www.house.gov/
curtweldon. This document gives the full pictorial representation of
what we think China had planned to acquire western technology.
  Now, should we fault China for establishing this network? Probably,
yes. But as many have said, what country does not spy or look to
acquire technology from other countries? I would say we are the fools
if we are stupid enough to allow China to access information that we
should be controlling. And that is why I think the bulk of the
responsibility here, Madam Speaker, lies with our own government. It
was our government that failed the American people.
  This chart outlines the Central Military Commission of the People's
Liberation Army of China. The red boxes on this chart, which are too
difficult to read without having the chart directly in front of you,
are the various military commands and entities that are a part of the
Central Military Commission that we know have been involved in engaging
and in acquiring technology for China. Now, some of that acquisition
has been legal, and there is nothing wrong with that. If they can buy
it, how can we fault China for buying things we are legally willing to
sell them or other countries will sell them? Some of it was not legal.
By and large, though, much of what they got, they got through legal
manipulation that we allowed to occur.
  The green boxes are those entities and banks and financial
institutions here, in Hong Kong and Macao, as well as in Europe and
Asia, that were designed to fund the acquisition of these technologies.
Now, because they could not buy them directly, front companies were
established, and they are the blue boxes. We estimate there were
hundreds and hundreds of front companies established by the Chinese to
acquire technologies, paid for by these entities, to go to the arms of
the People's Liberation Army, because that is a desire they had for
these specific technologies.
  A very elaborate scheme, but very simple. The financing through the
entities to buy it go back to those entities that wanted to improve
their missile systems, their nuclear programs, their computing
capabilities, the design of their fighter aircraft, whatever the need
might be. Again, if we are stupid enough to sell sensitive technology,
how can we just blame China for buying it in the open market? This was
the network.
  Now, we can see that what we did not look at in the Cox committee is
what influenced these people to allow this technology to flow. Was it
money, was it influence, was it a desire to increase economic activity
for American companies? What was the motivation? We did not look at
that in our China committee effort. We thought that should be a follow-
on once we determined that there was security harm done to our country.
That is why I prepared this document and the document I am going to
follow up with.
  There are some connections here, Madam Speaker, that the American
people need to look at, because some of these green boxes have attached
to them campaign donations. Ted Sioeng, $200,000 to $400,000 to the
Democratic National Committee. Or John Huang and James Riady, and all
of these people who contributed millions of dollars to the Democratic
National Committee. Or the temple that gave, through Maria Hsia,
$50,000 at a fund-raiser at a temple of impoverished religious leaders.
Those connections need to be pursued.
  This information, Madam Speaker, has been investigated much more
thoroughly by the FBI and the CIA than I have. Now, I have seen some of
the classified versions of this, which are far more elaborate, which I
obviously cannot show publicly. What I have shown here is an
unclassified version of the connections between these agencies that
have been publicly identified. And in response to a question by a
Member of Congress at a public hearing, Louie Freeh, the director of
the FBI, was asked: ``How much of the information that we are aware
about in public form, like this, compares to what you know in the FBI
and the CIA about what happened in this entire series of
transactions?'' This was the response of FBI director Louie Freeh.
``The public knows about 1 percent.'' One percent of what went on that
we have in the FBI and the CIA in terms of these connections. One
percent, Madam Speaker, which means that 99 percent beyond this our
intelligence and our law enforcement agencies know about but we do not.

                              {time}  2215

  Madam Speaker, the individual that Louis Freeh assigned to
investigate this, Charles LaBella, when he got

[[Page H3845]]

through all of this evidence, well beyond what I have, wrote a
memorandum to Louis Freeh that I have been told is almost 100 pages in
length. That then resulted in Louis Freeh sending a memo to Janet Reno
saying there is enough evidence here that you better impanel a special
investigative effort, an independent counsel, because of what may be
here. Janet Reno refused Louis Freeh and refused Mr. LaBella. That
document has never been released to the Members of Congress nor the
American public. In fact, I am not aware of any Member of Congress that
has read that memo. But I can tell you, Madam Speaker, every Member of
this body and every citizen in America should demand of this President
one thing, and, that is, to release the LaBella memorandum. If this
President and Vice President Gore have nothing to hide, if there are no
connections, if there is no scandal, if there is no grand scheme, if
there are no implicating factors, it can all go away very quickly by
releasing the LaBella memorandum. That document has been subpoenaed by
the Congress and it has been refused by Janet Reno to be turned over to
us so that we have not had the opportunity to see what Charles LaBella
said was there in that 99 percent of information that we do not know
about. What I have given to the American people is the unclassified
information that they can read, and it in itself is revealing. In fact,
Madam Speaker, you will notice there are lines connecting many of these
boxes. The solid lines indicate direct working relationships between
the PLA entities, the financing entities, and the front companies. So
they are directly linked. The dotted lines, which are fewer in number,
are those where there is a loosely connected relationship but not a
direct relationship. Now, the logical question is, ``Well, hold it,
Congressman, you can't just draw lines. You've got to provide some
documentation.'' Well, we did. Again working with existing employees of
this government who have been frustrated by what they have seen
occurring have helped me identify 26 documents that are available on
the public record that are not classified, that include newspaper
articles, research documents, business reports, company annual reports
where you can connect the lines. Each of the numbers on this chart
which corresponds with a line gives you a specific document that you
can read which I have outlined and identified in the Congressional
Record yesterday which you can get off of my web site which gives you
the public information that supports the linkage between these various
entities. It is public information. Now, that is not all. And the media
when I brought this out last week said, ``Well, wait a minute, you
haven't established a direct relationship.'' I cannot show classified
information here. That is a violation of our Federal laws. I have given
unclassified documentation which without a doubt shows the connections
between the major players in the effort to allow China to acquire
technology that they have been wanting to buy.
  Now, the administration would have us believe that this is really all
concocted by China and that we should make China the evil empire. I am
not doing that, Madam Speaker. I cannot blame China if decisions made
by this administration allowed technology to flow legally, and that is
what occurred in most cases. The influence that was peddled by these
financial people ended up lowering the controls over our regulation of
technology being sold abroad. The influence exercised by these people
and their money influenced key decisionmakers in this administration.
In my opinion, that lies in terms of fault at the feet of this
administration itself. And as much as we would like to totally blame
China, I blame our own government.
  Now, are there instances where China went too far? Absolutely. And I
would say this again on the record. If we can document that there is
direct espionage that took place at our labs or at other facilities, we
should use the full force of our law to prosecute those people who in
fact spied on America, much like we have done in the past. But we
cannot blame a country if we willingly sold them the bulk of this
technology because of influence they were able to get by putting some
money around or by currying favor with certain people.
  Let me go to the second chart, Madam Speaker. The second chart, which
was also prepared with the help of existing employees that work for
this government who are in sensitive positions, gives the time line,
the time line of liberalized and decontrolled technologies to the
People's Republic of China. But I want you to know, it was not just
China that benefited from these policies. Many of these policy
decisions benefited a number of countries who were able to legally buy
our technology.
  Now, I am not against our companies selling technology abroad. In
fact, I am an advocate of our companies being able to sell and compete
in the world marketplace. But, Madam Speaker, that is not what occurred
here. What occurred here was the elimination in a wholesale way of a
legitimate process that was in place under previous administrations to
monitor technology and to do it with our allies. As I mentioned last
night, the reason I started this chart in 1993 was not because that is
when Bill Clinton took office, it was because in 1993 this President
ended a process called COCOM. COCOM was an organized group of our
allied nations and Japan that met on a regular basis to monitor
sensitive technology that was produced in any one of the allied
countries. There was an agreement that none of those COCOM nations
would sell sensitive technology to countries that we thought might use
it against us, so that none of our companies were hurt because all the
countries that have this technology were working together so that no
one could benefit.
  It was this administration in 1993 that unilaterally decided to end
COCOM, did away with it. Without even consulting with our allies, we
said, ``We're doing away with this process.'' From 1993 on, the
floodgates opened. Because now you had companies in Great Britain and
France and Japan who said, ``Wait a minute, there's no more COCOM,
we're not going to let the U.S. sell this technology abroad, we're
going to sell competing technology.'' So now you had a mad scramble,
you had American companies trying to keep up with German, French,
Italian, British and Japanese firms who now saw American companies
selling technologies that under COCOM they could not sell. So the
European countries and Japan said, ``Wait a minute, we're going to sell
that technology as well,'' and you had a mad scramble to sell
technology in a totally uncontrolled fashion. That began in 1993 under
this administration. The Commerce Department will tell you it was good
for business. Some business leaders will tell you it was good for
business. We on the Cox Committee will tell you it was bad for America.
Other allied nations will tell you it was bad for international
security. Proliferation has never been worse than it has been for the
past 6 years. Iran, Iraq, Syria, Libya, North Korea, India, Pakistan,
all have cutting-edge technologies that up until 1993 were tightly
controlled by COCOM, all of that ended by this administration. That is
the focus of the Cox report.
  The chronology of this chart takes each technology separately:
warhead design, machine tools, low observable technologies,
telecommunications, propulsion systems, high-powered computers,
encryption technology, space launch technology, and analyses when key
decisions were made by this administration and gives you the month and
the date that allowed technologies to flow that up until these dates
were controlled. And you can see by the number of red dots here that
during this time frame, the floodgates opened. We said, ``We'll sell
anything and everything and we won't consult with our allies.'' So you
have had a mad competition among companies in countries that up until
1993 worked together to make sure that no one could unfairly have a
larger share of the market with sensitive technologies. After 1993, the
demise of COCOM, the floodgates opened. Everything and anything was for
sale. Our companies got their way, they got to sell whatever they
wanted, foreign countries and companies the same thing, and China took
advantage of it.

  Now, there are some interesting other factors about this chart, Madam
Speaker. You will notice a gray area in the center of this chart,
starting in 1995, ending in 1997. Why did I make that gray? Because in
1995, we have been told by Bill Richardson that this

[[Page H3846]]

 administration found out that China was acquiring our most sensitive
technology. And if you listened to Secretary Richardson, this is what
he said: ``Boy, when we found that out, we took aggressive action. We
said, `We're not going to let China steal our technology.'''
  Well, that is what he said. The color in the blue, Madam Speaker, and
all the red dots you see here, just under Space Launch alone, 15
separate actions after this administration knew that China had stolen
our design technologies that they took in 3 years to give more
technology to countries like China. And that is across the board, Madam
Speaker. So the blue indicates where this administration knew that
China was trying to acquire this technology and doing it illegally,
opened the floodgates even further for more technology.
  There is one more factor here, Madam Speaker. All of us in America
know when the elections were held. It is kind of interesting when you
look at this chart from a distance that the bulk of the clustering of
these dots are in and around the time frame of 1996. I wonder what was
happening in that year, Madam Speaker? Might that have been the year
when the presidential elections were being held? Could there be some
coincidence that many of these key decisions in terms of policy changes
were being done because elections were being held and maybe people were
interested and from the standpoint of corporate America in having
policymakers make determinations to allow more products to be sold
overseas, could that be a reason? That is what the LaBella memorandum
referred to, Madam Speaker, that this country needs to see for itself,
the reasons why these decisions were made. Why did we change our policy
so much? Why did we allow access? Why did we totally decontrol
technologies in a way that was not being aware and cognizant of our own
security concerns?
  But it goes beyond these issues, Madam Speaker. Let us move down to
this next item here. PRC Nationals to U.S. High Tech Companies. It was
in 1994, in fact it was in March, that Chinese nationals to our U.S.
labs and our U.S. high tech companies was allowed. The COMEX review of
foreign nationals was abandoned, by this administration. That was in
1994. I am sure that was done because the companies wanted less hassle
of foreign nationals going into our high tech companies. And over here
in 1997, we revised our deemed exports policy to allow foreign
nationals to work at U.S. high tech companies. Now, that was in 1997.
These were decisions made that allowed more Chinese nationals to work
in our high tech companies in America. And how about the high tech
furnace approval for weapons of mass destruction? That approval was
given in 1998, Madam Speaker, a technology that gives China capability
for the production of weapons of mass destruction. Even though this
administration said when they found out about the theft of nuclear
secrets, they took aggressive action to control it.
  Let us go down further, Madam Speaker. During this same period of
time, China and Russia were both violating international arms control
agreements. The Missile Technology Control Regime, the control of
exports. We caught them on a number of occasions. In fact, in last
night's special order, and again the American people can read this
through my web site or get a copy of it through the Congressional
Record last evening--and I did not do the work, the Congressional
Research did the work--we documented the arms control violations that
we caught Russia and China involved in over 6-year time period. Here is
that chronology as documented by the Congressional Research Service.

                              {time}  2230

  The dates, the type of transfer, who the transfer went to are all
documented. This was not done by some partisan group; it was done by
the Congressional Research Service, a part of the Library of Congress.
  These violations of arms control agreements by China, were they sent
technology? Where did they send the technology to? Let us look at the
chart.
  Well, they sent technology to Pakistan, Iran; Iran? North Korea.
Syria. They sent solid propellant production technology to Libya, Iran,
Egypt. They sent missile accelerometers and gyroscopes to Iran, Syria,
Libya, Egypt and Pakistan. They sent antiship missiles to Iran. They
sent more material to Pakistan; chemical weapons technology to Iran
again.
  All of these transfers done by China.
  What was the response of this administration? Nothing.
  On, yes, two times out of about 17 or 21, I forget which it is, they
did impose temporary sanctions; but they eventually waived them.
  So not only are we getting Chinese access in a way they never had
access before, not only were we helping to expedite and grease the
skids for the financing of the purchase of technologies, but we were
ignoring violations of arms control agreements that China was required
to abide by. We did not call them on these violations.
  And at the bottom of the chart, Madam Speaker, even though I could
not complete it, I was only able to do this up through 1996, I list a
number of times that the major players in the Chinese financing scams
visit at the White House, not visited Members of Congress, but were in
private visits in the White House itself.
  In the case of John Huang, in the one year of 1993 alone, we know of
12 times he was in the White House. In 1994, twice; in 1995, let us
see, one, two, three times; or 1994, three times; 1995, three times.
These are people that are involved in that elaborate scheme of
organizations and financing entities that were given direct access to
our White House, to our top policy maker to our commander in chief, to
our key leaders who were then being pressured to relax our policies
relative to technology being sold abroad.
  Madam Speaker, these two charts represent the pictorial view of the
Cox committee report. They represent what needs to be explored further.
  I am not here as a partisan, Madam Speaker. Both times I ran for
mayor of my hometown I was the nominee of the Republican Party and the
Democrat Party both times I ran. I work with many Democrats in this
body and frequently get up on the floor of this House and praise our
Democrat colleagues for their leadership role on defense and security
issues. I have joined with members of the Democrats on a number of key
issues involving social policy, family medical leave, environmental
policies, protection for our workers, and I have supported the
President and the administration in some of those issues which my party
has not been supportive of. But, Madam Speaker, when it comes to
national security, we have a big problem here. This needs to be looked
at beyond the Cox committee.
  To me, I know why in my mind Janet Reno turned down the
recommendation of Louis Freeh based on the memos sent by Charles
LaBella to appoint an independent counsel. I am convinced, Madam
Speaker, the evidence is there. I am convinced that 99 percent that we
have been told we have not seen yet has far more than many people in
this country want to become public.
  I am also convinced, Madam Speaker, that we had better pay attention
here. This is not some story about a dress, this is not some intern in
the White House. This is not some story about a travel office. This is
not even about Republicans or Democrats. Madam Speaker, this is about
the very core of what our country is about. No one, no party official
in either party, no elected leader, has the right to allow a wholesale
technology faucet to open that we are going to have to pay the price
for.
  Now, if I am overreaching, Madam Speaker, I do not think I am
because, a member of the Cox committee having sat through as many of
those meetings as any one of my colleagues, with perhaps the exception
of Chairman Cox himself, I know what evidence the FBI and the CIA has,
and I have only seen a small fraction of what is not on this chart. I
know there is much more.
  If there is nothing there, Madam Speaker, the President can clear
this entire issue up in a heartbeat. All he has to do is release the
entire unabridged version of the Charles LaBella memo to Louis Freeh.
If there is nothing to hide, if there is nothing to these connections,
if there is no story, I will be happy.
  I do not think that is the case, Madam Speaker. I think the reason

[[Page H3847]]

why Janet Reno did not accept Louis Freeh's recommendation, based on
LaBella's memo, is because she knew what is there. That document that
LaBella prepared, which I understand is quite voluminous, goes into
extensive detail and actually points to individual people.
  Madam Speaker, this country, this democracy, needs the American
people and its elected officials to see the overview of the evidence
that LaBella gave to Freeh that now remains closed and confidential. If
there is nothing there, then there is no problem with the memo; if
there is no evidence, if there is no story, if there is no substance,
the whole thing will go away, and the China story will end, and we will
make the necessary corrections to our own policies.
  Madam Speaker, I would encourage every one of our colleagues and
every constituent in every district of a Member of this body and the
other body to demand that this administration do one thing: release the
full text, the uncensored text, of the Charles LaBella memorandum to
Louis Freeh. Let us see what evidence they thought may be there in
terms of a greater scheme for the Chinese to acquire technology by
facilitating and greasing the skids of certain key people and certain
key agencies that ended up with America's security being harmed. That
was the unanimous vote of all nine members of the Cox committee, that
America's national security has been harmed by the actions that we
investigated in the Cox committee work.
  We cannot just stop with this document, and we cannot rely on the
mainstream media because with the exception of a few people like those
that I have mentioned and some others, the mainstream media is too
stinking lazy to go through the investigative details necessary to
uncover what is here. We need to have this administration come clean,
give us the uncensored text of what Charles LaBella said to Louis Freeh
which only went to Janet Reno. When that happens, we will then know the
true extent of the China connection and its impact with this
administration.

                          ____________________
