House Report on Spying Leans Toward Dire Side

WASHINGTON —  When a Senate committee heard testimony last week about suspected Chinese espionage at the Los Alamos National Laboratory, two senior Energy Department officials gave starkly conflicting evaluations of the damage to national security.

But a select House investigative panel’s report on China’s acquisition of U.S. nuclear weapon secrets, as well as other sensitive technology, relies heavily on the expert with the more dire assessment.

The nine-member Cox committee, named for its chairman, Rep. Christopher Cox (R-Newport Beach), concludes in its report that China acquired numerous U.S. nuclear warhead designs and other military secrets during the last 20 years and that China continues to maintain an aggressive spying operation, according to Cox and other members of the committee.

The bipartisan report also asserts that China secretly controls as many as 3,000 “front companies,” especially on the West Coast and in Massachusetts, to obtain U.S. satellite and other civilian technology with potential military uses.

The front companies are often incorporated by Chinese nationals living here, the report says, and include large corporations as well as small nonprofit groups.

The unanimous report also alleges that the Chinese government gives specific intelligence “collection requirements” to many of the thousands of students, tourists and other Chinese visitors who come to the United States each year. The committee was told that China’s “mosaic approach” is similar to building a sandcastle one grain at a time.

Not everyone is likely to agree. The head of a prominent U.S.-Chinese group, who asked not to be identified, said his members were “deeply offended” by the charge during a background briefing by a member of Cox’s committee last week.

The portion of the Cox committee’s report that is likely to draw the most interest and concern focuses on espionage at the nation’s nuclear weapon labs. And for that, the panel relied heavily on its star witness, Notra Trulock, now acting deputy director of intelligence at the Energy Department.

In his testimony Thursday before the Senate Energy and Natural Resources Committee, Trulock called the current Los Alamos case among the worst in U.S. history. China’s theft of nuclear secrets, the 25-year intelligence veteran said, “is on a parallel with the Manhattan Project compromises,” referring to the Soviet spy ring that stole blueprints from Los Alamos in the 1940s and helped Moscow build its first atomic bomb.

But Edward J. Curran, director of counterintelligence at the Energy Department and a veteran of 37 years with the FBI and CIA, was far less certain. “We all agree that there was a breach” of security, Curran told the Senate committee. “I think it’s yet to be determined the degree of that breach.”

He added, “As far as I know, there is no information available that we have to say this information is in their hands.”

Political leaders from both parties took to the airwaves Sunday to blast the Clinton administration, and Atty. Gen. Janet Reno in particular, for responding too slowly to Trulock’s claims of Chinese espionage at Los Alamos, first made after three Los Alamos scientists approached him with their concerns in May 1995.

Criticism especially focused on why Justice Department lawyers refused an FBI request, shortly after the bureau launched an investigation in June 1996 for permission to examine the office computer of Los Alamos scientist Wen Ho Lee.

A search after Lee was fired for security violations in March found he had improperly transferred millions of lines of highly classified nuclear weapon test codes and data from the lab’s secure computer system into a system potentially open to outsiders.

Lee has not been charged with any crime, and his lawyer has denied the Taiwan-born scientist broke the law. The FBI has not found evidence that anyone other than Lee gained access to the files, but it can’t rule out the possibility.

Sen. Richard C. Shelby (R-Ala.), who heads the Senate Select Committee on Intelligence, called for Reno to resign over the case. “I believe it’s time, considering her role or lack of role,” he said on CBS’ “Face the Nation.”

Sen. Robert Torricelli (D-N.J.) appeared to agree. “I think it’s time for President Clinton to have a conversation with the attorney general about her ability to perform her duties and whether it is in the national interest for her to continue.”

For his part, Trulock complained that, although he briefed more than 60 members of the administration, his warnings and assessments were generally ignored until mid-1997.

“There was a predisposition not to accept the findings of our work,” he said on NBC’s “Meet the Press.”

Trulock, a self-described “whistle-blower” who is a controversial and contentious figure, was more direct in his Senate testimony last week. He complained then that he and his colleagues were “labeled Cold Warriors, knuckle-draggers and even McCarthyites.”

Energy Secretary Bill Richardson continued to question Trulock’s general assessment, however. Appearing on ABC’s “This Week,” he acknowledged that China has obtained U.S. nuclear secrets but said it wasn’t clear if any came from U.S. labs in the last decade.

Other sections of the Cox committee report allege that Hughes Electronics Corp. and Loral Space Electronics Ltd. violated U.S. export licensing laws and regulations when they helped China investigate why two Long March rockets carrying their satellites crashed in 1995 and 1996.

The report does not refer new information to the Justice Department, which has investigated the case for several years without bringing any charges. Spokesmen for Loral and Hughes, the nation’s largest and third-largest satellite manufacturers, said last week that company employees cooperated with Cox’s committee. Both companies have denied any wrongdoing.

One chapter also looks at how the U.S. companies hired Chinese sentries or security companies to guard U.S. satellites and other sensitive equipment. It says some were found drunk or asleep, or were allowed to take photographs. The report specifically recommends that U.S. soldiers or security guards be used to guard launches of U.S. satellites in China.

Another part of the report examines the role of U.S. and multinational companies that insure the satellites and whether they bend the rules to aid their customers.

A key finding accuses the Clinton administration of not complying with the National Security Act, which requires regular reporting to the intelligence committees and the leadership of the House and Senate.