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AIM Report: Stealing Secrets and Property at Los Alamos

Yet another scandal has emerged at Los Alamos National Laboratory, the nation’s premier nuclear weapons lab in New Mexico. This involves the potential compromise of sensitive or classified nuclear weapon and national security information. Internal lab documents show a staggering number of missing, lost or stolen computers, many of which were used in lab divisions responsible for nuclear warhead design, physics and engineering.

The name of Wen Ho Lee, a former Los Alamos nuclear weapons scientist who was suspected of stealing top-secret nuclear weapons information for China, is on one list with two “unlocated” printers valued at about $1,900. A listing doesn’t necessarily imply any criminal activity but is a matter that has to be resolved by experienced investigators, some of whom have already been fired for trying to uncover the facts. Lee pleaded guilty to one count of copying classified information on computer tapes.

There is no doubt that some crimes have taken place in this new scandal. Indeed, whistleblowers have charged that the troubled laboratory has experienced a wave of “major criminal activity” over the past three years and that lab managers have concealed the problem.

Internal lab documents verify many of these allegations and show that the lab has “lost” nearly $2.7 million of government property since 1999. Other documents portray a pattern of concealment and deception dating back at least a decade. The lab had hired two seasoned criminal investigators, Glenn A. Walp and Steven L. Doran, to probe on-going thievery at Los Alamos.

Investigators Booted

Two days before Thanksgiving, Walp and Doran were fired and told that “you are not a suitable fit for the requirements of your position.” They were given no reason for their termination. Their termination letters were identical and both signed by Stanley L. Busboom, the lab’s director of security. Busboom wanted them out of the lab immediately. They were escorted by armed security guards while they cleaned out their offices, then taken to their cars and told to get off of lab property.

Ironically, in July Busboom had written in Walp’s performance appraisal that he had the “potential and aspirations to have a positive and lasting impact on the laboratory-very effective performer.” Too effective, apparently, for his own good-at least at Los Alamos.

The documents also depict program managers complaining of disruptions and delays in critical lab national security projects as a result of the theft of lab property. The new scandal is another blow to Los Alamos’ credibility as a responsible steward of the nation’s nuclear secrets.

CBS News’ Sharyl Attkisson, Bill O’Reilly of Fox News, a Los Angeles Times editorial, and Adam Rankin of the Albuquerque Journal have covered the story. But it deserves far more attention because of its national security implications. Lab and University of California officials have limited their public comments, and have denied that classified information was compromised. Los Alamos spokesperson Linn Tytler did put a happy face on the scandal by telling local reporters that the lab had accounted for all but about $100,000 of property in 2001. The laboratory claimed it earned an “outstanding” rating for its property inventory for the year, a claim subsequently repeated by the lab’s director. But an internal memo put the actual 2001 loss at $1.3 million, or ten times higher than Tytler’s claim.

Cover-up Suspected

This has fueled suspicions of a cover-up. Two Energy Department reports, published earlier this year, identified similar problems at another New Mexico laboratory and more broadly throughout Energy’s nationwide laboratory complex. But Los Alamos’ alleged abuses far exceed anything reported in the complex thus far. At most federal agencies, abuses of this type are sufficient grounds for dismissal or the loss of national security clearances required for employment at the Energy Department. Los Alamos has placed several employees on paid “investigative leave” and says that it has terminated one “contract employee.”

In a related development, a University of California (UC) vice president, John McTague, resigned his post shortly after the new scandal emerged. He called it a coincidence. McTague was responsible for oversight of operations at Los Alamos. The position was created in early 2001 after UC was embarrassed by back-to-back national security scandals at Los Alamos. This new scandal underscores the findings of a 2002 blue-ribbon commission that the Energy Department’s policies and practices continue to risk “undermining its security and compromising its science and technology programs” at the labs. The commission’s findings were surprising given congressionally-mandated reforms in the wake of the Wen Ho Lee and missing- computer-hard-drives scandals in 1999 and 2000. The Los Alamos whistleblowers cited concern for homeland and national security in explaining their reasons for making this scandal public.

New Missions, Old Problems

Los Alamos was the site of the design and development of America’s first atomic weapons. Over the years, it remained the premier nuclear-design laboratory and developed many of the warheads currently in the U.S. nuclear arsenal. In 1993, the Clinton administration shut down all nuclear testing and also the design of new warheads. The lab now says its mission is to enhance global security by ensuring the safety and reliability of the existing U.S. nuclear stockpile, developing technologies to reduce threats from weapons of mass destruction, and solving problems related to energy, environment, infrastructure, health and national security concerns. The lab has a $1.4 billion annual budget, mostly in federal funding from the Energy Department and other government agencies, and is the largest employer in northern New Mexico. Public documents also indicate that the lab manages just under $1 billion of federal property.

In February 2002, the lab hired Glenn A. Walp to head up the Office of Security Inquiries within the lab’s Safeguards and Security Division. Walp is a former Commissioner of the Pennsylvania State Police, a graduate of the FBI’s National Police Academy, and has nearly 35 years of law enforcement experience. He was hired specifically to “professionalize” lab investigations of criminal incidents such as larceny. He told Sheryl Attkisson of CBS that he soon realized that there was “a lot of crime occurring” at the lab. Walp says that in March he recommended to his division leader, Stanley L. Busboom, that the FBI be called in to investigate a “major theft problem” at the lab. Busboom turned down that request, but whistleblowers went outside the lab to call in the FBI.

FBI Stonewalled

In July, Walp hired Steven L. Doran, who also had an extensive police background particularly in white-collar crime, to assist him. After the whistleblowers brought the FBI in, Doran became the lab’s main point of contact for a joint lab-FBI investigation. But the FBI quickly ran into obstacles as managers grew increasingly concerned that the lab’s reputation and image would be badly tarnished if the media learned of the on-going scandal. Walp says he was told by Busboom that the lab “is famous for sacrificing their children to protect their image” and, in mid-July, Walp and Doran’s contact with the FBI was halted. They were told that, henceforth, any contact with the bureau would be managed though the lab’s chief counsel, Frank Dickson, who then steered FBI agents to other, less knowledgeable investigators.

It is that alleged interference in an on-going investigation that seems to have spurred lab whistleblowers to send internal Los Alamos documents to the Project on Government Oversight (POGO), a Washington nonprofit watchdog. They revealed substantial thefts of government property and refusals by lab managers to report the thievery. Walp and Doran have confirmed many of the allegations contained in the documents.

The whistleblowers wished to remain anonymous for fear of retaliation by lab or Energy Department managers. Former U.S. Senator Frank Murkowski once characterized Energy’s treatment of whistleblowers as “If there is a problem, classify it, hide it, and get rid of the people who brought it up.” The whistleblower documents charge lab managers with a concerted effort to bury this scandal and keep it away from “the public, DOE, federal law enforcement agencies, political oversight groups, and especially the media.” The lab’s subsequent dismissal of Walp and Doran justified the whistleblowers’ fears.

A Special Government Car

POGO received a written message in early November that expressed a deep frustration with lab officials for their failure to deal with the continuing thefts of lab property. It charged that lab employees had used government credit cards or vouchers to make unauthorized purchases and obtain cash for personal use, and it named names. One notable case involved a lab employee said to have purchased a Ford Mustang for $19,950 at All Mustang, a Phoenix, Az, dealership. She then spent an additional $10,000 on high performance parts and accessories, and charged everything to a government credit card. An All Mustang representative said that the FBI had visited his shop in recent weeks asking questions about the Los Alamos case, but told him not to discuss the case while their investigation was on-going.

The laboratory claimed that it spotted the purchase and stopped it, but internal lab documents indicate that the employee had successfully completed the transaction. The whistleblowers wrote that the lab had been warned about the employee’s suspicious purchases, but took no action until the bank that issued the credit card brought the Mustang purchase to the lab’s attention. Walp confirmed this to Sheryl Attkisson, telling her that the credit card company alerted the lab in July about the Mustang purchase. Walp and Doran then intervened to prevent the employee from taking delivery of the souped-up car. The anonymous memo says that the case was eventually referred to the FBI and the New Mexico U.S. Attorney’s office, but the lab refused to cooperate with their investigation. A voice-mail message on the employee’s lab phone says that she will be gone for an “extended period of time;” the lab says she has been placed on “investigative leave.”

More Allegations

The whistleblowers alleged that other lab employees have used government credit cards to purchase diamond jewelry, customized golf equipment, refrigerators, and televisions and VCRs. Walp and Doran confirmed this, adding that “literally thousands of items” have been bought without authorization. Doran said it would take “six hours” to list everything they had uncovered. The two were particularly disturbed that managers allowed the offenders to repay the lab and then quietly resign. Title 18 of the U.S. federal code authorizes prosecution of such activities as federal crimes.

In mid-August 2002, the lab did announce that two unnamed lab employees had been placed on “investigative leave” in connection with “apparent irregularities in the use of lab-issued purchase cards.” The lab claimed that the misappropriated funds totaled only about $2,500, but the Mustang purchases alone came to over $29,000. The lab also unveiled new regulations for administering credit cards. It announced that Price-Waterhouse-Cooper had been called in to review all purchase card use for the past two years, and appointed a former Energy Department Inspector General to head up an internal investigation. It was also reported that lab director John C. Browne held a closed-door meeting to discuss ethics with lab employees. All this was intended to demonstrate to the public that the lab was firmly in control of the problem and ready to “move on.”

If so, the strategy was demolished in late October when the FBI obtained search warrants on additional laboratory employees on allegations of theft of government property, bribery and conspiracy. AIM obtained copies of the search warrants and accompanying affidavits from the U.S. Attorney in New Mexico and was told that the bureau has opened a full field investigation on Peter Bussolini and Scott Alexander. The two are alleged to have made a series of “unallowable purchases” in excess of $50,000 between July 2001 and late October 2002. The affidavits claim that several of the alleged purchases, including expensive gas-grills and patio furniture, are clearly visible at homes of the two employees. After the FBI opened its investigation, the two were placed on paid “investigative leave.”

Containing Another Scandal

Bussolini is a Team Leader and Alexander a purchasing agent in Field Management Unit 75, in the lab’s Nonproliferation and International Security (NIS) Division. The NIS Division does highly sensitive national security and intelligence work under contract to federal defense and intelligence agencies. The Division also houses many of the lab’s “black” projects which require special access security clearances, which both employees hold. The NIS Division leader is Houston T. Hawkins, who played a key role in the lab’s 1999 campaign to minimize the public relations damage to the lab from the Wen Ho Lee scandal.

The lab had a purchasing order agreement worth $2.7 million with Mesa Equipment and Supply of Albuquerque, NM. With Bussolini’s approval, Alexander was authorized to buy air compressors, vacuum systems, machine tools and machine shop supplies, most likely in support of the division’s programs to develop sophisticated bio-warfare agent detectors, arms control monitoring and verification sensors, and other highly sensitive national security technical projects.

Instead, the two, whose lab salaries are about $150,000 and $75, 000 respectively, allegedly brought dozens of items for their personal use. They are apparently outdoorsmen as many of the purchases were of camping gear, all-weather garments, all-terrain vehicle accessories, motorcycle helmets for themselves and their children, hand-held land and maritime global positioning system devices, footwear, and, in one order, 135 different types of specialty knives. At least one television and VCR plus a CB radio, bought through the lab, were found in one employee’s recreational vehicle parked at his home. The affidavits also listed cameras, scanners, rangefinders, tools, fly-fishing equipment, and plumbing fixtures. One of the employees was remodeling his bathroom and used the purchase order to upgrade his plumbing fixtures.

They purchased automatic gate openers, remote control devices, and solar panels. One set was observed by the FBI at a car dealership owned by the father of Alexander’s live-in girlfriend. Those items not observed by the bureau were believed stored in bunkers in an isolated area of the lab used by the NIS Division for special projects. An employee of Mesa Equipment and Supply told the bureau that he altered the purchase invoices at the lab employees’ request. For example, a picnic table was written up as a workbench and “monitors” were actually television sets. Alexander also allegedly purchased auto parts and tires for a truck later observed for sale on a local lot.

Stealing for Daddy

The FBI told AIM that the lab’s security office had referred the case to the bureau, although the whistleblowers claimed that the bureau learned of the case only after two other unit employees went around the lab directly to the FBI. That was later confirmed by Walp and Doran. The search warrants cite five lab employees, identified by number only, who provided information to the FBI about Alexander and Bussolini’s purchases and misuse of government property. In one instance, Bussolini’s daughter is alleged to have said to one of the employees making deliveries to his house, “So you’re stealing for my daddy.” Walp and Doran confirmed this and claimed that the two had also purchased lock picks, anti-bugging devices, and high-speed digital cameras.

Many have questioned how this buying spree could continue for 15 months or more without detection. Bussolini was allegedly giving “presents” to lab officials, including one in the Assessments and Audit Division, responsible for investigating reports of waste, fraud, and abuse at the lab. Efforts to contact that official by phone and email have been unsuccessful thus far. A division secretary did tell AIM, however, that he had been recently transferred out of the unit. In a startling development, the Albuquerque Journal later reported that two expensive knives, given as gifts by Bussolini, were reported stolen from the lab’s Office of Security. The knives had been stored in an evidence box inside the locked office. Their “disappearance” would eliminate tangible evidence of bribery at the lab.

Walp and Doran said they had first started working on the NIS case in July, but after they told Busboom about it, their superiors “made it extremely difficult for us to continue.” They both thought it was time to call in the FBI, but their supervisors told them “that we were not allowed to communicate with the FBI” regarding this or any other investigation. They said two days before the FBI served the search warrants on Bussolini and Alexander, they were taken off the case and cut off from any contact with the Bureau. The FBI requested that they be reassigned to the case, but the lab refused.

Lab Security Director Put on Notice

Through its claims to have requested an Energy Department inspection and its statements minimizing the actual value of the thefts, the lab clearly hoped to limit damage to its public image. But that posture was hard to maintain after whistleblowers sent two more internal documents to POGO. The first is an internal memo prepared by Walp and sent to his supervisor, the lab’s Director of Security, Stanley L. Busboom, a retired Air Force security police colonel.

In a memo dated March 26, 2002, titled “Analysis of Theft of Property at LANL” (Los Alamos National Laboratory), Walp told Busboom that thievery at Los Alamos has been a problem since at least 1999. Walp told Busboom that he was trying to portray in a “holistic” manner a “comprehensive view of the thief picture presently being experienced by LANL.” Attached to the memorandum are inventory logs detailing “Reports of Lost and Stolen” lab property for the years 1999 through 2001. The memo says that missing items under $5000 in value are not reported to security. On the inventory logs, such items including computers, are plentiful. In fact, the logs list dozens of computers-laptops, personal, and desktops as well as Sun Micro Systems workstations valued up to as much as $9,500. The next most popular items are cell phones, computer printers, and VCRs. There are also “big ticket” items, including many highly technical instruments like oscilloscopes, spectrometers, an electrophorometer worth $16,900, and a “centrifuge” worth $6,000. Equipment used in signals analysis and processing is listed as lost or stolen. Motorola and Ericsson radios belonging to lab security and emergency management and response teams are also missing.

Not Just Petty Thievery

Items useful for outfitting a machine shop are also listed as missing, lost or stolen. These include a numerically-controlled milling machine valued at $25,000, a wire-brush machine for removing burrs and giving a high-quality finish to metal pipes valued at $39,000, a fork lift at $6500, and two magnets one valued at $39,000 and another “lifting-type” at $31,000.

Walp’s memo documents the lab’s efforts to conceal the problem. Many items initially listed as “lost” are often later determined to have been stolen. Walp complained that only 39 incidents of theft of government property were reported in 2001 and that no “professional inquiry” had been conducted into any of them. Instead, administrative personnel-in one case a college student- conducted telephone interviews and each report then was stamped closed “due to lack of investigative leads.” In 2001, Walp told Busboom that not a single case was cleared, no culprits were identified, and no arrests had been made.

Walp said that these reports lacked even basic details like make, model, or serial numbers of the stolen items. He told Busboom that the stolen computers “may have had sensitive or proprietary materials on those systems, but inquiry personnel failed to explore that potential.” The reports were transmitted to the Los Alamos police and the FBI, but they are so incomplete that the stolen materials are never placed in the National Crime Information Center. The NCIC is a computerized database available to law enforcement authorities nation-wide which, among other uses, helps find stolen property.

Enron Accounting?

In early April 2002, lab Chief Financial Office Thomas Palmieri sent a memo to lab “Leaders” warning of “disturbing negative trends” in the lab property management practices. This is the memo that put the lab’s missing, lost or stolen property for the year 2001 at $1.3 million, more than ten times Tytler’s public statement. Attached to the memo is another listing of “unlocated items” that refers to two “unaccounted for” Sun Micro Systems workstations valued at $7,300 and $9,600 each. The most expensive item on any of the lists is a “system data acquisition” manufactured at the lab valued at $64,000. The item was acquired by the lab’s Physics Division in 1995.

The lab and its University of California manager issued a press release claiming that the dollar amounts listed in the internal memos released to the public overstate the value of the property missing, lost, or stolen. The lab prefers to total only the “depreciated value” of the missing property not the original acquisition costs to the taxpayer. Instead of losing over a million dollars worth of goods in 2001, for example, the labs say the depreciated value is only about $160,000. Further, the lab director, John C. Browne, complained that many of the losses were due to mix-ups in the lab’s accounting system.

What You Can Do

Send the enclosed cards or your own cards or letters to Energy Secretary Spencer Abraham [1], to Rep. James Greenwood [2] and to Michael S. Jeffries, Chairman of Abercrombie & Fitch [3].