In recent years, AIM has chronicled the decline of the FBI, once revered as our premier investigative agency. Under the direction of Bill Clinton’s appointee, Louis Freeh, the bureau compiled a nearly unbroken record of botched investigations, shoddy laboratory analyses, and politically inspired cover-ups. But it has excelled in persecuting whistleblowers like special agents Dennis Sculimbrene, Frederic Whitehurst and Mrs. Whitehurst in an effort to protect its reputation. Beyond its criminal investigative duties, however, the FBI is supposed to defend the nation from espionage and terrorism. The 9/11 attacks were the result of a massive intelligence failure that exposed the weaknesses of the FBI and the CIA in this vital area. Equally worrisome has been the FBI’s performance in detecting spies, especially those of nations employing non-traditional techniques, like the People’s Republic of China (PRC).
The FBI’s counterespionage successes of recent years have all come against the successor agency of the KGB. A number of Americans spying for Russia, some from the FBI itself, have been betrayed by former Russian intelligence officers out to make a quick buck. But the evidence indicates that the bureau has failed miserably to deter or detect Chinese espionage against our centers of military science and technology.
The Wen Ho Lee case stands out as a signal failure, one that has its roots in the complicated relationship between China and the United States that stretches back to the early 1980s. It is also clear that in the Clinton White House and the FBI itself, avoidance of offending China took precedence over investigating nuclear espionage. The FBI agents responsible for covering Los Alamos inexplicably failed to apply any of the FBI’s counterespionage procedures or techniques in the four years that Wen Ho Lee was under suspicion of spying for China.
Three recent publications offer an opportunity to look at the strange case of Wen Ho Lee from a fresh perspective. First, Lee has published his memoir of the case, My Country vs. Me, It tells his story of “persecution” by the FBI, the Justice and Energy Departments. Lee claims that he was an innocent bystander caught up in the political fallout of the Clinton campaign finance scandals, the Energy Department’s mismanagement of security at the U.S. nuclear weapons laboratories, and Capitol Hill partisan politics. Lee says that he did nothing wrong, at least nothing that many other lab scientists haven’t done, and the only reason he was prosecuted was because he is Chinese. Lee’s book and his public appearances generated a good deal of favorable media attention.
Two official reviews of the government’s handling of the Wen Ho Lee case were also published around Christmas time. The first was the so-called Bellows Report, officially titled the “Final Report of the Attorney General’s Review Team on the Handling of the Los Alamos National Laboratory Investigation.” In 1999, under mounting criticism for her handling of the case, Janet Reno appointed Randy Bellows, Senior Litigation Counsel in the U.S. Attorney’s Office in the Eastern District of Virginia, to head up a comprehensive review of the government’s handling of the case.
The review was concluded by May 2000, but the report was highly classified. In mid-2001, as the result of civil actions against Lee and others, the Justice Dept. released two chapters of the report that were very critical of the Energy Department’s role in the case. Those dealing with the Justice Dept. and the FBI were not released, but under pressure from Congress, finally in December 2001, a heavily redacted version of the report was published on line in the Attorney General’s Reading Room on the Justice Dept. Web site.
The second report was issued by the Senate Judiciary Subcommittee on Department of Justice Oversight. It was entitled, “Report on the Government’s Handling of the Investigation and Prosecution of Dr. Wen Ho Lee.” Both reports are as critical of the FBI’s handling of the Wen Ho Lee case as Lee’s book, but from strikingly different perspectives. Unlike Lee’s book, the two official reports garnered hardly any media attention.
Back in 1995, the U.S. intelligence community, led by a small group of analysts and nuclear scientists at the Energy Department, uncovered indications of a massive assault by China on the U.S. nuclear weapons laboratories and U.S. military science and technology industries. Over the next few years, the government uncovered thefts by China of classified U.S. nuclear weapons information, including the neutron bomb, the W88 thermonuclear warhead, the latest models of strategic ballistic missiles, techniques for improving the performance of advanced Chinese nuclear warheads, and U.S. advanced conventional weaponry. By 1999, the Clinton administration had sold the Chinese more than 600 high-performance computers on which to run newly acquired computer codes and copies of advanced U.S. software.
The depth and breadth of the Chinese penetration of our military science and technology centers is unknown to this day. It appears every bit as comprehensive and successful as the Soviet Union’s assault on the Manhattan Project during and after World War II. As such, it would seem to warrant a government counterespionage effort at least as aggressive as that conducted by the FBI against the Soviet Union in the 1940s and early 1950s. But this was not to be.
The FBI had dramatically reduced its counterespionage capabilities in favor of new priorities established by the new FBI director, Judge Louis Freeh. He emphasized street crime, drug busting, and white-collar crime over counterespionage. He was especially interested in expanding the FBI’s reach abroad.
FBI sections devoted to countering Chinese espionage were especially hard hit and were stripped of many of their best agents and resources. Many of the better China-squad agents retired in disgust; others left during the Chinese campaign finance scandal after refusing to permit the White House to compromise some of their most sensitive sources. China would continue to be a blind spot for the FBI throughout the 1990s, and concern about offending China may have played a role in hindering the Wen Ho Lee investigation.
The Clinton administration cultivated a new relationship with China. Soft money flowed into the Democratic National Committee from the People’s Liberation Army (PLA) and the Chinese intelligence services, channeled through White House coffees and photo opportunities for sale to the highest bidder. ‘This seems to have colored administration assessments of China. It adopted a “see no evil, hear no evil” policy with regard to China and moved hard against anyone within the government who argued otherwise. A number of career intelligence officers at the CIA and elsewhere were terminated when they tried to report accurately the Chinese penetration of U.S. defense industries or nuclear labs or China’s continuing role in the proliferation of weapons of mass destruction. Speaking truth to power in the Clinton administration when the subject was China was clearly not a career-enhancing activity.
In this context, in 1996 Wen Ho Lee, a nuclear weapons computer code writer at Los Alamos National Laboratory, emerged as a prime suspect in the Chinese theft of classified information on the W88 nuclear warhead. Lee was already the subject of an on-going preliminary inquiry after FBI sources had reported that the director of China’s nuclear weapons program had said that Lee had helped the Chinese nuclear program with computer codes and software and that he was well known in Beijing. In his job, Lee had access to all of the secrets about U.S. nuclear warheads, including access to a vault that contained warhead blueprints and nearly 50,000 classified documents. These reports from reliable sources warranted a full FBI counterintelligence investigation, but managers in the Albuquerque field office opted for a preliminary investigation, which by definition may not employ the full range of investigative tools available to the FBI. But it didn’t matter since the agent in charge devoted little attention to the inquiry.
In 1996, the FBI was confronted with espionage allegations “as serious as any it ever investigated” in the words of the Bellows report, involving Lee and the W88 theft, raising the specter of the post-war Soviet penetration of Los Alamos. But this FBI investigation effort would pale in comparison with the FBI’s efforts in the Manhattan Project. In fact, the FBI conducted an investigation in name only. The investigation never really got off the ground; it suffered from inattention, insufficient resources, and inexplicable delays. The FBI didn’t even assign a full-time agent to the case. Everything else took precedence over counterespionage, reflecting Freeh’s new priorities. This seems like a strange choice for an FBI office in the heart of such a “target rich” environment for foreign intelligence services. New Mexico contains two nuclear weapons labs, several U.S. air force bases, military testing ranges, and defense contractors.
In early 1997, FBI agents dispatched from Washington to help with the case were diverted to gang units and Indian reservation crime units. Not surprisingly, the investigation was littered with missed opportunities, the most significant of which occurred in 1996, when the FBI agent running the case made a feeble effort to examine Wen Ho Lee’s computer activity. Source reporting about Lee’s help to China with computer codes, software and his duties at the Los Alamos lab were more than sufficient justification for a full-scale examination of Lee’s computer activities. But a Los Alamos contract counterintelligence officer refused to permit the FBI to examine Lee’s computer on the grounds that this would be a violation of Lee’s Fourth Amendment right of privacy. The FBI accepted that, even though Lee had signed security waivers in 1995 acknowledging that his computer was subject to a search and monitoring. The contractor didn’t know about the waiver. He presumed Lee’s right to privacy. The FBI caved in.
Too bad, because the FBI could have discovered that Wen Ho Lee had been creating his own personal library of nuclear weapons’ computer codes and electronic blueprints of war-heads containing data on dimensions, contours, and the materials used in their production. He stored this library on an unprotected Los Alamos computer network that was highly vulnerable to outside attacks. His first transfers occurred in 1988 around the time of a visit he made to Beijing. Beginning in 1993, he downloaded these files onto portable computer tapes. In 1997, after the FBI missed an opportunity to uncover this activity, Lee made yet another tape, this one containing the latest available information on Los Alamos nuclear codes and, worse yet, data on the recently redesigned W88 warhead. That tape has never been recovered.
The way Lee constructed these files led lab experts to believe that they represented a “complete portable nuclear design capability which could be installed on a supercomputer center or even lesser computer capabilities”-like the high performance computers the Clinton administration sold the Chinese in the late 1990s. By 1997, the government knew that the Chinese were after exactly the type of information on Lee’s tapes, but it took no action to step up protection of the lab’s computer networks.
In early 1999, coming under increasing pressure from the Energy Department and Congress, the special agent in charge (SAC) of the FBI’s Albuquerque office recommended to FBI headquarters in Washington that the case be closed. He concluded that Wen Ho Lee was not guilty of providing W88 data to the Chinese. This was based on a badly botched Energy Department polygraph, one interview of Wen Ho Lee conducted for the purpose of closing out the case and a statement that Lee was allowed to write and then sign clearing himself of any wrong-doing. He dismissed allegations of Lee’s giving W88 secrets to the Chinese, writing, “If they were co-conspirators in a plot to pass the W88 material, such activity would have come to light during the course of the [DOE] polygraph.” The SAC wrapped up with the following conclusion:
In as much as Wen Ho Lee has been cooperative, passed the DOE polygraph and provided a sworn statement, FBI-AQ [Albuquerque] has no reason to believe Lee is being deceptive. Based on the FBI-AQ’s investigation, it does not appear that Lee is the individual responsible for passing the W88 information.
But an FBI quality control review of the Energy Department polygraph showed it to be badly flawed and useless for determining Lee’s deceptiveness. Lee later flunked an FBI polygraph specifically on questions related to the W88 warhead and nuclear computer codes. The SAC’s characterization of Lee as “cooperative” proved to be a bad joke. After the second polygraph, Lee began to reveal more details of his interactions and aid to the Chinese-details that he had withheld from lab security officials and the FBI for over a decade. Lee now admitted lying to the FBI and lab security officials about his contacts with Chinese nuclear scientists, their efforts to elicit classified information from him, and the computer help he gave them, which even he admitted could easily be used in the development of nuclear weapons.
Instead of closing down the Lee case, the FBI searched Lee’s office and found evidence of his illicit computer transfers and, later, his portable tape library. Not having put him under surveillance after he failed their polygraph, they missed catching him destroying incriminating evidence. They never found the 20 or so computer tapes which may contain the most sensitive classified information on our nuclear weapons.
The circumstantial evidence of Lee’s espionage was piling up. The Bellows Report later concluded that there was sufficient “probable cause” to believe that Wen Ho Lee “was currently engaged in clandestine intelligence gathering activities for or on behalf of the PRC.” But the Justice Department and the FBI declined to pursue espionage and opted instead to prosecute Lee on charges involving the mishandling of classified information. This was the second time that the Clinton Justice Department shied away from an espionage prosecution that could have implicated the government of China. In 1997, Justice opted for lesser charges against another lab scientist suspected of handling classified information to the Chinese and blamed miscommunication for accepting a plea bargain before a damage assessment had been prepared.
“Miscommunication” was also a problem in the Wen Ho Lee investigation along with mismanagement, inept investigators and a host of other problems. But none of these can fully explain the FBI’s performance in the case. There is another factor, however, which the Justice Department, the FBI and the White House all have gone to great lengths to conceal from the public. That is the subject of the Lees’ relationship with the government that began in the mid-1980s and continued up until at least 1991. There is a chapter of the Bellows Report devoted to this period, but it is entirely blacked out. A Senate Judiciary Committee report was similarly redacted. The government acknowledges a relationship between the Lees and the FBI. The CIA was also involved in this relationship, but the Justice Department has kept this secret as well.
Twice in the 1980s the FBI intervened with Los Alamos officials to save the jobs of Wen Ho and Sylvia Lee. The first time came in 1984, after Lee came under suspicion of contacting another FBI espionage suspect-a Chinese American scientist at Livermore National Lab. Lee denied the contact, but before the FBI could question him further he offered to help the FBI with their case against this colleague. The FBI ran Lee in a “false flag” operation against the suspect. With the FBI listening, Lee phoned and personally contacted him.
The details and results of this operation are still shrouded in secrecy. When the FBI polygraphed Lee regarding his call to the suspect, it learned that Lee had been passing documents to the Taiwanese since the late 1970s, and had been in contact with a Taiwanese intelligence officer and other high-level officials. Lee’s security obligations and Taiwan’s status as a “sensitive country” due to its apparently active nuclear weapons program required that such contacts be authorized.
The FBI ran a full counterintelligence investigation, but it claims it couldn’t make the case. When Los Alamos security learned of Lee’s actions, officials recommended removal of his security clearances and, with those, the loss of his job. But the FBI persuaded the Los Alamos lab director to leave Wen Ho Lee in place. Why? Probably because the Lees offered to go to work for the FBI as “informational assets.” They spent the next decade reporting to the FBI and CIA on their contacts with nuclear scientists from the People’s Republic of China. The CIA played a role in managing and “tasking” the Lees from about 1984 on.
Congressional sources report that Sylvia Lee provided over 100 pages of material to the CIA after she returned from one Beijing trip in the late 1980s. After another trip she wrote a report for the CIA. Wen Ho Lee’s defense lawyers have claimed that the FBI gave the Lees small tokens of appreciation for their service, but these almost certainly came from CIA. The Lees must have been considered valuable sources. The FBI was probably hoping for recruiting leads among the Chinese nuclear scientists, who could then tip the FBI to potential breaches of U.S. lab security. The CIA was probably more interested in the intelligence the Lees could collect on the Chinese nuclear program.
Whatever the case, it was a good deal for Wen Ho and Sylvia Lee. She became the unofficial hostess at Los Alamos for visiting Chinese scientists and dignitaries and Wen Ho got to travel to China and talk science with the cream of China’s nuclear establishment. They made two trips to Beijing in the late 1980s, a third trip to Hong Kong in 1992, and entertained visiting Chinese scientists in their home outside of Los Alamos. The FBI picked up the tab for their travel and entertaining expenses, collecting in return information about Chinese nuclear scientists. Sylvia Lee handled requests from Chinese scientists for unclassified lab reports and computer codes. She translated letters between the Chinese and their Los Alamos counterparts, and acted as an interpreter for visiting delegations. She became so popular with the Chinese scientists that she was invited to present a paper at a Beijing conference in 1990-an unusual honor for a data entry clerk at the Los Alamos lab.
There is a question as to whether the FBI was getting its money’s worth. It was interested in how much the Chinese knew about the U.S. program, so the types of questions posed to Wen Ho would be of great interest to them. Some of the first alarms about Chinese nuclear espionage were sounded in the mid-1980s when returning lab scientists told the FBI how much the Chinese seemed to know about U.S. nuclear weapons programs and trends. Every scientist returning from visits to Beijing reported Chinese efforts to elicit information, except for one-Wen Ho Lee. Lab security officials became suspicious. Lee was the only Los Alamos scientist to travel to China twice and not report efforts to gain information from him. It would be more than a decade before the FBI would learn that the Chinese had indeed sought classified information from him on those trips about current U.S. warhead programs and solving problems in their nuclear weapons computer codes.
This was exactly the kind of information the FBI wanted. It could have tipped them off to breaches of security on the W88 program years before the first hints of problems. Lee withheld it from them, saying first that he had “forgot” to tell the FBI, but later he claimed in his book that he was afraid to tell them for fear of getting into trouble. But why would he get in trouble if he had given them no classified information? If he told the FBI about the questions he had been asked, he might have been subjected to another polygraph, but that should not have been a problem for him if he had rebuffed their efforts to get secret information from him.
The Lees would continue working for the FBI until 1991 when the relationship apparently ended, for reasons yet unexplained. Perhaps they had outlived their usefulness, especially if Wen Ho was coming home telling the FBI nothing was happening on his visits to Beijing. The Lees continued to host visitors to Los Alamos and, on at least one occasion, Wen Ho continued to discuss nuclear weapons codes with visitors to their home. The relationship probably ended when FBI agents began to realize that Wen Ho Lee was holding out on them; they suspected that the Chinese were eliciting classified information from them.
The W88 espionage investigation, begun in 1996, languished for three years, despite repeated efforts by the Energy Dept. to spur the FBI to take some action-any action. At the FBI’s request, Energy had left Lee in a “non-alert” status to avoid tipping him off. He went to work every day in the nation’s premier nuclear weapons lab and continued to have unfettered access to the nation’s most sensitive nuclear secrets. None of the usual FBI investigative procedures were followed. The FBI did no comprehensive financial analysis on Lee, conducted no interviews with supervisors or co-workers, never established surveillance on Lee-even on an episodic basis, did no trash covers, never examined his computer or computer activities, and, after more than three years of the “investigation,” was still unprepared to interview him.
Why was the Albuquerque SAC in such a hurry to get the case wrapped up and off the books in early 1999? Beyond the pressure from the impending release of the Cox Report and administration sensitivities over China, the SAC had to be aware of the Lees’ prior relationship with his field office. The FBI goes to great lengths to avoid embarrassment, and the risks of embarrassment in the Wen Ho Lee case were high. If their hunt for the spy who had given the Chinese the secrets of the W88 turned out to be an agent they had used to get information on China’s nuclear program, the embarrassment would have been acute, not only for the FBI but for the Clinton administration. It appears that by bungling the investigation the FBI was trying to cut its losses and save its face.
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