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DEPARTMENT OF ENERGY SECURITY ISSUES

House of Representatives,
Committee on Armed Services,
Military Procurement Subcommittee,
Washington, DC, Wednesday, October 20, 1999.

    The subcommittee met, pursuant to call, at 2:45 p.m., in room 2118, Rayburn House Office Building, Hon. Duncan Hunter (chairman of the subcommittee), and Hon. Mac Thornberry (vice chairman of the subcommittee) presiding.

OPENING STATEMENT OF HON. MAC THORNBERRY, A REPRESENTATIVE FROM TEXAS, VICE CHAIRMAN, MILITARY PROCUREMENT SUBCOMMITTEE

    Mr. THORNBERRY [presiding]. The subcommittee will come to order. The Chairman, Mr. Hunter, is attending another event and he will be joining us very shortly, but in the meantime we wanted to go ahead and get started. First, let me apologize to our witnesses and all our guests for the delay. There was, as you may know, another hearing in this room before we got started and it has caused the schedules to get messed up.

    Without objection, I will put the statement of the Chairman Mr. Hunter into the record at this point and ask the ranking member Mr. Sisisky if you have any comments you would like to make.

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    [The prepared statement of Mr. Hunter can be found in the Appendix on page 59.]

STATEMENT OF HON. NORMAN SISISKY, A REPRESENTATIVE FROM VIRGINIA, RANKING MEMBER, MILITARY PROCUREMENT SUBCOMMITTEE

    Mr. SISISKY. I am delighted that our guests are here and I have been at this meeting since 9 o'clock this morning and so I will put my comments in the record.

    [The prepared statement of Mr. Sisisky can be found in the Appendix on page 63.]

    Mr. THORNBERRY. Without objection. We will first hear testimony from Mr. Edward McCallum. Mr. McCallum was an employee of the Department of Energy for 25 years and Director of the Office of Safeguards and Security at DOE for the last 10. We will then hear testimony from Mr. Glenn Podonsky, the Director of DOE's Office of Oversight and Performance Assurance. Mr. Podonsky's office evaluates security and emergency operations at DOE facilities. Mr. Gil Weigand, the Deputy Assistant Secretary of Energy for Defense Strategic Commuting and Simulation, will then discuss the sale of a supercomputer by Sandia National Laboratory which could have had national security and proliferation implications. He will be followed by Dr. Paul Robinson, the Director of Sandia National Laboratories, who will explain the sale and recovery of the computer. Finally, General Eugene Habiger, often referred to as DOE's new Security Czar, is the Director of DOE's Office of Security and Emergency Operations. He will describe the efforts of his office to improve DOE security.
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    With that brief introduction let me turn to the witnesses and Mr. McCallum you may proceed.

STATEMENT OF EDWARD J. MCCALLUM, FORMER DIRECTOR, OFFICE OF SAFEGUARDS AND SECURITY, U.S. DEPARTMENT OF DEFENSE

    Mr. MCCALLUM. Thank you, Mr. Chairman, ladies and gentlemen, Congressmen and Congresswomen, I am here to speak with the committee about my observations of the Department of Energy's Safeguards and Security Program. As has already been described earlier this year, DOE's arrogant disregard for national security was clearly described in the June '99 report on security at the Department of Energy by the President's Foreign Intelligence Advisory Board chaired by Senator Rudman. The title, ''The Best of Science, the Worst of Security,'' set the stage for Congressman Cox's committee report on espionage at our national laboratories.

    It is clear today that DOE has sacrificed nuclear security for other budget priorities and has jeopardized national security by failing to protect our laboratories against widespread espionage and possible terrorist attacks.

    I am currently assigned to the Department of Defense as the Acting Director of the Combating Terrorism Technology Support Office under the Assistant Secretary for Special Operations and Low Intensity Conflict. However, over the past nine years I served as the DOE Director of Safeguards and Security as you stated. In this capacity I was responsible for the policy that governs the protection of the DOE's national assets, including nuclear weapons, nuclear materials, highly classified material and facilities.
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    As the director, my team provided senior DOE management with sound professional judgment regarding the security of our Nation's most critical security assets. We provided specific action plans to correct shortcomings, even though much of what was recommended was not considered politically correct since the end of the Cold War. The steady decline in resources available to the DOE Safeguards and Security Program, as well as a lack of priority, allowed the Department security posture to deteriorate to a point where it is not effective.

    Numerous unclassified reports from the Office of Safeguards and Security issued between 1994 and 1999 document the reduction in the Department's security readiness. These reports are supported by hundreds of classified incident and inspection reports that provide detailed analyses.

    The information I present today is not new. The message has been repeated consistently over the last decade in such reports prepared by my office as the annual reports to the Secretary in 1996 and 1997. In fact, these reports were frequently referenced and footnoted in the PFIAB report this spring. External reviews such as the report to the Secretary by General James Freeze or the review by the Department of Defense's nuclear command and control staff report on oversight in DOE in 1998 cite similar concerns. There have also been dozens, literally dozens, of GAO office reports addressing these areas.

    We have frequently reorganized, restructured and studied these issues. However, the Department has not chosen to resolve these serious and long-standing problems.

    I would like to briefly cover just a few specifics to introduce the committee to the severity of the issues. However, I must point out that I have been off the DOE security scene for six months and there may have been some changes as the Department has attempted to correct some of these issues.
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    But it is clear to me that there remains a serious need for an infusion of technical expertise in the Department and continuous external oversight or the problems will not be fixed except in the short run. Reorganization and reshuffling will not suffice.

    One of the areas covered very heavily in the last year has been information security. Because of the espionage issues, the issues covered heavily by Congressman Cox, there has been a multitude of activity in the Department. Indeed, just before I left we were preparing a number of action plans to try to bring the Department's laboratories and facilities up to speed.

    I think we are still sitting at the center of the worst spy scandal in our Nation's history. We knew our greatest secrets were being stolen and we did nothing about it. The DOE's computer security program has suffered from a variety of problems. Of primary concern is the lack of protection for unclassified systems. Until recently, little guidance was issued and as early as 1995 the chief information officer at the Department of Energy and my office collaborated with the field elements to develop a comprehensive manual. However, there was resistance at the labs and by the program assistant secretaries in Washington because they believed that providing protection such as firewalls and passwords, what I would consider simple and commercial-grade security, was unnecessarily expensive and a hindrance to science. As a result, implementation of the computer security manual was prevented completely.

    A variety of the computer security tools and techniques which would have been implemented, things as simple as using different floppy disk sizes between classified and unclassified systems, would have prevented many of the problems which have surfaced in reports to you ladies and gentlemen in the last year.
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    Despite the most severe and candid briefings to the Secretary on compromises of nuclear weapons data at national laboratories, we were still unable to move essential policy changes forward. Although we were well aware of ongoing espionage, it was not until parts of Congressman Cox's report were made public that DOE began to react.

    In another area which is of great concern to me, protective forces, there has been little public interest lately. However, it is an equally serious cause for concern. An example would be in 1992, the number of protective forces—since 1992, the number of protective forces at DOE sites nationwide has decreased by almost 40 percent. That should be contrasted with a gain of almost 30 percent in the quantities of special nuclear materials at our facilities. And when I say ''special nuclear materials,'' those are defined in our orders and regulations as materials which can be used to make nuclear weapons.

    Mr. HUNTER [presiding]. Would you repeat that? What declined by 40 percent?

    Mr. MCCALLUM. Mr. Chairman, the number of protective forces, the men and women who carry firearms and protect our facilities against theft of nuclear materials or sabotage, declined by 40 percent from 5,600 to a current number of around 3,500, depending on how that has changed since I left.

    As I already said they protect our facilities. They will be the first responders who would react in case of an attack by either outsiders or a wayward insider who we have given access.
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    The number of security police officers has declined to the point where it is questionable at some facilities whether the DOE security force can defeat an adversary. By 1996 several facilities were no longer capable of recovering a nuclear asset if it was lost due to terrorist action or insider action. Indeed, a number of sites had even stopped training for this mission because resources were reduced below the minimum level necessary to expect success.

    In order to rationalize these severe reductions, several of our sites began using unrealistic performance tests to verify that their protective forces could win. For instance, artificial safety constraints were imposed on exercise adversary red teams that effectively neutralized their ability to operate. Last year, a review by a DOD special operations team at one of our sites reported that needlessly restrictive exercise rules for the intruders were unnecessary and resulted in a false sense of security.

    This is related directly with physical security systems. The aging and deteriorating security systems throughout the DOE complex, including at such sites as Los Alamos and Rocky Flats, are a serious concern. Systems including such things as sensors, alarms, access control and video systems are critical to ensure the adequate protection of special nuclear material and classified information, including nuclear weapons parts. Many facilities have systems ranging in age from 14 to 21 years, and are based on technology developed in the mid-70s. Because of the obsolescence of these systems they fail too frequently and replacement parts and services are increasingly expensive and hard to obtain, also requiring very expensive and sometimes unreliable compensatory measures, meaning guard forces have to be assigned instead of sensors.

    Older systems are also vulnerable to defeat by advanced technologies that are readily available to potential adversaries who would like to enter our facilities. Continued reductions in budget, delays and cancellations in line item construction funding increase the risk to our facilities and materials. Further, DOE is not realizing some savings available through advancements in technology that have increased detection assessment and delay capabilities. As an example, the Air Force consolidated many of their nuclear weapons at one facility, Kirtland Air Force Base, reducing and closing many other facilities and saved a tremendous amount of money. Depending on what source you go to it is as much as half of their protection budget was saved.
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    I would like to cover another area quickly and move forward to some suggested fixes. I also fear that a recent decision by the Department to program assistant secretaries to fund the cost of personnel clearances will have severe repercussions in the future. Since implementing this new approach, at least when I left the Department, we were already seeing a dramatic backlog of personnel security investigations. As well as other security areas, program offices must decide between competing interests when determining which areas to fund. Unfortunately, security activities are relegated to a lower tier in terms of importance by many organizations. Adequate funding and timely conduct of reinvestigations is critical for DOE to maintain a security posture that ensures only trustworthy individuals are given access to critical national security assets.

    Now what you are probably more interested in is a path forward. Operating beneath the surface of some of these major shortfalls are some fundamental issues that if properly addressed could provide the impetus to effect real change. These challenges are not new nor are their solutions.

    The first area is safeguards and security program funding. I believe this is the central and root cause issue for failed security in the Department of Energy. As previously stated, when headquarters program assistant secretaries face funding shortfalls, there is a tendency to cut security programs in greater proportion than other program elements. In recent years, these cuts have been made routinely without the benefit of assessing the impact of these cuts on the security of our sites or the safety of site personnel and surrounding communities. The implementation of virtually every security program has suffered significantly. Many of these cuts are ill-advised and as we have seen have led to serious security lapses. Nevertheless, my office had no authority nor does the office that I left have the authority to ensure implementation of Department security policies and regulations.
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    The new DOE Security Czar, General Habiger, still does not have a budget for implementation of anything. Safeguards and security budgets for DOE should be provided through one line item to the DOE security director, not various program assistant secretaries. Program fragmentation of security funding has been in place for 20 years at DOE and it has not worked. Without an adequate budget there is simply no authority in this government.

    The second area which should be looked at is performance exercises. A centrally funded and well-integrated national security exercise program is critical to meet the safeguards and protection needs of DOE and the Nation. Regulations in existence require exercises annually at DOE sites. However, many of the exercises are conducted without participation of local law enforcement, the FBI, and other Federal offices that should be involved. Their lack of participation makes these exercises largely meaningless.

    Under Presidential Decision Directive 39, U.S. policy on counterterrorism, and Presidential Decision Directive 62, protection against unconventional threats to the homeland and Americans overseas, the Secretary is directed to conduct exercises to ensure the safety and security of its nuclear facilities from terrorism. With the cooperation and support of the FBI, several regional exercises were conducted at DOE sites last year. However, funding and commitment are far short of the required goals. My staff estimated that DOE is meeting only about 25 percent of site requirements. Significantly, the majority of funding for exercises resides at the site levels where expenditures must vie for other immediate program needs. Exercise funding should be centrally managed from a line item budget to assure the monies are available and spent on exercise.

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    The third area I would like to cover is oversight. It must be obvious by now that attempts to implement internal oversight of the DOE safeguards and security program have failed over the last decade. Indeed, many times over the last two decades, while there have been brief periods when oversight has been effective, organizational and budget pressures have played too central a theme for this function to remain within the DOE. When the student develops the grades and grades their own test and writes their own report card there is no independent oversight.

    Currently, internal oversight should be consolidated under the security director or abolished. Additionally, an organization like the Commission on Safeguards and Security and Counterintelligence for the Department of Energy facilities proposed by the Senate in Section 3152 of the National Defense Authorization Act for fiscal year 2000 should be established rapidly to ensure independent review of security at DOE and its laboratories. This would fulfill long-standing recommendations of both the GAO and the Congress.

    Further, a direct information mechanism of some type needs to be established with one or more of the congressional committees that have oversight of these areas in the Department of Energy.

    Last, I would like to talk briefly about organizational structure and accountability. In all of the reviews of the safeguards and security program conducted during the last decade, there is one recurring theme. Namely, the organizational structure of the Department's safeguards and security program doesn't align programmatic authority and responsibility and is too often open to manipulation by the contractors. Severe fragmentation of the safeguards and security program staff guarantees a lack of accountability in the program.
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    For example, the current structure of the safeguards and security program has one organization developing policy, training and providing technical assistance to the field, the Office of Safeguards and Security; another organization providing funding and implementing guidance, the headquarters program assistant secretaries; a third tier, the operations offices, is responsible for implementation, while a fourth is responsible for oversight, formerly known as EH and now I guess it is the OA, which Mr. Podonsky will address.

    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 systemically and systematically address the major challenges previously addressed. These organizations must be consolidated with policy guidance and implementation in one location and with an appropriate budget to participate in Department decision-making within the Department.

    Secretary Richardson recently announced the creation of a new security czar for the Department. According to the Secretary's pronouncements and the things that I have read in the newspapers, many of the concerns that I have cited today are being addressed. However, the Secretary's statements and the actual actions occurring within the Department sometimes seem startlingly different. Program assistant secretaries continue to maintain separate security staffs. These staffs can be largely ineffective because they are small, they lack some knowledge in areas, their experience levels are low, and they favor parochial interests frequently over national security concerns.

    A disturbing document that I read recently entitled Safeguards and Security Roles and Responsibilities was circulated by Sandia National Laboratory. It would give the Security Czar less authority in the Department of Energy than I had for the last ten years. Specifically, in the proposed security structure, critical approvals would be delegated from the headquarters to the very laboratories that have allowed critical losses. Important security plans as well as approval of exceptions to national and departmental regulations would be delegated to the field. And, finally, oversight inspections would be conducted for cause only, based on initial reviews and self inspections by the labs. Worse still, this internal oversight program would not even report to the so-called czar.
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    Ladies and gentlemen, this devolution of the few authorities reserved to the DOE is in direct conflict with the serious negligence identified in both Congressman Cox's report and that of the PFIAB. It is the organizational equivalent of sending the fox in to count the hens.

    In a short closing, I would like to mention that the most positive aspect of the Department's Safeguards and Security Program is that the program is staffed by hard working, dedicated men and women, both Federal and contractor, who are firmly committed to protecting the national security assets entrusted to their care. Despite the dwindling resources available to them, these individuals continue to perform in an outstanding manner.

    Where this Department has failed is in providing these professionals the necessary resources to allow them to perform their responsibilities safely and appropriately. The Department has also failed to provide management support and protection so that individuals will bring forward problems and deficiencies without fear of retaliation.

    Thank you, Mr. Chairman.

    [The prepared statement of Mr. McCallum can be found in the Appendix on page 65.]

    Mr. HUNTER. Thank you, Mr. McCallum.

    Mr. Podonsky.
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STATEMENT OF GLENN S. PODONSKY, DIRECTOR, OFFICE OF INDEPENDENT OVERSIGHT AND PERFORMANCE ASSURANCE, U.S. DEPARTMENT OF ENERGY

    Mr. PODONSKY. Mr. Chairman, I have a prepared statement that runs about 8 or 9 minutes, or I have a summary. I would like to ask the Chair which would you prefer.

    Mr. HUNTER. Without objection, go ahead and summarize your testimony, if you will.

    Mr. PODONSKY. Then I will submit my written testimony.

    Mr. HUNTER. Without objection. It is received.

    Mr. PODONSKY. I appreciate the opportunity to discuss the status of security programs at the Department of Energy nuclear facilities, including the results of our most recent inspections. I am the Director of the Office of Independent Oversight and Performance Assurance, which is a direct report to the Secretary and has responsibility for conducting independent oversight inspections of safeguards and security, cyber security, and emergency management within the Department of Energy.

    Since we were established, we have had three major focus areas: Review of safeguards and security programs that have known problem areas, evaluating the effectiveness of cyber security programs in both classified and unclassified arena, and evaluating the DOE emergency management programs.
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    As reported in the most recent annual report to the President, one or more important safeguard and security program elements at several DOE defense program sites were rated less than satisfactory. As a result, the Under Secretary of Energy established a goal and a plan for achieving a satisfactory status at all DOE defense program facilities by the end of this calendar year.

    Based on our inspection of problem sites from the national security perspective, Los Alamos National Laboratory, Lawrence Livermore National Laboratory, Sandia National Laboratory and the Y–12 Plant, it is clear to us that a positive trend has been established. At every site we have evaluated, safeguard and security programs have received high levels of management attention over the past year and there have been significant improvements.

    As just one example, Los Alamos National Laboratory has now established an effective firewall to protect against unauthorized penetration of their unclassified computer network. Although significant progress has been made, there is much work to be accomplished to achieve the goal of fully satisfactory programs at all DOE sites. The most prevalent problems we are currently seeing are in the areas of protection of the nonnuclear components of nuclear weapons, which are the classified weapons parts, and unclassified cyber security.

    At the four sites we have reviewed, only Los Alamos National Laboratory was assigned an overall satisfactory rating. The other three sites were rated as marginal. However, based on their corrective action plans we believe that Livermore and Sandia are on track to making improvements needed to achieve a satisfactory rating. The inspection of the Y–12 Plant was completed on October 8th and we are anticipating receiving their corrective action plan next week.
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    While the Y–12 Plant had significant challenges to overcome to achieve a satisfactory status, DOE headquarter organizations are coordinating their efforts to ensure that the needed improvements are being made on an expedited basis.

    There are indicators that safeguard and security is on a positive track to achieving satisfactory programs within a short timeframe. The sites corrected many of their identified weaknesses soon after they were identified. Unlike the past, the sites have developed corrective action plans that address each of the oversight findings. I must note that this is a major sea change in the Department of Energy. In my last 15 years of inspecting the Department of Energy, the Department never tracked, or seldom tracked, its issues and findings and then corrected the problems. That is the difference today from what Mr. McCallum was talking about in his statement.

    Before the end of the year, we will be doing follow-up activities at all of the sites and will provide DOE senior management with an unbiased and independent perspective on progress toward the goal of fully satisfactory programs at all these sites.

    Prior to this organization being directly put under the Secretary of Energy, we had conducted independent oversight for 15 years. Our reports, many of which Mr. McCallum just referred to in terms of issues and findings, have documented many of these issues, but much of what Mr. McCallum just stated, however, in the last 7 months have been corrected as far as we can see from our inspections.

    At the time prior to seven months, there was no element of DOE that was adequately addressing these issues. We believe that this has now changed with the infrastructure that Secretary Richardson has put into place in which the policy organization under General Habiger, together with the program offices that are responsible for implementing, together with the oversight, are working to a common end of improving the safeguards and security in the Department of Energy.
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    Thank you, Mr. Chairman.

    [The prepared statement of Mr. Podonsky can be found in the Appendix on page 73.]

    Mr. HUNTER. Thank you. General Habiger.

STATEMENT OF GEN. EUGENE E. HABIGER, DIRECTOR, OFFICE OF SECURITY AND EMERGENCY OPERATIONS, U.S. DEPARTMENT OF ENERGY

    General HABIGER. I would like to thank you, Mr. Chairman and members of the committee, for the opportunity to speak to you today regarding the current status of security at the Department of Energy.

    Let me make it clear right up front that I did not come out of retirement from San Antonio, Texas, to be involved in mere reorganization and reshuffling. I am here to make things happen and I can report to you that things are happening.

    I had not met Secretary Richardson before our meeting in June. He interviewed me for the job, and I must tell you I am very impressed with him and what he is doing. Since my arrival at the Department, I have visited all of the Department's major sites, reviewed virtually all of the site security plans, observed and participated in segments for protective force training to include qualifying on the side arm, rifle, and shotgun that we use with our protective force. I have examined our newly implemented cyber security procedures at our national laboratories. I have talked to hundreds of scientists, technicians and security policemen. And I have taken, and happily I am here to report that I have passed, the DOE administered polygraph test.
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    This is what I have found so far, Mr. Chairman. First, it is clearly obvious that the Department reacted appropriately to the wakeup call received this past year with the uncovering of internal security problems and the publication of both the Cox and the Rudman reports. And I will also tell you that those two reports formed the checklist for me as I began my initial work in the Department.

    Second, security throughout the Department is being administered responsibly and conscientiously by dedicated and hard working professionals who are firmly committed to protecting the critical national security assets. The responsibilities of these individuals are demanding, yet despite obvious challenges they continue to perform in an outstanding manner.

    Finally, although we do have security issues which we must and will address, I found all sites that I have visited have the foundation to perform their security functions capably given adequate resources.

    But I also discovered several troubling issues. First and foremost, it was apparent to me early on that the Department was extremely close to losing the confidence and trust of both the American people and the Congress with respect to our ability to perform our security responsibilities. The enormous media coverage surrounding recent security related events coupled with DOE's historical track record of security deficiencies added to this erosion of public trust.

    Second, and equally as important, I discovered that over the years the Department had lost its focus on security. Let me emphasize that, Mr. Chairman, we lost our focus on security. The Secretary, on several occasions, has referred to the Department as being a group of fiefdoms within fiefdoms and almost every fiefdom had its own security responsibility and security budget. There was no office within the Department who had ultimate accountability for our security requirements. By-products of this organizational dysfunction and lack of focus included a deterioration of security awareness and education resulting in the failure to remind and educate our employees and contractors as to their personal security responsibilities and accountabilities, a lack of attention to our cyber security practices and a world of increased computer hacking and cyber terrorism, and a gradual erosion of resources required to improve our capabilities to combat ever-changing terrorist and cyber terrorist threats.
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    And, finally, and this is a big issue with me, Mr. Chairman and members of this committee, Congress has as yet, up to this point, failed to fund the Department's fiscal year 2000 budget amendment which came forward in July in order to make near- and long-term fixes. We have valid requirements in the area of cyber security. For example, we have a valid requirement for $35 million to jump start our cyber security program and we got zero dollars in our request.

    In addition, we need to equip our protective forces to combat weapons of mass destruction, chemical/biological warfare equipment to fully arm the headquarters protection forces. Over at the Forrestal building less than 50 percent of our protective forces are armed because we can't afford the training for our people there and to complete our headquarters security upgrades. And we were flogged for all the right reasons for not having a robust foreign visitor access program. We have no money to start that program, nor do we have any funds to set up an acceptable plutonium, uranium and special nuclear materials control and accountability program.

    Simply stated—

    Mr. HUNTER. General Habiger, let me hold you up for a second. Your lab leaders came to this Congress and begged us—and I am looking at one of them right now—to continue the foreign visitor program. That wasn't imposed on you by Congress. That has been requested by the labs as an important part of the lab culture and the lab operation. So the idea that now that they have asked us to have—that you don't have enough money to administer it, this subcommittee has asked you and your representatives from DOE about 15 times to give us what the ticket is, what the bill is for the foreign visitor program. They have always deflected and deferred the question.
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    You are the first one who has sat there and said it actually costs money to operate that program. So I am going to put it on you to find out how much it costs and give us a bill. Maybe we will take a second look at whether we need to have it or not.

    [The information referred to can be found in the Appendix beginning on page 107.]

    General HABIGER. I appreciate that, Mr. Chairman. You will get it quickly. Simply stated, we have been given the mandate but not the resources to accomplish that mandate. Through a series of comprehensive and sweeping initiatives by Secretary Richardson, the Department has turned the corner and has aggressively and dynamically changed the way it does its security business.

    Another important step was a change in the way the Department managed its security responsibilities. In this regard, the Secretary worked diligently to remove the organizational barriers that have historically impeded the Department's ability to effectively and efficiently implement a comprehensive security program within the Department.

    Very quickly, Mr. Chairman, I would like to outline the four-phase program I have initiated since coming into the position. First, phase 1, which was completed in August, I initiated visits to each our DOE sites in the field and established a baseline from which to move forward. Areas requiring immediate fixes were identified. During this period a complex wide security standdown was conducted to promote security awareness as an individual responsibility. New policy was implemented for foreign visitors who visit our facilities to ensure that the tightest security procedures were followed.
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    In phase 2, currently underway, I completed the visits to the sites and issued, or am in the process of issuing, policy addressing key issues as standardized weapons for our protective forces, the requirement for protective forces to keep a round in the chamber of their weapons. We weren't necessarily training the way we would fight. We now have policies in the field which mandate the timely reporting of security incidents, the use of warning banners on computer systems, and badge validation procedures.

    We are developing an integrated security awareness training curriculum and two similar personnel security assurance programs will be combined into a single departmental human reliability program to eliminate redundancy and streamline the administration process.

    In the area of cyber security the national laboratories have implemented numerous corrective actions. Key among those is a program to achieve physical incompatibility between removable media formats within common laboratory work areas. We are taking sweeping action to prevent the intentional or inadvertent transfer of classified information to unclassified systems or to a media format easily concealed or removed.

    Phase 3, which will occur from January to March of next year, at which time most of our new policies to fix security will have been implemented. And I will reevaluate while visiting the field to see the effectiveness of these policies. And we are developing metrics to measure what we are doing. When we reach phase 4 in April of next year, proposed fixes will be in place and our efforts turned toward adjustment as we maintain our security program.

    We cannot control or alter the threats to the security interest entrusted to our care. But what can be controlled, however, is our ability to plan and respond to threats should they ever materialize. The changing security environment and other threats over the past decade have fundamentally altered the Department's security perspective and posture. This is a significant challenge and one that the Department of Energy is prepared to meet.
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    And, Mr. Chairman, if I may, I would like for just a few minutes to talk about some of the issues that were addressed by Ed McCallum at the end of the table. First of all, Ed has a great reputation. I have seen his work. He has done magnificent things for the Department and to correct and to identify many of the problems that I and my staff are working today.

    But I would like to correct the record if I could. As Ed pointed out, he has been out of the fight for six months now and there have been some significant changes.

    First, backlog of investigations. Mr. Chairman, we no longer have a backlog of background investigations or reinvestigations, and whatever backlog we have for new hires I will be monitoring that on a monthly basis. You can put the backlog of investigations in the Department of Energy in the ''it has been corrected'' category.

    Ed stated the new Security Czar doesn't have the budget for implementation of anything. That was one of the contract items that I had with the Secretary before I hired on. The Secretary understood, and I understood, that if you don't have the control of the purse, so to speak, you don't have much control of anything. Now, we have some missionary work to do with the authorization and the appropriations committees, but for the fiscal year 2001, the President's budget that will be coming over, there will be a separate line item for all security dollars and I will have control over those dollars.

    Ed made reference to a disturbing document entitled Safeguards and Securities Roles and Responsibilities, and how that document would seriously degrade my authority. I couldn't agree more. That document is OBE'd and it is not in any way, shape or form a policy document.
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    That is my opening statement, Mr. Chairman.

    [The prepared statement of Gen. Habiger can be found in the Appendix on page 81.]

    Mr. HUNTER. Thank you, General. Mr. Robinson.

STATEMENT OF DR. C. PAUL ROBINSON, DIRECTOR, SANDIA NATIONAL LABORATORIES

    Dr. ROBINSON. Mr. Chairman, I appear before you to testify on a much narrower Issue, the issue of questions surrounding Sandia's sale of an excess Paragon computer. I have prepared a longer statement for the record that gives all the details. If I may, I will just summarize briefly.

    Mr. Chairman, I think there is less here than has met the eye in this matter. Sandia's excess computer was neither sold nor exported to the People's Republic of China, nor was it made operational, and no classified information was released with or on the computer when it was transferred.

    The story of the computer, its role in our laboratory, its declaring to be excess is delineated in the testimony. It was compared against the list of high risk materials. It was not on the list. It was circulated for availability within the entire Federal Government, including calling sites that had computers of the same type asking if they would like to use it for spare parts. There was no interest. It was then advertised for sale twice to U.S. corporations.
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    In the end it was sold to a U.S. corporation. The fact that the system was disposed of in a completely lawful manner does not—

    Mr. HUNTER. Describe, too, Dr. Robinson, what finally happened to the computer for members of the committee here.

    Dr. ROBINSON. Okay. The computer was sold to a company whose principal, so we later learned, was a citizen of the People's Republic of China. As a result of the Cox commission training, one of the individuals who was involved in the sale came forward to the laboratory management and said, gee, I think that individual might not be a U.S. citizen but could be a Chinese citizen. We began to investigate. We informed the Department of Energy at that time. The Department of Energy directed us to find out what the status of the computer was. We found the computer was stored in a site in Cupertino, California, where it has originally been transported after the sale.

    The individual allowed us to inspect the system. It was suggested that in order to be sure there was no possibility that this computer could ever be exported even though it was clearly marked as export-controlled on the documentation and on all of the containers that we buy it back. Indeed we did buy it back.

    Now, I would like to say am I satisfied with Sandia's performance, that what we did was lawful and it checked all the squares? I would like to tell you that the answer is no. I think we do have a higher obligation as a national security laboratory to put a lot more due diligence into looking, is there any hypothetical use, even though my experts tell me if they were given the same problem of obtaining computers to do supercomputing calculation by buying it from the market, this is not the route they would have gone. That there are many other routes available that were available a year ago at time of this sale that would be far more advantageous than this much older vintage computer which carried high operating cost and a high failure rate.
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    As I looked into it, I did find some serious problems I think within our U.S. laws. And I have suggested to you in the testimony some steps we might take together. The law prohibits in the sale to a U.S. corporation of making an inquiry as to the citizenship of the owner of that company. I think for items that are export-controlled it would be appropriate that you not only check to see what the ownership is, but that if it is a country listed on our sensitive countries list as established by the State Department, and by which we rate the seriousness of visits to the laboratories, that any country—any company that is controlled by members from a sensitive country we should prohibit such sales. Had I known about this sale at that time and that the individual was a citizen of the PRC, I would have said no, we should ask for a waiver not to sell the device. And so I have proposed some suggested fixes for your consideration.

    I would like to point out that the initial press stories of this were far from the facts of the case, and indeed no harm to U.S. security resulted from the incident but I think we are all wiser by the exercise that has taken place and the lessons learned, including looking at gaps in our own coverage for treating such matter of export controlled material to U.S. companies.

    [The prepared statement of Dr. Robinson can be found in the Appendix on page 89.]

    Mr. HUNTER. Dr. Robinson, thank you.

    Dr. Weigand.
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STATEMENT OF DR. GILBERT G. WEIGAND, DEPUTY ASSISTANT SECRETARY FOR DEFENSE STRATEGIC COMPUTING AND SIMULATION, U.S. DEPARTMENT OF ENERGY; ACCOMPANIED BY STEPHEN MICHELSEN, TRISHA DEDIK, AND BILL HENSLEY

    Dr. WEIGAND. Thank you, Mr. Chairman. I would like to shorten my testimony just a small amount. Dr. Robinson has covered a couple of items that I have duplicated, but I would like to read into the record a part of my testimony.

    Mr. Chairman and distinguished members—I would also like to introduce three people who are with me here from the Department of Energy and who were all involved in the examination and subsequent review of the events that took place around this Paragon opinion. First, Stephen Michelsen, who is the Director of the Office of Contracting Resource Management; Trisha Dedik, who is the Director of the Office of International Policy and Analysis in our Office of Arms Control and Nonproliferation; and Bill Hensley, who is the Director of Security for the Office of Defense Programs.

    Mr. Chairman and distinguished members of the committee, I thank you for inviting me to testify on security issues. In my capacity as Deputy Assistant Secretary for Research Development and Simulation at the Office of Defense Programs, I oversee the nuclear weapons research development and simulation work at Los Alamos, Lawrence Livermore and Sandia National Laboratories. While my office had no direct role in the recovery of the Sandia Intel Paragon computer I will try to provide you with the information from the Department about that incident.
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    I am best prepared to address the capabilities of the computer itself, and the computers in general, with regard to their use in the U.S. nuclear weapons program, although to answer your questions on computers in some degree of detail it may be necessary to speak in a classified environment.

    The Department named an incident review team to conduct an investigation of the sale and recovery of the Paragon computer. Experts on procurement and export controls from the Department's Office of Contract Resource Management and Office of Arms Control and Nonproliferation with background and procedures and requirements regarding such transactions were asked to perform the investigation and to provide the Department with a report of their findings. I would like to ask that a copy of that report dated September 23, 1999, titled Sandia National Laboratories's Sale of an Intel Paragon Supercomputer, be entered into the hearing record as part of my testimony today.

    And I would also like—

    Mr. HUNTER. Without objection.

    [The information referred to can be found in the Appendix beginning on page 109.]

    Dr. WEIGAND.—like the cover letter that I have sent out to Dr. Robinson asking that a corrective action planning developed on the 11 points found in this incident report be also entered in the record.
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    I will skip over since the record will have the report, it basically indicates 11 recommendations that we have now asked Dr. Robinson to follow.

    I want the committee to know that I fully supported the Department's decision to investigate the Sandia Intel Paragon incident and my office provided support to the experts who were assigned to the team. The DOE nonproliferation Office of Arms Control and Nonproliferation led recovery activities and provided the investigative input of the subsequent review. That office, along with DOE's administration Office of Contract and Resource Management provided the Department with the incident report.

    I want to just give you a brief idea of what this computer was so that the committee does understand quite possibly its impact on national security.

    The Intel Paragon is basically a 5-year old computer. It was declared obsolete by Sandia. After determining that there was no U.S. government agencies interested in the system, it was sold by Sandia on September 29, 1998, to a—

    Mr. HUNTER. Would you discuss the capabilities of the computer too in your description.

    Dr. WEIGAND. Yes, I will. It was sold to this company, licensed American corporation, EHI Group in Cupertino, California. And Dr. Robinson described what happened thereafter.

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    As far as the computer goes, depending on its operating configuration, the Intel Paragon was capable of 150,000 million theoretical operations per second to 200,000 million theoretical operations per second. And there is that wide gap as to how you sum up the adders and arithmetic units in that computer how you ultimately get a number. There is no single number to describe it. It is in that range, it is a very powerful computer.

    While the theoretical speed does sounds impressive, in practical terms there are limitations with regard to this system. It was a forerunner of a research machine used in part to learn how to build the next generation of computers. That next generation of computers doesn't exist at Sandia. It is called a terra flops computer. Today it would be the most useful in an academic setting for research on parallel computer machines. The other use for it would be for spare parts on similar types of machines.

    The machine would be very expensive to operate and not very efficient were anyone to try to use it in a production mode. It did have, though, some of the U.S.'s foremost and advanced interconnect technology and was sold with its operating system still on the machine, although the disk

drives on which classified processing was done were not sold with the machine.

    I think the single most important statement probably that you could make about the machine's power is, to a nation that has little computer power or capability, the capability of this machine would represent a significant capability. It would be a substantial advance from anything that would be obtainable on the market.

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    And the rest of my remarks are basically stats and facts about the computer and they will be in the record.

    [The prepared statement of Dr. Weigand can be found in the Appendix on page 98.]

    Mr. HUNTER. Okay. If you could, Mr. Weigand, just put that in context of the controlled range that we have for computers in terms of MTOPS.

    Dr. WEIGAND. I will attempt to do that for you and if I err I would like to have Ms. Dedik help me.

    Mr. HUNTER. Sure. We will let you revise and extend. Don't worry.

    Dr. WEIGAND. We have about a 7,000 MTOPS limit on many exports to countries that are on the list of controlled—we call it our control list. I think it is tier 4, level 4. To our allies we don't have any restrictions so this computer can be obtained—computers of this type and quality can be obtained by our allies. But to countries in the level 4 category this computer would represent a very significant capability. Well above what they could obtain from the United States through the legal export.

    Mr. HUNTER. So there is a 7,000 MTOPS level?

    Dr. WEIGAND. Yes, sir.
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    Mr. HUNTER. With respect to the categories, controlled categories in which China is a member.

    Dr. WEIGAND. Yes, sir.

    Mr. HUNTER. And the MTOPS on this computer were what?

    Dr. WEIGAND. 150,000 MTOPS is a rating number and it could be higher.

    Mr. HUNTER. 150,000 MTOPS?

    Dr. WEIGAND. 150,000.

    Mr. HUNTER. So 7,000 is as high as you can go legally and this one was 150,000?

    Dr. WEIGAND. Yes, sir, yes, sir.

    Mr. HUNTER. Okay. Proceed if there is anything else you want to make in closing.

    Dr. WEIGAND. That basically concludes my remarks except for stats that are going to be in the record.
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    Mr. HUNTER. Thank you very much, Dr. Weigand. This is the second hearing that we have had today and our members have sat patiently through hearings all day literally with this subcommittee and the R&D Subcommittee. So the Chair is going to defer to folks who have not had a chance to ask questions in the earlier hearings and we have got quite a few wrap-up questions here at the end that we will go with.

    Mr. Sisisky.

    Mr. SISISKY. I have been asking questions all day. Let me just go ahead and ask one, then I have some other ones. General Habiger and Mr. Podonsky, this is to you. Title 32 of the fiscal year 2000 National Defense Authorization Act for fiscal year 2000 mandates establishment of a National Nuclear Security Administration. And I know there has been a lot of talk regarding the legislation constraining the ability of the Secretary's staff to assist him in performing his duties.

    What will be the practical effect of the legislation on the performance of your specific duties?

    General HABIGER. To be very candid with you, sir, I don't know. I hope it is not significant. My initial look is that there is potential for some significant changes in the way I am now established to do business. I am established to do business in terms of providing policy, oversight and control of the Department's $800 million security budget which I would not have under the newer organization, and I am also responsible now for operations and emergency response and under the title I would no longer have responsibility for that.
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    The Secretary has made it very clear that we will comply by the law. I said that yesterday in the Senate hearing.

    Mr. SISISKY. Made it very clear?

    General HABIGER. Yes, sir. And I will comply by the law. I am an American, and I understand laws. And we will make it work as best we can. But I will tell you based upon my current responsibilities there would be some significant changes.

    Mr. SISISKY. If everybody complies with the law—I think if it is wrong then we can make changes, but if people don't comply with the law, shame on you. I will just go by and sum up some questions later, Mr. Chairman.

    Mr. HUNTER. The gentleman from South Carolina is recognized. Mr. Spence? Okay. Then Mr. Ryun.

    Mr. RYUN. Thank you, Mr. Chairman. My question is a bit of a follow-up to what was just said by the gentleman a moment ago about your willingness to comply with the law.

    I have sensed on our panel there has been a little bit of hesitation from the Secretary and from the Administration and even from your verbal statement you have said that you want the trust by the public and the Congress restored. So we will take you at your word and look forward to working with you. I do have a question though and it relates back to the foreign visitors program that has a 90-day limit on visitation from sensitive countries and that takes effect on November 5.
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    Do you feel that is sufficient time, the 90 days, for everything to be put in order so that the program will work well?

    General HABIGER. Yes, sir, as a matter of fact one of the policies that we have developed and is working through the staff now is a policy on foreign visits and assignments, and that policy will get out, it will comply with the intent of the act that was just passed and we will be able to get on it at the end of the 90-day period. I am confident of that.

    Mr. RYUN. I would like to direct that question to Mr. McCallum. Do you feel that 90 days is sufficient to put the foreign visitors program in order? If you care to comment on that. I know you have been gone six months.

    Mr. MCCALLUM. I would have to caveat my answer with I have been gone six months. I am not sure how much work has been accomplished in that time. But I will tell you that the Department has been trying to fix that program for the last 15 years. And it is one that it will be very difficult to fix. But there are so many interests that want elements of other countries in as assignees or visitors. I wish General Habiger the best of luck on that and I hope if there is anything that I can do to help I will be pleased to consult. That is a very difficult answer and a very difficult problem for the Department of Energy.

    Mr. RYUN. And I do have one other question for Dr. Robinson—or I don't know who would want to respond to this with regard to the computer. I am curious as to some of the numbers involved, first of all how much it was purchased from you for, how much you had to offer to get it back, and then how much you actually paid.
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    Dr. ROBINSON. Let's see.

    Mr. RYUN. There are three parts to that question.

    Dr. ROBINSON. I would even give you a fourth if you would allow. First, I believe that our original price was just under $31,000 when we sold it as excess. The original offer when there was a strong interest shown in it and the suggestion that this might be a matter of some concern an initial number of $2.7 million was suggested and no one took that seriously. The individual had spent approximately $140,000 in buying the computer, in transporting it to California, in hiring a warehouse space for it for the 9 months in which it was in his custody. We were authorized by the Department of Energy to offer up to $100,000. My colleague, the Chief Information Officer of Sandia, Pace VanDevender, who is sitting here behind me, then negotiated and agreed on a number of $88,888.88. It seems 8 is a lucky number in China.

    Mr. RYUN. Thank you very much, Mr. Chairman.

    Mr. HUNTER. Mr. Spratt.

    Mr. SPRATT. Thank you, Mr. Chairman. And thank you very much for your testimony, gentlemen.

    Just briefly on the back of an envelope, what do you need in the way of additional resources to do this job well? I will put the question first to General Habiger. Funds, personnel, new equipment updated, security equipment, and has this committee turned down or not fully funded some of your pending requests that would be useful to you?
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    General HABIGER. Sir, I am not aware of this committee turning down any specific requests for funding. This is the first time I have appeared before this subcommittee and your reputation in the Department is very high and very positive in terms of your support for what we are doing and the problems we are trying to correct.

    What I would prefer to do, sir, I will give you a thumbnail sketch now, but I would like to, when I respond to the chairman's request for specific information for the foreign visitors program, to give you a breakout by line item. But specifically in the area of cyber security, it's $35 million. We are asking for $16.5 million associated with hardware for the laboratories so they can centrally control this highly classified data so it can be only authorized under a two-person policy to be released to individuals.

    We need about $4.5 million for encryption equipment. $5 million for training. We discovered and I have John Gilligan, our cyber security point of contact here with me today, and he discovered that we have not done a very good job in training our administrators out in the field at the laboratories and national laboratories and our sites on the intricacies of managing cyber security.

    We set up not too long ago a computer incident advisory capability at Lawrence Livermore. It is an awesome capability, but we discovered that the labs weren't willing to provide this organization with reports of hackers. And I would tell you that in my view from my previous experience, that a serious hacker trying to get into a Department of Energy computer is about the same as somebody setting off a truck bomb outside one of our buildings. We need to let experts know about it and let the rest of the Department know about it.
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    And so now we have policy in place that directs the laboratories to report to this capability at Lawrence Livermore what they—what has been happening to them and then they can do the proper analytical work and, oh, by the way for the first time ever that information is up channelled to us so that we can take the appropriate actions and see what our basic threats are. And I would offer that up as the primary program that I need support on.

    But more importantly, the design basis threat, which is an interagency threat of the kinds of terrorists that we expect to see going after our nuclear assets whether they are Department of Defense or Department of Energy, just came out in the 11th of June of last year, I cannot in this session go into any detail, but I will tell you that one of the things that came out of that new threat analysis is that our security people have to be able to respond to chemical and biological attacks in guarding our nuclear assets. There is a $5 million bill associated with that, which is unfunded.

    So our foreign visitor program—and again, Mr. Chairman, I did not mean to imply that you, you specifically, Congress were telling us to fix that problem, because as I recall that was a specific in PFIAB report needing to get our act together in that area, but there were developing new software. And I don't have any—I have a very minimal staff. I have to hire something in the order of 12 new people to get that program up. We need to get it up for three reasons: number 1, to tighten our process; number 2, to make sure that our new tightened process is handled in a timely manner so that the labs don't have to come in with a 6 or 8-week lead turn time for us to respond so that they can get approval. I am very sensitive to the fact that foreign visitors are essential in the continuing dialogue in the scientific community. And, finally, I just need the people to make it happen. Right now I don't have the people. I will get you that, Mr. Chairman, and, sir, and get it over to you very quickly.
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    [The information referred to can be found in the Appendix beginning on page 105.]

    Mr. SPRATT. What is the status of this inventory of your needs and the funds associated with it; can you obtain that money out of the hat of the fiscal year 2000 budget or is this a fiscal year 2001 request?

    General HABIGER. It came over on the 14th of July, sir, as part of the Department's fiscal year 2000 supplemental.

    Mr. SPRATT. Supplemental?

    General HABIGER. Yes, sir. As I said we didn't do very well.

    Mr. SPRATT. So the supplemental is still unfunded?

    General HABIGER. Yes, sir.

    Mr. SPRATT. And that means until it is funded, you have got important needs that can't be completed at least, undertaken but not completed as robustly as you would like?

    Mr. SISISKY. Would the gentleman yield for a moment.

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    Mr. SPRATT. Certainly.

    Mr. SISISKY. You are already programming to get some of those funds, are you not?

    General HABIGER. No, sir.

    Mr. SISISKY. Are you sure?

    General HABIGER. I am not aware of it, sir. I mean—it was a budget amendment for fiscal year 2000.

    Mr. SPRATT. In conference or as a separate supplemental?

    General HABIGER. It was a separate supplemental, as I recall, sir, as part of the overall request.

    Mr. SPRATT. And some of it has been funded, we have passed—we have approved—

    General HABIGER. Congress has approved some additional monies that we requested for additional background investigations. Len Podonsky asked for some supplemental funds for his organization and most of that was funded.

    Mr. SPRATT. In the Energy Appropriation Bill?
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    General HABIGER. Yes, sir, I believe so.

    Mr. SPRATT. Dr. Robinson, one question to you—Dr. Johnny Foster makes a point not only about this, but about safeguarding, security and safeguard operations generally severed by his responsibility, and if you make it a linear responsibility, then some people will tend to think that is somebody else's job, it is not my job and you need to inculcate this sensitive security awareness with then everybody.

    Among your chemists and physicists and high-powered scientists, is this a problem now? Is there a new level of awareness and any resistance to it?

    Dr. ROBINSON. I think there is a new level of awareness. We have used the word integrated security management. The most important people are the people who have the knowledge to design the nuclear weapons. Having their good will, their attention to these matters is crucial. You can hire any number of guards standing outside, and if you don't have that, you don't have good security. And so you have to integrate the entire package. And I think I favor my thinking along the lines of Dr. Foster.

    Mr. SPRATT. Is tightened security affecting morale but in particular measures like polygraphs?

    Dr. ROBINSON. There is no question that the question of polygraphs as a screening device, a widespread screening device, has gotten lots of criticism. General Habiger was brave enough to go around and do public hearings at all the sites and he heard from our staff members regarding their questions. I believe the actions this week taken by the Secretary saying rather than a case of polygraphing every individual we will look to polygraph a more appropriate smaller group was music to the ears.
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    We do have a record of polygraphing for sensitive programs and at my laboratory, just under 200 people have been polygraphed in the past, as they work in compartmented programs, both for Defense Department and supporting intelligence agencies. Within that framework adding this for DOE matters is appropriate and I think we are ready to live with it. I believe we are working together to make these more directed and less onerous.

    Mr. SPRATT. Thank you very much.

    Mr. HUNTER. I thank the gentleman.

    Mr. Gibbons.

    Mr. GIBBONS. Thank you very much, Mr. Chairman.

    Mr. Podonsky, you are formerly the Deputy Assistant Secretary for Energy for Oversight, are you not?

    Mr. PODONSKY. Yes, sir.

    Mr. GIBBONS. Who did you report to in that job?

    Mr. PODONSKY. In that job I reported to the Assistant Secretary for Environment and Health.

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    Mr. GIBBONS. In your current position?

    Mr. PODONSKY. In my current position, I directly report to Secretary of Energy, Mr. Bill Richardson.

    Mr. GIBBONS. You have taken just one level of management out of—

    Mr. PODONSKY. Actually, sir, I would tell you that is one giant leap. Having been in the Department for 15 years, we have identified issues, including similar issues that were related to the Ho Wen Lee situation as far as back as 1994, and we were not very successful in getting people to pay attention to some of those issues and part of that was where we reported to.

    Mr. GIBBONS. That is my next question, because I notice in your testimony at the bottom of page one where you say we are pleased to report that our independent oversight inspections are receiving considerable attention and management support. And it leads me to believe that they were not given considerable attention by management or the support of management prior to this incident. I am not sure whether it is simply because of the change in the hierarchy or the structure of management or a renewed emphasis on the fact that we now know that there are some serious problems out there with the security of our labs.

    Second, I would like to ask you the question about the ratings, and I presume that this sheet, this colored sheet is something you are familiar with, which has the current and projected status of security ratings for all of the laboratories and Department of Energy facilities.
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    Are you familiar with it?

    Mr. PODONSKY. Yes. That is our rating sheet; that is, the Department's rating sheet. It has to do with the annual report to the President that we feed into.

    Mr. GIBBONS. All right. Well, I noticed that there is some, like the Los Alamos labs, across the board have received a marginal rating in their security, which is less than satisfactory, but yet in here the policy that was established says that the Secretary plans or intends to have every agency of the Department up to a satisfactory grade in security by the—I don't know—the end of the year.

    Mr. PODONSKY. End of the calendar year.

    Mr. GIBBONS. Right. I notice on this sheet as well the DOE has a couple of projected status sections in there that show only marginal. So something doesn't jive, either with their projected statement or they are saying they can't get there. But that is not the case.

    What I want to talk about maybe if I can go back over to Dr. Weigand, you said the computer had its operating system intact when it was sold.

    Dr. WEIGAND. Yes, sir, that is correct.

    Mr. GIBBONS. What does that provide in terms of capability to any country which may have obtained this, if some country had been permitted, for example China, what capability would that computer with that operating system in there given its current condition, a country like China, with regard to its nuclear weapons projects and programs? Would it have been able to use that computer, for example, to go directly to the design of miniaturized warheads?
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    Dr. WEIGAND. It is not the operating system directly, Congressman. It would allow the machine to provide them expertise in making a leap to scientific answers. The operating system for a computer allows the computer to interact with the different peripherals, the disks, the computers, and it allows the human component to interact with the computers. It is sort of the brains of the computer.

    The scientists who work with the computer supply the knowledge through computer programs that are a set of instructions that the computer loops through in order to arrive at scientific calculations. So the operating system would be essential but not complete.

    Without an operating system, the scientists would not be able to communicate with the computer. With an operating system there, they are able to take their knowledge, transcribe it into the codes that the computer understands, connect with the operating system and come up with the answers and then make scientific judgments.

    The computers does not make the scientific judgment. The computer does not design the bomb. The computer does not give you the dimensions and height and weight and that. What the computer does is give you scientific judgment.

    Mr. GIBBONS. The question now becomes with this system, the computer system in the hands of the Chinese, would they have been able to move forward with their miniaturization program with nuclear weapons.

    Dr. WEIGAND. Sir, I will return to my statement that I made that a country that does not have a substantial computing capability would benefit in a national security way from obtaining a computer of this type.
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    Mr. GIBBONS. Your answer would essentially be yes, it could move forward?

    Dr. WEIGAND. You are drawing a conclusion.

    Mr. GIBBONS. I don't want to put words in your mouth, Dr. Weigand.

    Dr. WEIGAND. I understand, I don't want—

    Mr. GIBBONS. The text of your answer—

    Dr. WEIGAND. I understand. The capability of small and light weight is a substantial capability. I would not rather—I would rather not discuss in an open session as to the computing capability and the methods by which you arrive at that.

    Mr. GIBBONS. I understand. Have any other systems like this been sold previous to this that you have come across, which we have been unable to return, unable to question in terms of the sale to countries that weren't authorized?

    Dr. WEIGAND. I am not aware of any, you know, exactly similar instance. To my knowledge, there were two computers that had been raised as questions in the past with regard to their entry into I believe it was the Soviet Union, but I think we should—Trish, do you want to comment—this is not the same class of computers. This is a substantially powerful computer. Those are in the class of about 32,000 MTOPS.
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    Mr. WELDON. If the gentleman would yield, I apologize for having to leave. Steve Bryan, who was our first director of DTSA, has said publicly he knows of no computer of this size that has ever been sold. Is he correct?

    Dr. WEIGAND. No computer of this size has ever been sold to whom?

    Mr. WELDON. On the surplus market.

    Dr. WEIGAND. To my knowledge, that is a true statement.

    Mr. GIBBONS. I thank the gentleman.

    Dr. WEIGAND. You have got to understand that computer is one of the largest computers in the world. That is why we had it.

    Mr. WELDON. I understand. I agree with the amendment.

    Mr. GIBBONS. I guess the question then would be my final question, would be do we need to do something with regard to our checks and balances in terms of sales again of equipment like this overseas or is there something that we are missing that would have allowed a sale like this to go through?

    Dr. ROBINSON. If I can clarify, this was not exported and so—
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    Mr. GIBBONS. It would have probably gone export though.

    Dr. ROBINSON. There is no prohibition against the sale domestically of computers of any size.

    Mr. GIBBONS. I presume, Dr. Robinson, that anybody who is a foreign national can establish a United States company, buy a computer of this type and then say that this company is transferring it for its own use to its other businesses overseas. Would that be an avenue they can—

    Dr. ROBINSON. Congressman, I have looked into that at some depth as I tried to look at the hypotheticals of this. Our law assumes that if someone establishes a business in the U.S. and registers their business in the U.S. that they will abide by our laws and we right now have no basis in law to assume otherwise.

    I suggest in my testimony it might be a good idea for us to try and amend things when we are dealing with folks who represent sensitive countries. I would agree with you.

    Mr. GIBBONS. Let me just follow-up if I may, Mr. Chairman, when you have a company that you are selling a computer of this magnitude, of its computing capacity to, do you ever question them as to why they need such a computer? If you did in this case, what was their answer?

    Dr. ROBINSON. Yes. You should recall that this was not being sold as the full computer. Parts had been removed and it was a substantially smaller portion and it was being sold as scrap at that point for parts. The individual indicated he had the prospects of salvaging the processor chips for an Internet service provider named Pacific Bell in his part of California and that was the basis of why he was buying the computer.
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    Mr. GIBBONS. Thank you, Mr. Chairman.

    Mr. HUNTER. Mr. Robinson, do you have any knowledge as to whether or not that was a true assertion? I mean I think the unasked question that we all kind of are wondering about is, was this a storage bin that you found this thing in or did this guy have an ongoing business where he could actually use a computer which was 40 times as powerful as the highest level of computer you could legally transfer to China?

    Dr. ROBINSON. No—

    Mr. HUNTER. I mean did he have a Dairy Queen operation or did he really have a place where you could use this thing?

    Dr. ROBINSON. His purchase of the computer and his shipment was very consistent with a scrap dealer. He transported it on a flatbed truck, which anyone wanting to use the computer would never have done.

    Mr. HUNTER. Well, certainly. Didn't we do some investigation about this guy?

    Dr. ROBINSON. We did. And we did an index check and he came up clean.

    Mr. HUNTER. I am not talking about an index check. Does he have a scrap business?
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    Dr. ROBINSON. I am told he buys various technology as he can and then sells it. So he is an intermediary dealer but not a widespread scrap dealer.

    Mr. HUNTER. Has he ever sold any scrap before? I mean you guys know some things about this gentleman, so why don't you just tell us? What is your take on this guy that he was likely looking at a transfer to China or to another country or was he a legitimate scrap dealer who just happened to have a nationality from another country?

    Dr. ROBINSON. Why don't we have someone who is close to the discussion.

    Mr. HUNTER. I think we need that because I think your statements at least imply that. And I think we need to just walk this thing through. Let us find out what this guy was.

    Ms. DEDIK. Mr. Chairman, I am Trisha Dedik. I was part of the negotiation process. The individual in question was not a scrap dealer. He was a small businessman. I believe we found that he sold small computer products and whatnot. He had never bought anything of this size to our knowledge before, anything near that size. His explanation of what he planned to do with it did vary from time to time.

    He did talk about this IP address that he was going to establish. He talked about several other possibilities. And he did change his story from time to time. There is an ongoing investigation that continues by the Department of Commerce. And I believe that they would be able to provide more information at this time, because we have not gotten all of the information after the computer was again acquired by the Department. But this investigation does continue and the individual is being looked into.
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    Mr. HUNTER. All right, that is what we wanted to know. Okay. Mr. Gibbons, you can go ahead and continue if you want to.

    Mr. GIBBONS. I am finished.

    Mr. HUNTER. Thank you. The gentle lady from California, Mrs. Tauscher.

    Mrs. TAUSCHER. Thank you, Mr. Chairman.

    Gentlemen, thank you very much for being here. As many of you know, I represent Livermore, California, the home of the best scientists in the world, sorry, Dr. Robinson. But I do have some of yours at Sandia.

    Let me start by thanking you for your very hard work in a very tough situation. This has been a tough time generally as we have figured out the post-Cold War environment is a lot more difficult than necessarily the Cold War was for us. And it is a very challenging time, and we have got to pull together to make sure that we are using all of our energies to get from out behind the 8 ball and move forward. And clearly we can accept nothing less than a zero tolerance for anyone and anything that wants our secrets. We are the ideal goody bag in the world, and people are going to try and constantly stick their hand in the bag and try to take things out. We have got to be smart about how we prevent that.

    I believe that we have had a multidecade, perfectly bipartisan systemic failure to really get this. And there is lots of blame to go around and lots of people to blame. But I am tired of that, so I want to go ahead and fix it. And what I am interested in eliciting from you, specifically, Dr. Robinson, and, General Habiger, is your indication of acceptance of what we have done in Title XXXII and the ability to move forward.
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    I believe that the Secretary's comments as of yesterday indicate his willingness to move forward, and that we have got to do the best we can with a law that we have passed and the President signed just a few weeks ago in the Defense authorization bill. And as you know, Mr. Thornberry is chairing a panel that Chairman Spence has put together as a special oversight panel. Many of the members are here in this room.

    So we are looking forward to hearing from you, and certainly the Secretary subsequently, as to what we can do to make sure that we are absolutely never confused again and that we are absolutely preeminent, not only in the science that we produce, and the protection of our nuclear stockpile and in our nonproliferation efforts around the world but in national security. And it goes the band width from things that nobody ever thought we would have to worry about to gates and guards.

    And I know that it has been tough and you are not going to get an apology from me for being tough about it, but I know that we all share the heightened sense of the necessity to work together and the ability to work together. So I look forward to that opportunity.

    Mr. Chairman, I really don't have any questions, but I do want to tell you that I think this is probably in my opinion the number one thing we have to do in this Congress, and in the next Congress is to make sure that we get this right, we don't have another chance.

    Dr. ROBINSON. Could I—

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    Mr. HUNTER. Certainly.

    Dr. ROBINSON. Could I respond? I have been disappointed, in fact, somewhat confused that the recent problems arose between the different views of how to fix this. We talked to Secretary Richardson as a group of lab directors on his joining the Department and said we must change the past where there were too many people all giving conflicting views, all in control, we must streamline, we must have someone who is accountable and that the decision loops close instead of endlessly going on.

    He agreed with that and took some major steps to reorganize the Department into lead principal secretarial officers and we were delighted with that. What he did is very close to the legislation so it is my sincere hope on behalf of the laboratories that we can close the gap the rest of the way to streamline, get accountability, but not have many sets of open loops of management direction taking place.

    Mrs. TAUSCHER. If I can just add one more thing, Mr. Chairman. I think that Chairman Spence has shown great agility and great foresight in helping us by creating this Panel, to make sure that we were really focusing on Congress' role in making sure that at least on this side in the House that we were paying specific attention because this is such a changed environment. And I want to congratulate you, Mr. Chairman, for your ability to do that. Thank you.

    Mr. HUNTER. I thank the gentle lady.

    Mr. Jones.
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    Mr. JONES. Mr. Chairman, thank you very much. And first I want to thank you—I am not a member of your subcommittee, but I thank you for the opportunity of sitting here today and listening to the testimony from the panelists. And I thank each and every one.

    I guess that the fine lady from California, I want to go a little bit back in history, because I have an obligation to the people in my district, I represent the Third District of North Carolina, I take great pride, Camp Lejeune, Cherry Point, Seymour Johnson Air Force Base, and we have 77,000 retired veterans, men and women, who are very patriotic and have great strong feelings in this country because they have served many during wartime, obviously if they are veterans.

    And I feel compelled to go just a little bit back in history. You know, I think about it when this revelation came out a year or two ago that there might be some type of espionage at our labs, Mr. Chairman. I think about it, quite frankly, if there had not been that leak if it was a leak, if it not been for the Cox Report, then we probably would not be here today having this discussion, because we would not have known what happened, and that is what concerns me.

    And I am going to start with Mr. McCallum and then Mr. Podonsky—did I say that correctly?

    Mr. PODONSKY. Close. Podonsky.

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    Mr. JONES. Thank you, I have got to practice. I want to start, and I want to ask this. Mr. McCallum, you were the director for how long as safeguarding security office?

    Mr. MCCALLUM. The Office of Safeguards and Security was just short of ten years.

    Mr. JONES. Okay. And, Mr. Podonsky, I will keep trying, don't give up on me, you have been with the Department of Energy for 15 years, right?

    Mr. PODONSKY. Yes, sir.

    Mr. JONES. Okay. What I want to know is how did we get into the situation that we are in today? When did you, Mr. McCallum, Mr. Podonsky, when did you suspicion that we had a problem? When were you ready to say to someone in higher authority, we have got a problem?

    Mr. MCCALLUM. Congressman Jones, the problem, as many problems, evolved. We have always had a level of interest in our laboratories. I think as Congresswoman Tauscher said, it is a goody bag and it is too good a technology base for foreign countries and rogue nations not to be interested in. So there has always been a level that you can look back to that we are, the FBI have been looking at, but evolving from about 1993 to about 1995, resources had been depleted, technical personnel had left the Department, and we stopped being able to maintain any kind of sense of where we were. But there was a clear sense of decline.

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    By 1995, my office, the Office of Safeguards and Security, wrote a very cautiously negative report that essentially warned that there were cracks appearing in the infrastructure but there were parts—and that funding and support for the program needed to be escalated. And I focus on funding because funding sends a major signal to the labs, to the lab directors, and to our field elements whether it is important or not. Our funding had been chopped in the safeguards and security arena by about 40 percent at the same time that we knew espionage was occurring.

    We were aware of Chinese espionage in our labs back to about 1985. You have heard the magic word ''Tiger Trap'' and some of those operations that the bureau was running back then. We knew that there was activities, those reports were ongoing. The lab safeguards and security and the lab counterintelligence people were briefed regularly by me and the director of operations in counterintelligence. So those elements were happening, but they slowly escalated. Incidents with computers, the evolution of computer systems escalated to the point that by 1995 we sent a flare up.

    Mr. JONES. Who did you send your report to? I mean to whom should that have raised a red flag? Who did the report go to?

    Mr. MCCALLUM. We raised the flag for the first serious time to the Secretary of Energy in our annual report to the Secretary for calendar year 1995 in January of 1996. Before that there were numerous incident reports and numerous situations that pointed to a deteriorating information security, computer security program back to about 1992. But it had not become critical to the point where we had really lost control of the program in my words in the Department until 1995.
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    Mr. JONES. Mr. Podonsky.

    Mr. PODONSKY. I go back a little bit further, Congressman Jones, relative to when the problems in the Department began. And I go back to the 1970s. There is a great concern by the legislative on the government about the Department's ability to protect its nuclear materials and weapons. A great deal of effort by Congressman Bliley and Congressman Dingell forced the Department to take a good hard look back in the early '70s on how to plug these gaping holes of security.

    That was fine up until about '84 to '89. Safeguard and Security was plugging the holes in terms of all the glaring problems. Then the Department in 1989 started to focus on environment, safety and health and the focus on security lessened. Some of the reductions in resources came about during that period.

    We continued to do inspections and raise issues that we are taking about today as far back as '88, and the most telling one was in '94. From '94 to '97, there was a great deal of focus on human radiation experiments as opposed to safeguards and security or even environment, safety and health.

    It wasn't until recent times that we have come full circle back to the attention paid on safeguards and security. And I would say having been in the Department, living through all of these cycles, the thing that is encouraging my people and myself the most is the way that this new infrastructure is working and something that would be helpful to long past survive this current Secretary who had a vision to state with keeping a separate policy office and independent oversight and holding the line accountable is somehow we need to make sure that Federal and contractor people alike are accountable.
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    It is a problem more of attitude and accountability, and that is one thing that we haven't seen in the Department. It has always been easy in the Department to blame contractors for failings, but it goes all the way back to the Federal staff as well. And that is where the biggest problem lies in terms of the Department, whether it be a safety issue or security issue that we are looking at today.

    Mr. JONES. So, and then I am going to go to another question, Mr. Chairman, but, basically, and again this is my first opportunity to sit in to hear this discussion in depth, but basically when you or Mr. McCallum in the mid-'90s, you became concerned that maybe this espionage had picked up, so to speak, or as Mr. McCallum says it has been ongoing, but maybe then you have become aware that it was picking up as far as the advances being made in espionage, so basically when you—this report that he spoke about or your explanation, then you don't have—you couldn't go to the Secretary at that time and say to her or to him, listen, we have got a serious problem out here, we need some action.

    I mean does the process work that way?

    Mr. PODONSKY. First of all, just a point of clarification, our reports never alluded to the specific espionage. We specifically called out the systemic problems involving cyber security, the classified and the unclassified. I just wanted to make that point clear. But, yes, the problem has been as I explained to Secretary Richardson in May, the problem has been the ability to access the Secretary to inform the Secretary of what is actually going on, as well as over the years, our ability to brief the legislative part of the government as to what was going on.
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    Mr. JONES. Mr. McCallum, was that—

    Mr. MCCALLUM. We had a great deal of difficulty getting to the Secretary's office in the '94–'95 time frame. We couldn't get through staff. There were clearly guardians at the gate and we were not allowed to get there. We did finally almost push our way into the deputy secretary's office, Mr. Charlie Curtis, who listened to the report, was very disturbed by it and had us brief the field managers in a session on what we were finding. And the briefing was done, but frankly, the secretary's chief lieutenant, Mr. Don Pearman, told the field managers not to worry about it.

    Mr. JONES. Told the field managers not to worry about it?

    Mr. MCCALLUM. He said don't worry about it. He said do what you have got to do. So the signals from the very top of the time frame this is not a priority, this is not an important mission, don't worry about it, we will take care of these guys.

    Mr. JONES. Just a couple more. Let me ask you, in your comments, and Mr. Podonsky and maybe the gentlemen also could speak to this, I don't guess this would be classified, but you mentioned a concern that I found very interesting about terrorists within the country or terrorists coming from outside the country that could maybe overtake a lab, one of our labs.

    Did I understand that right in your testimony? I didn't get a chance to read it, but I was listening that you mentioned that you did have a concern that this could happen?
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    Mr. MCCALLUM. I am going to be very careful about how I answer that in an open session.

    Mr. JONES. Okay.

    Mr. MCCALLUM. But clearly from the 1970s, as Mr. Podonsky mentioned, the Congress and the American people became concerned about terrorism, after the Munich Olympics, we were all urged in numerous organizations to get moving, and, in fact, the Department of Energy changed from an industrial-based security operation to one which, if you looked at it in the mid-'80s, you know, we have SWAT teams, we have helicopters, we were ready to react in a military fashion to a possible terrorist event, particularly when we were looking at nuclear weapons and nuclear material from which nuclear weapons could be readily ahead.

    So, yes, the concern is there. I think that the FBI and the intelligence community and the kind of report that General Habiger mentioned has always said that the risk is low if we maintain a high security base, but that if we drop our security base, it could become increasingly problematic, because we know that there are people and organizations out there that want a nuclear capability.

    So, yes, it is possible, and we became concerned by 1996 that several of our facilities had lost enough people and tactical capability that they could no longer effectively respond. Now to go into my more detail about that, we have to be in a closed session.

    Mr. JONES. When you say lost a number of people for protection purposes, was that because of the—excuse me, decline in the budget or was that administrative decisions that—
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    Mr. MCCALLUM. I think there were reductions in the budget about that point. But the reductions frankly as we looked at it, one of the evaluations that we did, the Department took about a 25 percent cut in our lab budgets and what we were doing from the Department, but we took about a 40 percent cut in personnel in the safeguards and securities arena and the cuts meant that weapons, ammunition and training declined to the point that the people who were there were tactically questionable.

    Many of the younger people who came on to our forces when we became oriented towards special weapons and tactics and military responses to a terrorist event were the first people to go because many of our sites are unionized, and as in most union operations, you know, the newest people are the first ones to go, so the age of our force increased dramatically. So it was largely capability and numbers.

    If you have been to some of our sites, they are cities. There are hundreds of buildings and multiple targets. So what we ended up with was a smaller force that was guessing where the bad guys might hit. And being the security director at the time, I had to worry about whether they were capable of stopping a terrorist attack if it should occur. And we raised those issues in I think the strongest terms.

    Mr. JONES. And I guess, Mr. Podonsky, this is now being addressed and, General, this comment that was made by Colonel McCallum, as far as the concern he had when he was there with the Department of Energy, we are addressing that adequately now, right?

    Mr. PODONSKY. I can't speak for the General, but from an oversight perspective, we think that in the last six months there has been a marked sea change, especially—I don't want to emphasize the infrastructure, but having General Habiger as the head of policy and the securities czar having also direct access to the Secretary as do I, we are seeing—any time you have a chief executive officer of a corporation get personally involved, you see major changes taking place, including the stressful test that Barb Stone, who is with me today, her people run performance tests on all the sites.
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    And we are going to continue to test. We will trust, but we will continue to verify, that the Department is moving on this track and not just rest our laurels on the infrastructure, but we do believe that the Department has made a tremendous sea change.

    General HABIGER. Just one comment, if I could, relating to access to the Secretary. It is total, it is immediate, and he listens. Virtually everything I have recommended to him he has accepted and told me to implement. There is no bureaucratic nonsense. It is involved. It is, get out there and fix it.

    And in my opening statement I made a comment about personally reviewing the security plans for each of our sites. Are they all perfect? No. Are we going to make them better? Yes. And we are going to do it very, very quickly. We have cut down the bureaucratic in-fighting between the headquarters and the field to make sure we have viable security plans out there.

    As a matter of fact, I have a team at one of our sites out there today, as we speak, to correct some bureaucratic in-fighting and by the end of this week or the middle of next week we will have a viable plan out there.

    Mr. JONES. Mr. Chairman, this will be my last question if I may. General, I will ask you, Mr. Podonsky and Colonel McCallum, one of you gentlemen mentioned, either Mr. Podonsky or Colonel McCallum, in your comments that you felt that we needed to have oversight by an agency outside of the Department of Energy as it related to security.

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    Would you three gentlemen comment on that, either you do or you don't, or you don't know at this time?

    Mr. PODONSKY. I think Mr. McCallum was the one who made the statement. And there was a point in time that I would fully agree with him. Having been in the job for 15 years, and at one point Mr. McCallum and I did the job together, when we were not able to get the attention of the Department, oftentimes we discussed whether an external entity would be more effective.

    But also on a personal note having been a regulator with the Nuclear Regulatory Commission, I would tell you that in my opinion external regulation for the Department on safeguards and security is not the answer. The answer is to institutionalize responsibility, accountability and hold people accountable. That is what it comes down to. We pay a lot of people, both Federal staff as well as contractor folks, to run our laboratories and our sites. If they are held accountable, like private industry is, you don't need more oversight. Oversight with a sledge hammer is not the way to change the hearts and the minds of people, it is to hold them accountable for what they were hired to do.

    Mr. Jones. Colonel, would you like to respond and then then General?

    Mr. MCCALLUM. If I believe that would endure, I would agree. It certainly is the cleanest way to work it. Certainly cabinet level officers should be able to do that. But I have been with the Department in one capacity or another for about 25 years, and I have seen that cycle move through the phases, we are going to fix it, and then it gets broken again on three separate occasions.
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    I sat a table like this in front of Congressman Dingell's committee about eight years ago with the Secretary of Energy when the Secretary of Energy said we are going to fix it and it is going to stay fixed. And he was committed to those, Admiral James Watkins. And it worked for a couple of years. And then it went back, you know, in the wrong direction.

    I don't think that something as important as the protection of nuclear weapons can rely on the good faith and intentions of one or two people. And unfortunately, I think things got so bad for several years that something outside of the Department needs to be looked at. There is a proposal I think in the legislation this year, I think it is in the legislation, there will be a commission. That should happen.

    The activity and activity level of the commission can depend on whether the Department is carrying out its responsibilities, but it has just failed too many times and the promises have been made by too many different people and it has failed. The competition for resources and the competition between open science and national security is just too much of a problem in the Department. Somebody outside needs to make—at least be able to send a flare up.

    And I hope the commitments that I hear made and the statements are very true, but I don't know what happens in 4 years or 6 years or 8 years. We shouldn't be here again with this system broken. Nuclear weapons are too possibly disastrous.

    General HABIGER. I would just like, if I could, comment quickly. I disagree. I think the Department can oversee itself. Mr. Podonsky has done some marvelous work in institutionalizing the process so that his oversight evaluations are done. When they are completed, I sit next to him. I sat down at Sandia when Dr. Robinson was outbriefed on his evaluation. I will go to the field, and when I leave, my successor will go to the field.
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    I think, Congressman Jones, the key to success here, and I am apolitical, I said this many times, there is only one person who knows how I vote and that is my wife, and we cancel each other out every year, but the point is we need strong leadership in the position of Secretary of Energy. That is key. I think we have learned some lessons here.

    Mr. JONES. Thank you, Mr. Chairman.

    Mr. HUNTER. Thank you, Mr. Jones.

    I am going to ask a guy who has been a real star in this area to—he has got a few comments on this, Mr. Weldon, to kind of be our cleanup hitter.

    Just before we do this, I just wanted to ask you, General, you are a military person obviously, you believe in accountability. You believe in change of command. If you look at that diagram over there to your left, that is what you have in place right now. If you had a division size element and you wanted to make sure that you had accountability and had responsibility and had the ability to bring people before you who had done either a good job or a bad job and act accordingly, you wanted to get your mission accomplished, I would submit to you that if that was your chain of command coming down from a division where you had a lot of—or people on the staff of a division commander could end up micromanaging platoon members in the third platoon, company B, fourth battalion, that you would have a mess.

    If the staff could replace that with what we have come up with with respect to reform of DOE, at least their weapons department, I want you to see what we replaced it with. We basically replaced it with a military model. Put that poster up there. That maze has been replaced with this.
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    Now, you know, I have told Bill Richardson, and I know he wants to have a strong security. I believe that very truly. He has an administrator, he makes the policy. He is the division commander, and he makes a policy on intelligence and counterintelligence. And if the administrator makes a mistake, he can pull that administrator before him and he doesn't have 35 different lines of communication going down to the lab level.

    Now, I think it was you or Mr. Podonsky who mentioned fiefdoms within fiefdoms, was that your statement?

    Dr. ROBINSON. Yes, sir.

    Mr. HUNTER. Sir, if we didn't go, if we hadn't gone to this new military-like accountability chain of command, you would still have fiefdoms within fiefdoms. And I think that is the genesis for Mr. McCallum's statement, essentially what he has been saying. And I think there is some truth there.

    In that if it is true, if everybody is pulling together and you have energized this culture of being very attentive to security, you can hold that for a while. But with that maze that we have there that is present—the present way that these fiefdoms within fiefdoms operate, the thing can degenerate back into a situation where, and I think you saw this, when Mr. Lee was identified as having stolen some nuclear secrets, the head of the FBI sat in a room with the Under Secretary of Energy, according to him, and said, remove this guy from the nuclear weapons vaults and take away his classified material, because he may be stealing stuff from us. She nodded approvingly.
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    A couple weeks later he had a meeting with the Secretary of Energy, he said, we think this guy is stealing nuclear weapons or nuclear secrets, take him away from these classified areas. He nodded approvingly.

    Fourteen months later, somebody turned around like a scene from the Keystone Cops and said is that guy still down there next to the weapons vault? I thought you were suppose to fire him. And somebody else said I thought you were suppose to fire him. That is what has made the nuclear weapons laboratory system the laughing stock of the country.

    In my estimation, it is also partially a result of that maze that you saw, and all that conclusion and the lack of accountability that has manifested it. So, you know, I would hope that you would look at this as a military man, that very clear chain of command that we now have and that Administrator is not hired by Congress. He is not hired by some adversary, he is hired by the administration who hires the same Secretary of Energy, and he should be a guy in whom the Secretary has enormous confidence and trust.

    And if something doesn't go right, he can jerk him into the office and say, why didn't this go down right down in the third platoon, company B.

    Now, don't you think that is a preferable to the mess that we have been operating under?

    General HABIGER. Mr. Chairman, I sat before this panel two days after I was hired, and I saw that—your previous chart and then I was shown the chart that the Secretary of Energy Richardson showed you and he said, hey, this is where we are today, it is not quite as bad as you have depicted it or Chairman Spence depicted it.
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    When I came and signed this contract with the Secretary of Energy, I asked for two things; number 1, if General Habiger is going to fix this problem of the Department of Energy, I need the full weight, power and authority. And, number 2, I said if I am going to fix the problem in the Department of Energy, not specifically defense programs, but in the Department of Energy, I need total and absolute control of those $800 million.

    This is a new paradigm and that is why when I was asked the question earlier what my role and responsibility and how I am going to do it, I don't know yet. It is a new way of doing business. I understand your military analogy, and in concept I agree totally with that, sir.

    Mr. HUNTER. Okay. Thank you. And now, Mr. Weldon.

    Mr. WELDON. Thank you. It is time to liven the hearing up a little bit.

    First of all, I am going to start out by saying that I think the concerns that have been raised about our labs were largely brought up by Bill Richardson himself. Why do I say that? I was one of those nine Members of Congress who served on the Cox Committee. I sat through seven months of meetings with the CIA and the FBI. And I attended almost every one of them during all of our holidays.

    I saw the evidence presented, and I was involved in all the recommendations we made, which were all 9 to 0. There were no 7 to 2, or 8 to 1, or 5 to 4 votes. All of our votes were 9 to 0. If there was a problem with any issue or any piece of any language of any of our recommendations or findings, we changed it. It was 9 to 0 vote.
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    What we found in the Cox Committee was not just about the labs. In fact, in my opinion, that was one small part of what we found in the Cox Committee. There was a gross abuse of technology transfer capabilities being taken away from DTSA, the DTRA movement allowing technology to flow in terms of HPCs, encryption technology, aerospace technology across the board.

    The Administration got a report the first week of January and started looking for a—and knew what was in there, then made Bill Richardson the pit bull. And as you know when the report was finally released in May, he was the person we saw all over this city doing all the press conferences, talking about the Cox Committee. What did he focus on? He didn't focus on the relaxation of the export controls. He didn't focus on DTSA and how it had been watered down. He didn't focus on the cooperation between space entities and the Loral and the Hughes situation. He focused on one thing, it is all about the labs.

    Because why? Because the transfer of the W–88 warhead occurred in the previous administration, and Bill Richardson could then say this was all about something that occurred in the previous administration, and we have corrected that. We have corrected all of these problems. So the whole focus in this country came around during the debate on whether our labs are with it or not and how could our labs have allowed the threat of the W–88 warhead to occur. When I knew full well as someone who sat through seven months of testimony that what Bill Richardson was doing was spinning the Cox Committee report, spinning it to try to make it look like it was something that it wasn't.

    Now I have some concerns that arise, but I am also a big supporter of our labs. I will get to that in a moment. I want to focus on this issue, because in my mind, in my opinion, it is Secretary Richardson who created this problem, because he thought the spin on the labs and the W–88 warhead theft could divert attention away from the other problems that we uncovered in the Cox Committee relative to seven years of allowing technology to flow in an uncontrolled manner from U.S. to China.
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    And then we got to ask the questions, and I am going to ask you, Dr. Robinson. Wasn't it Secretary Hazel O'Leary who ended the laboratory I.D. Security program?

    Dr. ROBINSON. The biggest change, and I think it has been a major change, came in that period to omit the requirement of a Q clearance for all of our folks and to substitute for a large number of folks, in fact a majority of folks, an L clearance.

    Mr. WELDON. Didn't you take away the color coded classification system?

    Dr. ROBINSON. Yes.

    Mr. WELDON. Wasn't it Hazel O'Leary who did that?

    Dr. ROBINSON. That is my understanding.

    Mr. WELDON. Didn't we just reinstate that after the Cox Committee report came out?

    Dr. ROBINSON. It has been reinstated.

    Mr. WELDON. Isn't that interesting. Bill Richardson never mentioned that to the American people. Wasn't it Hazel O'Leary who did the background checks at the labs, the kind of checks that occurred before she took office?
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    Dr. ROBINSON. That is the Q and L, I think.

    Mr. WELDON. Is the answer yes?

    Dr. ROBINSON. If I understand, it is the Q and L, yes.

    Mr. WELDON. Wasn't it Hazel—you are not familiar with Lawrence Livermore, so I will just put this on the record because I know this to be true. When we found out that one of our retirees from Lawrence Livermore had violated his security clearance and had given away classified information in a public setting, one of the offices in California, I can't think of which one it was, punished him by taking away his top secret clearance or his security clearance as a retiree and that went to Hazel O'Leary's desk, and she overturned that denial.

    Were you aware of that, Dr. Robinson? And wasn't it Hazel—I know it was Hazel O'Leary, so I will put this on the record—all of this fuss about Bill Richardson about the labs in the '90s and '80s allowing the Chinese to steal the W–88 warhead designs is kind of interesting when in 1995 it was Hazel O'Leary herself who gave the designs for the W–87 warhead to a U.S. News and World Report reporter, who published that in a special edition in July of 1995, including the warhead design of the W–87 warhead, which I was told by the lab leadership at Lawrence Livermore was classified at that time.

    Now, Bill Richardson tried to create the impression when the China Cox Committee came out that this all was something the labs were doing, and that he was taking control of all of this, and he was straightening it out, and that offended me, because I knew what had occurred and I knew much of what had occurred in the labs was orchestrated by the leadership of DOE, much like the dismantlement of the Russian fission program that was formerly run by J. Stewart was totally eliminated, even though it had been recognized by everybody from me and Fred Warner, when he headed NATO, to the former Secretary of Energy and James Schlesinger to being an outstanding effort. J. Stewart's effort was eliminated because he was coming to some conclusions that would cause ill feelings perhaps in Russia because he was telling Hazel O'Leary and others the Russians did not have total and adequate stockpile of the Russian fissile material.
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    And what offended many of us was when Bill Richardson spun the story, and spun the Cox Committee at the labs because he felt that that one issue, the warhead issue, would be the one that would grab the media and the American people's attention. That is why I was so offended as Bill Richardson went across the country talking about what he had done and all of these things that were being changed from previous administrations, then resulted in us seeing the sale of this computer at Sandia.

    Now, Dr. Robinson, as you know, I have been a big supporter of your labs and all the labs. I can tell you nothing incensed me more than this transfer. I wrote you immediately. I called on the phone. You wrote me a response back. And I am going to ask some very specific questions, because I don't think we have been given the very specific information we need.

    My concern with the lab wasn't some political rhetoric against Secretary Richardson, nor against you personally because I have the highest regard for you. It was based on a memo that I got from Dr. Weigand. Have you seen that memo, Dr. Robinson, the memo that Dr. Weigand wrote to Vic Reese about the transfer?

    Dr. ROBINSON. I don't believe I have.

    Mr. WELDON. You remember this memo, Dr. Weigand?

    Dr. WEIGAND. Yes, sir, I remember the memo. It is not a memo. It is the following morning after I got the information, I wanted to write down what I knew, when I knew it, and inform my line of management. It is an internal memo that has never been released to my knowledge until I have seen it in your hand. And it was my way of writing down what I knew, when I knew it, so I documented very carefully something that I considered a very significant incident with my boss.
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    Mr. WELDON. Mr. Weigand, I agree with you, and I have the highest respect for you and the work that you have done. I got this memo handed to me along with several other memos, and when I read it, I said what in the heck is going on here. It wasn't that I had some problem with Livermore. I wanted to chase Bill Richardson, but Bill Richardson is out telling the world that everything is okay, I have got everything under control. And I see this memo, which absolutely knocks me off of my chair.

    And, Dr. Robinson, when I quiz you about the sale it is like oh, well, no big deal, it happened. And I want to go through some specifics with you that were in Dr. Weigand's memo and ask if these two things are in sync.

    First of all, Dr. Weigand, were you ever approached and offered the opportunity to buy the computer in question that was being offered for sale?

    Dr. WEIGAND. Sir, I owned it.

    Mr. WELDON. You owned it. They were selling your computer?

    Dr. WEIGAND. Sir, the equipment, that is maybe a term of art, I owned it. This is Department of Energy's equipment, it is in my line. It would have been my responsibility.

    Mr. WELDON. Okay, then I should ask, has DOD ever had the opportunity to acquire the equipment?
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    Dr. WEIGAND. The process should have allowed the Federal Government to have first dibs.

    Mr. WELDON. Was DOD offered that opportunity?

    Dr. WEIGAND. My understanding is yes, sir.

    Mr. WELDON. They turned it down.

    Dr. Weigand. Yes, sir.

    Mr. WELDON. So we have got on the table about the capability of the computer is between 150,000 MTOPS and 200,000 MTOPS; is that correct?

    Dr. ROBINSON. Yes, that is of the full computer, yes.

    Mr. WELDON. The way this whole thing came about was we sold the computer for surplus to an individual, and I would ask my colleagues, I have classified information I can't put on the record about who this individual and his one person company is. Do you know the company is EHI.

    Mr. HUNTER. He owns a Dairy Queen.

    Mr. WELDON. He is a one-person shop who happens to buy high performance computers. Dr. Robinson, are you aware of any affiliation between EHI and an Australian operation, an Australian company?
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    Dr. ROBINSON. None.

    Mr. WELDON. Are you aware of whether or not EHI—are you aware of that connection? You are aware of that connection.

    Ms. DEDIK. Yes.

    Mr. WELDON. I would suggest to my colleagues they have to see the analysis that I as a Member of Congress got about this individual, EHI, the Australian company and the ties directly back to the Beijing Research Institute of Telemetry. And I can't for the life of me understand how we would not check a person trying to acquire a computer of this size and what his past activities may have been in terms of technology for the People's Liberation Army and one of its arms.

    It didn't take much to ask for this. And I don't know, myself, if I were going to be involved in surplusing what is, in fact, and Steve Bryan, as I have just gotten on the record, says he has never known of a sale like this ever during the time he served as director of DTSA, and I think Mr. Weigand said he has never heard of one of this size either, how we can take a supercomputer of this size and still decide we are going to surplus this, and this guy is going to use it for some casual case of having the need for this surplus material.

    In fact, you know how we found out about this? He went to the Intel Corporation to buy the parts to reconfigure the computer. Is that right or wrong, Dr. Robinson?

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    Dr. ROBINSON. That is how we first learned of it, yes.

    Mr. WELDON. And Intel, their security, thank goodness for Intel's security person, they called the lab in DOE and it was, was it you, Dr. Robinson, or was it Mr. Weigand? Who did they call?

    Dr. WEIGAND. They called people in the laboratory.

    Dr. ROBINSON. They called people at the laboratory, and I would point out the parts they wanted were no longer made.

    Mr. WELDON. But the request was he had gone to Intel trying to buy the parts to reconfigure the computer, so it wasn't our surveillance that found out about this.

    Mr. WELDON. Intel Corporation tipped us off and when that happened in July, all of a sudden the you-know-what hit the fan and everybody started jumping around. And that is when the lab started—

    Mr. HUNTER. If the gentleman will yield, then you are saying that he wasn't going to scrap the computer, he was trying to—

    Mr. WELDON. Reconfigure.

    Mr. HUNTER.—reconfigure the computer.
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    Dr. Robinson, why did you spend so much time talking to us about this guy being a scrap dealer?

    Dr. ROBINSON. That is all I knew him to be, sir. I must say if he were going to reconfigure the computer, it would have been a really stupid act to transport on a flat bed truck with no control and store it in a nontemperature controlled area. And indeed when we acquired the computer, we found it in very, very bad shape from its journey on such a truck.

    Mr. WELDON. If the gentleman is finished. In fact, I have a copy of the contract here, and in the contract that we signed between Sandia and EHI, we gave him the contact at Intel. Now, if he wasn't going to reuse the computer, Dr. Robinson, if it was going to be scrap, why would we write on the contract the name, contact Wayne Rogers, Intel Corporation, (507) 677–7787. If he wasn't going to reuse the computer, why would he give the name of the contact at Intel?

    Dr. ROBINSON. The system of the computer required Intel's approval to deliver it and that was the individual who approved that. And it was provided. The computer was sold ''as is, where is,'' which we reminded him when he later made a request of Sandia that, gee, there is not enough here for me to make this operational, we reminded him this was sold ''as is, where is.''.

    Mr. WELDON. But on our contract with him, why do we put the Intel contact for that commuter if he was going to just scrap it? What is the purpose? I don't understand the purpose.
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    Dr. WEIGAND. Could the gentleman who did the investigation for the DOE comment?

    Mr. MICHELSEN. My name is Steve Michelsen, and I wrote the report that has been offered into the record with regard to the investigation on the incident. A couple things have been said; maybe I can clarify.

    With regard to the representations made by Intel, our investigation indicated that in fact those calls were made to Sandia National Laboratory in December of 1998. And the issue that was being raised was that there was a Mr. Jiang, the buyer of the Paragon computer offering—asking about parts, equipment, but not understanding what pieces of equipment he really needed for the computer and asking for available parts that actually were not accepted and in that computer configuration. So it came across as there was an individual who had a high-powered computer that didn't have sufficient information to really understand, not only what he had, but what was available to be added to that computer. Just give me parts, and that raised some suspicion.

    Mr. WELDON. So that was in December of 1998?

    Mr. MICHELSEN. Yes, sir.

    Mr. WELDON. Why did we wait six months to try to buy it back?

    Mr. MICHELSEN. If you read the report—
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    Mr. WELDON. I haven't seen the report yet, so—I haven't read it.

    Mr. MICHELSEN. The call was made to a senior program person within the Sandia organization. That individual raised the issue that a respected individual from Intel, a man who they had contact with over a long period of time, a man who was not given to glib remarks, had suggested that an individual was calling about a computer. He didn't seem to understand exactly what he had or what parts were available. There was a suspicion that the computer was on its way to Peking or the People's Republic of China. And the contact at Sandia respected that information, raised it with his immediate supervisor, and with the reapplication specialist on site there at Sandia.

    Circumstances occurred that information really never went any further within the laboratory organization. Individuals acting on their own made a decision that this information was not credible.

    Mr. WELDON. So what triggered the offer to buy it back? Was it a TV station that came in and did the story in June or July?

    Mr. MICHELSEN. I interviewed 20 people at the laboratory after July 23rd. And what was said to me was that the Secretary's stand-down event at Sandia Laboratories had raised the consciousness of the individuals in the laboratory to security as an issue, and that somebody had remembered this incident in December of 1998 and brought that forward within their organization and elevated it to the attention of the laboratory and, ultimately, to the Department.
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    Dr. ROBINSON. I think you could credit the Cox Commission and the Secretary's response to it with triggering this information to be passed up the management chain of people that felt, well, no, this is gossip, it doesn't look like it is really something. And when we focused the attention on Chinese espionage and the laboratories as a result of our first day's training, a call was made to the management and came up to me. And we began to investigate and we notified the Department of Energy.

    Mr. WELDON. Was that in July?

    Dr. ROBINSON. I thought it was June.

    Mr. WELDON. So the incident, you are aware of it as a lab was in December?

    Dr. ROBINSON. We learned of it in the stand-down.

    Mr. WELDON. But in July is when it came up.

    Let me read you a sentence from Mr. Weigand's memo which indicates to me—I didn't get your characterization of your testimony, Dr. Robinson, but the chairman did you say it was kind of like a trivial incident. Was it a major incident? Much ado about nothing? Much ado about nothing?

    Mr. HUNTER. No. Less than it appeared.
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    Dr. ROBINSON. Less than met the eye in the press.

    Mr. WELDON. Let me read the statement of the gentleman sitting next to you. You have characterized it your way.

    ''Until we are certain that there is physical evidence that the machine is still in the U.S. We should treat this matter as a significant national security concern.'' Now, that grabs my attention, if someone who I have the highest respect for, who is in charge of our computers, says that what may have happened here is a significant national security concern; and to say this is less than a major issue certainly doesn't reflect the concern at that time. Maybe it has changed since then, but it certainly doesn't reflect the tone that Mr. Weigand had about what was happening in this incident when we were asking the questions, when I first called Secretary Richardson and he had no idea what was going on.

    He wasn't aware that you were trying to buy it back, and in fact had the computer. He wasn't aware of that.

    Dr. ROBINSON. If I could answer for the record, and I need to make this a classified answer and you will understand why—

    Dr. WEIGAND. Wait. Wait. Wait. You are not going to discuss classified here.

    Mr. WELDON. No. He said he wouldn't make it classified.
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    Dr. ROBINSON. The question of what could be assembled from the marketplace if a country wanted a super computer of this performance, formed the basis of our assessment, that a country intent on trying to provide nuclear weapon calculations would not rate this as an exceptional opportunity versus what the marketplace could provide. And that is what I will provide to you. That is the basis of why I have tried to put it with a little bit of perspective.

    Mr. WELDON. I would like to see that, because that flies in the face of this statement that to a country that has all of this computer power capability, reassembling this system would provide significant capability. That is from the memo.

    Now, we either have it one way or the other. Either it does provide significant capability or it doesn't. But we can't have it both ways.

    Mr. HUNTER. If the gentleman will yield, before you got here, Dr. Weigand said it would provide significant capability.

    Didn't you, Dr. Weigand?

    Dr. WEIGAND. Yes, sir. I stand by the statement.

    Normally, I think—in fact, the good General knows you don't make a whole lot of decisions on the first bit of data you get from the battlefield. But those statements that I made, I stand by the explanation of those statements I am not at liberty to go into with you except in a classified mode. You need to understand we are beginning to delve into intel data. We are beginning to develop into what could be or couldn't be important to a Nation's program that could or could not develop into substantial national security.
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    Mr. WELDON. Dr. Weigand, I agree with you fully. That is why I am so outraged that the whole attempt by this Administration is to wipe this issue off the table. Publicly, the perception being given by the lab and by Robertson is nothing happened; it is all much ado about nothing.

    If people would look at what you wrote and look at the classified capability here, they would see what you are saying is true. I am sick and tired of saying it publicly and having people in the administration say, oh, it is nothing, but we can't talk about it in public, we have got to go to a classified session.

    Dr. WEIGAND. I apologize for you.

    Mr. WELDON. You don't have to apologize. It is not you.

    Dr. WEIGAND. I intend to guard the information I have until an appropriate setting, and I will be glad to discuss it with you.

    Mr. WELDON. I have asked the FBI for a full FBI investigation.

    Dr. WEIGAND. I want to be sure we go on the record, this is not a problem that is alone with the laboratories. We have some of the most nationalistic minded men and women at work at the laboratories. I do not believe that they intentionally would harm this Nation's national security.

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    This information we are dealing with, I am telling you this is a pure and simple computer science issue that I am making those statements from. I am not making those statements necessarily specific to nuclear weapons. I am making them about how computer science today, which exists at every major U.S. university, how we use that computer science information in special ways to produce what we do for this Nation.

    Mr. WELDON. I understand.

    Dr. WEIGAND. It is not that it is unique, but I do not want to give anyone any hedge on us by telling them what we think is important or don't think is important. Let them figure it out for themselves.

    Mr. WELDON. I understand. That is why my concern, Mr. Weigand, is, going through the China commission process that we went through, the cavalier attitude that I think has developed in terms of the sale of high-performance computers has caused this country harm; and the Cox Committee agreed with that.

    Steve Bryan, the first director of DTSA, testified on the record both in public and in classified session that up until 1996 China had no high-performance computers in the 8- to 10,000 MTOP range and above. Zero. We changed, the U.S. changed its policy on exporting high-performance computers in 1996. Even though Japan wasn't a part of that process and they were the other manufacturer, we changed unilaterally. Within two years, because of our policy change, China acquired over 400 high-performance computers.

    Now, I agree with you, I don't want other people to understand our process, but I would think that certainly sends a signal that up until 1996 we are not going to make these PCs available, then all of a sudden, we are going to flood China with over 200 or 400 then we are going to be told we are going to be given a paper that is going to tell us where that HPC computer is being used. Then we find out from China they won't give us access to find the location of those HPCs.
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    Dr. WEIGAND. I will go silent on this issue, if you allow me one other comment. The word HPC, high performance computer is used and abused widely. The computer performance capability of a single microprocessor has, to my complete thrill as an opportunity to be in that technology, increased fantastically because of the U.S. manufacturing capability. So what was a very specialized military capability, specially built computers today, your kids have them.

    And so the problem we are dealing with here is that it is not the computer cycles that is the thing we need to understand how to protect; it is people like me. It is people who understand how to use them and use them in ways that can advance your national security gains, because the computing cycles are out there, sir.

    Mr. WELDON. I understand.

    Dr. ROBINSON. If I could respond, I certainly do not testify on behalf of the Administration; as I pointed out to my own peril when I testified on the test ban two weeks ago, I do not speak for the Administration, but try and provide to you as an arm of the government the best technical judgment I can provide.

    Let me give you one number that might put things into perspective. And it involves Microsoft Corporation and their 20th anniversary. It was pointed out that over the 20 years of their existence the cost of computing went down by a factor of one million, that is bits per second that you could buy when they started versus their 20th anniversary. It went down by a factor of one million over 20 years.
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    They revealed a study on the occasion of their twentieth anniversary that had been performed by Intel Corporation, Hewlitt-Packard, working with Microsoft that made a projection for the technology for the future that over the next 20 years there would be at least another million. So we will go by a trillion decrease in cost for computers. And that is the bits he is talking about. So you have to recalibrate yourself as to what is available, what makes sense to protect, what you can hope to protect at any given point. It is that perspective I will provide you in a classified memo.

    Mr. HUNTER. If my friend would yield for just a second, Dr. Robinson, I think that is the whole point here. We were fortunate that this guy who was a scrap dealer who really wasn't a scrap dealer who showed up at your place in a flat bed truck and just happened to have the nationality of a country that's been trying to get some of this stuff and probably was trying to get it for that country, didn't ship it. It was there for 80 days.

    Now, you sent stuff out through Long Beach Harbor, and we had the Customs Service before us and they testified to us that only about two percent of the ships that move in and out have any search at all, so probably physically this stuff could have been moved offshore. The point is—

    Dr. ROBINSON. Sir, the date, it was there; 8-1/2 months it sat in his warehouse.

    Mr. HUNTER. That is my whole point. You have pointed out that it didn't leave and, therefore, we should feel better. But my point is, that is not because of any brilliant action on the part of the labs; that is because it just didn't move. And if you look at the massive traffic going in and out of Long Beach Harbor, much of it carried out by China's corporatized merchant marine COSTCO, the guys that shipped the 2,000 machine guns into California, they only had a small percentage of those ships searched for or looked at or surveilled or monitored. So, obviously, it could have left.
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    So, I mean, we have got a system here that hasn't worked. And it is the same nonworking that was manifested in the 14 months that passed between the head of the FBI telling the Secretary of Energy to get a guy who he thought was a spy away from the nuclear weapon plants, and 14 months later the guy is still there and nobody is sure who is supposed to have removed him.

    Now, that is the system that we have got here. And so, sure, we all know, we have all seen the statistics that you can buy at the same dollar today what will be a million times as much computing power as a few years ago. I wouldn't use that to hide behind. That is all the more reason for when we do have MTOP levels past which you are not supposed to ship; the idea is not to let that stuff hemorrhage out any faster than it is going to in the natural course of business.

    And so, I mean, this is almost a comedy: Guy drives up in a flat bed truck; he is a scrap dealer who has never scrapped anything, you know, he is supposed to get rid of this stuff, but your guy writes down the name of the company that theoretically can get him the rest of the parts to rehabilitate it. He probably wasn't very smart. He probably didn't know what he was getting, but he took a chance on it and it didn't cost him much. Didn't cost China much because I am sure they are the people that would have ultimately paid for it.

    The point is you have got a system that is broken here.

    Mr. WELDON. I don't want to get bogged down in a computer discussion, because I agree with that discussion about the technology changing so rapidly. The issue is, concerns were raised by the technical experts, and what I am seeing is double-talk. That is what I want to get at, the double-talk and double-speak.
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    Attached to the memo that Dr. Weigand sent to Dr. Reis, which—I will give the chairman a copy, and it will be kept in the classified form—is a summary page along with a copy of the contract. This is called a summary of the Paragon computer sale. I don't know whether you have seen this or not Dr. Robinson, so I will not ask you to respond but this is what it says and I will read from it, quote, C&D staff also stated that there are no security concerns since the computer had never processed classified or sensitive information. that is what it says. Is that right? You know—but that is what it says.

    Dr. ROBINSON. The computer that was sold. All of the classified parts were dismantled and were not sold.

    Mr. WELDON. But here's what you said to a letter to me on July 26th, quote, ''Hard drives with sensitive and classified information were not part of the sale,'' end quote. That doesn't jibe with this. Because it was used for classified, you are just saying that those hard drives were not.

    Dr. ROBINSON. That is correct.

    Mr. WELDON. Let me read you Bill Richardson's letter to me on August the 11th, quote, ''Classified data in the computer was erased.'' so is the Secretary wrong?

    Dr. ROBINSON. The hard drives—the way the system was operated, different sets of drives were connected or disconnected. There was a security procedure, there was a double check with the two-person rule to make sure that they could never be connected at the same time. The parts that were used in any classified computation, anything that could have a persistent memory was removed from the computer. They were degaussed; they were then destroyed.
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    Mr. WELDON. When Bill Richardson says that classified data in the computer was erased, that is correct?

    Dr. ROBINSON. That is correct.

    Mr. WELDON. So there was classified information, but it wasn't on the computer?

    Dr. ROBINSON. That was sold.

    Mr. WELDON. Given to the fellow there, the EHI.

    Dr. ROBINSON. That is correct.

    Mr. WELDON. Next line of questions deals with both Dr. Robinson and Secretary Richardson insisting that no sensitive information was provided in the sale, both insisting that classified data was degaussed before the sale.

    Dr. Robinson, you state in your letter to me that the sensitive and classified portions were degaussed and destroyed. But then you go on to say that insensitive hard drives were included in the sale, but were not degaussed because doing so risked deletion of parts of the operating system and added nothing to security.

    So there were hard drives sold and they were degaussed?
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    Dr. ROBINSON. Yes. They were the unclassified hard drives, yes, sir.

    Mr. WELDON. So that is not a problem?

    Dr. ROBINSON. No.

    Mr. WELDON. Do you agree with that, Dr. Weigand?

    Dr. WEIGAND. If I am not mistaken, the requirements for selling the machine would have required them to degauss those also to eliminate information. I think we should get experts to comment.

    Okay. So those were supposed to be and one of our findings is that they weren't. But the information to—our knowledge to date is that there was no classified information.

    Mr. WELDON. On that system?

    Dr. WEIGAND. On that system. But we are continuing to investigate that.

    Mr. WELDON. Did you want to add something?

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    Mr. MICHELSEN. Our property regulations require that any computer that is sold and moved out of the Department of Energy complex be degaussed and memory erased and then operating system reinstalled, for instance, if we are going to donate to a school or university.

    In fact, this machine did not have the memory erased. The operating system was available. And what hasn't come up yet is, as part of the sale, there were discs and manuals and documents transferred unbeknownst to the laboratory. The Office of Security Affairs is reviewing those discs, manuals and documents now. As of this morning, I was advised that the capability of the forensic unit in the Department to look at those discs and discern what was on them, the capacity of the Department was exceeded. The discs have been returned to the Department of Commerce, that is continuing the investigation, and those discs will be passed on to the FBI. They are all evidence in an action that is being taken against Mr. Jiang.

    Mr. WELDON. Thank you for the explanation.

    Also, in the memo to Vic Reis, there is mention that all the parts were not included, as you stated, Dr. Robinson. And I won't read the exact quote, but it also suggests that what was provided should only present a challenging but straightforward task for a talented group of CS computer systems and EE engineering types to put a substantial computer in working order again.

    Do you agree with that, Dr. Robinson?

    Dr. ROBINSON. I certainly didn't write it.
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    Mr. WELDON. But you agree with it?

    Dr. ROBINSON. I would have to evaluate—

    Mr. WELDON. But here we have someone saying that even though parts are removed for a group of computer systems and engineering types, it wouldn't be that difficult of a task to put a substantial computer back in working order again.

    Dr. ROBINSON. I would assume that is the case, yes.

    Mr. WELDON. How in the world could we sell this? I don't understand. I just don't understand. I mean, for—and if the system was not necessary and had been removed of all the sensitive, why would we try to buy it back or why did we buy it back for $88,000? Why not just let it go as surplus parts and let the guy have it?

    Dr. ROBINSON. First of all—and you missed my earlier testimony—I asked myself in this process if I had this to do all over again, would we have sold the computer had I known about it? And I said the answer is no, we would not have. We abided by the law, we took the steps that are required.

    Mr. WELDON. Not all of them.

    Dr. ROBINSON. Not all of them, I agree. But I am told we should have applied for a waiver and we would have likely been granted that waiver. But I would not have followed through even with the steps if there was a chance that national security would be affected.
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    Mr. WELDON. But you weren't informed of this?

    Dr. ROBINSON. I was not informed, but I believe I speak for the folks in my organization, they are as patriotic as anyone else you can find. They believe the value of the system and the part that they were selling compared to what the marketplace could provide, that this did not present a major national security step.

    Mr. HUNTER. If the gentleman would yield on that point, we have established 7,000 MTOPs as the level beyond which the clients cannot legally buy a computer. This computer is 150,000 to 200,000 MTOPS. So how could they come to the conclusion that they can go out and buy a similar computer?

    Dr. ROBINSON. I would like to answer that for you only in a classified memo.

    Mr. HUNTER. I think what you are going to have to tell me in the classified memo is, they can buy one illegally.

    Dr. ROBINSON. No. But trust me, I do not want to point my finger towards what is the right way for someone interested in getting higher computing capability off the open market to go. I have no desire to help anyone else do that. But there are ways with present products to get that.

    Mr. WELDON. Is the gentleman finished?
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    Mr. HUNTER. Yes.

    Just one further, if my friend would indulge me here. One thing that you have said here, this guy was a dummy because this thing was virtually unusable. But the last statement that Mr. Weldon read to me indicates he is not a dummy, because he read in the statement that in fact a smart team of computer guys do find this a challenging prospect, but nonetheless could put this thing together.

    Now, if you are the Chinese nuclear complex and you can't legally buy anything more powerful than 7,000 MTOPs, but by using one of your teams and a discarded computer from an American nuclear establishment, you can get one that is 40 times as powerful as the one that you can legally buy, doesn't that make it somewhat valuable, Dr. Robinson?

    You haven't used the term ''valuable'' throughout this entire hearing.

    Dr. ROBINSON. That is correct. And it is probably a better term. Had it had that value, I think it would have been a very stupid thing for Mr. Jiang to do to then transport it in an open flat bed truck without shipping it the way other computer systems are with very carefully shock-controlled, temperature-controlled vans.

    Mr. HUNTER. You are using the flat bed truck as the determinate of whether or not he is very smart or not. My point is that this memo that Mr. Weldon just read said that a group of smart computer guys wouldn't have had a lot of trouble putting this thing together. Then they would have a computer that had 150,000 to 200,000 MTOPs, which is 40 times the power what the Chinese nuclear complex could buy legally on the market. Why is he such a dummy?
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    And I wouldn't use the flat bed—I mean, I think he did a great job. He drove up like an old junk man. You found out later he wasn't an old junk man. He never parted out anything, and you felt comfortable because he drove up in an old truck.

    Dr. ROBINSON. He didn't drive up in the old truck. The bid was solicited through the mail. He came with his brother-in-law to inspect the equipment and then chartered a truck, which was a flat bed truck.

    Mr. WELDON. But you didn't know that when you signed the contract?

    Dr. ROBINSON. Of course not.

    Mr. HUNTER. You brought that up about 20 times in this hearing. It has got all these smart guys in it. The one thing, we don't have any systemic capability apparently of stopping this stuff, but what we do have is, we can reflect on the fact that the guy drove away in a flat bed truck, and somehow that is probative of whether or not this was an espionage operation, whether or not the guy was very smart and whether or not the Nation lost anything of value.

    Dr. ROBINSON. Congressman Hunter, let me say, I offer as evidence our expectation, if someone really intended to use a computer and not just for parts, it would be not a smart idea to ship it in the flat bed truck. Indeed, when we repurchased the computer and examined it, there was massive damage done to the computer. And it had to be as a result of that ride in the flat bed truck.
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    Mr. WELDON. I think it is a little disingenuous to make that the issue here. No one knew he was going to pick it up in a flat bed truck when he bought it, obviously. Maybe the guy didn't know what he was doing in transporting it that way. But you didn't know that at the time.

    If the intention I have—if he was selling it for scrap, why wouldn't we have removed the insensitive hard drive and not given him that on the computer? Why wouldn't we have kept that part of the equipment as well? If he was going to use it for scrap anyway, why would you give him any of the hard drive?

    Dr. ROBINSON. When it was advertised for sale, it was that it could be put back together and operated. But we were offering no guarantees that it could. It was ''as is.''.

    Mr. WELDON. So it was advertised, you could put it back together?

    Mr. MICHELSEN. It was sold as operational.

    Dr. WEIGAND. Sold as operational, yes, sir.

    Mr. WELDON. Maybe I haven't been hearing in the room. Maybe there is some echo.

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    Dr. ROBINSON. It was sold ''as is, where is.''.

    Mr. WELDON. ''as is,'' to me, doesn't imply operational.

    Dr. ROBINSON. That is correct, it doesn't to me either.

    Mr. WELDON. It was sold as operational.

    Mr. MICHELSEN. Let me clarify for the record, in doing the investigation, we talked to any number of people at the site. We asked about why the hard drives are not been erased. And the explanation was that it lessened the value of the unit as an operational entity.

    Mr. WELDON. Let's go back to that again. Repeat that sentence again.

    Mr. MICHELSEN. To erase the hard drive would lessen the value of the unit as an operational entity.

    Mr. WELDON. But it was being sold for scrap.

    Mr. MICHELSEN. Look at the sales document itself; it says, here's a list of parts sold ''as is, where is.'' the sales document really doesn't say, ''that is operational.'' but within the laboratory complex there were some people who were thinking of it as a unit that could be put into operation.
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    I will clarify that even by university or by another government agency.

    Mr. WELDON. I don't see anything in the contract about ''as is.'' it lists all the parts, and I don't see where it says ''as is'' or—

    Dr. ROBINSON. I could point that out in the sales documents.

    Mr. WELDON. What is offending me even as much as the sale itself is the way that it has been spun different ways by Secretary Richardson, by the lab, and even here today. If we made a mistake, fine, we made a mistake; we own up to it and move on.

    But to say you are overstating the case, it is really not that bad, when we have got internal memoranda stating it is a very severe issue, it is like we are trying to spin the thing as opposed to doing what may have been an honest mistake.

    Dr. Robinson, you mentioned the term ''questioned patriotism.'' no one is questioning anyone's patriotism. Don't even mention that, because I am offended by that. I don't think anyone did this because they want to secretly undermine the U.S.

    What I think may have happened is, there may have been some casual conversation between these—this individual at EHI and some of your employees at the lab who got to know him, and he was a good ol' guy; they decide to sell him the system because he wasn't going to do anything. It wasn't an attempt to sell it to the Chinese.

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    My point is that we shouldn't allow that kind of a transfer to occur under any circumstance. Without getting into the details of the capability of the computer, now to go back and try to reinterpret what was said and reconfigure what kind of equipment was in it, which I am not going to get into because I am not a computer expert at all, I am not computer literate, just makes me think that we are now trying to some extent cover our tracks for what had occurred. And I hope and I think you have made the point here really eloquently that it is not going to happen again. But I can't for the life of me understand how it happens in the first place.

    Dr. ROBINSON. Well, understand this was a sale of scrap computer parts to a U.S. company for which there are no prohibitions.

    Mr. WELDON. But that is a one-person company.

    Dr. ROBINSON. That must be understood—

    Mr. WELDON. A one-person company owned by a Chinese national that has ties to an Australian firm that if somebody would have checked it out would see where the connections go back to Beijing.

    Dr. ROBINSON. That is the point. If you will check into my testimony, the recommendation I am putting forward, sir, is that there are no constraints against that in law, nor—to seek to know what the ownership of the company is would have, in fact, been a breach of the law.

    Mr. WELDON. But, Dr. Robinson, I call that common sense. I call that common sense. I mean, I am not a Ph.D., but I tell you I have enough common sense to know if I am going to sell 150,000 MTOP computers to a Chinese national one-person shop, I would have found something out about the guy.
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    Dr. ROBINSON. I am telling you that that is what the law should be changed to allow. Had I known that, I testified that I would have tried to stop this sale. But I made no bones about it. We stand in great deference as to the belief of what you think the national security risk was of that system, what I believe, and what Dr. Weigand believes.

    Mr. WELDON. Whoa. Whoa. Whoa. Wait a minute, Dr. Robinson. This memo wasn't written by me. It was written by Dr. Weigand. Don't you go saying you and I. Everything I said is based on what Dr. Weigand wrote.

    Do you want me to read the entire memo to you publicly?

    Dr. ROBINSON. No.

    Mr. WELDON. Then don't say it is me and you. I am reading what he wrote.

    Dr. ROBINSON. I am telling you that the risk, if there was a risk to national security in this particular case, was a very low risk. Mr. Weigand believes differently. You have decided to believe his version.

    Mr. WELDON. You just said it was me versus you and him.

    Dr. ROBINSON. I would be happy to have us settle that debate, but that debate shouldn't be done in public.
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    Mr. WELDON. It shouldn't be done in public and this sale shouldn't have occurred in public. And damn it, you ought to acknowledge it instead of trying to spin the thing 1,000 different ways.

    Dr. ROBINSON. I can only give you my testimony, sir.

    Mr. WELDON. You have given me your testimony, and I can tell you it is unacceptable. I have respect for you, but like I said, this in my opinion should have caused Secretary Richardson to resign.

    He is out telling the American people everything is okay, don't worry, we are under control, when he created this whole situation by blaming the labs on the W–87 issue. And he wasn't aware even of what you were doing. He wasn't aware when I talked to him on the phone that you were buying the computer back because the press out in L.A., or out in California, was on your tail, that they were aware of the story and had access to the same information that I got. They have these papers, and they were raising the same concerns I have raised.

    I am sorry, Mr. Chairman, for being emotional, but I think this is outrageous. I think the spin trying to be created here is outrageous, and I am not going to accept it.

    Mr. HUNTER. I thank the gentleman. I think there have been a number of different themes that have been offered today and they are all extremely interesting.
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    Dr. Robinson, you mentioned that you didn't have the—there is no bar to selling to a one-man shop as long as it is in an American company.

    There was no mandate to sell this computer, was there?

    Dr. ROBINSON. Yes, there is.

    Mr. HUNTER. There is a mandate?

    Dr. ROBINSON. Yes.

    Mr. HUNTER. You have to do it?

    Mr. WELDON. Excuse me. By whom is it mandated?

    Dr. ROBINSON. I could have applied for an exemption not to sell it. And had I known of even possible difficulties or potential for it, I would have probably exercised it. But there is an order that all equipment that is used should be sold for salvage.

    Mr. WELDON. Cite that for me. Give me the reference of that, where it said—not say ''should''; you said you ''had'' to sell it. Gave me the citation.

    Dr. ROBINSON. It is in my testimony, but—unless it is on the high-risk list, and this was not on the high-risk list of equipment.
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    Mr. WELDON. You are saying on the record it had to be sold? You had no choice?

    Dr. ROBINSON. Unless you seek an exemption. That is correct.

    Mr. WELDON. The exemption is what, for you to keep it?

    Dr. ROBINSON. Or to do something else with it.

    Mr. WELDON. So you were being forced by our regulations to sell this computer.

    Dr. ROBINSON. Unless you get an exemption. That is correct.

    Mr. WELDON. Who gives the exemption?

    Ms. DEDIK. I believe this is a slight misunderstanding if I may respectfully disagree with my colleague from Sandia.

    I believe he is talking about—he is not looking at the law that actually should govern this case, and those are the export laws. And, in fact, part of the Department of Commerce's investigation now, they are looking into the fact of whether or not this indeed was an export, because it was sold to a Chinese national. So it has not been established that this was not an export and that there was no violation of law.
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    I do understand that this is Sandia's belief, because they do believe that there are other pieces of law that would not allow them to check on the nationality of a potential buyer for this equipment. So I understand their part to it. But on the other hand, I do think that there is an ignoring of the export laws that were on the books; and what we found in our investigation was that there was not a thorough enough review of the export rules.

    So we do disagree with Sandia on that part.

    Mr. HUNTER. In your estimation, is there a mandate to sell this equipment as surplus equipment?

    Ms. DEDIK. In my estimation, absolutely not.

    Dr. ROBINSON. What?

    Mr. HUNTER. Okay.

    Dr. WEIGAND. Congressman, may I put something else on the record, please? I would like to put two things on the record.

    One of them is that as soon as the Department found out about this computer being outside of the Sandia National Laboratory's control, we immediately informed line management. It was immediately raised with the Under Secretary. The Under Secretary nearly immediately formed a task force to go, and within two days the machine was back in the possession of the—of Sandia labs and the Federal system.
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    Mr. HUNTER. Let me ask you, Mr. Weigand, I thought this machine resided for months in a warehouse.

    Mr. WELDON. It did. This was in July.

    Dr. WEIGAND. Congressman Hunter, that is absolutely true. What I am putting on the record is, as soon as we knew and understood that this computer was outside of the control of the Department of Energy—

    Mr. HUNTER. Why was it July? Why did it take so long?

    Dr. WEIGAND. You know, I am looking into that. I have asked for processes. I attached my letter to the top of the issues. And if you want to know just my professional opinion, it is, the machine should have had a more—a look before it went out the door, with regard to national security.

    Mr. HUNTER. Could you find out why it was July and let us know?

    Dr. WEIGAND. I will take that and get back to you.

    Dr. WEIGAND. The second item I want to put on the record is that I hope that you could take some comfort from the fact that the Department of Energy does have this resident, the expertise to determine what computers may or may not be of risk to national security. I am one part of that; Trish is another part of that.
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    With regard to this computer, I was actually the program manager at the DOE's Defense Advanced Research Projects Agency. You are probably familiar with that agency; it actually did the research and development and built this computer under contract with—

    Mr. HUNTER. So you recognized the value when you saw it?

    Dr. WEIGAND. I know that computer inside and out. I participated in parts of the design. And so I believe that the Department of Energy has called this just about right, that this computer went on the loose, was a little bit of a—I stand by my statement it was a national security concern.

    Mr. HUNTER. Okay. Thank you.

    Mr. McCallum, let me go back to this one issue that we have talked about a little bit, which was the 14-month lapse between Mr. Lee being—the instruction from the FBI to get Mr. Lee's clearances away from him so he couldn't steal more nuclear secrets and the 14-month lapse before somebody slapped their forehead and said, is he still working there and does he still have the clearances?

    What happened there, in your estimation? Are you up to speed on that?

    Mr. MCCALLUM. Congressman Hunter, much of that I don't have the detail on much more than you have already talked about. My office supported it, the Office of Counterintelligence, in some of those investigations. And I know that at one point the Department was a little slow to take action because they were waiting to see whether the Federal Bureau of Investigation was finished with the investigation, and didn't want to blow their case. I guess it was not until we became aware that Director Freeh supposedly said, ''Get him out of there.''.
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    Mr. HUNTER. He said, and I quote, ''There is no investigative reason to keep him there. Get him out of there.''.

    Mr. MCCALLUM. Once the Bureau said, There is no investigative reason, to get him out of there, we should have taken immediate action.

    Mr. HUNTER. If the staff could put up that matrix—and we are going to get everybody out of here very shortly—put that matrix up that we had. That is the present system before the reform. This, General, is one thing I want to bring to your attention. You had the head of the FBI tell the Assistant Secretary of Energy, and then about a week later the Secretary of Energy, to remove the person he had identified as a spy from our nuclear secrets. If you want to analogize that to a military operation, that is the division commander being told by the CINC to get that guy in third platoon out of there, okay?

    Somewhere in that maze that message was lost. That is what we are trying—so no matter how many good feeling, patriotic, hard-charging, energetic people you put into that system, and no matter how much you change the culture, I think you have got a system there that was begging for this to happen. I mean, if you look at that, you have got so many different chains of command and channels of communication, nobody will stand up and say, this shouldn't have been done. When we have tried to figure out what happened, nobody is sure; it was mass confusion. And the interesting thing is, the confusion happened not once but twice.

    And maybe we can talk—I think with Secretary Pena, who received the second direction to do this and apparently didn't act on it. But that is what we are trying to change with a shortened, direct, accountable chain of command, if you will, between the Secretary and the head of the security administration. I mean, I hope you can appreciate that. And I would hope that you would work with the Secretary and help him to understand that is not going to hurt him.
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    I think that is going to help him. I think that is going to help any Secretary. And I think that will keep, as Mr. Podonsky mentioned, this thing from being a cyclical thing where you concentrate on environment one era to the detriment of security, and the next era you concentrate on something else to the detriment of security and finally something blows up and you concentrate on security.

    But I think you need to look at what we have done in terms of making this thing more like a military operation with respect to accountability for security. And I would think that that is something the Secretary should appreciate.

    Do you have any comments on that, Mr. McCallum, Mr. Podonsky and then General? What do you think about the system we put in? Do you think it is going to help any?

    That ain't it, incidentally; that is, beforehand.

    Mr. MCCALLUM. I think the new system would have several major benefits, and one of them is to raise the level and attention of the defense programs element of the Department. There have been a number of proposed reorganizations over the years that have looked at essentially creating another Under Secretary. There are some serious benefits to that.

    I have one major concern, and I will address it in security, but I believe it will also told true in safety, and that is if you move the security element into the defense programs or nuclear weapon piece of this, you have got major quantities of special nuclear materials that reside outside of those programs under the Assistant Secretary for Environmental Management at places like Savannah River Plant, Idaho National Engineering Laboratory, Richland operations office, and the Rocky Flats site in Colorado, that material would then lie outside of the direct command and control of this new organization.
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    When I first came to the headquarters, in Mr. Podonsky's role as the inspector, that is, in fact, the organization that we were in. And frequently those organizations with tens of tons of weapons usable material did not pay any attention to us because we were defense programs. There is material that lies outside of that direct umbrella that you have drawn that would not necessarily be covered adequately. And it is as good material as the nuclear weapons people have.

    Mr. HUNTER. How would you recommend adapting this system to handle that stuff, to control it?

    Mr. MCCALLUM. If you—

    Mr. HUNTER. What you are saying is, under the environmental umbrella, the old sites being cleaned up, et cetera.

    Mr. MCCALLUM. Yes, sir. And there is still very good material at those sites, at some of them.

    In the area of security, I think that the person who is the security director for the Department of Energy has to oversee all of those elements. Fragmentation has been part of the problem with different calls. As you have done the line in block chart here, there needs to be one person in control, one budget, and one program.

    Mr. HUNTER. Okay.
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    Mr. MCCALLUM. That way we will get all of the material properly protected.

    Mr. HUNTER. Thank you.

    Mr. Podonsky.

    Mr. PODONSKY. The devil and salvation are in the details, and the details for the proposed agency have obviously not been totally worked out.

    I would like to offer up an observation. In 1984, when I first joined the Department at a time when both Mr. McCallum and I were in the same business, the defense programs had counterintelligence and had intelligence and had oversight; it had policy. The lines of communications were very clear. It was very difficult for both Mr. McCallum and/or myself to get the attention of the Assistant Secretary for the defense programs because there was more focus at the time on the production of nuclear weapons and maintaining the stockpile.

    So while I agree that the streamlining of the chain of command is necessary in the Department for it to work, I still go back to an earlier statement I made about accountability, about an independent capability to oversee what that group is doing both from an environment safety and health, as well as a security perspective.

    So again I conclude with the opening piece that the details are going to be very important to work out. And we need to look at history so that we don't make the same mistakes that we made 15 years ago.
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    Mr. HUNTER. General?

    General HABIGER. I agree wholeheartedly with what Mr. McCallum just said in terms of about 50 percent of the things that we are worried about are outside of the new structure. And that is—one of the reasons why I took this job was that the Secretary was going to make me the Director of Security for the Department of Energy, not for semiautonomous agency or for defense programs. And I am not trying to pick an argument with you, sir, I know better than that, but the chart that you showed with your military organization, the reason why I waffled on you, I didn't see a Director of Security for the Department of Energy. And when you have the site that he had just pointed out still not under the firm control of a security czar, I have concerns.

    Mr. HUNTER. Well, how about if you have got weapons material basically? Much of it in these closed and clean bases are in the process of cleaning up. I presume that is a lot of the stuff that we are talking about here.

    General HABIGER. In one site, yes; three sites, no.

    Mr. HUNTER. How about bringing that material under the direction of the Administrator? He answers directly to the Secretary. You are saying he doesn't have the jurisdiction for it right now and therefore it has got to be overseen by somebody else. If you bring it under his jurisdiction, then he would have all of the nuclear material under his jurisdiction, stuff that is in the environmental sites as well as the weapon sites.

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    General HABIGER. As my colleague, Glenn Podonsky, just pointed out, the devil is in the details to try to make that work. Also, sir, your very clean lines of military organization which I can appreciate become convoluted when you start doing things like that.

    Mr. HUNTER. Well, but if you are talking about real stuff, real material, you may have to just move that under their jurisdiction and let them handle it. I mean, we do that in the military all the time. We change jurisdictions, we change commands.

    Anyway, I would be interested in any additional thoughts you have for the record in taking a look at the thing. I am sure you already have. But if you come back to the committee with an articulation of this problem Mr. McCallum mentioned in the way that you would involve it, we would be happy to take a very close look at it. Appreciate it.

    Okay. Staff just gave me a memo to the effect that, Mr. Podonsky, your organization is not barred from monitoring the nuclear material within the NNSA, but you still don't control it.

    Mr. PODONSKY. Yes.

    Mr. HUNTER. They are barred from monitoring.

    Mr. PODONSKY. Right.

    Mr. HUNTER. Okay. Well, gentlemen, it has been a long and lively hearing, I think kind of an important one to have. Thank you for being with us. And we will do this again shortly.
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    So the devil is in the details. There are a lot of details. We are going to be spending some time working with you. Thank you for being with us today. Thank you for your endurance.

    Oh, General Habiger, Mr. Thompson reminds me that at the Director level or at the Secretary level, there is a Director of Security in title XXXI. Take a look at that.

    Mr. PODONSKY. Okay.

    [Whereupon, at 5:45 p.m., the subcommittee was adjourned.]

      

A P P E N D I X

October 20, 1999

      

      

PREPARED STATEMENTS SUBMITTED FOR THE RECORD

October 20, 1999
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DOCUMENTS SUBMITTED FOR THE RECORD

October 20, 1999