FAS Note: Much of "the Bellows report" was so aggressively censored that the surviving text is often incoherent. Following are some of the more substantial excerpts from released text of Chapter Six of the Report.

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[page 234]

CHAPTER SIX

THE PREDICATE

Questions Presented:

Question One: Did the DOE Kindred Spirit Analytical Group (KSAG) assess that Secret Restricted Data was compromised to the Chinese?

Question Two: Did KSAG eliminate indigenous development as a possible explanation for the advancements achieved by the Chinese nuclear weapons program?

Question Three: Did KSAG assess [deleted]?

Question Four: Was the KSAG assessment accurately communicated to the FBI by DOE?

Question Five: What was the scope of the compromise communicated to the FBI by DOE?

Question Six: Were there opportunities when the FBI could have recognized that the KSAG assessment had been inaccurately communicated to the FBI by DOE?






[page 235]

A. Introduction

[paragraph deleted]

[paragraph deleted] This group was called the Kindred Spirit Analytical Group (KSAG).

KSAG concluded their review in September 1995 and produced a two-page summary of their assessment. This concise summary, comprising a series of bullets, contained the assessment of these preeminent nuclear weapons designers and definitively answered the question they were assembled to address. [line deleted] Nor was there any dispute that this compromise had aided the Chinese nuclear weapons program by helping to establish what were attainable achievements and to

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avoid blind alleys in their own research and development program. What KSAG concluded, however, and what the FBI would be told these DOE experts concluded, were two different matters. [remainder of paragraph deleted]

KSAG's assessment would never be provided to the FBI. In its place the FBI was told [lines deleted]. This inaccurate communication of the predicate resulted in the FBI spending years investigating the wrong crime.

The FBI received several summaries purporting to represent DOE experts' conclusions. The FBI was told [lines deleted]. Each of these representations inaccurately reflected the conclusions of KSAG.

On September 25, 1995, after the KSAG working group's assessment was completed, DOE told the FBI [lines deleted]. (AQI 2984-2985 at 84) On May 28, 1996, OEI released to the FBI a report of the Administrative Inquiry (AI) into this matter. It stated [lines deleted]






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[deletion] (AI at 3; FBI 00527) Each of these representations also inaccurately reflected the conclusions of KSAG.

KSAG clearly concluded [lines deleted]. That investigation, which is underway today, should have begun in 1995, not 1999.

OEI controlled the message that was communicated to the FBI and is responsible for the inaccurate representations given to the FBI. The consequences for the investigation caused by the inaccurate representations were profound. [lines deleted]. Responsibility for this massive failure rests with both OEI, for failing to accurately communicate the KSAG assessment, and with the FBI, for failing to become thoroughly familiar with the predicate for such an important investigation. As demonstrated below, a thorough examination of the investigation's predicate would have alerted the FBI to the inaccurate assessment communicated to them by OEI.






[...]

[page 246]

[lines deleted] (FBI 00336) It is unclear why [deleted] does not track the analysts' language precisely. The FBI never received either the April 25, 1995 or May 25, 1995 memoranda and relied on this summary of the initial DOE assessment.

[deleted] investigative plan identifies five specific requirements for the working group to address. He characterizes it as "important" to "assist in the development of a logical investigative effort" to accomplish each of these five requirements.






[page 247]

(FBI 00336)

Trulock initially contemplated forming only a LANL team, with CIA [deleted] participation, to validate the initial assessment.362 "[Trulock] directed that the following actions be initiated ... establish a damage assessment team from LANL to review [deleted] (DOE 3473-3477 at 76) (McIntyre memorandum to the file dated June 23, 1995). This expanded to include LLNL, SNL and DIA. The specific composition of the KSAG was largely a product of selection by the initial members of the working group. The initial members were already assisting DOE Headquarters review intelligence reporting. Trulock personally selected [deleted] and then [deleted] to examine the [deleted] reporting.

Trulock approached and selected [deleted] to chair the KSAG during his trip to LANL in June 1995.363 [Deleted] selection represented a

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recognition that someone with the necessary "horsepower" was needed to manage this group of experts assembled from the national laboratories and intelligence agencies. [Deleted] of LANL's X Division (responsible for nuclear weapons design), was ideal. [Deleted] reputation was as a fair, unbiased scientist who could draw a consensus, if one could be drawn, from a group of nuclear weapons experts. [Deleted] the most forceful advocate of the Chinese espionage of United States nuclear weapons information, did not object to [deleted] selection. [Deleted] believes [deleted] suggested [deleted] to Trulock. [deleted] 11/9/99) [Deleted] assumed Director Hecker had made the suggestion when he was briefed by Trulock on June 28, 1995.364 [deleted]

KSAG included nuclear design experts in recognition of the complex scientific issues involved in assessing the Chinese nuclear weapons program and China's ability to achieve such progress [deleted]365 KSAG consisted of two very

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different groups, pure analysts366 and nuclear scientists.367. The analysts were familiar with the intelligence reporting while the scientists had designed and tested dozens of nuclear warheads. [Deleted] described the difference as "voting members and tire kickers" -- the latter group composed of OEI members who sat in chairs away from the table and never spoke. [Deleted]

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[...]

[page 263]

[lines deleted]

Although the compromised W-88 information was not thought to be public, it was believed to have been widely disseminated within this country's nuclear weapons infrastructure. [Deleted] recalls thinking, [lines deleted]. While KSAG may have recognized this broad dissemination, [deleted] did not. This distinction would prove to be a major failure within OEI.

The KSAG minutes from the August 16, 1995 meeting reflect the assessment [deleted]. It also reflected KSAG's assessment [deleted]. The information could not have come from [deleted] or from unclassified sources. Therefore, [deleted]. (EAT 00370) There was also further debate within KSAG over [lines deleted]

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[deleted] (Id.) KSAG would revise this assessment at their next meeting and in the final bullets.381

The fourth and final meeting of KSAG (and the third meeting chaired by [deleted] occurred on September 7, 1995. Although the previous meeting's minutes articulated an intention to "draft a report," EAT 00371, no such report was ever written. Instead, a series of bullets were drafted by the assembled experts capturing their collective assessment of the Chinese nuclear weapons program and the possible compromise of United States classified information. This two-page document, dated September 8, 1995, represents the conclusions reached by the assembled nuclear weapons experts. The brief document was carefully written. The experts recalled significant debate over the use of each particular word and phrase. [Deleted] was able to draw a consensus among the nuclear experts with only [deleted] dissent to two of the nine bullets. No other document was produced by the KSAG nor blessed by the

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collective experts.382 These nine bullets represent the only written conclusion produced by the group. The bullets were maintained in DOE's Headquarters inside OEI and were distributed only to the CIA. The FBI never received a copy of the document.383

KSAG's bullets, if shared with the FBI, could have prevented the misdirection of the FBI's counterintelligence investigation in this case. [lines deleted] See KSAG's second bullet, which states [lines deleted] (EAT 373-374 at 73) (emphasis added).

[lines deleted]

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[page 266]

[lines deleted]

[Deleted] the FBI has been investigating a crime which was never established to have occurred [lines deleted] DOE's own experts, the nuclear weapons designers themselves, after reviewing the available evidence, did not make this assessment. Having been inaccurately briefed, the FBI failed to identify those documents which contained the compromised information [deleted]. Similarly, they failed to identify those individuals with access to this more limited information. [Lines deleted]. The far more limited group identified to the FBI could have been the source of this compromise, but a much larger group, including contractors, Department of Defense employees and other DOE employees located at numerous sites across the United States, could have just as likely been the source of this compromise. This larger group was not identified to the FBI [lines deleted].

[lines deleted]

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[...]

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E. OEU's inaccurate portrayal of the working group's conclusions to the FBI

The assembled experts returned to their respective laboratories believing their services were no longer needed. They were unaware of the FBI's interest or earlier briefing [deleted] on [deleted] conclusions. The experts were unaware that the FBI would be briefed on the assembled experts' assessment. Not one of the nuclear weapons designers were asked to participate in this briefing. The [deleted] was not aware that such a briefing had ever occurred. Instead, on October 31, 1995, [deleted] joined by [deleted] briefed the FBI on DOE's assessment of the Chinese nuclear weapons program. This briefing was billed as the working group's assessment. The FBI understood this briefing to summarize the assembled experts' assessment of the available intelligence. The briefing did not include the written bullets and no weapons designer was present.

There are indications that [deleted] KSAG's assessment of the available intelligence. First, the OEI chronology mischaracterizes the final KSAG meeting, inaccurately suggesting a split between LANL and OEI versus LLNL and the CIA. Second, [deleted] describes [deleted] dismissing the KSAG and [deleted] The AGRT assembled the most complete set of FBI records on the Kindred Spirit investigation, from multiple field offices and Headquarters. No copy of KSAG's bullets has been located among the FBI's files.386 Third, [deleted] comments to [deleted] capture his concerns with the bullets. Finally, [deleted] briefed the FBI on October 31, 1995, inviting only [deleted]

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[...]

[page 287]

KSAG concluded the advancement observed in the Chinese nuclear weapons program may have occurred indigenously. KSAG assessed [lines deleted] (EAT 373) [deleted] who first reviewed these portions of the AI at the request of the AGRT, conceded it was "overstated" and the working group would not have agreed with it. [Deleted] observed that [deleted]

[Deleted] and the FBI heard only [deleted] assessment, elevated by OEI to represent the unanimous assessment of KSAG. This briefing, [deleted] ensured that DOE itself would investigate the wrong crime during their own AI. The inaccurate predicate inherent in DOE's own investigation would be relied upon by the FBI during their subsequent investigation. The error would not be recognized until 1999.416 Little, if any, oversight was exercised over [deleted] the FBI. [Deleted] September 25, 1995 letter to the FBI was [deleted] Deputy Secretary Curtis, who personally briefed the CIA, [deleted] concerning the FBI. (Deputy Secretary Curtis 1/24/00) [deleted]

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[...]

[page 290]

[...] FBI agent be detailed in support of this preliminary investigation by letter dated September 25, 1995. (FBI 375) The final AI report was provided to the FBI on May 28, 1996.420 The FBI opened a full investigation on May 30, 1996.

[Deleted] developed an investigative plan for DOE AI in June 1995. This plan was shared with the FBI-HQ.421 (FBI 336-337) [lines deleted] (Id. at 36) This well conceived plan was not followed. KSAG never assessed [deleted]. The OEI briefing, however, did provide answers to the satisfaction of both [deleted] and the FBI. The OEI briefing indicated [lines deleted] Although purporting to speak for KSAG, neither conclusion was reached by the working group. Relying upon this briefing, [deleted] began tasking LANL and LLNL to assemble their records of PRC visitors and laboratory personnel travel records for future review.

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[...]

[page 295]

It is true that LANL was not the only DOE location mentioned in the AI, but LANL was clearly emphasized as the likely location of the compromise by the Chinese. In the final report, LANL is subdivided into individual groups and offices, while the other locations are not subdivided.427 The report breaks LLNL into three divisions (A, B and W), but they are all eliminated in the final report. [lines deleted]428 (AI at 39; FBI 563) Other locations were either ignored entirely (Defense Program elements) or the AI simply records that no records were located.429

[lines deleted] LANL became the focus as a direct result of how [deleted] defined the scope of the compromise. [lines deleted]

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[page 296]

[lines deleted] It was [deleted] impression that some of KSAG's members from LANL, including [deleted] thought LANL was the probable site of the compromise. Every time the discussion would move away from LANL, these members would bring it back to LANL. That focus didn't make sense to [lines deleted]

[lines deleted] The FBI readily accepted both this predicate and abbreviated suspect list and, until December 1998, never questioned the accuracy of the briefing or final AI report. Had the investigators been accurately briefed, they could have begun to identify the documents which were the likely source of this compromise. The current investigation, begun only recently, may be able to identify the documents which were compromised. This investigation, deferred for three years due to an inaccurate briefing, now must occur with the associated publicity and still greater passage of time. KSAG deserves recognition for rapidly evaluating the available intelligence and producing a one and one-half page assessment which has survived the test of time.






[page 297]

Unfortunately, because KSAG's assessment conflicted with [deleted] it was never disseminated.430 The briefing given to the investigators has not survived the test of time.

H. Missed opportunities to discover the inaccuracies in the OEI briefing

There were a number of occasions when the investigators might have realized that the OEI briefing was inaccurate.431 Five missed opportunities occurred prior to the AI's completion. The first missed opportunity occurred in August 1995, when the LANL liaison FBI agent learned of and reported to FBI-HQ the debate within KSAG. The second missed opportunity occurred when the investigators visited LLNL on December 4-7, 1995, and spoke with [deleted] briefed KSAG on the particulars of [deleted] and was aware of [deleted] in the walk-in document. The third missed opportunity was when SA [deleted] reviewed the supporting intelligence for the predicate on December 19, 1995. The fourth opportunity occurred when the FBI received the walk-in document [deleted]. The fifth opportunity occurred when [deleted] at LANL, sought access to the walk-in document in conjunction with the investigators' visit to LANL in February 1996. During this visit, at [deleted] suggestion, the investigators and future case agent were briefed by [deleted] concerning the dissemination of the W-88 information.

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[page 298]

SA [deleted] the FBI's liaison to LANL, based in Santa Fe, New Mexico, became aware of the debate within KSAG during a telephone conversation with a LANL counterintelligence officer on August 10, 1995. This source repeated information obtained from Diane Soran, deceased, who was then the supervisor of many LANL employees detailed to the OEI working group, KSAG. SA [deleted] repeated this information in a communication to FBI-HQ on August 22, 1995. "Lawrence Livermore National Laboratory (LLNL) individuals (NFI) and CIA personnel (NFI) familiar with the information which initiated DOE efforts in Kindred Spirits believe it is not unreasonable for the PRC, on its own, to do what was claimed in the document in the possessin of the CIA. LANL individuals involved in the DOE damage assessment do not feel this way, and want to do more assessment. LLNL and the CIA believe DOE is dealing with a non-issue, and the CIA has told this to DOE HQ." (AQI 2944-2946 at 45, AGO 191-193) The cable continues: "The issue is whether the PRC could have arrived at the information, as contained within the document in CIA possession, on its own without outside help, [deleted] (Id.) The communication repeats hearsay and contains several errors. However, it does place the FBI on notice that there are conflicting opinions among the experts reviewing the intelligence. It identifies [deleted] and also identifies [deleted] although confusing his role [deleted] work.432 (Id. at 46)

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SA [deleted] followed his August 22, 1995 cable with another dated October 10, 1995. This second communication again relied upon the LANL counterintelligence officer repeating information learned from Soran.433 Written a month after KSAG had provided its written assessment [deleted] it states that:

(AQI 2964-1965 at 65) Soran revealed that the KSAG report was provided [deleted], although no specific individual is identified and this cannot be verified.

Thus, by October 10, 1995, the FBI had in its files, at both Headquarters and in the field, communications raising a number of very important leads. They identified a "damage assessment report" that was never given to the FBI; provided the names of two prominent weapons designers who participated in KSAG; identified the wide dissemination of the leaked information ("the time period is such that a leak cannot be limited to any particular laboratory or organization"); suggested the CIA and LLNL did not agree with DOE HQ or LANL and suggested that the PRC might have accomplished their achievements indigenously. Had these leads been pursued by the FBI, the problems identified in this report could have been avoided.

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[...] represented the FBI's only access to the raw materials in this investigation. [lines deleted] The FBI never received access to KSAG's written bullets.

The fourth missed opportunity during the AI occurred [deleted] when the FBI received a copy of the walk-in document. [deleted] SSA [deleted] conceded as much from his own review of the document. [deleted] 12/15/99) Nevertheless, the FBI uncritically accepted [deleted] SSA [deleted] explained that the FBI presumed that DOE had the appropriate expertise, not readily available anywhere else in the country, to assess the implications of this intelligence. The FBI was no more prepared to go behind the predicate for this investigation [deleted]

It was a grave mistake for the FBI not to insist upon a detailed explanatin of the underlying intelligence for such an important FCI investigation. [lines deleted] Nevertheless, despite little prior experience working FCI cases with OEI, the FBI was prepared to accept the OEI evaluation of the intelligence and was not about to test that assessment. This failure to insist upon a complete understanding of the investigation's predicate at its inception cost the FBI years while they pursued an inaccurate predicate. More importantly, it cost the FBI the opportunity to investigate this crime without the publicity that is now irrevocably associated with this matter. This impact cannot be undone regardless of the resources devoted to the case today.

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[...] seems to suggest that this May 17, 1996 briefing was principally conducted to ensure that DOE's credibility was not damaged by [deleted] within Washington.

Whatever motivated this briefing, its lesson never left the Forrestal Building. No formal report resulted, no letter was sent to the FBI, nor were there any meetings between the Deputy Secretary and the FBI. Instead, [lines deleted] Eleven days later the final AI report was transmitted to the FBI [lines deleted]

J. The reexamination of the predicate in light of the CIA's withdrawal of the walk-in document

[paragraph deleted]

[lines deleted]






[page 314]

[deleted]453 (FBI 489) [lines deleted] 454 (FBI 485-488 at 86). [lines deleted] (Id. at 87) SSA [deleted] explained that although he was alerted to the issue by the CIA, he deferred action until the CIA and DOE completed their review of the predicate. [deleted] 12/15/99) [lines deleted] (Id. at 88).

On July 29, 1996, the CIA formally issued a communication alerting the earlier recipients of the walk-in document of the CIA's intention to [lines deleted]

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[lines deleted]456 (Id. at 5)

After receiving the CIA's [deleted] SSA [deleted] ordered FBI-AQ to suspend the full investigation on Wen Ho Lee pending DOE's reexamination of the predicate. In a note to SSA [deleted] FBI-AQ, dated July 31, 1996, SSA [deleted] wrote: [deleted] This DOE conclusion was a major basis for above full FCI. AQ should temporarily suspend investigative activity until DOE HQ and FBI HQ can sort out this new information.(S)"457 (AQI 992) SSA [deleted] suspended the full investigation pending DOE's revalidation of the underlying predicate and a review of the matter by OIPR.

This reexamination of the walk-in document by OEI was limited to a small group including [deleted] Recently [deleted] wrote Secretary

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Richardson [lines deleted] (FBI5334-39) In an apparent reference to the OEI's reexamination of the predicate subsequent to CIA's alert, [lines deleted] (Id. at 36)

On August 19, 1996, OEI met with the FBI to reaffirm the predicate and provide a letter from [deleted] to Section Chief Jerry Doyle, FBI, reaffirming the OEI analysis of the Chinese nuclear weapons program despite the CIA recall/reissue cable. In attendance at this meeting were [deleted] and SSA [deleted] Unit Chief [deleted] and Section Chief Doyle. (FBI 662; see also FBI 11725) The OEI Kindred Spirit chronology identifies [deleted] as among the attendees, but omits [deleted] (FBI 675) [lines deleted] We have discussed this judgment with representatives from the respective CIA offices responsible for dissemination of this information and they do not disagree with this assessment."458 (FBI 668) [lines deleted] (Id.) The FBI acted quickly to reactive [sic] the Wen Ho Lee investigation (AQI 1008-1011) ("DOE stands by their original conclusion").

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On September 13, 1996, the FBI interviewed [deleted] who was at DOE Headquarters.468 [lines deleted] 469 (FBI 694-95 at 95; AQI 1046-47 at 47)

[Deleted] described the wide dissemination of the compromised information.470 He specifically identified both contractors and the Department of Defense as potential locations where the compromise may have occurred. "When asked from where and when the Chinese might have acquired the information, [deleted] said it would be very difficult to say, as the W-88 is a deployed system. Deployment means that the plans would be available to various groups of people such as the US Navy (the W-88 is used by the Navy), contractor personnel and other involved personnel apart from the Department of Energy." (Id. at 95 and 46)

The FBI sought to record the predicate, not challenge it through this lead. This distinction probably explains their failure to react to the content of [deleted] interview

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upon receipt. Neither the case agent in the field nor the supervising agents at Headquarters recognized the clear discrepancy in this interview and the predicate communicated to the FBI. [Deleted] was not interviewed further by the FBI until recently.471

[Deleted] when interviewed by the AGRT, emphasized [lines deleted]472 Although he allowed that one never can say never, he thought it unlikely based on the intelligence he has seen. [Deleted] within the working group from this consensus position. [Deleted] added that [deleted] and as a result he lacks credibility. [Deleted]

The FBI did take a few initial steps to review the predicate for this investigation, but, significantly, it did not follow up on those steps with additional

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interviews to clarify important conflicts captured in the 302s. Had SA [deleted] and SSA [deleted] sought out [deleted] they would have come to understand the inaccuracies not only in the OEI briefing, but also in the AI report. SA [deleted] and SSA [deleted] failed to interview [deleted] who was at LANL and not DOE HQ like [deleted] SSA [deleted] should have insisted that SA [deleted] cover this lead personally. SA [deleted] failed to identify the composition of the OEI working group, KSAG, so that he would know who at LANL was aware of the Chinese documents and already aware of the compromise. These individuals could have been interviewed without any expansion of the number of individuals aware of the compromise. SA [deleted] was present when [deleted] name were mentioned on February 13, 1996. These members whould have become resources to guide the FBI investigation at LANL. WMFO covered this lead and interviewed two subjects beyond the one identified by the case agent. The results were recorded on FB-302s and then apparently ignored by both the field and Headquarters.

L. The CIA's independent assessment of the Chinese nuclear weapon program

After receiving the AI report on May 28, 1996 and completing the three predicate interviews in September 1996, the predicate for this investigation was left unchallenged until ASAC Lueckenhoff began to question it in December 1998, with one exception. That single exception is a 1997 review of the Chinese nuclear weapons program by the CIA. The CIA's written report was shared with the National Security Council, DOE and the FBI. This Chinese Nuclear Warhead Paper accurately characterizes the walk-in document, a document that the FBI received on [lines deleted] (FBI 12365) The CIA report was provided to the FBI on September 11, 1997. It should have led to a comprehensive reevaluation of the predicate. It did not.

In July and August 1997, [deleted] numerous senior government officials on his analysis of China's nuclear weapons program. That briefing presented an






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alarming portrait of Chinese efforts to acquire United States nuclear weapons information.473

DOE and CIA records indicate that [deleted] the National Security Council ("NSC") during this time period as well. (DOE 3420; EAT 180) On August 5, 1997, Sandy Berger, the President's National Security Advisor, asked for a CIA evaluation [deleted] concerns. (EAT 180)

That evaluation was begun in mid-August and completed by the end of the month. It was delivered to the NSC on September 5, 1997, (EAT 181) and to the FBI on September 11, 1997. (FBI 12388, 12360, 12361)

[lines deleted]

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[page 327]

[lines deleted]

[paragraph deleted]

There were several noteworthy limitations to the CIA assessment. First, the analysts prepared it in just two weeks. [Deleted] Second, it was never intended to confront [deleted] head on.477 Third, the analysts never addressed

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KSAG's findings or interviewed the KSAG experts.478 Finally, the original draft was completely rewritten to create a much shorter and less detailed product.479

Since neither analyst was familiar with [deleted] them so they could become familiar with and assess the briefing's content. That briefing took place on August 13, 1997. [Deleted] recalled that [deleted] a series of slides.480

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[lines deleted] During the briefing, [deleted] gave [deleted] names to answer any questions and provide whatever other assistance the analysts might require. The analysts

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did speak with [deleted] Neither [deleted] expressed significant disagreement with the CIA's assessment of the Chinese nuclear weapons program.483 [deleted]

[paragraph deleted]

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[page 331]

[lines deleted]

The final 1997 CIA position paper, as well as the draft, does adopt a position closer to that articulated [deleted] than that of KSAG. [lines deleted]485

In addition, it appears that in the pursuit of brevity, much of the qualifying language used by the CIA analysts was removed from the final position paper.486 [lines deleted]

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[lines deleted] (EAT 445)

In an amazing example of circular reasoning, the CIA's position paper attaches and incorporates a written submission by the FBI. Not only would the FBI fail to recognize [lines deleted] On September 4, 1997, CIA [deleted] received the FBI's written submission (EAT 472-276) [lines deleted] The attachment summarizes various FBI investigations, including Kindred Spirit: [lines deleted] It would also be lost on the FBI when they received the final paper.






[page 333]

On September 5, 1997, Section Chief Steve Dillard, Unit Chief [deleted] and SSA [deleted] provided an in-depth review of the Kindred Spirit investigation to [deleted] at the NSC (Id.) After the briefing, the NSC asked the FBI [lines deleted] (FBI 1086) This resulted in a time line, dated September 8, 1997, outlining the predicate in support of the FBI's investigation. It was forwarded to the NSC in preparation for the the NSC's briefing of NSA Berger on September 9, 1997 (Id.) This outline clearly records the inaccurate briefing given the FBI by OEI on October 31, 1995. [lines deleted] (FBI 13024-26 at 25) The outline includes important dates relevant to the walk-in document. On September 10, 1997, [deleted] requested the appendix to the CIA's position paper from the FBI. OIPR, which had previously approved the oral briefing of the NSC by the FBI (FBI 01085), also approved the dissemination of this information to the NSC on September 11, 1997. (FBI 12388) The appendix was sent to the NSC by facsimile the same day. (FBI 1088)

On August 29, 1997, Unit Chief [deleted] and SSA [deleted] attended a CIA meeting to review and contribute to the DI's paper addressing the PRC threat to the labs. (FBI 15752) Trulock was also at this meeting. During the meeting [lines deleted] At one point, [deleted] the CIA analysts [deleted]

Sometime between August 29, 1997 and September 11, 1997, Trulock wrote DCI George Tenet a letter which was described by one CIA officer as [deleted] (FBI 12388) Trulock wrote: "we would be remiss in not expressing our concerns regarding both the overall analysis and several of the key conclusions. In our judgment, the DI paper contains a number of important flaws." (EAT 384-85 at 84) Trulock also wrote: [lines deleted]






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[lines deleted]487 (EAT 384)

The analysts wrote an internal response dated September 30, 1997. "We agree with Notra's assessment that the National Laboratories have a CI problem and fully support DOE's efforts to combat this problem. We were asked to conduct an independent analysis of [deleted] We tried to convey the known acquisition of US nuclear weapons design information and put it into context [deleted] (EAT 386-87 at 86)

On October 15, 1997, [deleted] briefed [deleted] and [deleted] of NSC. [lines deleted] had already returned to LLNL to resume [deleted] detail and was not present. The DOE contingent arrived forty minutes into the briefing which had already begun with the CIA assessment.489 Although the CIA's brief was in ninety-five percent agreement with [deleted] and focused on the five percent which [deleted] The analysts believe that

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[lines deleted] that he never claimed [deleted] At this point [lines deleted]492 [deleted]

A copy of the CIA's final paper, bearing the facsimile date of September 11, 1997, was provided to Director Freeh as part of a briefing package to assist the FBI/CIA effort to improve the counterintelligence program within DOE. [lines deleted]493

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[page 336]

Thus, Director Freeh recognized that the CIA paper was clearly taking the position [deleted] But that point -- and its implications -- needed to be understood at a far lower level within the FBI, specifically at the [deleted] level. For it was the [deleted] personnel -- specifically Unit Chief [deleted] and SSA [deleted] -- who had read the AI report and received the October 31, 1995 [deleted] It was at this level that the message needed to be received and understood that there was a fundamental contradiction between what DOE had told the FBI and what the CIA was telling the FBI. It was received, but it was not understood.

The CIA's review of China's nuclear weapons program in 1997 represented the last opportunity to correct the predicate as it was communicated to, and accepted by, the FBI. [lines deleted]

M. The impact of the inaccurate prediction upon the FBI's investigation and current developments

From May 30, 1996 until early 1999, the FBI investigated the wrong crime. [lines deleted] The inaccurate predicate caused the FBI to improperly narrow the focus of their investigation to LANL due to the associated assumption [lines deleted]. The error was compounded by the FBI's complete and uncritical acceptance of the AI report's selection of Wen Ho and Sylvia Lee as the subjects of their investigation. The AI was accepted by the FBI until December 1998 when ASAC Lueckenhoff raised serious concerns over its content. The inaccurate predicate survived for months longer. Only in March 1999 did the FBI begin to recognize the error when they first visited SNL. At

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[page 337]

SNL, the FBI, by chance, spoke with [deleted] an original participant of KSAG, and began to appreciate the predicate's inaccuracy.

[paragraph deleted]

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[page 338]

Parallel efforts, by the FBI and DOE OCI, are presently underway [lines deleted] This effort has already demonstrated a broad dissemination among various DOE components, DOD components and contractors. It has also identified documents disseminated before the 1984 window established by KSAG and utilized by the AI. [Deleted] observed that they "didn't recognize the fact that in the interface documents" this "information is shared with a larger number of organizations." "It was a blind spot" in their 1995 analysis. [lines deleted] These documents were widely disseminated within DOE, DOD and the contractors.

Similarly, [deleted] at SNL have identified documents in the early 1980s that were widely disseminated which contain the compromised information. In an effort to acquire an accurate understanding of the predicate, the FBI has assembled a task force to interview the original participants of KSAG and identify what information has been compromised and which documents contain that information. This effort, combined with the ongoing review by DOE OCI of W-88 documents to determine which contain the compromised information, should focus the FBI's future investigation on the information which was compromised to the Chinese. These efforts will better define those materials which represent the universe of documents capable of having been the source of the compromise. Whether that will also identify the individual or individuals responsible for the compromise is more difficult to predict.

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