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By Steve Macko, ERRI Risk Analyst

WASHINGTON (EmergencyNet News) - According to U.S. Energy Secretary Bill Richardson, there is "no evidence" of additional espionage activity in the federal weapons laboratories. Richardson recently said: "With the measures in place and the counterintelligence presence that we have at the labs now, the polygraphs, the increased scrutiny ... we believe the problem is addressed."

The Secretary said counterintelligence programs have been beefed up at the labs and "there's no evidence of any more espionage cases. The growing national security controversy erupted after the Energy Department fired a Chinese-American computer scientist at the Los Alamos National Laboratory, where he had been under FBI investigation since 1996.

Although federal officials said the FBI investigation was continuing, the scientist, Wen Ho Lee, quickly went into hiding. He has not been charged with a crime. Richardson said the case is a law enforcement matter and he is uncertain if charges will be filed.

While it is ERRI's intention to try to keep politics out of our reporting of this case as much as possible, there have been some questions that have been left unanswered by the White House. One such question would be why the FBI investigating action was taken just this week?

Some Republicans have called for the resignation of national security advisor Sandy Berger over the issue. Berger has replied that he has no intention of quitting. Berger, who is traveling with POTUS in Central America, said Tuesday night: "I reject the notion there was any dragging of feet."

Berger said he received a narrow briefing in 1996 on an espionage case at Los Alamos. Then in July 1997 he got a briefing from Energy officials about China and the labs. He said: "I heard enough in the July '97 briefing to believe we had a serious problem."

A senior administration official, speaking on condition of anonymity, said that the President issued a directive in February 1998 ordering increased security at the weapons labs and there hasn't been any allegation of "leakage of technology" since those safeguards were imposed. But the able chairman of the Senate Intelligence Committee and other lawmakers on Tuesday questioned why the investigation had taken so long before any action was taken.

Senator Richard Shelby, the Intelligence panel's chairman, said his committee would question Richardson and FBI Director Louis Freeh at a closed-door hearing next week about the delay and whether the White House downplayed the incident when it first surfaced. Richardson has defended the investigation as "extremely thorough and vigorous" and said he had no choice but to wait before taking action against the scientist. He said: "The moment the FBI gave me the green light to terminate this individual, I did." The DoE secretary said he had been advised not to pursue the dismissal until "a thorough investigation and questioning took place."

The scientist Lee is a native of Taiwan. Associates describe him as being in his 50s, had worked at the prestigious weapons research laboratory in New Mexico for about 20 years. According to U.S. officials, he became a prime suspect of an espionage investigation as early as 1996. The investigation was triggered by the concerns of U.S. Intelligence that China in the 1980s had obtained top secret information on nuclear warhead technology that allowed the Chinese to develop miniaturized nuclear warheads so that more than one warhead could be delivered on a single missile. Nuclear scientists at Los Alamos had developed the technology.

In a related development, CBS News reported on Wednesday that the U.S. is investigating efforts by China to obtain classified data on a neutron weapons program being developed at a laboratory in California. Citing unnamed sources, the CBS report said that the top-secret probe has been under way for several years and currently remains "active and unsolved."

The Chinese espionage targeted the Lawrence Livermore Laboratories in California, the report said. The CBS report said the California case was proof of China's "active and aggressive" espionage efforts in the United States.

In the next week or so, ERRI plans to publish on a report on Chinese espionage activities in the United States, including the some of the methods that were used.

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By Steve Macko, ERRI Risk Analyst

In the recent aftermath of reports that a scientist from the Los Alamos National Laboratory allegedly helped China steal nuclear secrets, former and current U.S. intelligence and FBI officials say Beijing has created a vast espionage network that has penetrated not only the United States' nuclear weapons labs but also many corporations whose technology China covets.

In fact, the officials say, the case of Taiwan-born computer scientist Wen Ho Lee, along with a classified congressional report documenting a sustained and successful effort by China to steal U.S. military secrets, raise disturbing questions about whether any U.S. secrets are safe from China's intelligence apparatus.

U.S. counterintelligence experts say that although many nations aggressively pursue U.S. secrets -- in fact most nations do -- China's loosely knit spy network is especially difficult to combat because of its large size and because it possesses some important cultural, political and economic advantages.

Oliver "Buck" Revell, a highly-respected former deputy director of the Federal Bureau of Investigation, who is now a private security consultant in Dallas, said: "The Chinese are the most patient and perhaps the most thorough of any of the intelligence services. They send out thousands of agents to pick up grains of sand and come back and build their sand castle."

According to Paul Redmond, a former head of counterintelligence for the Central Intelligence Agency who is credited with exposing Soviet spy Aldrich Ames, China's espionage efforts constitute a "completely different kettle of fish. Culturally, in my view, they operate in a totally different environment and a different time frame."

Redmond left the CIA in 1998 to start his own security firm. He added, that the "Chinese do not think in terms of hours, days or weeks but in terms of decades. They are an ancient civilization. They are able to deal with the intricacies of long-term planning."

The former CIA officer explained that in the espionage business, long-term planning allows for "seeding operations" in which agents can be planted and then spend many years insinuating themselves into sensitive positions before ever being called upon to deliver.

Ambassador James Lilley is a former CIA station chief in Beijing and is currently the U.S. ambassador in China. He said, "This is a long-standing program. A number of cases trace back to the 1960s." He said that the real opportunity came in the 1970s when Washington started to open up and a flood of Chinese intelligence officers entered the United States with two priorities: "to get American technology and to destroy Taiwan's influence in the United States."

Lilley said that by the 1980s, China's intelligence agencies had succeeded in penetrating many of the nation's research labs. But he added that the outflow of secrets had probably accelerated since the end of the Cold War and the relaxation of many security barriers.

Redmond added that long-range planning is not China's only advantage. He said China also benefited from the large pool of ethnic Chinese in the United States and from the strong cultural bonds that he said make some American Chinese vulnerable to recruitment by China's numerous spy agencies.

According to Redmond and others, many of those recruited to collect intelligence for China are visiting Chinese scientists and students, some of whom have easy access to research of potential commercial or military value. But some Chinese Americans are also recruited often through appeals to their loyalty to the motherland.

Milt Bearden, a former CIA clandestine service officer who speaks Chinese and spent six years in Hong Kong for the CIA, said: "Chinese espionage is infinitely more subtle and less overstated than most. With Soviet espionage, it gets down to signing on the dotted line and becoming a spy. The Chinese mostly deal with overseas Chinese, Chinese Americans or somebody who's got a link to China and is presumed to want to do what's right for the Chinese people. It gets into this kind of almost 'don't ask, don't tell,' and the next thing you see is a lot of information is passing."

U.S. intelligence officials who work ``Case-200s'' -- alleged incidents of Chinese espionage -- say they are astonished that suspected Chinese spies often confess immediately when confronted and seem genuinely unaware that they may have done something wrong.

Bearden added that while some Chinese Americans may be vulnerable to recruitment by China's spy agencies, it is wrong to assume that Chinese Americans are more prone than other groups to betray their country. He said, "On balance, the contribution of Chinese Americans is so overwhelmingly in the positive column for this country that whatever goes in the other direction does not begin to tip the scales."

Many experts say that security at the nation's weapon's labs has been so lax that the General Accounting Office reported that of 5,472 visitors to the labs between 1994 and 1996 from 22 countries on a government "sensitive" list, only 892, or 16 percent, were given background checks before being allowed access to the nuclear weapons labs.

New security measures have been imposed since the GAO report was released in November 1997, but Redmond said a chronic conflict remains between the eagerness of security personnel to keep secrets and the eagerness of scientists, steeped in the academic values that foster a free flow of information, to share knowledge with their professional peers.

Ten years ago, the FBI was so worried about spying by Chinese officials in the United States that it urged the U.S. State Department to classify China as a nation with a "hostile intelligence service." But the request was turned down. To label China in this way, a State Department official explained at the time, "doesn't seem to us to go along with our overall relations." Instead, the U.S. government continued to characterize China as a "friendly, nonaligned country."

It is known that the People's Republic of China has been spying on the U.S. at least since the time of the Korean War, when Mr Larry Wu-Tai Chin, the most notorious Chinese agent of them all, began working as a CIA translator.

On Monday, the Central Intelligence Agency announced an independent panel to assess the damage from Chinese nuclear spying. George Tenet, the Director of Central Intelligence, said this would "provide an outside review of damage assessment which is now being completed" by analysts from across the U.S. intelligence community.

Tenet named retired U.S. Navy Admiral David Jeremiah, a former Vice Chairman of the Joint Chiefs of Staff who left the service in 1994, to head the independent panel and said other members would be appointed later.

An internal assessment of damage of the Chinese espionage report is being led by Robert Walpole, National Intelligence Officer for Strategic and Nuclear Programs for the National Intelligence Council. It is due to complete its work by the end of March and a CIA statement said its results would be shared with the White House and Congress.

The CIA statement said Admiral Jeremiah's task would be to "ensure that we have made a rigorous review of all available facts and have come to the appropriate conclusions."

Comment by ERRI's Executive Director, Clark Staten, on 03/15/98: "We would  be sincerely interested to see a probe of Chinese infiltration into America's computer industry, where they are also thought to be deeply entrenched. Our guess is that we would find that their computer industry has also grown and become more sophisticated in recent months as these so-called "scientific exchanges" have taken place. Another matter of concern is how much computer programming (including Y2K remediation) is now being done off-shore by Chinese and other foreign nationals that might not have America's best interests at heart?"