Tiger Trap: America's Secret Spy War With China (15 page)

Under an agreement reached in 1982, Britain was allowed to equip its submarines with Trident II missiles. "It had been public knowledge for nearly a half century that the US and the Brits had a cooperative and shared arrangement for their nuclear weapons programs. We've even had our scientists from DOE's national laboratories detailed to the British nuclear weapons facilities at Aldermaston and Burghfield."

Dillard was not saying that the walk-in's information had leaked from Britain. His point was that the Energy Department's analysts "failed to perceive that the material could have been compromised through various components of the US government, including the Defense Department, possibly even through a foreign government."

After China tested its small warhead in 1992, the Energy Department pulled together about two dozen scientists in its
KINDRED SPIRIT
advisory group. That in turn led to the DOE administrative inquiry that produced the forty-four-page report to the FBI stating that Wen Ho Lee was "the only individual" who could have leaked the information about the W-88. The administrative inquiry had supposedly drawn upon the findings of the
KINDRED SPIRIT
advisory group. Dillard resolved to dig deeper; he decided that the FBI would talk to the advisory group.

"I couldn't believe that two dozen of our weapons scientists could be so wrong. By that time, the original members of the group had scattered around all over the country. I had our agents locate and interview every single member of the original group. Only about four or five of that group said that it had to have originated in Los Alamos and X Division. The rest of them, along with me and my FBI and Justice Department colleagues, thought that idea was baseless."

According to Dillard, "about twenty members of the advisory group said they could not identify the source of the information in the walk-in document. But what DOE sent to the FBI was the administrative inquiry which pinpointed not only X Division, but specifically Wen Ho Lee."

The Bellows Report, the exhaustive review of the Wen Ho Lee case, agreed that DOE had sent the FBI on a wild-goose chase. But it was equally critical of the FBI for unquestioningly accepting DOE's conclusion and focusing all of its resources on Wen Ho Lee. It faulted "the FBI's own lack of investigative interest in looking beyond Wen Ho Lee."

But for Dillard, that was ancient history. He had now been assigned to the investigation that should have taken place three years earlier. And the trail was cold.

The Chinese, he realized, could have obtained the information about the W-88 not only from Los Alamos, where the warhead was designed, or from elsewhere in DOE, but from a much broader spectrum of agencies within the government—from the Pentagon, the armed services, hundreds of defense contractors, even the British. Pinpointing the source of the leak was proving nearly impossible.

Nor did the rivalry between the CIA and the FBI help matters. When the bureau wanted to interview the walk-in, the CIA said he was inaccessible. Dillard thought otherwise, and the FBI found him, living in the United States.

Doug Gregory and Dave Lambert, the two agents who interviewed the walk-in, concluded he had not been sent by Chinese intelligence. Unlike the CIA's view, their assessment was that he was not controlled. However, the walk-in was unable to shed any light on the source of the W-88 document.

Dillard did not confine his investigation to the W-88, although that was the major focus. Although only a few documents in the walk-in's trove dealt with nuclear weapons, there were others of counterintelligence interest, including classified US documents containing data from the Army, the Navy, and the Air Force.

In a vault in the basement of the CIA, languishing in dust-covered boxes, Dillard was astonished to find thousands of documents that had never been translated when they were brought out by the walk-in four years earlier. Now they would have to be examined by the task force.

It was slow and painstaking work. The titles of the documents were translated first. Dillard assigned priority to those that looked the most interesting. These were summarized, and if they had intelligence value, some of the full texts were translated. But there was nothing in the other material that gave any clue to the origin of the W-88 document.

Dillard was hoping to find a document, somewhere inside the defense and nuclear weapons establishment, that might match up to the details in the Chinese document. Then it might be possible to zero in on a US agency or even one of its components in the search for the source.

But there was a problem. Some US documents contained data about the fission and hydrogen bombs inside the warhead. Other documents dealt with the delivery vehicle itself. But few combined the two. The fact that the Chinese W-88 document contained data about both the physics package—the bombs—and the outer shell or nose cone made it likely, Dillard concluded, that the information obtained by China had come from more than one document.

While
SEGO PALM
was under way at FBI headquarters in 1999, others were also trying to solve the mystery of the W-88 leak and the documents obtained from the walk-in. At Los Alamos, Robert Vrooman, who headed counterintelligence at the lab for a decade, wrote a memo reporting that four scientists at the lab believed that the documents originated with a defense contractor in Colorado Springs
that manufactured subcomponents for much of the US nuclear arsenal.

Dillard also looked at defense contractors in California, Florida, Texas, Nevada, and elsewhere. In trying to pinpoint the source of the W-88 document, the FBI sought help from the Navy, and the Naval Criminal Investigative Service, as well as the Pentagon and DOE.

Dillard's task force also had to look at several other locations. The warhead was designed at Los Alamos, but DOE's Sandia National Laboratories in Albuquerque did the engineering of the W-88, and many nonnuclear elements are manufactured at DOE's Kansas City site. Tritium, a key component of hydrogen bombs, comes from DOE's Savannah River plant near Aiken, South Carolina. The warhead itself was assembled at Pantex, the DOE plant, northeast of Amarillo, Texas.

At Los Alamos, meanwhile, Ken Schiffer, a Chinese counterintelligence specialist at the FBI for twenty-nine years, had retired and in 1998 became director of internal security at the laboratory. Schiffer, too, asked three nuclear weapons scientists at Los Alamos to analyze the W-88 document for clues as to its origin.

Schiffer had an unusual background. He grew up near Sheridan, Wyoming, where his father raised horses and cattle and later bought a ranch in Kaycee, Butch Cassidy and the Sundance Kid territory. Schiffer, who joined the bureau after graduating from the University of Colorado, had entered and won prizes in rodeos and continued competing during his FBI career. Possibly he forgot he was not on a bronco in February 1970 when he wrecked an FBI Plymouth Fury III.

As punishment he received a letter of censure from J. Edgar Hoover—"It is clear that you did not give proper attention to your driving"
—and in addition was ordered to Chinese-language school. Apparently the FBI chief suspected there were spies in the nation's Chinatowns, because Schiffer was required to learn Toishan,
a Cantonese dialect spoken by many of the older immigrants who came to the United States and opened Chinese restaurants.

Schiffer, who framed Hoover's letter and put it on the wall of his home, much to his wife's dismay, might never have become a Chinese counterintelligence agent had he not wrecked the Plymouth. In the 1980s he ran the China squad at the Washington field office, then worked at headquarters, and later supervised counterintelligence in San Diego.

The Los Alamos scientists reported to Schiffer that the walk-in's document on the W-88 appeared to match a 1986 "interface" document
from an earlier stage in the development of the warhead. The term is used to describe a progress report on a project. When the Pentagon wants a new nuclear weapon, an interface document is generated and sent to DOE and the labs, which design the weapon.

Schiffer relayed the scientists' conclusions to the FBI, but their findings did not bring the bureau closer to determining how the Chinese had acquired the details of the warhead. And because the document had circulated back and forth throughout the labs and the Pentagon, even if China had acquired it, there was no way to tell at what point in the loop it might have been intercepted.

One cause of contention among the intelligence experts who analyzed the walk-in's documents was a very slight discrepancy between the measurements of the W-88 in the Chinese document and the true size of the warhead. The Chinese data was said to be one millimeter off.

Ken Schiffer said the discrepancy could be explained by the fact that the walk-in document was based on dimensions in the 1986 document. "This was an early stage that changed later on."

Ray Wickman, who headed the FBI's China squad and later worked in counterintelligence at DOE, offered a different reason for the minuscule variance in the Chinese data from the actual dimensions of the warhead. "The US document had measurements in inches. The Chinese document had dimensions in millimeters. If you translated the US document into millimeters and rounded off the number and then translated it back to inches there could be a slight discrepancy."

About six months into the
SEGO PALM
investigation, Dillard decided to call in the Jasons. A secretive, elite group of the nation's top scientists, Jason—the organization uses the singular rather than the plural form of the name—probably has about fifty members, only some of whose identities are known. Twice a year, the group prepares studies for the Pentagon and the intelligence community. Most of its reports are classified.

Dillard asked the Jasons and Richard L. Garwin, a brilliant nuclear physicist and government adviser, to review the W-88 document. A number of other nuclear scientists were brought in to help.

The CIA was prevailed on to give the Jasons a
TOP SECRET
briefing on the document and its provenance. The briefing was held in a SCIF at the headquarters of the Mitre Corporation, in McLean, Virginia, which administers Jason. In a SCIF, a vault supposedly secure from eavesdroppers, no laptops or other electronic devices are allowed. The scientists, at least for a while, were deprived of their BlackBerrys and cell phones.

The Jasons endorsed
SEGO PALM
's methodology, and provided some additional recommendations. But even the brainy scientists could only guess at where or how the information about the W-88 warhead might have found its way to China.

At DOE, Richardson's new director of intelligence, Larry Sanchez, was also looking into the loss of the W-88 design details. Sanchez was not a typical cubicle-dwelling government official. He grew up in Washington, DC, where his mother was vice counsel of the Brazilian embassy. After working as a charter boat captain and scuba instructor, he joined the CIA in 1984 and served overseas in several posts in East Asia in the agency's clandestine service. Dark-haired and muscular, he was a competitive weightlifter who jumped out of airplanes for relaxation; he reported to work at DOE with a gold bead in his pierced left ear, awarded the year before, after he'd completed five hundred jumps.

Sanchez quickly discovered that dissemination lists of more than half a dozen DOE classified manuals, each several pages long and containing the same information as in the Chinese document, had been distributed inside DOE, as well as to the Defense Department, the armed services, and some five hundred government agencies and private contractors.

Officials conducting the intelligence community's damage assessment in 1999 thought that the document turned over by the walk-in closely paralleled a US Navy document that was circulated widely within the government. In Los Alamos alone fifty copies were found. The Navy document was a memo from the undersecretary of defense for research and engineering to the chief of naval operations. It appeared to have been written in the Navy's Strategic Systems Project Office in the early 1980s.

With so many different theories floating around, Dillard had his hands full, juggling a mountain of information, much of it conflicting. And then tragedy struck. At 9:37
A.M.
on September 11, 2001, some of the investigators on Dillard's task force were among those lost when American Airlines Flight 77, hijacked by terrorists, struck the west wall of the Pentagon, killing 125 people and all 64 people aboard the aircraft.

The work went on, and a Pentagon unit, part of the
SEGO PALM
investigation, did find precise evidence of the origin of at least one of the walk-in's documents. According to Dillard, "We found one original document from a defense contractor with the same schematic diagrams, the same information, the same names, and it matched exactly with one of the walk-in documents written in Chinese. But this was not the W-88, it was a classified portion of one of the delivery systems."

In the end, Dillard judged that the Chinese had most likely put together the data about the W-88 and the other weapons systems little by little over a long period of time. "When you look at all of the materials we examined, we concluded that the compromises were likely to have been made by either multiple personnel or multiple means over a several-year period from the '70s to the early '90s."
China had obtained the information, Dillard said, "by spies, or through technical means, or through negligent acts."

After two and a half years running
SEGO PALM
, Dillard early in 2002 was nominated by FBI director Robert S. Mueller III to head the Office of Counterintelligence at DOE. The office had been created in the wake of the Wen Ho Lee case. Dillard remained a senior FBI official, detailed to his new position at the Energy Department.

Mike Donner, a veteran FBI counterintelligence agent, took over the
SEGO PALM
investigation. Donner, who had worked on the Aldrich Ames spy case, was well informed on both the W-88 conundrum and the history of the Wen Ho Lee affair. He had helped to put together the Bellows Report on the case two years earlier.