Department of Energy, FBI, and Department of Justice
Handling of the Espionage Investigation into the
Compromise of Design Information on the W-88 Warhead
Senate Governmental Affairs Committee Chairman Fred Thompson (R-TN)
Senate Governmental Affairs Committee Ranking Minority Member Joseph Lieberman (D-CT)
August 5, 1999
We participated in extensive Governmental Affairs Committee hearings reviewing the government's espionage investigation into the apparent compromise of design information on the W-88 nuclear warhead. The W-88 warhead is the weapon used in the Trident II submarine-launched ballistic missile (SLBM) system carried aboard United States Ohio-class ballistic missile submarines.(2) The Committee's hearings focused upon the conduct of and communications between the Department of Energy (DOE), the Federal Bureau of Investigation (FBI), and the Department of Justice (DOJ) with regard to this matter.
During the course of this inquiry, the Committee has conducted nearly 13 hours of closed hearings on this topic. These hearings involved 20 witnesses:
FEDERAL BUREAU OF INVESTIGATION (FBI)
Larry Parkinson, General Counsel, FBI
Neil Gallagher, Assistant Director, FBI National Security Division (NSD)
John Lewis, former Assistant Director, FBI NSD
Stephen Dillard, Section Chief, FBI NSD
"Agent A," Supervisory Special Agent, FBI NSD
"Agent B," Unit Chief, FBI NSD
"Agent C," Supervisory Special Agent, FBI Albuquerque Division
"Agent D," former Special Agent, FBI Albuquerque Division
DEPARTMENT OF JUSTICE (DOJ)
Frances Fragos Townsend, Counsel, Office of Intelligence Policy & Review (OIPR)
Gerald Schroeder, former Acting Counsel, OIPR
James Baker, Deputy Counsel for Intelligence Operations, OIPR
Allan Kornblum, former Deputy Counsel for Intelligence Operations, OIPR
David Ryan, line attorney, OIPR
Daniel Seikaly, former Director, DOJ Executive Office for National Security (EONS)
DEPARTMENT OF ENERGY (DOE)
Lawrence Sanchez, Director of Intelligence, DOE
Notra Trulock, former Director of Intelligence, DOE
LOS ALAMOS NATIONAL LABORATORY (LANL)
Terry Craig, counterintelligence officer, LANL
Robert Vrooman, former counterintelligence officer, LANL
R. Gary Lee, former team leader for computer security, weapons division, LANL
Robert Ayars, computer security officer, LANL
The Committee has also compiled a comprehensive collection of classified and unclassified information about this topic. This document outlines, in unclassified form, the principal facts which we feel this investigation to have established thus far.
The matter at hand is an issue of enormous importance to U.S. national security. When something as significant as the theft of design information on our most sophisticated nuclear warhead is alleged to have occurred, it is vital that our national security apparatus be able to move rapidly and effectively to determine the facts, and, where appropriate, identify and apprehend those responsible.
We take no position in this document on whether W-88 or other nuclear weapons information was in fact compromised, or by whose hand this may have occurred. Rather, we have focused upon how the federal government has
handled the investigation into this matter from the first significant indications of compromise in 1995 until the present day. This is a story of investigatory missteps, institutional and personal miscommunications, and -- we
believe -- legal and policy misunderstandings and mistakes at all levels of government. The DOE, FBI, and DOJ must all share the blame for our government's poor performance in handling this matter.
I. The Initial Inquiry
In 1995, the Department of Energy (DOE) and the Central Intelligence Agency (CIA) independently acquired certain information indicating that the People's Republic of China (PRC) may have acquired certain highly-sensitive information on several U.S. nuclear weapons, including design information on the W-88 warhead.(3) Although this new information indicated the possible compromise of several warheads, DOE's initial investigation focused exclusively upon the W-88. The DOE team apparently failed to look into the theft of information on the other warheads at all,(4) but they concluded that it was highly likely that compromise to China of W-88 information had indeed occurred.(5) The Department accordingly began an "Administrative Inquiry" into this apparent counterintelligence failure. With the assistance of an investigator detailed for the occasion from the Federal Bureau of Investigation (FBI), a DOE team was assembled to attempt to pinpoint possible locations for this compromise, and to identify likely suspects.(6)
Based upon its analysis of the dates of the information indicating the loss of this design information and the locations at which this information was stored in the United States during the relevant period, the DOE inquiry concluded that the compromise had occurred between 1984 and 1988(7) -- and that it had most probably occurred at the Los Alamos National Laboratory (LANL) in New Mexico.(8) This conclusion has faced criticism, because, as the President's Foreign Intelligence Advisory Board (PFIAB) has noted, "key technical information concerning the W-88 warhead" that could have formed the basis for the W-88 information obtained by the PRC was apparently available at "numerous government and military entities since at least 1983."(9) Nevertheless, the DOE administrative inquiry team specifically identified LANL as the likely source, and, building upon this conclusion, set about trying to produce a list of possible LANL suspects through what is known as a "matrix" analysis.
In order to identify such suspects, the DOE team attempted to compile and compare three lists of persons: (a) individuals at LANL having access to the design information in question; (b) individuals at LANL who had traveled to China during the years 1984-88; and (c) individuals at LANL who had contact with Chinese scientific delegations visiting Los Alamos during this period. Los Alamos record keeping did not permit compilation of a list of LANL employees who had had significant contact with visiting delegations, but the inquiry determined that of the people at the laboratory who had visited China during the period in question, a limited number had access specifically to the information in question.(10) Given the fact that DOE employee record-keeping was "spotty at best," there is reason to suspect the accuracy of the numbers considered.(11)
Two of these individuals stood out in the minds of the DOE investigators: Wen-Ho Lee and his wife Sylvia Lee. Wen-Ho Lee, a Taiwan-born naturalized U.S. citizen, was a scientist working on nuclear weapons-related hydrodynamics in LANL's nuclear weapons design division, and Sylvia Lee was a secretary at the laboratory. DOE investigators believed that the Lees stood out from the other suspects for various reasons, principal among them the aggressive efforts Sylvia Lee had made to involve herself with visiting Chinese scientific delegations and Wen-Ho Lee's prior involvement as a suspect in a previous espionage investigation in 1982-84.(12)
The DOE completed its administrative inquiry on May 28, 1996. It was forwarded to the FBI, which began its own full-scale field investigation at the direction of the FBI's "Agent A".(13) The FBI already knew of Wen-Ho Lee, having investigated him not only for the abovementioned 1982-84 matter, but also on account of a separate FBI investigative lead.(14) This third FBI look at Wen-Ho Lee -- this time in connection the W-88 matter -- began only two days after DOE's inquiry report had arrived. The Bureau's Albuquerque Division field office took primary responsibility for the investigation, assigning it principally to "Agent D" and his supervisor, "Agent C."(15)
II. The Early FBI Investigation
Not long into its investigation, FBI officials at the Albuquerque field office decided that it would be important to gain access to Wen-Ho Lee's office computer. In November 1996, the FBI's "Agent D" contacted Terry Craig, team leader for counterintelligence at LANL, regarding the possibility of searching Lee's computer. Specifically, they discussed whether it would be possible to access records of Lee's e-mail activity. Their recollections of these conversations differ somewhat, but Craig and "Agent D" may have also discussed whether or not the LANL e-mail system displays a security "banner" to users upon log-in, thereby obtaining consent to monitor activity.(16)
These conversations began a series of miscommunications and mistakes between LANL and the FBI that had significant implications for the course of the Lee espionage investigation.
To begin with, their discussions -- and subsequent dealings between FBI and LANL -- showed a remarkable degree of confusion between the idea of computer "search" and computer "monitoring." It was clear that "Agent D" wished somehow to gain access to Lee's computer, but seems not to have specified whether he wanted to check the contents of Lee's computer files (search) or to track current computer activity (monitoring), or both. FBI memoranda speak of the need to "search" Lee's computer, but "Agent D" apparently only asked LANL for "paperwork executed by LANL employees authorizing the review of e-mail traffic by LANL officials."(17)
Though he had apparently failed to ask Craig for information directly relevant to a full computer "search," "Agent D" advised FBI headquarters that he would provide the Bureau's National Security Law Unit (NSLU) with any documentation he received from LANL in this regard. This documentation, it was hoped, would permit the FBI to determine whether it had the authority to monitor the suspect's activities without having to apply for a search or electronic surveillance warrant under the Foreign Intelligence Surveillance Act (FISA).(18)
In response to this request, Craig consulted certain officials at Los Alamos and then advised "Agent D" that while LANL was implementing a new computer training program that involved signing a waiver form, employees at LANL's weapons division -- including Wen-Ho Lee -- had yet to complete this process. Craig also provided "Agent D" with three documents describing current computer policies at LANL.(19)
While it was apparently true that employees of the weapons division had not signed this "training waiver," Craig's inquiries around the laboratory failed to disclose that Wen-Ho Lee (and other LANL employees) had in fact signed different consent-to-monitoring waivers with regard to both classified and unclassified laboratory computers in April 1995.(20)
Craig, however, never looked further into this matter, and did not learn of the 1995 waiver until 1999.(21)
Craig's failure to supply the FBI with accurate information was critical. It is still unclear whether Lee's computer waiver actually would have permitted the FBI searches desired.(22) This said, however, if the Bureau had known of the 1995 waiver, it might have been possible to access Lee's computer much earlier.(23) In turn, had investigators thus discovered the classified file transfers that Lee was actually undertaking with his computer,(24) there would likely have been little dispute with the Department of Justice over the existence of probable cause for FISA surveillance of the Lees.(25)
For his part, the FBI's "Agent D" also inexplicably failed to pursue this computer-access issue with appropriate diligence. Despite having been advised by Craig that Wen-Ho Lee and the rest of the weapons division had not yet signed computer-monitoring waivers as part of the ongoing LANL training program -- but, implicitly, that they were expected to do so -- "Agent D" apparently never again consulted Craig about this issue. Moreover, though the purpose of requesting documentation from Craig was to provide FBI headquarters with the information necessary to support a determination as to whether FISA authority would be needed in this case, "Agent D" neglected to send headquarters the documents Craig gave him. According to "Agent D," he simply got distracted, and "got involved in many other things at the time."(26)
These failures were also potentially quite significant. To the extent that a subsequent waiver through the LANL training program could have been obtained, it might have (as described above) greatly affected later disputes over probable cause under FISA. Moreover, "Agent D's" apparent failure to forward Craig's computer training documentation to Washington also deprived the NSLU of any firm basis for its determination that FISA authority would be required.(27) Even were no waiver to have existed, it is significant that LANL's computer policy assumed that the laboratory did have the right to monitor employees' computers at will for "waste, fraud, and abuse";(28) the documents provided "Agent D" by Craig were intended to convey the substance of this policy to the FBI.(29) Because of "Agent D's" failure properly to inform his superiors, the NSLU was apparently never informed of this policy, and thus never given the chance to decide whether the ability of LANL to access these computers in order to prevent "abuse" also meant that the FBI could do so in order to prevent espionage or the unauthorized disclosure of classified information.
To make matters worse, Craig had also assumed, on the basis of his own experience elsewhere in the laboratory, that LANL's weapons division did not employ security "banners" to persons using unclassified e-mail accounts. He did not discuss this issue with anyone at this division, however, and thus failed to learn that some computers -- apparently including the one Wen-Ho Lee used -- did indeed display such banners.(30) Thus unaware of the facts, Craig informed "Agent D" that no banners were used in the division.(31) (Craig did not discover this mistake until 1999.(32)) It is uncertain precisely what banners were used in the weapons division at that time, but had Craig pursued this matter further, it would at least have been possible for NSLU to make an informed decision on whether or not FISA authority was required.
Ultimately, it is still unclear precisely what information was given to FBI headquarters before an NSLU line attorney made the determination(33) that a FISA warrant would be needed to access Lee's computer.(34) Plainly, however, these compound missteps by Craig and "Agent D" ensured that the anecdotal information apparently conveyed to the NSLU line attorney -- namely that there existed neither a waiver nor a security banner that could permit the FBI to access Wen-Ho Lee's computer -- was incomplete at best, and perhaps even wholly incorrect. The story of the mishandled Lee investigation thus moved into its next phase: the FBI's repeated attempts to obtain FISA surveillance authority.
III. Efforts to Obtain a FISA Warrant
A. The FBI's Request to the Justice Department
The FBI has conceded that it proceeded too slowly with its investigation, and perhaps should have requested FISA authority earlier,(35) but in April 1997 -- prompted by Lee's request to his LANL superiors to hire a Chinese national as his research assistant -- the Bureau finally began preparing a formal FISA request.(36) On June 5, 1997, the FBI's "Agent A" completed a "letterhead memorandum" (LHM) addressed to DOJ's Office of Intelligence Policy and Review (OIPR), asking that office to submit to the Foreign Intelligence Surveillance Court (FISC) a request for a FISA surveillance warrant. For unexplained reasons -- and despite the fact that the FBI's field office had wanted a computer search in 1996 -- the Bureau did not request a computer search in this application; it merely requested other types of surveillance.(37)
On June 30, the FBI sent its completed FISA request to OIPR. After receiving the FBI's draft FISA request, OIPR reviewed it and drafted a proposed application to the Foreign Intelligence Surveillance Court (FISC). Allan Kornblum, then OIPR's Deputy Counsel for Intelligence Operations -- the office within OIPR responsible for FISA matters -- received the letterhead memorandum and immediately recognized the huge national security importance of this case. Kornblum thought the case "important and urgent," and was
"shocked to read about the loss of the nuclear weapon design [information]. * * * I was also shocked by the facts, the idea that this guy is making official trips to the PRC to meet with his counterparts in nuclear weapons design. I couldn't believe that."(38)
Spurred by these concerns, Kornblum quickly assigned the Lee case to David Ryan, a line attorney in his office, who prepared a draft application to the FISC over the Independence Day holiday weekend.(39)
Kornblum reviewed Ryan's draft application, and "found it wanting."(40) It would be necessary, he felt, to consult further with the FBI "in order to complete the application and send it forward."(41)
Kornblum annotated Ryan's draft with his questions and comments. A series of discussions then ensued, both within OIPR and with FBI agents knowledgeable about the case, and two further draft FISA applications were prepared as the FBI added additional information in response to Kornblum's queries. (Only drafts one and three can presently be found, however.)(42)
As described below, OIPR attorneys and the FBI agents held their final 1997 meeting on this subject in August. As Allan Kornblum recalls,
"Following that meeting, the case was put back to the Bureau to further the investigation in order to flesh out and eliminate some of the inconsistencies, to flesh out some of the things that had not been done * * *."(43)
OIPR would not hear back from the FBI for nearly a year and a half.
B. The Debate Over Probable Cause under FISA
The disagreements between the FBI and OIPR attorneys over the surveillance application during this period in July and August of 1997 concerned whether or not the evidence collected in this case satisfied the "probable cause" standard of the FISA statute.
(1) The Legal Standard
In order to obtain FISA surveillance against a "U.S. person" -- that is, United States citizens, permanent resident aliens, associations "a substantial number of members" of which are citizens or permanent residents, or corporations incorporated in this country(44) -- the government must be able, among other things, to demonstrate probable cause that the target is an "agent of a foreign power."(45) This means that a targeted U.S. person -- such as Wen-Ho Lee -- may be targeted only(46) if there is probable cause to believe that he:
"(A) knowingly engages in clandestine intelligence gathering activities for or on behalf of a foreign power, which activities involve or may involve a violation of the criminal statutes of the United States;
(B) pursuant to the direction of an intelligence service or network of a foreign power, knowingly engages in any other clandestine intelligence activities for or on behalf of such foreign power, which activities involve or are about to involve a violation of the criminal statutes of the United States;
(C) knowingly engages in sabotage or international terrorism, or activities that are in preparation therefor, for or on behalf of a foreign power; or
(D) knowingly aids or abets any person in the conduct of activities described [above] or knowingly conspires with any person to engage in [such] activities * * *."(47)
According to the U.S. Supreme Court, "probable cause" is "a fluid concept -- turning on the assessment of probabilities in particular factual contexts."(48) It does not mean proof to a high degree of certainty such as might be required in order to convict the defendant in a criminal proceeding. Rather, it reflects in essence a simple balancing of probabilities. Generally, "probable cause" is to be determined according to "the factual and practical considerations of everyday life on which reasonable and prudent men, not legal technicians, act."(49) As the FBI's General Counsel put it at the Committee's hearing -- in a formulation with which OIPR's lead attorney agreed -- "[p]robable cause in our view is more probable than not that this person is an agent of a foreign power, and it's a very fact-specific, case-by-case determination."(50)
Indeed, "probable cause" has traditionally been viewed as more flexible a term in the national security context than it is with regard to criminal investigations. As the Supreme Court put it in 1972, a
"different standard [of probable cause] may be compatible with the Fourth Amendment if [it is] reasonable both in relation to the legitimate need of Government for intelligence information and the protected rights of our citizens. For the warrant application may vary according to the governmental interest to be enforced and the nature of citizen rights deserving protection."(51)
This case preceded the enactment of the FISA statute, and the degree -- if any -- to which it prescribes additional flexibility in the interpretation of "probable cause" under that statute is unresolved.
(2) The Lee Case and Probable Cause
By mid-August 1997, the information compiled by the FBI in support of its FISA application and presented to OIPR included the following:(52)
Viewed together, in the "totality of the circumstances," the FBI believed that this information amounted to "probable cause" that Wen-Ho Lee and his wife Sylvia were "agents of a foreign power" such that approval for electronic surveillance was authorized under FISA.
OIPR, however, viewed the evidence against the Lees differently. OIPR argued that the information from the FBI's 1982-84 investigation of Lee and the FBI's more recent, separate investigative lead, in particular, was not "current" enough to satisfy the statutory definition of an agent of a foreign power as someone who "engages in" intelligence activities -- i.e., one who is currently involved in such things. OIPR officials argued that the FBI had "not sufficiently demonstrated a connection" between Lee and the compromise of the W-88 information, and that "all of the most interesting things that would qualify him for coverage were too distant in time."(63)
Most importantly, however, OIPR viewed the FBI's case as being flawed from the outset, and "the central reason" for that, OIPR Attorney Allan Kornblum explained, "had to do with the fact that the DOE and Bureau had [multiple] suspects, and only two were investigated. * * * That is the principal flaw which ha[d] repercussions like dominoes throughout all of the other probable cause."(64) There being no evidence directly linking the Lees to the compromise of the W-88 warhead, the FBI's case for probable cause rested upon the Lees standing out amongst the other potential suspects. At least some of the other suspects, however, also had access to the information and had traveled to China, and many of them shared some of the additional elements put forward by the FBI in its probable cause showing: they all worked at LANL and had access to information desired by Beijing, a number were ethnic Chinese, some presumably had contact with visiting Chinese delegations, and the elements related to PRC intelligence tradecraft applied to many of them as potential targets of Chinese espionage. In OIPR's view, the failure of DOE and FBI investigators to look into the other suspects who satisfied the matrix criteria -- that is, to assess whether these others were not for some reason equally suspicious -- meant that it was impossible to be sure that the Lees really did stand out as the prime suspects.
In Kornblum's view, this failure to do more to rule out the other suspects(65) separated the Wen-Ho Lee case from many other "matrix"-driven FISA cases on which he had worked -- including the successful Aldrich Ames and Earl Pitts espionage prosecutions.(66) He felt that while the FBI had presented OIPR with some suspicious incidents involving the Lees, none of the elements recounted by the FBI was in itself sufficiently compelling, many of them on their own could be viewed as benign, some occurred too long ago to illuminate whether Lee was currently engaged in espionage activities, and it was impossible to fairly evaluate their significance absent a comparison with the other individuals on the matrix. Kornblum felt that the separate FBI lead -- which the FBI viewed as significant -- could also reasonably be viewed as innocuous. His assessment of this incident, Kornblum suggested, might have been different if the FBI had been able to show that none of the other suspects had similar security incidents. Having failed to investigate the others, however, the Bureau was unable to do this. All in all, OIPR attorneys felt, as Attorney General Reno later put it, that "[t]he facts presented in 1997 were insufficient to support a finding of probable cause" under FISA.(67)
OIPR attorney Dave Ryan discussed these concerns with the FBI's "Agent A," telling him that "the other people have not been investigated. We think it would be very helpful if you could do that."(68) "Agent A," in turn, recalls "pass[ing] that information off, down to the field office as results of the meeting and what needed to be done."(69) The Albuquerque field office, however, apparently did nothing to look into the other suspects until much later -- apparently not until 1999(70)-- and "Agent A" never followed up on the issue with OIPR.(71)
When asked why, given the seriousness of the case, they did not simply ask the FISA Court itself to decide whether these elements amounted to probable cause, OIPR attorneys offered two answers. First, Kornblum explained, OIPR believed that the FBI was still working on the issue and would return with more information for the FISA application. "When we broke off discussions in '97," he said, "I fully expected the Bureau to come back."(72) Second, and more broadly, it was OIPR's position, in dealing with FISA matters, that the Department of Justice should be essentially certain that there is probable cause before forwarding a FISA application to the court. According to OIPR attorneys, the statute's requirement that the Attorney General find that the requirements of the statute have been met imposes a legal and ethical obligation upon them to make the determination of probable cause themselves.(73) OIPR, however, was far from certain: the acting head of OIPR, Gerald Schroeder, felt that the evidence did not show probable cause(74) and did not even make "a close case."(75)
Accordingly, on August 12, 1997, Allan Kornblum headed a meeting between OIPR and FBI officials at which the application was discussed, and he recounted OIPR's objections. (FBI official "Agent A" took notes at this meeting; this is apparently the only written record of OIPR's denial.)
On August 14, John Lewis, then chief of the FBI's National Security Division, sent a memorandum to FBI Director Louis Freeh. In this memorandum, Lewis recounted to Freeh that he had turned in the Wen-Ho Lee FISA application earlier than anticipated(76)-- and without as much supporting information as he would have liked. He advised Freeh that OIPR had found it inadequate.(77) In Lewis' view, Congress had created the FISA court precisely in order to enable it -- rather than OIPR -- to decide close cases.(78)
(3) A Conversation with the Attorney General
OIPR attorneys are reluctant to describe their disposition of the matter as a "denial" or "turndown," but it is evident that the FBI took it as such. As one FBI official put it, "I think if you were to ask the FBI our impression was that we were not successful, we were turned down in our efforts to get a FISA [warrant]. * * * We didn't get it. We were turned down."(79) It is also evident that after not hearing back from the FBI for some time, OIPR effectively also concluded that the matter was over, for when Ryan's file cabinet and the computer diskette upon which he had stored his draft Wen-Ho Lee FISA applications both became full, he destroyed these records in order to make space for new materials. (At the time, OIPR had no record-keeping policy regarding cases that were not sent to the FISA court for approval; the only documents that remain from this process were kept by the FBI.)
That the FBI viewed OIPR's assessment as a refusal is also apparent from the Bureau's subsequent -- and unprecedented -- decision to appeal the matter to the Attorney General. On August 20, DOJ and DOE officials met at the Justice Department to discuss security issues at DOE. Officials present included Attorney General Reno, Deputy Attorney General Holder, and DOE's intelligence chief, Notra Trulock. After this meeting, the head of FBI's National Security Division, John Lewis, mentioned to the Attorney General that the FBI had sought a FISA warrant in the Wen-Ho Lee case, but that "we've been turned down by OIPR."(80) (Attorney General Reno has said that she does not recall the conversation, but does not deny that it occurred.)(81) According to Lewis, she told Kornblum to "[r]evisit it, and I'm going to have either [Daniel] Seikaly [of DOJ's Executive Office for National Security (EONS) within the Deputy Attorney General's office] or the Deputy [Attorney General Eric Holder] review it."(82) The FBI's Stephen Dillard, who also attended the August 20 meeting, thereupon discussed the FISA denial with OIPR Acting Counsel Schroeder and Deputy Counsel Allan Kornblum.(83)
At or after the August 20 meeting, Seikaly was asked to review the Wen-Ho Lee FISA matter. Seikaly told the Committee that he does not recall who asked him to do this,(84) but when reviewing this Statement prior to its declassification, OIPR's Allan Kornblum "recalled that * * * Mr. Seikaly [told him] that the Attorney General had asked Mr. Seikaly to review the matter."(85) Seikaly met with Kornblum to discuss the FBI's evidence of probable cause; they talked about this matter at least once.(86)
Though he had been asked to undertake a review of OIPR's legal judgment in this enormously important case, Seikaly had no experience with FISA matters and had never worked on a FISA issue before (although national security was his field of expertise). "[T]his was -- in my experience at least, a singular event. I had never done it before or since. * * * I am not a FISA expert."(87) After his consultations with Kornblum, however, Seikaly soon agreed with OIPR that the FBI had failed to demonstrate probable cause.(88) Seikaly apparently did not consult with the FBI.(89)
In late August or early September 1997, Seikaly communicated his decision to the FBI through Allan Kornblum.(90) Though he had apparently been specifically requested to deal with this important matter, Seikaly says he did not report his disposition of this matter to his supervisor, the Deputy Attorney General, or to the Attorney General herself.(91)
The FBI's action in raising the Wen-Ho Lee FISA issue directly with the Attorney General -- as well as the involvement of the Deputy Attorney General's office in adjudicating this intra-Departmental "appeal" -- was apparently unprecedented. Every approval of a FISA surveillance or search request made by OIPR necessarily involves the Attorney General, since her certification is required on the application submitted to the FISC. The denial of a FISA request by OIPR, however -- itself an extremely rare occurrence(92)-- had never before been thus appealed. Similarly, while it was not uncommon for the Deputy's office (though obviously not Seikaly) to become involved in helping assess FISA requests where OIPR recommended approval but the Attorney General still harbored doubts, non-approvals had never before been thus addressed.(93)
Given that the FBI believed that probable cause existed to mount FISA surveillance against Wen-Ho Lee and viewed this espionage case as an extremely important national security matter -- one important enough to provoke the first-ever appeal of a FISA denial within the Justice Department -- it is remarkable that Director Freeh at no point contacted the Attorney General about this issue. As even OIPR's then-Acting Counsel agreed, the vast "significance of the case" was not "lost on any of us."(94) Apart from Lewis' effort to raise the matter with the Attorney General, however, the Bureau was apparently content to take "no" for an answer. It is equally remarkable that no Justice Department official apparently felt that this matter deserved any serious personal attention from the Attorney General.
After Seikaly's decision, the FBI was frustrated that "the FISA review had been turned down again"(95) and discouraged about its ability to mount electronic surveillance against the Lees. Indeed, FBI Director Louis Freeh met with Deputy Energy Secretary Elizabeth Moler to tell her that there was no longer any investigatory reason to keep Lee in place at LANL, and that DOE should feel free to remove him in order to protect against further disclosures of classified information.(96) In October 1997, Freeh delivered the same message to Energy Secretary Frederico Peña that he had given to Moler.(97)
Freeh took this step out of concern that DOE might be using the investigation as an excuse to avoid making necessary security reforms at the nation's nuclear laboratories. An FBI report in April 1997 had identified major security problems at the laboratories, but thus far DOE had taken no action.(98) DOE officials, in fact, were apparently resisting these changes, ostensibly on the ground that they did not wish to interfere with the FBI's "ongoing investigation" by alerting Lee in some fashion. Freeh's messages to senior DOE leadership were intended to help remove the grounds for this excuse and help prompt the Energy Department to take action, though the recent report on security at the DOE laboratories suggests that Freeh's hopes were apparently in vain.(99)
(4) Events in 1998
In the summer of 1998, the FBI endeavored to revive its stalled investigation. The Bureau undertook additional, proactive investigative steps.(100) While not dispositive of Wen-Ho Lee's status as an agent of a foreign power, these additional steps did yield additional information that OIPR attorneys would have considered relevant to a determination of probable cause for FISA surveillance.(101) Nevertheless, the FBI's "Agent A" did not mention the FBI's additional investigative steps to OIPR for four months, and when he did, he failed to recount vital details relevant to a probable cause determination -- details relating to Lee's failure to make full disclosure of a certain significant matter.
Indeed, the FBI's only effort to inform OIPR of the results of these additional investigative steps took the form of an unscheduled meeting that occurred when "Agent A" dropped by Ryan's office at the Department of Justice on December 22, 1998. At this meeting, they briefly reviewed "the prior application and the reasons for its declination," and "Agent A" "advised Dave of the FBI's most recent steps and their results."(102) The "results" that "Agent A" recounted, however, were only the bare fact that the investigative steps had not yielded a positive result. He did not tell Ryan about the additional details relating to Lee's failure to make full disclosure that could have affected OIPR's prior determination.(103)
By this point, officials at OIPR had become aware of additional information bearing upon the W-88 issue at Los Alamos. In November 1998, the National Counterintelligence Center (NCIC) distributed a report assessing the Chinese espionage threat to the Energy Department's laboratories. This report highlighted the efforts of Chinese intelligence to target these Energy facilities and amplified upon many of the issues (e.g., particular aspects of Beijing's intelligence practices) raised in the draft FISA applications prepared by the FBI and OIPR in the summer of 1997.(104) The new head of OIPR, Frances Townsend, received this report in November or December 1998, and she used it to help prepare the Attorney General for a meeting with Energy Secretary William Richardson.(105) OIPR attorney Allan Kornblum also saw the report in or around March 1999.(106)
IV. Events in 1999: Debating Criminal vs. FISA Warrants
A. Polygraphs and Computer Searches
On December 23, 1998, Wen-Ho Lee took a polygraph test administered by a private security contractor working for DOE, the Wackenhut Corporation. After FBI and DOE officials reviewed these results, LANL removed Lee's access to classified information. On February 10, 1999, Wen-Ho Lee was given another polygraph test, this time by the FBI. Specifically, among the questions in this second test were the following: "Have you ever given any of [a particular type of classified computer code related to nuclear weapons testing] to any unauthorized person?" and "Have you ever passed W-88 information to any unauthorized person?"(107) Wen-Ho Lee failed this polygraph test.(108)
On March 6, the New York Times ran its first story about Chinese nuclear espionage at the DOE laboratories.(109) DOE had continued to employ Lee despite Director Freeh's 1997 warning that there was no longer any investigative need to keep him in position and despite the failed polygraph a month before. It was not until March 8, 1999 that the Department actually fired Lee.(110) (Energy Secretary Richardson has said that it was "strictly a coincidence" that this occurred within 48 hours of the first press accounts.(111))
The FBI still lacked FISA authority to mount surveillance upon the Lees, but in March 1999 it asked and obtained Lee's permission to search his office and his office computer.(112) Upon conducting this search, the FBI discovered that Lee had undertaken certain suspicious activities on his office computer.(113)
B. The Final Round of FISA Discussions
Armed with this new information -- the failed polygraph of February 10 and the new discoveries regarding Lee's computer -- the FBI returned to OIPR for a final attempt to obtain FISA authority. At this point, however, the focus of the FBI's efforts was upon searching the Lees' home, and the FBI simultaneously pursued two avenues of approach: (a) the possibility of FISA search authority, and (b) the possibility of a criminal search warrant under Rule 41 of the Federal Rules of Criminal Procedure.
In the first few days of April 1999, a draft Rule 41 criminal search warrant was circulated among prosecutors in both the Criminal Division of the Department of Justice in Washington and the U.S. Attorney's Office in Albuquerque. To the FBI's frustration,(114) the Criminal Division prosecutors concluded that the draft contained an insufficient showing of probable cause to search Lee's residence.(115) This conclusion led the FBI to begin working with an assistant U.S. Attorney in Albuquerque to craft a second affidavit -- as well as to initiate an additional round of FISA discussions with OIPR.(116)
In a conference call with FBI agents from Headquarters and from Albuquerque, prosecutors from the Criminal Division and the U.S. Attorney's Office discussed strategies to bolster the showing of probable cause. Shortly thereafter, the FBI added additional facts to the draft Rule 41 affidavit it had circulated, and this affidavit was reviewed and approved by the Criminal Division and the U.S. Attorney's Office. The revised affidavit was presented to a U.S. Magistrate Judge on April 9, 1999; the Rule 41 criminal search warrant against Wen-Ho Lee was executed without incident the following day.
As noted, however, before the FBI finally went to the District Court for this Rule 41 warrant, it tried once more to persuade OIPR that there was ample reason to obtain a FISA warrant against Wen-Ho and Sylvia Lee. On April 7, FBI officials met with OIPR attorneys to discuss this matter. The FBI recounted the new information about Wen-Ho Lee.(117) As memorialized in notes taken by OIPR's new Deputy Counsel for Intelligence Operations, James Baker -- and in an "action memorandum" to OIPR drafted the next day by the FBI General Counsel's office (though apparently never sent) -- FBI officials also told OIPR that FBI Director Louis Freeh preferred to use FISA authority to search the Lees' house. According to these FBI representations, Freeh was prepared formally to supply the necessary certifications that this search met the requirements of the FISA statute -- that is, that it was being sought for purposes of intelligence collection (e.g., to learn about Lee's alleged contacts with Chinese intelligence).(118) The FBI's General Counsel has confirmed that Director Freeh was indeed "prepared [to make this certification] if we were going to go that route."(119)
At this April 7 meeting, OIPR attorneys raised their old concerns with the "currency" and sufficiency of the evidence against Lee, but also raised two new issues. First, they expressed concern that -- particularly in light of the negative reaction from ISS with regard to the Rule 41 idea -- there might be the "appearance" that FBI was improperly using the FISA process as a proxy for criminal search authority. Second, OIPR expressed concern about the prospect of conducting an unprecedented overt FISA search. Now that Lee had been fired from his Los Alamos job, he and his wife remained at home most of the time -- leaving little opportunity for a clandestine search of their house. A FISA search, therefore, would have to be conducted in broad daylight and with the Lees' knowledge. This had never been done before, and OIPR attorneys expressed serious practical and legal reservations.(120) These issues were not resolved at the April 7 meeting.(121)
Though, as noted above, the FBI did prepare a draft "action memorandum" to OIPR on April 8 requesting FISA search authority for the Lee house, the Bureau did not return to OIPR on this subject and never sent the memorandum. FBI officials have said that this final loss of interest in the FISA route was simply because the Bureau chose to obtain a Rule 41 criminal warrant in Albuquerque -- as indeed occurred on April 9, 1999.(122) The real reason that the FBI filed the Rule 41 warrant affidavit in Albuquerque on April 9 and abandoned its FISA approach, however, may be related to contacts on April 7 or 8 between OIPR Counsel Frances Fragos Townsend and the FBI. According to handwritten notes taken by the FBI's "Agent A," an NSLU attorney was told by NSLU's chief that "the FISA search warrant is not going forward" because "F.F. Townsend called and said it was way too criminal."(123) Townsend has denied saying this specifically to FBI General Counsel Parkinson, but she did admit talking with him about the Lee case and did not specifically deny conveying such a message to his office or to NSLU.(124)
With the issuance of a criminal warrant on April 9 and the search of Lee's house on April 10, the Wen-Ho Lee espionage investigation moved into its criminal phase, which at the time of writing was still ongoing.
Investigation Time Line
Dec 82- FBI's first counterintelligence investigation of Wen-Ho Lee. Although Lee
Mar 84 eventually took a polygraph and the FBI closed the case, Lee was deceptive when first questioned about this contact and admitted passing unclassified information to a foreign government. [see supra pp. 5 & 16-17]
1984-88 Period during which W-88 nuclear warhead information is believed to have been compromised. [see supra p. 4]
Jun 86 Lees traveled to PRC nuclear weapons design laboratory on LANL business. Afterwards, they took additional vacation time in China. [pp. 15]
Jun 88 Lees traveled to PRC nuclear weapons design laboratory on LANL business. Again they took additional vacation time in China. [pp. 15]
Early 90s Lee again came to the attention of the FBI based upon a separate FBI investigative lead. FBI initiated a preliminary investigation of this incident but subsequently opted to fold it into the larger investigation of the W-88 loss. [pp. 6 & 16]
circa 95 CIA acquires information indicating PRC may have information on a variety of US nuclear warheads, including sensitive design information on the W-88. DOE separately was already evaluating independently derived information suggesting the same. [p. 3]
28 Sep 95 DOE opens W-88 administrative inquiry. [p. 4]
28 May 96 W-88 administrative inquiry presented to FBI, which begins full investigation two days later. [p. 6]
4 Nov 96 FBI Albuquerque queried HQ about the possibility of "searching" Lee's computer. [p. 7]
12 Nov 96 LANL advised the FBI that Lee had not registered his computer under a program that would have involved signing a privacy waiver. (It was learned in 1999, however, that Lee had signed some form of waiver in 1995.) [pp. 7-8]
14 Nov 96 FBI HQ advised the Albuquerque field office that a FISA warrant was required if FBI wanted to search Lee's computer. [p. 9]
Apr 97 Nearly five months after determining a FISA warrant would be needed, FBI begins drafting a request for OIPR to make FISA application to the court. [p. 10]
30 Jun 97 FBI makes formal request to OIPR for FISA application. [p. 10]
4 Jul 97 First of three OIPR FISA drafts finished. [p. 11]
12 Aug 97 OIPR advised FBI that the FISA request was inadequate. OIPR's concerns about currency and sufficiency of evidence, and about "matrix" analysis were conveyed to FBI. [pp. 11 & 14-20]
Aug 97 FBI Director Freeh advised DOE Deputy Secretary Moler and Intelligence Chief Trulock that there was no longer any investigative need to keep Lee in place and that he could be moved to a less sensitive post. [p. 23]
20 Aug 97 John Lewis, head of FBI's National Security Division, mentions concern about the denial of the Lee FISA application to Attorney General Reno. [p. 21]
Aug 97 Dan Seikaly of the Executive Office for National Security within the Deputy Attorney General's office was asked to review the OIPR decision. After review, Seikaly concurred with OIPR's decision in late August or early September. [pp. 21-22]
Summer 98 FBI undertakes additional investigative steps that do not yield dispositive results. [p. 25]
22 Dec 98 FBI's "Agent A" first informs OIPR Attorney Dave Ryan of additional investigative steps. Ryan not informed of all details. No further action taken. [p. 25]
23 Dec 98 Lee took polygraph administered by DOE contractor. [p. 26]
23 Dec 98 Lee is moved by LANL to position without access to classified information, a step FBI Director Freeh had said could be taken in August 1997. [p. 26]
early 99 FBI begins preliminary inquiries into other suspects as urged by OIPR in 1997. [p. 19]
10 Feb 99 Lee took an FBI polygraph on questions related to espionage. [p. 26]
6 Mar 99 New York Times published article detailing alleged theft of nuclear secrets from LANL. [p. 26]
8 Mar 99 Wen-Ho Lee fired by DOE, more than 18 months after FBI first told DOE that there was no longer any investigative reason to allow the espionage suspect to remain in place. [p. 26]
March 99 Lee consented to FBI search of office and computer. [p. 27]
Apr 99 FBI begins discussing Rule 41 criminal search warrant with DOJ's Criminal Division. [pp. 27-28]
7-8 Apr 99 FBI staff informally raised question of seeking FISA warrant with OIPR staff. FBI drafted, but did not transmit formal request to OIPR. [pp. 28-29]
9 Apr 99 FBI obtained criminal warrant to search Lee's house. Search conducted next day. [p. 28]
1. Prior to its release in unclassified form, this document was reviewed by the Department of Justice and the Department of Energy in order to ensure compliance with applicable laws and regulations regarding the disclosure of classified information and in order to prevent the compromise of ongoing criminal investigations.
2. 2 See "Key Findings," Intelligence Community Damage Assessment on the Implications of China's Acquisition of U.S. Nuclear Weapons Information on the Development of Future Chinese Weapons, unclassified version (April 21, 1999), at 1.
3. 3 See Representative Christopher Cox, testimony before the Senate Subcommittee on International Security, Proliferation and Federal Services of the Governmental Affairs Committee (May 26, 1999) (summarizing unanimous conclusion of House Select Committee that "[t]he People's Republic of China has stolen information on seven thermonuclear warheads," including the W-88); President's Foreign Intelligence Advisory Board, Science at its Best, Security at its Worst (June 1999) (unclassified version) [hereinafter PFIAB], at 30-31; Neil Gallagher, testimony before the Senate Governmental Affairs Committee (May 20, 1999) [hereinafter "GAC I transcript"], at 4; Neil Gallagher, testimony before the Senate Governmental Affairs Committee (June 9, 1999) [hereinafter "GAC II transcript"], at 16; Notra Trulock, GAC II transcript, at 64; see also former Deputy Energy Secretary Charles Curtis, testimony before the Senate Armed Services Committee (April 12, 1999) (recounting that "[t]he first indication that there may have been acquired the national--security information with respect to a particular weapons system began to develop in 1995.").
4. See PFIAB, at 31 ("[O]nly one investigation was initiated. That investigation focused on only one warhead, the W-88, only one category of potential sources [of loss] -- bomb designers at the national labs -- and on only a four-year window of opportunity.").
5. 5 Trulock, GAC II transcript, at 65; Charles Curtis, testimony before the Senate Armed Services Committee (April 12, 1999) (noting "a judgment reached by the analytic group" of DOE and CIA experts in November 1995 regarding the security breach).
6. 6 See, e.g., PFIAB, at 31; Neil Gallagher, GAC I transcript, at 4; see also Notra Trulock, testimony before the Senate Armed Services Committee (April 12, 1999) ("[B]eginning in November of 1995, * * * the Department of Energy [initiated] an administrative inquiry in order to identify the potential source of the problems that we had identified."); Charles Curtis, testimony before the Senate Armed Services Committee (April 12, 1999) (recounting that after experts decided that compromise had occurred, DOE initiated administrative inquiry "to determine [the] means and methods and source of" the loss).
7. 7 See, e.g., Gallagher, GAC I transcript, at 6; see also Charles Curtis, testimony before the Senate Armed Services Committee (April 12, 1999) ("[W]e are considering before the committee information that pertains to the acquisition of nuclear secrets with respect to one particular weapon system, an acquisition that * * * is estimated to have occurred in a period of time bracketed, I believe, in 1984 to 1988. * * * It is that espionage that Paul Redmond refers to as an espionage of perhaps greater national security import to this country than the Rosenberg or the Fuchs espionage.").
8. 8 See, e.g., Secretary of Energy William Richardson, appearing on CNN Crossfire (March 16, 1999) (responding "Yes" when asked whether "we know for a fact that the[se] missile technology secrets came from the Los Alamos nuclear lab").
9. PFIAB, at 31; see also Robert Vrooman, GAC II transcript at 62-63 (questioning whether other laboratories, e.g., Lawrence Livermore National Laboratory [LLNL], had been adequately ruled out). Indeed, according to DOE intelligence chief Notra Trulock, "there was [W-88] information at DOD facilities and DOD contractor facilities." Trulock remembered that it had been intended that the FBI pursue the investigation at such Defense Department facilities at the same time as DOE pursued it at the nuclear weapons laboratories. Trulock, GAC II transcript, at 66. This, however, never occurred. Today, FBI officials say that they have "no knowledge of any request made of the FBI where the FBI, separate and apart from this administrative inquiry * * * [was] to conduct [a] review." Gallagher, GAC II transcript, at 67; see also id. at 78.
10. 10 Gallagher, GAC I transcript, at 8; see also generally GAC II transcript, at 71-72.
11. See GAC II transcript, at 70-72. For one, former LANL security official Robert Vrooman disputes the numbers -- and has voiced serious concerns about the strength of the "matrix" analysis in ruling out other suspects and laboratories -- but there is dispute over whether he made his concerns known at the time. According to Vrooman, the DOE inquiry neglected to consider as suspects certain other individuals (and laboratories) from which the loss of this specific W-88 information could have occurred. See GAC II transcript, at 73-89.
12. 12 Gallagher, GAC I transcript, at 9-11. Although Lee eventually took a polygraph in the 1982-84 case and the FBI closed that case, Lee had been deceptive when first questioned. Lee acknowledged passing unclassified information to a foreign government. (This incident is discussed further below.)
13. 13 Gallagher, GAC I transcript, at 5; "Agent A," GAC II transcript, at 104; Gallagher, GAC II transcript, at 7; see also Charles Curtis, testimony before the Senate Armed Services Committee (April 12, 1999) ("The matter [was] turned over [to] the FBI, I do believe, in May of '96."); Notra Trulock, testimony before the Senate Armed Services Committee (April 12, 1999) ("We completed this inquiry with the assistance of the FBI in the spring of 1996, and we formally transmitted the results of our inquiry to the FBI in early summer of 1996, and at that point, the FBI initiated a full-field investigation.")
14. 14 When the FBI had learned on or shortly after October 31, 1995 that DOE was looking into Lee in connection with the W-88 matter, however, it had suspended its inquiry into the separate FBI lead pending the outcome of the DOE inquiry. This suspension -- which occurred on November 2, 1995 -- was undertaken in order to avoid interfering with the Wen-Ho Lee inquiry. Gallagher, GAC II transcript, at 7-12.
15. "Agent D" was later replaced by another special agent, who has in turn since been replaced.
16. 16 See Terry Craig, GAC II transcript, at 18-20; "Agent D," GAC II transcript, at 20-21, 35, & 37-38.
17. Memorandum from "Agent D" to "Agent A" (November 5, 1996), at 2.
18. 18 See, e.g., id. at 2; "Agent D," GAC II transcript, at 38-41.
19. 19 Craig, GAC II transcript, at 18-21.
20. 20 R. Gary Lee, GAC II transcript, at 25-26 & 30; GAC staff telephone conversation with Associate Deputy Attorney General Craig Iscoe (May 14, 1999).
21. 21 Craig, GAC II transcript, at 23.
22. Even if the waiver did authorize LANL officials to search his computer, it is unclear whether under governing Supreme Court case law it would have been sufficient to allow the FBI access for law enforcement purposes.
23. 23 See Gallagher, GAC II transcript, at 47.
24. See infra note 113.
25. 25 See, e.g., Gerald Schroeder, GAC I transcript, at 152-53 (noting that if Lee's actual computer activity were known in 1997, "I think it's a fairly safe bet this one very much would have gone forward.").
26. 26 "Agent D," GAC II transcript, at 41; see also id. at 54 & 56; Larry Parkinson, GAC II transcript, at 55 (recounting that there is no evidence that the three documents were ever sent to FBI headquarters).
27. 27 Cf. "Agent D," GAC II transcript, at 45 (noting that the FISA legal determination would have been made at FBI headquarters, and that it was the duty of the field office in Albuquerque to provide NSLU with the information necessary to make this decision).
28. 28 Craig, GAC II transcript, at 17 & 35.
29. 29 Id. at 41-43 & 58.
30. 30 See GAC II transcript, at 18-20, 24, & 28 (testimony of Terry Craig and R. Gary Lee).
31. 31 See Craig, GAC II transcript, at 19; GAC staff telephone conversation with Craig Iscoe (May 14, 1999).
32. 32 Craig, GAC II transcript, at 23.
33. 33 See "Agent A," GAC II transcript, at 46 (identifying specific NSLU line attorney as having made decision).
34. 34 See GAC II transcript, at 56-58; GAC staff telephone conversation with Craig Iscoe (May 14, 1999).
35. 35 Gallagher, GAC II transcript, at 48-49.
36. 36 "Agent A," GAC II transcript, at 105-06.
37. 37 FBI officials acknowledge this to have been an oversight, but they insist that "it was an oversight that would have been rectified very quickly if we had gotten the probable cause approved through [the] Department of Justice." Gallagher, GAC I transcript, at 30. Allan Kornblum from the Department of Justice agrees, noting that if probable cause had been established, the Bureau could have easily added any other type of surveillance it wished. Kornblum, GAC II transcript, at 191.
38. 38 Kornblum, GAC II transcript, at 115-16.
39. 39 See, e.g., id. at 116-17; "Agent A," GAC II transcript, at 106.
40. Kornblum, GAC II transcript, at 117.
41. Id. at 118-19.
42. 42 See GAC II transcript, at 118 (testimony of Ryan and Kornblum); "Agent A," GAC II transcript, at 120-21.
43. Kornblum, GAC II Transcript 119.
44. 44 50 U.S.C. § 1801(i).
45. 45 Id. at § 1805(a)(3)(A).
46. 46 During wartime, however, or when "an emergency situation exists," the President -- through the Attorney General -- may authorize surveillance with far fewer restrictions. See id. at §§ 1811 (authorization during time of war) & 1805(e) (emergency provisions).
47. 47 Id. at § 1801(b)(2).
48. 48 Illinois v. Gates, 462 US. 213, 232 (1983).
49. 49 Brinegar v. United States, 338 U.S. 160, 175 (1949).
50. Parkinson, GAC II transcript, at 183-85.
51. 51 United States v. United States District Court, 407 U.S. 297, 322-23 (1972).
52. 52 Unless otherwise specified, all items in this list are discussed generally at GAC I transcript, at 87-96.
53. 53 See also former Energy Department Office of Intelligence Deputy Director E. Bloodsworth, testimony before the Senate Armed Services Committee (April 12, 1999) ("In the Chinese case, however * * * most of the Chinese people that we're concerned about are coming from the academies, not from the [Ministry of State Security, the PRC's civilian intelligence agency].").
54. "Draft #3" FISA application (undated), in Office of Senate Security Document 1999-1920, at 92.
55. The evidence compiled focused upon Wen-Ho Lee and his wife Sylvia together. He had access to the relevant weapons data, while she had access both to him and to visiting Chinese delegations.
56. The information gathered by the FBI did not indicate, however, whether the Lees' 1986 and 1988 trips to the PRC had been undertaken on the initiative of LANL or the Chinese government.
57. 57 "Agent A," GAC II transcript, at 123-24. Hydrodynamic calculations are useful for helping model nuclear explosions.
58. 58 See Gallagher, GAC I transcript, at 53. The FBI subsequently concluded that the graduate student was not a PRC agent.
59. 59 Gallagher, GAC II transcript, at 109.
60. See GAC II transcript, at 214-15 & 218-19.
61. For a classified discussion of this matter, see Gallagher, GAC I transcript, at 12-14.
62. "Draft #3" draft OIPR FISA application (undated) [Office of Senate Security Document 1999-1264, at 44].
63. 63 "Agent B", GAC I transcript, at 33; see also Stephen Dillard, GAC I transcript, at 50-51 (summarizing OIPR objections with regard to "the probable cause issue and the staleness issue").
64. Kornblum, GAC II transcript, at 185.
65. 65 See generally "Agent B," GAC I transcript, at 33; Kornblum, GAC II transcript, at 185-87. Ironically, although FBI officials have told the Committee that the LANL files of the other suspects were indeed reviewed as part of the initial DOE inquiry -- and that none of these files contained security incidents analogous to Wen-Ho Lee's -- this information was apparently never conveyed to OIPR. See FBI NSD Section Chief Charles Middleton, GAC staff interview (June 30, 1999).
66. Kornblum, GAC II transcript, at 188.
67. 67 Janet Reno, quoted in "Reno reproves Justice, FBI officials for handling of wiretap dispute," The Baltimore Sun (May 29, 1999).
68. GAC II transcript 192.
69. GAC II transcript 192.
70. See Gallagher, GAC I transcript, at 99-100 ("[W]e are [looking into the others.] And we've been able to very quickly eliminate some of [them]. We're going out, because the whole world knows of our investigation, and doing direct interviews with them."); Charles Middleton, interview with GAC staff (June 30, 1999) (confirming that inquiries into the other suspects did not begin until 1999).
71. "Agent A," GAC II transcript, at 191-92; see also Gallagher; GAC I transcript, at 99-100.
72. GAC II transcript, at 193.
73. 73 See, e.g., GAC I transcript, at 134-35 (testimony of Baker and Kornblum).
74. Schroeder, GAC II transcript, at 204-05.
75. 75 Schroeder, GAC I transcript, at 157.
76. The reason for this haste was the FBI's interest in obtaining authority to monitor Lee's contacts with the graduate student with whom he had intended to work on Lagrangian codes. See "Agent A," GAC II transcript, at 105-06.
77. John Lewis, Memorandum to Louis Freeh (August 14, 1997) [Office of Senate Security Document 1999-1264, at 51-52].
78. 78 See Lewis, GAC I transcript, at 36-37. Furthermore, FBI Director Louis Freeh is on record as having said that he believes that there was probable cause to support the FISA warrant request against Wen-Ho Lee. Louis Freeh, Federal News Service (June 7, 1999) (responding "Yeah" when asked whether he believes probable cause existed). Though he did not use the phrase "probable cause," Energy Secretary Richardson has also stated that he believes there are strong reasons to suspect Wen-Ho Lee of the W-88 espionage. In March 1999, Secretary Richardson was asked whether "we know for a fact that Mr. Wen Ho Lee is or was a spy for China." He responded that "we know he's a suspect * * * [and] there's [sic] some very strong suspicions." CNN Crossfire (March 16, 1999).
Interestingly, the President's Foreign Intelligence Advisory Board has also lent support to the FBI's view. The Board has said of the W-88 case that "we do believe the Department of Justice may be applying the FISA in a manner that is too restrictive, particularly in light of the evolution of a very sophisticated counterintelligence threat and the ongoing revolution in information systems." PFIAB, at 35. In a joint hearing before the Senate Energy, Governmental Affairs, Intelligence, and Armed Services committees, PFIAB Chairman Warren Rudman called OIPR's reading of the FISA statute "one of the most baffling" parts of the W-88 story. Warren Rudman, testimony before joint hearing by the Senate Energy, Armed Services, Select Intelligence, and Governmental Affairs Committees (June 22, 1999).
79. 79 Gallagher, GAC I transcript, at 32.
80. 80 John Lewis, GAC I transcript, at 38.
81. GAC staff telephone conversation with Craig Iscoe (May 14, 1999).
82. 82 Lewis, GAC I transcript, at 49.
83. 83 Stephen Dillard, GAC I transcript, at 50.
84. 84 Seikaly, GAC I transcript, at 113-14. Though Lewis' request was made directly to the Attorney General, it is not clear who requested Seikaly's involvement. The Deputy Attorney General does not recall having any involvement in the matter. This Week (May 2, 1999).
85. Acting Assistant Attorney General Jon Jennings, letter to Christopher Ford and Laurie Rubenstein (August 3, 1999).
86. 86 As Kornblum recalls, "he and Mr. Seikaly only met once to discuss the matter." Acting Assistant Attorney General Jon Jennings, letter to Christopher Ford and Laurie Rubenstein (August 3, 1999), at 2; but see GAC I transcript, at 115 & 118-19 (suggesting possibility of second meeting); see also id. at 116 (noting that he understood his job to be to review the adequacy of the FBI's showing of probable cause).
87. 87 GAC I transcript, at 114 & 118.
88. 88 Id. at 118.
89. See id. at 114-20 (Seikaly recounting his actions).
90. 90 Acting Assistant Attorney General Jon Jennings, letter to Christopher Ford and Laurie Rubenstein (August 3, 1999); cf. Janet Reno, quoted in "Reno reproves Justice, FBI officials for handling of wiretap dispute," The Baltimore Sun (May 29, 1999) (describing Lewis' request for reevaluation of the Wen-Ho Lee FISA request and Seikaly's role in process).
91. 91 Seikaly, GAC I transcript, at 163.
92. 92 OIPR attorneys have told the Committee that they do not keep statistics that would indicate the proportion of cases in which it has refused an agency's request for FISA authority, see James Baker, GAC I transcript, at 171, but the number of such denials is apparently "very, very low," John Lewis, GAC I transcript, at 59. OIPR officials testifying before the Committee disagreed about the proportion of OIPR refusals. Compare Kornblum, GAC I transcript, at 173-74 (claiming that perhaps between 6 and 10 out of 60 FISA requests for surveillance of U.S. persons are turned away) with Schroeder, id. at 174-75 (saying that he "would never agree" with this figure, and emphasizing that during his 8½ month tenure as OIPR's acting counsel only one such refusal occurred: in the Wen-Ho Lee case). As the FBI's General Counsel put it, "I think this case is an aberration in terms of being turned down * * *." Parkinson, GAC II transcript, at 197. Prior to this case, the FBI had apparently never had any particular problems in obtaining FISA authority even for surveillance on a U.S. person. Id. at 198-99. (Nor has the FISA court been any more stringent: out of a total caseload of perhaps 800 FISA applications each year, the FISC has never turned down even one case for lack of probable cause -- though it has sometimes requested more factual development prior to approval. See James Baker, GAC I transcript, at 132 & 172.)
93. 93 See generally, e.g., Kornblum, GAC I transcript, at 118.
94. 94 Schroeder, GAC I transcript, at 121.
95. 95 Dillard, GAC I transcript, at 54.
96. 96 Gallagher, GAC I transcript, at 62; Trulock, GAC II transcript, at 210.
97. 97 See Elizabeth Moler, testimony before the Senate Armed Services Committee (April 12, 1999) (recounting meetings in August and October 1997 at which "Mr. Freeh expressed an opinion that a particular investigation was not going anywhere at that time" and that as far "as the FBI was concerned, the department was no longer obligated * * * to keep that particular individual in his current job"); see also Notra Trulock, testimony before the Senate Armed Services Committee (April 12, 1999) ("Twice in 1997 the director of the FBI urged DOE senior officials, including Secretary Pena and Deputy Secretary Moler, that FBI investigations should not prevent DOE from taking immediate action to protect sensitive information at the laboratories."). Trulock evidently shared FBI Director Freeh's assessment, see supra, that these warning should have prompted immediate action. See id. ("And yet for another 14 months after these warnings, [Lee] continued to retain [his] clearance and access.").
98. 98 At the request of the Senate Select Committee on Intelligence (SSCI), the FBI had issued a report on the system of counterintelligence (CI) safeguards at the DOE weapons labs. This report found the CI system woefully inadequate, and recommended a number of changes.
99. 99 As the FBI Director later put it, "[t]he vulnerability of the laboratories should have been addressed in 1998. At that point, there was enough information, not very different from some of the information [available] today." Louis Freeh, ABC World News This Morning (March 29, 1999).
100. See GAC I transcript, at 65; GAC II transcript, at 135-39.
101. 101 See Frances Townsend, interview with GAC staff (June 4, 1999).
102. 102 "Agent A," GAC II transcript, at 141.
103. 103 See generally Ryan, GAC II transcript, at 142-43; cf. id. at 143 ("Agent A" agreeing with statement that "that was a bad move on your part, wouldn't you agree?").
104. See generally GAC II transcript, at 219-28.
105. Id. at 225-27.
106. Id. at 227.
107. 107 Gallagher, GAC II transcript, at 145-46.
108. According to the Secretary of Energy, DOE "instituted a polygraph on this individual, which he first passed." Thereafter, "we [sic] gave him another [polygraph], and he failed it." William Richardson, CNN Crossfire (March 16, 1999); see also William Richardson, 60 Minutes (August 1, 1999) (describing Lee as having failed polygraph test). According to Secretary Richardson, Lee "was improperly using security procedures, because he was talking to individuals from sensitive countries without reporting." Id; see also William Richardson, The Buffalo News (March 10, 1999) ("We fired him because he had misused security. * * * He had improper contact with foreign officials and he had violated a number of security measures.").
109. James Risen & Jeff Gerth, "China Stole Nuclear Secrets from Los Alamos, U.S. Officials Say," New York Times (March 6, 1999).
110. James Risen, "U.S. Fires Nuclear Scientist Suspected of Spying for China," New York Times (March 9, 1999).
111. 111 William Richardson, CNN Crossfire (March 16, 1999).
112. Gallagher, GAC II transcript, at 146.
113. 113 According to Energy Secretary Richardson, Lee engaged in a "computer transfer" in which he "improperly moved [information] from classified to unclassified" systems. William Richardson, National Public Radio (April 29, 1999); see also William Richardson, 60 Minutes (August 1, 1999) (recounting that Lee improperly transferred nuclear weapons information from a classified to an unclassified computer system in violation of DOE security rules).
114. See Parkinson, GAC II transcript, at 156 ("We were a little frustrated that we weren't making more progress * * *.").
115. Gallagher, GAC II transcript, at 151 ("We were initially told by the Criminal Division at Department of Justice it was lacking."); see also Parkinson, GAC II transcript, at 153 ("[W]e had had some preliminary discussions with the Criminal Division that were not particular[ly] productive.").
116. Gallagher, GAC II transcript, at 151 (recounting that after Criminal Division told FBI that draft affidavit was "lacking," "[w]e tried the FISA track, at least to sit down and talk. At the same time we were crafting a second affidavit, using an attorney from the FBI, with an attorney from the U.S. Attorney's office, and very quickly we were able to produce an affidavit.")
117. 117 See Baker, GAC II transcript, at 154.
118. 118 See generally GAC II transcript, at 157 & 159-64.
119. 119 Parkinson, GAC II transcript, at 179.
120. 120 See generally, GAC II transcript, at 148-49, 155-56 & 164-66.
121. 121 Kornblum, GAC II transcript, at 168.
122. 122 See, e.g., Gallagher, GAC II transcript, at 169.
123. 123 See Handwritten notes (April 4, 1999); "Agent A," GAC II transcript, at 171. (The word "too" was misspelled in the original notes.)