Report Assails Botched Probe of Lee Spy Case

Federal authorities in the Wen Ho Lee espionage case “investigated the wrong crime” for nearly three years and zeroed in too aggressively on the Los Alamos nuclear scientist as the prime suspect, according to a government report released Monday.

Investigators ignored evidence that might have led them in other directions, mischaracterized their findings and relied on scientific analysts with suspect credentials, the long-awaited Justice Department review found.

The startling collection of gaffes means that investigators may never know how--or even whether--the Chinese government stole technology on the design of U.S. nuclear warheads, the heavily censored report suggests.

The report, offering a host of new details about a probe that led to Lee’s controversial nine-month-long incarceration, amounts to the Justice Department’s strongest acknowledgment yet of just how badly officials botched the investigation.

But the report rejects one of the central claims from Lee’s supporters--that he was unfairly branded a spy because he is Asian American.

A 1995 Energy Department plan for probing possible nuclear breaches did in fact say that “an initial consideration will be to identify those U.S. citizens, of Chinese heritage, who worked directly or peripherally with the [nuclear warhead] design development,” the report reveals.

Even so, Assistant U.S. Atty. Randy Bellows, who wrote the report last year at the request of then-Atty. Gen. Janet Reno, said there is “no evidence of racial bias” in the Lee investigation.

The plan to “identify” Chinese Americans was never carried out, Bellows said. Moreover, the memo “was simply acknowledging the fact that [China] specifically targets ethnic Chinese for espionage purposes,” a viewpoint backed up by veteran counterintelligence agents, he added.

The Lee investigation “had many serious problems. Racism was not among them,” the report concludes.

The finding troubled some of Lee’s supporters, who pointed out that Bellows’ report was completed before sworn declarations from two Energy Department officials who said Lee was targeted partly because of his race.

But overall, Lee’s backers were pleased with the report.

“We’ve said from the beginning of this investigation that the government should not have focused on Dr. Lee as an espionage suspect, and this report appears to support our concerns,” said Mark Holscher, Lee’s defense attorney.

Fired from the Los Alamos National Laboratory in 1999, Lee was under investigation for more than three years for allegedly passing nuclear secrets to the Chinese. But the case against Lee collapsed last September when the Taiwanese-born scientist was allowed to plead guilty to a single felony charge of mishandling nuclear secrets, as prosecutors dropped 58 other counts.

Even now, nearly a year later, the case continues to resonate.

Lee is preparing to publish a book about his experience, which Energy Department censors now are reviewing to determine whether it reveals any nuclear secrets. An Energy Department official accused of racism in the investigation is bringing a defamation suit against Lee.

And the report sparked a new round of recriminations Monday from leaders in Congress who are pushing for widespread reforms at the FBI because of the Lee case and other agency blunders. Sen. Patrick J. Leahy (D-Vt.), chairman of the Judiciary Committee, said the report “paints the picture of a wayward investigation that was flawed from inception.”

Both the FBI and the Energy Department are blasted for their handling of the Lee matter in Bellows’ 184-page report, a top-secret review that was prepared in early 2000 but was released publicly in redacted form Monday only by order of a judge in the defamation suit against Lee.

Portions of the review are heavily blacked out on national security and privacy grounds, leaving many unanswered questions. It is part of a much longer report from Bellows that Justice Department officials promised to release publicly last year. The longer version is still weeks or months away from release, as Justice Department officials continue to black out extensive portions.

Officials at the Energy Department and the FBI declined to discuss specific accusations in the report but noted that they already have taken steps to improve national security operations in light of concerns raised by the Lee case.

The Bellows report found that one of the early and critical missteps in the Lee case came in 1995, after an Energy Department working group examined how the Chinese had gained sensitive W-88 nuclear warhead technology.

While the working group identified a range of options, its findings were mischaracterized in follow-up reports and were never passed on to the FBI as it began examining possible suspects, the report says.

The final version of a later Energy Department review concluded that Lee, who had visited China, was “the only individual identified during this inquiry who had the opportunity, motivation and LEGITIMATE access” to pass the nuclear technology along to the Chinese. But Bellows’ report says that “even a cursory investigation” by the FBI would have revealed how “woefully inadequate” the Energy Department’s internal review had been.

The report suggests that investigators ignored a range of other possibilities, including that the Chinese developed the technology on their own or that defense contractors or Energy Department employees outside the Los Alamos lab were responsible for the breach.

By mischaracterizing what it had found, the Energy Department “compromised and undermined the FBI’s own investigative efforts. This is not to say that Wen Ho Lee did not warrant investigation. . . . He did.

“Rather, it is to say that the mischaracterization of the [foundation of the Energy Department review] caused the FBI to ignore and exclude numerous other possible subjects and numerous other possible venues” for leaks, the report says.

Investigators failed to search numerous laboratory vaults containing hundreds of thousands of pages of potentially useful documents, the report found.

They relied on analysts whom they thought to be “scientific experts” but who in fact lacked fundamental knowledge about nuclear warheads.

And they suffered a “terrible misunderstanding” during one interview that led them to erroneously exclude an entire lab, apparently Lawrence Livermore, from suspicion as a possible source of the technology breach.

The result was that “from May 30, 1996, until early 1999, the FBI investigated the wrong crime” as it failed to challenge the Energy Department’s erroneous assumptions about the case, the report says.

Energy Department investigators did not begin their initial probe looking to prove that Lee was a spy, but that suspicion became a “self-fulfilling prophecy,” the report says.

“Given [the review’s] slap-dash quality, its flawed rationales, its complete mischaracterization of the predicate, and its queer mash of intense review of some pertinent records and complete ignorance of other venues of [security] compromise, once Wen Ho Lee was ‘tagged’ with the patina of suspicion, the [review] was all but over. He would be ‘it.’ ”

There may be no way of knowing just how badly the misdirected investigations hurt the effort to plug U.S. national security leaks, the report suggests. “Had either the FBI or DOE done what it should have done, the FBI could have been investigating in the year 1996 what it is now investigating in the year 2000,” the report says.