Lab Woes Give New Ammo to Critics of UC

For 60 years, since the atomic bomb was first conceived and built at Los Alamos National Laboratory in the high desert of New Mexico, the University of California has had a lock on the federal contract to run the nuclear weapons research center.

The two institutions have been so closely linked, their histories so intertwined, that the contract to manage Los Alamos, with an annual budget of $1.7 billion, has never been put up for bid -- and the university has vowed never to compete for it.

Now, however, with strong evidence of financial fraud and other problems at the lab, UC’s management and business practices are under withering attack from the Energy Department, members of Congress and outside critics.

Some say the university’s grip on the prestigious contract to run Los Alamos -- along with its sister nuclear weapons facility, Lawrence Livermore National Laboratory, and the Lawrence Berkeley energy research lab -- is no longer assured.

“It may very well be that the only way to solve the problems is to put [the contract] up for bid,” said Rep. James Greenwood, a Pennsylvania Republican who heads a congressional subcommittee investigating the lab. Pledging tougher oversight, he said the university will now “be judged not only on the bombs they build, but on their accounting and management of the lab.”

An Energy Department report released Jan. 30 provided powerful ammunition to UC’s critics. The investigation by the department’s Office of Inspector General confirmed allegations of financial problems, including the theft or loss of at least $1.5 million in government property. Perhaps more damaging, the report cited weak internal controls and a culture that valued loyalty to Los Alamos and the university above honesty.

The report also corroborated allegations by two whistle-blowing investigators who were hired to look into the fraud reports, then fired when they spoke out about what they found. After the pair, Glenn Walp and Steven Doran, complained of a cover-up, they were rehired as consultants by UC to help with the expanding investigations.

UC supporters argue that the university has provided effective leadership for decades on one of America’s most challenging national security missions. They cite the potential risks of a management shift, including an exodus of top scientists, and say it makes sense for the nation’s most highly regarded public university system to manage the labs that are among the country’s most critical security assets.

“The University of California has a 60-year history of providing effective stewardship and superior science at Los Alamos and its sister institutions,” UC President Richard C. Atkinson said last month. “The university’s commitment to serving the nation’s security interests is unwavering.”

Pulling the contract for all three labs would cost UC up to $25 million in fees -- nearly $9 million from Los Alamos alone. But the more significant blow would be to the university’s prestige. Directors of both the Los Alamos and Livermore labs say such a move would also be unwise.

“In some ways, you can argue that we need UC more than ever,” said Michael Anastasio, director of Livermore, near Oakland. “We need access to the very best scientists and technologists this country has available.”

George Nanos, interim director of Los Alamos, added that although the lab’s faulty business practices are under scrutiny, the heart of the lab’s mission -- performance of scientific research -- has not been questioned.

Still, some experts question whether any educational institution is suited to run the labs.

Harold Smith, a former assistant secretary of defense for atomic weapons, said university faculties tend to view management as a secondary responsibility.

“A company would be more concerned with doing a good job,” said Smith, a distinguished visiting scholar at UC Berkeley.

He pointed to Sandia National Laboratory in Albuquerque, a nuclear weapons engineering facility run by Lockheed Martin Corp. The company has held the publicly bid contract for Sandia since 1993 and is generally considered to have a better performance record than UC, he said.

UC’s operation of the weapons laboratories dates to the Manhattan Project, the secret World War II program to develop the first atomic bomb. Although the Army Corps of Engineers essentially directed the program, senior scientists involved insisted that a university system formally control management, reflecting the scientists’ uneasy relationship with the military.

With development of the hydrogen bomb and, later, miniature nuclear devices, the need for university research remained crucial. In fact, weapons experts say, top researchers are needed now more than ever to handle the nation’s aging nuclear stockpile. But evidence suggests that UC business practices have not kept pace with increased demands for accountability.

Meanwhile, over the years, private corporations -- and many other universities -- lost interest in participating in the nation’s defense programs. By the 1980s, many blue-chip corporations were dissatisfied with the profits and political controversies that came with the job. The exodus hit hard at the Energy Department, which saw AT&T;, DuPont and Westinghouse Electric exit their contracts to run nuclear weapons plants.

Through all this, UC’s labs remained the most critical and most stable part of the nation’s nuclear weapons system.

The federal government spends about $3.7 billion a year on operations, staff and equipment for the three labs. But with UC’s contract, and the billions of dollars in equipment, comes the responsibility to manage the labs well, said Sidney Drell, a Stanford University professor serving on a UC committee addressing the problems at the labs. “These are not private toys for the universities.”

UC, however, has come in for periodic criticism over the years -- in Congress and elsewhere -- from those who say it operates its nuclear weapons facilities almost the way it does its campuses, treating them largely as autonomous entities capable of running themselves.

“The university comes into the loop when there’s a new lab director to be appointed, or when there’s trouble,” said Frank von Hippel, a co-director of Princeton University’s program on science and global security who has served on external review committees at Los Alamos. “Aside from that, they collect their fee and don’t interfere.”

Smith, the former assistant defense secretary, said the current woes cap a history of management problems at the labs. The financial fraud at Los Alamos may be “the straw that broke the back, but it is not an issue that is worthy by itself’” of stripping UC of the contract, he said.

In recent years, the reputation of Los Alamos has been sullied by a string of security lapses, including scientist Wen Ho Lee’s 1999 indictment on a security violation and the mysterious disappearance in 2000 of two classified computer hard drives. The drives later turned up behind a copy machine. Lee, who was accused of leaking nuclear secrets to China, eventually pleaded guilty to a single count of mishandling nuclear data, and prosecutors dismissed 58 other counts against him.

The university was also hit last year with criticism from Energy Secretary Spencer Abraham and Congress for its decision to appoint Ray Juzaitis, a former Los Alamos supervisor of Lee, as director of Livermore. Although Juzaitis was found to have had little to do with the Lee affair, the university was knocked for what appeared to be a politically insensitive appointment. Juzaitis eventually took himself out of the running.

Richard L. Garwin, a physicist and longtime chairman of the State Department’s arms control and nonproliferation advisory board, said the Juzaitis incident and the current scandal reflect the university’s historically lax approach to lab leadership.

“They need to take seriously their responsibilities, especially about the selection of the top managers at the labs,” said Garwin, a senior fellow at the Council on Foreign Relations who nonetheless believes UC should continue to run the labs. “I don’t think they’ve done that over the years. They’ve been too hands-off.”

A former top Pentagon official, who spoke on condition of anonymity, said the university’s management system at the labs is cumbersome. Writing memos at times has superseded exercising leadership, he said.

“The culture is so bureaucratic and Balkanized, it is very hard to manage,” he said. “It is a real mess, a shame. It is a national resource that is atrophying.”

The Energy Department also has come in for its share of criticism and three years ago, after the Lee scandal, formed the semi-autonomous National Nuclear Security Administration to strengthen its oversight.

But now criticism of the labs has reached a new level.

Energy Secretary Abraham has said the financial irregularities and whistle-blower dismissals have called into question UC’s ability to run them.

UC advocates are alarmed that an end to the university’s historic role at the labs is even being contemplated.

“It is crucial to bring the best and brightest talent to bear on weapons stewardship,” said Sig Hecker, former director of Los Alamos. “That depends on a university, and why not the best? Why not one that has demonstrated its capacity over the last 60 years? UC is the best.”

But watchdog groups and others welcome the opportunity to question the role of UC in weapons research.

“They’ve had this contract for life with no sense of real accountability,” said Danielle Brian, executive director of the Project on Government Oversight, a nonprofit watchdog group that has disclosed many of the lab’s troubles.

“When we talk to whistle-blowers at the lab, they say there’s a sense there of, ‘We can do no wrong.’ ”

Michael Smith, 23, a UC Berkeley philosophy major who is a member of an antiwar group, hopes the recent troubles will lead to substantial change.

“I would love it if my university could stop making nuclear weapons,” he said.

But Smith said he would prefer that UC give up the contract voluntarily.

“I’m not thrilled that we are at risk of losing it because of incompetence,” he said.

“I am never thrilled at incompetence, especially when it comes to nuclear weapons.”

*

Times staff writer Akilah Johnson contributed to this report.