Energy Failure

0 Comments | Insight on the News, July 17, 2000 | by Sean Paige

In the wake of the probe, Morrison Knudsen, the parent company of Westinghouse, pledged to take "appropriate personnel actions" in response to the alleged lapse. "We take this matter very seriously," company Administration Director John Roberts told the Associated Press, promising that "nothing like this" would happen again. As a result of the snafu, the company's incentive fee from the government was reduced by $1 million -- but it still will total $11 million this year, according to a DOE spokesman.

The Savannah River episode certainly isn't the first time computer-security lapses have occurred at DOE or that the agency has been embarrassed by improper disposal of surplus equipment. The agency was stung in the early 1990s when a used-car salesman from Pocatello, Idaho, purchased next-to-new uranium-reprocessing machinery at a DOE auction, acquired assembly instructions through a Freedom of Information Act request and was shopping the system around on the world market, drawing considerable foreign interest, when he came to the attention of a chagrined British intelligence service, which alerted Washington.

Last July, Insight reported that Sandia National Laboratory in Albuquerque sold a $9 million surplus supercomputer for $30,000 to a Chinese national in California who specializes in exporting advanced U.S. equipment to Beijing. The October 1998 sale of the Intel Paragon XPS system raised a "significant national-security concern," according to a classified report leaked to this magazine, and federal sources said the supercomputer could have been a major addition to the Chinese nuclear program if it hadn't been discovered and stopped.

Alarm bells about the sale only started ringing after the purchaser, who Sandia believed had bought the system for scrap, contacted Intel Corp. seeking parts that would get it up and running again. Federal investigators eventually were able to interview the purchaser, locate the computer and persuade him to sell the system back to Sandia -- at a considerable markup, of course.

Although Sandia appears to have followed procedures in making the sale, it could have been far more security-minded and exhaustive in unearthing crucial facts about the buyer, Insight sources said at the time -- including the fact that the buyer's one-man business has as its only client the government of the PRC.

The most recent episodes come at an inopportune time for Los Alamos and Energy Secretary Richardson who, just when last summer's furor about espionage allegations was dying down, suddenly find themselves putting out new wildfires, literal and figurative. Although once rumored as a possible No. 2 on the Democratic presidential ticket behind Vice President Al Gore, Richardson suddenly found himself being scorched from another source -- Capitol Hill, where Republican Sen. Jon Kyl of Arizona, Alabama Sen. Richard Shelby, chairman of the Senate Intelligence Committee, and Florida Rep. Porter Goss, chairman of the House Intelligence Committee, were suggesting that he do the proper Roman thing and fall on his sword -- an invitation Richardson steadfastly has declined.