Stealing the Atom Bomb: How Denial and Deception Armed Israel

by Roger Mattson

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  On March 11, 1976, Carl Duckett, perhaps sensing his days at the Agency were limited, wrote a memo to DCI Bush to summarize the NUMEC case.450 He attached a Memorandum for the Record dated March 9, 1972, entitled “Possible Diversion of Weapons Grade Nuclear Materials to Israel by Officials of the Nuclear Materials and Equipment Corporation (NUMEC).”451 Duckett told Bush the 1972 memorandum “was written by (redacted) who originated CIA action on this case and who is available to answer any further questions you may have.” It is highly likely that the author of the 1972 memorandum was John Hadden. Duckett recalled in this 1976 memorandum that former DCI Helms brought the intelligence aspects of the case to the attention of Presidents Johnson and Nixon, Attorney General Clark, Secretaries of State Rusk and Rogers, the Joint Committee, and Henry Kissinger, among others.

  Duckett went on to provide Bush a chronology of CIA’s efforts “to persuade the FBI to undertake an investigation of Shapiro and NUMEC and to keep track of its activities in this regard.” The list began with the April 2, 1968 letter from Helms to Clark described above. There were six entries in the list showing that Helms and Hoover did not agree on the course of the FBI investigation. The last item that CIA had received from FBI at that time (1976) was a report that Shapiro requested to be brought up to date on a sensitive project two weeks after joining Kawecki Berylco in July 1971.

  Hadden’s seven-page Memorandum for the Record of March 9, 1972 began with a summary of how Congress and the AEC allowed special nuclear material first to be leased and then owned by companies in the private sector. Hadden then summarized the formation and financing of NUMEC, beginning in 1957, including the role of David Lowenthal. CIA redacted approximately six lines of text concerning Lowenthal when it released this document in 2015. The memorandum then summarized the inventory difference that AEC discovered at NUMEC in 1965 and the ensuing investigation. The technical details in Hadden’s memorandum accord with the information developed in this book. The memorandum then turned to “The facts developed to date pertinent to such a possible diversion.” Hadden listed eleven facts. CIA redacted facts 2-5 in their entirety and portions of the others when it released the document. The information that remained in the memorandum that has not already been mentioned above included the fact that Shapiro received a tour of the Suez Canal area by the Israeli Air Force following the 1967 war. In addition, although the facts are highly redacted, Hadden opined that NUMEC might have been conceived as an alternative route to the Israeli bomb from its inception or it might have become a necessity later, “when the existence of the reactor at Dimona was discovered.” In either event, Hadden concluded, “On the basis of the foregoing it must be assumed for the purpose of U.S. national security that diversion of special nuclear materials to Israel by Dr. Shapiro and his associates is a distinct possibility.” Hadden went on to estimate the circumstances of the diversion.

  To the best of our knowledge, the strike which gave supervisory personnel free run of the facility pinpoints the time at which material could have been most easily diverted to Israel and the time at which the evidence of such a diversion could best be covered up. Given the state of affairs at NUMEC from 1957 on, a diversion could have occurred at any time, but the period January – February 1964 is certainly the most suspect. . . . [Transportation] would present no radiation hazard and [the uranium] could have easily gone by diplomatic pouch or Israeli merchant ship or even El Al Airlines. Transportation of diverted material to Israel would have been a simple matter.

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  On April 21, 1976, Marcus Rowden succeeded William Anders as Chairman of the NRC.

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  On April 22, FBI Director Kelly sent the attorney general a four-page summary of FBI’s two previous investigations of Shapiro and NUMEC. He said the first investigation was initiated at AEC’s request in 1965 and concerned whether Shapiro should have registered as an agent of a foreign government. The summary noted that between the first and second investigations the Bureau learned of the missing uranium at NUMEC and decided not to intervene “under the circumstances presented by AEC.” The information surrounding the advent of the second FBI investigation in 1968 was completely redacted from this FBI report. The substantial investment in NUMEC by David Lowenthal’s company Apollo Industries is mentioned at the end of the summary, as is Shapiro’s being “active in fund raising and bond drives and . . . a heavy contributor on behalf of Israel in the United States.” The last paragraph of the summary notes that since January 1972 Shapiro had been employed as an assistant in charge of the breeder reactor division at Westinghouse where he held no security clearance.452

  Attorney General Levi attached the April 22 FBI report to a memorandum he dispatched that same day to President Ford.453 Under the heading “Possible Violation of Criminal Statutes,” Levi said:

  The FBI did not conduct an investigation into the alleged discrepancy in nuclear materials at NUMEC because it was advised by the AEC that any loss likely was attributable to inadequate accounting procedures and that there was no evidence or suspicion of a violation of law. Since no investigation was undertaken, the Department of Justice cannot state that there is no evidence which would support a criminal charge. The facts available with respect to this matter indicate that the following criminal statutes may be involved. . . .

  Levi went on to list 10 possible violations of the Atomic Energy Act and criminal statutes. Two of them, unauthorized dealing in special nuclear material and transportation of dangerous articles, suggest the Justice Department’s suspicion that enriched uranium was unlawfully removed from the NUMEC facility. The last three crimes listed were accessory after the fact, misprision of felony (that is, concealing knowledge, usually by a government official, of a felony committed by another person) and conspiracy. These violations appear to refer to someone in the federal government. Levi went on to say:

  Because the statute of limitations may not have run with respect to any [of the three] offenses that may be involved and because of the responsibility to consider whether any dismissal or other disciplinary proceedings may be appropriate with respect to any persons presently employed as federal officials who may have participated in or concealed any offense, I believe it necessary to conduct an investigation. Section 2271 of the Atomic Energy Act provides that “the Federal Bureau of Investigation of the Department of Justice shall investigate all alleged or suspected criminal violations” of the Act.

  On April 27, Senator John Pastore (D-RI), Senator Baker and Murphy met with two representatives of the Justice Department. They discussed procedures for the Joint Committee to gain access to information available to FBI on Shapiro and NUMEC without FBI turning over all of its files. Senator Baker explained that the reason for urgency on this matter was “a Presidential request.”454 President Ford probably made the request of the Joint Committee after he learned of the concerns of NRC Chairman Anders.

  That same day, Kelly sent Levi another summary memorandum on Shapiro and NUMEC for Justice Department review before sending it to Murphy. This second summary was five pages long and FBI redacted it in its entirety before releasing it.455

  Only two days later, FBI was given “oral instructions” in a meeting attended by the attorney general, the FBI director and others to “undertake at once an investigation of matters concerning Shapiro, the Atomic Energy Commission (which by then had become NRC and ERDA) and the possible diversion of special nuclear material. Investigation is to be based on provisions of the Atomic Energy Act and Obstruction of Justice.” The FBI recorded in minutes of this meeting the specific sections of the Act that might pertain, including one relating to an offense that secures an advantage to any foreign nation, one that prohibits transfer of SNM unless authorized by an AEC license, and several relating to the disclosure of restricted data. The minutes also listed the penalties that might accrue for the various charges. The penalties included fines up to $20,000 and imprisonment for up to 20 years for the alleged violations of the Atomic Energy Act or a
fine of up to $5,000 and imprisonment for up to five years for the obstruction of justice charges. It was noted that the statute of limitations for the Atomic Energy Act violations was 10 years.456 These oral instructions by the attorney general apparently resulted from his April 22 letter to President Ford, described above.25

  To recap, this was the third FBI investigation of Shapiro. The first investigation concerned his relationships with Israel and the possibility that he should have registered as an agent of a foreign government; the second was initiated at CIA’s request after it concluded Israel obtained an atom bomb faster than anticipated and U.S.-enriched uranium was found near the bomb factory at Dimona. The third investigation concerned both the possibility of a diversion of HEU (a violation of the Atomic Energy Act) and a subsequent coverup (obstruction of justice).

  Attorney General Levi launched the third investigation in the last year of the Ford Administration based on the FBI’s summary of the two previous investigations and the concerns expressed by NRC Chairman Anders. Senator Baker said the urgency of the investigation stemmed from the interest expressed by the president. President Ford’s diary shows that he discussed “nuclear safeguards” at a White house meeting on May 7, 1976 with Senator Baker, JCAE Executive Director Murphy, White House counselor John 0. Marsh and James Connor, Cabinet and Staff Secretary.457

  Senator Howard Baker and President Gerald Ford

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  In formalizing the attorney general’s request for a new investigation, the Justice Department told FBI to address “the possibility that current or former government officials, in particular the Atomic Energy Commission, did not take appropriate action to thoroughly resolve allegations against Shapiro, the operations of the NUMEC plant, and the alleged transmittal of restricted data and/or nuclear materials [one-half line redacted]. Your investigation should be closely coordinated with Criminal Division attorneys.”458 Before then, no one questioned whether AEC officials hindered the earlier investigations. Seaborg may have gone the extra mile in backing Shapiro’s quest for a higher security clearance, but Seaborg had not yet published his memoirs supporting Shapiro in the NUMEC affair. The redacted copies of FBI documents do not disclose what particular government official at AEC the attorney general had in mind, if any.

  The FBI agents assigned to the new investigation quickly contacted the agents that conducted the prior investigations and set up office space at ERDA to review documents describing AEC’s prior dealings with Shapiro and NUMEC. FBI’s contact at ERDA was Robert Tharpe, deputy director of the division of safeguards. Early in the new investigation, Tharpe had some difficulty in locating AEC’s files on the matter but said he had copies of all NUMEC contracts with AEC and would make them available for review.459 Historical records about Apollo had a way of disappearing.

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  By early May, FBI determined which organizational elements of AEC became part of ERDA and which ones became part of NRC. An FBI agent made contacts with both agencies to tell them of the new investigation and to request access to the files they inherited from AEC. At NRC, the agent contacted the office of inspection and enforcement, the division of safeguards, and Executive Director for Operations Lee Gossick, who identified two individuals [names redacted] that would be most knowledgeable about Shapiro and NUMEC.460

  The FBI files show that ERDA had recently been supplying information on Shapiro and NUMEC to the Joint Committee and to the White House. In addition, about this time, FBI files show that the Bureau assigned the code name DIVERT to this third investigation of Shapiro and NUMEC.

  The FBI interviewed several NRC managers, including Harold Thornburg, acting deputy director of the Office of Inspection and Enforcement, Kenneth Chapman, director of the Office of Nuclear Material Safety and Safeguards and Ralph G. “Gerry” Page, deputy director of the Division of Safeguards. All claimed their knowledge of the facts was superficial and recommended that FBI interview other NRC staff members that had more direct experience with NUMEC by virtue of their prior employment at AEC.

  FBI also interviewed George Murphy of the Joint Committee staff and James Connor, secretary to the cabinet and staff secretary to the president, John Marsh, counselor to the president, and William Hyland, deputy assistant to the president for national security affairs. The White House people said President Ford was aware of and interested in the NUMEC matter and was “particularly concerned with any indication of a prior coverup.” Connor, who was key to raising the matter with the president, was more specific. He told John Fialka “You could look at all the documents and ask yourself whether something had happened here. The answer was probably yes. Then the question was whether you could do anything about it, and the answer was no.”461

  The White House staffers recommended others in the administration that might be able to provide additional information, including Fred Ikle, the president’s National Security Advisor, John Lehman of the Arms Control and Disarmament Agency and Dave Elliott of the National Security Council.462 They said the president had discussed the NUMEC matter with Senators Pastore and Baker of the Joint Committee. Marsh noted that Representative John D. Dingell (D-MI), chairman of the House Subcommittee on Energy and Power of the Committee on Interstate and Foreign Commerce, “may suspect diversion of the material involved inasmuch as he has stated that he feels the full story has not come out.” George Murphy suggested no new names for the FBI to interview and provided no direct information about why the Joint Committee had renewed its interest in the case.463

  On May 3, 1976, Robert Tharpe of ERDA told the FBI, “when AEC conducted an examination of NUMEC’s performance it was found that the shortage of material experienced by NUMEC over the years and over the span of its contracts was more or less in line with that experienced by other manufacturers under contract to the AEC at that time.” He thus contradicted the statement and data presented by AEC General Manager Hollingsworth ten years earlier in a letter to Joint Committee Executive Director Conway, i.e., the NUMEC losses were about double what one would expect by examining the performance of similar plants.464 Tharpe’s statement also contradicted a statement to the FBI in 1979 by Robert Fri, the former acting administrator of ERDA, who recalled “NUMEC had perhaps twice as much recorded loss as other plants doing similar conversions.”465 There is no indication in the FBI documents that FBI agents detected or understood these important contradictions.

  About the time that FBI was interviewing Tharpe of ERDA, Gerry Page of NRC told the FBI that the losses at NUMEC and a similar fuel processing facility, “were possibly due to the uniqueness of these two plants,” implying the losses at Apollo were higher than other plants of its type.466 Perhaps the Justice Department harbored suspicions of a coverup in light of these contradictions among the government’s technical experts.

  On May 11, 1976, FBI agents interviewed James Connor, Secretary to the Cabinet and former director of planning and analysis at the AEC (1972-1974).467 Connor said his “interest in the NUMEC situation was kindled indirectly by an article which appeared in Time magazine about six weeks ago which was titled to the effect ‘How the Israelis Got the Bomb.’” He said he was not a technical expert but he knew enough to recognize inconsistencies in the article so he looked into the NUMEC situation. He was “appalled over what he felt was the superficiality of the AEC investigation with regard to NUMEC and Shapiro.” For example, he found it curious that in the earlier investigations no one had inquired where NUMEC found the means to pay off the bank loans it took when AEC imposed the fine for losing the uranium associated with the Astronuclear contract. Moreover,

  Mr. Connor felt that the AEC interview of Shapiro was not of a penetrating nature and that AEC officials failed to ask a large number of logical questions. Failure to explore Shapiro’s contacts with David Lowenthal [one line redacted] puzzled Mr. Connor. Mr. Connor did not understand the ready acceptance by AEC that significant records and material may have been destroyed in a vault fire at NUMEC. . . . [He] is puzzled why the investigative effort dir
ected at Shapiro and NUMEC seemed suddenly to come to a stop.

  On May 13, 1976, FBI agents again interviewed George Murphy.468 In reply to a question about whether the Joint Committee had any information whatsoever that would be of assistance to the current investigation, Murphy replied, “You’ll have to check with John Mintz at FBI about that.” John A. Mintz was then FBI Assistant Director and legal counsel. His name appeared on distribution for some internal FBI documents concerning NUMEC, and there were some documents authored by “Legal Counsel.” No record has surfaced of what Murphy might have told Mintz that was different than what he told the FBI agents on May 13. In that interview, Murphy said he had no concrete evidence about any possible diversion of nuclear materials from NUMEC or elsewhere and no knowledge of any interference by anyone that would have limited previous investigations. Thus, one of the most highly placed, long-time doubters of Shapiro’s innocence offered nothing concrete to back up his opinions.

  On May 14, an FBI Special Agent interviewed John Martin, Acting Deputy Chief of the Internal Security Section in the Criminal Division of the Department of Justice. They discussed the general nature of the documents then in FBI’s possession concerning the 1968 investigation of Shapiro and NUMEC. “No communication was observed which specifically qualified the investigative direction to be taken in the FBI’s 1968 inquiry to the Shapiro-NUMEC matter. Nor was there observed a copy of the reported correspondence between (line redacted) and the then Attorney General, Ramsey Clark, supposedly dated in early April, 1968.”26 Martin advised that he had requested a search to be made through any Ramsey Clark correspondence still maintained by the Department of Justice. The subject correspondence was not located.469 Martin stayed on the case for some time. Two years later he headed a three-man task force for the Justice Department “to determine if there is any individual agency in the Government which knew about a possible violation of the Atomic Energy Act and did nothing about it.”470 The memorandum referenced here was signed by “Legal Counsel” and was directed to the FBI Director. Since the Justice Department is in a superior position in the Federal hierarchy to FBI, the phrase “any individual agency” would appear to include CIA and FBI, not just AEC and its successors.