Stealing the Atom Bomb: How Denial and Deception Armed Israel

by Roger Mattson

  On May 17, FBI interviewed former FBI Assistant Director Charles Brennan who recounted his earlier meeting with James Conran of NRC. Brennan said Conran had identified loopholes in the nuclear security system and was convinced that “forces” at NRC were deliberately covering up reported losses of nuclear materials from facilities under its control. Brennan considered Conran to be sincere “but did not know whether he was paranoid or not.” The interviewing agent noted that an internal investigation of Conran’s allegations was then underway at NRC.471 The internal NRC investigation conducted by the Conran task force that is described in the following chapter of this book was not initiated until a year after this FBI interview of Conran. The task force did not learn of an earlier internal NRC investigation, if there was one.

  Conran later reported to NRC investigators that in November 1975 he met with Chick (sic) Brennan, former director of the domestic intelligence division of FBI who was retired and working as a consultant for MITRE Corporation.472 Conran said Brennan brought along “a knowledgeable member of what is generally thought of as the intelligence community.” Conran attributed the new FBI investigation in 1976 to Brennan’s contacts with Congressional sources after that meeting, which, if correct, could explain why the Joint Committee took an interest in the matter before Carl Duckett briefed the NRC in February 1976.

  The same day in May 1976 that FBI interviewed Charles Brennan, a staff member at the NSC, David Elliott, wrote a memorandum about NUMEC for his boss, National Security Advisor Brent Scowcroft. Elliott referred to an earlier meeting in Scowcroft’s office with Marcus Rowden of NRC, Robert Fri of ERDA, John Marsh of NSC, James Connor, secretary of the cabinet, and others. In the memorandum, Elliott asked for a two or three-week delay in forwarding to President Ford an NRC report about “those remedial steps that had been taken since the NUMEC incident.”473 General Edward Giller (USAF retired), DOE’s director of military applications, later told DOE investigators that he too attended the March 1976 meeting in Scowcroft’s office that was convened out of Rowden’s concern that some of the younger members of the NRC wanted to “spill the beans,” about Apollo.474

  ***

  On June 1, 1976, Carl Duckett retired from the CIA for reasons of health, or so he said.

  ***

  On June 15, the special agent in charge of FBI’s Washington Field Office sent a report to FBI Director Kelley to acquaint FBI headquarters personnel, the attorney general and the White House with two prior “extensive” investigative efforts involving NUMEC.475 The SAC said,

  The President is particularly concerned with indication of a prior coverup. James Connor expressed the feeling that he was appalled at the superficiality of the AEC investigation into this matter. It is also noted that this matter has been on a need-to-know basis at the White House and it is the hope of the White House that instant investigation would not come to the attention of the general public.

  The Washington SAC went on to say that an enclosed report appeared to answer the president’s concerns and that FBI had neither indication of a coverup nor indication that the prior AEC investigation was superficial. The agent closed by saying that the possibility of public disclosure increased the longer the investigation continued. Attached to the letter was Dr. Sam McDowell’s 23-page report, plus 40 pages of attachments, dated April 1966, that described AEC’s investigation and independent inventory of Apollo.

  On July 26, 1976, Enno Knoche, CIA’s deputy director of central intelligence, wrote a memorandum for DCI Bush, about NUMEC.476 Knoche noted,

  The FBI has completed its passive background review of the case. Their preliminary finding is that while a diversion of nuclear material could have occurred there is no solid evidence that a diversion did occur. . . . The FBI is now preparing to initiate an active investigation of the case. They have authority from the FBI Associate Director, Mr. Adams, to conduct a no-holds-barred investigation... One of their early interviewees will be Dr. Charles Reichardt, a former AEC official.”477

  Of particular note in this memorandum, written at the highest level of American intelligence, was a concern that the FBI investigation team leader expressed to Knoche.

  [He] informs me that the team feels strongly a need for a briefing on (half line redacted) nuclear energy technical matters. . . . While the FBI team has some technical background they are not specialists in nuclear energy and know nothing about foreign nuclear energy programs. They have had no hard objective briefing on the possibility of a diversion and related evidence and they understandably feel uneasy at confronting possible hostile witnesses without a proper background surrounding the case.

  This would not be the last indication that the FBI was over its head and that the CIA was withholding relevant information.

  ***

  On August 10, 1976, a five-member team from the FBI’s Washington Field office met with three CIA representatives to discuss the NUMEC case.478 The purpose was to give the FBI “investigative team a general background briefing (one-half line redacted) and [provide] a technical tutorial on nuclear matters.” The meeting “led into a general discussion in which several of the FBI agents were quite vocal . . . the agents had formulated various theories vis-a-vis any diversion.” The CIA redacted the description of the two theories advanced by the FBI agents when it released the document in September 2015. Apparently, the FBI theories rested on the agents’ judgment that the stated losses were consistent with the primitive nature of NUMEC’s Apollo plant. “The FBI agents in advancing the foregoing arguments against a diversion evidenced considerable frustration” at the failure to get financial records without a subpoena. The account continues, “Sensing this frustration early in the discussion the CIA participants did not engage in any polemics or spirited argument but presented their evidence, information and views on a very low key basis throughout.” The FBI agents “indicated that even if they came up with a case it was extremely unlikely that Justice and State would allow it to come to trial.” The author of the memo closed with the thought “In sum they feel they have been given a job to do with none of the tools necessary to do it.”

  ***

  Echoing the frustration of the FBI’s investigation team, on August 17, the Special Agent in Charge of the FBI’s Washington Field Office wrote a brief memo to FBI Director Kelley saying, “WFO strongly suggests that no further effort be exerted in this matter and that all investigative work cease immediately.”479 Kelley apparently agreed with the recommendation and wrote to Attorney General Levi two weeks later asking whether further investigation was desired. The memo noted that the Bureau had used a six-man investigation team.480

  Six weeks later, the deputy assistant attorney general for the criminal division of the Justice Department replied that more investigation was needed and should include persons employed at NUMEC during the pertinent period.481

  ***

  President Jimmy Carter was inaugurated in January 1977. As part of the transition of administrations, John Marsh, counsel to President Ford, wrote a two-page memo about the “NUMEC matter” to Carter’s incoming Secretary of the Cabinet Jack Watson. Marsh recalled their earlier discussion of NUMEC and certain classified documents that he showed to Watson. Marsh attached a file of those documents to his memo. One of those four documents was Helms’ two-page memo to Attorney General Clark on April 2, 1968 asking that FBI’s NUMEC investigation be reopened, presumably on the basis that CIA had detected HEU near Dimona. In his memo, Marsh said that Phil Buchen (friend, law partner and Counsel to President Ford) and Ed Schmults (deputy counsel to President Ford and cochairman of the Domestic Council Review Group on Regulatory Reform) had discussed the NUMEC matter with Bob Lipshutz (counsel to President Carter). Marsh suggested that Watson discuss the matter with Lipshutz. Marsh said he did not know whether the paper that the NSC prepared for President Ford in the spring of 1976 on NUMEC (a paper originated by CIA, ERDA and NRC) ever went to the president. Marsh referred to a paper he prepared for NSC staff on hearings by Congressman Dingell
, which might address the NUMEC matter (those hearings occurred later that year).

  On January 21, 1977, the day after President Carter’s inauguration and Bush’s resignation as DCI, Carl Duckett’s successor, Deputy Director for Science and Technology Leslie Dirks, sent a handwritten routing slip to the Acting DCI, Enno Knoche, “For your eventual background use if Senator Baker asks to see you after he talks to Atty General. If you find it necessary to give Sen. Baker a paper on the case, DD/S&T will provide something appropriate.”482 The routing slip probably transmitted Carl Duckett’s March 11, 1976 memorandum to DCI Bush described above. If so, it likely included John Hadden’s memorandum of March 9, 1972, both of which contained more detail than CIA was willing to release in September 2015, 43 years after Hadden assembled the CIA’s assessment of NUMEC’s involvement with the Israeli weapons program.

  * * *

  22 To NRC and DOE, the word “safeguards” includes measures for physical security and for material control and accounting that are required of its licensees and contractors to provide reasonable assurance that bomb quantities of SNM, such as plutonium and highly enriched uranium, are not diverted for unauthorized purposes.

  23 By the 1980s, after the Congressional and FBI investigations of NUMEC ended, Conran served on the staff of Victor Stello, NRC’s executive director for operations. Conran did well in that assignment, no doubt glad to be relieved of his whistleblower status. Attempts to find him in 2015 were unsuccessful.

  24 In November 1975, President Ford reorganized his national security structure. Henry Kissinger became Secretary of State, Brent Scowcroft became National Security Advisor, Schlesinger left his post as Secretary of Defense and Colby left CIA. Richelson reported that Colby’s demise owed to his openness with Frank Church’s Senate select committee in its investigation of CIA that led to the disclosure of “information that the White House and Kissinger would have preferred remain secret.”

  25 In June 1967, the Comptroller General reported to the Joint Committee on a GAO review of the NUMEC affair. The GAO concluded at page 5 of its report that Section 222 of the Atomic Energy Act of 1954 would apply to unauthorized transfer of SNM and would require punishment by death or imprisonment for life if such transfer occurred with intent to injure the United States or with intent to secure an advantage to any foreign nation. In 1980, NRC staff reached the same conclusion. (NUREG-0627, p. 15).

  26 That correspondence would have been the Helms to Clark memo that requested the Attorney General to begin a new investigation of Shapiro in light of the uranium connected to NUMEC that CIA found in Israel.

  Chapter 12

  Conran the Whistleblower (1977)

  While the third FBI investigation was underway, Jim Conran stoked growing concerns within the NRC as he failed in his attempts to get safeguards officials at ERDA to tell him what they knew. By April 4, 1977, his frustration with and mistrust of bureaucratic secrecy led him to send An Open Letter to the Nuclear Regulatory Commission and separate letters to President Jimmy Carter and Congressman Morris Udall attaching the NRC letter. Udall chaired the Subcommittee on Energy and Environment of the Committee on Interior and Insular Affairs, which oversaw NRC operations for the House of Representatives.

  Conran’s letter expressed concern that safeguards of bomb-making materials were inadequate because, among other things, they failed to take into account “serious indications that successful diversion of a large quantity of SNM from at least one existing processing facility might already have occurred at some time in the past.” He went on to say that reactions of NRC to this possibility and to his other concerns “have been so consistently bewildering and deeply troubling, and so totally out of character for the NRC . . . as to suggest that something is indefinably but terribly wrong. . . . [Such reactions] are consistent with symptoms one would expect to see if a situation existed in which government officials were involved (or culpable) in the theft of SNM. . . .” If he had been using such tough talk behind the scenes before this time, it is no wonder that the Ford Administration decided a year earlier to take a new look at what AEC did in the past. Ironically, if someone had told Conran about the president’s interest in the matter and the renewed FBI investigation, he might not have blown the whistle.

  Even though AEC, FBI, CIA and the Joint Committee had worried over the NUMEC affair for years, and AEC had significantly upgraded its requirements for safeguarding strategic quantities of SNM after the alleged theft, the fledgling NRC was compelled to launch its own investigation to test the merit of Conran’s allegations.

  NRC Chairman Marcus Rowden asked me to head a task force to conduct the investigation. He assigned six other people to the task force—Frank Arsenault, Paul Baker, Mark Elliott, Norman Haller, William Reamer and Bernard Snyder. The task force members came from various offices of NRC, had appropriate security clearances and had experience in nuclear safeguards; however, this was the first time we had worked together. The efforts of the task force spanned about three weeks and included reading reports of past investigations by AEC and interviewing Conran, his managers and peers, and others from NRC and ERDA who knew of the earlier concerns about NUMEC. Conran said he was satisfied with the qualifications and integrity of the task force members, but he insisted that all of its discussions with him be on the record, which was accomplished by hiring a security-cleared court stenographer.

  Senior NRC managers told the task force that FBI and CIA were interested in the case. However, they provided no details about the extensive efforts that those two agencies invested in the NUMEC affair before the task force arrived on the scene. Nor did they say that President Ford had initiated a new FBI investigation because of what Duckett told the commissioners in February 1976.

  It took the task force a few days to realize that it was making people nervous. Task force members asked hard questions, and outsiders like CIA and ERDA could not predict where the task force might be going because its members were technical people not known in political or intelligence circles. Furthermore, rumors reaching the task force about NUMEC suggested there had been a coverup.

  The anxieties of senior managers at NRC and ERDA increased when the national press learned of Conran’s letter. The people most in the know were the ones that were most nervous about going on the record about NUMEC. For example, Paul Baker, who worked in the Division of Safeguards, tried to opt out of the task force several times, claiming he had prior knowledge of Conran’s efforts and saying he feared reprisals from his management and peers were we to find in Conran’s favor.

  Reporters were not the only ones to take an interest in the Conran task force. The CIA required that the task force provide a verbal progress report each evening to Bryan Eagle, executive assistant to Chairman Rowden. In retrospect, it is unclear whether this was a CIA requirement or a Rowden requirement, the latter trying to keep the task force under control as he had controlled the AEC team that went to Apollo in 1966. Eagle said he phoned periodic reports on progress of the task force to someone in CIA. We wondered what CIA feared we might find that CIA did not already know. Perhaps the Agency feared leakage to the public and the Congress of the classified things it had told the NRC commissioners and senior staff in February 1976. Whatever the reason, CIA’s oversight of the activities of an independent domestic regulatory agency must have been a first, if Eagle really called.

  ***

  On April 14, CIA Associate Deputy Director for Operations Theodore “Ted” Shackley wrote a memo to CIA’s deputy director for central intelligence [Enno Knoche] advising him not to attend a meeting on NUMEC that was scheduled for the next day with the NSC staff.483 Shackley recommended that Knoche not attend the meeting because “a good possibility exists that sources and methods, as well as contradictory intelligence assessments, could become an issue. . . . The ERDA meeting with Dr. Brzezinski may be concerned with an issue of domestic law enforcement in which CIA has no authority or responsibility.” Shackley recommended that CIA brief the NSC staff in private at a later d
ate. He went on to summarize CIA’s evidence on the matter, all of which was redacted by CIA when the document was released in September 2015.

  Shackley attached to his memo a “talking points paper and a chronology [line redacted] for use by the DDCI should this option [briefing NSC separately] be selected.”484 The talking points paper and chronology were nine pages long and were mostly redacted when released by CIA. An unredacted statement read, “To provide all of our information to ERDA would release information that has been considered extremely sensitive up till now.” Armed with this summary of secret evidence that CIA continues to withhold today, and contrary to Shackley’s advice, Knoche went to the meeting. This memo confirmed, once again, that CIA withheld information from ERDA, as it did with the FBI.

  ***

  On April 15, 1977, nine days after kicking off the Conran task force and without its knowledge, Rowden briefed the NSC staff about NUMEC.485 His briefing concerned the pending release of a Strategic Nuclear Material Inventory Difference Report, then scheduled for August 4.486, 27 The briefing occurred in National Security Advisor Zbigniew Brzezinski’s office and was attended by NSC staffers David Elliott, John Marcum and Jessica Tuchman; ERDA representatives Robert Fri, Major General Alfred Starbird (USA retired and ERDA’s head of National Security), and General Giller; and Enno Knoche of the CIA.28

  Rowden summarized “what the White House and Mr. Brzezinski should be aware of regarding the NUMEC issue” in light of the pending release of the report that claimed no significant quantities of SNM had ever been stolen or diverted. Fri summarized the NUMEC case and the various investigations conducted by AEC, GAO and FBI. He said AEC had concluded there were “technical reasons which could account for the loss of this material. He noted, however, that there were some special concerns in the Intelligence Community and he invited [Knoche] to say what they were.” Knoche’s “concerns” were fully redacted from his Memorandum for the Record when released by CIA in September 2015.487 No record has been found to show that Rowden relayed the views of Knoche and the CIA to any of the other NRC commissioners. Commissioner Gilinsky, for one, was not told.488 Knoche’s Memorandum for the Record noted, “[Fri] and Rowden went on to describe the rather agitated state of mind of a current [NRC] employee . . . likely to become a subject of controversy. . . . Later in the same day, during the scheduled DCI Intelligence briefing session with the President, Dr. Brzezinski briefed the history of all of this to the President.”