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Coverup alleged at UC weapons lab
Fired investigators say university hiding financial mess at Los Alamos
James Sterngold, Chronicle Staff Writer
Tuesday, January 14, 2003
©2003 San Francisco Chronicle | Feedback
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/01/14/MN41836.DTL
Los Angeles -- Two investigators fired after they found evidence of theft and
mismanagement at one of the nation's most sensitive nuclear weapons labs
charged Monday that the University of California is concealing the extent of
financial problems at the Los Alamos National Laboratory.
The account of financial improprieties at Los Alamos, given by the university's
own investigators, emerged as UC declared it has accounted for almost all of
the nearly $4 million in lost or stolen property at the nuclear weapons lab, which
is managed by the university for the U.S. Department of Energy. The university
insisted it has been swift and decisive in responding to the scandal.
But the two investigators said the university still is engaged in a coordinated
coverup of theft and abysmal accounting that involves far more money and goes
far deeper than UC has acknowledged.
Even some UC supporters said that if evidence of a coverup emerges, the
university could lose its historic contract for managing the nuclear weapons lab
at Los Alamos, in New Mexico, a facility that ushered in the atomic age six
decades ago.
"It is incomprehensible that you could (account for) as much as they say, with
everything that I know is out there," said Glenn Walp, a former Pennsylvania
State Police commissioner and the leader of the Los Alamos lab's Office of
Security Inquiries until he was fired in November.
A GAME OF COVERUP?
"It's my opinion that they're still in that game of trying to cover up. They don't
know. They just don't know," Walp said.
Allegations of credit card abuse, missing or stolen equipment and
mismanagement at Los Alamos surfaced publicly in late November when lab
officials fired Walp and Steven Doran, another former police officer hired by the
university to bring better security and oversight to the labs.
The firings led the Energy Department and the House Energy and Commerce
Committee to start independent reviews and led to the resignations and
transfers of several top officials at Los Alamos.
UC CONTRACT THREATENED
Secretary of Energy Spencer Abraham warned UC President Richard Atkinson
that the investigations threaten the university's contract to manage Los Alamos.
UC also manages Lawrence Livermore National Laboratory and Lawrence
Berkeley National Laboratory under its contract with the Energy Department.
Los Alamos, Livermore and a third lab, the Sandia National Laboratory,
designed and engineered the nuclear arsenal, and now their mission is ensuring
the stockpile's reliability and safety. Lawrence Berkeley is an energy research
center and is also owned by the Department of Energy.
UC's Board of Regents is expected to hear this week from Atkinson and others
about the problems at Los Alamos and the administration's response.
The university said in a progress report -- dated Friday -- that its auditors have
reconciled all but $120,000 of $3.8 million in questionable purchases and other
transactions that were identified by accountants last year.
But in response to questions, a spokesman for the university said Monday that
auditors have added $500,000, bringing the problem transactions up to
$620,000 -- and that figure could still grow.
QUESTIONABLE TRANSACTIONS
The university has acknowledged other questionable transactions or missing
property as well as blatant misuse of lab credit card accounts. The transactions
include those by two officials who, over a period of years, ordered what Walp
said were tens of thousands of dollars in camping gear, expensive knives,
electronic goods, plumbing fixtures, remote- controlled airplanes and other items
for their personal use.
Another lab employee tried to charge a $20,000 Ford Mustang and $10,000
worth of spare parts on a lab credit card. The university said that the Mustang
purchase was halted before it went through and that the United States attorney's
office in Albuquerque has investigated and decided not to prosecute the person
involved.
But Norman Cairns, a spokesman for the U.S. attorney, refused to confirm that
there has been any decision not to prosecute.
The university also identified 355 computers as missing, but insisted none of the
computers contained classified information.
The problems, the university said in its report, have only redoubled its resolve "to
maintain an outstanding reputation in the performance of all aspects of
laboratory management."
The university has been struggling to quell the storm, hiring expensive attorneys,
reassigning the director and deputy director of the lab and promising wholesale
changes in the way it manages Los Alamos.
But the problems have continued to grow more threatening because of concerns
in Washington over the appearance of both lax management and a possible
coverup.
Despite occasional dissent among faculty members at the university's
campuses, UC is proud of having managed the Los Alamos and Lawrence
Livermore. The university insists that it gets little financial gain under its
management contract and that it has received excellent performance scores
from the Energy Department.
In return for managing the weapons labs and Lawrence Berkeley, UC is
reimbursed for its expenses and can receive as much as $17 million a year in
performance bonuses.
SURVIVOR OF SCANDALS
UC management of the labs has survived periodic scandals over the years
involving environmental problems and the security of nuclear secrets at the labs.
In fact, the Energy Department renewed the contract in January 2001, and in
October quietly gave the labs what amounted to a clean bill of health after the
latest problems, involving the mishandling of nuclear secrets during the Wen Ho
Lee case.
But several people in Washington said UC could lose its contract if evidence
emerges that the university fired Walp and Doran in an effort to cover up
wrongdoing.
The university said in its progress report that it still is investigating the firings.
Walp said he and his attorney are scheduled to meet university officials Friday
for the first time.
A lab official said at the time that Walp and Doran were dismissed because they
had lost the confidence of other officials at Los Alamos they had to work with.
Walp said that within a month of having been hired last January -- a hiring that
was part of the effort to toughen internal controls after the last scandal -- he
began to hear about rampant theft and quickly collected evidence of problems.
But once senior officials began to sense that the information might become
public, threatening the university's contract, roadblocks were put up, he said.
His main concern, he said, was that the evidence suggested a culture of theft
and mismanagement.
"Let me put it this way," he said. "You don't start out by stealing a Mustang. I had
just begun to scratch the surface. This was not the first adventure."
Walp said he and Doran were fired when he demanded that the investigation be
turned over to the FBI.
Doran said the real problem was what the financial irregularities represent.
"If they can't control their money, they sure can't control their nuclear secrets,"
Doran said, although he added he has no evidence that secrets have been
compromised.
"I looked at this, and I can tell you the accounting was so bad, there's no way it
would be humanly possible for them to find all this stuff," he said.
An organization in Washington that frequently works with whistle-blowers and
looks into allegations of corruption -- the Project on Government Oversight --
also has been investigating the weapons labs and has helped provide an
attorney for Walp and Doran. Peter Stockton, a senior investigator at the
nonprofit group, said UC might have gotten through this problem had it not fired
its own investigators.
"They've led a charmed life, and they've had absolutely no real oversight,"
Stockton said. But, he added, "I really do think it's time to get somebody
competent in there to manage the labs."
WIDER PROBE OF UC LABS SOUGHT
-- The scandal: The Department of Energy, Congress and the FBI are
investigating
allegations of credit-card theft, stolen and lost equipment and mismanagement
at Los Alamos National Laboratory in New Mexico.
-- New developments: Congress was asked Monday to widen the probe to
include the two other labs the University of California manages for the
Department of Energy -- Lawrence Livermore and Lawrence Berkeley national
laboratories. UC said it had resolved most of the allegations at Los Alamos, the
nation's premier nuclear weapons facility.
-- What's at stake: UC could lose its contract to manage the labs for the
Department of Energy before the contract ends in January 2006.
E-mail James Sterngold at [EMAIL PROTECTED]
©2003 San Francisco Chronicle | Feedback
Page A - 1
~~~~~~~~~~~~~~~~~~~
http://www.latimes.com/news/nationworld/nation/la-na-
alamos14jan14,0,921276.story?coll=la%2Dheadlines%2Dnation
THE NATION
Los Alamos Probe Widens to Include Two Other Labs
A House panel seeks inquiry at Bay Area sites also managed by UC. Changes
at New Mexico facility continue as audit chief is reassigned.
By Rebecca Trounson
Times Staff Writer
January 14 2003
One of several congressional committees looking into allegations of fraud and
mismanagement at Los Alamos National Laboratory has widened its probe,
calling on federal investigators to include an examination of the University of
California's management practices at two other national labs.
The House Energy and Commerce Committee has asked the General
Accounting Office, an investigative arm of Congress, to scrutinize the
university's recent record at the Lawrence Livermore and Lawrence Berkeley
labs, both in the Bay Area. The university manages the three laboratories for the
Department of Energy.
Los Alamos Director John C. Browne resigned last week amid investigations by
the FBI, the Energy Department and Congress into mounting allegations of
credit-card abuse, missing equipment and a possible cover-up at the New
Mexico facility, the birthplace of nuclear weapons. The lab's deputy director and
its top two security officials also have resigned or been reassigned.
On Monday, the shake-up at the troubled lab continued, with an announcement
that the facility's audit director, Katherine Brittin, has been reassigned to a non-
management position. In the near term, UC auditor Patrick Reed, who works
from the university's systemwide headquarters in Oakland, will directly oversee
the lab's audit program, while the various investigations move forward and the
lab conducts a search for a new audit director.
The university is scrambling to hold onto its 60-year-old contract to run Los
Alamos, which Energy Secretary Spencer Abraham warned recently has been
jeopardized by the allegations of wrongdoing.
Abraham has ordered an evaluation of the university's management of Los
Alamos, to be completed by late April, but he has not publicly questioned its
ability to run the other facilities.
But interest in Congress is clearly growing.
In the announcement Monday, Energy and Commerce Committee members
said they were concerned that the alleged problems of credit-card abuse and
equipment theft might not be confined to Los Alamos.
They asked the GAO to look as well at the university's procurement practices
during fiscal years 2001 and 2002 at Livermore, a nuclear weapon facility near
Oakland, and Lawrence Berkeley, an energy research center in the Berkeley
hills.
Committee spokesman Ken Johnson said questions about the other labs had
come up in preliminary conversations with several former employees and
whistle-blowers at the facilities.
Two former police officers who had been hired to investigate the allegations at
Los Alamos were fired by lab officials in November and later claimed that the
dismissals were part of an attempt to cover up the alleged wrongdoing.
The two men, Glenn A. Walp and Steven Doran, are expected to testify when
the committee holds hearings in mid- to late February.
Johnson said the committee thus far has received 20 boxes of documents from
Los Alamos and the university's external auditor, PricewaterhouseCoopers.
He said it hopes to receive at least preliminary findings from the GAO's review
within three months, before the April deadline set by Abraham.
In response to the announcement, UC spokesman Michael Reese said that the
expansion of the investigation was "not unexpected" and that the university
already had broadened its own management reviews to include the other
laboratories.
A<:>E<:>R
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