C05674848 PPROVED FOR RELEASE - CIA NFO DATE 25-Au -2015 ' ·1 'I · - -·- 9 Marbh--1972 'i I I I•1EMORANDUM FOR THE RECORD i SUBJECT -Possible Diversi-on of Weapons Grade Nuclear Materials to Israel by Offi cials of the Nuclear Mat·erials and Equipment Corporation NUMEC I I I i ' l • From 1947 until the Atomic nergy Act or 1954 all special nuclear material was owned by the United States Govel nment and with certain exceptions was he·ld by the AEC and its cost type contractors operating Government owned and or controlle facilities The Act or 1954 was designed to widen participation in the use of atomic e ergy While the material was still owned by the U S it was more widely held by Government contractors and by licensees who were not overnment contractors Legislation in 196 4 made private own·ership of special nuclear material permissible · The 195 Act author zed the AECto regulate the use of these materials and to guard against loss or diversion In setting up regulations to enforce the ·control of· material the Commission concluded that· the physical protection and accouatability controls which licensees as prudent businessmen would maintain over special nuclear material because of its intrinsic value and their ·responsibility for its loss or damage and the severe criminal penalties· provided by AEC's governing legislation would adequately protect the national interest from the standpoint or unlawful diversion· In ·1955 a policy was ·adopted along these lines by the AEC In May 1966' the AEC concluded that a change toward tighter controls was in order and the Commission amended their regulations on 25 January 1967 In 1957 Dr 2 and established a firm Zalman Mordeohai called Nuclear Shapiro 1 eft Westi nghouse Materials and Equipment Corporation NUMEC in Apollo Penn$ylvania Instrumer tal of the new firm· was a Pittsburgh industrialist close personal trie·nd named David L Lowenthal a long-time of Shapiro Lowenthal fought in Israel as a volunteer in 194 in the financing I 1 I I f 1 i I I · I I I ' I • b 1 b 3 NatSecAct EO 13526 3 3 b 6 25Yrs 25X1 I I C05674_ 48 PPROVED FOR RELEASE • CIA INFO DATE 25-Au -2015 25X-1------- b 1 --------- ------- b 3 NatSecAct -------------- ______ J Jv t L' LV l i EO 13526 3 3 b 6 25Yrs ---------- --- · 3 · ··1 · 2· -------------- a uraniwn propessing faciiity received material under lease arrangement in December 1957 and received its first as an AEC-contractor in December 1957 From the material start up through 31 December 1966 NUi1ECreceived 21 750 kg of U 235 and shipped 19 865 kg U 235 reporting losses of about 260 kg or a bout 1 2% of total receipts Starting about 1960 -the AEC began a continuing but 1n the opinion of the Comptroiler General of the United St tes ineffective campaign of the material to get NUNECto implement adequate control This matter came to a head in - roveinber 1965 in -1ts plant when the AEC made a detailed survey to determine total losses up and to attempt to explain the unexpectedly since start high U 235 loss on the WANL contract We tinghouse The · survey established the less from 1957 until 31 October 1965 as 178 kg U 235 Of this total 84 2 kg was estimated by the· survey team to have been· lost through kµown loss mechanisms NOL and the remaining amount of 93 8 kg was categorized as MUF• MUF is defined as usually the result of uncertainties in measurements unknown losses and undetected errors in cords In 1964 a fire occurred in the vault containing at NUMEC which·effectively destroyed re crds nuclear materials of the input and output of material · The fire occurred during a strike when the plant was shut down -The AEC report on the the view that while it could · November 1965 survey presented not be stated· with certainty that di version did not take place the survey team found no evidence to support the possibility of diversion The Comptroller General foun·d ·that because or the condition of NUMEC's records they were unable to state an opinion on the disposition of the MUF but had no reason-to question the AEC conclusion with regard to diversion The had been asked to investigate this situation by Comptroller an alarmed Joint Committee of the Congress on Atomic Ene rgy on 7 September 1966 The Comptroller General's report to the Congress stated Notwithstanding extensive reviews of' NUMEC's operations neither the AEC nor NUMEChave been able the specific to identify with a high degree of certainty causes of WANLmaterial loss· 11 · · at Apollo NUMECowned and operated '1 I Pennsylvania It first - · ' -···- • • C05674848 PPROVEDFOR RELEASE- CIA INFO DATE 25-Au -2015 b 1 b 3 NatSecAct o 135-26-3 3 b 6 25Y s -3- 4 Durimg the· ·period August 1958 to October 1965 NilltEC shipped some q25 kg of 235 overseas to various parts of the world -under some 28 differ nt contracts The AEC eport states the following Quantities in individual shipments domestic as well as i'oreign are not confirmed independently by _the AEC Such·actions have been outside the scope or the present AEC system of control of nuclear material · Instead reliance has been placed on a technical review of the shipper's internal controls and independently developed receivers data The validity of this approach is of course largely dependent on the integrity of the shipper and the receiv r 11 The facts diversion developed follow to date pertinent to such a possible to the Israeli Dr Shapiro was a c9nsultant AE program in 1960 or earlier Sometime prior to 1964 D r Shapiro allowed an Israeli scientist to work for nine months a year at the NUMECplant · 1 to ' b 1 b 3 NatSecAct EO 13526 3 3 b 6 25Yrs 25X1 C05674848 PPROVED FOR RELEASE • CIA NFO DATE 25-Au ·2015 · IVE l J · l • J L S1 oc7' ' 'l -- -- · b 1 b 3 NatSecAct -4- ' b 1 b atSecAct i EO 13526 _3 3 b 6 25Yrs 1352 EO j ' _ s Follow g the June 1967 war ris said to have included an aerial tour ·-- __Suez Canal- area by the IDF Air Force or I ' 25X1 b 1 b 3 NatSecAct EO 13526 3 3 b 6 25Yrs the C05674848 PPROVEDFOR RELEASE• CIA INFO DATE 25-Aun-2015 b 1 3 NatSecAct b 1 -5X1 S 13526 3 3 b 6 25Yrs -5- b 3 'l tSecAct EO 1352p 3 3 b 6 25Yrs r -· ····· -· · 6 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 Such a diversion might be -evolutionary or revolutionarv NUMECwas formed bv Dr Shan1ro and his associates in 19571 7 0 the other hand it is diversion didn't occur until much the reactor at Dimon 8 Isr el Dr Shapiro on nuclear that the idea the existence was a consultant to the Government at least as earl as 1960 • matters· or of or b 1 b 3 NatSecAct 25X1 EO 13526 3 3 b 6 25Yrs b 1 b 3 NatSecAct EO 1 3526 3 3 b 6 25Yrs 25X1 C05674848 PPROVED FOR RELEASE - CIA INFO DATE 25-Au -2015 - b Q 3 NatSecAct EQ 13526 3 3 b 6 25Yrs -6- 2sx1 ·------1- --- · I _ It is interesting 1n this connection to quote from the AEC investigation of 1966 when the AEC NUMEC production control and process team requested engineering records on the WANL and other contracts All efforts in this direction were negated when it was learned that many of the requested records had been 1nadvert·ently by supervisory personnel during a 'clean-up' destroyed campaign at the time of an employee strike January l to February 25 1964 11 This was in addition to the fire mentioned in paragraph 3 above 9 To the best of our knowledge the strike which gave supervisory personnel free run of the facility pinpoints the time at which the material could have been most easily diverted to Israel and the time at which evidence or such a diversion could best be covered up Given the state of affairs at NUMEC from 1957 on a di version could have occurred at any time but the period January - February· 1964 is certainly the most suspect With regard to the material itself it could have been shipped in less than critical lots of say twenty pounds per lot Lead coated or nickel plated ·it would present no radiation hazard and could have·-easily gcme by diplomatic pouch or Israeli merchant ship or·even El Al A rlines Transportation of diverted material to Israel would have been a simple matter 10 In September 1969 CIA was informed by the FBI that Shapiro had been interviewed by AEC officials on 14 August developed during the 1969 On the basis of information interview particularly Shapiro's statement that he had never furnished classified information to unauthorized persons the -AEC has advised that it does not contemplate further action on this matter The FBI informed CIA that while they had developed information clearly pointing to Shapiro's pronounced pro-Israeli m athies and close contacts with Israeli · officials the FBI b e r e - v - e - - a ----- u r -i -e -r -- rn v -e -s - g--a ' o 'n-- w o u - e--- u n i to produce any facts leading to conviction and therefoJ e··· were terminating their active investigation It sho d be noted that the AEC meeting with Shapiro w s not coptdinated with CIA although the AEC was well aware of CIA'_s-···1nterest ±n the affair CIA attempts- to persuade the FBI __ ti continue the '' b 1 c ·- · · ···- - b 3 NatSecAct a - -··· -- -- -' 25X1 EO 13526 3 3 b 6 25Yrs C05674848 PPROVED FOR RELEASE - CIA INFO DATE 25-Au -2015 1· I •' _ I -7proved investigation 11 In June fr itless 1970 Shapiro a position as Vice President with Kawecki Eer•lco Com an resigne·a from NUMEc· and took for Research and Develo ment in Tern le· Pa n July 1971 Shapiro left K wecki Berylco and took a position as executive assistant to Westinghouse breeder reactor divisions' general manager To quote Nucleonics Week of 8 July 1971 At Westinghouse he'll be giving guidance and advice on the Fast Flux Test Facility project and breeders with special concentration on fuel b 1 b 3 NatSecAct EO 135 6 3 3 b 6 25Yrs 25X1 e r · - 0 l 1J I' f '