Departmen t of Energy Washington DC 2058 5 Oct obe r 24 2008 Mr Roger Mattson 25 l l Fossil Trace Court Golden CO 8040 l Re Freedom or Information Act Request 2007-000554 Dear Mr Mattson This is the Onice or Inspector General OlG response to your request ror information that you sent to the Departmen t orEnergy DOE under the Freedom ot· Information 1 c1 l OIA 5 U S C 552 You asked for a document entitled August 8 1977 NumecRclated Congress ional Hearing elated April 27 1979 In a letter elated Ju ly 19 2007 the Headqua rters FOIA Prirncy Act Group informed you that your request wus assigned to the History and Archives Group in the Office of the Executive Secretariat for action On September 24 2008 the History and Archives Group transmitted the responsive document to the Headquarters FOlA Privacy Act Group lo r release determination Howeve r after rurther review by Headquarters the docume nt was referred to the OJG for final processing on Septembe r 26 2008 Also in a conversation with Mr Chr is Morris of the I lcadquarters staff on September 26 he acl 'ised you that the document located is a declassified excised version I le also informed you the Of'fice or Classification reviewed the document and determined that the document remains unclassified with its original excisions You advised Mr Morris that you would like a copy or this docume nt On October 17 2008 Ms Adrienne Martin O IG Privac Act Orficc r spoke with you about the responsive doc ument and informed you that there are add itional docume nts in the form of exhibits that arc responsive to your request She also informed you that these exhib its are classified and pursuant to Title l 0 Code or Federal Regu lations C F R Sl 'ction I00-t 6 the documents must be submillccl to the Office of Document Review Office of Classification to conduct a declassification review You informed Ms Martin that you 'Ould like to receive the docume nt witho ut the exhibits Ms Martin further adv ised you that ir you ould like to recei ·e the exh ibits you must submit a new FOIA rcq uest The OIG has completed its review ol' the responsive document and a determination co ncerning its release lws been made pursuant to the 1701 5 U S C 552 The document is rcl a scd ·ith material has been 'ithheld pursuant to subsections b 6 and b 7 C orthe fO l or Exemptions 6 and 7 C respecti ·ely Printed I ith soy ink on recycled paper - emption6 protects from disclosure personnel and medical and similar files the disclosure ol' which would constitute a clearly unwarranted invasion of personal privacy Exemption 7 C provides that records or information compil ed for law enforcement purposes'· may be withheld from disclosure but only to the extent that the production of such documents ··could reasonably be expected to constitute an umvarrantecl invasion of personal privacy amcs and information that would tend to disclose the identity of certain individuals have been withheld pursuant to Exemptio ns 6 and 7 C Individuals involved in OIG in 'l stigativc matter which in this case include subjects witnesses sources or information and other individual s arc entitled to privacy protections so that they will be free from harassment intimidation and other personal intrusions To the extent permitted by law the DOE in acco rdance with IO C F R I004 1 will make available records it is authorized to Yithholcl pursuant to the FOIA unless it determine s such disclosure is not in the public interest In invoking Exemptio ns 6 and 7 C ·e have determined that it is not in the public interest to release the withheld material In this request we have determined that the public interest in the identity of individuals whose names appear in these files does not out ci gh such individuals· privacy interests Those interests include being free from intrusions into their profess ional and prirnte lives As required all releasab le information has been segregated from the material that is ithheld and is provided to you See 10 C F R 1004 7 b 3 The decisions may be appealed within 30 calend ar clays from your receipt or this letter pursuant to IO C F R I 004 8 Appeals should be addressed to the Director Office of I lcarings and Appeals HG 1 L'E nf'ant Plaza Building U S Department or Energy 1000 lndcpcmkn ce Avenue S W Washington DC 20585-16 15 Thereafter jud icial review will be available to you in the federal district court either I in the district where you reside 2 where you have your principa l place of business 3 where the Depart ment's records arc situated or 4 in the District of Columbia Sincerely re- a Snider sLL Ass istant Inspector Genera l for Resource Management Of'fice of Inspector Genera l nclosurt 2 Document Number 1 Classificati on cancelled B I in •By By to Williamson VERSION Da ONLY April TO Uhder FROM Deputy Insp e ct or General SUBJECT August 8 27 1979 Secretary 1977 Nl MEC- Related Congressi onal Hearing This report resp ond s in part to your January 1978 memorandum askin g us to investigate exist indicating that been intentionally inaccurate furnished 'to whether the House Subco - r - it ee and Power the Hous e Subco i tt ee tion the £ held August hearin 6 1977 before Our ans er facts rr ay ha ve information on Energy with Jl Chairrna i to your ir conne c- Ding E 11 o - questior is yes ------ c--- --- ---- We fou nd facts sho in g that I J may hav e made accurate ' intelligence J I V 0 st ternents i - ' lof special j I nuclear i -· I C 0 o _u ____ r _ C _ jPennsylvan a diversio from the Nuclear Materials Corporation in the in- knowled ge of a U S material jand Equipment -1 I ' o 13 gen ·y' s ews on the alleged fJ I about intentionally NUMEC plant at Ap9llo mid-sixties J i According August 8 hearing to Chairman Dingell was twofold of infonnation · J- ti- ' I that first the purpose of the to evaluate had been generated the by the 2 f ormer ERDA and the on unaccounted material both Nuclear for Regulato i e e riched spe ci al a nd second r y Commission to in quire ERDA a nd NRC tha t there NRC nucle ar as su ra nc e s fro - into has ne er been a diversio or thef t of signific ant qua n ti t ies of spe c ial nucl e2Y 1 material s Thi s re po rt i s li mited to c on s i deYatior the testimony wi t nesses lat er th at wa s provided who appeare r e ort wri tte d at we ill t he hearing Since t estimony t he area s teDs h andling of the fo r purposes fin d in s o t h l Hou se Subco i tt ee of co -icern frorr the at by the ER A 2 8 hearing I r a oath y ou of our he d o the s u rr o un ded th e di scovery nucle ar material August a dvise answ e s furnis f o ll owing the under of controve relating r sy th a has o f un accou nted t he NU EC plant NUMEC situation of background J co ill for lon g sp ecial i n 1965 b e briefly The NUMEC incident ERDA's r eviewe c i s of 1 Au gust 8 1977 Hea rin g Tran scr i pt He aring Transcript Exhi bit B pp 1- 2 YOEARCHIVE 2 Th e ERDA witne sses we r in order of appearance _ 3 particular for significa enriched nuclear nce because nuclear weapon material the amount a s sufficient NUMECfir t be an d uraniUI' 'l in late delivery of product c ontract i th Westi -ighouse officials of predecess or of special that in spection r epo r t i n which and rule the report Labc -ato ry Corm ' i ssion EF IJ 's a pproxirr ately ere t a 93 8 L log -a - - s unacc ounted for 1 - a of 19 5 by a spec al on team The special not material cc N i ·' C's 1964 pursuant was made in ove ter AEC inspecti inadequate - detercined nuclear Following Astronuclear Energy on contrac s a 3 1957 of the Atomic deterr 1inatio-n a in October to produL working 0 proce ss enriche of unacc oun ec out t h ey concluded incomplete the tea also prepared that because accounting p ossibi lity records of a diversion and is s of NU iEC ' s they coul 2_ However evidence als o stated '' tha that a diversion the AEC had foun d ' 'na had occur-red 3 ai_ l L' - C r 0 1 - See Exhibit BB p 4 The inspection tea m also cor c 1u de d t h a t 61 of the s e 9 3 8 k i 1 o gr ams co u 1 d be a scribe ci_ to t he WANL c ont ra ct Exhibit BB pp 15-16 J Q ARCI li Wf' b II This attached r eport was issued on April 6 1966 · an d is a s Exhibi t BB See P· 4 b - 7 3 See Exhibit BB p 4 __ r '' • I 4 Th e AEC officials discrepancy further ·wa probably stated attributabl that the inventor e to a 1 accu - ' latior • of internall ci 1 i t y fa for y generated urani u r residuf' a the - ·S C th a t h d no t b etfn r e po rt e d in special nuc lear material processed ' l 1deY previo is 1 contracts that unaccounted in the the In piping The at NUHEC was countr y appear 1977 hearing agency was that J when questi queried govern e 1t likely s at lines nuclear but _the stuc or 954 through After mate rial hethe r J wo uld di sag ree with ¥ •as not ' aware wh et her one of nuclear material by ano - e - 973 of the August Jposi been diver e l co nc lu s io 1 any such 8 ti o - o f o- e i n elligen a g ency ons ab ou t th e n o diversion agency's diverted has ever knew ab o t gence special stolen 2 1 asked a bout i s questioned intelli ·that l ost transcript tha c co 1cl oed wa s most J where no n o special J material possibility from that for a U S on the the se officials wo rds Nill lEC c o lloquy of views other ce ab ·eilcy _Al sc ha s · certain conc lusion C J DOE RCHCVES I 21 See Exhibit See Exhibit BB B pp 6 20 pp 51-52 5 subsequently qualified - I this latter answer by adding J During i nvestigato twice the first interviews CIA with _J had rs c _ by representatives Agency 1tw o of of ------ the Central - - - ----------- ---- been Intelli ----- our briefed gence ---- ------- ------- ---- ------ ------ ------ ------------- ---------- The first such briefing 15 1977 the office of Zbigniew K National Security President the for possible who appeared Deputy second on April Br zezinski NUHEC diversion was at in that meeting Assistant 2 in to the The CIA position presented his on by Enno capacity as Knoche the of CIA Director The occurred --- briefing on t his of subject took _ place in This briefing office -- The odore was Shackley ERDA o n July at requested by ERDA and who wa s the Associate 29 1977 conducted by Deputy DOE ARCH Vf_C Hearing Transcript lin es 3 - - - -- -- -- - --- - --- J 971 - 73 Exhibit B p 52 6 Director of CIA Operations attended by General Assistant The briefing Alfred Administrator deputy General D Starbird for Edward Jmernory corroborated their that prior to Subcommittee have to the ERDA was of Starbird and this in J to 197 7 hearing ERDA' s files this review Bureau of recalled in response Investigation information briefing from is Giller withholding 3 NRC In our classified second in 21 our investigators before the that to that House NUMEC may an inquiry had been J alleged because improperly his 1 - General investigators August ERDA and Jcertain Federal initiated Security undertaken the substance our the ---------------- r addition documents the also ----------------------- Giller by General statements In by of then National ----- ------- ----------------- was that NUMEC- elated interview with DOE ARCHIVES ll I-- -- ---------- -- ----- --- --- -- ------ -- - J 2 See Exhibit PP pp See Exhibit MM p 2 4- 5 and Exhibit QQ p 8 1 1 CC _ 7 J NUMEC fi les in ERDA- NRC report material NU i EC-related gence Estima te ----- - 1_ sta ff of the ii In spec ial from files a Special -------------------- excerpt addition document the when shown J us ' s NUMEC implications to National Int elli ---------- J fami this th e nuclear available of contents for of of 1 1977 - 4 an excerpt c er t ain fo r th e release on unaccounted l was 3 J _ preparation on August Among the that liari a copy that ty - -- i t h the by our wa s awar e --------------- - - - - - - - - - - - - - -- -- - -- - - - -- - - -- -- - - - - -- - - -- · J crn F 5 QQ -- See Exhibit IIII p 2 i i See Exhibit JJJ firs t page 11 - - - - - - - - - - - - - - - - - - - - - J ii See Exhibit IIII p 2 8 When asked i n the direct c o lloqu y be tw een J construed had an l y by our the that 954 and 1 were narrowly agency vi e w ------- Accord in g t o C J had never tative a signed CIA official t hat had However it appears nished that the House point --------------- answer the occurred to was us or whether that· - -------- accurate CIA 2 - J si nce from definitiv facts an authori ely concluded do exist in tentionally inaccura·te -- ----- fur - info rm ation on --- ---- --- - -- - - - - --- - ---- -- -- ------ - -- --- -d- -Q - the 1 - - -- -------------------- ----- - - --- --------- -- · --- accurate heard ------------------------ - ----------------- 973 were mean CIA had Subcorn mi ttee J - ------------ J may have --------- to document that a diversion indicating this seen f if lines they questions staf Similarly ' since - __ DOE ARCHIVES l See 2 - - - - - - - - - - - - - - - • - - - - J See Exhibi Ex h i bit t IIII IIII p 4 p 4 - 9 had the benefit of the and Jwas officials t he Special briefings by two senior familiar National with Intelligence hearing certain that questions clusion at one 968 o f the knowing Subcorrunittee their conclusions actual J was should agencies been But standing disagreed with seems con- intelligence a position to know the addressed _ assert C J no questions directly further divers to the elaboration i on that i on that is possibility that be a agencies NUMEC diversion and to suggesting the without of CI A had di version implies corrununity have the on the ot __in the time knowledge statement ask The statement intelligence left of House best Transcript qualifying --1 agency the J Hearing misstatement at -- Accordingly line _j knew ERDA' s no from - - ------ i ntelligence about excerpt Estimate --- - -- - --------- -- -- -- ---- __ the the CIA about cryptic at that views of on their th e views intelligence no intelligence conclusion the oo£ agency t RC p 10 Finally J referred of may have to our the would took Department further action of place of law of to false to one that in NUHEC incident Justice on this has matter on its indicated with _ I th at respect it to vt d1_ _ _ · _ · C '--IL cc _ I The Secretary Deputy Secretary See Exhibit JJJJ portion e agency nuclear Accordingly will take J no r V _ ___-----'-- - -J rf 1l _ yt_· mass that intelligenc of the the in no diversion review that support statements whether was concluded view the report Based Justice tha possibility this evideri ce made relating the Justice insufficient with raised federal Department that _ concur findings Department testimony material the the contains conclusion our violated rep ort the report of since Wi QQg _8 tl1V£S EXRIBITS TO REPORT ON AUGUST 8 1977 NUUEC-RELATED CONG SS ONAL •r @lum s eeiJ Le B 7 Authority of ill e pr 2 4-26-79 Memo from INDEX OF EXHIBITS EXHIBIT B Transcript of Hearings Committee on Interstate Commerce Subcommittee and Power -- Oversight ERDA Nuclear MUF Data 1977 Before The and Foreign on Energy NRC and - August 8 EXHIBIT BB Report of Survey - Control Over Enriched Uranium Nuclear Materials Equipment Corp Apollo Pennsylvania - April 6 1966 EXHIBIT MM Summary of May 19 1978 Interview of Robert W Fri former Acting Administrator of the Energy Research and Development Administration EXHIBIT PP Summary of May 30 1978 Interview of General Alfred D Starbird former Assistant Administrator for National Security Ener gy Research and Development Administration EXHIBIT QQ Summary of May 4 1978 Interview of General Edward B Giller former Deputy Assistant Administrator for National Security Energy Research and Development Administration EXHIBIT JJJ Excerpt from Special National Intelligence Estimate-4-1 dated August 23 1974 EXHIBIT IIII Summary of March 8 1979 Interview of Robert W Fri former Acting Administrator of the Energy Research and Development Administration EXHIBIT JJJJ April 27 1979 Letter from John C Keeney Deputy Assistant Attorney General Department of Justice to Thomas S Williamson Jr Deputy Inspector General Department of Energy ·-··-- J _ ' ' - ·- - •7 n f En ' l ••• -- - - ·- mac t W Fri Consultant and former Administrator for the Rb o er · ' dm' · t' ERDA Energy Research and DevelopD e nt A 1n1stra ion was interviewed in the o £ices of the USIA by James H Anders0n and William M Knauf of the Office of Inspe tor General OIG on May 19 1978 The pur p ose of the 1n erv1ew was to develop information essential to the understanding of the U S Government's efforts to identify and to report inventory differences ID of special nuclear materials SSM in general and to document any · evidence of specific di ersions rom the N MEC pl nt at Apollo Pennsylvania Mr Fri was advised of this OIG interest and of the fact that the results of the interview would be su mmarized and report ed to the Secre_tary and to int_erested congressional 9ffices Mr Fri stated that while with the Energy Research and Developnuclear mament Administration ERDA the 1965 NUMEC special terial invent ory difference issue came to his attenti on on three occasions He recalled that he first became familiar with the issue during the late spring or early sum mer of 1976 when an aide to President Ford asked for the NUMEC files and secondly wheR Commission er Marcus Rowden of the Nuclear Regulatory ·com NRC in his presence briefed seve ra l of the National mission Security Council Staff on the subject The third occasion was when he was the Acting Administ rator for ERDA and ne reviewed the pertinent NUMEC documents so he could make his own assessment of the issue prior to the release of the ID report • Mr · rri remarked that on the first two occasions that the NUMEC issue came to his attention he h ad little involvement and he conduct ed no in-dept h study of NUMEC He recalled t hat-in 1976 he recei ved a c al l from J ames Connor who was a sta f s ·ecretary to P-reside Qt Ger a ld Ford and who asked to have the NUMEC files sent to him for review He said that he contacted Mr James Wilderotter o f the General Counsel's office to deter mine if his was prop e r and upon rec eiv in g an okay he asked General Alfred Starbird Assistant Administrator for National Securit y Affairs to mak e th e arra ngemen ts for the files to be delivered to Mr Conner for his review He added that although it is still unclear to him why the NUMEC files became of interest to the White House the request for the material wa s made prior to the current Federal Bureau of Inv es tigation FBI r view of the NU MEC matter which was launched in May 1976 • Mr Fri stated that Stan Knocke Messrs he W S present Dave Elliott •• when Commissioner Rowden briefed Tuckrnan 6£--tJie and Ms Jessica • • l - • t I • • J • • • • ' · ' • _ _ _· __ · --··-·-· 2 • National Security Council Staff in Mr Brezensiki'e office on the pendin rele ase of the Strategic Nuclear Materi l Inventory Differ e nce Report and i for me d them J wbat he te House and Mt Bre ze·ns ik i sliould- -be aware _ of _rega ing the NU r- c -ciss _ue ·Mr Knocke also articulatec on the - Central Intelfigence Agency tIA pos1t1on on the iss _ He presentea - a sum ary analysis based on the collected infor ma tion developed by various CIA sources Mr Fri explained that in pr epa ration fer the release of the ERDA ID report which prese n ted the cumulative specia nuclear material inventory differer c t s fer liMEC and other licen sed facil i ·ties under AEC ERDA jurisdiction prior to J anu ary 19 6 8 as well as for ERDA weapons facilities he decided that he needed an in-depth revi ew of the NUMEC documents so he could re a ch some conolusion and make an assessment for the prefac e of the report Mr Fri ·um attention comment ed th a t the NUMEC issue had been receiving some for an extended tw o - yea r peri od of time Although Mr Fri could not specifically recall the cause he agreed that the OIG reference to the ti ming of th e emphasis as coming after Mr · Jam e s Conran of NRC was refused permission by ERD to review the personnel· security file pertaining to Mr Zalman Sh ap iro genesis for the issue former President of NUMEC was a reasonable He said ERDA's decision to deny Conr an access to the Shapiro file was concurr ed in · by NRC and then Conran thr ough h-is a il ega tion s forced an inve stiga tion by the NRC and FBI charging that ERDA was in poss ess ion of classified information that SNM had b ee n diverted to Israel and that ERDA had this in forma tion on file and was not willing to share this inform at ion with NRC which was now respon· sible for the safeguards pro gram for licensed facilities Mr Fri stated that because of the FBI inquiry and the press athe felt that as a tention that the HU MECi ssue was receiving responsible official h e needed to review the NUMEC do cuments himself so he could make a decision based on his review of all the evidenc e both in-house as well as the material -o r ev id ence alleged to be on file in the intelligence commu·nity zr r i- t li Mr Fri related that he heard from three CIA official s n thr ee separate occasions He remarked that he felt Mr t • i - '»@ of the CLA presented a summary of significant information n ot really relevant to the NUMEC issue and that his briefing drew no · j l ___ J 41 - 4 - He explained that the ERDA information also showed that NUMEC oid not calculate the losses at the time of processing and carried th em forward until 1965 when the lar ge ID was uncoverec He said th e operation of NUMEC was such th at th e ID's c ou 1a · be legitim a te He corrunented t ha t the most likely explanation was that the ID wa s in fact _an ID which was more believable than Mr Shapiro dive rtin g S M in heavy sui teas es to Isr ae l He said th e alternative explanation is that it is a hi g hly circumstantial c ase that a diversion was successfully co mpl et ed by Mr Shapiro Mr Fri co mmented that d ur i ng the dr aft i ng process of•th e ERDA two 1977 is sue s r egard i ng NUMEC evolved which he felt ID re ort were relevant 1 Sh o uld the alleged diversion of SNM from NUMEC to Is rae l be r einvestigated by ERDA He con cl u ded that bas ed on the informati on available t o him there was no reason to probe the issue further and 2 should major adjustm e nts to the ERDA oversight mechanism be made Mr Fri felt t hat the safeguar ds system of t oday was advanced to the point where he believe d such l osses could not h appen again Mr Fri added that he revi ewed the draft ID report in de t ail a nd sugg ested changes to the document He s a d his ch anges were 1 editori a l and 2 rel ated to th e fo cus of the document He felt th at the way t he in f orrna tion was first prop9sed fo r presentation l eft the r eader with th e i mpression that the SNM was lost This was not th e ca se He sai d t ha t h e th erefore su g gested a ch a n ge that was int e nded t o clarify t he fact that the inventory differences rep orted to · th e public were tr aceabl e to rneas ed system retentions wh ich co uld not be accurately made - J '-' r 'f ' Mr Fr i remarked I r that his statement in the preface of the ID re- · as well as the narrative portion in the body of the report in effect th at the nuclear safeguards sys t em is sound The report doe s not s ay th ere is no evidence how ever it does say port state l' • • ••• that nuclear no significant materials · have quantiti e s of been stolen • strategic special • •' • • • - · - · ·-·· · • •••• • - -- --- 'I •I - 5 - Mr Fri commented that prior to testifying before the Subcomon August 8 1977 his instructions to Edward Giller and Aifred Starbird were that he had reviewed all of the in formation past and current and he found no reason to believe that any inform a tion was withheld On that basis therefore it wa·s his judgm en t that no significant amounts of SN -L had been stolen or diverted He said that he pointed out that this was not to say he was ri ght or that there were not contrary hypoth ese s on this subject however based on the evidence he saw he reached the conclusion he presented b fore the Subcommittee mittee _ • • •• • • I I •• • -· __ i _ · al · ' O RC ' 0 f p - -· a' 3· General Alfred D Starbird for National Security U S formerly Assistant Administrator Energy Research and Develop ment Administration ERDA and now retired was interviewed by James H Anderson and 'lilliam M Knauf of t he Office of Inspector General OIG on May 30 1978 The meeting was held at the U S Department of Energy Building DOE located at 20 Ma sachusetts Avenue in Washington D C At General Starbird's request the meeting was also attended by his attorn ey E Gr e y Lewis of th e law firm of Morgan Lewis and Beckius The purpose of the interview was to develop information essential to the understanding of the U S Government's efforts to identify and to report inventory differences of special nuclear materials S NM in general and to docur ient _ any evidence of specific diversions from the NUMEC plant in Apollo Pennsylvania More specifical ly OIG discussed with Gen eral Starbird whether or not any facts indicated either an intentional or unintentional submission of inaccurate information to the Congress or to the public relating to ERDA's oversight of SNM OIG also examined General Starbird's recollection of the ERDA staffing and preparation of responses to re ated congr e ssional interrogatories stemming from the August s· 1977 hearing by the Subcommittee on Energy and Power of the House Committee on Interstate and Foreign Commerce Gener al Starbird was advised of this OIG interest and of the fact that the results of the interview would be summarized and reported to the Secretary and to interested congres ional offices General Starbird advised that he became acquainted in some detail with the 1965 NUMEC special nuclear materia l SNM inventory difference ID controversy in 1977 when he r vi wed NUMEC documents maintained in the Division of Safeguards and Security He recalled that his document review was initiated to assure himsel f that information contained in the strategic nuclear materia Inventory Difference Report that was being prepared for public release on August 4 1977 was accurate He also wanted to be sure that there was no information on file anvwhere within the Atomic Energy Commission AEC annals or ERDA files which uld lead to the conclusion of theft or diversion of SNM from NUMEC He commented that he wanted to know also what safeguard procedures were in effect in 1965 Therefore he reviewed the security and accountability surveys of this time period ccnducted at NUMEC by AEC personnel He added that he al so reviewed the various memoranda and letters exchanged between·the AEC and the Joint Committee on Atomic Energy at the time to assure himself j I •• • • Q ' • · • • f'- - 2 that he understood the NUMEC case General Starbird related that in addition to his docume t review he also questioned selected AEC ERDA staff who were involved in the 1965 66 investigations of NU EC His review also included examination of the General Accounting Office GAO and the Fe de ral Bureau of Investigation's FBI's investigations held by ERDA relating to NUMEC He said that after his analysis of the NUMEC documents and after his conversations with the above-mentioned selected staff he discuss ed the matter with General Edward Giller ERDA's principal intelligence officer and br efed the then-Acting Administrator Robert W Fri • General rafted Starbird stated that when the ERDA ID report was being his role was that of a top-level reviewer He remembe red that when he reviewed the report during the drafting stages he felt that it containe d some overstatem ent s which strongly implied that th e safeguards of today were comparable to those of the early 1960's General St arb ird said that these implications were misle ading and were therefore corrected He emphasized that the AEC ERDA management approach to implementing a viable safeguards program had been significantly adjusted since the mid-1960's He explained that prior to the NUMEC inc dent and for a time thereafter the safeguarding of S M at AEC-licensed facilities was limited to a reliance OR the intr nsic value of the material as a sufficient influence to force the user to protect against theft or diver s ion He noted that this automatic SNM protection mechanism was complemented by the AEC making -occasional security and accountabil ity surveys and by making recommendations to the licensee on how to improve their security systems or accountability records · He pointed out that in the AEC plants th emse lv es th e safeguards systems were strong then but not as strong as they are now He also believed that the security and accountability systems of the AEC plants were adequate for that time General Starbird advised that his review of AEC ERDA files on conversations with selected AEC staff and the briefings he and other AEC ERDA officials received from the Central Int lligenc e Agency CIA caused him to conclµde after first carefully weighing all the evidence that a significant amount of SNM had never been stolen from NUMEC or any other facility monitored by the AEC ERDA General Starbird further clarified his conclusion for OIG by explaining that his choice of words reflected the same rationale he had attempted to apply to the NUMEC his • • • 1-1 - ' · ''QT - 3 explanation of this issue during the press and media briefing at the time of the public rel ease of the ID report He precisely differentiate d between t he words n o and significant amounts of SNM He amplified on this difference by emphasizing that the rep ort was respondin g to an intent to examine strategic i e sufficient to influence an enhan ced nuclear weapon capabilfty to any major de g ree relative to the status of that capability prior to the acguis ition of the SNM losses and or alleg ed diversions Finally General Starbird also insisted as he had t estifi ed in the hearing that any interpretation of the AEC ERDA position on this question should not misconstrue his statements to mean he was certain that no diversion kad ever occurr ed He pointed out that in answer to an Qral question during the hearin g he had answered I would not say that I am c onfident that a sign ifican t amount of SNM has never been diverted I have said th at neither AEC or ERDA had found evidence t o lead them to conclu de that a significant amount of strategic special nuclear material has ever been diverted General Starbird recalled that great care was tak e n in all word usage in all stages of preparation of the ID Report He rein which one of membered a meeting with Dr James Schl es inger the final iterations was br iefed and Dr Schlesinger raised a specific question on the no ev i den ce statement Klthough Starbird explained th ere was no direction by Dr Schlesin Gen ral to change the report Dr Schlesinger caused a discussion of the potential use of qualifiers such as direct evidence of findFu ·rther General Starbird said he re al ized that all ings etc little inci dentals can be con sidered as evidence as 11n ·i ts and ne-cessary to arrive at any conclusion Therefore after pieces careful weighing of the data the appro xima te qualifier was inat the corporated at the press confer enc e and in the testimony Dingell Subconunittee hearing General ing from · Starbird stat ed th e CIA that in ' -· _ -- ' T · d - - · if • A ' ilH ' · Apri l 1976 ·t · • ' · y· - · - he r eceived ' ··--- ' · 7 ' i· ·' _ ' f i · i · · · ·- · · - -· ' • ' ' · -· • • • a brief- 'l ' - 'n '· 0 tt i- • -1'' l fi_ h • • ge • - - • • •• •• • • - • I I ··-·-- · -- - - · - - - - - 4 General Starbird said that before his CIA briefing either he or his Deputy General Edward Giller i e he believes it was hirnseif received a call from Mr Dave Elliot of the staff of the Nation a l Security Council SC Mr Elliot requested that a draft t a l k ing p ape r be pr e pared on the NU IBC situation and that a similar pap e r was to be secured from the Nuclear Regulatory Com ission NRC and the CIA He believes that he or Giller instructed Mr Robert Tharp Deputy Director of Safeguards and Security to visit the CIA to develop this paper He added that in subse q uent c o nversati o ns with Mr Tharp Mr Tharp told him that he received his instructions to go to the CIA from Giller rather than from General Starbird He recalle that r T p c a me bac k with a two-thirds of a page i put fro11y the CIA which Mr Th a r p ex l ai ned was pr ep ared b r Sa re S -61' th e CIA He said th a t f i reme mbrance th't r was undat ed -u nsig ned and not written on CIA letterhea er Also as he rem emb ered it had not been receipted foY He'reiat e d that after t h re three drafts were put together they le rned from Dav e Elliot that the CIA would submit their own version General Starbir d belie v ed that the CIA two-thirds of a page copies in ERDA ther eaf ter had been destroyed However copies were later discov e red in the files of Safeguards and Security and transferred to the intelligence files of ISA H ·also recalled that his learning that a copy was still in ERnA did not occ r until after the ERDA DOE rec e ipt of the second letter from Congr e ssman Dingell in 1977 While reviewing with Chapman and LaB a rre that second letter on November 16 he was told of the exist e nce of the copy in ISA fil e s He stated that in ad d ition to t h is c op y of the draft anoth r_ dbcu ment which he id e ntified as a chro n olo g y of CIA brie f ings of AEC ERDA and other a ge ncy of f icials was located in the s a me files of the Office of Int e rnation a l Se curity Affairs ISA on November l6 1977 He ad de d that this later document was a copy of a memo or letter a d dr e ssed from CI A Director Stansfield Turner to the U S Comptroller Gen e r a l Elm e r Staats that he had previously never seen He stated that the eleventh-hour discovery of these two documents was a disturbing indication of lack ·of adequate staff coordination · I I •• • • • ' - s -· · • · · · ' •' • ' • • · • • • •• • ·• - · ·· · - t - ' j s -· · ' ' - 8 0 1 f f ·· 'I •• • • ·· ' - ' · ' '- i - o C lCJJ _ W i - _ - 1 He reit e ·and other E i0A officials man Dingell and the House August 8 1977 ' 0 I' - erated said Energy - - c 0 - ' for OIG t at _this w2 ·s what when testifying before Chairand Power Subcommittee on Finally in connection with these CIA briefings and interface General Starbird explained that he was comfortable with the AEC ERDA position which maintained that ERDA had no access to any CIA reports He said that in his view a repo t is not a alking paper or a memoran 91 1 D for the rec _o rd Neither of the C · e had seen represente d- an officially CIA-agencvsan'ctioned statem nt of position Therefore without the stated approval of the head of the agency i e the CIA Director General Starbird did not consider anything he saw as a report 0 • · General Starbird remarked that subsequent to these August 8 1977 hearings Congressman Dingell forwarded to ERDA for response a series of questions relating to nuclear safeguards NUMECand to the CIA position on the NUMEC issue General Starbird stated L at he had mi ssed the point of several questions asked in Chairman Dingell's first letter until receipt of the Chairman's second letter Initially he had thought the Co mittee was attempting to secure the answer as to what information CIA had relative to NU MECand who in AEC ERDA was briefed ERO had felt that such information would mor appropriately and accurately come from th ·e CIA It was for this reason that the October 11 ER A reply suggested referring several questions to the CIA It was not u il receipt of the second letter from Chairman Dingell in November that he recognized that the purpose of some questions was to determine ERDA's understanding and comprehension of CIA information and how ERDA responded He said the questions were r ceived in the Division of Safeguards and y • • • • • I• I Clm r H - 6 g Q Security DSS Mailroom on September 22 1977 and when he learned of their receipt he instructed the DSS Director to ' coordinate all of the responses with the interested parites adaed that he thought at the time those questions dealing · with intellig ence matters were assigned by DSS to ISA for rev sponse ·and he asked Messrs Ray Chapman or John LaBarre to ·have Edward Giller specifically review the responses in the i · intelligenc e area especially th ose dealing with ·Giller directly prior to any submission to him for review He re called that he made only a couple of minor changes to the j La ar e Gill e r raft respon es ne conceri i e how ERDA re·· eivea its funaing for the intelligence activity and the g other addres sed the matter of clarifying the fact that the g C ongress as a whole and not the Appropriations Com ' Jittee 0 · · grants or authorizes funds The Committee only recommends onies to meet the requirements of authorizations · 0 - ' r-il He 'V' ' 1 l 2 I I· f ' General Starbird stat ed that sometime in December 1977 he asked Mr La Ba rre for a copy of this Octob e r draft He recognized his handwriting making the changes enumerated above on the document however there had been other chan ge s in the final copy of the answering letter to Chairman Dingell He sa d that Mr LaBarre was unsure who made them but believed the changes were probably made in DSS He added th t Mr Torn Isaacs was the DSS action officer on this document Mr Isaacs later explained he was aware that DSS also worked up some answers in the intellig en ce area On reviewing in November after receipt from Chairm a n Dingell General Starbird final ans r to· Question No 25 s e nt to was drafted initially in ISA h ad been of the sed nd ·letter recognized that the Chairman Dingell which changed possibly by DSS and that it was not fully re sponsive He observed that it was only responsive from the point of view of DSS He stated that evid e n t ly when he reviewed the final document before he forward e 1 '' i t to the Subcommittee he missed this change General Star b ·· said that if he had read it more carefully he would have J o gnized it as being nonresponsi ve • - • '··· • • • • • _ I General Ed ard B Giller hereby solemnly swear that the following sum- - a -y interview conducted by Messrs James H Anderson and William M Knauf from the Office of Inspector General Departm en t of Ener gy and consistin g of pages is true and correct to the best of my knovledge and belief so elp me God ··- · • Deponent's sworn and 'me this -1978 Signature subscribed to before C ' t d ay of JJ1Ai-J d D - ii G Jl James H Ande rs o n In ves ti gat or ·Resident Insp ect or General 0 f Energy l ' I i l l· Willia · M Resident In t i gato r Office of In specto r General Departrn e ITt of Energy ' I I •• • • i_ t · J · _ ·· JL - · --- • - ·- -· ··- - ··n··· c' -- - t • ··t _ Genera1 E h ard B Giller Consultant Department of Defense Maritime United Nations Negotiations Division was inter viewed by Messrs James H Anderson and William M Knauf of the Office of Inspector General OIG on May 4 1978 The meeting was held at the Pentagon in the offices of the J-5 of the Joint Chiefs of Staff The purpose of the interview was o develop information essential to the understanding of the U S Government's efforts to identify and to report inventory differences of special nuclear materials in general and to document any evidence of specific diversions from the NUMEC Plant at Apollo Pennsylvania General Giller was advised of the OIG interest and of the fact that the results of the int Arview would be summarized and reported to the Secretary and to interested Congressional offices • The thrust of the interview with General Giller involved a · chronological examination of his institutional memory of his ·own involvements and responsibilities relating to inventory differences of special nuclear material SNM and his knowledge of and interpretation of the allegations of SNM diversions from the NUMEC-Apollo Pennsylvania facility to Israel - General Giller was questioned concerning 1 to a Secret National Intelligence Estimate on the for further proliferation of nuclear weapons in 1974 2 both his inter as well as intra-agency · efforts in his capacity as Senior Intelligence Officer to establish a s tisfactory perspective on the diversion question 3 his role in the preparation of the August 1977 report on SNM In ventory Differences ID to include the drafting of the report as well ·as his participation in the press GOnfe ence and official public release of the document 4 •nis ' testirnony and participation in the August 1977 Congressional hearings on the oversight activities of the Nuclear Regulatory Commission NRC and the Energy Research and Development Administration ERDA safeguardin g monitoring accounting for reported SNM ID's and 5 his substantive contributions to two sets of responses prepar e d by ERDA Department of Energy DOE to a series of questions submitted to ERDA DOE in connection with and subsequent to the aforementioried - Congressional hearings · Specifically his input prospects he first pecame afBackground - General Giller explained that filiated with the Atomic Energy Commission AEC in i967 while he was still on active duty with the u s· Air Force ·He SAid for the first five years of his association with AEC his • _ i y 1t tZ · _ • m L I - 2 assignments were in weapons this period to the best of bilities nor his activities edge of SNM ID's or alleged program managem e nt and that during his memory neither his responsiafforded him any awaren ess or knowldiv e rsions of SNM from NUMEC to Israel In 197i G netal Giller retired and accepted an offer Dr James Schle s in ge r to b ecome th e Assistant General for National Security whose r es ponsibiliti es included from Manag e r the Safeguards Divi s ion at th e AEC He stated that sub seq u e ntly the AEc · s e c u rit y function was c o ns ol idat ed into a co mb i ned Safeguards and Security Division General Giller ad vised that in July 1975 Mr Harvey Lyon assumed the position of Director of the ERDA Division of Sa f eg u ards and Security and th a t to tbe best of his memory it was prior to Mr Lyon's ap pointme nt during 1974 when NUMEC an d the alleged diversions first came to his attention an Secret National Int e lli qence Estim ate SNIE 4-1 A9gust 23 974 General Giller stated that in his capacity as Assistant General Manage r for Na tio nal Security he h ad the res po nsibility for and the need to know the background an d subst a nce of information involving NUMEC and the alleged diversion of SNM to lsr el · · c • • L - i '· · ' ---··--- · -·- - ····· - --- - • - 3 General knowledg claimed tempted forrn ation Giller explained that his dis sen t was based on his e and und e rstan d in g of the f ac ts at that time He that pr i or to his submission of the footnote he atand cr edibi lit y o e_ _i to determine the in t e rity pr e sent ed in sub a r ag raph c of th e SNIE c · ·--· - _ - - · · -' t · 11- IIE j lk M h · -'· - - ' Q · He stated th a r h e ciid n o r a t t empt SN ' Ehyp oth es is throug h any other intra-or inter-a r o v e rify the ge ncy source ·- However he also stated that he was aware of a hi gh -l evel discussion on the issue held privately by AEC Ch a i rma n Dixie Lee Ray and CI A Dir ecto r Willi am Co1by He believes th at this of executive-l eve l discussion wa s appa r ent ly t he C A ' way explainin g its position and the r eliabi lity of the inr ormat ion _on the is sue to the AEC He said he did n o t disc u s the footnote at an¥ time b efo re or af ter the Colby Ray meeting with the A CChai rman nor did he clear it wi th Chairm a n Ray He believes that Chai rman Ra y pr obably nev er saw it General Giller explained h oweve r that he did recall informing the AEC Ge neral Manager of his dissenting opi nion He said that h e a ss umed that Chai rm a n Ray was a dv ised of the position And that because she did not i ssue any instructions to the con·trary she did not disagree with th e substa nc e of the footnote General Giller als o stated t hat as a matter cours e he - Probably would have kept the Chairman g ene rally aware o f t he of Pk •• • • • • • • I - --- ···· --- - -- ···- I - - 4 NUMECissue and that it would have been logical for him to Colby that he discuss the specifics suggest to CIA Director of the SNIE hypothesis with her if the CIA saw no need for him to have access to that information He commented that it was quite possible that he had suggested that action by r Colby General Giller stated that in 1974 he probably sked his intelligence staff at AEC to brief him on NUMEC however he did not recall spending a lot of time researching NUMEC docu ments because he did not feel that he needed all the NUMEC information at that time General Giller explained that · he had review ed the significant decision documents on NUMEC to sufficiently insure from his manag eme nt perspective t hat there was no cause to disa gree with the substance of the p reviouslyreported responsible findings Secondly NUM ECwas not the •hot issue that it has become today as the subject of the Congressional hearings and the media exposure which have brought the NUMEC problem before the public He stated that based on his own review and on input from his staff he was certain of the substance and in his use of a footnote in the 1974 SNIE which was a standard way of expressing an explicit dissenting opinion within the intelligence community • All ged Diversion of SNM from NUMEC - ·_General Giller advised that after compilation and publication of the SNIE that NUMEC and the ID issue temporarily subsided He stated that sometime after NRC was formed he ecEf-ived a telephone cal 1 from the office ofl M __Marcus Rowde 11 NRC Commissioner most likely around th y part of 1976 during hich it was stated that Rowden want e d to alert the White House the percei ed significance of the old allegations of SNM diversion from t- 'UMECto Israel He rec a lled that Rowden was con ·eined that oun ge r members of the NRC w9 ntea to and he warrt eat o develop some kind paper that would p u- c- ' e safeguards issue and the NUMEC issue in the proper perspective for President Ford He explain ed that Mr Rowden had institution a l knowledge of the - NPMEC situation through his employrnent -as - l ss-i --st-a-n-t ···Ge ner l C-ounse l for Administration and Li t i gatiori' lor th e AECduring - the time frame of the alleged diversion _ of • ·· General Giller commented that as ·a result of this a meeting was held with the staff of the Nat nal conversation Securit • • o • - - 5 - Council NSC in approximately March 1976 and present were Ford's NSC Advisor Brent Scowcroft Mr Dave Elliott President of the NSC as well as Robert Fri Marcus Rowden and a representative of the CIA According to General Giller at the meetipg the substance of a paper prepared by ERDA CIA and NRC was agreed t o as the basis for the FBI to take a new look at the NUMEC situation General Giller recalled that Mr Robert Tharp Deputy Director Division of Safeguards and Security DSS ERDA and Mr Ralph Page Deputy Director Division of Safeguards NRC received a briefing from the CIA in April 1976 which was to be used as the basis for a report to the NSC staff on the current status of nuclear safe g uards and on the NUMEC problem He remembered that the ERDA input to this document was an historical co mpilation of the previous AEC Federal Bureau of Investig a tion FBI and General Accounting Office GAO investigations of the NUMEC facility He recalled reading the s1 mm_i f - - _ T '' K' B Pa-ge upon th e ir ret u rn fr or 1 the CI l - t·- ·· · i - t '1' i ' f · -t· - c-' ' l 1 fflt -i lrt2 K Zc I General Giller stated that in additio to reading the ThaDp Page summary he read and examined some of the AEC Inspection -reports and investigations into the reputed poor security _a s c of ad eouate accountabili tv 2nd ci -cuP st ntial occurrer ce8· · -- · · ' r z · · ' ' · - ' · · -'7 J1' t -£i - · ' 0_ i J · · ' j · of ¥ ' - •· 'l·l 'k - ' - - · f' · ·1 · i - - • -J »· · -- i lt 1£ if i l 1 1· k f iil I that cl a 1 med - tna L n e-b e J 1 e vea a ti me ano s l iJ c o s thu t the advanced technical co mplex ity of SNM utilizati o n and development at NUMEC was suf f iciently unique and difficult to preclude small ID's General Gi l ler explained that the metallurgical engineering difficulties involved in the required repeat e d handling of the SNM crea t ed an en v ironment in which it was t e chnically difficult if not imp ossib le to measure the lar ge rejections residues and loss es which physically accumuluted _in piping and was possibly lost throu gh various waste systems Therefore he ex p lained that based on the accounting system and because of the uniqu e aspects of this processing it would be normal for a relatively large ID to be E ' ii· i r-5 - i - t -i- tte m I M'f - wi# -f IJ i - 4 _ l _ Q t - --- 4 - recorded rtL- '• • •• • ---- • - 6 - On the curity other hand he did admit that the findings vis-a-vis seand accountability at NUMEC as portrayed in the AEC Inspection reports were valid and that NUMEC consistently failed to re spend adequately to _the Government's related recom - iendations He also said that this sloppy management aggravated the difficult bookkeeping problems He went on to say that he as not only unconvinced by these indicators which seemed to suggest to some observers outside the Government cormnuni ty that a diversion of SNM from NUMEC existed but he also saw no need for any crisi s management in reacting to qny formal repor t s on this matter prepared either by the AEC or the FBI Gen era l that he r cogn ize s Giller amplified his position by exrla ning the physical possibility of the ulleged diversionf and that a smaller record e d ID should have raised legitimate suspicion bcut the bookk eep in g He explain d that the only evidence he had seen or h ad been pri vy to was contained in these reports He ·· further stated that based on what in forma tion was available to him he remained unconvinced of the validity or truth of the allegations of planned diversions from NUMEC General Giller stated that iubsequent to the Tharp Page visit to CIA he and General Alfred Starbird Assistant Administrator for National Security received separate detailed briefings from the CIA in April 1976 which did not cause hirn to alter his opinion that a diversion had not occurred General · Giller said t l I I· thc i t his conclusion a proof was that of diversion could not be ·made He stated ·th at h e did not and cannot see sufficient evidence that there was a diversion even though he also reco g nizes the lack of evidence to disprove the allegation Jie r called that either Mr Sayre Stevens of the CIA or the - Iit Deputy Director fa Science and Technnlogy in the April 1976 time frame conducted the briefing He recalled th a t the sp ec ific in fonna tion present e d on Mr Shapiro was information th a t he had heard before and he was not given sufficient ard _i t t 12 LJ 2-F t iQ ' _ to c ause _-c- 't· · _ t ·-•' - him ' - ·· chanae to - - • - his conclusions ··- · -- ' '-fl' rr --t - - rc -- l 9 -- r '7 - -E - - r - 1 - _ T • '-• ·- 1 r · - i t t O t l - -'Q -- r•·- ' • • • •• -- - - -•'f ' ' - · _ f- t • r r r 'J ' -- '1' 7 ·' c -t 'lJ · • - · · •· r · ' - f ' ' ' '1 -- • · i ' ' -- · · ' J ·· ' · it '· ··°¥ · · •· • -- - · - I 1 ' ' ' -' - 1 f'r ' · · ·· ' - ' - •'i · - - · 't' ' ' - · ' C -·' _ - · t '• ' _ _ _ • t -r1LU • • --· l i _ r i l 1' -- 1 - 4 _ · ' ·t · - •I•' ·· ' · - · - - -- -t• • -l -•• -- j 't 'J '1 _ a ·- ' _ 'f' • · - · • - ' ·v • ' - ' w l f ·-- ' • · 1 ' · i' · · •T - J _ 4 1 · a•' J ''V - _ °' c·· · ·· · - _ - '•• '°' ' _·r I · · ·• - '- --'· t - 7 · - _ · - j - -1'1- 't '-' - · __ 1 - ·- ' 1 _ ' · - e 'f ·· • - · · _ t • °- ' ' r ·· - il l _ - • •- · • -' ' • • I I- ' ' • • ' ' i ' J'·· · t' ' l'1 V' · - - --· - _ t • -v · · -·· t r· to4 ·J Ge·1- neral J h -- • - _ ' ' 1 r ' • · • 1 ccoraing Gl l 1 C ' •· - ' ' ' - ' • · - 01a ' • • · - • '' ' J •A ' ' • r - • ·' c •# · - · ' '¢ -lr''I- t 4 t ···· · · 7• lv ' • · '- · c hc1nge essenthat this in- in · I • • - - - - - - - not He explained i lll s uata · • J w···· - -- - t - · tially what he had known bef o re formation on Mr Shapiro was weighed _ 4 ' · - • _ ' -1•- J P ·· ' - ·· - · i • _ i r1c -- ' 1 ' ' • • - · 4 _ - - 7 relation to all the other evidence Based on a broader scientific awareness and expertise the reports on Mr Shapiro were theref o r e j udged by him as less sign if ica nt in asses£ing fhe diversion possibi ity than the technical evidence mentioned above I' I· I j I I I p General Gille r r eca lle d attending a meeting in June 1977 involving himself Gene al Starbird Dr Schl es i nger and representatives from NRC during which th ey _ dis cussed t he draft of th special n uc l ear material in ventory r epo rt that was being reudied for public r e l ease He said ther e was a discussion with ·-Dr ·schlesin ge r uring which Dr Sc h l esinger as ked both Generals Starbird and Giller th e question of what exactly constituted •evidence General Giller explai n ed that this particular · conversati on dealt wi th what the d ocumen t said about f'JU -EC Th e stated purpose was to r ev i ew t heir position for re· p onse t o what he referr ed t o as the in evitab l e question relatin g t u the NRC ERDA conclusion th at there was no diversion Therefore he said th ey were tryin g to es t ablish just what facts were availabie to s how that the evidence did not sup port a diversion and that this c o nclu sio n was accura t e He e xplai n ed th a t th e discussion was cri tica l and that it was h e ld because ERDA NRC anticip at ed getting pin ged on the evidence of diversion question General Giller described this meeting as a norm al staff action He also said that during the dis c ussion they attempt ed to analyze how the diversion conclusion was r ac hed and exactly on what the co nc lusi on was base d He amplified his remarks by stating that the question of evidence of diversion was ulby detennining that the available intelligence timately answered and oth e r data on ly amounted to a series of individ ual f cts or p eces of information which were not conclusory or convincir s y • • ··- af f j 'f_l · f ' _' r ri - · -Mt w Jt ····· ' - I ' I B - 1 ' in thcm5clves There orc he f- ilicl t hnt in his mind n o jucl9u ter we iqhing all the fa c ts for an ri nient could be formulated gainst a diversi n which could SU pcrt a conclusion th t such a mani pul ati on had ta ke n place Even th0ugh h said ther e was · therefore no evidence t o support the allGg d diversicn he fl3rtbcr stated tl w t the facts ls o d o n ot s ay the r Jas no diverii nn General Giller advist ·d tl P1t hi s only ot Pr intcragcncy involve-ment in address i ng the NUl- EC i sue took pla c e in July l 9 7 when h e Gene ra l Sta rbi r d and Rob e rt Fri Acting ERD AJmini s trdt o r recei ve d a briefing in Dr Fri's offic bv ed Sh lck l ey o th e C A 1n wh ch he p ovi 1 2d tnDA w th 8 r H a t the amc 1nf ouna t l o n 1n co mect1on wJ lh t r of essentially prepa rution of gressional t he hearing ERDA I D neport and s on safe9 u Jr ds fchc -e1· J o d Con- the Ile cor 11 11 n ted t hat h l' · rr i and S tarbird E i ic h rer d c 1 CI A tafk ing pe1j' er on 1rn ·lEC sr d Genend Gi l ler ch c ractc r i zc · 1 the pa per as a bas ic r -co · 1 iJ lti o n cf th e l r c ad - kr J'·· ' b 1c q r 0i 1 1 i n f o • Tri 3 r i C't'1 ' -id • v i c1r 1 C I ' r e J - t i ri- 1 f i r' ' · · ' '' · • · r · · ·_· °'· T ·t f'J l -' t • • • lo I • • -i t J l u i 1 t ' t L-- •• iJ r f- Yf · r · Gi J l P r· f -- · - i 1 ' t 'rt ' °J ·i' f u c i f t 'L t - fj - _ 1 i General thoriz d fk _ iJ - - - - _ ···· 1 '- -r ' rll 0 ' 'r 't°1 M f •· i · - - ' • -1 17 ' ·_ - ····· · ·· ··· _ - li o · J - ···· i J t · ·· U i----- • 1 1 J J ' • · - _ '· · ·-' ·' _ · ·· -· ···N· 1 - r '·· · r· _ · ·r_ l - ' ' ' '-·· - ' 1 1 r •·i ·r ' fi' · -1 - 't · · · • J - ' · t' 1 - # --- - J '- ' y • Gill er expla ine d th a t the U S Govern 'T1ent shipments of hi gh- nri c hcd SNM to Israel • 1 · ·- - · · J • • c c -• ' • -_ - • h rtd made au in th e p l t - 9 -· ' General Giller added that at ·the conclusion of the CIA briefing he was offered a document wh ich summarized chronologic lly in tel li gence presentations g i ven to AEC ERDA offi ci als rela ting to this issue He vaguely r ecalled another document which he beli eves was nothing new but a simple co mpi lation of the old data relating to the alleged diversion - SNM - Material Unaccounted Ger eral Gill for I MUF - ID Report er stated that he was not involved in the staffing of the ID Report He explained that as th e Benior Intelligence Officer he served as a br oad brush reviewer of selected iterations of the draft He also said that he served a similar role in the prepara ·tion of th ap ' mpanying press relea se to the report • · · --·· · or preparation review made on General Gill er s aid that there was an ERDA policy the no e idence question He emphasized that there was no intended cov erup and that a position based on a review of all evidence available at that time did not support a conclusion of diversion This conclusion was discussed and it was decided that there was no reason to alter the previous AEC ERDA position Ge eral Gill e r explained the fact that th e ID Repo rt was an accounting doc ent not a representation of e identiary facts He said however that r etrospectively he agre e s that more 6elective l anguage shoold have been u sed to explain that the •preponderance of information does not support a conclusion of diversion He claimed that anot er example of inappropriate communication was the reference t o the WQ 9 - B e -- n _the • • • - 10 August 4 1977 press conference at the time of the ID release and in conn ection with AEC ERDA review of CIA materials He said that these questions were anticipated because of the turmoil but that the selected word usage was poor because it inadver 't ent ly _ suggested that critical information was being withheld wh ch was not tru e Subco mmittee on Energy and Pow e r of the U S tatjv e s Commit t ee on Interstate a nd For eign Hous e of Commerce Repres e n- On Aug st 8 1977 the Subcommittee examined NRC and ERDA ID General Giller said that h e feels that his testi mony was and is s e lf-e xplanatory He did sta e__w __E__bas i P re · h un de r s in g_b t e e 11_ _BD __qIJ d N B i tnesses that tJ' ey wo ul cL_g oss J _ple to avoid being drawn into any dis c ussion s of he illegeacflvers-1 Q Di ssue He exp laine d that th e c onsensus was to adher e to tff e' 'third agency rule and ·not to violate t he CQnfidentiality of the CI _in formation dat a -l J T General Gill e r stated th a t subse que nt to the heari ng befo r e t he Subcommittee Congressman Din ge ll forwarded a s er ies of questions to ERDA for response Th e in te rrogatories relat ed to t he safe guards pro g rams NUMEC · and to CIA' s position or theory of NUP C He recalled si g ning off on the first set of draft inte ll igence re ated res pon se s however hd did not clear the final doc ument that was sent forward to the Subcommi t t ee He said it was his µnderstanding th at pro ba bly Mr Lyon of DSS p repa r ed the final responses for revie w by the Assi stant AdministratJ r for Natio n2l Security Affairs prior to release to th e Su bc omm it f e • H nlso acknowled ge s that Mr Lyon had a key r ole in th e eview in g proces des pite the fact that the DSS piece of the overa l l inte ll igence pie relat ed on ly to safeguard ma tters He did say though · that the techni cal side of the NUHEC question wa s definitely a DSS responsibility General Giller also said however that the introduction of pointo the NU11EC-issue relitical and intellig en ce indicat quired the elevation of the q ue stion to a higher level of man agement This melding of th e var iabl es at the decis ion- ak ing level also included i np uts fr om ISA as well as from oth er sourc e He statc l that if there was an ERDA management failure to ma rry effectively the DSS and Inter nationa l Security Affairs IS A responses i e alleged di ve rsi o ns resulting from poor sec ur it y and accountability at NUMEC DSS and Shapiro's activities ISA in responding to the questions it could have contrib ut ed to so e Congressional misconceptions Finally General Giller said that • fo • ___ - _ I ' ··- · -· ··- ·- - ·- ·--- I I - 11 with respect to those quest io ns · dealing with the CIA position theory on NUMEC he dec ide d th a t the best way to respond to the questi on would b e to ad v is e the Su bcomm ittee that th e se questions should be more -pr ope rly addressed to the Director of CIA •He s a i d he did no t want to be a p arty to providing cla s sified CI A tnformati o n to th e Sub committ ee via th e b a ck door and that in accordance with accepted standard proc edu res they i e ERDA official s did not do th i s during th eir August 8 1977 testimony b efore the Sub committ ee and th e r efo re would not address these qu es tions inv o lving CIA information • General Gill er added that this decision wa s one of rather th an secrecy and th a t the exercis e of such not unique to th e intelligence co mmunity principle an option is General Gill er said tha t hi s only con nect i on with the prep ara tion of th e second set of r espo ns es to th e Subco mmittee was when he was contacted b y telephone in Colorado with regard to the ERDA I SA input to the amended res ponses He ad d ed th a t John LaBarr e of ISA also visi t ed him at the P e ntag o n to discus s these responses However he expl a i ne d that since he h ad already retired from t he Agency he h ad no reviewing or si gnat ory authority on the second set of re pon ses • - J __ Ge eral Gi 1ler ____ ___ _ st a t ed th a t in s urmnary · - ·· ---- ' '- · ·· Y · - '· ' · --- • • ·• _- -- _ ·1 L - ' I · March 15 1979 r· SUMMARYOF MARCH8 1979 · · · INTERVIEW OF ROBERTW FRI Robert W Fri the former Acting Administrator of on March 8 1979 The _ interview · took place in Mr Fri's office at 1101 Connecticut Avenue N W Washington D C The interview was Jr conduct ed by James Anderson and Thomas S Williamson of the Office of Inspector General OIG of the Depart ent of Energy ERDA was interviewed · ' Mr Fri was advise ·d that the OIG desired a second interview with him to address several issues th0t needed clarification as a result of a previous interview relating to his August 8 1977 appearaQce before the House Subcommittee on Energy and Power l 1 Mr Fri was asked to expand on his statement in th e previous interview that he had • revie wed NUMECdocuments those in-house and allegedly on file with the intelli gence community Prior to resp9ndin g Mr Fri pointed out that · two years have elapsed since his direct invol vement · ·in these matters Therefore he stat ed he could not be sure of · exact dates nor could he recall precisely what documents · ·he may have reviewed · Mr Fri stated that in ap proximately July or A gust 1976 he was contacted by Presi dent Ford's Staff e cretary ·James Connor and requested to send the NUMECf iles for his review Mr Fri understood that these materials would be used by the FBI to conduct aq in qui ry into the · inventory difference of special nuclear material that h a d -·been di scovered at NUMECin 1965 Mr Fri remarked that upon receivin g this request he asked Mr Ja mes Wilderotter of the General Counsel's Office to determine what could be properly rele ased to the White House and what was the ·most expedient method to effect this release He said he 17 - • This earlier interview · -·· --- - ·- · • ---- t ¥ 5 • I • • ' • · on May 19 1978 occurred ·- -' _ ·_ _ _ · · · ·• • 2 asked General Alfred D Starbird his trator for National Se curity Affairs files Assistant Administo arran ge for the to Mr Connor for his review to be delivered · Mr · Fri commented that in 1977 prior to the release of the ERDA NRC Inventory Difference Reports he again and asked General became involved with NUMECmaterial · Starbird · to review th e relevant files General Starbird briefed Mr Fri and furnished h i m with documents that h General Star trd _ _f l t-mi-gl'l-t_bg _ relevant -- Mr Fri ·stated · 1 that about this period of time he was shown an undated unsig ned peice of paper whi ch was identified to him by · General Starbird and General Edward Gil l er St rbird' s -Deputy as a CIA intelli gence ass ess ment on the Isr ae li i nuclear weapon capabili y · · · l· ·' · • • • 1 _ _ · ·S' · · · _ _· JI_ -- D 'n 1 1 ' Th - ' 8 o ' f ·· c · · ' · · · • ' '· · f f 1 ' ' - • - • - ' - · _ _ · - -- ·· · ' · t f t • • - - - _' _ _ '_ - · -- · - ·· · • • J 1 i 't'· · - - · ' - j T _ -· - _ · it i1 · 'u-fii · i irti t1- g p bi -B QU Wi£·#4 · • tt Mr Fri un derstood that Genera l Gill er had inclu de d because he had internreted the relevant · para g r aph as a reflec t i on of a view hel _h i e rtain CIA cc-1zp S · li6 i f Cip q j4 _z w 4fJCP- ' ' -t · -'1'i · offici als r'- - the footnote · - ' · · - · · -· - _ - · · · ·1t' · ' rl pqf t1• ' • • • f -i' ····· 5 ± tt' 4 ' y -0 · ·· 1 ·td • ' '- · · · • ·• t i ·· · · · · _ - --- · W ft °' · 11' ¥ffl' ¥t - - J ·' i' t 4 f - N · ··t 'sn as aI Estelle-- 3 11qu mm TVTHELVH Ell eagun sq spends 1qu - u Hr Fri else recalled that prier ten the release of the ERDA ID Repert an August in IQTT he was present when C mmissiener Hareus Rewden ef the NRC briefed members ef the National Security Ceuneil staff in Mr Breezinski's effiee en the pending release ef this report and infermed the staff that the White Heuse as well as Mr Brzezinski sheuld be aware ef the NUHEC issue Hr Fri a a Senier efficiel ef the CIA Stan gave an oral Elsie LaHg-Lr- briefing on the issue Hr Fr' desentnd ts-Ii paJMe-xutmn mh presentati en as ineenelusive if hm 1' r a rII Ti Hai- - get me - h qf iwm uai- W Imiq i-anme-rm Hr tri emphasised that these 39111 were -1I5I'Ii'esehteeI e3 Iir Kneeke with-nut an definitive official statement specifically relating these matters te furthermore l-Ir- Fri also ramemheree that _531-1-ud-mchH1- misis tr' mus- 5333 52 11 t a 4 f wa 1 o-Iy' fret-I 5'11 - Tht i g Frhe' - Ital-v 3 - rim II ii-i Ia iII h raise- 4 $32152 13- - - IL f-rsn TI- - - - 1 32 -- 7 5 filing 'Elh LI wNH-h Wit I L'iwil n 'i 'rr ts - '31 I - I'm-1 Eli-5 2 arse 4 I J- I Esau-usenil-1t I'It'- 4- 4'rrI-Il' I 4 - Hui est a5 1- west gee est sis-erect Mfrs am it xer-l- ham I t in west swims i a 1 ies-vs megs - ef g i gg 1r - a - a r-ue- - - - F's-Ir 511 5 Eli s eras I I Is an 3e amt - I -11 __ _ ___ Mr Fri was asked to review his testimony that he furnished before the House Subcommittee on Ener gy and ·Power on August 8 1977 on SNM safeguards Spe cifically -he was asked to review his response be g inning on line 965 and his response be g in n in g on line 968 of the hearin g transcript He was then asked if his answers on those lines were accurate He respond e d that he considers his answers to be accurate He added that he construed the Subcommittee's questions narrowly to refer onl y to an agency conclusion or opi nion as j_ s£ t__pz1 1J sJ1 f rom t h e - - - - ' f J r '°r b l1 J ews of i n div id ua l CIA of f icials l ' t - h He stat e d th a t he was ' i navja i - ' -o f -i r - -- - tr 1 - - - ' signed cto c1 '°Jen c or a_ny_ st atem _ l 9 Y P - - -Sr ' J - qJA - - r J ti 2 · $ Mr Fri added that during this part of the hearin g 'be was under the impression that his questioner Mr Wa d was attempting to draw out of him directly or by implication the views or opinions of the CIA on the NUMECissue - Fri felt he had no·authorit y to speak for t h e CIA on this subject and he also mentioned that he and the other ERDA witness e s had a gre i Q _ to - t _e_ b arin g not J o the views of any intelJ g nce _ag enci e s on the rep esent NUMECmatter Furthermore -s- rn·ce a discussion o f these intelli g ence ag encies' opinion s would possibly in_volv disclosure of cla s sified inform a tion in a public fo ' JIIl he thought that it would be i mproper for him to attempt ·to describe the NUMEC-related views of any intelligence agency I have read the above s t atement and determined that and accurate s ummary of my March 8 1979 interview with repre se ntatives of the Department of Energy Inspector General's Office it is a true Sigx ied · 2_ @ Date • •• • Fri i DEPUTY ATTORNEY CRIMINAL ASSISTANT GENERAL OIVISION r parlnumt of Wustite 20530 a5lrn£imt Mr Thomas S Willia mson EXHIBIT JJJJ APR2 1979 Jr Deputy Inspector General Department of Energy Washington D C 20585 Dear Mr Williamson This is in reply to your letter dated March 19 1979 wherein you forwarded your report on an investigation into the testimony of Mr Robert W Fri former Acting Administrator of ERDA before the House Subcommittee on Ener gy and Power on August 8 1977 Your report specifically called testimony relat to our attention that portion of Mr Fri's ing to whether one intelli g ence agency would concur with his view on the NUMECincident and questioned whether this testimony may have constituted a violation of federal law We have carefully re v iewed the entire record forwarded by you in this matter It is our considered opinion that the report forwarded to us contains insufficient evidence stateto support the conclusion that Mr Fri made false ments in that portion of the testimon y relating to whether one intelligence agency would concur with his view that no diversion of nuclear material took place in the NUMEC incident Therefore no further action will be taken on this matter 7 ry truly 11 _ I v17 a 7 yJurs 'µ1 hn c Ke ney eputy Assistant ttorney General