Official Can't Assure Classified Info Not Lost

WASHINGTON, D.C. Department of Energy Inspector General Gregory Friedman couldn't assure Congress on Wednesday that no classified or sensitive information from Los Alamos National Laboratory was contained in more than 263 lost or stolen computers still unaccounted for by the weapons lab.

Los Alamos officials have previously said a review showed no classified information was on any of the missing computers.

Friedman also told members of the House Energy and Commerce Committee that he didn't have enough confidence to say exactly how many computers were missing or lost, or how LANL would ever know because some may never have been entered into inventory.

He gave his testimony at the first of three congressional hearings on allegations of fraud, mismanagement and cover-up at LANL. Committee members pushed University of California officials for answers on how such abuse and lack of control could go unnoticed for years at the nation's premier weapons lab. They also wanted to know why the university, which has operated the lab since 1943, is allowing many of the managers responsible for oversight failures to stay on the payroll with six-digit salaries, even after they were removed from management positions.

The hearing, which lasted a little more than four hours, opened with the introduction of Jaret McDonald, the surprise witness who was not named when the witness list was announced last week.

Other witnesses included the two fired whistle-blowers, Steve Doran and Glenn Walp, and Bruce Darling, the University of California's acting vice president for lab management.

McDonald, who currently works for LANL site-services contractor Kellogg, Shaw and Los Alamos Technical Associates, or KSL, was previously an employee of Johnson Controls Northern New Mexico.

He was the first employee to call attention in late 2001 to the possible fraudulent purchases now estimated to be valued between $200,000 and $400,000, up from the $50,000 cited earlier in FBI documents by lab employees Peter Bussolini and Scott Alexander.

McDonald told the Energy and Commerce subcommittee on oversight and investigation how he questioned the appropriateness of scores of purchases, including John Deere tractors, roto-tillers and a snowblower.

In September 2001, McDonald said he went to a lab investigator with concerns about all the equipment he came across stashed in secret and restricted bunkers on lab property.

The investigator told him, "'People have turned these people in before,' but I didn't believe it," McDonald said.

After several failed attempts to get different LANL divisions to investigate, McDonald said he filed an anonymous tip with the FBI in March 2002, at which point an investigation started and is still ongoing.

Rep. James Greenwood, R-Pa., chairman of the subcommittee, said Bussolini and Alexander had told the vendor salesman who delivered all the fraudulent purchases to LANL that they were setting up a secret anti-terrorism center at LANL, so he should change the invoice descriptions of the items the two bought.

As evidence was presented showing how tens of thousands of dollars were misspent, committee members reacted with shock and concern.

"This is so outrageous, it is hard to know where to start, frankly," said Rep. Greg Walden, R-Ore., at one point during questioning.

Several committee members asked how LANL management could control and safeguard national security and nuclear secrets if it couldn't control the business practices and fraudulent activity of its own employees.

Rep. Jan Schakowsky, D-Ill., said it appeared LANL had an ingrained "culture of denial and deceit." She was most concerned that lab management knew about many of the problems ranging from lack of controls on purchase cards to failure to adequately investigate theft yet did nothing until the matter reached Congress and the media.

Walp and Doran repeated for the committee what they have been saying since the day the two were fired by LANL management in late November that their managers told them to protect the UC contract to operate the lab at all costs.

Walp said LANL's head lawyer, Frank Dickson, "obstructed my office and the FBI's efforts to obtain necessary documents."

As recently as January, Doran said LANL managers were passing "false information" on to UC and DOE about expenses on purchase cards.

He said before he traveled here for the hearing, lab informants gave him documents showing that, as recently as January, lab employees were still buying items with purchase cards from vendors that should be off limits, such as Smiths Foods, Amazon.com and Barnes and Noble.

UC's Darling said the university accepts full responsibility for all the problems brought to Congress, but said "we are aggressively making the changes necessary to restore public confidence in Los Alamos."

Saying the changes UC has implemented "are only a beginning," Darling asked the committee for the chance to prove UC can mend management and business problems at the lab.

Energy Secretary Spencer Abraham is expected to decide whether to allow UC to continue operating LANL by the end of April, after a DOE review.

Among several improvements, Darling said UC has made broad personnel changes including the termination or demotion of 15 senior lab managers increased fiscal responsibility and strengthened property control.

He said interim LANL director and retired Navy vice admiral Pete Nanos has been an important part of bringing change to the lab, as well as restoring confidence and trust with employees.

House Energy and Commerce Committee legal aides said they expected the next hearing to take place the week of March 10.