LOST URANIUM MYSTERY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88-01315R000400060021-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 16, 2016
• Document Release Date: November 26, 2004
• Sequence Number: 21
• Publication Date: November 6, 1977
• Content Type: NSPR

Approved For Release 2005/01/12 : CIA-RDP88-01315R000400060021-2
~~ y b [ -r 7.t. cr.L
CZ.4 Ll Usio
6 iIoverber 1977
c A -- - WASHINGTON POST 4 ,
dpsj
ran aimMl
"It'
Nafi]inston Post Staff Writer
Documents released yesterday by
the federal gover-inient reveal persist-
ing suspicious that `triggered three In-
vestigations in the last 11 years to see
if uranium was diverted from a Penn-
sylvania ;factory to Israel for nuclear
weapons.prcductfon;
The first investigation was directed
In 1966. by the' now-defunct Atomic
Energy; Cornniission and the last two
thy, the Federal Bureau of Investiga-
tion, in 1969 and in 3976. All three in-
.vest.igations sought, to. find out if
,weapons-grarle uranium was ever
,smuggled tii Israel from a factory in
Apollo, Pa., operated by the Nuclear
Materials and . Equipment Corp.
'(NUMEC) and owned by a man named
Zalman Sh-spiro who - had known nu-
clear business interests in Israel.
Each time, the federal investigators
cleared NUMEC and Shapiro of- any
conspiracy to divert uranium to Israel
or anywhere else. But each-time Sha-
p1ro was cleared, fresh suspicions
emerged to trigger a fresh investiga-
tion.
The latest FBI investigation,' which
'took more than a year and was turned
;over to the White House no more than
two months ago, concludes there are
to grounds to, prosecute Shapiro for
,any crime "because there is no evi:.
hence of any crime."
In documents that cover the investi-
gations of 1966, 1969 and 1976, one in-
~ternal memo in 1967 to then AEC
{Chairman Glenn `Seaborg is repeat-
edly quoted. The memo says: "It can-
not be said unequivocally that theft or
diversion has not. taken place, but the
most probable explanation is that NU-
MEC consistently .underestimated its
plant process losses and that the dif-
ference between actual and estimated
losses was passed- on from completed
jobs to new jobs."
When investigators exhumed a bur-
, Sal pit outside the NUMEC factory
looking for the missing uranium, they
found fewer than 10 pounds of the 206
.pounds that were lost. The following
1966 telephone: conversation between
:Curtis Nelson and James Haycock of
Ithe AEC was transcribed:
"Are they still digging up there?"
Nelson asks.
. "No, they've completed that," Hay-
cock replies.
"Didn't turn out to be so rich after
all, did it?" Nelson says. ?
s quite 'evident they're under-
stated the amount of loss they've had
in both the atmosphere and the riv-
er," Haycock goes on. "In addition,
`NUMEC has finally agreed they'll
have to admit they used material from
one contract to another. They hesitate
to make this admission because their
contracts said they were not to do it
but with the amount of material being
unaccounted for, then it's necessary to
look at these transfers between con-
tracts.",
.These are some of the things that
emerge from 32 volumes of documents
declassified by the Department of En-
ergy yesterday on the three investiga-
tions of NU14TF?C;
i ? In 1966, NUMEC was unable to ac-
count for 206 pounds of weapons-
grade uranium that had been, in its
possession for more than two years.
'The uranium had gone to NU-1TEC
from the Oak Ridge National Labora-
tory for fabrication into fuel elements
for nuclear submarines and the Rover
nuclear rocket engine then under de-
velopment. _
The documents show.that at first
the Atomic Energy Commission and
the Central Intelligence Agency sus-
pected the uranium might have been.
stolen by the Chinese because nuclear
debris left In the atmosphere by the
first Chinese atomic test In 1964 re-
sembled in content the uranium
missing from the NUMEC factory.:
Once the AEC concluded that China
had its oivn source of %i?eapon.grade
uranium, the Investigation turned on
concerns that Zalman Shapiro had
close business ties to Israel and that
he routinely shipped nuclear fuel
components overseas. -
"The concern has been expressed,"
the AEC staff wrote in a May 10, 1966,
memo,. `that uranium could theoreti-
cally have been diverted by a mechan-
ism of overshipping and understating
the true quantities on the transfer doc-
ument."
Shapiro's firm had a contract to
build two nuclear generators for Is-
rael. Shapira was half-owner with the
Israeli government of Isorad, a com-
pany based in Israel that made.equip-
5nent to preserve foods by nuclear ra-
;diation. In a letter to the then FBI di-
rector, J. Edgar Hoover, the AEC
asked if Shapiro should not register
himself as a foreign agent. The FBI
replied that he did not have to.
AEC documents show concern over
his employment of an Israeli metallur-
gist. They also show that Shapiro ern,
ployed two Argentinian chemists, two
Japanese technicians and a - Dutch
plant manager. The AEC investigation
also noted that betweeen 50 and 60 al-
iens from a dozen countries -1sited
Shapiro's Apollo factory every year.
As the AEC deepened its investiga-
ion, it checked shipping documents
and weights of every order NUMEC
had filled overseas. , Out of 59 ship-
;ments? it found one ? discrepancy.
NUMEC had shipped cylinders of ura-
?nium to West Germany that wero'26
pounds short.
The AEC even seized two shipments
of uranium NUMIEC was sending to?
rance and analyzed them to see if
their weight and uranium content con-
formed to the orders and shipping
documents. The AEC found that they
were almost identical.
Still unsatisfied, the AEC conducted
interviews with 37 people, Including
23 _NUMEC employees, 12 former em-
ployees and two engineers with West-
inghouse Electric who had worked
with NUMEC on the contract -where
X134 pounds of uranium were missing.
"None of these varied and lengthy
.associations," the AEC staff wrote in
;a 1967 letter to Chairman Seaborg,
"revealed any evidence that would
Blend support to the possibility of a
diversion of special nuclear materials
at NUMEC."
-
The AEC esren seized two ship-
ments of uranium NUM?IEC was send-
ing to France and analyzed them to
see if their weight and uranium con-
tent conformed 'to the orders and
shipping documents. The AEC formd
that they were almost identical.
Still unsatisfied, the AEC conduct-
ed Interviews with 37 people, includ-
ing 23 NUMEC employees. 12 for-
mer employees and two engineers
with Westinghouse Electric who had
worked with NUMEC on the contract
where 134 pounds of uranium were
missing. ?
"None of these varied and lengthy
associations," the AEC staff wrote
in a 1967 letter to Chairman Seaborg,
"revealed any evidence that would
lend support to the possibility of a
diversion of special nuclear materials
at NUMEC." ?
Approved For Release 2005/01/12 : CIA-RDP88-01315R000400060021-2