'CREDIBILITY GAP' IN U.S. NUCLEAR MATERIALS CONTROLS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88-01315R000400060027-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 16, 2016
• Document Release Date: November 26, 2004
• Sequence Number: 27
• Publication Date: August 23, 1977
• Content Type: NSPR

1 (, ,4 Ike 3-6 1,
fie TP a 7 Approved For Release fM1(1'1C##Dkr(RbM04000FP6,
C~,~. P, J _- f t 23 AUGUST 1977
The company's export 'records, mal plant operations could not
compiled in the case, showed that no count for 206 pounds of the loss,
quantities of highly enriched
uranium were shipped to Israel.
However, several shipments were
made during the period to NUMEC's
French affiliates.
During-the mid-1960s, the French
were known to have a number of se-
cret nuclear agreements with Israel,
including the joint operation of a
plutonium-producing nuclear reactor
in Israel. -
During September 1965, according
to the documents, Brown and other
AEC officials pressured NUMEC's
owner, Zalman M. Shapiro, to dig up
a burial pit at the plant site.
ac-
the
In a letter accompanying the sur-
vey team's report, the AEC blamed
the loss on - an "apparent lack of.
supervisory awareness" of proper
control techniques.
"ALTHOUGH IT cannot be stated
with certainty that theft or diversion
did not take place, the survey team
.found no evidence to suggest those
possibilities," the report added.
NUMEC eventually paid the AEC a
total of $1,344,000 for the bomb-grade
uranium that was never recovered.
According to one AEC calculation, to
accumulate that amount of loss
through normal plant operations,
NUMEC would have had to run for 60
years. NUMEC was founded in 1957..'
"Collusion" between NUMEC and
any of its overseas customers was
FOR SEVERAL months,' Shapiro
had assured the AEC that most, a not
all of the lost material, had been mis-:'-
takenly buried as wastes in 1963.
At one.?"point in the meeting, ac-
cording to'. one . AEC memo, "Dr.
Shapiro became emotionally over-
come" and ~ the meeting was ad-
journed for-10 minutes to allow NU
.MEC's owner to "collect his
'thoughts." Afterwards, Shapiro'
.admitted he was worried about suf-
fering financial losses if his major
customer,.` Adm. Hyman Rickover,
head of the Navy's nuclear subma-
rine program, took his business else ;
where
? `The memo adds that Shapiro then.
described the dilemma he was in:
"He (Shapiro) reported that he felt-'
confident that the 1963 pit contained.
the missing material, he was reluc-
tant to gamble .that it might not be
there., We (the AEC) pointed out. that
he?- was?.:tasking.: the commission to
gamble that-it might not be there,'.-
thus placing the. commission in an
intolerable position.".
Finally, the. AEC -prevailed and
Shapiro was forced to dig. up the pit.
In the fall of 1965, according to AEC'
files, Shapiro was only able to locate
about. 10 percent of the.'highly en-
rich d.uranium that he had ioped;to;
!- find in the
pit t a .~
eluding dealings wippt~qq rowde~ e1ea (~ , K6;1
French firms and NUIGI.C's position `cfal AEC survey team scoured the
as "sales agent for the government plant and concluded that 382 pounds
of Israel' working through Israel's nv hioh1v anti,-haef ttrarrirfm . tvne
ACCORDING- TO the memos,
which were released upon request by
The Washington.Star and by several i
other news agencies, the AEC inves-
tigators had suspected since 1960 that.;!
there were serious losses of highly
enriched uranium that was being
processed at a company called the
Nuclear Materials : and Equipment
Corp. (NUMEC) at Apollo, - Pa
located 30 miles northeast of Pitts
burgh " ~ i,
However= according' to memos ;
from the files of Howard' C. Brown r
Jr., then the AEC assistent general:
manager, the agency did not begin to`
press NUMEC about its losses until.:-
one year after the Chinese explosion..
The bomb had raised the specter of
what Brown referred to as the. "Nth
country problem," or the possibility
that a number of countries would be
willing to take substantial risks to
join the nuclear club (The United
States initially feared that the metal
in the Chinese bomb came from-U.S-.
.,sources,. until aerial reconnaisance.:
revealed that the Chinese had com-
pleted theirrown.uranium: enrichment
plant).
Officials worried about a numbe
of NUMEC's foreign business ties, i
pletely answered.
By John Fialka
Washington Star Staff Writer
The explosion of an atomic bomb
by the Chinese Communists in 1964
triggered a secret re-examination of
U.S. nuclear policies that exposed a
serious "credibility gap" in the way
the nation kept track of bomb-grade
nuclear materials in the hands of pri-
vate companies.
The ".cyap," as described in a series
of documents released yesterday by
the Energy Research and Develop-
ment Administration, was that there
was "no method" to detect a U.S.
company which shipped more than a
contracted amount of nuclear ma-
trial out of the country in "collu-
sion" wjth a foreign customer.
The Chinese explosion, named
-"Chicom I" in the ERDA documents,
led to a re-evaluation of U.S. prac-
tices which relied heavily on the
honesty of U.S. companies and the
feeling that since highly enriched
uranium was. worth $10 a gram, the
losses would be minimal.'
One year later, , a U.S. company
with close ties to two foreign govern-
ments reported that it had "lost"
enough uranium to make at least 10
nuclear weapons:' At that point, the
CIA, the FBI and ERDA's predeces-
sor, the Atomic. Energy Commission, '
launched investigations to see
whether the "gap" had been used. _
The question has never been com-
never proven, although the CIA has
one at Apollo may have somehow di-
not a foreign agent.
One of.the questions raised by the
s why, if the AEC
had information as early as 1960 f`
the losses at NUMEC, did the agency
.wait until 1965 to investigate.
In a memo to his files, Brown as-4
serted that, "It appears that respon-t
. sible personnel apparently believed
.that they had less authority and l
power to force improvement than, in I
retrospect it appears, they actually;
did."
Prior to the Chinese explosion, the d
memo notes, there was widespread l,
opinion within the AEC that "The
commission's involvement in the
protection of these strategic materi-
ais did not extend beyond the con-
tract licenses' ability to pay for the
losses," . -
15R000400060027-6