Document released yesterday by the federal government reveal persisting suspicions that triggered three investigations in the last 11 years to see if uranium was diverted from a Pennsylvania factory to Israel for nuclear weapons production.
The first investigation was directed in 1966 by the now defunct Atomic Energy Commission and the last two by the Federal Bureau of Investigation, in 1969 and in 1976. All three investigations sought to find out if weapons-grade uranium was ever smuggled to Irael fro a factory in Apollo, Pa., operated by the Nuclear Materials and Equipment Corp. (NUMEC) and owned by a man named Zalman shipiro who had known unclear business interests in Isael.
Each time, the federal investigators cleared NUMEC and Shapiro of any conspiracy to divert uranium to Israel or anywhere else. But each time Shapiro was cleared, fresh suspicions emerged to trigger a fresh investigation.
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 no grounds to prosecute Shapiro for any crime "because there in no evidence of any crime."
In documents that cover the investigations of 1966, 1969 and 1976, one internal memo in 1967 to then AEC Chairman Glenn Seaborg is repeatedly 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 NUMEC consistently underestimated its plant process losses and that the difference between actual and estimated losses was passed on from completed jobs to new jobs."
When investigators exhumed a burial pit outside the NUMEC factory looking for the missing uranium, they found fewer than 10 pounds of the 206 pounds that was lost. The following 1966 telephone conversation between Curtis Nelson and James Haycock of the AEC was transcribed:
"Are they still digging up there?" Nelson asks.
"No, they've completed that," Haycock replies.
"Didn't turn out to be so rich after all did it?" Nelson says.
"It's quite evident they've understated the amount of loss they've had in both the atmosphere and the river." 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 contracts."
There are some of the things that emerge from 32 volumes of documents declassified by the Department of Energy yesterday on the three investigations of NUMEC.
In 1966, NUMEC was unable to account for 206 pounds of weapons-grade uranium had gone to NUMEC from the Oak Ridge National Laboratory for fabrication into fuel elements for nuclear submarines and the Rover nuclear rocket engine then under development.
The documents show that at first the Atomic Energy Commission and the Central Intelligence Agency suspected the uranium might have been stolen by the Chinese because nuclear debris left in the atmoshpere by the first Chinese atomic test in 1964 resembled in content the uranium missing from the NUMEC factory.
Once the AEC concluded that China had its own source of weapon-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 theoretically have been diverted by a mechansism of overshipping and understating the true quantities on the transfer document."
Shapiro's firm had a contract to build two nuclear generators for Israel. Shapiro was half-owner with the Israeli government of Isorad, a company based in Israel that made equipment to preserve foods by nuclear radiation. In a letter to the then FBI director, 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 metallurgist. They also show that Shapiro employed two Argentinian chemists, two Japanese technicians and a Dutch plant manager. The AEC investigation also noted that between 50 and 60 aliens from a dozen countries visited Shapiro's Apollo factory every year.
As the AEC deepened its investigation, it checked shipping documents and weights of every order NUMEC had filled overseas. Out of 59 shipments it found one discrepancy NUMEC had shipped cylinders of uranium to West Germany that were 26 pounds short.
The AEC even seized two shipments of uranium NUMEC was sending to their weight and uranium content conformed 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 employees and two engineers with Westinghouse Electric who had worked with NUMEC on the contract where 134 pounds of uranium were missing.
"None fo these varied and lenghty associations." the AEC staff wrote in a 1967 letter Chairman Seaborg," revealed support to the possibility of a diversion of special nuclear materials at NUMEC."
The AEC even seized two shipments of uranium NUMEC was sending to France and analyzed them to see if their weight and uranium content conformed 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 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 lenghty 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."
What the interviews depicted was a struggling company bidding on the toughest jobs, paying low wages that resulted in high labor turnover and overemphasizing getting each contract finished as quickly as possible.
Westinghouse engineer Charles Meuche told the AEC that NUMEC lost uranium on the nuclear rocket contact because its process produced large amounts of "diamond hard" scrap that was "difficult to crush and dissolve." Meuche said he was not surprised that 14 pounds of uranium had been lost.
Others interviewed told the AEC that ducts were never cleaned and walls and ceilings rarely scrubbed and vacuumed to recover uranium dust lost through milling and machining. One workers said several thousand gallons of uranium waste were flushed into a nearby river every day without any attempy to recover the metal.
Scrub and laundry water were never recycled to recover uranium. Ventilators ran without filters to trap airborne dust. Cleanup time was shortened, one worker said, "to get started on new jobs."
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The AEC turned over its files to the FBI, which said it would not pursue the matter.
"In the absence of evidence of suspicion of violation of law," the FBI told the AEC, "it was determined that an inquiry by the FBI was not warranted."
But on two later occasions, the FBI did conduct inquiries, one in 1969 at the apparent behest of the CIA and the second time in 1976 under orders from the White House.
The documents declassifed yesterday do not reveal the nature of the 1969 inquiry but it came on the heels of a CIA request to the AEC that it estimate how many atomic bombs Israel could make if it possessed all of NUMEC's missing uranium. An April, 1976, letter to J.S. Ingley, chief of the CIA's nuclear division, showed that the AEC prepared such estimates for the CIA without revealing when and how it did so.
The matter surfaced again last year when the Ford White House asked the Energy Research and Development Administration to turn over its files on the case. The White House did so at the suggestion of former Nuclear Regulatory Commission Chairman William Anders, who had been briefed by the CIA on its suspicions in the matter.