When retired Adm. James D. Watkins took over the Energy Department in early 1989, then-President George Bush told him that security and safeguards at the department's nuclear weapons laboratories were "a complete mess."

In response, Watkins instituted a study of security and beefed up some personnel rules and physical barriers. But the former chief of naval operations, who worked on nuclear matters throughout his Navy career, made his first priority restructuring responsibility within the department, particularly environmental, safety and health standards.

Today, a decade after Watkins started his reforms, new examples of lax personnel security and allegations of Chinese espionage have brought on another reform of security measures, imposed by the Clinton administration and now being enacted into law by the Republican-controlled Congress.

Security has been a perennial problem in the nuclear labs, going back to the Manhattan Project at Los Alamos during World War II. It is therefore not surprising that the current uproar has led to a major effort to reorganize the entire nuclear weapons complex.

The House, for example, last week voted down transfer of the weapons program to the Pentagon. A more serious effort is underway in the Senate to attach to the fiscal 2000 intelligence authorization bill a plan to establish an independent Nuclear Security Administration within the Energy Department to run weapons building.

The restructure, being proposed by three powerful senators, Budget Committee Chairman Pete V. Domenici (R-N.M.), intelligence committee Chairman Richard C. Shelby (R-Ala.) and Sen. Jon Kyl (R-Ariz.), would make the current assistant secretary of energy for defense programs the administrator of all nuclear weapons programs, accountable only to the Energy secretary.

The proposal faces strong opposition from Energy Secretary Bill Richardson. "A new fiefdom in the Department of Fiefdoms is not what I need," Richardson said last week. Instead, he has established a "security czar" with "crosscutting responsibility through the entire complex of [the Energy Department]."

The Energy Department has been bifurcated since its creation during the Carter administration. More than half its functions -- and its $14 billion budget -- relate to civilian energy issues, such as coal, gas and electricity, and those programs often are looked upon as public works projects.

The nuclear weapons complex, on the other hand, is central to U.S. national security and charged with maintaining the country's lead in development and production of nuclear weapons. With the end of the Cold War, the focus has been less on building new weapons and more on maintaining the existing stockpile.

But the nuclear weapons labs, to attract the best scientists, must spend at least half their efforts on non-weapons research. As Richardson pointed out last week at a Senate hearing, "our labs don't just do weapons work. They do energy, they do climate change, they do biology, they do genome research. They are multifaceted."

Watkins said during a recent interview that when he arrived at the Energy Department he found blurred lines of authority. In addition, none of the three political appointees President Ronald Reagan chose as secretary -- an oral surgeon, a soft drink executive and a White House personnel director -- had any serious military background.

Demanding his attention were highly publicized, politically explosive lawsuits for nuclear waste problems and worker radiation exposure. In the security area, the threat was less espionage and more terrorism, with the possibility of physical attacks against nuclear weapons facilities and their transportation vehicles.

Watkins said the Reagan transition team told him there were no security problems, but he later learned that there had been an FBI espionage investigation into alleged Chinese spying at the Lawrence Livermore National Laboratory and that the General Accounting Office and Congress had completed sharply critical studies of the nuclear complex's physical security.

It was right at the time of the transition from Reagan to Bush that the Chinese allegedly obtained classified data about the W-88, the most advanced U.S. nuclear warhead, according to the recent report of the House select committee chaired by Rep. Christopher Cox (R-Calif.).

During his four years at the Energy Department, Watkins said he introduced tougher physical security standards, tightened the foreign visitor clearance program and pushed to end the backlog in background re-investigations of long-term employees.

When the former chief of Naval operations left office, he said during a recent interview that he felt "more than 50 percent" along the way toward "changing the culture" toward security that he found when he arrived.

But last week, Domenici disclosed at a Senate hearing that it was during Watkins's time as secretary that a security file on a Los Alamos scientist suspected of being "turned" as a Chinese agent was misplaced at the department's headquarters. "Nobody bothered to ask its whereabouts or check it," Domenici said. "It just had disappeared."

The scientist was Wen Ho Lee, who is a suspect in the alleged Chinese spying affair and was fired from his job at Los Alamos in March for security violations. "It was not until earlier this year that the then-director of the Los Alamos Laboratory was told [about the lost file] . . . and yet people would assume that in fact he should have known and been suspicious of Mr. Wen Ho Lee."

It was also during Watkins's tenure that the FBI began its investigation of another Los Alamos and Livermore scientist for espionage. But Watkins said he never heard of the case of Peter Lee until 1997, when Lee pleaded guilty to mishandling classified information.

Before he left office, Watkins briefed his Clinton administration replacement, former utilities executive Hazel O'Leary, on the major issues she would face. Watkins said he was disappointed that, like the Reagan administration secretaries, she was more interested in the energy side of the department than in weapons building -- more interested in commerce and openness than in security.

As he left office in 1992, Watkins listed his 25 top accomplishments. He was proudest of having clarified responsibility for reactor and nuclear facility safety. Establishing an office to gather information about other nations' nuclear weapons was No. 15. Creating a counterintelligence office to improve security was No. 21.