In 1993, the Energy Department had some nuclear fuel reprocessing equipment, with accompanying blueprints, that it no longer needed. So it sold the package as surplus. When officials belatedly realized the merchandise could be useful to a foreign country or group seeking weapons-grade nuclear materials, the department bought it back -- from an Idaho salvage dealer.

The sale -- and embarrassing repurchase -- were cited yesterday by a special investigative panel of the President's Foreign Intelligence Advisory Board as one of several examples of "substantial problems in management" that the panel said have undermined security at the Energy Department and its nuclear weapons laboratories.

Citing layers of bureaucracy, other management failures and 20 years of lax security caused by blurred accountability, the panel recommended to President Clinton a reorganization to give more autonomy or even independence to the nation's nuclear weapons complex, which is managed by the Energy Department.

Key members of the House and Senate who have been pushing for a more independent Nuclear Security Administration inside the Energy Department voiced support yesterday for the panel's recommendation. Rep. William M. "Mac" Thornberry (R-Tex.), whose district contains the Pantex plant that produces and dismantles nuclear weapons, called the panel's proposal "a ringing endorsement" of what he is trying to do.

"This report confirms . . . that the management problems at [the Energy Department] are long-standing and systemic and go to the very heart of the way the department is managed, structured and organized," he said.

The investigative panel's chairman, former senator Warren Rudman (R-N.H.), took issue with Energy Secretary Bill Richardson's continued opposition to the proposal and his insistence that the public can be assured that nuclear secrets are now more secure. Although the energy secretary told a television interviewer that he "can't guarantee that espionage will not occur," he did guarantee "we've put in place the toughest measures to prevent it."

Rudman, who served on the Senate Intelligence and Armed Services committees, called Richardson "either naive or ill-informed" about counterintelligence matters.

Although Rudman's panel voiced doubts about the extent and impact of alleged Chinese espionage, it found weaknesses in physical and personnel security that had been sharply and repeatedly criticized in the past but never reformed by a bureaucracy at the department that showed little concern toward security matters. For example, the panel noted that although Richardson put an emphasis on computer security, "the stark fact remains that as of the date of this report a nefarious employee can still download secret nuclear weapons information to a tape, put it in his or her pocket, and walk out the door."

An Energy Department official pointed out that transferring secret information to a disk or tape "is universal and not peculiar to Energy." He said his department, as "a stopgap measure," is removing floppy-disk capability from classified computers and will switch in a year to a newer, disk-less system in which all information transfers will be done remotely in a vault not accessible to individuals.

"I am not aware of any other agency moving as aggressively in this area," the official said, adding, "They know we are under the gun and will be following us."

The Rudman panel also said that other counterintelligence tools developed to fight spies in the 1970s may not be adequate now. It specifically cited the Foreign Intelligence Surveillance Act of 1978, which set the standards for court-approved wiretaps, bugs and break-ins in foreign intelligence cases.

"It may no longer be adequate to address the counterintelligence threats of the new millennium," the panel said, recommending that the National Security Council tend to the matter.