In the aftermath of allegations of Chinese espionage, the Department of Energy and its congressional critics are moving toward a compromise: creating a new agency within the department to oversee the production of America's nuclear weapons.

The proposed reorganization is aimed not only at reducing the vulnerability to spying but also at clarifying lines of authority and making more efficient the $6 billion-a-year complex of weapons laboratories, reactors and assembly plants that stretch from coast to coast, employ more than 30,000 people and are vital to the nation's security.

The weapons complex, once part of the now dissolved Atomic Energy Commission, was given to the new Energy Department in 1977 because neither the Carter administration nor Congress wanted nuclear arms production to be controlled by the Pentagon.

But the fit between the highly secretive weapons programs and the rest of the department--which is nonmilitary science aimed at energy and environmental issues--has never been entirely comfortable. Calls for change, which have been growing over the past decade, were given new force since a bipartisan committee headed by Rep. Christopher Cox (R-Calif.) released a three-volume report last month alleging Chinese spies stole information on America's most advanced nuclear warheads from U.S. national laboratories.

Last week, a presidential panel headed by former senator Warren B. Rudman (R-N.H.) reviewed the evidence and challenged some of the Cox committee's "worst case" assumptions about the extent of Chinese espionage. But the President's Foreign Intelligence Advisory Board also lambasted the Department of Energy for "organizational disarray, managerial neglect and a culture of arrogance" that had "conspired to create an espionage scandal waiting to happen." The Rudman panel suggested two possibilities: turning the nuclear complex into a semiautonomous agency inside the Energy Department, or stripping the department of responsibility for nuclear weapons.

Energy Secretary Bill Richardson initially resisted both options. First, he attempted to tackle the security concerns by bringing in a former top FBI supervisor, Edward J. Curran, to run the department's counterintelligence operation. Then, he named retired four-star Gen. Eugene E. Habiger to be the department's "security czar."

Last week, however, Richardson acknowledged that his aides were "trying to merge our differences" with Cox, Rudman and other critics. "I don't think we are that far apart," Richardson said in an interview Friday. "We all want accountability, clear lines of authority, centralization and security."

The emerging compromise may be outlined on Tuesday when Rudman is to testify before an unprecedented joint meeting of the Senate committees on commerce, armed services and energy.

"All signs point to reorganization," said Sen. Pete V. Domenici (R-N.M.). Domenici, whose state is home to two major nuclear weapons laboratories, has joined Sens. John Kyl (R-Ariz.) and Frank H. Murkowski (R-Alaska) in proposing to create a Nuclear Security Administration within the Energy Department.

Domenici, who chairs the Senate Budget Committee, said he had been working for 12 years to get rid of the cumbersome bureaucratic structure that surrounds the national laboratories.

Reflecting this change in emphasis, Sen. Bob Kerrey (D-Neb.), vice chairman of the intelligence panel, said that the primary concern on Capitol Hill is shifting "from a potential security problem [at the Energy Department] to how to structure the nuclear weapons program."

Part of what drives the restructuring is the managerial complexity of the nuclear weapons programs. The sites are run by companies and universities. Some of them do work for weapons and nonweapons programs. They report both to regional authorities as well as Energy Department headquarters. And at headquarters the sites report to program authorities as well as environmental, safety and security divisions.

One concern among DOE officials is that if the three main national laboratories--Los Alamos, Lawrence Livermore and Sandia--focus on weapons, it could endanger the other, wide-ranging work that the labs now do. "We could lose nonmilitary funding," said one senior energy official, "and that $100 million support for key pure science could cut the labs' links to universities. That could harm recruitment of scientists and in the end hurt the defense programs."

Along with the three labs, which spend about $1 billion each per year, the complex also contains nuclear weapons facilities at Amarillo, Tex., and Kansas City, Mo.; nuclear materials facilities at Savannah River, S.C., and Oak Ridge, Tenn.; and the Nevada Test Site.

Under a proposal by Rudman that Domenici and his colleagues appear likely to approve, the semiautonomous agency also would include the Energy Department's $700 million nonproliferation and arms control program, which helps to dismantle former Soviet nuclear arms; the $200 million fissile material disposition program, which is cutting back on weapons building materials such as plutonium and enriched uranium; and the $700 million nuclear reactor program for U.S. Navy vessels.

Although the United States no longer produces new nuclear weapons, the complex continues to research and develop new ways to keep operational the country's aging stockpile of nuclear bombs and intercontinental ballistic missiles.

Los Alamos, Lawrence Livermore, Sandia and the Nevada Test Site support the so-called stockpile stewardship program that assures the reliability of U.S. nuclear weapons without testing, which is banned by international treaty. Using supercomputers and subcritical nuclear devices--those that do not produce an explosion--scientists "divide the physics of the explosive sequence into each of its parts and analyze each separately," Victor H. Reis, assistant secretary of energy for defense programs, recently told Congress.

At Los Alamos, the ability to produce primary nuclear weapons explosives is being reestablished, something the complex has not been able to do since the plant at Rocky Flats, Colo., was closed in 1989. The weapons complex is performing major refurbishment of several weapon types, giving extended service to older nuclear bombs and the W-87 warhead, which is used on the MX intercontinental ballistic missile.

The first W-87s were delivered to the Air Force last month.

At Sandia National Laboratories, the complex maintains what Reis called "a robust and world-class microelectronics capability." Sandia works on technologies that would allow for "miniaturizing weapon components and improving their reliability," Reis said.

At the Savannah River Site, preparations are underway to produce tritium, a radioactive gas that will be needed to replace older tritium elements that are slowly deteriorating. Uranium machining, recycling and storage takes place at the Oak Ridge Y-12 Plant.

At the plant in Amarillo, employees are dismantling old warheads and fabricating new high explosive components for rebuilt ones.

The Kansas city plant produces electrooptical devices, plastic and machined parts for nuclear and nonnuclear weapons, and defense-related equipment. The Kansas City plant also has been qualified to produce tritium gas reservoirs for warheads, and Sandia will soon have a production facility for neutron generators for refurbished warheads.


Site: Los Alamos National Laboratory, N.M.

Managed by: University of California

Employees: 6,900

Fiscal 2000 budget request: $1.3 billion

Major weapons activities: Stockpile stewardship and maintenance, arms control, waste management.

Site: Lawrence Livermore National Laboratory, Calif.

Managed by: University of California

Employees: 6,400

Fiscal 2000 budget request: $1.1 billion

Major weapons activities: Stockpile stewardship and maintenance, arms control, waste management.

Site: Sandia National Laboratories, Albuquerque

Managed by: Sandia Corp., (Lockheed Martin)

Employees: 7,500

Fiscal 2000 budget request: $1.1 billion

Major weapons activities: Weapons design, arms control, waste management.

Site: Kansas City Plant

Managed by: Allied Signal Corp.

Employees: 3,200

Fiscal 2000 budget request: $291 million

Major weapons activities: Weapons construction.

Site: Pantex Plant, Amarillo, Tex.

Managed by: Mason Hanger-Silas Mason Co.

Employees: 2,900

Fiscal 2000 budget request: $269 million

Major weapons activities: Weapons assembly, dismantling, disposal.

Site: Nevada Test Site Las Vegas and Nye County, Nev

Managed by: Bechtel Nevada, Inc.

Employees: 2,300

Fiscal 2000 budget request: $650 million

Major weapons activities: Stockpile stewardship and maintenance, nuclear testing, disposal.

Site: Savannah River Site, Aiken, S.C.

Managed by: Westinghouse Savannah River Co.

Employees: 1,400 in defense programs

Fiscal 2000 budget request: $1.5 billion

Major weapons activities: Nuclear materials production.

Site: Y-12 Plant, Oak Ridge National Laboratory, Tenn.

Managed by: Lockheed Martin Energy Systems

Employees: 5,500 in Y-12 defense programs

Fiscal 2000 budget request: $740 million

Major weapons activities: Nuclear materials production, arms control, disposal.

SOURCE: Energy Department

CAPTION: Energy Secretary Bill Richardson

CAPTION: Rep. Christopher Cox (R-Calif.)