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Nuclear Safeguards - NUMEC Case
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1563110
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Nuclear Safeguards - NUMEC Case
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John O. Marsh Files (Ford Administration)
John Marsh's General Subject Files
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The original documents are located in Box 26, folder "Nuclear Safeguards - NUMEC Case"
of the John Marsh Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 26 of the John Marsh Files at the Gerald R. Ford Presidential Library
NATIONAL ARCHIVES AND RECORDS SERVICE
WITHDRAWAL SHEET (PRESIDENTIAL LIBRARIES)
FORM OF
CORRESPONDENTS OR TITLE
DATE
RESTRICTION
DOCUMENT
1
Inventory
la list
Inventory CIA/NUMEC (1 p ) Declassified 15/31/89 KBH Undated
A
Declassified 2/5/91 ICBH
1b Memo
Richard Helms to the Attorney General (1 p.)
4/2/68
A
lc Memoa
Richard Helms to Ramsay Clark (2 pp )
4/2/68
A
EXEMPTED 3/4/08, 3/30/10
ld Memo
J Edgar Hoover to Richard Helms (2 pp )
portions
REDACTED 10/22/08
exempted
9/3/69
A
138/2/21
le Memo
Richard Helms to the President (3 pp. 1
9/8/69
A
EXEMPTED 3/4/08, 3/30/10, 5/12/10, 2/22/12
lf Memo
Deputy Director for Science and Technology to
3/11/76
A
Director of Central Intelligence (3 pp )
kg
EXEMPTED 3/4/08, 3/30/10
lg Memo
Memo to the Record (7 pp )
3/9/72
A
EXEMPTED 3/4/08
2
Levi to President 4/22/76
2a Report
FBI report re NUMEC (4 pp ) portions exempted 12/2/86 4/22/76
REDACTED 10/22/08
A
3 Memo
Jack Marsh to Philip Buchen et al (1 p ) Declass, 4/30/76
ified 5/31/89
KBH
A
4. M Letter
John Marsh to Jack Watson (2 pp ) Declassified 5/31/89
2/8/77
A
KBH
FILE LOCATION
Marsh Files
General Subject File
Nuclear Safeguards NUMEC case
Box 26
RESTRICTION CODES
(A) Closed by Executive Order 12356 governing access to national security information.
WHM 1/22/86
(B) Closed by statute or by the agency which originated the document.
(C) Closed in accordance with restrictions contained in the donor's deed of gift.
GENERAL SERVICES ADMINISTRATION
GSA FORM 7122 (REV. 5-82)
June 7, 1976
MEMORANDUM FOR:
ED LEVI
FROM:
JACK MARSH
Ed, did you see the story involving Mrs. Srouji's allegations,
appearing in the Washington Post yesterday, on the missing
nuclear materials, which she says will be the subject of her
forthcoming book?
JOM/dl
FORD has LIBRARY 07087
numec
June 7, 1976
MEMORANDUM FOR:
BRENT SCOWCROFT
JIM CONNOR
BILL HYLAND
MIKE DUVAL
FROM:
JACK MARSH
In the Sunday edition of the Washington Post, there is a story that
Mrs. Srouji, the individual who is a part of the controversial case
involving the FBI and the NSC, alleges there has been a great
diversion and loss of different materiais, a loss sufficient enough
to establish a black market. She says this will be the subject of
her forthcoming book.
I wanted you to be aware of this.
JOM/dl
FORD & LIBRARY 07/839
TCP SOCRETA
SENSITIVE
INVENTORY-- CIA/NUMEC
1. Helms 2-page memo to Attorney General Clark (with trans-
mittal cover)
Dated -- April 2, 1968
2. Photostat of 2-page letter from J. Edgar Hoover to Helms
Dated -- September 3, 1969
3. Helms 3-page letter to the President
Dated -- September 8, 1969
4. Internal 3-page memo from Carl Duckett to DCI
Dated - -- March 11, 1976
with a Memorandum for the Record, 7-pages (attached)
Dated - -- March 9, 1972
DECLASSIFIED
E.O. 12356, Sec. 3.2 (G)
MR 87-2,#3 C/A ltr. 1/25/89
By KBH Date 5/18/89
TOP SECRET/
SENSITIVE
FORD i 046830 LIBRARY
IEMORANDUM FOR: The Att ey General
Since the subject matter of this letter
3 so sensitive for obvious reasons, I would
ppreciate if you would return it to me when
rou have taken whatever action you feel apprc-
riate.
OFFICE OF TH Richard Dish Helms
RECEIVED
ittachment -APR 2 1968
*
ATTORNEY GENERAL
2 April 1968
(DATE)
SECRET
10.
101
REPLACES FORM 10.101
(47)
54
WHICH MAY BE USED.
DECLASSIFIED
E.O. 12356, Sec. 3.4.
MR 87-3,#4, C/A Hr.1/2/91
By KBH NARA, Date 2/5/91
DERALD R. FORD LIBRARY
OCURET
INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
1c
WASHINGTON, D. C. 20505
CENTR
AGENCY
OFFICE OF THE DIRECTOR
2 APR1968
The Hcnorable Ramsey Clark
The Attorney General
Washington, D. C.
INTERAGENCY SECURITY CLASSIFICATION APPEALS PANEL,
Dear Ramsey,
You are well aware of the great concern which exists at the
highest levels of this Government with regard to the proliferation
of nuclear weapons. With the expanding use of nuclear energy for
DECLASSIFIED UNDER AUTHORITY OF THE
power and the greater civilian involvement with nuclear material
E.O. 13526, SECTION 5.3(b)(3)
ISCAP APPEAL NO. 2013-062, document no. 1
DECLASSIFICATION DATE: March 18, 2014
there is a real danger that clandestine traffic in these materials
might occur.
In this connection I would like to bring the following matter
to your attention. The Nuclear Materials and Equipment Corpo-
ration of Apollo, Pennsylvania, is one of the principal processors
of nuclear materials such as plutonium and U 235 which if diverted
could be used for weapons. Although NUMEC made periodic physi-
cal inventories and the United States Atomic Energy Commission
performed a number of accountability surveys, a significant
quantity of enriched U 235, possibly representing a cumulative loss
over a period of years, could not be accounted for in the spring of
1965. These losses came to light in the closing out of a large
contract. Because of the condition of NUMEC's records and the
nature of the operation, the specific disposition of this material
could not be identified. At that time the AEC reported that al-
though it could not be stated with certainty that a diversion of this
material had not taken place, no evidence had been found to support
the possibility of diversion and that other information did exist to
reduce such a possibility.
25X1, E.O.13526
-
RECEIVED
GERALD LIBRARY P. FORD
WR2
SECRET
ATTORNEY
GENERAL
SECRET
25X1, E.O.13526
It is critical for us to establish whether or not the Israelis
now have the capability of fabricating nuclear weapons which might
be employed in the Near East. Furthermore, introduction by
Israel of such weapons into their arsenal would undoubtedly affect
the Non-Proliferation Treaty which has been placed before the
United Nations by the United States and the USSR.
Given the aforementioned circumstances, I urge that the
Federal Bureau of Investigation be called upon to initiate a dis-
creet intelligence investigation of an all source nature of Dr.
Shapiro in order to establish the nature and extent of his relation-
ship with the Government of Israel.
Sincerely,
Dich
Richard Helms
GERALD LIBRARY P. FORD
2
SECRET
69-4430
U.N. :D STATES DEPARTMENT OF STICE
FEDERAL BUREAU OF INVESTIGATION
Id.
of
WASHINGTON, D.C. 20535
DECLASSIFIED UNDER AUTHORITY OF THE
September 3, 1969
INTERAGENCY SECURITY CLASSIFICATION APPEALS PANEL,
E.O. 13526, SECTION 5.3(b)(3)
BY LIAISON
ISCAP APPEAL NO. 2013-062, document no. 2
DECLASSIFICATION DATE: March 18, 2014
Honorable Richard Helms
Director
Central Intelligence Agency
Washington, D. C.
Dear Mr. Helms:
As you are aware, this Bureau has been conducting
an investigation of Dr. Zalman Mordecai Shapiro, head of
the nuclear processing firm, NUMEC, Apollo, Pennsylvania,
since May, 1968. Copies of reports covering our inquiries,
including a summary report prepared by our Pittsburgh Office
under date of February 18, 1969, have been furnished to your
Agency on a continuing basis.
Shapiro was interviewed by representatives of the
Atomic Energy Commission (AEC) on August 14, 1969, concerning
his relationship with Israeli officials. On the basis of
information developed during this interview, particularly
Shapiro's statement that throughout his associations with
Israeli officials he has never been asked to furnish classified
information, has never furnished, and would not, if asked to,
furnish such information to unauthorized persons, the AEC has
advised that it does not contemplate further action in this
matter at this time.
We have conducted a thorough and extended inves-
tigation of Shapiro for more than a year, including substantial
SECRET
Group 1
Excluded from automatic
downgrading and
GERALD LIBRATY P. FORD
declassification
SECRET
25X1, E.O.13526
Honorable Richard Helms
physical surveillance coverage. We have developed information
clearly pointing to Shapiro's pronounced pro-Israeli sympathies
and close contacts with Israeli officials,
It is believed most unlikely
that further investigation will develop any stronger facts in
connection with the subject's association with Israeli officials.
The basis of the security risk posed by the subject lies in
his continuing access to sensitive information and material
and it is believed the only effective way to counter this risk
would be to preclude Shapiro from such access, specifically
by terminating his classified contracts and lifting his security
clearances. However, after careful consideration, including
an interview with Shapiro, AEC has advised that it plans no
further action at this time.
Under these circumstances, we are discontinuing our
active investigation of the subject. We will, of course,
continue to keep interested agencies advised of any pertinent
information concerning the subject which may be received from
our sources.
Sincerely yours,
J. However
- 2 -
GERALD R. FORD
SECRET
25X1, E.O.13526
GERALD R. FORD LIBRARY
This form marks the file location of item number
listed on the pink Withdrawal Sheet found at the front of this folder.
DECLASSIFIED UNDER AUTHORITY OF THE
if
INTERAGENCY SECURITY CLASSIFICATION APPEALS PANEL,
E.O. 13526, SECTION 5.3(b)(3)
11 MAR 1976
ISCAP APPEAL NO. 2013-062, document no. 3
DDS&T-1290/76
DECLASSIFICATION DATE: March 18, 2014
Withheld under statutory authority of the
Central Intelligence Agency Act of 1949 (50
DCI
read
U.S.C., section 403g)
MEMORANDUM FOR: Director of Central Intelligence
FROM
: Carl E. Duckett
Deputy Director for Science and Technology
SUBJECT
:
Nuclear Materials and Equipment
Corporation (NUMEC)
1. The attached memorandum dated 9 March 1972
summarizes the NUMEC case. It was written by
who originated CIA action on this case and who is
available to answer any further questions you may have.
2. Since the Agency was looking at this case from
the point of view of obtaining information on the nuclear
intelligence capability of a foreign government we did not
make a concentrated effort to follow this case from the
standpoint of its domestic implications subsequent to the
time of the attached memorandum.
3. It is our understanding that Mr. Helms brought the
intelligence aspects of this case to the attention of
Presidents Johnson and Nixon as well as Attorney General Clark,
Director of the FBI, Mr. Hoover, Secretaries of State Rusk
and Rogers, Deputy Secretary of Defense Rush, General Manager
of the AEC Brown, the Joint Committee on Atomic Energy, and
the Special Assistant for National Security Affairs,
Mr. Kissinger.
4. The matter was again brought up recently in your
discussions with The Joint Committee on Atomic Energy.
The DDS&T also briefed the Commissioners of The Nuclear
Regulatory Commission on NUMEC. The ADD/S&T and
also discussed the matter at some length with Mr. Murphy,
Staff Director of The Joint Committee, on 5 March 1976.
GERALD LIBRARY P. FORD
Withheld under statutory authority of the
E2 IMPDET
Central Intelligence Agency Act of 1949 (50
U.S.C., section 403g)
CL BY 1.70374
SECRET SENSITIVE
SUBJECT: Nuclear Materials and Equipment
Corporation (NUMEC)
5. The following information outlines Agency efforts
to persuade the FBI to undertake an investigation of Shapiro
and NUMEC and to keep track of its activities in this regard.
a. On 2 April 1968 Mr. Helms sent a letter to the
Attorney General urging that the FBI initiate a discreet
,intelligence investigation of Dr. Shapiro. Mr. Hoover
had suggested this course of action.
b. On 23 April 1968 the Attorney General called
Mr. Helms to say that he had directed the FBI to
investigate.
C. On 3 September 1969 Mr. Hoover sent Mr. Helms
a letter stating that the AEC doesn't contemplate any
further action on the case at that time. Mr. Hoover
said that the Director of Security, AEC, had asked
Shapiro whether he had passed classified information
to any foreign government. Shapiro replied that he
had not. Apparently no mention was made of the
passage of nuclear material tö a foreign government.
Mr. Hoover further stated that the FBI was discontinuing
any further active investigation of the case.
d. On 13 October 1969 Mr. Helms sent a memorandum
to Hoover, FBI, urging him to conduct audio surveillance
of Shapiro since it appeared that Shapiro planned to
emigrate to Israel.
e. On 17 October 1969 Mr. Hoover sent a memorandum
to Mr. Helms stating that he had reviewed the Shapiro
matter and Mr. Helms should take the matter up with
the Attorney General. This was not done.
f. On 4 October 1970 the CIA asked the FBI if
they had any further information on Shapiro's activities.
On 3 February 1971 the FBI sent a response to CIA based
on the 1970 request. One FBI report was received from
the October 1970 request that was germane to the problem.
The report indicated Shapiro had requested from an
official of the Kawecki Berylco Company to be brought up
to date on a sensitive AEC project two weeks after he
joined the company. There was no further FBI reporting
on the case after that.
GERALD R. FORD
- 2 -
SECRET SENSITIVE
SUBJECT: Nuclear aterials and Equipment
Corporation (NUMEC)
50X1-HUM, E.O.13526
7. Our files in the NUMEC case consist for the most
part of data received from the AEC and the FBI. A number
of FBI reports were received and we presume these reports
included all the substantive data collected by the FBI
through February 1971 though we have no assurance of that
fact. The AEC information consists of only a few documents
on the results of their investigation of the NUMEC case.
No investigative reports are in our file.
R
Carl E. Duckett
Withheld under statutory authority of the
Central Intelligence Agency Act of 1949 (50
Attachment:
U.S.C., section 403g)
As stated
GERJAD R. FORD LIBRARY
SECRET SENSITIVE
INTERAGENCY SECURITY CLASSIFICATION APPEALS PANEL,
1g
9 March 1972
DECLASSIFIED UNDER AUTHORITY OF THE
MEMORANDUM FOR THE RECORD
ISCAP APPEAL NO. 2013-062, document no. 4
DECLASSIFICATION DATE: March 18, 2014
SUBJECT: Possible Diversion of Weapons Grade Nuclear
Materials to Israel by Officials of the Nuclear
Materials and Equipment Corporation (NUMEC)
E.O. 13526, SECTION 5.3(b)(3)
1. From 1947 until the Atomic Energy Act of 1954 all
special nuclear material was owned by the United States
Government and with certain exceptions was held by the AEC
and its cost type contractors operating Government owned and/or
controlled facilities. The Act of 1954 was designed to widen
participation in the use of atomic energy. While the material
was still owned by the U.S., it was more widely held by
Government contractors and by licensees who were not Government
contractors. Legislation in 1964 made private ownership of
special nuclear material permissible. The 1954 Act authorized
the AEC to regulate the use of these materials and to guard
against loss or diversion. In setting up regulations to
enforce the control of material, the Commission concluded that
the physical protection and accountability controls which
licensees as prudent businessmen would maintain over special
nuclear material because of its intrinsic value and their
responsibility for its loss or damage and the severe criminal
penalties provided by AEC's governing legislation would
adequately protect the national interest from the standpoint
of unlawful diversion. In 1955 a policy was adopted along
these lines by the AEC. In May 1956, the AEC concluded that
a change toward tighter controls was in order and the
Commission amended their regulations on 25 January 1967.
2. In 1957 Dr. Zalman Mordechai Shapiro left Westinghouse
and established a firm called. Nuclear Materials and Equipment
Corporation (NUMEC). in Apollo, Pennsylvania. Instrumental
in the financing of the new firm was a PittsBurgh industrialist
named David L. Lowenthal, a long-time, close, personal friend
of Shapiro.
25X1, E.O.13526
R.
FORD
SPOREW/SINSITIVE
GERALD
LIBRAT
25X1, E.O.13526
3. NUMEC owned and operated a uranium processing facility
at Apollo, Pennsylvania. It first received material under
lease arrangement in December 1957 and received its first
material as an AEC contractor in December 1957. From the
start up through 31 December 1966 NUMEC received 21, 750 kg
of U 235 and shipped 19, 865 kg U 235 reporting losses of about
260 kg or about 1.2% of total receipts. Starting about 1960
the AEC began a continuing, but in the opinion of the
Comptroller General of the United States ineffective, campaign
to get NUMEC to implement adequate control of the material
in its plant. This matter came to a head in November 1965
when the AEC made a detailed survey to determine total losses
since start up and to attempt to explain the "unexpectedly"
high U 235 loss on the WANL contract (Westinghouse) The
survey established the loss from 1957 until 31 October 1965
as 178 kg U 235. Of this total, 84.2 kg was estimated by the
survey team to have been lost through known loss mechanisms
(NOL) and the remaining amount of 93.8 kg was categorized as
MUF. MUF is defined as usually the result of uncertainties
in measurements, unknown losses and undetected errors In
records. In 1964, a fire occurred in the vault containing
nuclear materials at NUMEC, which effectively destroyed records
of the input and output of material. The fire occurred during
a strike when the plant was shut down. The AEC report on the
November 1965 survey presented the view that while it could
not be stated with certainty that diversion did not take place,
the survey team found no evidence to support the possibility
of diversion. The Comptroller General found that because of
the condition of NUMEC's records, they were unable to state an
opinion on the disposition of the MUF but had no reason to
question the AEC conclusion with regard to diversion. The
Comptroller had been asked to investigate this situation by
an alarmed Joint Committee of the Congress on Atomic Energy
on 7 September 1966. The Comptroller General's report to
the Congress stated: "Notwithstanding extensive reviews of
NUMEC's operations neither the AEC nor NUMEC have been able
to identify with a high degree of certainty the specific
causes of WANL material loss.
R.
FORD
GERALD
LIBRATY
-3-
4. During the period August 1958 to October 1965, NUMEC
shipped some 425 kg of U 235 overseas to various parts of the
world under some 28 different contracts. The AEC report
states the following: "Quantities in individual shipments,
domestic as well as foreign, are not confirmed independently
by the AEC. Such actions have been outside the scope of the
present AEC system of control of nuclear material. Instead,
reliance has been placed on a technical review of the
shipper's internal controls and independently developed receivers
data. The validity of this approach is of course largely
dependent on the integrity of the shipper and the receiver."
25X1, E.O.13526
SECRET SENSITIVE
R.
FORD
GERALD
LIBRARY
4
25X1, E.O.13526
SECRET/ SENSITIVE
OF R. FORD LIBRARY
-5-
25X1, E.O.13526
6. On the basis of the foregoing it must be assumed for
the purpose of U.S. national security that diversion of special
nuclear materials to Israel by Dr. Shapiro and his associates
is a distinct possibility. Such a diversion might be
evolutionary or revolutionary. NUMEC was formed by Dr. Shapiro
and his associates in 1957
7. On the other hand, it is possible that the idea of
diversion didn't occur until much later when the existence of
the reactor at Dimona was discovered
8.
25X1, E.O.13526
SITIVE
GERALD LIBRARY R FORD
-6-
25X1, E.O.13526
It is interesting in this connection
to quote from the AEC investigation of 1966 when the AEC
team requested NUMEC production control and process
engineering records on the WANL and other contracts: "All
efforts in this direction were negated when It was learned
that many of the requested records had been inadvertently
destroyed by supervisory personnel during a 'clean-up'
campaign at the time of an employee strike, January 1 to
February 25, 1964. " (This was in addition to the fire
mentioned in paragraph 3 above.)
9. To the best of our knowledge, the strike which gave
supervisory personnel free run of the facility pinpoints
the time at which the material could have been most easily
diverted to Israel and the time at which evidence of such a
di rsion could best be covered up. Given the state of
affairs at NUMEC from 1957 on, a diversion could have occurred
at any time, but the period January - February 1964 is certainly
the most suspect. With regard to the material itself, it
could have been shipped in less than critical lots of say
twenty pounds per lot. Lead coated or nickel plated, it
would present no radiation hazard and could have easily gone
by diplomatic pouch or Israeli merchant ship or even El Al
Airlines. Transportation of diverted material to Israel
would have been a simple matter.
10. In September 1969 CIA was informed by the FBI that
Shapiro had been interviewed by AEC officials on 14 August
1969. On the basis of information developed during the
interview, particularly Shapiro's statement that he had never
furnished classified information to unauthorized persons, the
AEC has advised that it does not contemplate further action
on this matter. The FBI informed CIA that while they had
developed information clearly pointing to Shapiro's pronounced
pro-Israeli sympathies and close contacts with Israeli
officials
the FBI believed that further investigation would be unlikely
to produce any facts leading to conviction and therefore
were terminating their active investigation. It should be
noted that the AEC meeting with Shapiro was not coordinated
with CIA although the AEC was well aware of CIA's interest in
the affair. CIA attempts to persuade the FBI to continue the
25X1, E.O.13526
R.
FORD
-
GERALD
LIBRATY
Withheld from public release
-7-
under statutory authority
of the Federal Bureau of
Investigation-
investigation proved fruitless.
FOIA 5 USC §552(b)(7)(C)
11. In June 1970 Shapiro resigned from NUMEC and took
a position as Vice President for Research and Development
with Kawecki Berylco Company in Temple, Pa.
In July 1971
Shapiro left Kawecki Berylco and took a position as executive
as istant to Westinghouse breeder reactor divisions general
manager. To quote Nucleonics Week of 8 July 1971, "At
Wes inghouse he'll be giving guidance and advice on the
Fast Flux Test Facility project and breeders, with special
concentration on fuel."
R.
FORD
SECRET/CENTINE
GERALD
JOHNSP. DINGELL, MICH.
CHAIRMAN
fil-
SILVIO O. CONTE. MASS.
:"OM STEEQ. OKLA.
JOHN J. LAFALCE, N.Y.
United States House of Representatives
NUCLEA
HAMILTON FISH, JR., N.Y.
FERNANDJ. ST GERMA'N, R1.
WILLIAM S. COHEN. MAINE
COHNKREBS. CALIA
MARTIN A. RUSSO. ILL.
HERMAN BADILLO. N.Y.
Committee nit Small Business
Diversis matter
CALDWELL BUTLER. VA.
/
MICHAEL J. WARD,
SUBCOMMITTEL COUNSEL
202-225-4351
FLOYD J. FITHIAN, IND.
Subcommittee nn Energy and Emironment
PAUL E. KHITZER,
Ninety-fourth Congress
ASSISTANT MINORITY COUNSEL
2361 Rayburn House Office Huilding
202-225-4038
Mashington, D.C. 20515
Clopien to A6,
April 5, 1976
Honorable Edward H. Levi
Attorney General
Department of Justice
Washington, D. C. 20530
Dear Mr. Attorney General:
For over a year, the Subcommittee on Reports, Accounting
and Management of the Senate Government Operations Committee
and the Subcommittee on Energy and Environment of the House
Small Business Committee have been participating in a joint
investigation of the accuracy of the accounting methods used
by government contractors in handling special nuclear materials
and of the adequacy of government required safeguards for pro-
cessing and protecting such materials. By mutual agreement,
investigation. the Subcommittee on Energy and Environment will complete this
You are invited to appear and testify before this Subcom-
mittee on Tuesday, April 27, 1976, in Room 2359 Rayburn House
Office Building, Washington, D. C. The hearing is scheduled
to begin at 10:00 a.m. and is expected to continue for the re-
mainder of the day and may be extended into the following day,
should it be necessary.
You are to prepare a written statement of whatever length
you feel necessary, together with any documents you wish to
include, which will be inserted in full into the hearing record.
You are to submit fifty (50) copies of this material to the Sub-
committee counsel in Room 2361 Rayburn House Office Building by
noon, April 19, 1976. No extensions will be granted. This will
provide the Members and staff time to review the material prior
to the hearing so that 'we can dispense with the reading of the
statement and proceed directly to the questioning.
In addition to any general information you wish to discuss
regarding the adequacy of the Federal Bureau of Investigation
and the Justice Department's investigation of the issues under
FORD is LIBRARY 938839
Hon. Edward H. Levi
April 5, 1976
page 2
review, you are to specifically include a thorough explanation
of the following matters:
1) The status of the Justice Department's investigation
of the charge that the rights of union members were violated
at the Cimarron facility of Kerr-McGee in Crescent, Oklahoma.
2) Your Department's conclusion and the reasons and evi-
dence therefor of:
(a) whether foul play was involved in the death of Karen
Gay Silkwood on November 13, 1974;
(b) how special nuclear materials were taken from the Cim-
arron facility or any other facility and by whom, and what happened
to this material;
(c) how Karen Silkwood came to be contaminated and, if appli-
cable, by whom;
(d) whether Karen Silkwood's specimens were tampered with
and by whom;
(e) whether Karen Silkwood possessed documentation of health
and safety violations at the Cimarron facility, and if so, what
became of such documentation;
(f) Who was responsible for scattering uranium pellets around
the grounds at the Cimarron facility;
(g) how Karen Silkwood's apartment came to be contaminated.
3) The independence and adequacy of the Federal Bureau of
Investigation's investigation of these matters and the degree to
which the Bureau relied on information supplied by Kerr-McGee and
the Atomic Energy Commission.
4) The thoroughness of the Justice Department's review of
the evidence supplied by the Federal Bureau of Investigation.
5) The Justice Department's refusal to allow the Subcommittees'
staffs access to all documents relating to the FBI's investigation
of these matters.
6) The results of any investigation of the possibility of
diversion of special nuclear materials from the NUMEC plant in
Apollo, Pennsylvania in the mid-1960's and from the nuclear fuel
service's plant in Erwin, Tennessee.
7) The name of anyone outside the Department who discussed
the Silkwood case with any Justice Department employee and the
nature of such discussions.
GERALD FORD LIBRARY
Hon. Edward H. Levi
April 5, 1976
page 3
You are requested to be accompanied by the following indivi-
duals: Deputy Assistant Attorneys General John Keeney and Kevin
Maroney, Phil Wilens, Chief, Management and Labor Section, staff
attorneys Joe Tafe and John Martin of the Statutory Unit which
handled this case and appropriate officials of the Federal Bureau
of Investigation, and specifically agent Larry Olsen.
the Subcommittee counsel, Michael J. Ward, in Room 2361 Rayburn
Arrangements for your appearance may be made by contacting
House Office Building, (202) 225-4351.
I look forward to receiving your testimony
Sincerely yours,
John D. Dingell, Chairman
Subcommittee on Energy and
Environment
LIBRARY GERALD FORD
THE WHITE HOUSE
/ STATES LIBRARY
WASHINGTON
Sent copy
to Phil 4/23 B.
(v"gan
-
OF
Office of the Attorney General
TWO
Washington, n. C. 20530
JUSTITA
*
April 22, 1976
MEMORANDUM FOR THE PRESIDENT
The purpose of this memorandum is to set forth my
views on two issues -- (1) whether the jurisdiction of
the Joint Atomic Energy Committee is exclusive and (2)
whether the statute of limitations has run on any possible
criminal offenses arising out of the discrepancy in nuclear
materials at the Nuclear Materials and Equipment Company
(NUMEC) -- and to attach a brief memorandum summarizing
the FBI's role in this matter.
I. Jurisdiction of the Joint Atomic Energy Committee.
Section 202 of the Atomic Energy Act, 24 U.S.C. 2252,
which defines the authority of the Atomic Energy Commission,
provides in pertinent part:
* * All bills, resolutions, and other
matters in the Senate or the House of Repre-
sentatives relating primarily to the Commission
or to the development, use, or control of atomic
energy shall be referred to the Joint Committee. "1/
Nothing in this text indicates that this referral is exclusive,
and that other Committees may not consider those matters if
they also come within their jurisdiction.
During the debate of the Atomic Energy Act of 1954 on
the floor of the House there was a colloquy in which Congress-
man Yates expressed the view that with respect to legislative
proposals the jurisdiction of the Joint Committee is exclu-
sive. 100 Cong. Rec. 11667-11668. In our view, however, this
statement is insufficient to give to the text of the statute
a significant feature which it does not in fact contain, parti-
cularly in light of the subsequent legislative practice.
1/ This section is derived from section 15 of the Atomic
Energy Act of 1946.
- 2 -
The House and Senate rules do not contain any provision
which would give the Joint Committee on Atomic Energy exclusive
jurisdiction. The Senate Rules merely reprint without comment
the provisions of the Atomic Energy Act relating to the Joint
Committee. 42 U.S.C. 2251-2257; see Senate Manual paras. 565-
571. The House Rules give only a short digest of those statu-
tory provisions. Manual and Rules of the House of Representa-
tives, § 983a. Moreover, at least one House committee is
specifically accorded jurisdiction over a matter which comes
within the Joint Committee's authority as well. The House
Committee on Interior and Insular Affairs is given special
oversight functions "with respect to all programs affecting
...
nonmilitary nuclear energy and research and development,
including the disposal of nuclear waste." Manual and Rules
of the House of Representatives, 8 679, 693.
A study covering the practice of the first fifteen years
of the Joint Committee indicates that it repeatedly had to
share jurisdiction with other committees on matters involving
the development, use or control of atomic energy. For example,
in the case of nuclear powered merchant vessels, the Joint
Committee had to share jurisdiction with the Senate Committee on
Commerce, and the House Committee on Merchant Marine. Recently,
the Subcommittee on Energy and Power of the House Committee on
Interstate and Foreign Commerce considered instances of alleged
misuse of radioactive materials, a subject which unquestionably
comes within the jurisdiction of the Joint Committee on Atomic
Energy.
We conclude that it cannot plausibly be asserted that
the jurisdiction of the Joint Committee is exclusive.
There are, however, other features distinguishing the
Joint Committee from other committees of Congress, so that the
executive branch could justify an unwillingness to furnish
sensitive information to committees other than the Joint
Committee. Under 42 U.S.C. 2256, the Joint Committee "may
classify information originating within the Committee in accor-
dance with standards used generally by the executive branch
2/ See Green and Rosenthal, The Joint Committee on Atomic
Energy: A Study in Fusion of Governmental Power (1961), pp.
262-274.
3/ Id. pp. 270-271
- 3 -
for classifying Restricted Data or defense information."
The effect of such classification is at the very least to
enable the Act's provision on the protection of Restricted
Data to become applicable -- and possibly to enable the
invocation of other criminal statutes as well.
Under 42 U.S.C. 2255 the Joint Committee is authorized
to permit its members, employees and consultants to carry
firearms while in the discharge of their official duties;
and under 42 U.S.C. 2257 it is authorized to direct such security
safeguards as it deems appropriate. We are advised that by
virtue of these provisions the Joint Committee has an extremely
secure recordkeeping system.
These special features would obviously justify Presi-
dential willingness to provide information to this Committee
which might be withheld from others.
II. Possible Violation of Criminal Statutes.
The Federal Bureau of Investigation conducted one
criminal investigation which related to NUMEC. That investi-
gation involved a possible violation of the Foreign Agents
Registration Act by the president of NUMEC for acts occurring
in 1956-66. The Criminal Division advised the Bureau in
September, 1966 that these acts did not constitute a violation
of the Act and the investigation was closed. The five-year
statute of limitations which applies to this Act has since
expired.
The FBI did not conduct an investigation into the
alleged discrepancy in nuclear materials at NUMEC because it
was advised by the AEC that any loss likely was attributable
to inadequate accounting procedures and that there was no
evidence or suspicion of a violation of law. Since no investi-
gation was undertaken, the Department of Justice cannot state
that there is no evidence which would support a criminal charge.
The facts available with respect to this matter indicate that
the following criminal statutes may be involved:
42 U.S.C. 2077 - Unauthorized dealings in special
nuclear material
42 U.S.C. 2273 - Violation of Atomic Energy Act gen-
erally, or of agency regulations
42 U.S.C. 2275 - Receipt of Restricted Data
42 U.S.C. 2276 - Tampering with Restricted Data
- 4 -
42 U.S.C. 2277 - Disclosure of Restricted Data
18 U.S.C. 832-834 - Transportation of dangerous
articles
18 U.S.C. 793-794 - Espionage: gathering or trans-
mittal of defense information
18 U.S.C. 3 - Accessory after the fact
18 U.S.C. 4 - Misprision of felony
18 U.S.C. 371 - Conspiracy to commit offense
The Statute of Limitations for the above-enumerated
offenses is five years (18 U.S.C. 3282) except for violation
of 42 U.S.C. 2274-76, for which it is ten years (42 U.S.C.
2278) Furthermore, if concealment of the substantive offense
is continuing, the statute of limitations would not bar a
prosecution under 18 U.S.C. 3 (accessory after the fact),
4 (misprision of felony) and 371 (conspiracy).
Because the statute of limitations may not have run
with respect to any offenses that may be involved and because
of the responsibility to consider whether any dismissal or
other disciplinary proceedings may be appropriate with respect
to any persons presently employed as federal officials who
may have participated in or concealed any offense, I believe
it necessary to conduct an investigation. Section 2271 of
the Atomic Energy Act provides that "the Federal Bureau of
Investigation of the Department of Justice shall investigate
all alleged or suspected criminal violations" of the Act.
A brief summary of the FBI's file on this matter is
attached.
Attorney General
OFFICE OF THE DIRECTOR
go
DEPARTMENT
OF
UNITED STATES DEPARTMENT OF JUSTICE
BUREAU OF THE
FEDERAL BUREAU OF INVESTIGATION
WASHINGTON, D.C. 20535
April 22, 1976
DR. ZALMAN MORDECAI SHAPIRO
ATOMIC ENERGY ACT
The Federal Bureau of Investigation (FBI) has
conducted two investigations of Dr. Shapiro. The first
investigation was prompted by the Atomic Energy Commission
(AEC) advising this Bureau in 1965 that the Nuclear Materials
Equipment Corporation (NUMBC), an AEC subcontractor in Apollo,
Pennsylvania, was negotiating with the Government of Israel
to establish at joint company in Israel to be known as Israeli
NUMEC Isotopes and Radiation Enterprises (ISORAD), Limited.
The firm was to engage in the irradiation of citrus fruit. A
Foreign Agents Registration Act investigation was initiated to
determine if Shapiro was acting as an agent of the Israeli
Government in the United States. During the course of this
investigation, Shapiro was interviewed. He claimed his close
relationship with the Israeli Government was strictly a business
matter.
The results of this investigation were furnished to
the Justice Department. In September, 1966, the Justice Depart-
ment advised that the activities of Shapiro and NUMBC did not
fall under the purview of the Foreign Agents Registration Act.
In February, 1966, the ASC advised there were
indications that NUMBC was lax in the management of nuclear
materials. Since April, 1957, AEC had made extensive internal
technical checks at NUMBC and had reported the situation to the
Joint Committee on Atomic Energy (JCAB). The Joint Committee
was told by ABC on February 14, 1966, that in the absence of
evidence or suspicion of a violation of the law, AEC had
determined that inquiry by the FBI was not then warranted.
SECRET
Classified by 5019
Date of Declassification Indefinite
DECLASSIFIED E.O. 12958 SEC. 3.6
cin etr cirect 1/16/08, state ltr 10/22/08
Exempt from GDS, Category 3
WITH PORTIONS EXEMPTED
E.O. 12958 SEC. 1.5
MR.07-105 #4; DOE ets 12/21/07
BY NARA 3/5/09
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure
SEATTLE FORD LIBRARY
Subject to Criminal Sanctions
SECRET
Dr. Zalman Mordecai Shapiro
According to AEC, NUMEC received 1,012 kilograms of
uranium-235 from AEC to process into fuel elements for nuclear
reactors for space propulsion. This subcontract was completed
on October, 31, 1964. In April, 1965, an AEC inventory indicated
a loss, fixed by a later AEC check in November, 1965, at 61
kilograms valued at $764,000. In addition, a survey of the
plant's operations since 1957 revealed that NUMEC had experienced
a total cumulative loss on all AEC subcontracts of 178 kilograms,
all but 61 of which AEC considered properly accounted for by
normal processing losses. AEC was unable to say unequivocally
that theft or diversion of the 61 kilograms had not taken place,
but AEC believed that NUMEC consistently underestimated its
processing losses and that the losseof the 61 kilograms charged
to the latest subcontract actually reported an accumulation of
losses over an 8-year period. AEC pointed out, however, that
because the NUMEC records system was not then so set up, no
determination could be made as to when the various losses occurred
or whether material provided for the latest subcontract was used,
knowingly or inadvertently, to offset losses on other contracts.
AEC advised that there would be no financial loss to
the Government as NUMEC had agreed to pay for the 61 kilograms.
In addition, NUMEC had developed a better system for controlling
nuclear materials and an improvement was also expected due to
NUMEC's hiring of a former AEC official. AEC advised, however,
that prior to making more penetrating checks into NUMEC's
operations, it was felt the FBI should be consulted to determine
whether the FBI desired to assume investigation of the matter.
The FBI advised AEC on March 1, 1966, that the FBI had
given full consideration to this matter and that under the circum-
stances presented by AEC, the FBI did not intend to assume any
investigative responsibility; however, it was requested that AEC
advise the FBI of any further developments coming to its attention
concerning this matter which would indicate there had been a
violation within FBI jurisdiction.
SECRET
- 2 -
SECRET
Dr. Zalman Mordecai Shapiro
David Lowenthal is the President of
Raychord Corporation in Apollo, Pennsylvania. Lowenthal is also
an officer of Apollo Industries in Pittsburgh, a company which
was instrumental in establishing NUMEC through investment of at
substantial amount of money in NUMBC stock.
I
Shapiro was active in fund raising and bond
drives and was a heavy contributor to activities on behalf
of Israel in the United States.
SECRET
- 3 -
SECRET
Dr. Zalman Mordecai Shapiro
The results of the investigation were furnished on
a continuing basis to AEC, CIA and the Department. In September,
1969, the FBI advised AEC and CIA that the only way to counter
the subject's potential threat to the internal security of the
nation rested in terminating his classified contracts and lifting
his security clearances. AEC subsequently interviewed Shapiro
and thereafter, advised that no further action was being taken
by AEC. Shapiro resigned his position as President of NUMEC in
June, 1970. In January, 1972, Shapiro was employed as the
Assistant in Charge of the Breeder Reactor Division, AEC,
Westinghouse Electric Corporation, Monroeville, Pennsylvania.
He held no security clearance and did not have access to
classified materials. By letter dated April 15, 1969, the Department
of Justice advised that based on the results of the FBI investigation
conducted to date, the facts of the matter were not such as to
warrant action against Shapiro.
SECRET
- 4 -
SECRET/EYES ONLY
DECLASSIFIED
E.O. 12356, Sec. 3.4 (5)
CIA ltr. 1/25/89 MR87-5# 11
By KBH Date 5/18/89
April 30, 1976
MEMORANDUM FOR:
PHIL BUCHEN
GEORGE BUSH
FRED IKLE
ED LEVI
BRENT SCOWCROFT
FROM:
JACK MARSH
Charlie Leppert, Director of White House Legislative Affairs for the
House, talked with John Dingell on his pending hearings. In that con-
versation it became apparent that Dingell is aware of the losses and
told Leppert they were in effect diversions of nuclear materials to a
foreign power. Dingell indicated be thought the diversions were to
China, and he intends to pursue his investigation vigerously and
thoroughly until the whole subject is developed.
He is of the view there is information in the Bureau that will disclose
what occurred, and be expects to persist in his demands on the FBI
for full disclosure.
87-528
BHS.
87,
BERALD R.FORD LIBRARY
SECRETREYES ONLY
JOM/dl
AM
MEMORANDUM
ACTION - 2885
well
NATIONAL SECURITY COUNCIL
CONFIDENTIAL
May 17, 1976
MEMORANDUM FOR:
BRENT SCOWCROFT
FROM:
DAVID ELLIOTT D.E.
SUBJECT:
Report on Safeguards
As you recall, following a meeting in your office with Rowden, Fri,
Marsh, Connor, Etc., it was agreed that the NRC would take the lead
in preparing a short paper for the President outlining those remedial
steps that had been taken since the NUMEC incident. The paper would
conclude with an assessment of the invulnerability of U.S. domestic
nuclear safeguards. It was agreed that the study would be submitted on
May 17th, which coincided with the completion of an internal NRC study
on the adequacy of safeguards and recommendations for further measures.
The report for the President has been completed and, among other things,
references the follow-on actions that are recommended in the internal NRC
study. The NRC Commissioners, however, do not want to forward the
report to the President until they have had a chance to review and approve
the content of the program that is recommended in their internal study.
The Commission has therefore requested either that they be given two to
three more weeks before submitting the report to the President, or,
alternatively, that they provide it to us as a non-paper without attribution
to the Commission or commitment to all of the future measures mentioned
in the paper.
I am not sure of how acute your timing problem is, and would like your
guidance on which of these approaches is preferable from your viewpoint
and that of Connor and Marsh.
CONFIDENTIAL/GDS
FORD & LIBRARY GERALL
DAD,1/15186
Some items in this folder were not digitized because it contains copyrighted
materials. Please contact the Gerald R. Ford Presidential Library for access to
these materials.
Washington Post
Sunday, June 6, 1976
Nuclear Black Market
Feared by Journalist
NASHVILLE, June 5 (AP)
This would lead me to
- A Journalist fired last
believe the possibility of nu-
month for alleged FBI con-
clear gunrunners dealing in
black market plutonium,"
nections has said she has in-
said Sroufi, who was fired
DECLASSIFIED
E.O. 12356, Sec. 3.5 (B)
February 8, 1977
C/A etr. 1/25/89 MR 87-5,#12
By KBH
Date 5/18/89
Dear Jack:
You will recall our discussing the NUMEC
matter and my showing you several
classified documents on this subject.
I believe it would be helpful for you to
have a set of these documents and one is
attached. Included in this file are:
---
Helms two-page memo to the
Attorney General (Clark) (with
transmittal cover) dated
April 2, 1968;
---
Photostat of two-page letter
from J. Edgar Hoover to Helms,
dated September 3, 1969;
------
Helms three-page letter to the
President, dated September 8, 1969;
-
Internal three-page memo from Carl
Duckett to DCI, dated March 21,1976
with a Memorandum for the Record,
seven pages, dated March 9, 1972.
It is my understanding that Phil Buchen
and Ed Schmults discussed this with Bob
Lipshutz and, therefore, you may wish
to pursue this with him.
FORD KIBRARY
SBCRET/SENSITIVE
-2-
Additionally, in the Spring of 1976, the
NSC prepared a report for the President
on safe-guarding materials. Whether it
was completed and sent into him I am not
certain.
Also, I have sent you a copy of a short
memo from me to certain other members of
our staff concerning the Dingell hearings
which we thought might address the NUMEC
matter.
Finally, in the closing days of the Transi-
tion, I mentioned to you the Srouji case.
The Srouji case is a rather controversial
matter involving the FBI. I have attached
a copy of a news clipping from the Washing-
ton Post on this individual.
With kindest personal regards, I am
Sincerely,
John O. Marsh, Jr.
The Honorable Jack H. Watson
The White House
Washington, D. C. 20500
SECRET/SENSITIVE
JOM/dl
FORD LIBRAR