Ethics Clouds Hang Over Los Alamos National Laboratory

LOS ALAMOS, N.M. – The laboratory that built the atomic bomb and is entrusted with some of America's most sensitive defense secrets has lost track of millions in equipment and credit-card expenses in a scandal that has claimed five top managers, including the director.

The Los Alamos National Laboratory is under investigation by the FBI and at least three congressional committees, which are looking into allegations of theft, fraud and a cover-up by management. The allegations surfaced after two internal investigators were fired last year.

Los Alamos' new interim director, Pete Nanos, told employees on his first day on the job earlier this month that he will have to "drain the swamp" at Los Alamos, and start with a wall-to-wall inventory.

"We are not a bunch of crooks -- the problem is, I can't prove it," he said.

The scandal is the latest embarrassment for the elite research lab in the past several years. In 1999, Wen Ho Lee was accused of mishandling nuclear weapons codes, but the government's case fell apart and ended with a plea bargain that freed the Taiwanese-born scientist. The next year, two computer hard drives with top-secret nuclear-related material disappeared, only to turn up mysteriously behind a copy machine.

Now Los Alamos is under scrutiny from the Energy Department and other agencies looking into allegations it lost $2.7 million in computers and other equipment. In addition, a lab-commissioned audit found nearly $4.9 million in questionable credit card transactions over four years.

Separately, the FBI is investigating two workers suspected of using $50,000 in purchase orders to buy fishing and camping gear and other items for themselves. Four other employees allegedly used lab purchase cards -- sort of like credit cards -- for such things as cash advances at casinos and jewelry. One even tried to charge a customized Ford Mustang.

The scandal cost Director John Browne his job last month. He and four other managers have either resigned or been reassigned. The University of California, which runs the lab for the Energy Department, has assumed oversight of the lab's audit office and other business operations.

"The broader public perception of the lab has been severely damaged by these scandals," said Steve Aftergood of the Federation of American Scientists, which tracks secret research.

The man-on-the-street view of Los Alamos, he said, "is likely to be credit-card fraud or theft instead of the frontiers of modern physics."

Nicknamed "The Hill" for its isolated mountaintop location, the lab has always been secretive about its work. Outsiders do not get in without a pass, and the area that handles highly dangerous plutonium is surrounded by razor-wire fences and heavily guarded gates.

Internal investigators Glenn Walp and Steve Doran said they were fired in November because lab officials did not want the problems to become public and endanger the university's contract to run Los Alamos, which expires in 2005.

Lab managers said the two men were dismissed because they were not a "suitable fit." But Energy Secretary Spencer Abraham has asked the department's inspector general to investigate the firings and the men's allegations of a cover-up.

Abraham also put university officials on notice that they need to fix the problems "to ensure we return Los Alamos to its pre-eminent position in science and national security."

Lab officials said they have accounted for all but about $260,000 of the questionable credit-card charges. As for the missing equipment, lab spokeswoman Linn Tytler said Los Alamos is working with university auditors to find it.

Doran, a former police chief hired to help Walp, a former Pennsylvania state police colonel, said a "bottomless budget" at Los Alamos led to a cavalier attitude about rules and spending.

"It's this spoiled-rich-kid attitude they've had for years," he said.