Wen Ho Lee, a Chinese Milken Jude Wanniski December 14, 1999

Memo To: Henry Tang, Chairman
Committee of 100 (Chinese-Americans)
From: Jude Wanniski
Re: Wen Ho Lee, Designated Scapegoat

It made me sick when I heard the news that Wen Ho Lee was arrested by federal agents on Friday and charged with 59 counts of downloading "nuclear secrets" onto tapes (diskettes?). When our Political Establishment wants to crush an individual, it will stop at nothing. It now is evident that the Democratic administration and the Republican Congress both have a vested interest in lynching Wen Ho Lee and there will be no disagreement among these political "leaders." Because they can't prove that he is a spy, their goal is to make life so miserable for him that he agrees to some Mickey Mouse technical violation, on HIS assumption he will get short jail term in a country club federal prison rather than spend the rest of his 59-year-old life in court. This is what happened when the feds went after Michael Milken. You should know this story:

The feds caught a genuine scoundrel named Ivan Boesky, who lived on insider trading, and Boesky cut a sweetheart deal with the U.S. Attorney, Rudy Giuliani. In exchange for short jail time in a country club federal prison, Boesky told a string of lies about Michael Milken. Giuliani set the stage by leaking the Boesky lies to The Wall Street Journal's James B. Stewart, and for more than a year Stewart ran unattributed stories -- quotes from anonymous sources -- that persuaded the paper's readers that Milken had to be guilty as hell. The paper's readers of course included the editors of all the other papers and the managers of the electronic media. The feds then indicted Milken AND HIS BROTHER on 96 felony counts. As it became clear Milken not only would fight the charges, but also show how impossible it was for the charges to be true, the feds turned up the heat. They let him know that if they beat these counts, they had another several dozen new charges waiting in the wings. They would keep him and his brother in the courts until they were old men. Even with his $2.5 billion, Milken could not stand up to that kind of pressure. He agreed to plead guilty to six technical violations that were not in the original indictment, things he could in good conscience say he actually did that were felonious: Such as, failing to instruct his secretary to file a certain paper with the SEC within 24 hours of its receipt. Crap like that. Milken actually hoped this would produce only community service, but the Establishment had too much invested in this scapegoat. They gave him TEN years in the slammer, a fine of several hundred million, and barred him from doing business with the markets for the rest of his life. Let me assure you, Mr. Tang, Michael Milken is a true financial genius, who needed to cut no corners to squeeze nickels and dimes from little old lady investors in order to amass his great fortune -- from a standing start -- before he was 40 years old. He would not double-park or jaywalk, let alone commit felonies. He's been out of prison for several years now, yet is still on parole, but continues to work night and day for worthy causes.

Mr. Tang, I do feel a little better today, having read on the front page of the NYTimes that your organization will support Mr. Lee morally and financially. Please let me know where I can make a financial contribution. I helped Milken as much as I could, after I did the due diligence and realized he was being railroaded by the Powers That Be. He did not need my financial assistance (and I never asked nor took remuneration from him in exchange for my countless hours and energies in his defense). What is happening to Wen Ho Lee is in parallel. The Clinton administration made incredible blunders in its early years. It first shut down nuclear testing in accordance with the Comprehensive Test Ban Treaty, even though it was not ratified by the U.S. Senate. It then put China on track to be part of our nuclear Stockpile Stewardship Program -- which left everyone at Los Alamos believing we had to share stuff with Beijing as long as Energy Secretary Hazel O'Leary was posting secrets on her government website. This would have been red meat for the Republican Congress, but Rep. Chris Cox [R-CA], was more interested in his coalition to beat up the People's Republic of China. Just as Richard Nixon used Alger Hiss as a stepping stone to the White House, Cox would use Wen Ho Lee, the designated scapegoat.

I understand that you already had contacted Dr. Gordon Prather, a longtime friend of mine, shortly after the publication of his "Prather Report." Dr. Prather charged, and no one has even attempted to refute that charge, that if any scientists at Los Alamos had deliberately -- as the Cox Committee Report alleged -- or inadvertently given the PRC any information about U.S. nukes that technically was still at least classified, they did so, at least in part, because the disarmament policies of the Clinton Administration encouraged them to do so. When I began to smell a rat early this year when the NYTimes ran a front-pager on Chinese espionage, several weeks before the arrival of PRC Premier Zhu Rongji -- I contacted Dr. Prather and had him dig into the story as it unfolded. Since there apparently is not a shred of evidence that Wen Ho Lee ever gave the PRC anything -- deliberately or inadvertently -- that he had not been encouraged by the Clinton Administration to give them, the Administration has charged Wen Ho Lee with technical violations of DOE regulations on handling Restricted Data. Since neither Wen Ho nor his lawyers are experts when it comes to these complicated regulations, I urge you to concentrate your efforts of providing them expert advice. As I understand those regulations, it is all going to come down to "timeline" and "intent" namely: When did Wen Ho Lee do what he did, and why did he do it.

Here, briefly, is what I have pieced together from the Cox Report itself, corrected by the Rudman Report, the Thompson Report, and columns by Walter Pincus of The Washington Post.

[1] CIA's George Carver made a speech at Lawrence Livermore National Lab (LLNL) circa 1980 wherein he "revealed" that the PRC had "stolen" the secret of the "neutron bomb." The leaked "suspect" was apparently Peter Lee (a TRW employee working under contract at Livermore's inertial confinement facility [ICF]).

[2] Enter Los Alamos National Lab's [LANL] Wen Ho Lee. Circa 1982 he made a phone call to Peter Lee at LLNL -- intercepted by the FBI -- regarding Peter Lee's dismissal by LLNL as a TRW contract employee. After first investigating Wen Ho, himself, the FBI then made Wen Ho their agent against Peter. (The FBI investigation of the Lees -- both of whom the FBI previously had cleared for access to secret information and would clear again in future years -- came to nothing). Notra Trulock was then, or became soon thereafter, a counterintelligence agent and employee of the University of California, which runs LANL. Although the FBI had cleared Wen Ho Lee, Trulock apparently decided that Wen Ho was a fiendishly clever bigtime PRC spy and continued to focus his attention on him for more than a decade, during which time Wen Ho Lee's "clearance" was twice renewed by the FBI.

[3] In 1993-4 Counterspy Trulock went -- initially as a UC LANL "detailee" -- to the Clinton-O'Leary DOE/HQ to head up the counterintelligence office. (He apparently at some point became a DOE employee, because Richardson gave him a $10K SES bonus after Wen Ho Lee was fired). Clinton-O'Leary had launched in 1993 the triple whammy [CTBT, Openness, PRC Constructive Engagement] that resulted in LANL et al. proposing to establish a Cooperative Stockpile Stewardship [SSS] program with the PRC. Wen Ho Lee was assigned [1993-94] to the archiving part of the LANL Science Based Stockpile Stewardship program, apparently in anticipation of the establishment of a co-op SSS program with the PRC.

[4] Enter [1993] a LANL scientist who was in the process of being laid off by LANL who went to Trulock circa 1993 with the ridiculous story that some seismic signals from PRC underground tests looked like the seismic signals of our W-88s. Whereupon Trulock apparently decided that the fiendishly clever Master Mole Wen Ho Lee must have given the PRC the "secret of the W-88" when he visited the PRC in 1984 or 1988. When the far-fetched PRC/W-88 Seismic Gambit got no support from Lab scientists, the LANL Seismic Gambit scientist was duly laid off, but Trulock got Sandia (SNL) to "hire" him [although Trulock reportedly re-imbursed SNL out of his DOE/HQ budget] to continue to work at LANL (not at SNL), presumably to continue to keep an eye on the fiendishly clever Master Mole Wen Ho Lee.

[5] Enter [1995] the CIA Walk-In, the turncoat Chinese spy. Trulock et al. promptly changed horses (from W-88 seismic signal to W-88 watermelon shaped primary design info) midstream, and got the FBI to focus solely on Wen Ho Lee as the source of the entire Walk-in document. As with the Seismic Signal gambit, the Walk-In Gambit got them nowhere.

[6] Enter [1998] Chris Cox. He fell for Trulock and his fiendishly clever Master Mole scenario: hook, line, sinker. The result was the deeply, deeply flawed Chapter Two of the Cox Committee Report.

[7] The CIA Panel of Experts -- belatedly called in by the Cox Commission -- said Chapter Two was a bunch of crap. Former Senator Warren Rudman and Physicist Sidney Drell who independently reviewed the case for the President's Foreign Intelligence Advisory Board said "Chapter Two" was a bunch of crap. Physicists Panofsky, Prather, Cohen, Agnew, et al. said "Chapter Two" was full of crap. Now it has just been revealed that the FBI knew all along that "Chapter Two" was full of crap. Cox Committee Member Spratt even went as far as to publish on his Website and write an article for Arms Control Today, saying that "Chapter Two" was a bunch of crap. Everyone who had access to the complete record expressed bafflement at why the counterintelligence hounds had gone off after Wen Ho Lee and only after Wen Ho Lee.

The Hounds came up dry. They didn't tree any fox. So now the Clinton Administration, which had refused to allow even a wire tap on Wen Ho Lee as late as 1997, are attempting to get Chris Cox off their backs by putting Wen Ho Lee in prison for life, for Life!!!, because he changed the filenames on some Restricted Data Files so that they could be downloaded from the Classified Computer System in LANL's X-Division. Dr. Prather tells me that it is extremely important to Mr. Lee's defense that he understand in great detail the nitpicking rules and regulations governing the handling of both DOE Restricted Data and DOD Defense Information, and he doubts very much that Wen Ho Lee understands any of this and his lawyers almost certainly haven't got a clue. But there are lawyers who do understand and you would be doing Wen Ho Lee a great favor if you could arrange to have such experts become a part of Wen Ho's defense team.