"Intelligence Community Damage Assessment on Chinese Espionage"

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CENTRAL INTELLIGENCE AGENCY
WASHINGTON, D.C. 20505

EMBARGOED FOR WIRE TRANSMISSION/PUBLICATION
UNTIL 4 P.M. ON WEDNESDAY, APRIL 21, 1999

DCI STATEMENT ON DAMAGE ASSESSMENT

Earlier this year, the Cox Committee recommended that appropriate Executive Branch departments and agencies conduct a comprehensive damage assessment on the implications of China's acquisition of US nuclear weapons information regarding the development of future Chinese weapons. In February, I appointed Robert Walpole, the National Intelligence Officer for Strategic and Nuclear Programs, to lead this effort. Mr. Walpole convened an interagency group including CIA, DOE, DOD, DIA, NSA, INR, FBI, both CIA's and the National Counterintelligence Centers, and multiple weapons designers, experts, and analysts from the national laboratories at Los Alamos, Lawrence, Livermore, and Sandia to draft the assessment.

The assessment consisted of a thorough analysis of China's nuclear weapons program to identify where and how US information played a role. Mr. Walpole told members of the damage assessment team to view their efforts through the lens of what we know, what we don't know, what we can't know, what we judge based on evidence, and what we speculate based on experience.

The Administration, in its response to the Cox Committee recommendation for the damage assessment, determined that the findings of the assessment should be reviewed by an independent panel of nuclear experts. In March, I asked Admiral David Jeremiah to lead a panel of weapons and national security experts to include General Brent Scowcroft, Dr. John Foster, Mr. Richard Kerr, Dr. Roland Herbst, and Mr. Howard Schue. They reviewed the assessment and its findings, met with the Community team, and concluded that they concurred with the assessment.

The damage assessment contains the most sensitive intelligence, nuclear weapons, and law enforcement information. We have not held back anything in its preparation, and the full report has been shared with the Administration and the appropriate congressional committees. Despite the extraordinary sensitivity of the information in the assessment, the independent panel has worked with the damage assessment team to produce a set of unclassified key findings. These findings are completely consistent with the classified key findings in the assessment. They are attached.

I wish to thank the damage assessment team for the thorough, extremely professional way they approached and carried out their responsibilities. I also wish to thank Admiral Jeremiah's panel for their very important contribution. I have taken on board the observations they have made.

Safeguarding our nuclear secrets and other weapons-related secrets is a matter of utmost seriousness-- an issue of critical importance to our national security. My colleagues at the Department of Energy and in law enforcement have taken a number of aggressive steps to protect sensitive information, tighten security, and prevent future breaches. These matters will require continued vigilance in the years ahead.

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Key Findings

The Intelligence Community Damage Assessment on the Implications of China's Acquisition of US Nuclear Weapons Information on the Development of Future Chinese Weapons (U)

Chinese strategic nuclear efforts have focused on developing and deploying a survivable long-range missile force that can hold a significant portion of the US and Russian populations at risk in a retaliatory strike. By at least the late 1970s the Chinese launched an ambitious collection program focused on the US, including its national laboratories, to acquire nuclear weapons technologies. By the 1980s China recognized that its second strike capability might be in jeopardy unless its force became more survivable. This probably prompted the Chinese to heighten their interest in smaller and lighter nuclear weapon systems to permit a mobile force.

China obtained by espionage classified US nuclear weapons information that probably accelerated its program to develop future nuclear weapons. This collection program allowed China to focus successfully down critical paths and avoid less promising approaches to nuclear weapon designs.

China obtained at least basic design information on several modern US nuclear reentry vehicles, including the Trident II (W88).
China also obtained information on a variety of US weapon design concepts and weaponization features, including those of the neutron bomb.
We cannot determine the full extent of weapon information obtained. For example, we do not know whether any weapon design documentation or blueprints were acquired.
We believe it is more likely that the Chinese used US design information to inform their own program than to replicate US weapon designs.

China's technical advances have been made on the basis of classified and unclassified information derived from espionage, contact with US and other countries' scientists, conferences and publications, unauthorized media disclosures, declassified US weapons information, and Chinese indigenous development. The relative contribution of each cannot be determined.

Regardless of the source of the weapons information, it has made an important contribution to the Chinese objective to maintain a second strike capability and provided useful information for future designs.

Significant deficiencies remain in the Chinese weapons program. The Chinese almost certainly are using aggressive collection efforts to address deficiencies as well as to obtain manufacturing and production capabilities from both nuclear and nonnuclear sources.

To date, the aggressive Chinese collection effort has not resulted in any apparent modernization of their deployed strategic force or any new nuclear weapons deployment.

China has had the technical capability to develop a multiple independently targetable reentry vehicle (MIRV) system for its large, currently deployed ICBM for many years. but has not done so. US information acquired by the Chinese could help them develop a MIRV for a future mobile missile.

We do not know if US classified nuclear information acquired by the Chinese has been passed to other countries. Having obtained more modern US nuclear technology, the Chinese might be less concerned about sharing their older technology. #

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INTRODUCTORY NOTE FROM THE REVIEW PANEL

The Intelligence Community's Damage Assessment on the Implications
of China's Acquisition of US Nuclear Weapons Information
on the Development of Future Chinese Weapons (U)

This damage assessment was reviewed by a panel of independent, national security and weapons experts-- Adrairal David Jeremiah, General Brent Scowcroft, Dr. John Foster, Mr. Richard Kerr, Dr. Roland Herbst, and Mr. Howard Schue-- prior to its publication. The panel members reviewed the report, held a question-and-answer session with the team, discussed the report amongst themselves, and concluded that they concurred with the report. The panel then worked with the team to develop a set of unclassified findings, which are completely consistent with the classified Key Findings in the damage assessment.

The panel would add the following observations:

It is important to understand Chinese strategic objectives in assessing their efforts to acquire technical information on US nuclear weapons. The need to preserve their second strike capability, their regional concerns, and their perceptions of future national and regional ballistic defenses have driven collection efforts.
The Chinese continue to have major gaps in their weapons program. We should seek to identify Chinese efforts to fill these gaps as indicators of future program direction and to provide insight into counterintelligence issues.
The panel feels strongly that there is too little depth across the Intelligence Community's analytic elements and they are too frequently occupied with whatever current crisis takes front stage. The necessity to pull Intelligence Community analysts and linguists off other activities to assess the compromises to US nuclear weapons programs and their value to the Chinese further reinforces the panel's view that the depth of Intelligence Community technical and language expertise has eroded.
A separate net assessment should be made of formal and informal US contacts with the Chinese (and Russian) nuclear weapons specialists. The value of these contacts to the US, including to address issues of concern-- safety, command and control, and proliferation-- should not be lost in our concern about protecting secrets.
The panel recognizes that countries have gained access to classified US information on a variety of subjects for decades, through espionage, leaks, or other venues. While such losses were and continue to be unacceptable, our research and development efforts generally kept us technologically ahead of those who sought to emulate weapons systems using our information. However, decreases in research efforts have diminished the protective edge we could have over those using our information, making such losses much more significant in today's world.

CENTRAL INTELLIGENCE AGENCY
WASHINGTON, D.C. 20505 IMMEDIATE RELEASE
March 15, 1999

DCI TENET ANNOUNCES INDEPENDENT PANEL

The Director of Central Intelligence, George J. Tenet, announced today that Admiral David Jeremiah, USN, (Ret) , will lead a panel of outside experts that will provide an independent review of the work of an interagency damage assessment team looking into possible harm to U.S. national security as a result of alleged disclosure of classified nuclear weapons information to China.

Admiral Jeremiah is the former Vice Chairman of the Joint Chiefs of Staff and currently Partner and President of Technology Strategies & Alliances Corporation.

Admiral Jeremiah wil1 be joined by several other prominent outside experts who will be named shortly.

The Jeremiah group will provide an outside review of the damage assessment which is now being conducted. That damage assessment is being led by Robert Walpole, National Intelligence Officer for Strategic and Nuclear Programs for the National Intelligence Council. Walpole's team is made up of intelligence analysts and weapons experts drawn from across the Intelligence Community and from the National Labs . The team is scheduled to complete their work by the end of March. Admiral Jeremiah's group will then review the damage assessment and provide their independent assessment.

In making the appointment of Admiral jeremiah, Director Tenet said: "I am grateful to Admiral Jeremiah, for sharing his expertise once again with the nation to ensure that we have made a rigorous review of all available facts and have come to the appropriate conclusions. Admiral Jeremiah is the perfect person to lead such a review. His credentials are impeccable and his credibility is unquestioned. We are fortunate to have him chair this outside panel of experts."

When Admiral Jeremiah's panel completes their work, the results will be shared with the White House and appropriate Congressional oversight committees.

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