-5 ~

~ ImiddotZ

5= B ~ ~ ~ SlN =Eshygtlt 8Cl NZ o_ middotoZEshy~ 0 ~ 5 s~oo Glt00 ~ lt a0 0 c 00 Q p~-

--------_jYrG

bull J

~ I

9 t-arch l9 72

flOFUI-YDDimiddot1 FOR TEE HECORD

JBJECT Possible Di versfon of e2pons Grade NucJear Materials to I~rael by Officials of the Nuclear l1at2rials and Equipment Corporeti6n (Nm~SC

2 Fron 1947 until the Atodc Energy Act of 1954 all pecial nucle2r naterlal 1-ras mred by themiddot U1ited States overnment and with certain exceptions was held by the AECnd its cost type contr2ctors operating Governinenc omiddotmed aridorontrolled facilities The Act of 19 5 Ll 2S designed to middotiden rlt--fG- _ c-1omiddotgt ~ oon in the

-use 0~

L CC---o a ~-- e ro~y -~r 0 thei4 lat ria l middot- - J

middot middot ~-- t bull r- e 2s sti l l o~middotmed by the us it imiddotas more iildely held by overrirtent contrc1ctors and by licensees tlho ere not Govermrrent

obull-ac-bullmiddotor~ Loisllogt n L06Ll gt-1~ -rltgt_e omiddotmiddotemiddot 1Sti otiol~- - -o -b C-t ~ola bull bull~middot-U-_tJ-_y__ 4 JtJ__p

special nuclear material permissiblemiddot The 1954 Act authorized the lEC to regulate the use of these m3teri2ls cr1d to guard against loss or divers1on In setting up regulatlons to enf-ce the control of material_ the Cor-sission concluded thatmiddot the physical protection and accot~tability controls gt-hich licensees as prudent businessmen would ~aintain over speci~l nuclear 1112-terial beCaUSe of its intrinsic V21Ue end their

middot rcsponsibili ty for its loss or d212e and the se1rere crininal penalties provided by AECs governing legislation would adequately protect the national interest from the stand~oint middot ot unl2wful diversion In 1955 a policy wis ~dcpted along these lines by the A2C In f1lay 1956 t~e EC co~luded that

a change tomiddotard ttghter controls w2s in order and the Commisston amended their regulatio1s on 25 Jcrmary 1967

2 In 1957 Dr Zaln2n ti[ordec~ai S~airo left ~middotresting10use 12nd establishccd a fi m called L middotlear gtI2te-ials cnd Sq_uip8nt

Corpor2tlon (~U~GC) in Apollo e~nsylv~nla Instrume~tal in the fin2ncing of the new fir~ was a Pi~tsb~rgh indus~rialist named David L Lowenthal a lon~-ti~e close cersonal rr~end of Shaplro

I 25Xl E013526

bull

about

I 25Xl E013526

3 NbrmiddottEC eM ned a1d ope rated a urani tllU pro~essing faciilty at Apollo Pennsylvaniamiddot middot It first received material under H~a$e arrangemei1t in middot December 1957 cnd r e ceived its first mat amprial as a n AEC contractor in December 1957bull Frommiddot the

middot smiddot-~middot ~rt up middot through 31 De cepber 1966 HtEmiddot~C received 21~ 750 leg of U 235 and shipped 19middot 865 kg U 235 reporting losses of 2BCF kg or about 12 of total receipts Starting ab6ut 1960 middotthe _ AEC began a continuing_ but in the middotopinioL of the COfptroller General of the United St~tes ineffectivet campaIgn to middotget NUiEC to implement adequate co1trol of the material middot injits plant This matter cathe to a head in - ~middotIoverrber 1965 Qi~J) the AEC made a detailed survey to dltFterrUne ttal Iosses s -fpe start up and to ctteinpt to expl2ln the un~~pecte(lly 11

high U 235 loss on the HANL contract (middotest inghtlus~ middot The stu~v~y established the loss from I957 until 31 OepQber l965 ~ -- middotmiddot 78middot 1- TJ middot2middot3 0- -h ~ - middot middot _0 middot1middot middot middot o l middot middot2middotmiddot middot middot ~ bullbull _ middotmiddot bullmiddotr middot fL _ middot bull middot tmiddot middot dS _+ rc gt l -gtJgt o middot ~a middot middot Vf~middot middot t r gt~_ c es-_ IIaileq_ By ne s(JrfJey team to have been lost throUgh knomiddoth loss mecharibimsmiddot (f~~f ) and the remaining amount of middot sectj ~ 8 kg tas catmiddotiigorji Ed as imiddotJUF~ - NUF is de fined as tfsuai ly the resul t of urtcert aiiities ~tr i idOzJieasureme ntS unkrtm-Tn losses a)d undetected errors in i fi z-ecqrds In middot1964 a fir~_ o ccur-recent tn fhe vault c9nta1rting

middotI nucJe ar mate rials at iftrrmiddot1EQ-middot--~1h]~h-e ffe cti ve ly des ~royed reqcrds of middotthe input and output of materialmiddot The middotfi1~e occurred during t a s -t r ike lt1middotrhe n the -p lantmiddot-~amiddots --snUt--- -domiddotjn bull The AEC r eport on the

-~middotioVerber 1965 survey presented the middot view that Hhile it could r()t be stated with c~rtainty thct di ver-sion did not tate place P

the survey team found no evidence to support the p pssibIllty of diversion The Compt roll~ GererltJl foun-d middotthc-t timiddotecaue of the conditi ori of HUHEG 1 s records they were unab le t o s -tate an opinion on the disposition of tne 1WF but had no reason to question the AEC conclusion igtii th regard to diversmiddoticentn The

comptroller had been asked to inv~stigate this situation by an alarmed Joint Corr~11ittee middot of the Congress en Atomie EnergrJ o middot 7 semiddot o-~-erbr middot l966 middotT-emiddot middot Coo1i~r Gmiddot a~els -lt=gtoo~t middottoJ I l bull ~- - ~ -_ --- _ __ __ -- middot

the Congress z tate d 11 Not~middoti ths t a-~dirg extensive revieimiddotTs of Nutmiddot1ECs operations neither the AEC nor NUiv~C have be~en eble to identify with a high degree of certainty the specif~c causes of imiddotAZiL material loss rr

lbull

_

____________________________________ _______

_ _~middot~---middot~ middot~--~~~~~~~~-~ -~middotmiddot~--middot~ middot middot --middot -~--~---------- --~----middot-middot middot-middot ---middot - --~-----~-middot--middot--middot middotmiddotmiddot- middot middot-~- bull ___ ___-~---- middot middot middot - middot ~ ---~ ~

------ --middot-- -middot-- -- --- - ------middotmiddotmiddot- ------- - --------middotmiddot--- - middotmiddot--- ------------ ----- ------- ------ ----middot- - ---~--- ------------- -middotmiddotmiddot-- --middotmiddotmiddot- - -----middot ----------- middot-middotmiddotmiddot---- -- - ---- - - ----- - - ---middot-------shy

-3shy ~

4 During the period 1ugust middot 1958 to October 1965 ~ 1HT1middot1EC shshyinoed soe L~25 kg of u- 235 oveseas to vcrious parts of the vorid under sone 28 differ~nt cortracts The A2C report s t o-te s the follomiddotJing 11 Quant it ie s in i ndividual shipnents dom~sti c as gtmiddotle ll as foreign middotare not c onfirmed independently by the AEC Such action~ have been outside the scope of the pr~s 2nt AEC system of coi1t rol of nmiddot~clear h2teri~l - Instead r eiliilimiddotance has been placed en a t e chnical reviemiddotr cif t he shpper s internal contro ls and irdependently devel_oped recetveamps d2t a The validity of this approcd1 is of cOurse largely

dependent on the integrity of the shipper 211d the receiver n

~

l

middot f bull - middot~-ro-

- --- --- --

---- - middot middotmiddot-~-middot middotmiddot--~---middot --middotmiddotmiddotmiddot- middot- - - _ __ __ __bull middotmiddotmiddot-

-------middot- -middot~- -------- ------ -- --- ----------- --- - - -middot-- ---middotshy

I 25Xl E013526

Photocopy from

Gerald R Ford Lbary

-~ middotmiddotmiddotmiddot -middotmiddot~ -- -- ~ ----~~---~- middot -middot~middotmiddotmiddot-_ bull - ~----- --- middot-middot--middot- -middot~ - -

middot middot ------=shy

~

25Xl E013526

sampe- 7~- - -- - -------s middot- - _ - - - bull bull - -1

Photocopy from

Gerald R Ford Ubrary ~-~ -

--------------------- ---- - --

- ---- -----middot-- - - -shy-~middot~---~---middot ~ middot- middotmiddot bullbull _____bullmiddot-bullmiddot-~~~---middot-~ ----middot----~------bullbull - bull - ----- -- -middotmiddot~middot- - ----middot- ------ _ - - -- _ _ bull-

~middot

---middotmiddot-----middot------ --------middot--middot ---------

-5shyI 25Xl EOl35~6 1shy

~middot

middot 6 On the basis o1~ the foregoing it must be ass~ed for ~ J1 the purpose of US national se curtty that diversion of special nuclear materials to Israel by Dr Shapiro aLd his associates middot 1 a distinct possibilL ty Such a di rersioa might be middot

middot evbiUtionary or revolutionary NUimiddotSC -ras formed b~i Dr Sh2piro _ aLcfhis associates in 1957 I

() 1(

-- - n middot 7 On the other hand middotit is possible that the idea or

di-version didnt occur until much later when the existence of the reactor at Dimona vlmiddotas dis cover~d I

middot middoti-shymiddot ~ ~I

8

I 25Xl KOl35~6 Jl

Photocopy middot from

Gerald R Ford library

rbullbull-bull-bullmiddotmiddot middotbullmiddotbull- bull

middotmiddot

-- _ __ _ ~-middot-middot-yenbull bull----middotmiddotmiddot----- _ _ _~~-----------middot--middotP bull-middot--~middotmiddot-middotmiddot bullbull bullbull-middot-middot-middotmiddot-middot~-----middot bullbullbull

I 25Xl_E013526 I _____shymiddot~ ~ ~middot

middot~ ~

L-----------------------~)t is interesting in thimiddot ~ iconnection tb quote from the PEC investigation of 1966 Hhen -the AEC t~am requested NUiEC product1on cotroJ cnd process eri~tneering recdrds on the WANL artd other contracts nAil etforts in this directio1 vrere negcted Khen it lljas learned thmiddotat many of the requested rlte cords hcd been inadvertently astroyed by supervisorY~ personnel during a ~clean-upr middot cpoundtrpaign at the time of an emp]Qyee strike 7 Jagt1uar-y 1 to Petiuary 25 1964 11 (This Has in addition to the fire m~J5lio1ed in paragraph 3 above )

9 To the best of our kncnl-ledge the strike rhtch gave sip middot~middot -rbullvisory personnel free run of the facility piripoints t$J -time at which the materal could have been rrost easily diY~rted to Israel and the tim~_ at Hh1cmiddot~ evid~nce 9pound ~ tJch a d~~~rsion could best be covered up Given themiddot sta1e ot apoundf~irs at HUMEC from 1957 on a ci~ versmiddot1on could ijave occu-rred middot-middotmiddot atWmiddotiriy time~ but the period Ja11uar-j - middotFebruargtvgtlpound19-middot 4_is -middotcebullrtaLnii tii~ ~ffrost suspect With regard t O middot the rhaterial itsect~) f_ _it coiyen4 have been shipped in less th2n critical lots_middot of say tw~~middotrfty pounds per lot Lead middot coated or nickel plated~ tt W6H~-0 present no radia-tiqn middothzzard and could have EJ~s-ily gone by qiP lonati c pouch or Israeli merchant ship or ev~rt E-~ Al A1rl1nes Transportation of diverted material to Israe-I ~middotdu1-d have been a simple matter

10 In Septemiddottnber middot CIA H2S infor~ed by the FBI that Shaniro had been interviemiddotJed by AEC officials on 14 August 19t59 On the basis o~f information developed during the interNiew particularly Shapirots st2tement thct ne_had never furni-shed classified inforrJation to unauthortzed pmiddot ~rsarts the

AEC has advised that it does not contemn late fUrther action on this matter The FBr informed CIA that igthile tiey had developed informction clearly pointing to Shapiros pronounced

middot pro--Israeli sympathies cU1d close contacts middotHith -Israeli officials I the FBI believed that further investigation would be unlikely to produce any facts leading to conviction and therefore were terzninating their active inves ~igation It sJiould be noted that the AEC ~eeting with Shapiro was not cod~dinated with CIA although the AEC v1as ~ell aHare of CIAs interest in middot the affair CIA attempts to persuade the FBI to continue the

1969

-~

middot~ middot ~middotmiddotmiddot

~

-

~

J

middotshy

- 1 2sx1 EOi35~6 r bulll

-~ middot

Photocopy

from Gerald R Ford Ubrary

middotmiddot~- ----- - - ---middot __-e

1

--------------------- ---- - --

- ---- -----middot-- - - -shy-~middot~---~---middot ~ middot- middotmiddot bullbull _____bullmiddot-bullmiddot-~~~---middot-~ ----middot----~------bullbull - bull - ----- -- -middotmiddot~middot- - ----middot- ------ _ - - -- _ _ bull-

~middot

---middotmiddot-----middot------ --------middot--middot ---------

-5shyI 25Xl EOl35~6 1shy

~middot

middot 6 On the basis o1~ the foregoing it must be ass~ed for ~ J1 the purpose of US national se curtty that diversion of special nuclear materials to Israel by Dr Shapiro aLd his associates middot 1 a distinct possibilL ty Such a di rersioa might be middot

middot evbiUtionary or revolutionary NUimiddotSC -ras formed b~i Dr Sh2piro _ aLcfhis associates in 1957 I

() 1(

-- - n middot 7 On the other hand middotit is possible that the idea or

di-version didnt occur until much later when the existence of the reactor at Dimona vlmiddotas dis cover~d I

middot middoti-shymiddot ~ ~I

8

I 25Xl KOl35~6 Jl

Photocopy middot from

Gerald R Ford library

rbullbull-bull-bullmiddotmiddot middotbullmiddotbull- bull

middotmiddot

-- _ __ _ ~-middot-middot-yenbull bull----middotmiddotmiddot----- _ _ _~~-----------middot--middotP bull-middot--~middotmiddot-middotmiddot bullbull bullbull-middot-middot-middotmiddot-middot~-----middot bullbullbull

I 25Xl_E013526 I _____shymiddot~ ~ ~middot

middot~ ~

L-----------------------~)t is interesting in thimiddot ~ iconnection tb quote from the PEC investigation of 1966 Hhen -the AEC t~am requested NUiEC product1on cotroJ cnd process eri~tneering recdrds on the WANL artd other contracts nAil etforts in this directio1 vrere negcted Khen it lljas learned thmiddotat many of the requested rlte cords hcd been inadvertently astroyed by supervisorY~ personnel during a ~clean-upr middot cpoundtrpaign at the time of an emp]Qyee strike 7 Jagt1uar-y 1 to Petiuary 25 1964 11 (This Has in addition to the fire m~J5lio1ed in paragraph 3 above )

9 To the best of our kncnl-ledge the strike rhtch gave sip middot~middot -rbullvisory personnel free run of the facility piripoints t$J -time at which the materal could have been rrost easily diY~rted to Israel and the tim~_ at Hh1cmiddot~ evid~nce 9pound ~ tJch a d~~~rsion could best be covered up Given themiddot sta1e ot apoundf~irs at HUMEC from 1957 on a ci~ versmiddot1on could ijave occu-rred middot-middotmiddot atWmiddotiriy time~ but the period Ja11uar-j - middotFebruargtvgtlpound19-middot 4_is -middotcebullrtaLnii tii~ ~ffrost suspect With regard t O middot the rhaterial itsect~) f_ _it coiyen4 have been shipped in less th2n critical lots_middot of say tw~~middotrfty pounds per lot Lead middot coated or nickel plated~ tt W6H~-0 present no radia-tiqn middothzzard and could have EJ~s-ily gone by qiP lonati c pouch or Israeli merchant ship or ev~rt E-~ Al A1rl1nes Transportation of diverted material to Israe-I ~middotdu1-d have been a simple matter

10 In Septemiddottnber middot CIA H2S infor~ed by the FBI that Shaniro had been interviemiddotJed by AEC officials on 14 August 19t59 On the basis o~f information developed during the interNiew particularly Shapirots st2tement thct ne_had never furni-shed classified inforrJation to unauthortzed pmiddot ~rsarts the

AEC has advised that it does not contemn late fUrther action on this matter The FBr informed CIA that igthile tiey had developed informction clearly pointing to Shapiros pronounced

middot pro--Israeli sympathies cU1d close contacts middotHith -Israeli officials I the FBI believed that further investigation would be unlikely to produce any facts leading to conviction and therefore were terzninating their active inves ~igation It sJiould be noted that the AEC ~eeting with Shapiro was not cod~dinated with CIA although the AEC v1as ~ell aHare of CIAs interest in middot the affair CIA attempts to persuade the FBI to continue the

1969

-~

middot~ middot ~middotmiddotmiddot

~

-

~

J

middotshy

- 1 2sx1 EOi35~6 r bulll

-~ middot

Photocopy

from Gerald R Ford Ubrary

middotmiddot~- ----- - - ---middot __-e

1

-- _ __ _ ~-middot-middot-yenbull bull----middotmiddotmiddot----- _ _ _~~-----------middot--middotP bull-middot--~middotmiddot-middotmiddot bullbull bullbull-middot-middot-middotmiddot-middot~-----middot bullbullbull

I 25Xl_E013526 I _____shymiddot~ ~ ~middot

middot~ ~

L-----------------------~)t is interesting in thimiddot ~ iconnection tb quote from the PEC investigation of 1966 Hhen -the AEC t~am requested NUiEC product1on cotroJ cnd process eri~tneering recdrds on the WANL artd other contracts nAil etforts in this directio1 vrere negcted Khen it lljas learned thmiddotat many of the requested rlte cords hcd been inadvertently astroyed by supervisorY~ personnel during a ~clean-upr middot cpoundtrpaign at the time of an emp]Qyee strike 7 Jagt1uar-y 1 to Petiuary 25 1964 11 (This Has in addition to the fire m~J5lio1ed in paragraph 3 above )

9 To the best of our kncnl-ledge the strike rhtch gave sip middot~middot -rbullvisory personnel free run of the facility piripoints t$J -time at which the materal could have been rrost easily diY~rted to Israel and the tim~_ at Hh1cmiddot~ evid~nce 9pound ~ tJch a d~~~rsion could best be covered up Given themiddot sta1e ot apoundf~irs at HUMEC from 1957 on a ci~ versmiddot1on could ijave occu-rred middot-middotmiddot atWmiddotiriy time~ but the period Ja11uar-j - middotFebruargtvgtlpound19-middot 4_is -middotcebullrtaLnii tii~ ~ffrost suspect With regard t O middot the rhaterial itsect~) f_ _it coiyen4 have been shipped in less th2n critical lots_middot of say tw~~middotrfty pounds per lot Lead middot coated or nickel plated~ tt W6H~-0 present no radia-tiqn middothzzard and could have EJ~s-ily gone by qiP lonati c pouch or Israeli merchant ship or ev~rt E-~ Al A1rl1nes Transportation of diverted material to Israe-I ~middotdu1-d have been a simple matter

10 In Septemiddottnber middot CIA H2S infor~ed by the FBI that Shaniro had been interviemiddotJed by AEC officials on 14 August 19t59 On the basis o~f information developed during the interNiew particularly Shapirots st2tement thct ne_had never furni-shed classified inforrJation to unauthortzed pmiddot ~rsarts the

AEC has advised that it does not contemn late fUrther action on this matter The FBr informed CIA that igthile tiey had developed informction clearly pointing to Shapiros pronounced

middot pro--Israeli sympathies cU1d close contacts middotHith -Israeli officials I the FBI believed that further investigation would be unlikely to produce any facts leading to conviction and therefore were terzninating their active inves ~igation It sJiould be noted that the AEC ~eeting with Shapiro was not cod~dinated with CIA although the AEC v1as ~ell aHare of CIAs interest in middot the affair CIA attempts to persuade the FBI to continue the

1969

-~

middot~ middot ~middotmiddotmiddot

~

-

~

J

middotshy

- 1 2sx1 EOi35~6 r bulll

-~ middot

Photocopy

from Gerald R Ford Ubrary

middotmiddot~- ----- - - ---middot __-e

1

middot1f bull bull t

--~ -- ~ (ishy

middot _ - ~ -Tshy Withheld from public release under statUtory authority of the Federal Bureau of

Irivestigatibn~ investigation proved fru~tless FOIA 5 USC sect552(b)(7)(C)

11 In June 19 middotmiddot 70 ShanLro middotmiddot resicrlt bullne-d bull -ffota -HtlrmiddotIEC and middot middot took a nmiddotosition as Vice re3ident middot fOr - Rese2rch middotmiddotandme~veJ-otgtment

wlt~h Ka)jecki i3eryJcent6 ComptSl-hY iri Tepie ~ -Pa_ f

__~~--------------------__-------ll Jh JJify l9 71 Sha-biro 1e ft Kamiddotie cld Bervmiddotic-co an-d took 2_ rrosttten as executive

~~~~~7t ~~ ~tn~~~~~t~~ ~-~~~~~clt~~r~~~f~f~~s~~ene ral bullespArgnouse he 11 be ~ givi-np gy~ c~nce and aavic 0n tPe FasectJRFlux Test FacilL-middotty projecf )ihid breeders~ t~ftll special conltccentntration ph fueL middot

1 I

bull

i ~

~ middot r middot-- shy

~

se~ 7- c-~ middot-middot -middotmiddot~ middot-~ - -- -middot- ~ -J

Photocopy from

Gerald R Ford Libraty middot

- -- - ~middot----middot --- ----------- ~-~-~-- -- --- --middot --------- -~ middotmiddot--middot---middot- --middot-------~-- ------~- - -middot---- -- --------_____-~middot-- middotmiddot-middot-middot ---middot middot- --middot