The Nuclear Spy Case Suffers A Meltdown

Warren Rudman had finally heard enough. Earlier this year, President Clinton asked the former Republican senator to review how the administration handled the case of Wen Ho Lee, the Los Alamos scientist suspected of leaking nuclear secrets to China. Rudman quickly concluded that the case against Lee was precariously thin. The FBI has turned up scant evidence that the Taiwanese-born physicist gave nuclear-weapons designs to Beijing. Instead, agents are now focusing on Lee's admission that he transferred nuclear codes onto his unsecure office computer. In a report highly critical of the investigation, Rudman questioned why agents had zeroed in on Lee while ignoring dozens of other possible leakers.

That's not the only question about the case against Lee. In particular, it stands out when compared to another government investigation into the misuse of classified material. In December 1996, the CIA discovered that retired CIA director John Deutch had routinely taken his work home, putting extremely sensitive material in his briefcase and loading classified documents onto his unsecure home computer. NEWSWEEK has learned that among the mishandled materials were memos to President Clinton about terrorism and the Iraqi weapons program that were marked sensitive compartmented information--the highest possible level of secrecy. Last week Deutch was stripped of his security clearance. But unlike Lee--who was fired from his job and is still being dogged by investigators intent on indicting him--Deutch will not have to answer any criminal charges.

In private, top federal law-enforcement officials are agonizing over the perception that Lee is being made a scapegoat while Deutch, one of their own, was given a free pass. Those tensions spilled out last week, when Robert Vrooman, the recently retired counterintelligence chief at Los Alamos, told The Washington Post that the Lee case "was built on thin air." Vrooman charged that the Feds targeted Lee because he was ethnic Chinese. (Vrooman has been criticized for his role in the case.) If prosecutors do bring charges against Lee, his lawyers say they will claim their client is a victim of "selective prosecution" and attempt to put the government's investigation on trial. "This plays right into the hands of the defense," says Edward Curran, the Energy Department's counterintelligence chief. Over the years, federal officials have documented dozens of instances in which government employees improperly transferred classified materials onto unclassified computers. None has ever been prosecuted. Curran warns that Lee's lawyers are sure to call Vrooman and Deutch as their first witnesses--although the lawyers themselves won't say who their witnesses will be.

In their efforts to prove that Lee was singled out for harsh treatment, defense experts say, his lawyers would likely subpoena files and witnesses from dozens of similar cases, laying bare how investigators routinely ignored other instances when classified material was mishandled. Prosecutors may try to block Lee's lawyers from rummaging through their file cabinets, but legal analysts say Vrooman's public comments make it far more likely that a judge would allow Lee's defense team to cast a wide net.

The government may never let it get that far. Prosecutors in the U.S. Attorney's Office in New Mexico, where the case would be tried, are vigorously pushing to indict Lee. But back in Washington, some top Justice and Energy officials argue that a trial would come at too high a cost to the government. Investigators have already conceded that they don't have the evidence to convict Lee as a spy. That leaves them with the prospect of nabbing him for the far more pedestrian offense of mishandling information. The relatively paltry payoff doesn't justify revealing the government's secretive "sources and methods" in a courtroom. "You don't make a lesser offense--an obscure lesser offense--the centerpiece of a prosecution in a major espionage case," says John Martin, the Justice Department's legendary former spycatcher. "It would be outrageous to follow a botched investigation with a botched prosecution." Sources tell NEWSWEEK that Martin's successor, Internal Security chief John Dion, has urged his superiors not to proceed with the case. Even so, insiders say that even if they decide against indicting Lee, prosecutors may never admit they went too far in publicly fingering him. In any event, Lee may be the one hauling the Feds into court.