THE SECRET FACILITY THAT CAN'T KEEP ITS SECRETS

Los Alamos sure has a hard time keeping track of its secrets. On July 6, officials at the New Mexico weapons lab learned that two portable drives full of classified data were missing from a safe in the hypersensitive Weapons Physics lab; a frantic search revealed that an employee had moved them to another building without logging them out. The next day lab workers discovered more missing data: a pair of Zip disks that, NEWSWEEK has learned, were filled with secret data from a meeting in October. By late last week, with the disks still unaccounted for and the Department of Energy breathing fire, an angry Peter Nanos, the lab's director, notified his 12,000 employees that all work at Los Alamos would stop until the safety and security snafus were resolved. "People in Washing-ton just don't understand how any group of people that purports to be so intelligent can be so inept," Nanos told staffers.

The digital security breaches are the third in just eight months--and by far the most serious. Despite five years of efforts to plug security gaps that surfaced when nuclear scientist Wen Ho Lee was caught improperly downloading classified data, Los Alamos still manages to embarrass the DOE. Nanos hasn't entirely ruled out theft, but says it's "highly unlikely" that an outsider or terrorist got hold of the disks. He blames Los Alamos scientists who think they are too busy to follow security protocols that require them to use bar-code scanners to check computer disks in and out of lab safes. "It's possible a number of people may have to go to prison over this," said Rep. Joe Barton, chairman of the House energy and commerce committee. "There's probably better security at the Ennis Public Library over CDs and videos."

The list of lapses is long. In 2000, two hard drives with sensitive data disappeared from the secret X Division--then reappeared a month later behind a copier. In December, staffers lost track of 10 disks slated for destruction; another one disappeared in May. Officials now believe the 11 missing disks were intentionally destroyed--but never accounted for--as part of a security effort that has cut the number of portable devices from 90,000 to 40,000.

In the wake of the work stoppage, all Los Alamos employees will be retrained in security and safety procedures (the latter took on new urgency last week after a student intern was struck in the eye by a laser). The process will last days in some parts of the facility, weeks in others. But it can't come soon enough for the University of California, the lab's operator, which faces competition for the first time ever when its management contract ends in 2005.