-Caveat Lector- from: http://www.aci.net/kalliste/ <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- Espionage Scientist Under Suspicion Given Key Nuclear Project PRC research assistant disappears WASHINGTON -- In spring 1997, Los Alamos National Laboratory chose a scientist who was already under investigation as a suspected spy for China to run a sensitive new nuclear weapons program, several senior Government officials say. The scientist, Wen Ho Lee, eager for the new post, asked that he be allowed to hire a research assistant, the officials said. Once in the new position, in charge of updating computer software for nuclear weapons, Lee hired a post- doctoral researcher who was a citizen of the People's Republic of China, intelligence and law-enforcement officials said. Although the Federal Bureau of Investigation had said that a wiretap on Lee, a computer expert born in Taiwan who is an American citizen, would allow the bureau to keep close tabs on him in the new position, the bureau never won approval for the electronic monitoring, the officials said. Now, two years later, Lee has been fired for security breaches at Los Alamos and senior Government officials say he remains a suspect in the F.B.I.'s continuing investigation of allegations that China stole nuclear secrets from America's weapons laboratories He is under suspicion of having stolen the data for one of America's most avanced nuclear warheads. China has denied that it engaged in nuclear espionage. And the research assistant has disappeared. Even as the bureau tries to find him to question him in connection with the Los Alamos spy case, Government officials say they are wondering whether he played a role in a Chinese intelligence operation at the heart of America's nuclear weapons program. In the midst of the furor over the Clinton Administration's handling of evidence of Chinese atomic espionage, the decisions to appoint Lee to the new post in 1997 and to allow him to hire a Chinese assistant have underscored doubts about the procedures followed by laboratory officials and the F.B.I. in the Los Alamos spy case. The F.B.I., which opened a criminal investigation into the spy case in June 1996, gave its approval when Los Alamos officials decided to give Lee the new position, intelligence and law-enforcement officials say. Clinton Administration officials said that Lee's new posting was approved in part because they believed his access to information would be "controlled." In the new job "he only had access to material he already had in his head," said one official. "He couldn't see the latest stuff." The bureau also assured laboratory officials and the Department of Energy, which owns the weapons labs, that it would keep close watch on Lee in his new job, and would seek approval for a secret wiretap to monitor his telephone conversations. But officials now say that the bureau's requests for a secret wiretap were repeatedly turned down by Justice Department officials who did not believe they had sufficient grounds to take to a Federal court to obtain the authorization for the wiretap. The hiring of the research assistant was not cleared with the bureau, officials said. "We didn't know about the hiring of the research assistant until after the fact," a senior law-enforcement official said. Once the F.B.I. found out, bureau agents investigated the postdoctoral assistant, officials said. The F.B.I. did not conclude that the student, whom officials declined to name, had any intelligence connection. Los Alamos officials assured the bureau that the assistant, who had studied at the University of Pittsburgh, would be restricted to unclassified work, law- enforcement officials said, though it is unclear how closely Los Alamos officials monitored his activities. The assistant worked with Lee from approximately May through September 1997, when he returned to complete his studies at the University of Pittsburgh, officials said. They said they were not sure whether the assistant, who was in the United States on a student visa, was still in the United States. The F.B.I. is still not sure whether the assistant is significant to its investigation, officials said. The Los Alamos lab director, John C. Browne, told The Washington Post this month that in April 1997, Lee's classified computer code -- access to a network of classified information -- was taken away under the guise of the job change so he would not be tipped off that he was under investigation by the F.B.I. But other law-enforcement and intelligence officials say that the new job did give Lee continued access to classified as well as unclassified information. Some officials add that he retained access to nuclear test data and to other classified information relating to nuclear warheads. The job given Lee in the spring of 1997 was to update nuclear weapons computer programming used to evaluate weapon performance. He was to update the programming codes for the weapons labs' "stockpile stewardship" initiative. That effort was part of a broad push by the national labs and the Energy Department to insure that the American nuclear weapons inventory could be safely maintained without further nuclear testing. Los Alamos officials decided to give Lee the job because he had the most expertise in that speciality of any scientist at the lab. Officials also say they believed that passing him over for a job for which he was the most experienced candidate would have aroused his suspicions that he was under investigation. But in September 1997, just a few months after Lee was moved to the new post, the F.B.I. Director, Louis J. Freeh, told senior Energy Department officials that the bureau did not have enough evidence to arrest him, law-enforcement officials said Freeh said there was no longer any investigative reason for the Energy Department to keep Lee in a sensitive position. The Energy Department did not move Lee out of his post, or remove his security clearance, for another year, however, officials said. By then, in late 1998, a select House committee investigating unauthorized transfers of American military technology to China, headed by Representative Christopher Cox, a California Republican, had been informed about the spy case. The senior Democrat on the panel, Representative Norm Dix of Washington, complained to Richardson about the lack of action on the matter. After that Congressional prodding, Lee was given a polygraph, or lie detector test, in December 1998 by the Energy Department, and he appeared to pass. Dissatisfied with the results, the F.B.I. gave him a second test in February, and officials said he was found to be deceptive. Lee was fired by Richardson on March 8 forof security violations, including unauthorized contacts with Chinese scientists. The New York Times, March 24, 1999 Assassination Politics Vice President in Paraguay Wasted by Three Assassins Maybe those calls for presidential impeachment will end now ASUNCION, Paraguay - Gunmen assassinated Paraguay's vice president in central Asuncion on Tuesday, the latest blow to a nation torn by a power struggle in the party that has ruled it for half a century. The vice president, Luis Maria Argana, a bitter rival of Paraguay's president, was killed on his way to his office Tuesday morning. Witnesses said three gunmen in military dress swerved their white car in front of Mr. Argana's red jeep, threw a grenade and sprayed him, his driver and bodyguard with bullets. Mr. Argana's aides said he was riddled with 10 gunshot wounds. Argana's driver died, but his bodyguard appeared to have survived. Paraguayan authorities closed the borders immediately, and no flights were allowed into the country, while diplomats from neighboring Argentina warned nationals not to travel there. The assassination ratcheted up the political tension in a country where President Raul Cubas has been fending off recent calls for impeachment. Paraguay has been the scene of months of bitter Sponsored Sectionspolitical infighting. In a nationwide address, the president appealed for calm. President Cubas - whose faction of the ruling Colorado Party is controlled by a convicted coup leader, Lino Oviedo, and which has fought the vice president for control of the party - said that Mr. Argana, 66, had appointed his own bodyguards rather than using state security personnel. Mr. Argana's distraught supporters and opposition leaders gathered outside the hospital and laid the responsibility for the killing, if not the blame, at the door of Mr. Cubas and his mentor, Mr. Oviedo, a former army chief. But Mr. Cubas appealed to his detractors not to make the vice president's death a political issue. ''I am not considering resigning from office,'' Mr. Cubas said at a news conference after his nationwide address. Referring to his four-year term that began last August, he added, ''I will finish out my mandate.'' The trade union leader Alan Flores said he would call a general strike until Mr. Cubas stepped down. The Colorados have ruled Paraguay for five decades, under the dictatorship of General Alfredo Stroessner until he was ousted by a coup in 1989 and since then by two elected Colorado presidents, Juan Carlos Wasmosy and Mr. Cubas. Mr. Oviedo attempted to overthrow Mr. Wasmosy in 1996. He then beat Mr. Argana in party primaries last year and ran for president - with much popular support - until Mr. Wasmosy threw him in jail and he was sentenced to 10 years for the coup attempt. Mr. Cubas, his running-mate, stepped in and won the presidency, and under party rules Mr. Argana automatically became his deputy. Since then the struggle for control of the party has been bitter. Last week followers of Mr. Cubas and Mr. Oviedo seized the party headquarters by force after Mr. Argana's followers tried to vote themselves back into top party posts. Mr. Wasmosy, who handed power to Mr. Cubas after the election last year, read a statement to reporters blaming Mr. Cubas for the killing. ''The person responsible for the period of chaos, violence and bloodshed that Paraguay is undergoing is the head of the executive branch,'' said Mr. Wasmosy, accused by Mr. Cubas last month of conspiring with Mr. Argana to oust him from office. Juan Carlos Galaverna, one of the slain official's chief aides, demanded the ''immediate resignation'' of Mr. Cubas and the arrest of Oviedo. Stores shuttered their doors, schools and colleges canceled classes and a union announced a work stoppage to protest the killing. International Herald Tribune, March 24, 1999 London Clearing House LCH to Clear Interest-Rate Swaps Regulatory Exemptions Granted US regulators yesterday gave a green light to the London Clearing House, the UK central clearing house for a number of UK-based exchanges, to launch the world's first swaps clearing operation this summer. The approval, which essentially involves granting regulatory exemption to the LCH's SwapClear system, allows LCH to market it to US banks and institutions. It is a final order, coming into effect immediately without a comment period attached. Swaps are one-to-one risk management agreements, usually negotiated between sophisticated financial market participants, such as large investment banks. LCH first detailed plans for the SwapClear programme last year. Its scheme follows huge growth in the over-the-counter derivatives industry in the past decade, coupled with the growing standardisation of many swap agreements. SwapClear will initially handle interest rate swaps of up to 10-year maturity for the banks that deal in them, and has no intention of taking on "exotic" swaps. But the LCH's desire to market SwapClear to US banks and institutions meant it became caught up in a Washington turf-war over regulation of the US-based derivatives industry, and the over-the-counter market, in particular. The LCH asked the Commodity Futures Exchange Commission, the US futures industry regulator, for exemption from the US Commodity Exchange Act, the main legislation covering derivatives. But some participants in the swaps industry, who dispute that the CFTC has jurisdiction over the over-the-counter market, maintained that even granting an exemption would mean the agency was going beyond its mandated powers. But yesterday Arthur Hahn, legal adviser to the LCH, said the order "moved the clearing of swaps into the 'safe harbour' without the CFTC trying to expand jurisdiction over swaps". Now the exemption has been granted, the LCH hopes to launch SwapClear by August. It is testing systems with three banks in London, and will roll out the system over the next five months. It says it has 11 entities "advising" on the system, including two US banks. These organisations, which would be likely market participants after the launch of SwapClear, account for about 30 per cent of swaps turnover globally, it calculates. Some US swaps traders have questioned how much business SwapClear will attract. But Phil Bruce, LCH's managing director of strategic planning, said last week that the organisation was "confident that we will have enough participants on day one". SwapClear is one of a handful of new international initiatives from the LCH. It also intends to launch a clearing facility for the European "repos" market this summer. Repos are agreements under which one financial institution lends a security to another for cash, agreeing to buy it back at a later date. The Financial Times, March 24, 1999 ------------------------------------------------------------------------ ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance�not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. 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