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Libby & Nuclear Secrets to China

By Robert Parry
November 4, 2005

Indicted ex-White House aide Lewis Libby played a key role in an earlier case of slanting U.S. intelligence for political gain – four years before the Iraq War when he was legal adviser to a House investigation into how communist China got U.S. nuclear secrets.

In 1999, Libby, a China expert, served on a special Republican-controlled House committee that laid the blame for the compromise of U.S. secrets almost exclusively on Democrats, despite evidence that the worst rupture of nuclear secrets actually occurred during the Reagan-Bush administration in the mid-1980s.

The committee’s findings served as an important backdrop for Election 2000 when George W. Bush’s backers juxtaposed images of Democrat Al Gore attending a political event at a Buddhist temple with references to the so-called “Chinagate” scandal.

The American public was led to believe that $30,000 in illegal “soft-money” donations from Chinese operatives to Democrats in 1996 were somehow linked to China’s access to U.S. nuclear secrets. Millions of Americans may have been influenced to vote against Gore and for Bush because they wanted to rid the U.S. government of people who had failed to protect national security secrets.

But the reality was that the principal exposure of U.S. nuclear secrets to China appears to have occurred when Beijing obtained U.S. blueprints for the W-88 miniaturized hydrogen bomb, a Chinese intelligence coup in the mid-1980s on the watch of Ronald Reagan and George H.W. Bush.

The intelligence loss came at a time when the Reagan-Bush administration was secretly collaborating with communist China on arms shipments to the Nicaraguan contra rebels, an operation so sensitive that Congress and the American people were kept in the dark, even as White House aide Oliver North colluded with Chinese agents.

The House report – with Libby as a top adviser – obscured this central fact by setting up a timeline that placed nearly all entries about compromised intelligence in the years of Jimmy Carter’s or Bill Clinton’s presidencies. Only a close reading of the report’s text would clue someone in on the actual timing of the W-88 leak to China.

Libby’s role in this earlier manipulation of intelligence information for political gain is relevant after his Oct. 28 indictment for perjury, lying to FBI investigators and obstruction of justice.

Those charges were leveled in connection with a federal investigation into the outing of covert CIA officer Valerie Plame in July 2003 after her husband, former Ambassador Joseph Wilson, accused the Bush administration of “twisting” intelligence to justify invading Iraq.

According to the five-count indictment, Libby disclosed Plame’s identity to at least two reporters at a time when the White House was trying to discredit Wilson, who had challenged a dramatic claim of President George W. Bush’s case for war with Iraq, that Saddam Hussein was seeking uranium for development of a nuclear bomb.

Libby insisted that he had only circulated rumors about Plame’s CIA employment that he had picked up from a journalist, NBC’s Washington bureau chief Tim Russert. But the indictment said Libby learned Plame’s identity not from Russert, but from a CIA official and from Vice President Dick Cheney. Libby pleaded innocent on Nov. 3.

Scaring the Public

Warnings about “mushroom clouds” and Iraq’s alleged pursuit of uranium had been memorable parts of Bush’s terrifying case for war in 2002-2003. As Cheney’s chief of staff, Libby was an important architect for both the war and the P.R. campaign that sold it to the American people.

Several years earlier, in 1999, Libby had learned in the “Chinagate” case how politically useful national security accusations can be in scaring large segments of the U.S. population and swaying the Washington press corps.

The “Chinagate” investigation, headed by Republican congressmen Christopher Cox and Porter Goss, released an 872-page report in three glossy volumes on May 25, 1999. Its unmistakable message was that the Clinton administration had failed to protect the nation against China’s theft of top-secret nuclear designs and other sensitive data.

Along with Libby, Dean McGrath served as the investigation’s staff director. After George W. Bush became president, McGrath joined Libby again in Cheney’s office, working as deputy chief of staff. (Cox and Goss also joined the administration, with Cox as chairman of the Securities and Exchange Commission and Goss as CIA director.)

One sleight of hand used in the “Chinagate” report was to leave out dates of alleged Chinese spying in the 1980s to obscure the fact that the floodgates of U.S. nuclear secrets to China – including how to build a miniaturized W-88 nuclear warhead – appeared to have been open during the Reagan-Bush years.

While leaving out time elements for the Reagan-Bush era, the report listed the years for alleged lapses during the Carter and Clinton administrations.

For instance, the report’s “Overview” states that “the PRC (People’s Republic of China) thefts from our National Laboratories began at least as early as the late 1970s, and significant secrets are known to have been stolen as recently as the mid-1990s.” In other words, the report started with the Democratic presidency of Jimmy Carter and then jumped over the 12 years of Reagan and George Bush Sr. to Clinton’s administration.

In the report’s “Overview” alone, there are three dozen references to dates from the Clinton years and only five mentions of dates from the Reagan-Bush years, with none of those citations related to alleged wrongdoing.

In a two-page chronology – pages 74-75 – the report puts all the boxes about Chinese espionage suspicions into the Carter and Clinton years. Nothing sinister is attributed specifically to the Reagan-Bush era, other than a 1988 test of a neutron bomb built from secrets that the report says were believed stolen in the “late 1970s,” the Carter years.

Only a careful reading of the text inside the chronology’s boxes makes clear that many of the worst national security breaches came on the Reagan-Bush watch.

For instance, a box for 1995 states that a purported Chinese defector walked into a U.S. government office in Taiwan that year and handed over incriminating Chinese documents. While that would seem to apply to a Clinton year, the documents actually showed that Chinese intelligence may have stolen the W-88 secrets “sometime between 1984 and 1992,” Reagan-Bush years.

The Chinese tested their miniaturized warhead in 1992 while George H.W. Bush was president. In other words, it was impossible that the Clinton-Gore administration, which started in 1993, could have been responsible for this security breach.

Spy Suspect

Left out of the chronology also was the fact that suspicious meetings with Chinese scientists – that made Los Alamos scientist Wen Ho Lee an espionage suspect – took place from 1985 to 1988, while Reagan was president.

When released in May 1999, in the wake of Clinton’s impeachment and Senate trial, the “Chinagate” report was greeted by conservative groups and the national news media as another indictment of the Clinton administration. By then, the Washington press corps was obsessed with “Clinton scandals” and viewed virtually all allegations through that prism.

Yet, despite the intensity of the media spotlight, little attention was paid to the shallowness of the “Chinagate” report.

The report certainly didn’t resemble the typical green- or beige-bound congressional report. In a shiny black-red-white-and-gold cover, the report used 14-point type, more fitting for a first-grade reading primer than a government document. [By comparison, most congressional reports use 10-point type or smaller.]

Space also was taken up by large graphics, including one page devoted to a photo of a mushroom cloud. Other pages were given over to colorful graphs and shaded boxes defining simple intelligence terms, such as a “walk-in.” Some pages at the start of chapters were entirely black for dramatic effect.

Though the report fed the post-impeachment Clinton scandal fever, cooler heads began to prevail in June 1999. A study was issued by the President’s Foreign Intelligence Advisory Board – chaired by former Sen. Warren Rudman, R-N.H. – concluding that Chinese spying was less than had been “widely publicized.”

Still, the fallout from the spy hysteria continued. The 60-year-old Wen Ho Lee was imprisoned on a 59-count indictment for mishandling classified material. The Taiwanese-born naturalized U.S. citizen was put in solitary confinement with his cell light on at all times. He was allowed out only one hour a day, when he shuffled around a prison courtyard in leg shackles.

Nine months later, the case against Wen Ho Lee began to collapse and the government accepted a plea bargain on Sept. 13, 2000. The scientist pleaded guilty to a single count of mishandling classified material.

Reagan-Bush Lapses

New evidence also pointed to the fact that the hemorrhage of secrets to China traced back to the Reagan-Bush years. After translating more documents from the Chinese defector who had approached U.S. officials in 1995, federal investigators found that the exposure of nuclear secrets in the 1980s had been worse than previously thought.

“The documents provided by the defector show that during the 1980s, Beijing had gathered a large amount of classified information about U.S. ballistic missiles and reentry vehicles,” according to an article in the Washington Post on Oct. 19, 2000.

Still, the “Chinagate” report’s suspicions about Clinton-Gore treachery lingered. During Campaign 2000, a pro-Bush conservative group aired an ad modeled after Lyndon Johnson’s infamous 1964 commercial that showed a girl picking a daisy before the screen dissolved into a nuclear explosion.

The ad remake accused the Clinton-Gore administration of selling vital nuclear secrets to communist China, in exchange for campaign donations in 1996. These nuclear secrets, the ad stated, gave communist China “the ability to threaten our homes with long-range nuclear warheads.”

“Chinagate” – and the repetitive use of video of Gore among saffron-robed monks – proved important in enabling Bush to keep Election 2000 close enough so the intervention by five Republicans on the U.S. Supreme Court, stopping a Florida recount, could hand him the victory.

On Feb. 4-5, 2001, two weeks after Bush took office, the New York Times published a retrospective on the Wen Ho Lee case. A detailed chronology demonstrated that the suspected loss of nuclear secrets dated back to the Reagan-Bush administration.

The Times reported that limited exchanges between nuclear scientists from the United States and China began after President Carter officially recognized China in 1978, but those meetings grew far more expansive and less controlled during the 1980s.

“With the Reagan administration eager to isolate the Soviet Union, hundreds of scientists traveled between the United States and China, and the cooperation expanded to the development of torpedoes, artillery shells and jet fighters,” the Times wrote. “The exchanges were spying opportunities as well.”

Ollie's Mission

But the full story of the Republican-Chinese collaboration was even darker than the Times described.

By 1984, Ronald Reagan’s White House had decided to share sensitive national security secrets with the Chinese communists as it drew Beijing into the inner circle of illicit arms shipments to the Nicaraguan contra rebels.

Reagan’s White House turned to the Chinese for surface-to-air missiles for the contras because the U.S. Congress had banned military assistance to the rebel force and the contras were suffering heavy losses from attack helicopters deployed by Nicaragua’s leftist Sandinista government.

Some of the private U.S. operatives working with White House aide Oliver North settled on China as a source for SA-7 anti-aircraft missiles. In testimony at his 1989 Iran-Contra trial, North called the securing of these weapons a “very sensitive delivery.”

For the Chinese missile deal in 1984, North said he received help from the CIA in arranging false end-user certificates from the right-wing government of Guatemala. North testified that he “had made arrangements with the Guatemalan government, using the people [CIA] Director [William] Casey had given me.”

But China balked at selling missiles to the Guatemalan military, which was then engaged in a scorched-earth war against its own leftist guerrillas. To resolve this problem, North was dispatched to a clandestine meeting with a Chinese military official.

The idea was to bring the Chinese communists in on what was then one of the most sensitive secrets of the U.S. government: the missiles were not going to Guatemala, but rather into a clandestine pipeline arranged by the White House to funnel military supplies to the contras in defiance of U.S. law.

This was a secret so sensitive that not even the U.S. Congress could be informed, but it was to be shared with communist China.

In fall 1984, North enlisted Gaston J. Sigur, the NSC’s expert on East Asia, to make the arrangements for a meeting with a communist Chinese representative, according to Sigur’s testimony at North’s 1989 trial. “I arranged a luncheon and brought together Colonel North and this individual from the Chinese embassy” responsible for military affairs, Sigur testified.

“At lunch, they sat and they discussed the situation in Central America,” Sigur said. “Colonel North raised the issue of the need for weaponry by the contras, and the possibility of a Chinese sale of weapons, either to the contras or, as I recall, I think it was more to countries in the region but clear for the use of the contras.”

North described the same meeting in his autobiography, Under Fire. To avoid coming under suspicion of being a Chinese spy, North said he first told the FBI that the meeting had been sanctioned by national security adviser Robert C. McFarlane.

“Back in Washington, I met with a Chinese military officer assigned to their embassy to encourage their cooperation,” North wrote. “We enjoyed a fine lunch at the exclusive Cosmos Club in downtown Washington.”

North said the Chinese communists saw the collaboration as a way to develop “better relations with the United States.” Knowing about the illicit shipments to the contras also put Beijing in position to leverage U.S. policy in the future.

It was in this climate of cooperation that other secrets, including how to make miniaturized hydrogen bombs, allegedly reached communist China.

Though the evidence of North’s secret contacts with Chinese intelligence had been public knowledge since the late 1980s, the “Chinagate” report in 1999 made no reference to this secret collaboration between Reagan’s White House and China.

Enter Wen Ho Lee

Wen Ho Lee came to the FBI’s attention in 1982 when he called another scientist who was under investigation for espionage, according to the New York Times chronology.

But Lee’s contacts with China – along with trips there by other U.S. nuclear scientists – increased in the mid-1980s as the Reagan-Bush administration turned to China for help getting weapons to the contras.

In March 1985, Lee was seen talking with Chinese scientists during a scientific conference in Hilton Head, S.C. The next year, with approval of Los Alamos lab officials, Lee and another scientist attended a conference in Beijing. In 1988, Wen Ho Lee attended another conference in Beijing.

It was sometime during this period of physicist-to-physicist contacts when China is believed to have gleaned the secret of the miniaturized W-88 nuclear warhead.

“On Sept. 25, 1992, a nuclear blast shook China’s western desert,” the Times wrote. “From spies and electronic surveillance, American intelligence officials determined that the test was a breakthrough in China’s long quest to match American technology for smaller, more sophisticated hydrogen bombs.”

In September 1992, George H.W. Bush was still president.

In the early years of the Clinton administration, U.S. intelligence experts began to suspect that the Chinese nuclear breakthrough most likely came from purloined U.S. secrets.

“It’s like they were driving a Model T and went around the corner and suddenly had a Corvette,” said Robert M. Hanson, a Los Alamos intelligence analyst, in early 1995, the Times reported.

Looking for possible espionage, investigators began examining the years of the mid-1980s when the Reagan-Bush administration had authorized U.S. nuclear scientists to hold a number of meetings with their Chinese counterparts.

Though the American scientists were under restrictions about what information could be shared with the Chinese, it was never clear exactly why these meetings were held in the first place – given the risk that a U.S. scientist might willfully or accidentally divulge nuclear secrets.

Impeachment Time

But the Chinese-espionage story didn’t gain national attention until March 1999 when the New York Times published several imprecise front-page stories fingering Wen Ho Lee as an espionage suspect. This “Chinagate” story broke just weeks after Clinton’s impeachment and Senate trial for lying about sex with Monica Lewinsky.

With Clinton acquitted by the Senate, the Republicans and the news media were eager for another “Clinton scandal.” To get this fix, they brushed aside the timing of the lost secrets – the 1980s – and mixed together the suspicions about Chinese spying and allegations of Chinese campaign donations in 1996.

During those chaotic first weeks of “Chinagate,” pundits ignored the logical impossibility of Democrats selling secrets to China in 1996 when China apparently obtained those secrets a decade earlier during a Republican administration.

The House investigative report, with China expert Lewis Libby as a senior staff aide, added powerful fuel to the anti-Clinton fire. Conservative groups immediately grasped the political and fund-raising potential.

Larry Klayman’s right-wing Judicial Watch sent out a solicitation letter seeking $5.2 million for a special “Chinagate Task Force” that would “hold Bill Clinton, Al Gore and the Democratic Party Leadership fully accountable for election fraud, bribery and possibly treason in connection with the ’Chinagate’ scandal.”

“Chinagate involves actions by President Clinton and Vice President Gore which have put all Americans at risk from China’s nuclear arsenal in exchange for millions of dollars in illegal campaign contributions from the Communist Chinese,” Klayman’s letter said.

But the ultimate payoff to Republicans for this twisting of history came in November 2000, when possibly millions of Americans went to the polls determined to throw out the Clinton-Gore crowd for selling nuclear secrets to communist China.

That impression was anchored in the public mind by the House committee’s three-volume report, which had selectively presented the case and steered away from evidence that implicated the administrations of Ronald Reagan and George H.W. Bush.

The irony was that these American voters, eager to expel the Democrats for compromising nuclear secrets to China, actually let back in the Republicans who were much more deeply implicated in the offense.

But Lewis Libby had learned an important lesson – fears of foreign dangers could move the American people in a desired direction, as long as the information was carefully tailored and controlled.


Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Secrecy & Privilege: Rise of the Bush Dynasty from Watergate to Iraq, can be ordered at secrecyandprivilege.com. It's also available at Amazon.com, as is his 1999 book, Lost History: Contras, Cocaine, the Press & 'Project Truth.'

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