The Fifth Risk

by Michael Lewis

  The Trump people didn’t seem to grasp how much more than just energy the Department of Energy was about. They weren’t totally oblivious to the nuclear arsenal, but even the nuclear arsenal didn’t provoke in them much curiosity. “They were just looking for dirt, basically,” said one of the people who briefed the Beachhead Team on national security issues. “‘What is the Obama administration not letting you do to keep the country safe?’” The briefers were at pains to explain an especially sensitive aspect of national security: the United States no longer tests its nuclear weapons. Instead, it relies on physicists at three of the national labs—Los Alamos, Livermore, and Sandia—to simulate explosions, using old and decaying nuclear materials.

  This is not a trivial exercise, and to do it we rely entirely on scientists who go to work at the national labs because the national labs are exciting places to work. They then wind up getting interested in the weapons program. That is, because maintaining the nuclear arsenal was just a by-product of the world’s biggest science project, which also did things like investigating the origins of the universe. “Our weapons scientists didn’t start out as weapons scientists,” says Madelyn Creedon, who was second-in-command of the nuclear-weapons wing of the DOE, and who briefed the incoming administration, briefly. “They didn’t understand that. The one question they asked was,” Wouldn’t you want the guy who grew up wanting to be a weapons scientist?’ Well, actually, no. You wouldn’t.”

  In the run-up to the Trump inauguration, the man inside the DOE in charge of the nuclear-weapons program—Frank Klotz was his name—was required to submit his resignation, as were the department’s 137 other political appointees. Frank Klotz was a retired three-star air force lieutenant general with a PhD in politics from Oxford. The keeper of the nation’s nuclear secrets had boxed up most of his books and memorabilia just like everyone else and was on his way out before anyone had apparently given the first thought to who might replace him. It was only after Secretary Moniz called U.S. senators to alert them to the disturbing vacancy, and the senators phoned Trump Tower sounding alarmed, that the Trump people called General Klotz and—on the day before Donald Trump was inaugurated as the forty-fifth president of the United States—asked him to bring back the stuff he had taken home and move back into his office. Aside from him, the people with the most intimate knowledge of the problems and the possibilities of the DOE walked out the door.

  It was early June 2017 when I walked through the same door to see what was going on. The DOE makes its home in a long rectangular cinder-block-like building propped up on concrete stilts, just off the National Mall. It’s a jarring sight—as if someone had punched out a skyscraper and it never got back on its feet. It’s relentlessly ugly in the way the swamps around Newark Airport are ugly—so ugly that its ugliness bends back around into a sneaky kind of beauty: it will make an excellent ruin. Inside, the place feels like a lab experiment to determine just how little aesthetic stimulation human beings can endure. The endless hallways are floored with white linoleum and almost insistently devoid of personality. “Like a hospital, without the stretchers,” as one employee put it. But this place is at once desolate and urgent. People still work here, doing stuff that, if left undone, might result in unimaginable death and destruction.

  By the time I arrived in Washington, the first eighth of Trump’s first term was nearly complete, and his administration was still largely missing. He hadn’t nominated anyone to serve as head of the Patent Office, for instance, or to run the Federal Emergency Management Agency (FEMA). There was no Trump candidate to head the Transportation Security Administration, and no one to run the Centers for Disease Control and Prevention. The 2020 national census will be a massive undertaking for which there is not a moment to lose, and yet there’s no Trump appointee in place to run it. “The actual government has not really taken over,” said Max Stier. “It’s kindergarten soccer. Everyone is on the ball. No one is at their positions. But I doubt Trump sees the reality. Everywhere he goes, everything is going to be hunky-dory and nice. No one gives him the bad news.”

  At this point in their administrations, Obama and Bush had nominated their top ten people at the DOE and installed most of them in their offices. Trump had nominated three people and installed just one, former Texas governor Rick Perry. Perry is of course responsible for one of the DOE’s most famous moments—when in a 2011 presidential debate he said he intended to eliminate three entire departments of the federal government. Asked to list them he named Commerce, Education, and . . . then hit a wall. “The third agency of government I would do away with . . . Education . . . the . . . ahhhh . . . ahhh . . . Commerce, and let’s see.” As his eyes bored a hole in his lectern, his mind drew a blank. “I can’t, the third one. I can’t. Sorry. Oops.” The third department Perry wanted to get rid of, he later recalled, was the Department of Energy. In his confirmation hearings to run the department, Perry confessed that when he called for its elimination he hadn’t actually known what the Department of Energy did—and he now regretted having said that it didn’t do anything worth doing.

  The question on the minds of the people who currently work at the department: Does he know what it does now? In his hearings, Perry made a show of having educated himself. He said how useful it was to be briefed by former secretary Ernest Moniz. But when I asked someone familiar with those briefings how many hours Perry had spent with Moniz, he laughed and said, “That’s the wrong unit of account.” With the nuclear physicist who understood the DOE perhaps better than anyone else on earth Perry had spent minutes, not hours. “He has no personal interest in understanding what we do and effecting change,” a DOE staffer told me in June 2017. “He’s never been briefed on a program—not a single one, which to me is shocking.”

  Since Perry was confirmed, his role has been ceremonial and bizarre. He pops up in distant lands and tweets in praise of this or that DOE program while his masters inside the White House create budgets to eliminate those very programs. His sporadic public communications have had in them something of the shell-shocked grandmother trying to preside over a pleasant family Thanksgiving dinner while pretending that her blind-drunk husband isn’t standing naked on the dining-room table waving the carving knife over his head.

  Meanwhile, inside the DOE building, people claiming to be from the Trump administration appeared willy-nilly, unannounced, and unintroduced to the career people. “There’s a mysterious kind of chain from the Trump loyalists who have shown up inside DOE to the White House,” said a career civil servant. “That’s how decisions, like the budget, seem to get made. Not by Perry.” The woman who ran the Obama department’s energy-policy analysis unit received a call from DOE staff telling her that her office was now occupied by Eric Trump’s brother-in-law. Why? No one knew. “Yes, you can notice the difference,” says one young career civil servant, in response to the obvious question. “There’s a lack of professionalism. They’re not very polite. Maybe they’ve never worked in an office or government setting. It’s not hostility so much as a real sense of concern with sharing information with career employees. Because of that lack of communication, nothing is being done. All policy questions remain unanswered.”

  The DOE has a program to provide low-interest loans to companies to encourage risky corporate innovation in alternative energy and energy efficiency. The program became infamous when one of its borrowers, the solar energy company Solyndra, was unable to repay its loan, but, as a whole, since its inception in 2009, the program has turned a profit. And it has been demonstrably effective: it lent money to Tesla to build its factory in Fremont, California, when the private sector would not, for instance. Every Tesla you see on the road came from a facility financed by the DOE. Its loans to early-stage solar energy companies launched the industry. There are now thirty-five viable utility-scale, privately funded solar companies—up from zero a decade ago. And yet today the program sits frozen. “There’s no direction what to do with the applications,” says the young career civil servant. �
��Are we shutting the program down? There’s no staff, just me. People keep bugging me for direction. It’s got to the point I don’t care if you tell me to tear the program down. Just tell me what you want to do so I can do it intelligently.” Another permanent employee, in another wing of the DOE, says, “The biggest change is the grinding to a halt of any proactive work. There’s very little work happening. There’s a lot of confusion about what our mission was going to be. For a majority of the workforce it’s been demoralizing.”

  Over and over again, I was asked by people who worked inside the DOE not to use their names, or identify them in any way, for fear of reprisal. “People are heading for the doors,” says Tarak Shah. “And that’s really sad and destructive. The best and the brightest are the ones being targeted. They will leave fastest. Because they will get the best job offers.”

  There might be no time in the history of the country when it was so interesting to know what was going on inside these bland federal office buildings—because there has been no time when those things might be done ineptly, or not done at all. But if you want to know how the DOE works—the problems it manages, the fears that keep its employees awake at night, the things it does you just sort of assume will continue being done—there’s no real point in being inside the DOE. Anyone who wants a blunt, open assessment of the risks inherent in the United States government now has to leave it to find it.

  By the time I reached John MacWilliams’s kitchen table, in Quogue, Long Island, I knew about as much about the DOE as he had when he’d started there, back in 2013. MacWilliams had spent a lot of his life pursuing and obtaining a place in the world that he actually hadn’t wanted. In the early 1980s, after graduating from Stanford and Harvard Law School, he took a coveted job at a prestigious New York law firm. Seeing that the action was not in law but in finance, he jumped to Goldman Sachs, where, as an investment banker specializing in the energy sector, he rose quickly. Six years into his career as a Goldman banker, he realized he didn’t want to be a banker any more than he’d wanted to be a lawyer. He was actually seriously interested in the energy sector—he could see it was on the cusp of a great transformation—but he didn’t particularly care for Wall Street or the effect it was having on him. “One day I looked in the mirror shaving and there was this haggard face and I said,” But for the money, would you do this?’” What he wanted, he thought, was to be a writer—but when he shared his secret ambition with his Goldman boss, his boss just looked at him pityingly and said, “John, you have to have talent to write a book.” He wasn’t rich at that point—he had a few hundred grand to his name—but, at the age of thirty-five, he quit his Goldman job and set out to be a novelist.

  For the next year he wrote the novel he had imagined—The Fire Dream, he called it—and, despite the indifference of the publishing industry, he began another one. But while the first story had come naturally to him, the second one felt forced. He sensed that he probably didn’t want to be a writer much more than he had wanted to be a lawyer or an investment banker. “The hardest part was admitting to myself in my black blue jeans that I missed my old life,” he said. He set out to raise money for a fund that would invest in energy companies—at which point an editor from Random House called and said he couldn’t get The Fire Dream out of his head and regretted having rejected it. MacWilliams sensed absurdity in his situation: he’d already abandoned his literary ambition. “I can’t be a novelist trying to raise an equity fund,” he said, so he stuck his novel back in the drawer and became a founding partner of the Beacon Group, a private investment firm, and also within that group was co-head of a Beacon fund that specifically invested in the energy field. Seven years later he and his partners sold the Beacon Group to JPMorgan Chase for $500 million.

  Along the way he’d come to know a nuclear physicist, Ernie Moniz, who asked him to join an MIT task force to study the future of nuclear power. In early 2013, when Moniz was named energy secretary, he called MacWilliams and asked him to come to Washington with him. “I recruited him because my view was you should collect talent,” says Moniz. “And it’s unusual to have someone willing to work in government who has been so deeply involved in private-sector investment.” “I always wanted to serve,” says MacWilliams. “It sounds corny. But that’s it.” Still, he was an odd fit. He’d never worked in government and had no political ambition. He thought of himself as “a problem solver” and a “deal guy.” “I’d been investing in energy since the mid-1980s and never once went to the DOE and didn’t think I needed to,” he said. “I was just wrong.”

  In the beginning he spent much of his time bewildered. “Everything was acronyms,” he said. “I understood twenty to thirty percent of what people were talking about.” He set out, aggressively, to educate himself, pulling people from every nook and cranny and making them explain until he understood what they did. “It took me about a year to understand it all,” he said, which inadvertently raises the question of how long it would take someone who wasn’t so curious. Anyway, he figured out soon enough that the DOE, though created in the late 1970s, largely in response to the Arab oil embargo, had very little to do with oil and had a history that went back much further than the 1970s. It contained a collection of programs and offices without a clear organizing principle. About half its budget in 2016 went to maintaining the nuclear arsenal and protecting Americans from nuclear threats. It sent teams with equipment to big public events—the Super Bowl, for instance—to measure the radiation levels, in hopes of detecting a dirty bomb before it exploded. “They really were doing things to, like, keep New York safe,” said MacWilliams. “These are not hypothetical things. These are actual risks.” A quarter of the budget went to cleaning up all the unholy world-historic mess left behind by the manufacture of nuclear weapons. The last quarter of the budget went into a rattlebag of programs aimed at shaping Americans’ access to, and use of, energy.

  There were reasons these things had been shoved together. Nuclear power was a source of energy, and so it made sense, sort of, for the department in charge of nuclear power also to have responsibility for the weapons-grade nuclear materials—just as it sort of made sense for whoever was in charge of making weapons-grade uranium and plutonium to be responsible for cleaning up their own mess. But the best argument for shoving together the Manhattan Project and nuclear waste disposal and clean-energy research was that underpinning all of it was Big Science—the sort of scientific research that requires multi-billion-dollar particle accelerators. The DOE ran the seventeen national labs—Brookhaven, the Fermi National Accelerator Lab, Oak Ridge, the Princeton Plasma Physics Lab, and so on. “The Office of Science in DOE is not the Office of Science for DOE,” said MacWilliams. “It’s the Office of Science for all science in America. I realized pretty quickly that it was the place where you could work on the two biggest risks to human existence, nuclear weapons and climate change.”

  He was surprised—a little shocked, even—by the caliber of civil servants working on these problems. “This idea that government is full of these bureaucrats who are overpaid and not doing anything—I’m sure that in the bowels of some of these places you could find people like that,” he said. “But the people I got to work with were so impressive. It’s a military-like culture.” Federal employees tended to be risk-averse, the sort of people who carry an umbrella around all day when there’s a 40 percent chance of rain. But, then, sometimes, they weren’t. In 2009, amid protests that helped touch off Libya’s bloody civil war two years later, a young woman who worked for him went into the country with Russian security forces and removed highly enriched uranium. The brainpower of those still willing to enter public service also surprised him. “There were physicists everywhere. Guys whose ties don’t match their suits. Passive nerds. Guys who build bridges.”

  Ernie Moniz had wanted MacWilliams to evaluate the DOE’s financial risks—after all, that’s what he’d done for most of his career—but also, as Moniz put it, to “go beyond financial risks to all the other risks t
hat weren’t being properly evaluated.” To that end Moniz eventually created a position for MacWilliams that had never existed: chief risk officer. As the DOE’s first-ever chief risk officer, MacWilliams had access to everything that went on inside of it and a bird’s-eye view of it all. “With a very complex mission and 115,000 people spread out across the country, shit happens every day,” said MacWilliams. Take the project to carve football-field-length caverns inside New Mexico salt beds to store radioactive waste, at the WIPP (Waste Isolation Pilot Plant) facility. The waste would go into barrels and the barrels would go into the caverns, where the salt would eventually entomb them. The contents of the barrels were volatile and so needed to be seasoned with, believe it or not, kitty litter. In 2014, according to a former DOE official, a federal contractor in Los Alamos, having been told to pack the barrels with “inorganic kitty litter,” had scribbled down “an organic kitty litter.” The barrel with organic kitty litter in it had burst and spread waste inside the cavern. The site was closed for three years, significantly backing up nuclear waste disposal in the United States and costing $500 million to clean, while the contractor claimed the company was merely following procedures given to it by Los Alamos.

  The list of things that might go wrong inside the DOE was endless. The driver of a heavily armed unit assigned to move plutonium around the country was pulled over, on the job, for drunk driving. An eighty-two-year-old nun cut through the perimeter fence of a facility in Tennessee that housed weapons-grade nuclear material. A medical facility ordered a speck of plutonium for research, and a weapons-lab clerk misplaced a decimal point and FedExed the researchers a chunk of the stuff so big it should have been under armed guard—whereupon horrified medical researchers tried to FedEx it back. “At DOE even the regular scheduled meetings started with” You’re not going to believe this,’” says former chief of staff Kevin Knobloch.