by Sally Denton
Bechtel had dispatched more than a hundred employees to Mississippi, where it was reportedly “working under an informal agreement with no set payment terms, scope of work, or designated total value.” The company announced it was seeking subcontractors to provide water treatment, sewage, and electricity, “as well as mess halls, showers, even helicopters to move supplies.” A Bechtel spokesman dismissed criticism of the company’s coziness with the Bush administration. “Political contributions are not a factor,” Bechtel’s Howard Menaker told the press. “It is the fact that we could get the job done.”
For his part, Riley Bechtel joined the Business Roundtable—where he was cochairman of the Roundtable’s Gulf Coast Workforce Development Initiative—in launching a rollout of a recruitment effort to train up to twenty thousand new construction workers in the Gulf Coast region. “This landmark public-private partnership—involving businesses, the federal government, states, and other organizations—will train the workers that will be needed to rebuild the area,” he proclaimed. The Roundtable, which had grown to include 160 CEOs of the nation’s leading companies, was spearheading the reconstruction effort. “This partnership between government and business will be a powerful catalyst for recovery in the Gulf region, retention and development of the local population, and a model for future disaster recovery,” Bechtel said.
A later review by the Defense Contract Audit Agency—“the first line of defense for the public in policing billions of dollars” in government contracts, as DCAA has been described—questioned Bechtel’s estimates for Katrina work and accused the company of systematically stonewalling auditors. The charges led Congressman Henry A. Waxman to accuse Bechtel of trying to double-bill the government, and prompted Waxman to join Minority Leader Nancy Pelosi in calling for reforms to protect federal taxpayers from waste, fraud, and abuse. “We cannot allow greed, mismanagement, and cronyism to squander billions of taxpayer dollars, as has happened too often over the last five years,” the two California Democratic representatives declared in introducing the Hurricane Katrina Accountability and Clean Contracting Act. The Bush administration’s Office of Management and Budget rejected those calls for reform. Still, DCAA auditors not only accused Bechtel of denying government access to company documents but also charged DCAA higher-ups of inappropriate intimacy with Bechtel officials by condoning the company’s foot-dragging. Bechtel is “the slowest responding [contractor] that I’ve been at,” a DCAA employee emailed a colleague. “You would be unnerved to know that some of my data request [sic] here have been outstanding for more than six months!”
Auditor Acacia Rodriguez resorted to a twenty-four-page PowerPoint briefing to describe to her superiors how she and her coworkers struggled with Bechtel’s “ ‘chronic failure’ to provide requested financial records required to prove tax dollars were being spent properly.” Her bosses remained unmoved, even after a special congressional investigation determined that the emergency no-bid contract that FEMA awarded to Bechtel was among a group of so-called Technical Assistance Contracts that “ballooned from approximately $400 million to about $3.4 billion.” But Congress’s allegations against Bechtel, along with the company’s colossal failures in both Iraq and the Gulf Coast, did nothing to hinder its continued feeding at the public trough. Rather than learn from Bechtel’s many mistakes in both instances, the Bush administration determined to reward the company—this time on a large scale. Even as the Special Inspector General was auditing Bechtel’s poor performance in Iraq and DCAA and congressional investigators were lambasting Bechtel’s “mismanagement” and “wasteful spending” on the Katrina site, Bechtel received the biggest contract of all: managing the nation’s nuclear energy and weapons complex.
* * *
PART FOUR
FROM MULESKINNER TO SOVEREIGN STATE
2009–2015
* * *
When the modern corporation acquires power over markets, power in the community, power over the state, power over belief, it is a political instrument, different in form and degree but not in kind from the state itself.
—JOHN KENNETH GALBRAITH
CHAPTER THIRTY-THREE
A Convenient Spy
The same neocons who “egged on the hapless endeavor in Iraq,” as scholar Hugh Gusterson described them, led the propaganda assault on Los Alamos that broke up the long-standing and largely successful “triangular relationship between DOE, the weapons labs, and the University of California” that led to the lab’s privatization. The nonprofit University of California had managed Los Alamos National Laboratory in the high desert of northern New Mexico since the World War II–era Manhattan Project. At the behest of J. Robert Oppenheimer, the brilliant Berkeley physics professor considered the father of the atomic bomb, who was eager to keep civilians rather than the military in control of the top secret bomb-building program, the University of California agreed to administer the lab for the US government.
Inspired by wartime patriotism and with scant knowledge of the secret research, the university gained little from the deal. A “paltry management fee and much grief from pacifist students and faculty members” marked the arrangement from the start, the New York Times reported. Then, in 1952, the University of California established the University of California Radiation Laboratory at Livermore in Berkeley to compete with the atomic bomb builders at Los Alamos, championing a rival H-bomb conceived by the Hungarian physicist—and Oppenheimer’s future nemesis—Edward Teller. Soon after cofounder Ernest Lawrence died in 1958, it was renamed the Lawrence Radiation Laboratory, and then, in 1971, it was changed again to Lawrence Livermore Laboratory.
Even after the Cold War ended, the US government paid the University of California to keep the weapons labs operating, with the university “plowing much of the $8 million-per-lab management fee back into the labs themselves,” as Gusterson, who calls himself “the Margaret Mead of the weapons labs,” described the arrangement. The open-faced and enigmatic British anthropologist, who has studied nuclear weapons scientists for thirty years, traces the Cold Warriors’ takeover of the weapons labs to a trumped-up spy case against a Chinese American scientist.
On March 6, 1999, the New York Times published a sensational front-page story titled “China Stole Nuclear Secrets for Bombs, US Aides Say.” Two days after the story, Secretary of Energy Bill Richardson leaked to the press the identity of Dr. Wen Ho Lee—a nuclear physicist at Los Alamos—and terminated Lee’s employment there. A media frenzy ensued. For the next six months, television news crews camped outside the Lees’ modest ranch-style home, “hoping for a glimpse of the quiet man accused of being the new Julius Rosenberg,” wrote Gusterson. “Convoys of FBI agents trailed Lee and his wife whenever they went to the store for milk.”
When Lee had moved with his family to Los Alamos twenty years earlier, he was among the first dozen Chinese Americans—mostly Taiwanese—ever granted security clearances at the weapons lab. For decades, the US government had refused to hire anyone with relatives behind the Iron Curtain or in China. With the end of the Cold War, though, that stance had changed, as the lab’s mission theoretically expanded into unclassified projects with peacetime endeavors. In the nine months between the time that Lee was outed and his arrest, the government portrayed him as a dangerous spy who had threatened US national security.
Soft-spoken and diminutive, Lee was arrested on December 10, 1999, on fifty-nine charges of mishandling classified information—thirty-nine of which carried life sentences under federal sentencing laws. The case against Lee stunned the community of Los Alamos, which was inundated with rumors and innuendo about the phantom spy ring passing nuclear secrets to China, all masterminded by the well-liked and hapless Lee. “FBI agents descended on Los Alamos, administering polygraphs to weapons scientists, commandeering their offices, and, in some cases, dragging them from their beds in the middle of the night and driving them two hours to Albuquerque for interrogations,” according to one account.
Held in solitary confinement
for 278 days with handcuffs attached to a metal belt, shackled at the ankles, and allowed only one hour of exercise per week—cruel and unusual punishment for which the presiding federal judge would later apologize profusely—Lee’s case incited public demonstrations and outrage in the Chinese American community and beyond. In the end, the case would disintegrate due both to lack of evidence and flagrant racial profiling—but not before it provided a boon for Bechtel by publicly demonstrating that dangerous security lapses plagued Los Alamos. While FBI Director Louis Freeh stoked the media hysteria about Chinese espionage, the public perception of the nation’s nuclear weapons laboratories as a hotbed of spies and infiltrators took hold. Vice presidential hopeful Bill Richardson overzealously sought to use the case to establish his political bona fides as a protector of national security. Senior lab officials testified at a bail hearing that the information in Lee’s possession would change the entire global strategic balance if passed to US enemies.
Agitated Washington politicians responded to the frenzy, with a Republican-controlled Congress creating the National Nuclear Security Administration (NNSA)—the quasi-autonomous agency established within DOE to oversee the nation’s nuclear weapons and naval reactor program—and putting US Air Force four-star general Eugene A. Habiger in charge of security at both Los Alamos and the Lawrence Livermore National Laboratory. As far back as 1946, scientists had banded together to warn President Harry Truman about the danger of allowing military control over atomic energy. Now, nearly sixty years after atomic bombs were dropped on Japan—a period during which civilian control of the nation’s weapons complex had been guarded furiously—powerful military forces were pushing to transfer the entire nuclear enterprise into their jurisdiction. “Reporters and congressmen were so caught up in the fever pitch of a spy hunt—a nuclear spy, no less—that no one stopped to examine the basis for the original suspicions,” according to a later account of the panic.
After 278 days in jail without facing trial, Lee took the government’s plea offer to drop fifty-eight of the fifty-nine counts against him. He admitted to one felony count of mishandling classified information for removing computer disks from the lab that contained copies of top secret nuclear codes. (The disks were found behind a copy machine at the lab just days after being reported missing. No evidence ever surfaced that the codes had been given to anyone else at the lab, much less to a foreign country.) At the plea sentencing hearing, US Judge James Parker—a Ronald Reagan appointee—released Lee on time served and in an emotionally charged statement told Lee: “I am truly sorry that I was led by our executive branch of government to order your detention last December.” Parker went on to blame the executive branch, including President Bill Clinton, Vice President Al Gore, and Energy Secretary Richardson, for instigating a case that he portrayed as an embarrassment to all Americans. “As a member of the third branch of the United States government, the Judiciary, the United States Courts, I sincerely apologize to you, Dr. Lee, for the unfair manner you were held in custody.”
The exonerated Lee and a throng of his supporters accused Richardson of racial profiling. Dubbed the “convenient spy” by authors Dan Stober and Ian Hoffman, Lee, according to them, was the victim of mendacious scheming that went beyond racial profiling. “Wen Ho Lee was an invented crisis, not an intelligence operation,” said Greg Mello, executive director of the Los Alamos Study Group, the long-standing New Mexico watchdog organization that monitors nuclear safety and security at the lab. “It was a crisis designed to portray the University of California as a bad manager so the labs would go into private hands.”
Even Siegfried Hecker, a nuclear scientist and former longtime director of Los Alamos, was appalled by the case. Despite the fact that Lee had indeed betrayed the trust of the weapons world by not adequately protecting the security of computer disks, he did not deserve the ignominy he received, as Hecker saw it. “The way he was hung in public and the way he was jailed was really un-American,” Hecker said. Stober and Hoffman, who examined the Lee case and the politics of nuclear espionage at the beginning of the twenty-first century, agreed: “Regardless of Lee’s motives, the Wen Ho Lee affair was an ugly chapter in US history. It was a time when democratic ideals were forgotten in the name of national security, when ideology and ambition overpowered objectivity, and when partisan warfare trumped statesmanship.”
When it was all over, the Lee case was used to justify the privatization of the labs. Bechtel, not surprisingly, won the contract, having been handpicked by a high-level DOE official, Tom D’Agostino. After claiming to review recommendations from a board of experts, D’Agostino announced he was “quite confident” with the choice of Bechtel. It would be the first time that a corporation would manage the nuclear laboratory, marking a distinct transformation from its long-standing traditional academic atmosphere to a profit-driven post–Cold War reemphasis on nuclear arms. Under the management of the University of California, Los Alamos had operated as a relatively straightforward research facility—what one journalist described as a “fortified, forested mile-high plateau where 14,000 people work in a scientific wonderland, a place that cherishes its mystique as much as its culture of atomic secrecy.” The university behaved more like an absentee landlord—financial incentivation had never before been a factor—as private industry coveted a piece of a burgeoning commercial opportunity languishing behind a storied ivory tower.
“The greatest irony is that US leaders turned over management of the nuclear weapons complex to the private sector at the very moment that there should have been an open debate about the public purposes of the laboratories and facilities,” wrote Kennette Benedict, the publisher of the Bulletin of the Atomic Scientists. Mello concurred. “The Cold War is back,” he pronounced.
CHAPTER THIRTY-FOUR
Privatize the Apocalypse
President George W. Bush’s administration—in its passion to turn over key government functions to private industry, and as part of the post-9/11 agenda to privatize national security—decided to corporatize the nation’s nuclear warhead complex, with Bechtel at the helm. The DOE solicited bids from contractors interested in operating not only the two flagship weapons labs but also the nation’s entire nuclear enterprise, including the Savannah River National Laboratory in South Carolina; the Hanford Site on the Columbia River in Washington; the Y-12 National Security Complex in Oak Ridge, Tennessee; the Pantex Plant in Amarillo, Texas; and the Nevada Test Site north of Las Vegas. In 2007 the NNSA awarded a Bechtel-led consortium a multiyear, multibillion-dollar contract to oversee the country’s top secret nuclear laboratories and plants. The country’s National Laboratory System, a collection of seventeen labs, was the flagship of the United States’s nuclear weaponry research and development apparatus that was the primary deterrent to the Soviet Union.
Redubbed the US Nuclear Security Enterprise (NSE) by Bechtel corporate headquarters, the moniker replaced the traditional term of “nuclear weapons labs.” At a moment when there was resounding political pressure for closure of the labs because of their obsolescence, the new phrase implied an urgent mission. For a decade, there had been calls for a post–Cold War downsizing of the nation’s nuclear weapons complex, and an international groundswell for nuclear nonproliferation was under way. Government inspectors, DOE and DOD officials, and nuclear experts agreed that both national labs were twice as big as they should be. The dismantling of the Berlin Wall, the fall of the Soviet Union, and international calls for nuclear disarmament “sent Los Alamos and the whole U.S. nuclear complex into existential crisis,” as one journalist put it. “What do we do now that nuclear weapons have no obvious role in a world of, at best, medium-sized military enemies?” wrote activist Frida Berrigan of what she described as “the urge to privatize the apocalypse.”
The nuclear establishment was “deeply wounded at the end of the Cold War,” said Mello. “One-third of the weapons designers had retired by 1995, and the labs’ budgets were in free fall. There was a severe crisis in morale and
mission. Bechtel and private industry had long wanted to get their hands on the best-funded nuclear labs in the world, and finally they did.”
Under intensive lobbying by Bechtel and the nuclear industry, the Bush administration developed a solution in response to complaints from Congress that the weapons labs lacked a clear mission. A Nuclear Posture Review released by the DOD asserted the new direction of America’s nuclear arsenal: “The need is clear for a revitalized nuclear weapons complex that will be able, if directed, to design, develop, manufacture, and certify new warheads in response to new national requirements; and maintain readiness to resume underground testing if required.”
Congress responded by privatizing the labs, and the weapons complex became among the largest outsourcing to the private sector of the government’s national security budget. DOE’s $12.6 billion annual budget for fiscal year 2016 represented a 10 percent hike in appropriations for NNSA. “Washington should oversee the labs, not micromanage them,” became the rallying cry for those eager to profit from the transfer of “scientific discovery into the market” for commercial application—a position detailed in a contemporary Bechtel-sponsored policy white paper advocating expanded private sector access to the labs’ research. “A recipe for the enrichment of private entities with no accountability to the taxpayer,” Mello described the so-called government-owned, contractor-operated (GOCO) model of transforming government research into commercial products. Renowned physicist and independent consultant Robert Civiak concurred, defining the “corporatization” of the laboratories as “self-serving ideas” and “warmed-over proposals to operate the labs more like the private sector,” and calling the GOCO model “an anachronism of the Cold War.”
