[ISN] Los Alamos missing disks never existed

[InfoSec News]

http://www.abqtrib.com/albq/nw_state/article/0,2564,ALBQ_19863_3508091,00.html

By Leslie Hoffman
The Associated Press
January 29, 2005

Missing computer disks that virtually shut down Los Alamos National
Laboratory during the summer never existed, a new Department of Energy
report says, and the National Nuclear Security Agency has inflicted a
multimillion-dollar penalty on the University of California for sloppy
inventory control and security failures at the nuclear weapons lab.

In a harshly worded review that described severe security weaknesses
at the nuclear lab, the Energy Department concluded that bar codes
were recorded for the disks but the disks themselves were never
created.

A separate FBI investigation supported that finding, according to the
report released Friday.

"Although the FBI has validated our conclusions that the `unaccounted
for pieces of (classified removable electronic media) at the center of
this investigation never were created and, therefore, (are) not
missing from inventory,' the weaknesses revealed by this incident are
severe and must be corrected," the report stated.

The material was reported missing in July, and lab director Pete Nanos
halted all work at the facility pending retraining of staff on
security issues. Several workers were suspended and subsequently
fired. The incident was merely the latest in a series of security
breaches going back several years. Energy Secretary Spencer Abraham,
annoyed at the persistent problems with security, decided in 2003 to
put the management contract for the lab up for open bidding. A final
version of proposals is expected to be unveiled next week, and the
contract will go into effect for the winning bidder later this year.

Because of the problems detailed in the new report, the NNSA announced
it would slash the University of California's management fee, imposing
the largest fee reduction ever on a national laboratory. UC will get
only a third of the total fee it was eligible for as lab manager
during the last fiscal year ending in September.

Out of a possible $8.7 million, UC will get only $2.9 million.

In slashing the fee, NNSA chief Linton Brooks said he was concerned
about "major weaknesses in controlling classified material."

Those weaknesses "are absolutely unacceptable, and the University of
California must be held accountable for them," he said.

UC officials on Friday accepted responsibility for the problems but
pointed to the months of work they and lab officials have done
reviewing Los Alamos' safety and security procedures since the initial
shutdown.

"We got walloped. Unfortunately, we deserve this," UC spokesman Chris
Harrington said. "But what we have done is correct the problems and
put the right system in place so that we don't have to take this type
of hit again."

Sen. Pete Domenici, an Albuquerque Republican, objected to the funding
cut, saying the school has worked to make changes under difficult
circumstances.

"The NNSA has responded to the bad headlines by cutting the
university's award fee unreasonably," he said. "That willingness to
succumb to political pressure reveals to me that the university is
doing a better job of standing up to criticism that is the NNSA. I had
expected better from the NNSA."

Lab watchdogs that have long criticized UC's management of the lab
hailed the cut.

"It's certainly a step in the right direction," said Pete Stockton of
the Project on Government Oversight.

Sen. Jeff Bingaman, a Silver city Democrat, said he understood the
rationale behind the cut but noted that the most important issue
should be making sure the safety and security challenges raised in the
report released Friday are dealt with.

The report highlighted areas in which DOE and NNSA officials believe
corrective action was needed. They include enforcing accountability,
improving overall handling of classified material and improving
oversight of security at the lab.

One of the report's recommendations called for holding the university
accountable through the management fee.