Introduction

The Obama administration levied fines totaling nearly a million dollars this week against two of the nation’s nuclear weapons laboratories, mostly for failing to keep track of classified materials and for repeatedly disclosing information related to nuclear weapons design in public presentations stretching over nearly a decade.

In notices published by the Energy Department on June 5, the National Nuclear Security Administration provided only general information about the materials and data that got loose but said the breaches were among the most serious such infractions, and could have an “adverse impact on national security.”

It said a private company that operates Sandia National Laboratories in Albuquerque, New Mexico, would be fined $577,500 for its poor handling of classified nuclear bomb design information.

A second private company that operates Los Alamos National Laboratories, also in New Mexico, faced a fine of $247,500 for failing to secure something that was identified only as classified “matter,” according to one of the notices, as well as a fine of $150,000 for an unrelated employee safety violation.

The notice did not explain what the missing “matter” is, but accused Los Alamos of conducting a poor investigation into what happened to it and of wrongly assuming, for years, that it had been safely destroyed.

The Energy Department said the two violations involving classified materials and data were labelled with its highest level of severity because they “involve the actual or high potential for adverse impact on the national security,” but it did not explain further. Even Los Alamos’s own internal inquiry “concluded that a compromise of classified information cannot be ruled out,” the Energy Department said.

The notices suggest that the laboratories – which endured unusual scrutiny a decade ago over allegations that they had failed to safeguard highly sensitive nuclear weapons information – are still having trouble complying with security regulations.

In January, the Energy Department’s Office of Inspector General asserted that a Los Alamos classification officer had erroneously approved the release of classified information and said the lab had poorly trained its classification employees. In 2004, the laboratory’s director suspended the lab’s operations to fix problems that included the loss of classified computer disks, and in 2006, police responding to a domestic violence call at an employee’s home discovered thumb drives from the lab that contained classified information, along with illicit drugs.

Those events helped provoke the Government Accountability Office to say in a 2008 report that Los Alamos “has experienced a series of high-profile security incidents that have drawn attention to the laboratory’s inability to account for and control classified information and maintain a safe work environment.”

This week’s infraction notices add to the laboratories’ growing list of national security embarrassments.

In one, federal investigators specifically said Los Alamos National Security, LLC, the corporate consortium that manages Los Alamos National Laboratory with a base contract of $2.2 billion annually, could not account for an unspecified piece of classified matter. It was last logged in at Los Alamos in 2007, the report said, shortly before it was supposed to be shipped to the Energy Department’s Nevada National Security Site for disposal.

Personnel at the Nevada site did not determine until five years later that the missing material had never been shipped from Los Alamos, according to the notice, which did not explain the lapse. Los Alamos’s internal investigation into the missing material concluded that it was probably destroyed, but turned up no confirming documentation.

An investigation by the Energy Department concluded to the contrary that “the probability of undetected removal cannot be regarded as ‘low,’” according to the notice. Energy Department investigators found the lab’s internal investigation to be riddled with factual errors.

“The fact that [Los Alamos National Security] didn’t realize this material was missing for five years, and the unreliable nature of their review of it when they did learn about it is very disturbing,” Jay Coghlan, executive director of Nuclear Watch New Mexico, a nonprofit watchdog organization that tracks nuclear labs in that state, said. “It’s particularly troubling because the investigators’ report says it could have had a high level of damage to national security.”

In a separate probe, Energy Department investigators similarly found a longstanding security breach went undetected for years at Sandia National Laboratories.

Between 2003 and 2011, according to the notice, an unnamed employee of Sandia gave presentations at the lab and in settings open to the public that divulged classified nuclear weapon design information. In some cases, slides from the presentation were handed out on paper to the audiences, or computer disks containing the full presentation were distributed.

A supervisor at the lab discovered the breaches in 2012, kicking off an Energy Department investigation that eventually turned up 47 versions of the employee’s presentation saved on unsecure servers at Sandia National Laboratory. They were stored there as early as 1997 and were accessible for years to foreign citizens, according to the violation notice.

Even after the presentation’s presence on the unsecure network was discovered, Sandia did a sloppy job of purging it from the computer system, according to the notice. The lab searched only for documents with the same title, and overlooked others that lacked that label.

Sandia’s internal review reached the same overall conclusions as the Energy Department, according to the notice. Both concluded that classified information about nuclear weapon design was compromised.

The $577,500 fine was assessed against the Sandia Corp., the lab’s Lockheed-Martin-owned managing contractor. But Coghlan called it “a slap on the wrist” to a contractor that collected more than $26 million in bonuses and fees last year for managing Sandia.

Sandia’s three full-scale nuclear weapon development programs have strained the lab’s capacity to manage classified information, according to the National Nuclear Security Administration.

“Sandia continues to experience a significant number of security incidents, topping out at 190 incidents of security concern in FY2014,” according the administration’s last annual performance evaluation of Sandia. “Failure of the workforce to follow established Corporate Policy relative to classification reviews continues to be a [safety and security] management concern.”

“Sandia has taken this security issue seriously since becoming aware of it in 2012,” Jim Danneskiold, a spokesman for Sandia, said Friday, after the new notices were published. “After discovering and reporting the issue, Sandia analyzed the causes and identified, developed and carried out a series of improvements that will reduce the likelihood of security violations of this kind.”

The Energy Department’s violation notices acknowledged that both labs had made progress correcting the problems that led to the violations. The contractors have until June 26 to contest the fines.