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. _________________________________________ Bellua Cyber Security Asia 2005 - http://www.bellua.com/bcs2005
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