116 1 PAGES thn EXECUTIVE SESSION UNREVISED AND UNEDITED- NOT FOR QUOTATION OR D1JPLICATION IN ANY FORM nu it of ' tprt atutnttur a Transcript of ProceedlJils Hearing held before E X E CUT I V E S E S S ION COMMITTEE ON INTERIOR AND INSULAR AFFAIR S INFORMAL MEETING BETWEEN INTERIOR COMMITTEE REPRESENTATIVES AND DR ZALMAN M SHAPIRO Washington D C Thursday December 21 1978 lli 'IDm ENDENCE REPORTING iINC Officia Repo te u· ·Stiite 408 Marfair Building 499 South Capitol Street Southwest Washington D C 20024 202 '· 484-8900 NATIONWIDE COVERAGE PAGES UNaEVlIED AND ahna - - - - UNED NOT POR QUOTATION OR DUPLICATION IN ANY FORM ijoUSt of Itprt1itututiut1i Transcript of Proceedln Hearln held before COMMITTEE ON INTERIOR AND INSULAR AFFAIRS Washington D C INDEPENDENCE REPORTING INC 304 Independence Avenue S E Official Reporters Washin ton D C 20003 202 547-1005 BOYUM 1 EXECUTIVE SESSION INFORMAL MEETING BETWEEN INTERIOR C0M14ITTEE REPRESENTATIVES AND DR ZALMAN M SHAPIRO 2 3 Thursday December 21 1978 4 5 6 U S House of Representatives 7 Committee on Interior and Insular Affairs 8 Washington D C 9 The Committee on Interior and Insular Affairs met at 10 3 00 p m in room 1324 Longworth House Office Building 11 Han Morris K Udall Chairman of the committee presiding 12 Members present Representative Udall 13 Staff present Majority Henry Myers and Michael 14 McNulty 15 Minority Robert Terrell 16 Appearing on behalf of Dr Shapiro Abe Krash Esq 17 Leonard H Becker Esq and Hadrian R Katz Esq of 18 Arnold Porter 1229 Nineteenth Street N W Washington 19 D C 20036 20 21 22 23 24 25 INDEPENDENCE REPORTING INC 202 484-8900 I 2 Tape tn page 1 Chairman Udall '2 Mr Krash J Chairman Udall 4 Mr Krash 5 Are you ready to proceed Absolutely To get this thing concluded To answer whatever questions you have Congress man 6 Let me say Dr Shapiro did have a short prepared statement I but rather than taking up the time which I know is limited wha 8 we thought was if it is agreeable to you because this is so 9 10 11 12 IJ informal we just thought we would pass out copies and you can just incorporate it in the record and we can jus·t go ahead so w don't have to take too much time Chairman Udall All right either way at your preference Mr Krash Sure sure We've got -- that's fine I think I 14 15 16 17 it would be better because it would give you -- we don't propos to take up the time We would just appreciate it if you would just incor porate it into the transcript Chairman Udall All right lil We have the machines on and the reporter is here All I right This statement then of five pages which is undated '20 that begins Statement of Dr Zalman 1 Shapiro I' '21 Mr Krash Well it's 12 pages I'm sorry It's 12 page with an attachment 23 Chairman Udall I've got it It is 12 pages with a five- page attachment 25 l-1r Krash Right Dr Shapiro's prepared statement follows INDEPENDENCE REPORTING INC Tel 202 484-8900 I 3 Chairman Udall It will be made a part of the record at this point in this informal proceeding here today I may want t take a lO-minute break to glance through this and see if it would prompt any questions-Mr Krash Of course I understand Chairman Udall --that we may have omitted otherwise I also had a short opening statement It's not all that short but maybe to set the tone of what my purpose is here toda it might be smart if I read this Do you have copies of this for them l-1r Myers Yes Chairman Udall See if you can get one and I will begin This informal meeting is being conducted by me and it say I here Representative Bauman His aide Bob Terrell is here whom you have met since Congressman Bauman can't make it with us today But it is being conducted pursuant to the House Interior Committee's jurisdiction regarding federal requla1 ion of I the nuclear industry A continuing concern of the Committee hasl been the adequacy of safeguards designed to protect against theft and illicit diversion of nuclear explosive materials In early I I 1977 our Committee was informed that government files contained I II documents indicating the possibility that a substantial quantity I of missing bomb grade uranium had been diverted from a processin1 I plant operated by the Nuclear Materials and Equipment Corporatlon I in Apollo Pennsylvania INDEPENDENCE REPORTING INC Tel 202 484-8900 4 tape 1 p J While the losses in question occurred in the early or mid1960's I believe it is important that we explore whether there J are lessons that might be derived from the events and circumstan 4 ces of that period 5 placed on the table in order that we be able to reach the sound 6 decisions necessary to protect against the hazards and risks of I using nuclear power 8 To the extent possible the facts should be Our inquiry has several specific objectives First we wan 9 to understand any defects in safeguards as they existed in the 10 1960's so that we can be sure corrective measures have been 11 taken 12 Commission's responsibility to encourage nuclear development 13 forestalled its conducting with appropriate vigor an adequate in 14 quiry into the NUMEC situation 15 16 17 In I C 20 21 Our second objective is to know whether the Atomic Energ We need to understand this to help us judge whether the old donflict between the government's promotional and regulatory activities have in fact been resolved by dissolution of the AEC and establishment of the NRC We have in addition a third purpose It amounts to this I I NUMEC has been the subject of speculation and rumor for more tharl I a decade All of us who have responsibilities in this area have I i an obligation to work toward venting what is known The AmericaJ I I people who paid the bills and incurred the risks should be ablq 23 i to make their own assessment as to whether their government exerl I ciscd adequate caution in protecting nuclear materials and '25 whether all reasonable steps have been taken in search for an INDEPENDENCE REPORTING INC Tel 202 484-8900 I 5 Tape 1 p 4 I 2 explanation of NUMEC's uranium losses Underlying this and previous inquiries in the matter is J the fact that the AEC determined in late 1965 ahat some tens of 4 kilograms of bomb quality uranium had been lost by NUMEC since 5 the plant had begun operations in 1957 6 investigation the AEC accepted NUMEC's explanation that the After some months of material had been lost in the normal course of plant operations 8 9 10 11 12 13 The AEC was however unable to pinpoint the time at which the losses occurred or the mechanism that led to them In accepting NUMEC's explanation the AEC also stated that it could not unequivocally rule out the possibility of a diversion Our inquiry to date has found that safeguards requirements were minimal in the early and mid-1960's They were based on th I 14 15 16 17 assumption that those who possessed nuclear explosive materials would not engage in complex and illegal diversions and I might add that the financial responsibility of the companies involved would be a further deterrent I am reading this almos v0rhatim In but I have changed a word or two I 1 We have also found that NUMEC's material control procedures I 20 were repeatedly criticized by those who conducted material survers LI of the Atomic Energy Commission i In communicating with the i Committee on a matter related to this inquiry NRC Chairman I i 23 I Hendrie stated in December 1977 that he conclude s that fot regulatory purposes we must assume the circumstances were such '25 that a diversion could have occurred and must construct our INDEPENDENCE REPORTING INC Tel 202 484-8900 6 safeguards requirements accordingly tape 1 p 5 2 Our inquiry has shown that the Atomic Energy Commission was J particularly concerned about the public reaction were it to 4 publicize the uranium losses at NUMEC a consequence of its concern for the wellbeing of the nuclear 6 industry acted with restraint both with regard to enforcing its 7 own regulations upon NUMEC and imposing generally more stringent 8 safeguards requirements 9 In addition the AEC as I believe it was also out of concern for the adverse publi- 10 city and the impact of a crackdown upon the industry that led th 11 AEC and its successor agencies to play down for more than a 12 decade the possibility that a diversion did occur 13 being assured by both ERDA and NRC officials as recently as the 14 15 16 17 10 I 'I 20 21 22 23 While we wer summer of 1977 that there was no evidence of a diversion ther were responsible officials in the government who had believed fo years that there was circumstantial evidence indicating that materials had in fact been diverted We know now that as far back as 1966 at least one staff member of the Joint Committee on Atomic Energy questioned the propriety of then AEC Chairman Seabord having testified that he thought that there has not been any material diverted from peaceful to military uses We know also that in December 1971 William Ri ley former director of AEC security wrote in a memo·randum that Dr Shapiro reported to Riley that he Dr Shapiro 25 had been told by officials of the government of Israel that an INDEPENDENCE REPORTING INC Tel 202 484-8900 7 unnamed AEC Commissioner had suggested to representatives of a tape 1 p 6 foreign government that Dr Shapiro had been involved in diversio of materials to the Israelis 4 We know now that some high level officials of the CIA be- 5 lieved there was evidence of a diversion 6 Counsel Peter Strauss is reported to have said following a CIA I briefing at the NRC that he 8 had a fairly strong belief that the inventory discrepancy repre- 9 sented material taken to Israel 10 information was accurate there was a strong circumstantial case - 11 missing material motive and opportunity 12 Commissioners on November 12 of this year Commissioner Gilinsky 13 stated that he had told Mr Gossick with respect to the CIA 14 briefing at the NRC that 15 significant that should not be set aside easily was the fact 16 that whatever the fact the CIA seemed to be convinced of the 17 fact something had occurred there that there was a diversion III I would also like to note for the record that earlier this II • • • II • • • Former NRC General got the impression that the CIA He said that if the CIA's II At a meeting of NRC the one thing that I felt was 1'1 month we received from NRC Chairman Hendrie the Commission's 20 view that 21 II there are many people familiar with the information on this subject i e 23 diversion occurred and they have arguments that do have substance '2 Apollo NUMEC who seriously suggest a We have seen no hard proof one way or the other but there are various circumstantial items that INDEPENDENCE REPORTING INC Tel 202 484-8900 8 tape 1 p 7 keep the question unanswered L J 4 Given that allegations about a diversion necessarily affect the reputati ons of those who were in charge of NUMEC we have believed it important to ask Dr Shapiro as NUMEC's former 5 president whether he might wish to provide information on this 6 matter which would help resolve either by stilling the sus- I picions that exist or shedding light otherwise 8 9 10 11 12 We are aware that the investigations of this Committee coul intrude upon the privacy of Dr Shapiro We believe however that the seriousness of the allegations has required us to pursu this matter as far as we can making every effort to be fair and open 13 I would say in addition that if there had been more openI 14 ness over the years both by NUMEC with regard to conceding its 15 16 17 losses and the AEC in admitting the true nature of the situatio much of the current suspicion might have been put to rest long ago If We have agreed that this hearing would be held informally i I I I I with the attendance of myself Representative Baumen our staffSt I 20 Dr Shapiro and his attorneys Because of the informality of 21 j i the hearing Dr Shapiro will not be put under oath we will hav4 I a transcript and a recording of the hearing which will be provid d 23 to Dr Shapiro as soon as they are available At that time Dr Ii i Shapiro will be permitted to insert into the record whatever INDEPENDENCE REPORTING INC Tel 202 484-8900 9 supplemental or clarifying material he feels is necessary to present the facts as he sees them our inquiry to We plan at the conclusion 0 turn over all our documents to the Department of Justice It is important to me that Dr Shapiro not feel coerced or intimidated in any way If he chooses not to address any quest- ion put to him this afternoon he will not be pressed further on that issue Bob Terrell does Congressman Bauman have any preliminary remarks to make Mr Terrell No he doesn't Mr Chairman Chairman Udall Mr Krash Do you wish to respond Abe to this Not at all Congressman Chairman Udall All right Let me get involved in the questions then Dr Shapiro NUMEC was founded in 1956 1957 somewhere in that period Dr Shapiro 1957 Chairman Udall What was your role in getting the company started Dr Shapiro I was responsible for organizing it Chairman Udall You were one of the original organizers of the corporation Dr Shapiro Yes Chairman Udall You had been employed just previous to INDEPENDENCE REPORTING INC Tel 202 484-8900 tape p 1 at Westinghouse 9 2 Dr Shapiro Yes I was 3 Chairman Udall 4 Dr Shapiro What were your duties I was at Bettis the Bettis laboratory opera- 5 ted by Westinghouse 6 Chairman Udall I Doing what Just basically and generally what was the motive and purpose in establishing NUMEC 8 Dr Shapiro I wanted to own a business for myself 9 Chairman Udall Okay And can you tell us something about 10 the stockholders and the incorporators who the main investors 11 were and so on 12 Dr Shapiro Initially the investigators were private in- 13 vestors 14 were raised by -- through the 15 they owned somewhere in the neighborhood of 30 percent of the 16 stock initially 17 In 1 20 21 I believe there were about 25 of them and the funds • I Apollo Steel Company and I bellele I Apollo Steel had 30 percent of the stock Chairman Udall Dr Shapiro I believe that is correct Chairman Udall Did you personelly invest any money in the operation Dr Shapiro iI No I I Chairman Udall 23 other principals or four or five major principals that had invested besides 25 Can you give me the names of the two or th1ee Apollo Steel and anybody else Dr Shapiro There was an automobile dealer Katanning or INDEPENDENCE REPORTING INC Tel 202 484-8900 11 something like that tape 1 p 10 2 Chairman Udall I believe it is all on record Okay This isn't a vital point but I 3 had a question on it and I thought maybe you could remember 4 two or three of these people 5 others have their own money invested to your knowledge 6 Dr Shapiro I Chairman Udall 8 9 10 11 Did the automobile dealer and Yes Substantial amounts Could you give us a ballpark figure Dr Shapiro I really don't recall The total investment at that time was I believe $250 000 Chairman Udall Did you receive stock for your expertise 12 and management ability that you were going to devote to the 13 company 14 Dr Shapiro 15 Chairman Udall 16 17 I received some stock yes Do you remember roughly how much without going back to the records Dr Shapiro I don't recall what the initial number of In shares were because they were split and I just don't recall the 1 J actual numbers 20 21 Chairman Udall In the ballpark figure would these people have a few hundred dollars or few thousand dollars Was it in that range 23 Dr Shapiro category 25 It was ln the thousand-dollar investment There were as I said about 25 all together as I recall it and Apollo was the principal through which the INDEPENDENCE REPORTING INC Tel 202 484-8900 12 investment was made Chairman Udall investors yourself Dr Shapiro And did you go out and recruit the How did the group come together I helped to recruit some of them but principally investors in APollo Steel as I recall it Chairman Udall Who was the main person in charge of Apoll Steel The president at the time was Mr Lowenthal Dr Shapiro l' I believe Chairman Udall And who is he Dr Shapiro He was --- Chairman Udall Dr Shapiro f r ' ' it A businessman A businessman Chairman Udall Had you had prior connections or business dealings with him Dr Shapiro I had met -- no I never had any business dealings with him but I had met him through organizational work Chairman Udall We have the name in the materials we have looked at of Raychord Corporation connected with Was Raychord Corporation APollo Steel Dr Shapiro Raychord was I believe a subsidiary of Apollo Steel but it was formed subsequent to NUMEC's formation ChaiLman Udall Did you already have lined up in prospect government contracts when you formed NUr C or were you forming the corporation and then looking about for business INDEPENDENCE REPORTING INC Tel 202 484-8900 13 II I' tape 1 p 12 I II '2 I I Dr Shapiro Right Chairman Udall The latter J Dr Shapiro 4 Chairman Udall 5 Can you tell us whether or not there were any foreign in- Yes Okay 6 vestors or whether any foreign governments including specifi- f cally the government of Israel directly or indirectly was an 8 9 10 11 1'2 IJ 14 15 16 17 investor in NUMEC Dr Shapiro Absolutely not Chairman Udall Dr Shapiro You are certain of this I am positive Chairman Udall investors plus This was local money money of 25 or so Apollo Steel I Dr Shapiro Right Chairman Udall They wexethe only funds that went into thi to your knowledge I When NUMEC got underway and founded the company did you III have a plant building assigned equipment or were you starting I' from scratch with vacant property '20 Dr Shapiro No APollo Steel had a vacant building a '21 shipping and receiving building and we occupied that and we also occupied the top floor of the office across the street 23 Chairman Udall active 25 How soon was it before you began to get contracts for the company Dr Shapiro I really don't recall INDEPENDENCE REPORTING INC Tel 202 484-8900 14 Chairman Udall Dr Shapiro Fairly quickly Chairman Udall Dr Shapiro Months Months Chairman Udall Dr Shapiro Fairly quickly A few months after you were organized Yes Chairman Udall Was the company formed with the idea of getting processing contracts with the AEC or the Federal Government to handle uranium and nuclear materials Was this one of your objectives Dr Shapiro The principal objective was to get into the business of preparing fuel for power reactors and we took other business to further our objectives in this because that business I was at a low rate at the time Chairman Udall You were recognized in those days as an outstanding expert in this field Were there others in the organizational group that had expertise or were they simpJv investors looking for a good business investment Dr Shapiro No they had -- the people in the community you mean Chairman Udall The original investors incorporators and businessmen when you put NUMEC together were you the the one person with expertise in this field Dr Shapiro As far as the business people were concerned they had no expertise at all As far as those of us who started INDEPENDENCE REPORTING INC Tel 202 484-8900 15 the organization we all had expertise in one aspect or another 2 except for the attorney that was also one of the few original mernberJ I 3 Chairman Udall 4 Dr Shapirol Chairman Udall 6 Dr Shapiro 7 Chairman Udall 8 Dr Shapiro 9 Chairman Udall Do you remember his name Gray Ray Gray Oh Gray All right In the Pittsburgh No he came from Washington Did you have an adequate capital base 10 begin original operations with these original contracts just fro 11 your stock sales or did you go out and torrow money make loans 12 in order to get a capital base 13 Dr Shapiro 14 Chairman Udall 15 Dr Shapiro 16 Chairman Udall 17 Dr Shapiro 18 19 Yes From whom Primarily from the Potter Bank That is a Pennsylvania institution Pittsburgh institution yes wh ch later merged into other banks Chairman Udall Do you have a general idea of the 20 magnitude of those initial loans we are talking about 21 thousand or a million 22 Dr Shapiro 23 Chairman Udall 24 Dr Shapiro 25 was a few Approximately a quarter-million And was this money secured in any way It was secured against equipment that we purchased for the most part INDEPENDENCE REPORTING INC 202 484-8900 16 tape 1 p 15 Chairman Udall '2 J 4 I foreign governments anyone outside your group was involved in making the arrangements for that loan or those original loans that helped finance your business S Dr Shapiro 6 I 8 Can you tell us whether any foreigners There were none Chairman Udall There were none I think I have already asked this but I want to make clear that to your knowledge the government of Israel was involved in no way in the original 9 founding of the company 10 Dr Shapiro Absolutely not 11 Chairman Udall Or in getting the loans that got the com- 12 pany underway IJ Dr Shapiro Absolutely not 14 Chairman Udall All right sir 15 NUMEC your connection with NUMEC lasted what 10 years or 16 so You left NUMEC when 17 Dr Shapiro In 1970 In Chairman Udall So we are talking about a 13-year roughly I 13-year period 20 Dr Shapiro Yes '21 Chairman Udall Give or take During that time what pro-i I 2L I portion of NUMEC's revenues and overall workload was involved inl 23 government contracts and particularly the naval reactor program I 21 Can you specify in general terms 25 Dr Shapiro I really can't give you a -- it would just bei INDEPEi TIENCE REPORTING INC Tel 202 484-8900 17 conjecture on my part at this point Chairman Udall Dr Shapiro 5 I really don't remember Chairman Udall 4 Less than half or more than half But you did have a number of contracts an not just the processing of naval reactor fuel 6 Dr Shapiro Yes we did 7 Chairman Udall Can you give me a general idea of what the 8 other kinds of functions NUMEC had what other kinds of contract 9 you had Dr Shapiro 10 Well we processed a lot of reactor-grade 11 material We were one of the principal fabricators of uranium 12 oxide for power reactors Ij We also made hafnium crystal bar for control materials and for other pmposes and we made neutron sources 14 and 15 scrap recovery both for ourselves as well as for customers 16 17 If I' 20 radi tion sources and burnable poison materials and did Chairman Udall Some of your customers I take it then were government agencies and some were private Dr Shapiro Some of our customers were government agencie I and others were private firms yes Chairman Udall To what extent with regard to the Navy II I 21 fuel processing program were you their sole supplier Were you competing with other firms 23 21 25 Dr Shapiro We were competing with other firms Chairman Udall Many of them or where there just a few of them in this business in the 150s and '60s INDEPENDENCE REPORTING INC Tel 202 484-8900 I lsi I Dr Shapiro There were quite a few compared to the busineJs I L that was available Chairman Udall Dr Shapiro 4 Do you know Admiral Rickover Yes Chairman Udall Did you ever have any controversy with him There are some suggestions in all of this that 6 at NUMEC Rickover was very unhappy with NUMEC's performance which may 8 not be surprising given Rickover's personality but did you have 9 10 Mr Krash somebody's performance 11 12 Have you ever known him not to be unhappy with Chairman Udall did you have during that period 13 Dr Shapiro 14 Chairman Udall 15 16 17 In I J 20 I Yes What did they regard quality of work or Dr Shapiro No they did not generally -- they were not generally with regard to the quality of our work regard to the price and with regard to other Chairman Udall It was with contractual issues Did he ever corne to NUMECi did you meet with him in Washington from time to time Dr Shapiro He never carne to NUMEC Chairman Udall 23 Have you had any conflicts with him or Dr Shapiro And your My meetings with him were prior to -- except in one instance -- were prior to my corning to NUMEC 25 Chairman Udall Let me leave all this for a moment and hit INDEPENDENCE REPORTING INC Tel 202 484-8900 I 19 I I something that I think is very direct very fundamental here I As you know one of the charges that is kicked around SUsPicion in the conversation over the years has been that you were invol 4 ved in diversion may have been involved in diversion of enrich d 5 uranium to Israel or some other country 6 Dr Shapiro Were you No absolutely not Chairman Udall And so I don't leave any loopholes I am 8 talking about not necessarily direct to Israel but to agents of 9 that country to third countries who you understood were going to 10 divert to Israel anything of this kind 11 Dr Shapiro 12 Chairman Udall 13 Dr Shapiro 14 Chairman Udall I never diverted any material to anybody Do you know of anyone else who did No I do not You are unaware of any other arrangement 15 Did you ever hear of any other scheme or plan of anyone else to 16 use your plant or facilities to divert to Israel or any other 17 source enriched uranium III Dr Shapiro I' 20 21 No Chairman Udall Would you like to speculate -- this may be the kind of question you don't want to answer why have these -this has bothered me -- why have these rumors been so persistent these last 15 years 23 2t1 25 Dr Shapiro I can only speculate Chairman Udall I am trying to get an understanding Clearly this doesn't call for factual information on your part INDEPENDENCE REPORTING INC Tol 202 484-8900 20 If you want -Dr Shapiro J 4 You mean what have been the motives of these people Chairman Udall Yes Why is this thing so persistent in newspaper reports the memos back and forth between government 6 agencies Do you have any information Dr Shapiro First of all congressman Udall I donlt 8 believe they were persistent over the ·15 years 9 persistent over the past couple of years I think and I can 10 11 12 Ij 14 15 16 17 If They have been only speculate as to why this whole matter arose again quite recently I believe there were probably two reasons One that it wa a means of those who wished to demonstrate that nuclear power should be abandoned because of the possibility of diversion and the other I believe was because it suited some people also to use this as a means of embarrassing Israel Chairman Udall Do you feel that you have been lln-f'O l l'ly unjustly treated in all of -- 1'1 Dr Shapiro 20 Absolutely Chairman Udall -- in all of these allegations '21 Dr Shapiro Absolutely Chairman Udall 23 All right There is a memo Feb 27 Let me turn to somethiny else 162 and most of these memos I ' 1 am referring to are documents or things that we furnished your '25 attorneys If you are unfamiliar with them I will try to do INDEPENDENCE REPORTING INC Tel 202 484-8900 21 something about it but let me refer to one dated Feb 27 '2 an Atomic Energy Commission memo from J A Waters Director of J Security to Austin Betts Director of Military Applications 4 indicating that NUMEC served as technical consultant and train in and procurement agency for Israel in the united States 6 also states that under this agreement one Israeli metallurgist 7 worked at NUMEC's plutonium plant 8 gist and do you recall his name 9 10 end tape 1 turn 2 fls '62 Mr Becker document The mem Was there such a metallur- Let me say that we don't have a copy of that If you have a copy we could look at it 11 12 13 14 15 16 17 lfl I' 20 21 23 25 INDEPENDENCE REPOR1'ING INC Tel 202 484-8900 22 Chairman Udall Let me say by way of preface that I have been through a whole mound of materials myself Mr Krash What was your question Congressman Udall Chairman Udall Was there an Israeli Metallurgist and what was his name Dr Shapiro His name was Dr Bernard Cinai Chairman Udall Dr Shapiro Can you spell that C-i-n-a-i He worked at the plutonium facili ty Chairman Udall Dr Shapiro In Parks Township not at Apollo Chairman Udall Dr Shapiro At Apollo What was that facility That was the facility located about six miles down the road from Apollo in which we were working on the development of fuel for plutonium-bearing fuel for power reactors Chairman Udall What was the connection of tlwL -' Ull-' Cl ll company to NUMEC Dr Shapiro It was part of NUMEC Chairman Udall Dr Shapiro This was a subsidiary or It wasn't a subsidiary It was just a separate operation Chairman Udall I come 25 A separate operation I am going to back to him in just a moment but in your years at NUMEC were there other Israeli citizens that worked as technicians INDEPENDENCE REPORTING INC T Jl 202 484-8900 23 GeoK 2 in your facilities Dr Shapiro Not that I know of J Chairman Udall 4 Dr Shapiro 6 He is the only one that comes to mind The only one that I know of that worked in our facilities Chairman Udall Given the sensitive nature of the materials I you were handling and so on why was an Israeli citizen hired 8 for this job as against a U S citizen 9 Dr Shapiro Well this was done under -- with the knowled e 10 of and permission of the Atomic Energy Commission 11 done under the Atoms for Peace program and part of that program 12 was for the training of personnel and this man was as I say 13 a part of that program 14 15 16 Chairman Udall 1n Chairman Udall 21 So you advised AEC or asked their consent to employ him at the plant Dr Shapiro 20 He was without question an out stand- ing technical person 17 I' It was Yes What was the procedure Was this a written kind of procedure Dr Shapiro I believe it was written but I can't recall at this point but it was certainly done with their knowledge and consent without question 23 Chairman Udall And he came to the United States specifi- cally for the purpose of --25 Dr Shapiro Working at that facility INDEPENDENCE REPORTING INC Tel 202 484-8900 24 GeoK 3 Chairman Udall Working at that facility and learning and getting expertise and getting information about the peaceJ 4 ful uses of plutonium and nuclear power Dr Shapiro Of plutonium and nuclear power exactly Chairman Udall 6 you have said that you recall in your years at NUMEC --- 7 Dr Shapiro 8 Chairman Udall 9 Mr Krash 10 11 12 IJ 14 15 16 17 lfl And he is the only Israeli technician Right which came there for that purpose If I could interject I don't want to inter- rupt at all but I would like to invite your attention to the fact that in the prepared statement which I know you have not had a chance to see Congressman Udall at pages 7 and 8 we have listed the names of various individuals who were foreign nationals who worked at NUMEC There was a Dutch- man from South Africa there were some Argentinians and there were some Japanese In other words there were a number of eign nationals who were working there abollt half i1 for1 ln c'Y l actually and they are all listed there 1 Chairman Udall 20 They were here for the same purposes and same reasons 21 Dr Shapiro No Chairman Udall 23 Dr Shapiro What was the difference The Japanese were there for the same purpose The Dutchman was employed as an instrument expert 25 The Argen- tinians were analytical chemists who were working at our INDEPENDENCE REPORTING INC Tel 202 484-8900 25 GeoK 4 plutonium facility as I recall it Chairman Udall J 4 And these also were Atoms for Peace helping to train other countries Dr Shapiro These were people who had gotten their 5 degrees at the University of Pittsburgh if my memory serves 6 me correctly I Chairman Udall And would they typically seek you out 8 and seek employment or were you looking for these kinds of 9 people 10 Dr Shapiro 11 Chairman Udall 12 We were looking for analytical chemists And national origin was not of great concern so long as AEC would approve 1J Dr Shapiro 14 Chairman Udall Right Mr Cinai particularly what was the 15 nature of work that he performed and how long was he there 16 Do you recall 17 In I' 20 21 22 23 Dr Shapiro He may have been there about 12 1 1 'Tlnnl-h ' i and his specific project was on the degree of homogeniety achieved in the mechanical mixing achieved in the mix of uranium oxide and plutonium oxide for the purpose of making homogeneous mixed oxide for --Chairman Udall Dr Shapiro him out Nuclear fuel rods For nuclear fuel rods Chairman Udall 25 or Did he seek you out or did you seek Do you recall the circumstances of his employment INDEPENDENCE REPORTING INC Tel 202 484-8900 26 GeoK 5 Dr Shapiro L J I don't recall specifically how that came about Chairman Udall Over the years I suppose the work force 4 varied from time to time but during that 13-year period typical y 5 how many employees would you have total at NUMEC in all your 6 different operations Dr Shapiro 8 9 10 In all the different operations I think we peaked at 1 000 Chairman Udall And it was lower than that from time to time 11 Dr Shapiro 12 Chairman Udall Yes Yes The kind of work that Mr Cinai IJ was doing and I 14 nationals was this an opportunity to gain expertise that 15 could have been applied in nuclear weapons programs guess I would apply that to these other foreign 16 Dr Shapiro 17 Chairman Udall In I 20 LI Not that I can see at all The tasks he was doing the tp ehnnl involved was --Dr Shapiro The technology was Chairman Udall Dr Shapiro --- specific to --- was with uranium and plutonium oxides specifically with regard to the fabrication of fuel elements 23 for power reactors Chairman Udall '25 Would it be a fair summary with regard to these people -- and I am talking now about various foreign nationals -- that you are not aware of any information or INDEPENDENCE REPORTING INC Tel 202 484-8900 27 GeoK 6 anything that came to your attention over the years that these 2 people were trying to acquire information that might be helpful J to them in a nuclear weapons program particularly Israel's 4 nuclear weapons program Dr Shapiro 6 1 I certainly didn't give them such informa- tion Chairman Udall I am going to refer now to an October 8 15 1964 letter from Keller of the AEC Oak Ridge to you 9 Dr Shapiro in which he states that A crossover between 10 different jobs has occurred 11 My first question is this terminology does this mean 12 that materials assigned to one contract nuclear materials 13 assigned to one contract were mixed with materials from other 14 15 16 17 If I' 20 21 contracts Is that what you understand that allegation to cover Dr Shapiro If I could take a minute Chairman Udall Dr Shapiro Sure take your time I presume that he was referring to a job ln which we had permission from the Atomic Energy Commission to utilize material from one contract which had been deferred for some reason and for which material was on hand be used in another and which permission this permission was gotten 23 from a New York operations office and apparently there was some misunderstanding and as a result communication with 25 as I understand it Washington Headquarters that was later INDEPENDENCE REPORTING INC 'fill 202 484-8900 28 GeoK 7 rescinded and at the time that it was rescinded we stopped 2 J 4 doing it Chairman Udall In general your relationship contractual relationship with AEC was such that when you had material on one project it was a violation of the contract for you 6 to use that material in connection with some other project 7 or contract 8 Is that what he refers to here Dr Shapiro There were two kinds of material One 9 was the leased material which we simply leased for the purpose 10 of doing whatever jobs 11 materials and the specific contracts may have had on occasion a 12 provision which indicated that that material should not be 13 used for other materials depended entirely upon the materials 14 of the contract 15 16 17 In I' 20 21 Chairman Udall Some did permit crossover some did not permit crossover Dr Shapiro I just don't recall Chairman Udall All right I am going to refer now to what is referred to in many of these materials as the WANL contract which I take it is Westinghouse Astronuclear Laborato Dr Shapiro Yes Chairman Udall 23 Then there were specific contract involved Can you describe briefly what that contrac What were they sending you and what were you doing with it 25 Dr Shapiro They sent us uranium hexofluoride which INDEPENDENCE REPORTING INC Tel 202 484-8900 29 GeoK 8 is a gaseous rna terial which we got in cylinders diffusion plants from the ThaT was converted into a compound uranium J carbide which was in a particular form of little spherical 4 particals as large as essentially flyspecks which had very stringent specifications associated with them from the stand- 6 point of chemical composition I size and distribution 8 and sporicity and --- 9 Chairman Udall 10 Dr Shapiro 11 IJ Dr Shapiro 16 17 In I' 20 21 What was the end-use of these particals For the Navy For commercial fuel No no for the Nerva program which was a nuclear rocket Chairman Udall Now this WANL contract was that one in which crossovers were not permitted Dr Shapiro Yes Chairman Udall Under that contract you had no right to use those materials in connection with any other contract that you were operating under Dr Shapiro As I recall it Chairman Udall 23 density which were eventually fabricated by WANL Chairman Udall 15 nd fr6m·the'st ndpoint of These were to be used in the fuel elements 12 14 from the standpoint of All right Let me ask you then the obvious question Was any of this WANL material to your knowledge ever used to satisfy 25 obligations associated with other contracts INDEPENDENCE REPORTING INC Tel 202 484-8900 30 Dr Shapiro If it did occur it occurred only in an accidental way and in scrap recovery Now you have got to understand what scrap recovery entails Chairman Udall Dr Shapiro I would like to To recover scrap you must dissolve the material and then it must be put through a chemical extraction column liquid extraction column or columns in fact is dissolved in a highly corrosive acid It It is then put into these columns where it mixes with an organic material and there is a partition that occurs such that the pure uranium goes into one phase and the impurities go into another phase This material then comes out as uranyl nitrate which is a uranium material which is insoluble It must then be precipi- tated to form a solid which was generally don with ammonia and filtered dried and subsequently decomposed and then reduced to the uranium oxide form There were a number of steps Now in the process of extracting the material it is necessary to fill the pipeline so to speak and to get an equilibrium established within those columns And it is under those circumstances that you get the proper partition of the impurities and the uranium It was essentially not only impractical but impossible to take small quantities of material and put them through and segregate them and put them individually through those columns and achieve and maintain equlibrium INDEPENDENCE REPORTING INC Tel 202 484-8900 Therefore the 31 GeoK 10 procedure that was involved was to dissolve the material 2 to assay that material put it through -- in other words J to establish the quantity put it through and then to segregate 4 a portion of the material coming through depending upon what 5 the assay is make an estimate of what the losses in processing 6 were and I Chairman Udall 8 Dr Shapiro 9 Allocate --- and allocate that material to that particular contract and so it went 10 Chairman Udall Uh-huh So in that sense there may 11 have been some mixing of WANL contract material but only 12 in the scrap recovery process that I hope you don't ask me 13 to 14 Dr Shapiro 15 Chairman Udall --- explain again 16 I think I understand enough about it to ask questions 1J In That's right but that is about all DO you understand that your WANL contract permitted that I' kind of mixing 20 or the WANL contract itself 21 this kind of thing 22 Dr Shapiro That this was a violation of AEC regulations Did they know you were doing Did you do this --I am sure they knew that we were doing 23 it because eventually -- I don't remember when the supply 2 1 agreement was put into place but the AEC recognized the neces si 25 of doing it that way and adjusted their contractual arrangements' INDEPENDENCE REPORTING INC Tel 202 484-8900 32 GeoK 11 to allow for that to happen in recognition of that fact In 2 general we were doing work on scrap recovery as it was being J done as we understood it at the Oak Ridge National Laboratory 4 And 5 similar procedure 6 AEC I believe it was my understanding that they followed a So it was certainly not unknown to the Chairman Udall 8 9 10 And you feel you didn't violate your contract in scrap recovery with procedures of this kind Dr Shapiro There may be some who felt that we were violctwho understood the practical ing it but I believe that those 11 aspects of the situation recognized the necessity for doing 12 it that way IJ considerably greater because it would have entailed disturbing 14 of the equilibrium in the columns 15 through establishing equilibrium and the material coming 16 through 17 through last would be no good If put back I' first Otherwise the losses would have in fact been You would be putting it would be no good and the material that came That would then have to hp We would then have to clean up the columns between each 20 one and under those circumstances obviously the losses that 11 would have been incurred would have been greater in processing than they would have under these circumstances 23 Chairman Udall Okay One of the things that has been 2 kicked around by those who are suspicious is the suggestion 25 that you were paying off old -- that some kind of diversion INDEPENDENCE REPORTING INC Tel 202 484-8900 GeoK 12 33 or loss had been going on and that you woul d payo ff old conL trac ts by mate rial from new cont racts like runn ing chec ks J aroun d to diffe rent bank s that you were doing this kind of 4 thing and a lot of atten tion has been paid to this WANL con- S trac t 6 Can you tell us that you neve r enga ged in that kind of 7 a proc edur e with rega rd to this cont ract and that WANL mate rial 8 was not used to payo ff oblig ation s on old cont racts 9 Dr Shap iro It becam e evid ent durin g the cour se of 10 this cont ract that our losse s were grea ter than we had estim ated 11 and there fore the amou nt that we had alloc ated to each con- 12 trac t and shipp ed back to the custo mer was grea ter than it IJ shou ld have been base d on the actu al losse s that did occu r 14 versu s those that were estim ated 15 Is that clea r 16 Chair man Udal l 17 Dr Shap iro III I 'J '20 21 Yes I think I follo w And there fore the only way thaL cuu u have happ ened is that mate rial whic h shou ld have been charg ed to a subs eque nt batch was charg ed to the form er batch and in that sense it could have happ ened Chair man Udal l But you don' t see anyth ing devio us or sini ster abou t --23 Dr Shap iro Abso lutel y not Chair man Udal l --- abou t this oper ation I am abou t to leave this Henr y and it is very clea r INDEPENDENCE REPORTING INC Tel 202 484-8 900 34 GeoK13 J n my mind I don't want to corne back to it if -- all right Mr Krash J I hope you will feel free to ask any questions here that -- pursue any questions that you want to Chairman Udall 4 All right I want to go through and 5 do it just as quickly as possible and thoroughly as possible 6 If you have questions on items I have not clarified whisper I in my ear or speak up 8 that is major 9 Mr Myer s 10 Chairman Udall Do you have anything to this point No Let me move to another topic I am 11 going to be talking about section 6 13 of the AEC survey report 12 conducted in November of 1965 IJ in the brief that your attorneys submitted to us sometime 14 ago 15 I think you refer to that The AEC survey report says something like this -- it 16 is just a paragraph 17 loss mechanisms directly applicable to this purchase orner In I' 20 21 In an attempt to establish yields and the survey team requested NUMEC production control and process engineering data on this and other contracts The data made available was of little or no value in this regard Process lots or batches could not be correlated to points in time nor could a sequence of processing events be established 23 All efforts in this direction were negated when it was learned that many of the requested records had been inadvertently 25 destroyed by supervisory personnel during a cleanup campaign INDEPENDENCE REPORTING INC Tel 202 484-8900 35 GeoK 14 at the time of an employee strike January 1 to February 25 1964 J 4 I wanted to ask several questions about that set of allegations Tell me about this strike 6 I Dr Shapiro we had 8 9 12 IJ 16 17 Dr Shapiro as I recall it and into January and February Chairman Udall When you are handling nuclear materials does a stoppage of this kind cause any danger or particular problems for you Can you shut down the operation without hazard Dr Shapiro Yes you could shut down the operation without hazard Chairman Udall Was there any violence connected with this strike Dr Shapiro 23 There was violence Chairman Udall Dr Shapiro 25 It involved all the employees in the Apollo the dead of winter around the Christmas-New Year's period 20 2 Did it involve all your employees except plant except the supervisory personnel and it occurred in III ' It lasted as I recall for over two months for supervisory people 14 15 It was a very severe serious strike that Chairman Udall 10 11 Was it an actual work stoppage Of what nature Some of our equipment was tampered with For example one of the trucks had sugar poured into its gas tank The brakes of ft hEtp D IfiHJ61Vr ef W ¥ employees were Tel 202 484-8900 36 GeoK 15 cut that is the hydraulic lines were cut Chairman Udall J 4 Dr Shapiro Yes This fellow could have in fact been killed because as you know we live in a hilly area and this man's car was located on a hill 6 I was assaulted et cetera 7 Chairman Udall Okay What can you tell us with regard 8 to this statement here that the records they were trying to 9 get to trace these various batches were inadvertently destroyed 10 by supervisory personnel during a cleanup campaign 11 cleanup campaign occur because of the strike or have connec- 12 tion with it IJ Did the What can you tell me about destruction of these records 14 Dr Shapiro First of all the records were not destroyed 15 per se okay 16 the people who were doing the cleanup not because I had ordered 17 it but because they had decided they were cluttering up hc In 1 C 20 21 I can explain that area of the files and that they were no longer necessary and there was no necessity for retaining them type records see Give me an example When you run a batch through or process a batch Dr Shapiro '25 They were production They had nothing to do with SN l-1 control per Chairman Udall 23 These were discarded by We have to give our employees instructions for INDEPENDENCE REPORTING INC Tel 202 484-8900 Geok 16 37 Chairman Udall Dr Shapiro --- what they are to do and when they are to do it et cetera 4 5 6 I see And these were processing and manufactur- ing instructions Chairman Udall at that time You had been in business for seven years You had an accumulation of these old things is that what you are telling me 8 Dr Shapiro 9 Chairman Udall 10 11 12 13 14 15 16 17 Yes But none of these were of the kind of records that would help us to identify a MUF or a --Dr Shapiro I don't believe that theywere at all relev '1t to the situation and Mr Lovett whom I talked to subsequently felt that they had no relevance either They were just grabbing at straws Chairman Udall Did you indicate that your personnel destroyed cleaned them out got rid of them without your instructions on their own initiative 10 Dr Shapiro Yes The point was that during the strike I' supervisory personnel operated the plant to the best of their 20 ability I felt it was appropriate and desirable to clean 21 up and maintain the plant during that shutdown which they in fact did 23 And during the course of this the supervisory personnel in charge of production decided that these were no longer necessary to be kept and there was no need to keep 25 them for any -- we were not obligated to keep them for any INDEPENDENCE REPORTING INC Tel 202 484-8900 I GeoK 17 38 reason and that they were not relevant to anything we were L doing at that time J Consequently they discarded them 4 Chairman Udall Wouldn't it have been customary or was 5 there any requirement that you know of that you report the 6 discarding of these records to AEC or anyone I Dr Shapiro No There was no necessity for that because 8 they were internal production and processing type records 9 and those records which we were obligated to keep for govern- 10 mental or other purposes were always kept 11 Chairman Udall How would you respond then to this state- 12 ment and I will just read a part of it process lots or batches 1 3 could not be correlated to points in time nor could a sequence 14 of processing events be established 15 You are saying that five years after you processed some- 16 thing it is unimportant to anybody any more the exact order 17 or sequence in which you carried on an operation If essentially what it is I LO LI Dr Shapiro I would assume that this is what they had in mind but I -- really not having written this I really don't --Chairman Udall 23 Is thAt I am not blaming you for their report but I am trying to find out what it was they were complaining about because they apparently took the loss of these records 25 as being of some consequence INDEPENDENCE REPORTING INC Tel 202 484-8900 39 GeoK 18 Let me pursue that just a moment The brief you submitted to us at page 36 says that the J lost records would not have been substantially helpful in 4 determining the causes of material losses and you have just 5 repeated essentially that to me today 6 Dr Shapiro I Chairman Udall Yes The statement in the AEC survey that 8 I just read seems to suggest otherwise namely that the survey 9 team believed the records would have in fact been useful 10 I guess you have already commented on that conflict 11 12 lJ 14 15 16 17 Dr Shapiro Lovett Yes As a matter of fact as I said Mr who was responsible at that time for one of those who were engaged in the survey felt that they would be of no use Chairman Udall Do you have any knowledge of in what form the discarding took Dr Shapiro Was it burning or shredding I really don't know Chairman Udall What did you typically do with your I I waste paper 20 21 Dr Shapiro Dumped it in the garbage I guess Chairman Udall But there was no particular procedure for these kinds of records to shred them or burn them or take 23 2 1 2S precautions of that kind Dr Shapiro Mr Krash Shaking head If you shake your head it doesn't show up INDEPENDENCE REPORTING INC Tel 202 484-8900 GeoK 19 40 on the reporter's transcript You have to say something J The answer was no I take it Dr Shapiro No Chairman Udall There was some reference -- I can't 4 remember what it was -- of a fire that destroyed some records 5 Was this the only incident where records were discarded 6 you remember anything about a fire at the NUMEC plant L Dr Shapiro Do We had a fire in our storage vault and I don't recall there may have 8 there may have been some 9 been some involvement of paper at that time but because we 10 kept records of our storage in the vaults since the man who 11 had responsibility for incoming and outgoing material had 12 to keep the records there --- 13 Chairman Udall This was the same vault in which you 14 kept nuclear material 15 Dr Shapiro 16 Chairman Udall 17 Dr Shapiro If Chairman Udall I 'I L And the records related to them And it was a nuclear storage vault And the records relating to them were also sometimes also kept in the vault 20 LI Yes Dr Shapiro Yes and the important thing to recognize is that uranium carbide is a pyrophoric material This is a material then that can spontaneously burst into flame 23 Chairman Udall Can you tell us about when that fire was 25 Dr Shapiro I will guess around 1963 or thereabouts INDEPENDENCE REPORTING INC ToI 202 484-8900 41 GEoK 20 Chairman Udall 2 It was not connected with this strike that I referred to earlier Dr Shapiro 4 No Chairman Udall Now you think some records were destroyed in that fire that would have been of more consequence than the ki d 6 of batch processing records I was talking about a moment ago would you OW fols 8 9 10 11 1L 13 14 15 16 17 III I 20 21 n 23 INDEPENDENCE REPORTING INC Tel 202 484-8900 4 Dr Shapiro Frankly I don't remember whether there were any records involved at that time I do remember that there was material involved and that what we had to do was to come in with special fire extinguishers that we had to use and I just don't know whether there were in fact any records involved in that that might have been destroyed as a result of that fire Chairman Udall Well I had here that NUMEC notified AEC of the loss of records but not until 1966 which apparently was a couple of years or so after you had the fire in the vault Is there anything sinister or suspicious about that Dr Shapiro Nothing in my mind Chairman Udall Would you ordinarily -- the kinds of records that the AEC required you to keep had they been destroyed would this have been an event that you would have required to communicate with AEC on ordinarily Dr Shapiro If this were something which we were required to communicate with the Atomic Energy Commission we would have in fact done so because we always tried to do what was required by regulation Mr Terrell Mr Chairman could I ask a question Chairman Udall Mr Terrell Sure With regard to these records were there any records that you kept proprietary in nature since you were dealing with Government and outside the Government in the pri vate sector that would have been something INDEPENDENCE REPORTING INC Tul 202 484-8900 43 that you would want to safeguard for the benefit of the 3-2 contract Dr Shapiro 4 7 8 9 10 11 12 13 14 15 16 17 Not for material storage purposes Mr Terrell 6 Not for storage purposes addressing I mean production records that we are Would there be anything in there that would be of a proprietary nature It would seem to me that their treatment something of that nature would be something greater than casual In other words you just wouldn't throw them out because they were excess in the everyday average trashcan if they were proprietary at that time Dr Shapiro You are talking about discarding of the proI duction records Mr Terrell Yes Dr Shapiro I really don't know of anything that would cause us to treat them in any special way Ifl Mr Terrell Thank you Mr Chairman 1 Chairman Udall To return -- maybe I can conclude this _ 20 to the fire in the valllt which you said was roughly in the 21 '63 time frame you can't recall now whether there were or were not any records destroyed 23 Dr Shapiro I don't know Chairman Udall '25 You are saying there could have been the fact that we discussed some Were kept there at some time INDEPENDENCE REPORTING INC Tel 202 484-8900 44 Dr Shapiro 3-3 There were records kept there Chairman Udall And if anybody is charging that you -- J that there were actually records that were destroyed in that 4 vault fire that you didn't report for two or three years you 5 know nothing of that phase 6 Dr Shapiro I don't recall anything about that Chairman Udall I am now going to refer and quote from 8 an August 2 '65 memo to the Commission by AEC Assistant 9 General Manager Howard Brown 10 been furnished with this previously I believe your attorneys have 11 Let me quote from that 12 Mr Becker IJ Chairman Udall 14 Mr Becker 15 Mr Myers 16 Is it signed by Howard Brown at the end the last page 1J IlBy the middle of July Could we have just one second Sure I This is signed by Brown to the Commissioners7 Yes Howard Brown I think you have it there 10 Mr Becker I' Mr Myers I believe that's the one Mr Krash We have it 20 LI Chairman Udall He said 23 We have another one with the same date I am quoting from that memo Dr Shapiro By the middle of July the issue had not been resolved and on July 21 members of the AEC staff -- and we better close that door 25 members of the AEC staff met with Dr Shapiro and members of his staff in his office at INDEPENDENCE REPORTING INC Tel 202 484-8900 Apollo to discuss the situation and to ascertain what steps 45 might be taken to satisfy the interests of the company and the Government Shortly after the meeting began Dr Shapiro disclosed for the first time a new source of waste material at the plant which he averred would not only make up the dollar difference on the WANL contract but would result in AEC owing NUMEC Dr Shapiro stated this new source of valuabl waste was contained in about 800 drums of Kleenex Kimwipes et cetera buried under four feet of earth on the company property We asked Dr Shapiro why in view of the numerous discussions and the almost daily contact on this matter for the past several months he had not previously disclosed his estimate of the content of the material in the 800 drums Dr Shapiro simply said that the situation was embarrassing That is the end of the quote In meeting with the Commission on August 10 you Dr Shapiro proposed that the buried material be recovered over a 12-month period You indicated at that time that NUMEC would experience difficulties in excavating the material quickly It appears that NUMEC was urged to undertake the excavation on a more expedited schedule than you proposed Dr Shapiro eventually agreed and exhumation was begun on October 11 and completed on October 21 1965 The exhumed material contained approximately six kilograms INDEPENDENCE REPORTING INC Tel 202 484-8900 46 out of the total of 52 kilograms missing So I guess what I want to ask you first is What led you to be so firmly convinced in the first instance that these large quantities were actually buried in the disposal pile Dr Shapiro The fabrication of uranium carbide entailed a number of steps and the material by nature -- because of the particle sizes that we were involved in -- was extremely dusty It was necessary to because of the pyrophoric nature of the material to work in special atmospheric enclosures which had glass portholes In addition to that there were lights inside to illuminate the work and there were a number of pieces of equipment and so forth which were contained in these It was necessary very frequently for the workers to clean off the surfaces of the portholes and equipment and so forth in order to continue operating Those Kimwipes rags at cetera plastic materials which were used to enclose certain things accumulated this black uranjum carbide material Chairman Udall Dr Shapiro drum an Uh-huh And these were then bagged and put in a surveyed by our health physics man with an instrument and it was his opinion based on the survey that the amount of material contained in these drums was really quite small and not worth recovering so these were then buried When it became evident that our losses were greater INDEPENDENCE REPORTING INC Tel 202 484-8900 47 than we had anticipated during the course -- towards the end 3-6 2 of the contract I then became very concerned about where J this material might have gone and we looked for the various 4 possibilities 5 Among the things that I asked our people to do was to 6 take these Kimwipes and go through representative procedure I and then I had these things ashed so that we could concentrate 8 and accumulate the material and for the work that they did 9 the average amount that seemed to accumulate per Kimwipe 10 seemed to be approximately one gram 11 12 IJ 14 15 16 17 In 1'1 20 21 Chairman Udall number So you extrapolated from that to the of drums in the burial site Dr Shapiro Well taking the number of Kimwipes that had been used over this period of time I did just what you say I extrapolated and it appeared to me that we could have in fact accumulated a large quantity of material that had in fact been discarded by burial Chairman Udall Why were you wrong on that Did you get a bad sample a bad cross-section Dr Shapiro I am not sure that I was entirely wrong We did in fact -- according to the GAO report -- recover from the pits that we dug up 7 4 kilograms of U-235 and in addi- 23 tion to that it was estimated as a result of sampling the earth from one of those pits that there was an additional 25 2 2 kilograms of U-235 for a total of almost 10 kilograms INDEPENDENCE REPORTING INC Tel 202 484-8900 48 Chairman Udall 2 3 Dr Shapiro Were these drums metai The drums were metal But some of the mater'al was not put in drums some of it was put in cardboard boxes 4 Chairman Udall 5 Dr Shapiro Which had deteriorated Exactly And in the process of digging 6 this up particularly during the period that this was done 7 we were in a rainy period and as a matter of fact we had diffi 8 culty operating the bulldozer because of the character of the 9 mud much of this stuff was ruptured and it was difficult 10 to recover 11 NOw it was my feeling on the basis -- first of all you 12 must understand that not all of the pits were dug up 13 I mentioned that previously 14 Chairman Udall 15 Dr Shapiro I think Uh-huh It was my feeling that in fact that indi- 16 cated that there was in fact considerably more material that 17 had in fact been discarded in that way than we hdd esLuua teCl 18 Chairman Udall Do you then controvert the estimate 19 that apparently the AEC and the other people talking about 20 six kilograms was all that they recovered you feel there was 21 quite an additional and larger amount 22 Dr Shapiro I don't controvert that Congressman Udall 23 I am merely quoting from the GAO report which was subsequent 24 to that report by which time we had in fact recovered all 25 INDEPENDENCE REPORTING INC 202 484-8900 II 49 of the material that had been exhumed from the pits and 3-8 2 their number was 7 4 kilograms and the amount of material that was estimated to have leached into the soil from thut 4 particular pit was 2 2 kilograms Chairman Udall 6 So we could account then for la roughly 10 of the 50-some Dr Shapiro Ten of the roughly 50 some kilograms 8 Chairman Udall 9 Is that your judgment that that is about all there was 10 11 12 1 3 14 15 16 17 That were missing now in the pit or do you think that you --Dr Shapiro I think there was more Chairman Udall How much Ball park -- would you care to make an estimate Dr Shapiro I really can't tell Chairman Udall Dr Shapiro Considerably more I would say that there was considerably more by virtue of the fact that the conditions under whi lc WP III exhumed the material were very difficult and I am not SiJ re I' that this was entirely representative therefore of at we 20 could have gotten had it been done under more favorable cO 1 di · 21 tions Chairman Udall 23 That leads me to the related question Some might see something sinister in the fact that you 1 said this would take a year to do -- you were telling them 25 it would take a year to do it and you wanted to spread it out and in fact they did INDEPENDENCE REPORTING INC Tel 202 4 8 4- 8 9 0 0 50 it in ten days which would seem to suggest that you were not anxious to have this done and were delaying it Dr Shapiro My recollection Congressman Udall was that it took considerably more than ten days I don't recall exactly how much it took Chairman Udall Henry where did we get this figure that the exhumation began on October 11 and was completed October 21 Do you recall Mr Myers Dr Shapiro Mr Myers It's this October 22 '65 letter That may have been one pit The AEC staff said the excavation in the '63 burial pit was begun on October 11th and Mr Newman reported that on October 21 the excavation was 98 percent completed Chairman Udall Dr Shapiro Was there a pit for each year There were a number of pits I think he was referring to just one Chairman Udall This says excavation of the 1963 burial pit it's identified as the '63 burial pit Dr Shapiro Mr Myers Yes The impression from the documents is that's where it was expected that most of the material would be Is that correct Mr Becker Just a moment sir so we can show him that document INDEPENDENCE REPORTING INC Tel 202 484-8900 • 51 Does your copy say 1 23rd of the material exhumed Mr Myers Right Chdirman Udall Mr Myers Do they have this I think so yes Dr Shapiro First of all the exhumation actually started earlier than October as I recall it I believe it was in process for probably a couple of months prior to that time Mr Myers It said that in a meeting on September 24th I think that you said that -- this is a memo from APOLLO NUMEC dated September- 30 1965 Mr Becker We do have it Dr Shapiro Mr Myers What do you -In the first two paragraphs on page 4 it talks about the '62 pit Dr Shapiro I think it's obvious from this that the exhumation started before October Chairman Udall documents Well we have all been wandering around Jhe Do you recall suggesting it would take twelve -I I months or so to completely dig up and burn and assay all of th s I material Dr Shapiro I don't recall tha t I said specifically twelve months but I certainly felt that in order to do II I this an do it properly under conditions that would allow us to recover the material properly and to recover it through INDEPENDENCE REPORTING INC Tel 202 484-8900 I ' 2 the scrap recovery so that we could in fact determine how much was in it would certainly take a considerable length of time Chairman Udall Dr Shapiro Not a ten-day job By no means Chairman Udall Would you agree -- the suggestion here in these documents is that you were looking for a place where you were going to find most of the material that might have been missing from the WANL contract which was highly enriched uranium that the '63 pit was the obvious place Dr Shapiro I think I would agree to that although material in the contract proceeded over a period of two-plus years as I recall it Chairman Udall The documents here reflect that one of the conversations with you was that while the '62 pit was most convenient he admitted -- quoting you here on this same document -- that it would have been better from th st-ilnrlnni n l i of settling the WANL contract to have opened the '63 pit first 1 He stated that the '62 pit however did contain some material accumulated from the beginning of WANL and that he was I I encourag d 1 that they had located some material in the 76-percent range Dr Shapiro Right Chairman Udall He further stated that the '63 pit contains all of the remainder of material generated under the WANL contract Does that sound right INDEPENDENCE REPORTING INC Tel 202 484-8900 I Dr Shapiro Not entirely because as I recall it the WANL contract was -- we had gone from '62 through '64 and possibly even some of '65 but I don't recall exactly Chairman Udall Of the materials going through your plant if I had wanted to get my hands on some stuff that was most useful in making nuclear weapons was the WANL contract one of the most likely places I would have gone after or were you handling in other contracts materials equally valuable Dr Shapiro We were handling other contracts that had highly enriched material as I recall it at that time Chairman Udall But was this bigger than the others the major source of that kind of material Dr Shapiro It was a large source Chairman Udall Okay Henry I am kind of let's see on this Do you have anything else on this subject on the garbage pits Mr Myers No Chairman Udall All right Let me turn to something else I am going to talk about contracts that NUMEC had particularly foreign contracts In briefing the Commission on February 14 '66 the AEC I am talking about former Assistant General Manager Howard Brown stated that the data 1 the AEC staff had on NUMEC's foreign shipments was based only INDEPENDENCE REPORTING INC Tel 202 484-8900 54 on NUMEC records that the present safeguards system did not provide for or require independent AEC physical checks of if s h lpments Your brief at page 40 submitted to us by your printers suggested there were independent checks made on materials shipped from the NUMEC plant Let me ask you first to get perspective here how many in a typical year or month or some time frame how many shipments would be going out of NUMEC to foreign contracts that you were fulfilling Dr Shapiro I really can't tell you specifically Chairman Udall Dr Shapiro In the hundreds or a few dozen Oh we had as I recall it a total of 30 foreign contracts of which I think there were only some- thing in the 20's related to the shipment of special nuclear materials and only comparatively few of those pertaining to the shipment of highly enriched material Chairman Udall Now I think what we are talking about here is when you got ready to make one of those shipments was there any requirement that some outside person from AEC come by and physically check that shipment or did you have authority to simply put it in a container and send it off Dr Shapiro I don't recall specifically recall is the following All I can That the foreign contracts were all with the knowledge consent concurrence of the Atomic Energy INDEPENDENCE REPORTING INC 'fo 202 484-8900 55 Commission because they involved the bilateral agreemen between those countries involved whether it was France or Belgium or whatever And these arrangements were therefore made with the Atomic Energy Commission The material was checked by a number of people in our own plant prior to going out and I kno that at least in some instances there were AEC people who were involved in the transfer As a matter of fact I have a photograph of an AEC man with me next to a bird cage -- which was the container -showing that shipment next to the French person who was accepting it Chairman Udall But there was no ongoing requirement or procedure at NUMEC whereby some official from AEC had to come in and check a shipment before it went to one of these foreign contracts that you had Dr Shapiro I don't really recall Chiarman Udall I don't think so I am trying to grasp what it was that was kind of the program you had ongoing there How many foreign countries over the period of your association with NUME did you service A few A couple dozen Dr Shapiro I think there were less than a dozen Mr Udall all of this is in fact a matter of record and as a matter of fact I think Mr Myers has a full carplete listing INDEPENDENCE REPORTING INC Tel 202 484-8900 56 of all of the shipments that were made and the times and the quantities and the enrichments Mr Myers Yes Chairman Udall Okay I don't want to get into a lot of great detail but I was just trying to get some idea of the procedures What percentage of your business over the years was with Israeli firms or with the Israeli Government the shipments which you made abroad Dr Shapiro Comparatively small special nuclear material Are you referring to Or are you referring to business in general Chairman Udall I am referring to business in general at NUMEC Dr Shapiro Comparatively small Chairman Udall They were not -- the Israelis were not your largest customer you would say Dr Shapiro By no means Chairman Udall You can't really recall or help me very much with regard to the procedure whether AEC would come to your plant and verify different shipments Sometimes they did sometimes they didn't but you can't -Dr Shapiro At this time I can't recall I am really sorry but I would only be speculating as to that Chairman Udall Is there any way that the AEC could tell INDEPENDENCE REPORTING INC Td 202 484-8900 57 today or that this committee or anybody else could determine that highly enriched uranium was not shipped from NUMEC in containers that purportedly had other contents or low enriched uranium How would we go about establishing this today have shipping records that Dr Shapiro Do you would tell us There were certainly shipping records These records were not only kept at NUMEC but they were also we were obligated to send copies of these records to the Government They had their own set of records Chairman Udall But the signature of your company and the shipping officials there is all the proof that we would hav or the AEC VvDuld have that the carton contained what it says it contained Dr Shapiro the proof I really don't know whether this is all of I suspect that there was more because I do know that in at least a couple of cases they intercepted shipments and sampled material and had them sent to the New Brunswick laboratory for analysis and consequently there must have been other means of determining Chairman Udall Dr Shapiro This was AEC you are talking about Yes Chairman Udall They would make spot checks froQ time to time apparently Dr Shapiro Apparently I really didn't know whether INDEPENDENCE REPORTING INC To 202 484-8900 58 they made spot checks from time to time or all the time Chairman Udall But you know some of your shipments were intercepted and checked Dr Shapiro I do know in a couple of cases shipments were intercepted and checked Chairman Udall Typically maybe there isn't a typical case but your shipping to France or Belgium nuclear materials how would they go Would they go by APOLLO by truck you call United Parcel Do Do you put them on an airplane Give me as a laym m an idea of oow yoo WJUld get a shiprrent of rrater you had processed to your custcmer in Belgiun or France- or wherever Dr Shapiro First of all it's necessary to understand that when a shipment went out any shipment went out and particularly a foreign shipment went out these were very carefully checked tainers bird cages They have to be packed in special conThey were checked by a number of people in the organization for one whether we had in fact fulfilled the order terms and conditions of the order Secondly whether we had fulfilled the requirements with regard to specifio quality whether·they - v hether the shipments were properly packaged wrether there was any residual ra liat ioYi on the package and so on So there were a number of people who were involved in checking each specific shipment These papers were dispatched not only to the receiver but to the Government and to the INDEPENDENCE REPORTING INC Tel 202 484-8900 I 59 shipper that is to the carrier and it was trucked generally 3-18 2 to the airport and transfers were generally made by air J directly to the country involved 4 ow ends #4 fls Chairman Udall Suppose I had had evil purposes is there 5 some place along this route of shipment that I could -- a private 6 citizen or someone could I enriched uranium for low-enriched uranium or make some other 8 changes in the contents of the package - intercept andmaybe substitute high- 9 10 11 12 13 14 15 16 17 In I 20 21 '2 2 23 2'1 25 INDEPENDENCE REPORTING INC Tel 202 484-8900 'l'ake 4 Pt I GeoK Dr Shap iro I think this would be very difficult to 2 do 3 would recognize that there had been some mistake made both 4 in terms of the enrichment or the weight or whatever the case may be 6 First of all these were sealed and secondly the receive Chairman Udall of shipments here U0 I guess uranium oxide pellets 2 Dr Shapiro 9 I noticed just this one down your list Yes Chairman Udall U fuel pellets U0 powder pellets 2 308 10 How big would a typical one of these shipments be the kind 11 I have been reading 12 a huge container Is this a box I could carry 13 Give me some idea 14 Dr Shapiro Is it I don't know if there is anything here 15 that is really typical because as you can see the quantities 16 varied very significantly 17 Chairman Udall In that you just note there 9 Dr Shapiro Give me the biggest anclthe SHlulh si The largest one would be how big The largest would be a number of bird cages 20 which were probably 6 feet tall and several feet in diameter 21 and these were the containers that would be within this bird '2'2 cage and they were bolted in place and the containers themselves 23 were sealed 24 25 Chairman Udall What do they weigh when you get all through with it INDEPENDENCE REPORTING INC Tel 202 484-8900 GeoK 2 61 Dr Shapiro Well --- 2 Mr Becker 3 Chairman Udall 4 Oh several hundred pounds or more Chairman Udall Dr Shapiro I see several to Germany here U0 2 pellet Is that some hospital shipment of some kind 10 Mr Becker 11 Mr Myers 12 Chairman Udall 13 So you would need a forklift or crane Oh yes Chairman Udall 9 Yes the shipping container and the contents Dr Shapiro 6 With the bird cage and everything a small shipment 14 Mr Krash 15 Dr Shapiro We may not have the same list We have a slightly different list I am trying to get an example now of You have given me the big one You mean the size or weight of the shipment This would also go in the bird cage contain- 16 ing this 17 depending upon the enrichment In no but I believe that unless we had natural or depleted materia 19 it was necessary to use a bird cage to assure that there was 20 no possibility of accumulating critical configurations because 21 of the possibility of other shipments that might be on the 22 same carrier 23 There were some that did not require bird cages Chairman Udall If they were very 1m LliJ i hillCL I don't want to take too much time 24 but give me dimensions and weight for a small shipment 25 one there that is quite small and tell me how big that would INDEPENDENCE REPORTING INC Tel 202 484-8900 Find VI GeoK 3 62 be 6 inches square or what-have-you 2 Dr Shapiro Give me an example Well here is oils and powder amounting 3 to only 4 grams of material apparently 4 tainer probably That would be a con- packed in a container which might be like a pail a 5-gallon pail or something of that sort 6 Chairman Udall 7 something of that order u Dr Shapiro 9 Mr Krash 10 Dr Shapiro 11 Chairman Udall All right One foot to 2 foot in size I guess That would be for what quantity 4 grams That would be just 4 grams Does the size of the contain have any 12 connection with the column Percent Isotope for example 13 here is one to France U0 2 powder 89 2 is that the level 14 of enrichment indicated there 15 Mr Myers 16 Chairman Udall 17 Mr Becker IU Mr Myers 19 Dr Shapiro 11-23-62 to France I don't think we have the same 11-23-62 89 2 Chairman Udall 21 Dr Shapiro 25 hat Would that take a smaller or larger carton or does that matter Dr Shapiro is the percent isotope That is the enrichment Chairman Udall 24 UGCl lllUJL Yes this is from your documents 20 23 4 000 Does it have any bearing on it It is primarily the total quantity of the material and there were apparently somewhere in the neighborhoodI I I I INDEPENDENCE REPORTING INC Tel 202 484-8900 II 63 GeoK 4 of 4 000 grams 4 kilograms 2 3 So it would be a large container and in a bird cage Chairman Udall All right Let me proceed to a couple 4 of other things here 5 minded how difficult it would be for me to intercept at some 6 point along the shipment track one of these containers and 7 substitute highly enriched materials for low-enriched materials 8 or low-enriched material for high-enriched materia and you 9 gave me an answer on that 10 the container was put together in the plant for me or someone 11 else to get ahold of the container and do the same thing 12 make the same kind of substitution 13 Dr Shapiro I asked a moment ago if I were evil- How difficult would it be after I would say it would be quite difficult 14 because my recollection was that those were stored in the 15 vault until shipment 16 Chairman Udall Over the years -- and again you had 17 a great variety but I just want to get a general 18 tion -- what portion of NUMEC's revenues came from foreign 19 governments 20 Dr Shapiro 21 Chairman Udall 22 Comparatively little The majority of your work was for the U S Government and domestic 23 Dr Shapiro 24 Chairman Udall 25 dPJ JJ Jxl llld- For domestic yes And I may have asked this previously You said your shipments to Israel and to Israeli companies INDEPENDENCE REPORTING INC Tel 202 484-8900 64 GeoK 5 were a relatively small part of your foreign operations Dr Shapiro 2 I think it is important to note Congressman 3 Udall that we never shipped special nuclear material to Israel 4 other than possibly -- and I don't even know whether that 5 is true -- a neutron source which would contain only a very 6 small amount of SNM 7 Chairman Udall 8 Nothing in the range of bomb-grade quan- tities Dr Shapiro 9 No material other than that What we shippe 10 to Israel was equipment an instrument or something of that 11 sort Chairman Udall 12 13 this subject Anything else Mr Myers 14 All right Henry I am going to leave What is your feeling with regard to the con- 15 fidence we can have that high-enriched uranium was not shipped 16 to foreign recipients in containers with labels indicating 17 other contents I think you may have answered that 18 Dr Shapiro I think there is a high degree of confidence 19 Chairman Udall It would require for something of that 20 nature to occur it would require collusion at both ends 21 both at the shipping end and the receiving end 22 Dr Shapiro Yes 23 Chairman Udall Because in an ordinary contract the 24 receiver would know he was not getting what he had contracted 25 for INDEPENDENCE REPORTING INC Tel 202 484-8900 65 GeoK 6 Dr Shapiro Absolutely 2 Chairman Udall All right 3 Let me turn to something else related It is of great 4 importance to us in this inquiry whether a diversion could 5 have occurred as it is whether diversion actually did occur 6 I want to pursue that a moment 7 of these matters At the NUMEC plant did you have a 24-hour operation 8 9 three shifts most of the time 10 Dr Shapiro 11 Chairman Udall 12 Yes And give me a brief outline of the layout How big an operation did you have there 13 Dr Shapiro 14 long or 500 feet long The plant itself I think was 450 feet Chairman Udall 15 16 Dr Shapiro 18 Chairman Udall 19 Dr Shapiro 20 Chairman Udall 70 feet wide Chainlink fences around the whole opera- tion Dr Shapiro 23 Chairman Udall 25 Big parking lot for your employees Yes 22 24 Okay I am not trying to pin your down just a rough idea 17 21 I want to talk about some Yes Security guards and gates and that whole busines s Dr Shapiro Yes INDEPENDENCE REPORTING INC Tel 202 484-8900 GeoK 7 66 Chairman Udall 2 3 what kind of screening did you do to people coming in visitors and employees Dr Shapiro Well the employees for the most part were 4 cleared either Q or L and all visitors had to be announced 5 through the guard or the receptionist and there was not free 6 access if that is your question 7 Chairman Udall 8 Dr Shapiro 9 Chairman Udall 10 Dr Shapiro 11 Chairman Udall 12 Dr Shapiro 13 Chairman Udall 14 Dr Shapiro Yes that is what I was getting at No there was no free access And you had round-the-clock guards Round-the-clock guards And sentries at all places of entry Yes An outsider could not wander in When you say round-the-clock guards at 15 all places of entry the answer to that is no 16 round-the-clock guards at the place of entry 17 18 Chairman Udall Dr Shapiro 20 Chairman Udall And they did also regular rounds And in addition did you have more than one vault for the safekeeping of nuclear materials 22 Dr Shapiro 23 Chairman Udall 24 Dr Shapiro 25 I didn't state It cor- rectly 19 21 I understand We had Yes Several At Apollo I believe we had two but I don't recall INDEPENDENCE REPORTING INC Tel 202 484-8900 67 GeoK 8 Chairman Udall 2 3 4 Did your plant consist of several build- ings or just one building Dr Shapiro We had -- do you mean the principal plant at Apollo 5 Chairman Udall 6 Dr Shapiro Yes That consisted of one major complex of 7 buildings with some outlying buildings in which we had some 8 storage 9 Chairman Udall I want to talk a moment about an outside 10 group gaining entry to your operation 11 security measures you had adequate in your judgment to protect 12 against the clandestine entrance of two or three people a 13 small group who might have known the layout 14 Dr Shapiro 15 Chairman Udall Were the measures Yes This would be extremely difficult and 16 undoubtedly would have been detected by your people in the 17 way you operated 18 Dr Shapiro 19 Chairman Udall Yes If a group of this kind maybe aided j 20 by some insiders had gained entry to the plant what difficulti' s 21 would they have had in trying to get to highly enriched uranium 22 in your vaults or your safe storage places 23 Dr Shapiro First of all the vaults were locked and 24 those who had access were the vault custodians so they would 25 have had to have overpowered a custodian or forced him in INDEPENDENCE REPORTING INC Tel 202 484-8900 68 GeoK 9 some way to open the vault or he would have had to have been 2 in collusion with them 3 Chairman Udall 4 Dr Shapiro Sure So certainly that would be difficult Fur- 5 thermore he would have to go through the change room 6 wise it would become quite obvious that somebody who didn't 7 belong was there 8 9 All of our people had badges Chairman Udall Dr Shapiro 11 Chairman Udall All right 14 Mr Myers 16 I believe so --- and gotten through whatever security you had to the uranium materials themselves 13 15 So this would be highly unlikely that any group could have penetrated from the outside' --- 10 12 Other- Was there also a custodian at the vault 24 hours a day Dr Shapiro If material were in process -- and it was 17 required that material be shipped in and out of 18 then we had a vault custodian 19 and the only access then would be via the guard himself who 20 at one time punched a clock in the vault and later on it was 21 decided by I believe the security people and the AEC to 22 eliminate the clock punch from the vault the VdUJ L --- Otherwise the vault was locked I have talked about outside penetration 23 Chairman Udall 24 Let me talk about inside 25 for some person with an evil design to seek work at your How difficult would it have been INDEPENDENCE REPORTING INC Tel 202 484-8900 69 GeoK 10 plant where he would have access and then to spirit away quan2 3 ti tie s of SNM Dr Shapiro First of all the person would have had 4 to go through some clearance procedure 5 the person had evil designs and had a history of that sort 6 presumably that would have been picked up by the security 7 check 8 start wit h 9 And therefore if So that is certainly a major inhibitor to that to Secondly people were not isolated in their work They 10 worked with other people 11 would certainly over a period of time be noticed by neighbors 12 Chairman Udall So what that person would be doing There is no way that a person by himself 13 could go in and seize or get his hands upon substantial quanti- 14 ties of special nuclear material 15 Dr Shapiro I should think that would be highly unlikel 16 Chairman Udall You would almost need from the standpoin I 17 of what you have told us about the weight of shipmen L 18 the places that your materials were kept it would be almost 19 impossible for one person by himself even if he were in the 20 plant and had fooled or had the confidence of his co-workers 21 to do anything much by himself 22 Dr Shapiro I think that is true -Wu In terms of material 23 that was prepared for shipment I think it would be highly 24 unlikely that a person could ever do a thing like that by 25 himself INDEPENDENCE REPORTING INC Tel 202 484-8900 70 GeoK 11 Chairman Udall You have said that both of these instance 2 the outside penetration and the person who gets inside are 3 very unlikely 4 diversion had taken place 5 shortage would have shown up in the record 6 But assuming that in either case that some Dr Shapiro Were your records such that a I believe they were We kept records in 7 accordance with the requirements of the Atomic Energy Commis- 8 sion and I feel they were adequate to have dont it to have 9 determined whether there was any major amount of material 10 that might have suddenly disappeared 11 12 Chairman Udall My notes here talk about skimming do you mean getting material in process and --- 13 Mr Myers 14 Chairman Udall Taking a small amount out from time to time And gradually would increase to a large 15 amount 16 your processing your operations 17 Henry Is this possible or difficult given the nature of Dr Shapiro I would say that that would be highly unlike y 18 because what you are implying here I think is that this 19 would have to be an operation that would have to go on over 20 a per iod of time 21 Chairman Udall 22 Dr Shapiro 23 Chairman Udall 24 Dr Shapiro 25 Right And repeated many times Yes And given the set of circumstances I would say that that would be highly unlikely INDEPENDENCE REPORTING INC Tel 202 484-8900 GeoK 12 71 Chairman Udall Was the high-enriched uranium scrap 2 that was associated with the WANL contract any more or less 3 accessible to a skimming process than other materials that 4 you had Dr Shapiro 5 I would say it would be -- as far as accessi 6 bility to skimming I think in general the answer is the materi 1 7 is really not accessible to skimming 8 the case of the WANL contract by virtue of the nature of the 9 material it is even worse because of the pyrophoric character I would say that in 10 11 12 13 Dr Shapiro 14 Chairman Udall 15 Yes The word you used is a word to describe a material that can burse into flames simultaneously 16 Dr Shapiro Yes 17 Chairman Udall In the papers we have and inLhe iubmiss L n 18 you made there is talk of some of the missing uranium at NUMEC 19 being discharged with affluents 20 would happen 21 Dr Shapiro 22 Chairman Udall Could you tell me how this Yes How was your plant locked up and to 23 where would the affluents liquids coming out of your plant 24 go 25 own someplace Was it connected to somebody's sewer system or your Discuss that with me so that I understand INDEPENDENCE REPORTING INC Tel 202 484-8900 72 GeoK 13 Dr Shapiro 2 First of all you realize there are a number of operations which involve fluids water acids et cetera 3 Chairman Udall 4 Dr Shapiro Yes These were collected and put into large 5 tanks holding tanks where they were assayed 6 neutralized or whatever in order to assure that the chemical 7 nature of the material was suitable for discard 8 The assay was done and then these -- a They were I recall it now 9 the material was then pumped into another holding tank so 10 that the check could be made and then dumped out to the river 11 12 Chairman Udall the river 13 Dr Shapiro 14 Chairman Udall 15 16 Just dumped in a pipe running down to Yes Was there radioactive material in that effluent Dr Shapiro There were small quantities of radioactive 17 material in the effluent but these were in the 18 million quantities which were within the limits allowable 19 limi ts for di scard 20 Chairman Udall 21 Dr Shapiro 22 Chairman Udall 23 Dr Shapiro 24 Chairman Udall 25 paL L J -'CL What kind of quantities Thousands of gallons Every day Yes nd this was in compliance with the Clean Water Act INDEPENDENCE REPORTING INC Tel 202 484-8900 GeoK 14 73 Dr Shapiro Yes 2 Chairman Udall 3 Dr Shapiro 4 And whatever Federal regulations Whatever compliance was required with what- ever acts were in existence at that time yes Chairman Udall 5 You have agreed I think in all of 6 this that there were probably several tens of kilograms of 7 nuclear material missing over the period you operated at NUMEC 8 Dr Shapiro 9 Chairman Udall 10 Dr Shapiro 11 There were materials ----- unaccounted for There was material that -- yes which was unaccounted for not what I would say was missing per se 12 Chairman Udall All right Well we have talked about 13 some of it and I have asked you to give me a general estimate 14 of what went into the garbage dump and how much was leached 15 out 16 out through the effluent into the river 17 that in any range 18 19 20 How much do you estimate of the missing material went Dr Shapiro I am sorry I can't Could you quantify Obviously there were kilograms over a long period of time Chairman Udall Is this the major in your judgment 21 as an operator of the plant and with all your experience 22 is this the major point at which we have lost uranium 23 Dr Shapiro I really don't know whether that was the 24 major point There were a lot of places where uranium is 25 normally lost some of which are susceptible to measurement INDEPENDENCE REPORTING INC Tel 202 484-8900 74 GeoK 15 and others are not susceptible to measurement The materials 2 that we handle were not only in liquid form but they were 3 in powder form and consequently they became airborne rather 4 easily as well 5 the ceilings on the walls and as a matter of fact then we 6 had special -- in order to assure that people were not breath- 7 ing the material we used to have hoods which were constantly 8 pumped and therefore material went into filters and again 9 some went through the stacks 10 ventilating fans because we had lots of furnaces in the plant 11 and it became rather hot especially in the summertime and 12 it was necessary to have a large volume of air flow through 13 that plant in order to keep it cool and certainly there was 14 material that must have been sucked up through that and left 15 the plant through that mechanism 16 So you had material that would collect on The plant contained three huge In addition to that material spilled on the floors in 17 spite of attempts to prevent it and it was necessa cyto clean 18 it up and we had janitors constantly mopping the place to 19 assure that we -- the mop waters were monitored to assure 20 that there wasn't an excessive amount but over a period of 21 time it is quite obvious that even if you had a small amount 22 you would accumulate quite a bit of material over the years 23 this way and later on a study was done by Mr Lovett and 24 he indicated that we were in fact losing more material 25 through mop water alone than we had ever anticipated INDEPENDENCE REPORTING INC Tel 202 484-8900 GeoK 16 75 I can't give you numbers As a result of the nature 2 of the mop water as being heterogeneous and consequently 3 was not susceptible to good measurement and the determinations 4 by our analytical laboratory were therefore not as good as 5 they should have been 6 better methods were devised 7 8 But in any event there was a great deal of material that was lost by mechanisms of that sort 9 Chairman Udall 10 Dr Shapiro 11 12 Later on of course instrumentation So There are several ways this move can --- There are several ways in which material could be lost and not accounted for Chairman Udall Some in the effluent some in the leachin 13 ln the garbage pile some in the mop water some blown out 14 by the fans 15 Dr Shapiro Some even in the concrete because the 16 concrete is porous and we used to have -- this is highly acidic 17 material and when they spill it on the floor it would leach 18 into the concrete 19 Chairman Udall This talk -- there is a lot of loose 20 talk in some of these documents about losing this stuff in 21 the pipes 22 is physically in the pipes or are you talking about these 23 kinds of drainages we just mentioned the effluent the 24 mop water --- 25 By that do you mean or do these people mean it Dr Shapiro You can lose it two ways in terms of the INDEPENDENCE REPOIiTING INC Tel 202 484-8900 GeoK 17 76 pipes You lose it from the effluent and you also have material 2 that coats the walls of the pipes just as you would in the 3 case of household plumbing 4 Chairman Udall 5 Dr Shapiro Sure If you have ever opened up a pipe you 6 would notice there is a good deal of sediment that collects 7 material that collects in the thing 8 Chairman Udall 9 Dr Shapiro Sure So in addition to that we had a great 10 deal of maintenance on the plant as a result of the corrosive 11 nature of the material and they would remove pipes and or 12 valves pieces of equipment and we found that on occasion 13 the workers would not follow instructions properly and they 14 would discard that and bury it without having properly washed 15 it and leached off the material as they were instructed to 16 do 17 Chairman Udall So it is your best judgment th t 11' 18 accumulation of all these little things we have talked about 19 the slippage of each one of these points could add up to 20 the kind of MUF that we had at Apollo 21 Dr Shapiro Absolutely 22 Chairman Udall What would then be your answer to some 23 of those who point the finger of suspicion here that the MUF 24 at Apollo quantities of that were much larger than comparable 25 other facilities used by the Government INDEPENDENCE REPORTING INC Tel 202 484-8900 Do you challenge 77 GeoK 18 that assertion or do you have some explanation of why your 2 3 4 5 6 losses would be larger than other plants Dr Shapiro other plants doing similar work 9 10 11 RB fols The report that was put out by the Atomic Energy Commission NRC DOE whatever it was last August Mr Becker 8 Our losses were not larger than those of Of 1977 Dr Shapiro August of 1977 indicated that there was no statistical difference between the losses which were incurred in our plant versus those that were incurred in other plants doing similar work 12 13 14 15 16 17 If 1C 20 21 23 25 INDEPENDENCE REPORTING INC Tel 202 484-8900 78 So it is true we did not take credit for some of the losses that were through the stacks which we probably should have and did later take credit for Chairman Udall Dr Shapiro All right We had over 100 stacks in the plant Chairman Udall I have run by a lot of theories let me try one more on you Could a workman intent on diverting uranium have used low enriched uranium to dilute high enriched uranium and then skim off some of the high enriched material Dr Shapiro All of the product had to be assayed from the quality point of view One of those assays was the enrichment and we couldn't ship the product unless it met all those specifications Furthermore if a product were shipped to a customer he does his own assays on the other side He had to determine whether our weights were correct whether the assay of TJ 15 itself were correct and if they were not in accordance with the specifications I can assure you we would have heard Chairman Udall I am going to refer to a memorandum of November 27 1973 of Paul Gaughran Director of the Division of Security of the AEC wrote that in examining the history of NUMEC's security procedures that such procedures I i were not designed or geared to prevent an employee from removing INDEPENDENCE REPORTING INC 'I'd 202 484-8900 79 quantities of strategic nuclear material from the facility Would you agree with that assessment Mr Krash Excuse me just a moment Mr Congressman Mr Myers This is page 8 Mr Becker Background and history page 8 Chairman Udall sentence That's indicating it Yes 4th line down I just read one It's the 5th line down First of all this refers to a period Dr Shapiro of inspection after I had left the facility and had nothing to do with it I mentioned I had left in 1970 1971 when this was under either Babcock Richfield I don't know This refers to Wilcox or Atlantic I certainly can't speak for them What I can say with regard to our security is if you will refer I to another document that was produced by the inspection people of the Atomic Energy Commission they had indicated that during this period that we did in fact have adequate security measures nd not only that but that our personnel were highly conscious of the security aspects I believe you will see that among the documents that you have Chairman Udall I think what they are getting at here i and I want to leave this subject in just a minute I they I I i are saying in effect that while you can have adequate protectlonp i against the people who with violence and force come in and seize something and while you can have adequate protections jl iDEPENDENCE REPORTING INC Tel 202 484-8900 i 80 agai nst the clan dest ine inva der who tries to take some thing that the proc edur es were not real ly desig ned to prev ent an insid e job some offi cial or some body in the mana geme nt of the faci lity from dive rsion Isn' t that what they are tryin g to say Dr Shap iro If that is what they are tryin g to say I woul d say that that certa inly was not the case at NUMEC as far as I was conc erned Chair man Udal l had want ed to Coul d you have made a dive rsion if you Coul d you have arran ged a dive rsion of subs tanti al mate rial your self if you had want ed to with your know ledge of the proc ess Woul d you have requ ired a numb er of peop le help ing you and this sort of thing Dr Shap iro I woul d have requ ired many peop le to help me Chair man Udal l Peop le insid e the plan t who knew some thi g was othe rwis e wron g Dr Shap iro Abso lutel y Chair man Udal l of this All righ t Let' s try anot her face t We are maki ng a littl e prog ress here I think we will finis h in due time You had NUMEC had a subs idiar y in Isra el Isra el Isoto pes and Radi ation Ente rpris es Ltd or some times calle d ISOR AD and it was alleg edly half- owne d by the Isra eli Atom ic Ener gy Comm ission Is that corre ct INDEP ENDEN CE REPOR TING INC Td 202 484- 8900 4-11 pg 4 81 Not allegedly it was half-owned by Dr Shapiro 2 the Israeli --J All right strike allegedly Chairman Udall 4 Why did you form this subsidiary What was it supposed to do What was your relationship with it 6 Do you mean NUMEC's relationship Dr Shapiro I with it 8 Chairman Udall Yes 9 Dr Shapiro We owned 50 percent of the company The 10 11 12 13 purpose of the company was to primarily to irradiate food for th purpose of pasturization to prevent spoilage fruitfly infestation in citrus and for export purposes Chairman Udall 14 15 Is this a fairly common procedure in many countries Dr Shapiro 16 No Chairman Udall 17 In Also to kill This is a new kind of technology is it i I' Dr Shapiro No It is not a new technology it was I I 'i I 20 not a new technology at the time 21 adapting the technology which was under development in the Uniter ' 2 States at the time primarily at NADIC which is an Army supply cepte 23 and the Davis Campus of the University of California where they 2 1 were doing development of procedures for the irradiation of What we were doing was I i 25 i for preservation purposes INDEPENDENCE REPORTING INC Tel 202 484-8900 citr s 82 5 How highly enriched does Chairman Udall material L have to be that you use this process J I think you misunderstand Congressman Dr Shapiro 4 Udall These processes do not employ special nuclear aterial They employ a radiation source generally cobalt 6 Okay Chairman Udall How big an operation was I this in terms of people offices including ISORAD and others 8 We had our facilities initially at Dr Shapiro 9 Nacosor k which is the Israel Atomic Energy Commissions research 10 center and there were several irradiation facilities one of whi h 11 was in the pool of the pool reactor and we constructed the 12 facilities for this We constructed the equipment and the 13 14 15 16 17 In tools and worked with the technical people there in the mente Later on there were other radiation facilities that were put in operations Chairman Udall Dr Shapiro 20 Chairman Udall 11 Dr Shapiro 23 ' 1 '25 At peak how many employees would ISORAD have had I C n develop- Oh A few dozen Not even that many Chairman Udall Were any of those were most of the ISORAD employees Israelis or was it a mix of Dr Shapiro They operated in Israel so they were all Israelis except for an occasional person from NUMEC who went INDEPENDENCE REPORTING INC Tel 202 484-8900 83 6 there to either install equipment or to assist them ln a par2 ticular problem l Was there any need or requirement that Chairman Udall 4 ISORAD employees who were Israelis come to NUMEC in Pennsylvania from time to time 6 Dr Shapiro Yes on occasion I Chairman Udall Generally for what purposes 8 Dr Shapiro First of all there were discussions with 9 regar to the business itself secondly there were technical 10 -- when we shipped equipment there were technical discussions 11 with regard to the design of the equipment and et cetera for 12 the utilization of it and the installation And it was 13 some sort of -14 Chairman Udall So there was an occasional visit It 15 was not unusual to have ISORAD Israeli employees visiting you at 16 NUMEC from time to time 17 If I C 20 LJ J L 23 'I 25 Dr Shapiro There were occasional visits Chairman Udall of h 'ypn Did they have free access to the NUMEC premises and to your ongoing operations there Dr Shapiro Their access was restricted like the access of any other alien Chairman Udall They could not go through your equipment or your files or your processes Dr Shapiro No INDEPENDENCE REPORTING INC Tel 202 484-8900 84 Chairman Udall All right The Washington Star in a story published last November 6th Mr Myers That means '77 of course Chairman Udall -- in '77 yes reports that Ephraim Lahav then counselor on scientific matters to the Israeli Embassy in Washington repeatedly visited with vou at the NUMECApollo plant in the early to mid-1960s Did he and why Why did he visit you if indeed he did Dr Shapiro Lahav is Congressman I don't even recall who Ephrai There were people who visited us but I don't recall Lahav Chairman Udall Was it unusual for scientific people from the Israeli embassy or offices in New York to come to Apollo on visits Dr Shapiro It was not unusual for the counselor scientific counselor to come to NUMEC Chairman Udall Dr Shapiro How about Mr Hermoni I don't recall his ever visiting Apollo although he came to Pittsburgh he may have Chairman Udall Dr Shapiro I don't recall All right But one of the people that did visit that I do recall on two possibly even on three occassions was David Pellig who is the administrative director of the Israeli INDEPENDENCE REPORTING INC Tel 202 484-8900 8 85 Atomic Energy Commission who had specific responsibility for our joint operations of ISORAD and in addition to that the business relations were generally carried out by the scientific 4 attache in Washington Chairman Udall 6 I 8 9 Since the government itself was a half partner Dr Shapiro Yes Chairman Udall These people were acting and visiting you on behalf of the government 10 Dr Shapiro Yes they acted on behalf of the government 11 Chairman Udall Fine 12 In the January 9 1977 I guess that means Newsweek -13 you say '78 14 Mr Myers No that one is '78 15 Chairman Udall Continuing Newsweek refers to meetings 16 you held with Avraham Hermoni a scientific counselor 17 at the Israeli Embassy in Washington Who is he f Zllld In what kind of relationship did you have with him while you were 1' at NUMEC 20 Dr Shapiro Well you describe him as the scientific 21 counselor which he was indeed and during the time that he was scientific counselor he conducted the business the ISORAD 23 business on behalf of the government of Israel And in addition 1 to that he was interested in technical assistance from time 25 to time INDEPENDENCE REPORTING INC Tel 202 484-8900 86 Did you ever have any indication Chairman Udall that he was associated with the Israeli nuclear weapons program if they had one Dr Shapiro I don't Chairman Udall This was just never called to your attention or you had no reason to believe that that ight be the case No as a matter of fact I first met him at Dr Shapiro the University in Israel as I recall it How frequently did you see him during Chairman Udall the time he was in Washington and you were operating NUMEC Dr Shapiro I don't recall exactly Maybe probably less than half a dozen times The British Broadcasting System in a Chairman Udall documentary on the question of Israeli nuclear capability called you a frequent privileged visitor to Israel Were you frequent Dr Shapiro and did you feel privj c- J I am flattered Chairman Udall I think one of the things they mentioned was that you were given a special flying tour of the Egyptian frontier or something On the occasion of your visits did you get attention that you thought was special or privileg Dr Shapiro Oh yes but I got attention thatother visitor I i have gotten I know that I have been to Israel I believe some 17 times INDEPENDENCE REPORTING INC Tel 202 484-8900 ' If that 87 is frequent yes I was a frequent visitor Insofar as attention is concerned I am a member of the local board of Israel bonds I am a member of the Jewish National Fund I am a national officer of the Zionist Organization of America and therefore I am met and greeted by my counterparts and to the extent that I had business with the Israel Atomic Energy Commission I am met and greeted by them Chairman Udall Do you recall an event where you got a flying tour that was unusual Dr Shapiro A flying tour that was unusual It was very unusual for me because what happened was that I was there in '67 and I took a tour that others took too and then we flew over -- we flew over the Sinai landed in Al Arish and Tiran Chairman Udall I don't particularly want to beat this one to death but there was nothing particularly special about this had you requested it or did the govcrnmnn L j to do something or see something or was this a special opportunity to see the front Dr Shapiro This was right after the '67 war and I wanted very much to see the area Chairman Udall Okay One of the documents says that -- a memorandum from Tharp Deputy Director of the Division of Security in the Albuquerque Operations -- Tharp li'lDEPENDENCE REPORTING INC TuI 202 484-8900 88 11 quoted Dr Shapiro as having present intentions of moving L to live in Israel Did you ever intend to emigrate or consider j it or take any steps toward it 4 I never Dr Shapiro ook steps towards it but I certainly considered it because I think any Zionist considers 6 what is called aliyah and I certainly considered it I Chairman Udall Have you ever had at any time that you 8 can recall any discussion with Isr eli citizens who you knew or 9 believed were involved in the Israeli nuclear weapons program 10 Dr Shapiro Mr Congressman I don't know that they 11 have other than what I have read in the newspapers Consequent 12 ly I really would not know therefore who would be involved 13 in such a program if they have such a program 14 Were you ever involved or do you Chairman Udall 15 recall any relationships or contacts with people who might 16 have been known to you to be an Israeli intelligence operator 17 In 1' or in Israeli intelligence operations in this country Dr Shapiro In this country Chairman Udall Yes LO Dr Shapiro No 21 LL 23 Chairman Udall Dr Shapiro Or in Israel In Israel I met the head of the military intelligence there 1 Chairman Udall 25 Have you ever been asked to provide INDEPENDENCE REPORTING INC Tel 202 484-8900 89 12 classified information to people who were not authorized to 2 receive it 3 Dr Shapiro No 4 Chairman Udall On December 11 1971 the ABC Security 5 Director Riley wrote that Dr Shapiro had told him that the 6 Israelis had told Dr Shapiro -- we are getting third- or fourt - 7 hand removed here -- the following information 8 Commissioner told officials of a foreign government other than 9 Israel that the Commission suspected Dr Shapiro of having 10 helped divert bomb-grade uranium to Israel 11 Do you remember saying this to Riley 12 Dr Shapiro 13 Chairman Udall that an AEC I don't recall it On June 20 1969 there apparently was 14 a meeting between you and someone from the Israeli Embassy 15 at the Pittsburgh airport -- let me back off here 16 17 On October 30 1970 Robert Tharp -- was this the material give to us 18 Mr Myers Yes 19 Chairman Udall --- then Deputy Director of Security 20 at the AEC wrote a memorandum to H C Donnelly manager of 21 the AEC Albuquerque Operations Office in which Tharp described 22 a meeting between Dr Shapiro and AEC staff 23 during the course of this meeting that Riley had advised Shapir 24 that he Riley had indicated to the Commission that Dr 25 Shapiro had been less than candid in INDEPENDENCE REPORTING INC 202 484-8900 He said that 90 13 clarifying the derogatory implications particularly the L airport incident J Did you have a meeting with an Israeli official in the 4 Pittsburgh airport on or about June 20 1969 at the airport j I had a meeting but the date I don't Dr Shapiro 6 recall with an Israeli official - specifically the scientific I counselor 8 Chairman Udall What was his name 9 I think his name was Eph i miLahav but Dr Shapiro 10 I don't really recall 11 Chairman Udall How did this meeting come about 12 Who asked for it 13 Dr Shapiro I asked to meet him because as I had in- 14 dicated earlier we had in fact shipped some equipment to Israel 15 and I had -- they were delinquent in payment and I had repeated y 16 asked for payment and this was getting very embarassing to me 17 In I' 20 21 n 23 because in view of the fact that we had already mergea with Atlantic Richfield and we were about to have an audit they wanted to have payment made as quickly as possible Chairman Udall Dr Shapiro 25 Was this a contract This was for equipment that we had shipped Chairman Udall Dr Shapiro 'I For what ISORAD or another contractor To Israel I don't know whether it was in connection with ISORAD or whether it was in connection with jj iDEPENDENCE REPORTING INC Tel 202 484-8900 14 91 the resea rch estab lishm ent or what ever Chair man Udal l What was the amou nt of the claim you had on them in inde bted ness 4 Dr Shap iro It was quite a large amou nt Many thous ands of doll ars 6 Chair man Udal l Tens of thou sand s I Dr Shap iro Yes 8 Chair man Udal l You don' t remem ber anyth ing more than 9 that 10 Dr Shap iro I don' t remem ber prec isely 11 12 13 asked to meet with him And I had And it was a matt er of conv enien ce for both of us that we met at the airp ort I had offe red to 14 come out to Wash ingto n as I reca ll it and he said he was 15 actu ally going to be pass ing throu gh Pitts burg h on his way to 16 I think it was Dayt on and asked in view of the fact that he 17 was stopp ing over could we meet and I agree d to do so In It was a conv enien ce to him beca use othe rwis e he WUUl U I' have had to trav el an hour and a half or two hour s from the LO airp ort to Apol lo so it woul d be you know a three or four LJ hour trip just in trav ellin g '2'2 beca use it mean s that I didn 't have to go into Wash ingto n 23 Chair man Udal l And it was a conv enien ce to me So you drov e to Pitts burg h and met his fligh t 25 Dr Shap iro Yes Chair man Udal l By your self INDEP ENDEN CE REPOR TING INC Tel 202 484-8 900 15 92 Dr Shap iro '2 Yes Chair man Udal l Dr Shap iro 4 Yes Chair man Udal l Dr Shap iro 6 I 8 9 10 11 12 13 Did the two of you meet For how long Betw een plan es I don' t reca ll exac tly how long Chair man Udal l Dr Shap iro A few minu tes an hour Oh it may have been an hour there abou ts Chair man Udal l Dr Shap iro He was by hims elf He was by hims elf Chair man Udal l Dr Shap iro Wher e did you meet him I think I met him at the gate and then I th n we went to the Amb assad ors Club the TWA Amb assad ors Club 14 Chair man Udal l Can you tell us what occu rred there 15 Dr Shap iro I told him I was very emba rasse d and that I 16 had requ ested paym ent on a numb er of occa sions gent ly and that 17 for some reaso n or anot her I had been reass ured thnt i t W0S Ifl I' LO on its way but it was -- we had not yet rece ived paym ent and I felt that it was desi rable for him to urge ntly requ est Isra el to remi t LI Chair man Udal l Dr Shap iro What did he say to that He arran ged for it and we got paym ent 23 very shor tly ther eafte r Chair man Udal l With in a few days 25 Dr Shap iro I don' t know whet her it was a few days but INDEPENDENCE REPOR TING INC Tel 202 484-8 900 93 16 it was shortly after That payment was by check a draft Chairman Udall through a bank or something 4 Dr Shapiro 6 I would assume that that would be the way it was paid but I don't remember exactly how it was paid I am sure it was not 8 9 10 in cash Chairman Udall between you cash objects or anything else -Dr Shapiro No 11 Chairman Udall 12 Dr Shapiro 13 Chairman Udall 14 15 16 17 Was anything exchanged at that meeting You are certain of that Positive No package or parcel or object or paper or anything that you can recall Dr Shapiro I certainly don't recall any exchange of anything Chairman Udall It's probably unfair to ask you to commlnt In on other peoples' motivations or conclusions but do you have I any idea why this fellow Riley would have said that you had o been less than candid in clarifying the implications of this LI particular airport meeting Dr Shapiro 23 2 1 25 I really don't know Chairman Udall You do recall specifically that he was going on to Dayton somewhere beyond Pittsburgh Dr Shapiro Yes INDEPENDENCE REPORTING INC 'I'd 202 484-8900 94 Chair man Udal l Not as the infor mati on was that that I thou ght I had that he turne d righ t aroun d and went back to Wash ingto Dr Shap iro My reco llect ion was that he was going to meet his daug hter who was visit ing a frien d Chair man Udal l Did you take him back to his depa rture gate or did you leave him Dr Shap iro I prob ably took him to the plan e but I don' t real ly reme mber Chair man Udal l You don' t reca ll whet her it was a Dayt on plan e or Chic ago or Wash ingto n plan e Dr Shap iro I don' t reme mber Chair man Udal l Let' s talk abou t secu re comm unica tions Vario us John Fialk a artic les in the Wash ingto n Star have talke d abou t a secu re comm unica tions syste m talke d abou t scram blers and enco ding devi ce He has With out getti ng bogg ed down in term inolo gy was there any kind of devi ce or sys em that you woul d call secu re comm unica tions syste m dL Avul lo OLl NUMEC Dr Shap iro Not that I know of Chair man Udal l You woul d have know n it as the chie f exec utive offic er Dr Shap iro I was told in a story I hear d Mr Cong ressm an on the air abou t a cong ressm an who was talki ng to India ns --Chair man Udal l Okay INDEP ENDEN CE REPOR TING INC Tel 202 484-8 900 18 95 Dr Shap iro L goom bah J Chair man Udal l 4 All righ t Let me not limi t my ques tion to the NUMEC plan t at Apol lo 6 That 's it prec isely it's pure unad ulate rate Let me ask you abou t Rayc hord Stee l or Apol lo Stel l They were adja cent to your prem ises Dr Shap iro Yes 8 Chair man Udal l Was there a secu re comm unica tions syste 9 at eith er one of those oper ation s th you know of 10 Dr Shap iro Not that I know of 11 Chair man Udal l And if there was if you had used 12 13 it or had acce ss to it you certa inly woul d reme mber Dr Shap iro I 14 I certa inly woul d have reme mber ed it neve r used such a devi ce 15 Chair man Udal l 16 This is one of the troub ling thing s -- go ahea d 17 Mr Terr ell No that 's all righ t IE Chair man Udal l 1' This is one of the troub ling thing s aboJ t 20 this whol e ende avor we have been enga ged in is these rumo rs 'LI and repo rts get start ed and gain cred ence and they are repe at- '2'2 23 ed I I Mr Kras h We woul d like to have Mr Fialk e here to cros s exam ine him i I II I I 2 1 Chair man Udal l 25 I This is one of the most pers isten t ones that we have heard abou t INDEPENDENCE REPORTING INC Tel 202 484- 8900 II 19 96 Dr Shap iro It make s for a good story I am sure 2 Chair man Udal l J of 4 6 I 8 As far as you know you neve r heard it neve r saw it or neve r used it eith er at your comp any Rayc hord or Apol lo Stee l Dr Shap iro That is righ t Chair man Udal l All righ t Let me refe r again to the Octo ber 30 1970 memo of Robe rt Thar p The memo indic ates that 9 you were infor med that the Comm ission migh t decid e whet her 10 the Com missi on's Adm inist rativ e Revie w proc edur es shou ld be 11 used to reso lve the ques tion of whet her you shou ld be 12 gran ted a Q secu rity clear ance 1J Do you know why the AEC had ques tions and I gues s for 14 the reco rd we ough t to say we are talki ng abou t the perio d 15 when you sold NUMEC afte r you sold NUMEC to Atla ntic Rich field 16 and you went back to work for West ingho use and you were seek ing 17 secu rity clear ance to do some work there is that corr ect In Dr Shap iro 1' Chair man Udal l 20 All righ t This was at Kawe cki Bery lco Okay What seem ed to be the probl em Do you 21 have any idea why they were givin g you diffi cult y with rega rd n to the secu rity clear ance 23 Dr Shap iro 211 catio ns 25 secu rity matt ers Can you enlig hten us on that My clear ance perta ined to reac tor appl i- I I When I went to Kawe cki Bery lco they were work ing on othel and it requ ired an enha nced secu rity clear ancei I Furth ermo re it is custo mary that there isn' t a simp le tran sfer INDEP ENDEN CE REPOR TING INC Tel 202 484-8 900 I I 20 97 of security clearance it is necessary to reinstate the clearanc after one leaves one installation for another So I went through the usual application for the clearance and I 4 then expected that it would take the usual time which was maybe two or three months and when I did not receive notification of 6 clearance I called to determine what the problem was and I was I told that it was necessary to reinvestigate the situation because 8 of the enhanced clearance requirements but that it was a matter 9 of ti e and to be patient and that happened on a number of 10 occasions 11 I don't know whether I have answered your question 12 Chairman Udall Did you get the feeling that the delay 13 14 15 16 17 In inability to get a fairly prompt security clearance again related to the various investigations of NUMEC and the MUF and the circumstances surrounding this or did you feel that you believed it had regard to something else Dr Shapiro As I recall it as a result of my I I ' 20 21 conversations with Riley I believe that one of the factors thati he talked about was the Israeli -- my Israeli connections Chairman Udall All right I One of the questions raised here and I will raise it with you directly you apparently 23 had a right to go before the Commission's Administrative Review I Procedures Board and get this matter cleared up and you 25 I decided apparently not to press the clearance question with the INDEPENDENCE REPORTING INC Tel 202 484-8900 98 A tom ic Ener gy COJ lI'9 i p$ i on a nd i n$t ea d Jnove d on to a posi tion with West ingho use What were your moti ves your reaso ns for doing that Dr Shap iro It wasn 't quite that way Chair man Udal l Dr Shap iro All righ t expl ain it to me I was in fact pres sing for clear ance howe ver with out seek ing a posi tion at West ingho use I was calle d by the Pres iden t of the Powe r Syste ms Comp any and asked to come to see him abou t the poss ibili ty of a posi tion I was offer ed a very attra ctiv e posi tion at a much more attra ctiv e salar y and I decid ed to acce pt that posi tion Chair man Udal l It did not invo lve a secu rity clear ance this leve l of clear ance Dr Shap iro It did not invo lve this leve l of clear ance and when I acce pted the posi tion the whol e matt er of cour se becam e irrel evan t to the West ingho use posi tion Chair man Udal l The impl icati on in all of this is that you were afra id you coul dn't get clear ance and were fear ful of furth er inve stiga tions and therE fOre- sa1 d ' ·- to heck with it and took the West ingho use posi tion Dr Shap iro That may be the impl icati on but that is not Chair man Udal l That is not the case Dr Shap iro --Th at is not the case Chair man Udal l I want ed to clea r that up iNDEPENDENCE REPOR'l'ING INC Tel 202 484- 8900 Rela ted to OJ 99 22 that and not very important there is a letter from you to then-Commissioner Ramey in June '71 which suggests that Ramey had provided you assistance and advice that led to your taking 4 the Westinghouse job Did he in reality assist and advise you 6 I 8 Chairman Shapiro I would hardly say that he assisted me And as a result of not only discussions w'tl but we discussed it him but in discussions with others and my family and all other 9 considerations I finally decided to accept the job 10 Chairman Udall One final one on this security clear- 11 ance problem there is a memo by Riley of December 11 1970 whic 12 says that you consulted Mr Hermoni the science advisor 13 I mentioned earlier concerning your inability to get your 14 clearance renewed with the AEC which would raise an inference 15 that you were aware that somehow your problems on the clearance 16 were bound up with your relations with the Israeli Government 17 Did you think that Hermoni could help you with regard In to that I' Dr Shapiro No sir I just stated you had asked me 20 did I have any feeling for why there might have been some 21 holdup in the clearance and I indicated that I as a result of conversations with Riley it became clear that this was one of 23 if not the principle issue This was one of the issues II Chairman Udall Yes 25 INDEPENDENCE REPORTING INC Tel 202 484-8900 100 Dr Shap iro And I must have -- altho ugh I don' t reca ll spec ifica lly -- must have discu ssed the he may have 4 discu ssed the Herm oni issue with me and that is how this whol e thing aros e Chair man Udal l 6 I think the thing that puzz led me was if indee d your conn ectio ns and affe ction for Isra el was part of 8 your probl em with the clear ance why one woul d assum e that Herm o i 9 could help you get the clear ance ·It seem ed a littl e bit odd 10 11 I gues s you have expl ained it 12 Dr Shap iro I don' t reca ll the spec ific circu msta nces 13 of that but it undo ubted ly led from the discu ssion s I had with 14 Riley Chair man Udal l 15 I don' t know whet her this is impo rtant 16 enou gh 17 quic kly In are sugg estio ns that peop le on the AEC staf f felt that you went I ' over thei r head s from time to time to the Comm ission itse lf 20 when you felt the staf f had been over ly 21 cont ract cond ition s 22 23 to take your time but let me run it by you In some of the docu ment s that we prov ided you there Did you appe al to the Comm ission to make know n such conc erns from time to time and why and whic h ones Do you care to comm ent on that 25 scrup ulou s in enfo rcing I reco gniz e it's broad and kind of shotg un INDEPENDENCE REPOR'l'ING INC Tel 202 484-8 900 101 Dr Shapiro I really have no recollection of that j Chairman Udall Did you ever complain to the Department 4 of Justice that the FBI had harassed you or had you under surveillance or had given you trouble 6 Dr Shapiro No Chairman Udall I have about concluded the range 8 of things I wanted to cover Let·me suggest Abe that we 9 talk a bout a five minute break here and let me check with my 10 colleagues and check my notes 11 12 13 14 15 16 end 4-II Mr Krash Sure fine Chairman Udall Bob for Congressman Bauman do you have anything you wanted to cover Mr Terrell No Chairman Udall Let's take a break here 17 If 1'1 20 11 23 '25 INDEPENDENCE REPORTING INC 'ful 202 484-8900 102 tape #5 RAB ars turn #5 p 1 Mr Terrell Would you go through the statement 2 Chairman Udall Yes go ahead Ready 3 Mr Terrell 4 On page 4 you note Apart from what I have read in the Is the machine running 5 press I have no knowledge whether Israel does or does not 6 have a 'nuclear weapons program' Shap ro 7 Dr 8 Mr Terrell 9 Is that correct That is what I stated You really have no knowledge one way or the other other than the extent of this 10 Dr Shapiro That is true 11 Mr Terrell With your connections in Israel as far as 12 military intelligence there has never been any discussion 13 with you at any time relative to their capability 14 Dr Shapiro My discussions with the military intelli- 15 gence people pertained to a long-lived battery to be used in 16 intrusion detection 17 Mr Terrell But it never got outside of that area OL 18 discussion you never -- your concern for Israel's defense 19 it would seem to me that that would be a natural thing you 20 would want to know what military capability they would have 21 particularly in the nuclear weapons end of the thing 22 you were concerned in 1967 to take the tour that you did after 23 the war 24 a little bit more knowledge than I 25 I know with your concern it would just seem that you have Dr Shapiro I would say that many others have taken the INDEPENDENCE REPORTING INC 202 484-8900 103 turn 5 p 2 tour 2 J 4 5 6 I 8 9 Mr Terrell tour I am not suggesting you were alone on that I am just suggesting that from your concern --Dr Shapiro Others were interested in taking the tour and did take the tour in '67 Mr Terrell And you don't know any more than I know from reading the press Dr Shapiro I would know exactly what you know if I had read the same press articles 10 Mr McNulty 11 Chairman Udall 12 Mr McNulty 13 I have a question In the BBC documentary they carried this possibility oLthe diversicn of NUMEC 14 called plumb bat 15 with that at all 16 Dr Shapiro 17 Mr McNulty In Mr Krash 20 Mr McNulty LI Mr Krash 23 24 25 materials by something Does that ring a bell Are you familia I I have heard the name It's supposedly some scheme to Jlv LL some unknown tons of material--- 19 n Yes go ahead There is a book on the subject Yes Published by the London Tines Sunday Times which I assume you have seen Mr McNulty Right And I just wonder if you had known anything about it This book fairly convincingly portrays the ability of INDEPENDENCE REPORTING INC Tel 202 4 8 4- 89 00 104 Israeli intelligence to -- well I guess divert 1S a word to divert a whole shipload of yellowcake from the middle of the Mediterranean You talk about how extremely difficult it would be to divert uranium at NUMEC If they are so skille as to be able to carry out this plumb bat affair it just seems that that same skill could be used throw that out I guess you really couldn't comment on that Chairman Udall Mr McNulty I just wanted to That was pretty far afield Yes I guess Chairman Udall I have only one or two more questions and I am nearly through Why did you sellout the NUMEC facility to Atlantic Richfield just as a matter of curiosity Dr Shapiro Well I had been looking for the possibility of selling the company to a large company for -- ever since the new law I guess it was '64 was passed which allowed for private ownership of special nuclear material The reason for that was that the cost of special nuclear material was so high that private ownership required large amounts of capital and also the ability to borrow money at prime rates and we were not in the prime rate category and consequently we were at a serious disadvantage from a competitive viewpoint with companie I which did have the ability to borrow at prime rate And I felt it was necessary to rectify that situation by becoming connecte 24 with an organization which in fact could 25 capital and as a matter of fact I fought hard against the INDEPENDENCE REPORTING INC 202 484-8900 had that kind of 105 private ownership bill for as I recall it two years and gave testimony in connection with that and managed to hold it up I think for a year with a little conflict but nevertheless I did that and so I wanted somehow or other to rectify that prob lem that we were in and this was not simply a progression of events that occurred Chairman Udall Had you kept the same group of investors over the life of NUMEC the same original group that went into it Had there been some changes Dr Shapiro Oh a number of changes because we had a number of financing arrangements sUbsequent to that original group The original group as I indicated earlier was some- where in the neighborhood of $250 000 and that was a pittance compared to what was eventually required for the nature of the business that we in fact built up We needed a multimillion-dollar investment and therefore we had followed that original investment not only by the ing but then floated a $295 000 fund hOrr '7' that is sale of stoc within the state and that was in May subsequent to as I recal it subsequent to our going into business Chairman Udall Then there were You didn't go public in the sense that you went out and solicited investors from a large area Dr Shapiro We did go public Chairman Udall You did go public INDEPENDENCE REPORTING INC Tel 202 484-8900 106 Dr Shapiro Yes we did go public and that was handled by one of the investment bankers for us Chairman Udall At any time as you expanded and got large investors were you aware of any investment by the Israeli Government or people acting in behalf of them Dr Shapiro No Chairman Udall No When this large MUF finally was discovere or identified at NUMEC did this cost your company a good deal 0 money were you liable was the company liable for missing -Dr Shapiro We were always liable for missing material Chairman Udall Dr Shapiro Was this a very heavy burden It was certainly a heavy burden but as you may recall from reading the reports we had already declared losses as I recall it of 149 kilograms of material and we had to pay for those so this was the difference between 149 and 178 so we had already been paying heavily for the material But in every contract what we tried to do was to ntiripnt what those losses might be and ot put in the contract price anticipated losses so that they would cover it thos Naturally if we underestimated those losses then of course it would hurt II I I us I Were you ever in serious financial troubl as a company because of the losses that you had to pay the Chairman Udall Government for Dr Shapiro Well we certainly had -- we certainly had a severe casWhow INDEPENDENCE REPORTING INC Tel 202 484-8900 107 problem as a result of these losses ow 5-6 But in terms of 2 financial -- serious financial difficulty we had arranged prior 3 to this time a fairly substantial line of credit with the 4 Mellon Bank Chairman Udall 5 When you finally sold out to Atlantic 6 Richfield did you and the other investors make a profit on 7 your original investment of money 8 for you Dr Shapiro 9 Well I Was this a profitable sale had not invested any money and 10 got some stock and therefore anything 11 of it 12 Chairman Udall 13 Dr Shapiro I I would have gotten out You were ahead I would have been ahead except for the fac 14 that I put my heart and soul into this whole thing and I don' 15 know how much one can pay for that in money 16 other investors are concerned as I mentioned it depends upon 17 when And insofar as 18 Our original sale of stock was equivalent as I recall i 19 to ten cents per share and what we call our automobile dealer 20 friend sold out at $135 a share 21 tial profit 22 Chairman Udall 23 I am through 24 Mr McNulty 25 Mr Myers So I think he made a substa - Yes Questions anybody Not here I have a brief one INDEPENDENCE REPORTING INC Tel 202 484-8900 108 5-7 II While you were announcing along the way that these losses 2 were occurring it seems somehow not to have been gotten to the 3 Commission itself 4 summer of '65 that they seemed to demonstrate a lot of concern they had meetings and deciding what they were going to do about 6 all this 7 until then Because it seems that it wasn't until the Somehow it seems to have escaped their consciousness 8 Dr Shapiro 9 Mr Myers I don't believe that that was so I mean like this August 2 memorandum starts 10 out by saying from Brown to the Commissioners starts out by 11 saying 12 Mr Becker 1 3 Mr Myers 14 Chairman Udall 15 Mr Myers Just a moment August 2 August 2 It's the one we had out before For the record what year is it This is August 2 '65 It starts off by 16 saying We are faced with a potentially serious problem 17 involving the possible shortage and so forth III I' I don't think this has--may not have--anything to do directrl ly with you but the fact is there seems to be starting about 20 this time a major concern demonstrated by the Commission about 21 all this and how they are going to handle it and they have a I I i I i 23 meeting where you attend on August 10 and then they have their I I own meeting -- other meetings-- along the way and it just seemsj hard to understand why this concern suddenly gets to them and 25 why it had not been there before INDEPENDENCE REPORTING INC Tel 202 484-8900 i 109 What was it that happ ened at this time that made them 5-8 2 demo nstra te this worr y 3 Mayb e we shou ld ask them but -- 4 Dr Shap iro 5 Mr Myer s I think that that woul d be most appr opria te But do you agree that that 's the case 6 Ther e seem ed to be -- Howa rd Brow n seem s to be notif ying the 7 Comm ission for the firs t time that we are faced with a 8 pote ntial ly serio us probl em 9 10 11 Mr Beck er He is talki ng abou t a part icul ar cont ract and the docu ment s relat ed to it Mr Myer s Ther e were 60 kilog rams asso ciate d with that 12 cont ract but if you had been anno uncin g losse s along the 13 way -- whic h I gath er you had been -- why was it that the 14 Comm ission Howa rd Brow n is sudd enly sayin g We are faced 15 with a pote ntial ly serio us probl em 16 60 kilog rams -- 17 18 Dr Shap iro Beca use most of that Woul d you care for me to spec ul L that it 19 Mr Myer s 20 Well anyho w that 's one of the big ques tions abou t 21 22 Sure all this of cour se whic h -Mr Beck er I think you would have to ask the peop le who 23 wrot e the docum ent what they had in mind at the time 2 1 That is what your ques tion is 25 l Mr Myer s i ' ' i' I think what they woul d say is that Wel l INDEPENDENCE REPORTING INC Tel 202 484-8 900 110 yes maybe it was being reported but somehow it didn't or 5-9 2 we weren't you know it didn't strike us 3 aware of what it really was 4 I think that's what they would say Mr Becker 6 Mr Hyers I am lost We were not really Is there a question The question is that here if losses were 7 being announced along the way and they were being reported 8 along the way why is Howard Brown suddenly saying We are 9 faced with a potentially serious problem 10 11 12 13 14 Since the problem had been existing for a long time why is he suddenly on August 2 informing the Commission of this Mr Krash Do you have anything to shed any light on that Dr Shapiro Dr Shapiro I think it is clear that what they are 15 referring to here is a particular contract which entailed the 16 loss of approximately 60 kilograms of material which would -- 17 on that basis approximately six percent of the 113 and I would guess that was the reason for their concern 19 20 21 Mr Myers to L_ Jl lll Lc i lal Because that would be a higher percentage than on most contracts Dr Shapiro As I pointed out earlier the reason for '22 the higher percentage of loss processing loss in this 23 contract than in other contracts is because of the nature of 24 the material that needed to be fabricated and the low yields 25 I didn't mention this previously -- and the low yields that INDEPENDENCE REPORTING INC Tel 202 484-8900 III 5-10 we got which required the constant recycling of materials 2 3 So what you had was the accumulation of repeated accumulation of losses as a result of the recycling 4 Mr Myers 5 Dr Shapiro All right Nobody previously had ever attempted to 6 make in quantity this flyspeck material having these stringent 7 specifications 8 9 In retrospect I think we were fools to have undertaken it 10 Chairman Udall 11 Mr Terrell Bob I have only one question and I think I was 12 making a phone call when you were talking about it 13 tioned and I think it was verified later that your assay 14 on the Kimwipes and whatever other materials were used was 15 inaccurate 16 up and doing some sort of backward counting to find out that 17 you in fact not only varied two kilograms in fact it was 18 considerably more than that 19 What I am wondering is You men- This was only discovered as a result of digging Is the same technique applied 20 to the effluent that leaves the plant that goes into the river 21 and can we assume that there could be some inaccuracies there 22 as to how much actually went out through that effluent 23 Dr Shapiro Let me explain The problems with regard 24 to assaying material the amount of material depends upon the 25 character of the materials to a large degree INDEPENDENCE REPORTING INC 202 484-8900 Whether it's 112 homogeneous whether it's inhomogeneous and whether it is 5-11 2 3 4 J in fact distributed on material When it is inhomogeneous and distributed on a lot of material it is extremely difficult to get an accurate assay And in this particular instance the assay was done by radio- 6 active counting of the package and that indicated by virtue 7 of the counts that we got off of it that there was very littl 8 material associated with it 9 Consequently it was buried But when we tried to do a more accurate estimate by 10 actually burning the material then it became apparent that 11 there seemed to be much more associated with that than we had 12 dreamed of 13 Now in connection with the liquid effluent that we are 14 talking about there are also problems in that again there 15 is a homogeneity problem whether or not the material is 16 suspended or whether it is in -solution 17 Obviously if it is in solution it is much easier to 18 get an accurate estimate 19 depends upon how you take the sample and many other aspects 20 as to whether or not you get an accurate -- as to how accurat 21 the assay is If it is suspended then it '22 Did I answer your question 'n Mr Terrell Yes to the extent that I don't think that l anybody knows including yourself depending upon how much 25 confidence you put in the analysis you did on effluent I INDEPENDENCE REPORTING INC Tel 202 484-8900 113 don't think that you have any confidence or anyone else as to how much actually left the plant in the effluent that went into the river You are saying you were within certain Federal guidelines certain parts per million but how do you know that you were actually within those 'stats' Dr Shapiro By taking the assay that we did Mr Terrell Using the technique at that time Dr Shapiro That was available to us at that time Mr Terrell That is what I am saying What you are saying today -- obviouSly to the extent of your knowledge -- would you say today the techniques being util zed at the receiving and shipping end of this sort of thing is more refined to the extent that we know more clearly how much material is being received how much is being brought in in solution how much is being concentrated out of the process Dr Shapiro You could continuously fi nd vc u ia nee I L' ins the period of our operations Mr Terrell And did you adjust the procedures when you went back through and had it burned and assayed Did you do anything to rectify your assay procedures Dr Shapiro Well for Mr Terrell You know for future work Dr Shapiro I don't recall specifically Mr Terrell There were things that you probably -- I would INDEPENDENCE REPORTING INC Tel 202 484-8900 114 think -- that you would do something along those lines 5-13 2 3 4 It was our practice that if obviously we Dr Shapiro learned a lesson that we apply that lesson Mr Terrell Yes Chairman Udall Let me lay one more question on you and 6 then we are really going to quit 7 minute 8 This will just take a Henry correct me -- I am trying to find my reference and 9 I can't find it With regard to this famous June 20 meeting at 10 the Pittsburgh airport there was something in the file that 11 the AEC had interviewed you about that in August 12 was in June and that someone at the AEC called upon you to 13 interview 14 searching for was to the effect that when they first contacted 15 you about this you had no -- expressed the feeling you had no- 16 memory of the meeting and then later recalled a lot of details 17 and called them back with supplemental information 18 airport meeting you out 'Jlhe meeting in August and that the information I am 19 Do you recall this 20 Dr Shapiro 21 Chairman Udall aLJuuL Lhe No I cannot There is no way you can give me an explanation of that why you would forget that meeting at the 23 airport if indeed you did 24 25 Dr Shapiro My recollection is that I have forthcoming about that INDEPENDENCE REPOR'i'ING INC 202 484-8900 always been 115 Chairman Udall Dr Shapiro About that meeting Not only that meeting but everything per- taining to this whole issue Chairman Udall time Were there other airport meetings at that Any other time Dr Shapiro Not that I recall Chairman Udall That you met an Israeli official or citizen at the airport that you can recall Dr Shapiro I may have -- Chairman Udall In connection -- I am talking about a pre arranged meeting where during the time NUMEC was in operation where you had gone to the airport to meet someone Dr Shapiro people I have certainly gone to the airport to meet I have often done that And I would generally go out of my way for an overseas visitor whoever that was whether he was from England France Belgium or wherever And it was likely that I would have done the same for an Israeli visitor Chairman Udall I don't question that The puzzling thing about this to some people has been the idea that he made a special trip to the airport and you made a special trip to the airport and apparently a long conversation was held Dr Shapiro That was why I was -- Certainly that matter has been discussed and explained many many times INDEPENDENCE REPORTING INC Tel 202 484-8900 II II 5-15 116 Chairman Udall coming j 4 I 8 9 I must say I don't know where we go from here to ponder what has occurred today 14 15 true You are a very effective Y0U have got every right to feel aggrieved about the way you have been treated That is all I will say in conclusion Mr Krash I want to thank you Congressman for let the record reflect -- the most courteous treatment the witness has received here and we appreciate that very much We do stand ready and willing to cooperate with you in any way we can in responding to any questions that you may have 16 17 I want witness in your own behalf and if what you told us today is 11 13 You have been very good to be with us and answer the speculation that we have asked you to indulge in 10 12 Well I want to thank you for questions not only relating to your own knowledge but some of 5 6 Okay Chairman Udall While the record is being transcribed as I said in the beginning feel free to supplemont a itional III material or statements 1 Mr Krash We understand that the reporter will give us 20 a copy of the transcript and we will have a chance to review 21 that Chairman Udall You will indeed 23 Mr Krash Thank you very much '1 Chairman Udall All right We stand adjourned Whereupon at 5 01 p m the meeting was adjourned N ends INDEPENDENCE REPORTING INC Tel 202 484-8900 PAGES - - - - thna - - - - UNREVllm AJro UNEDITEDNOT FOR QUOTATION OR DUPLICATION IN ANY FORM I IinUlit nf prtlitutnttutB I I I I I I I Hea1D' held before I I COMMIITEE ON IN ERIOR AND INSULAR AFFAIRS I I j shington D C I I INDEPENDJNCE REPORTING INC 304 Inde ndence Avenue S E o ciat Reporters Washi ton D C 20003 2 547·1005