then issued to appropriate heads of DOE organizations and other individual agencies as necessary for their information and for their use in making decisions related to specific documents. In the case of the publication of the Morland article, the government was faced with the unavoidable problem of having authenticated it in a general way by our very efforts to prevent its publication. Unfortunately, the injunction was made moot by publication of the Hansen letter to Senator Percy in the Madison Press Connection. As a result of these publications, and in view of their wide dissemination, I took action on December 27, 1979, to declassify certain information compromised in the articles so the court could properly review and evaluate the in-camera material involved in the Progressive case. Since that time, in accordance with long-standing procedures, the Department has been reexamining and drafting revised classification policy and guidance to implement the declassification action. However, these revisions to classification guidance have not yet been issued, since the Progressive case has not been resolved. In light of the pending litigation, it would not be appropriate for me to comment further on this case. I would now like to respond to your request to Secretary Duncan for information on two specific items: the no-fund contract between the Atomic Energy Commission and KMS Industries, Inc., and the Classification and Security Agreement between the Energy Research and Development Administration and Jersey Nuclear-Avco Isotopes, Inc. (JNAI). 5 The KMS contract emanated from a KMS proposal in 1970 that it be authorized to pursue research and development in laser fusion at the company's own expense. The proposal involved technology which had classified nuclear weapons applications as well as prospects for unclassified energy applications. The Commission was, therefore, faced with deciding whether it should attempt to preclude any private interests from pursuing work in this field. The question was further complicated because certain key members of the KMS team had previously had considerable access to relevant, classified atomic weapon concepts through their past work for the government and government contractors, including work in the laser fusion area. Thus the KMS project involved a dispute with the government over rights to any developments that might be patentable. The Commission saw three basic alternatives for dealing with the situation: First, it could attempt to preclude the conduct of any such work on a private basis by applying the limitations on privately-generated Restricted Data and, ultimately, by using the prohibition of Section 92 of the Atomic Energy Act on the private manufacture of atomic weapons. Second, it could offer to make KMS a regular Commission supported contractor for research and development work in this field. - 6 As a third approach, it could allow such work to be conducted at private expense, but under controls designed to assure that it was directed toward unclassified energy applications and to minimize possible risks of disclosing classified technology. On balance, the Commission decided that the national interest would best be served through the moderate third approach: Private U.S. researchers could work in this area so long as any of their work of possible atomic weapons significance was conducted under appropriate security safeguards, and so long as the work was subject to monitoring by the Commission. A no-fund contract was signed by both parties and put into effect on February 3, 1971. Its provisions remain in effect today. Beginning in 1975 and periodically since, KMS has entered into a separate series of cost plus fixed fee contracts with ERDA and DOE for government-sponsored research in laser fusion. This research is on-going and supports and complements the Department's research efforts at other laboratories around the country. With regard to the Classification and Security Agreement with Jersey In 1967, the former Atomic Energy Commission recognized the broad scientific applications of certain isotope separation technology. In order to minimize interference with private research while still providing - 7 necessary safeguards against proliferation, the Commission took a declassification action. This action declassified all research and development work on methods of isotope separation other than gaseous diffusion and the gas centrifuge until such methods show a reasonable potential for the separation of practical quantities of special nuclear material. Any additional information developed after a method has advanced to the point of having such potential would be Restricted Data until specifically declassified. This action was taken with the intent to remove early theoretical or experimental work on these other methods of isotope separation from the category of Restricted Data. In this way, private researchers, universities, and the like, could perform this work, or submit research proposals involving such early work, without the necessity of applying immediate classification controls. This policy was reexamined and reaffirmed by the Commission in 1972. At that time, the Commission also clarified its reporting requirements, stating that the investigator should report to the Commission when his process has demonstrated, through theoretical studies or calculations, that the process can separate uranium isotopes. Following this report by the investigator, classification guidance would be provided. 8 Prior to the creation of the Energy Research and Development Administration (ERDA) in 1974, management representatives of JNAI met periodically with the Atomic Energy Commission to brief the Commissioners on the then current status of their laser isotope separation program. These periodic briefings were an outgrowth of a meeting with the Commissioners on November 22, 1971, at which JNAI was requested, and agreed, to keep the Commission informed of significant program developments. Subsequently, ERDA representatives made periodic visits to the JNAI research facilities to assess the status of their work from a classification standpoint. Through 1975, these visits confirmed that the JNAI work remained unclassified. However, JNAI's considerable technological progress and the company's decision to expand their experimental and development efforts ultimately brought their work into classified areas. Extensive negotiations and discussions ensued between JNAI and ERDA and on September 30, 1977, JNAI signed the Classification and Security Agreement, which is still in effect today. Since the execution of the JNAI agreement, there have been no difficulties from a classification point of view with JNAI. Because of proprietary interests, JNAI has followed a very conservative policy with respect to the release of information and they have strictly adhered to the classification guide that was specifically developed for their operation. |