Nuclear Nonproliferation: DOE's Program to Assist Weapons
Scientists in Russia and Other Countries Needs to Be Reassessed
(12-DEC-07, GAO-08-189).
To address concerns about unemployed or underemployed Soviet-era
weapons scientists in Russia and other countries, the Department
of Energy (DOE) established the Initiatives for Proliferation
Prevention (IPP) program in 1994 to engage former Soviet weapons
scientists in nonmilitary work in the short term and create
private sector jobs for these scientists in the long term. GAO
assessed (1) DOE's reported accomplishments for the IPP program,
(2) DOE's exit strategy for the program, and (3) the extent to
which the program has experienced annual carryovers of unspent
funds and the reasons for any such carryovers. To address these
issues, GAO analyzed DOE policies, plans, and budgets and
interviewed key program officials and representatives from 22
Russian and Ukrainian institutes.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-08-189
ACCNO: A78828
TITLE: Nuclear Nonproliferation: DOE's Program to Assist Weapons
Scientists in Russia and Other Countries Needs to Be Reassessed
DATE: 12/12/2007
SUBJECT: Federal funds
Federal procurement
Funds management
Nuclear proliferation
Nuclear weapons
Performance measures
Private sector
Program evaluation
Program management
Risk management
Strategic planning
Weapons of mass destruction
Program implementation
DOE Initiatives for Proliferation
Prevention Program
Russia
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-08-189
* [1]Results in Brief
* [2]Background
* [3]DOE Has Overstated the Progress Made on Key Performance Meas
* [4]DOE Has Supplemented the Salaries of Many Scientists in Russ
* [5]DOE Lacks Necessary Information and a Rigorous, Formalized R
* [6]DOE Has Overstated the Number of Former Weapons Scientists R
* [7]DOE Has Not Revised the IPP Program's Performance Metrics to
* [8]DOE Has Not Developed an Exit Strategy for the IPP Program,
* [9]Russian Government Officials, Russian and Ukrainian Scientis
* [10]DOE Has Not Developed Criteria to Determine When Individuals
* [11]DOE Expanded IPP Efforts to Iraq and Libya and Is Working wi
* [12]Iraq
* [13]Libya
* [14]Global Nuclear Energy Partnership
* [15]Multiple DOE and Contractor Reviews and Delays in Project Im
* [16]DOE Has Carried Over Unspent Funds Greater Than the Amount t
* [17]The IPP Program's Persistent Annual Unspent Balances Have Re
* [18]DOE Is Implementing a New IPP Program Management System, in
* [19]Conclusions
* [20]Recommendations for Executive Action
* [21]Agency Comments and Our Evaluation
* [22]Russian Institutes
* [23]Center for Ecological Research and BioResources Development
* [24]Gamaleya Scientific Research Institute of Epidemiology and M
* [25]Institute for Nuclear Research of the Russian Academy of Sci
* [26]Institute of Applied Physics of the Russian Academy of Scien
* [27]Institute of Biochemistry and Physiology of Microorganisms
* [28]Institute of General Physics of the Russian Academy of Scien
* [29]Krasnaya Zvezda (Red Star)
* [30]Kurchatov Institute
* [31]Moscow State University
* [32]Radiophysical Research Institute
* [33]Scientific Research Institute of Measuring Systems
* [34]Afrikantov Experimental Machine Building Design Bureau
* [35]Soliton-NTT Research Center
* [36]Russian Federal Nuclear Center--All-Russian Scientific Resear
* [37]Zelinsky Institute of Organic Chemistry
* [38]Ukrainian Institutes
* [39]E.O. Paton Electric Welding Institute
* [40]International Center for Electron Beam Technology
* [41]Institute for Metal Physics
* [42]International Institute of Cell Biology
* [43]Intertek, Ltd.
* [44]Kharkov Institute of Physics and Technology
* [45]State Design Office Yuzhnoye
* [46]GAO Comments
* [47]GAO Contact
* [48]Staff Acknowledgments
* [49]Order by Mail or Phone
Report to the Chairman, Committee on Homeland Security, House of
Representatives
United States Government Accountability Office
GAO
December 2007
NUCLEAR NONPROLIFERATION
DOE's Program to Assist Weapons Scientists in Russia and Other Countries
Needs to Be Reassessed
GAO-08-189
Contents
Letter 1
Results in Brief 5
Background 9
DOE Has Overstated the Progress Made on Key Performance Measures, Raising
Doubts about the IPP Program's Nonproliferation Benefits 11
DOE Has Not Developed an Exit Strategy for the IPP Program, but Instead
Has Expanded Efforts to Iraq and Libya and Is Using the Program to Support
the Department's Global Nuclear Energy Partnership 22
Multiple DOE and Contractor Reviews and Delays in Project Implementation
Contribute to the IPP Program's Large Balances of Unspent Program Funds 29
Conclusions 37
Recommendations for Executive Action 39
Agency Comments and Our Evaluation 40
Appendix I Scope and Methodology 44
Appendix II Additional Information on the Russian and Ukrainian Institutes
That We Included in Our Fieldwork 50
Appendix III Classification Systems Used to Assess IPP Project
Participants' Knowledge of Weapons of Mass Destruction 58
Appendix IV IPP Projects DOE Reported to Be Commercially Successful 61
Appendix V Comments from the Department of Energy 64
Appendix VI Comments from the Department of State 75
Appendix VII GAO Contact and Staff Acknowledgments 77
Related GAO Products 78
Tables
Table 1: Multistage Process for Assessing IPP Project Participants' WMD
Backgrounds 14
Table 2: CRDF, ISTC, and STCU Weapons Expertise Classification Codes 59
Table 3: DOE Projects Listed as Contributing to Commercial Successes in
DOE's Fiscal Year 2005 IPP Program Annual Report 61
Figures
Figure 1: Appropriations and Unspent Balances for the IPP Program from
Fiscal Years 1998 through 2008 30
Figure 2: ISTC/STCU Payment Process 32
Figure 3: CRDF Payment Process 34
Abbreviations
CRDF: U.S. Civilian Research and Development Foundation:
DCAA: Defense Contract Audit Agency:
DOE: Department of Energy:
EXACT: Expertise Accountability Tool:
GNEP: Global Nuclear Energy Partnership:
ILAB: Inter-Laboratory Board:
IPP: Initiatives for Proliferation Prevention:
ISTC: International Science and Technology Center:
NAS: National Academy of Sciences:
NNSA: National Nuclear Security Administration:
STCU: Science and Technology Center in Ukraine:
USIC: United States Industry Coalition:
WMD: weapons of mass destruction:
This is a work of the U.S. government and is not subject to copyright
protection in the United States. The published product may be reproduced
and distributed in its entirety without further permission from GAO.
However, because this work may contain copyrighted images or other
material, permission from the copyright holder may be necessary if you
wish to reproduce this material separately.
United States Government Accountability Office
Washington, DC 20548
December 12, 2007
The Honorable Bennie G. Thompson:
Chairman:
Committee on Homeland Security:
House of Representatives:
Dear Mr. Chairman:
During the decades before its dissolution, the Soviet Union produced a
cadre of scientists and engineers whose knowledge and expertise would be
invaluable to countries or terrorist groups trying to develop weapons of
mass destruction (WMD). After the Soviet Union's collapse in 1991, many of
these scientists suffered significant cuts in pay or lost their
government-supported work. The United States and other countries were
concerned that these scientists would sell their expertise to terrorists
or countries of concern, such as Iran, Iraq, and North Korea. To address
this potential proliferation concern, the Department of Energy (DOE)
established the Initiatives for Proliferation Prevention (IPP) program in
1994.^1 The objectives of the IPP program, which is implemented by the
National Nuclear Security Administration (NNSA),^2 are to (1) in the short
term, engage weapons scientists and scientific research and development
institutes located in Russia and other countries of the former Soviet
Union in nonmilitary work by supplementing their existing salaries and (2)
in the long term, create sustainable, private sector jobs for former
weapons scientists. As of April 2007, DOE reported it had supplemented the
salaries of over 16,770 scientists, engineers, and technicians and created
2,790 long-term, private sector jobs in Russia and other countries of the
former Soviet Union.
^1The IPP program was originally called the Industrial Partnering Program
and was established under Pub. L. No. 103-87 S 575, 107 Stat. 972-773
(1993). In 1996, DOE changed the program's name to reflect a greater focus
on and commitment to nonproliferation issues. In 2002, the IPP program and
another similar DOE nonproliferation program, the Nuclear Cities
Initiative, were placed under a common management organization within DOE
and designated the Russian Transition Initiatives. In 2006, the Russian
Transition Initiatives was renamed the Global Initiatives for
Proliferation Prevention and adopted the mission of addressing the
proliferation of WMD expertise globally. Since the program's inception,
North Korea has successfully tested a nuclear weapon, and there are
concerns that Iran has made progress in developing its own nuclear weapons
program.
^2NNSA is a separately organized agency within DOE that was created by the
National Defense Authorization Act for Fiscal Year 2000, Pub. L. No.
106-65, 113 Stat. 953 (1999), with responsibility for the nation's nuclear
weapons, nonproliferation, and naval reactors programs.
Through October 1, 2007, there were 929 draft, active, inactive, and
completed IPP projects involving personnel at about 200 nuclear, chemical,
and biological institutes in Russia and other countries. Many IPP projects
involve more than one institute, and sometimes a single project will
involve institutes in more than one country. Over 80 percent of the
projects are focused on institutes in Russia, and the majority of these
projects involve scientists and institutes specializing in nuclear
weapons-related work. Other countries that currently participate or have
participated in the IPP program include Armenia, Belarus, Georgia,
Kazakhstan, Ukraine, and Uzbekistan.
For each IPP project, DOE requires that at least 65 percent of the
project's funding go to Russia and other countries as payments to
individuals actually working on the project or to the participating
institutes in payment for project-related supplies, equipment, and
overhead. Because the IPP program is not administered through a
government-to-government agreement, as are many other U.S.
nonproliferation programs, DOE distributes funding for IPP projects
through three tax-exempt entities to avoid paying foreign taxes: the
International Science and Technology Center (ISTC) in Russia, the Science
and Technology Center in Ukraine (STCU), and the U.S. Civilian Research
and Development Foundation (CRDF). These organizations transfer IPP funds
directly to the personal bank accounts of IPP project participants in
Russia and other countries. To receive payment for work on IPP projects,
project participants must submit paperwork to these organizations
indicating, among other things, whether they possess WMD experience.
Project proposals under the IPP program are prepared and submitted to DOE
by officials from the participating national laboratories,^3 although a
project may also result from the initiative of a foreign institute or U.S.
company. Each participating DOE national laboratory provides technical and
financial oversight over a set of projects. Partnerships are formed by the
national laboratories between U.S. companies--known as industry
partners--and institutes in Russia and other countries. Industry partners
are engaged in projects through Cooperative Research and Development
Agreements with the participating DOE national laboratories, which require
cost-sharing to develop technologies for commercial application. An
Inter-Laboratory Board (ILAB) serves as the primary coordinating body for
the national laboratories involved in the IPP program. The ILAB
coordinates, reviews, and facilitates the activities of the participating
national laboratories and makes recommendations to DOE on how to implement
the program. Ultimate decision-making authority lies with the DOE
headquarters IPP program office.
^3DOE manages the largest laboratory system of its kind in the world.
Originally created to design and build atomic weapons, DOE's 22
laboratories have expanded their missions to conduct research in many
disciplines--from high-energy physics to advanced computing. The 12
national laboratories that participate in the IPP program are the Argonne,
Brookhaven, Idaho, Lawrence Berkeley, Lawrence Livermore, Los Alamos, Oak
Ridge, National Renewable Energy, Pacific Northwest, Sandia, and Savannah
River National Laboratories and the Kansas City Plant.
To improve the potential of IPP projects to create sustainable jobs in
Russia and other countries, DOE requires that a U.S. industry partner be
identified before it approves and funds a project. A consortium of U.S.
industry partners--the United States Industry Coalition (USIC)--was
established in 1994. To participate in the IPP program, a company must
become a member of USIC and pay dues based on its size. USIC reviews IPP
project proposals for commercial potential and requires that all project
proposals have the basic outline of a business plan for commercializing
the technology involved. In addition, USIC annually surveys its member
companies to determine the commercial results of IPP projects, such as the
number of long-term, private sector jobs created. DOE uses the results of
USIC's surveys to report to the Congress on the number of jobs the IPP
program created.
DOE's IPP program is one of several nonproliferation programs focused on
reducing the potential proliferation risks posed by scientists from Russia
and other countries. Other such programs include the Science Centers
program funded by the U.S. government--under the auspices of the
Department of State (State)--and other nations;^4 CRDF; and a variety of
initiatives primarily focused on biological institutes and implemented by
the Departments of Agriculture, Defense, Health and Human Services, and
State. In addition, from 1998 through 2006, DOE administered the Nuclear
Cities Initiative, whose goal was to create sustainable jobs for weapons
scientists in Russia's closed nuclear cities and to help Russia accelerate
the downsizing of its nuclear weapons complex.^5 The
government-to-government agreement between the United States and Russia
governing this program expired and was not renewed, and, as a result, the
program was terminated in September 2006.
^4The Science Centers, consisting of ISTC and STCU, are intergovernmental
bodies with over 12 contributing member states. The centers were
established to provide peaceful research opportunities to weapons
scientists of the former Soviet Union. For additional information, see
GAO, Weapons of Mass Destruction: State Department Oversight of Science
Centers Program, [50]GAO-01-582 (Washington, D.C.: May 10, 2001).
In 1999, we reviewed the IPP program and made several recommendations to
improve its management, including recommending that DOE (1) obtain more
accurate data on the background and number of scientists participating in
the program, (2) maximize the amount of funds going to former Soviet Union
weapons institutes, and (3) eliminate projects that do not have commercial
potential.^6 The Congress, among other things, subsequently prohibited DOE
from using IPP program funding, available after fiscal year 1999, to
supplement the income of scientists and engineers who (1) are currently
engaged in activities directly related to the design, development,
production, or testing of chemical or biological WMD or a missile system
to deliver such weapons or (2) were not formerly engaged in activities
directly related to the design, development, production, or testing of WMD
or a missile delivery system for such weapons.^7 The Congress also
prohibited DOE from funding any institute or scientist determined by the
Secretary of Energy to have made a scientific or business contact about
WMD with a representative of a "country of proliferation concern."^8
^5Ten closed nuclear cities formed the core of the former Soviet Union's
nuclear weapons complex. Many of the cities are located in geographically
remote locations and were so secret that they did not appear on any
publicly-available maps until 1992. For additional information, see GAO,
Nuclear Nonproliferation: DOE's Efforts to Assist Scientists in Russia's
Nuclear Cities Face Challenges, [51]GAO-01-429 (Washington, D.C.: May 3,
2001).
^6See GAO, Nuclear Nonproliferation: Concerns with DOE's Efforts to Reduce
the Risks Posed by Russia's Unemployed Weapons Scientists,
[52]GAO/RCED-99-54 (Washington, D.C.: Feb. 19, 1999). As a result of our
1999 review, DOE modified the IPP program by implementing requirements to
(1) better categorize the weapons backgrounds of scientists participating
in IPP projects; (2) review projects for potential dual-use technology;
(3) limit funding for DOE national laboratories to no more than 35 percent
for each IPP project; (4) eliminate basic research projects; (5) establish
direct, tax-free payments to participating former Soviet scientists; and
(6) institute audits conducted by the Defense Contract Audit Agency as a
way of verifying proper transfer of IPP program funds and equipment.
^7Pub. L. No. 106-65 S 3136(a)(2).
^8Pub. L. No. 106-65 S 3136(a)(3). As defined by the section, a "country
of proliferation concern" means any country designated as such by the
Director of Central Intelligence for purposes of the IPP program.
In this context, you asked us to review the IPP program. As agreed with
your office, we assessed (1) DOE's reported accomplishments for the IPP
program, (2) DOE's exit strategy for the IPP program, and (3) the extent
to which the IPP program has experienced annual carryover balances of
unspent funds and the reasons for such carryover.
To address these objectives, we examined 207 of the 929 IPP projects. We
selected this judgmental sample of draft, active, inactive, and completed
projects on the basis of a variety of factors, such as geographic
distribution, representation of all participating national laboratories,
and project costs. Of the 207 projects in our sample, we received or were
able to reconstruct information on payments to project participants for 97
projects. We interviewed key officials and analyzed documentation, such as
program guidance, project proposals, and financial information, from DOE
and its contractors at the Argonne, Brookhaven, Idaho, Lawrence Berkeley,
Lawrence Livermore, Los Alamos, Oak Ridge, National Renewable Energy,
Pacific Northwest, Sandia, and Savannah River National Laboratories; the
Kansas City Plant; and Defense and State. We interviewed officials from 15
Russian and 7 Ukrainian institutes that participate in the IPP program. We
also spoke with officials from the Federal Agency for Atomic Energy of the
Russian Federation, which oversees institutes involved in Russia's nuclear
weapons program. Furthermore, we interviewed officials from 14 U.S.
companies that participate in the IPP program to better understand their
perspective on the program's benefits and its implementation. In addition,
we analyzed cost and budgetary information from DOE, DOE's national
laboratories, CRDF, ISTC, and STCU. We interviewed knowledgeable officials
on the reliability of these data, including issues such as data entry,
access, quality control procedures, and the accuracy and completeness of
the data. We determined that these data were sufficiently reliable for the
purposes of this review. Appendix I provides more details on our scope and
methodology, and appendix II provides more detailed information on the
institutes that we visited in Russia and Ukraine. We conducted our review
from October 2006 through December 2007 in accordance with generally
accepted government auditing standards.
Results in Brief
DOE has overstated accomplishments for the 2 critical measures it uses to
assess the IPP program's progress and performance--the number of WMD
scientists receiving DOE support and the number of long-term, private
sector jobs created. First, according to our analysis of 97 IPP projects
involving about 6,450 scientists for whom we had complete payment
information, more than half of the scientists paid by the program never
claimed to have WMD experience. Furthermore, instead of supporting
Soviet-era WMD scientists as a way of minimizing proliferation risks,
officials at 10 nuclear and biological institutes in Russia and Ukraine
told us that IPP program funds help them attract, recruit, and retain
younger scientists and contribute to the continued operation of their
facilities. This is contrary to the original intent of the program, which
was to reduce the proliferation risk posed by Soviet-era weapons
scientists. For example, about 972 of the scientists paid for work on
these 97 projects were born in 1970 or later, making them too young to
have contributed to Soviet-era WMD efforts. Second, although DOE asserts
that through April 2007, the IPP program had helped create 2,790
long-term, private sector jobs in Russia and other countries, we were
unable to substantiate the existence of many of these jobs in our review
of 48 of the 50 projects DOE considers to be commercial successes. For
example, DOE reported that 350 jobs were created at one Russian institute,
but officials from that institute told us that only 160 people had
actually been employed, that most were on a part-time basis, and that they
could not account for jobs that may have been created at other institutes
previously involved in the projects. The validity of the number of jobs
reported to have been created by the IPP program is in doubt because DOE
relies on "good-faith" reporting from U.S. industry partners and
institutes in Russia and other countries and does not independently verify
employment data it receives. Finally, the metrics DOE uses to set IPP
program goals and measure progress are outdated. DOE officials admitted
that the IPP program targets--based on a 1991 assessment of the former
Soviet WMD scientist population--are not sufficient to judge the IPP
program's progress in reducing proliferation risks. However, DOE has not
updated its metrics on the basis of more recent estimates of the WMD
scientist population, and it has not set priorities for the program on the
basis of a comprehensive country-by-country and institute-by-institute
evaluation of proliferation risks. Due to the serious nature of these
findings, we are recommending that DOE perform a comprehensive
reassessment of the IPP program to help the Congress determine whether to
continue to fund the program. We believe this reassessment should include,
at a minimum, a thorough analysis of the proliferation risk posed by
weapons scientists in Russia and other countries, a well-defined
prioritization strategy to more effectively target the scientists and
institutes of highest proliferation concern, and more accurate reporting
of program accomplishments.
DOE has not developed an exit strategy for the IPP program in Russia and
other countries, although officials from the Russian government, Russian
and Ukrainian institutes, and U.S. companies raised questions about the
continuing need for the IPP program, given economic improvements in Russia
and other countries where DOE provides assistance. Importantly, a senior
Russian Atomic Energy Agency official told us that the IPP program is no
longer relevant because Russia's economy is strong and its scientists no
longer pose a proliferation risk. However, DOE has not developed criteria
to determine when scientists, institutes, or countries should "graduate"
from the IPP program. In contrast, State, which supports a similar program
to assist weapons scientists in Russia and other countries, has assessed
participating institutes and developed a strategy--using a range of
factors, such as an institute's ability to pay salaries regularly and to
attract funding from other sources--to graduate certain institutes from
its program. Even so, we found that DOE is currently supporting 35 IPP
projects at 17 Russian and Ukrainian institutes that State considers to
already have graduated from its program and, therefore, no longer require
U.S. assistance. Instead of finding ways to phase out the IPP program in
the countries of the former Soviet Union, DOE has recently expanded the
program to include new countries and areas as a way to maintain its
relevance as a nonproliferation program. Specifically, DOE recently began
providing assistance to scientists in Iraq and Libya. In addition, the IPP
program is working with DOE's Office of Nuclear Energy to develop projects
that support the Global Nuclear Energy Partnership--a DOE-led
international effort to expand the use of civilian nuclear power. DOE has
expanded the IPP program's efforts into these new areas without a clear
mandate from the Congress and has suspended parts of its IPP program
guidance for implementing projects in these new areas. For example, in its
efforts in Libya, DOE is deviating from IPP program guidance and its
standard practice of limiting the amount of IPP program funds spent at the
national laboratories for project oversight to not exceed 35 percent of
the total expenditures. We found that 97 percent of funds DOE spent on
projects in Libya through May 2007 were spent at DOE's national
laboratories for project management and oversight activities. We are
recommending, among other things, that DOE (1) develop a clear exit
strategy for the IPP program, including detailed criteria to determine
when specific countries, institutes, and individuals are ready to graduate
from participation in the IPP program, and (2) seek explicit congressional
authorization to expand IPP efforts outside of the former Soviet Union.
Regarding its management of IPP program funding, DOE has carried over
unspent funds in excess of the amount that the Congress provided for the
IPP program in every fiscal year since 1998. For example, as of September
2007, DOE had carried over about $30 million in unspent funds--$2 million
more than the $28 million that the Congress had appropriated for the IPP
program in fiscal year 2007. Two main factors have contributed to this
recurring problem: (1) lengthy and multilayered review and approval
processes by DOE and its contractors for paying former Soviet weapons
scientists for IPP-related work and (2) long delays in implementing some
IPP projects. Regarding the first factor, payments to supplement the
salaries of scientists in Russia and other countries are often delayed
because they are reviewed by multiple offices within DOE; participating
national laboratories; and the organizations, such as ISTC, that DOE uses
to make tax-free payments to project participants' bank accounts. DOE
officials acknowledged that the lag time between the allocation of funds,
placement of contracts, and payment for deliverables is a problem for the
IPP program. Russian and Ukrainian scientists we interviewed told us that
they regularly experienced delays of 3 months to 1 year in receiving
payments for completed work on IPP projects. In addition, some IPP
projects we reviewed experienced long delays in implementation because of,
among other things, administrative problems and turnover in key project
participants. For example, in 2006, the Russian Customs Service rejected a
testing device needed for one IPP project after it was improperly labeled
when it was shipped from the United States to the participating Russian
institute. As a result, DOE was unable to spend about $245,000 intended
for this project for more than 1 year until the issue was resolved. DOE
and national laboratory officials told us they are attempting to improve
financial oversight over the IPP program, in part, to address concerns
about unspent program funds. To that end, DOE is developing a program
management system, which it expects to fully implement in 2008--14 years
after the start of the program. We are recommending that DOE seek to
reduce the large balances of unspent IPP program funds and streamline the
process through which foreign scientists receive IPP funds by eliminating
unnecessary layers of review.
We provided a draft of this report to DOE and State for comment. DOE
agreed with 8 of our 11 recommendations to improve the overall management
and oversight of the IPP program, noting that a number of changes were
already under way. However, DOE disagreed with 2 recommendations and
neither agreed nor disagreed with 1 recommendation. Specifically, DOE
disagreed that it needs to reassess the IPP program, expressing the view
that a reassessment has already taken place that justified the program's
continued need. We are aware that DOE conducted internal assessments in
2004 and 2006 of its overall efforts to engage WMD scientists in the
former Soviet Union and other countries. However, these assessments did
not evaluate the IPP program exclusively and were conducted at a time when
the IPP program was complemented by and coordinated with a similar DOE
program focused on downsizing facilities and creating new jobs for
personnel in Russia's nuclear cities. This complementary program--the
Nuclear Cities Initiative--has since been canceled. As a result, we
believe these assessments are outdated because the IPP program operates
under a significantly different set of circumstances today than when DOE
conducted its previous internal assessments. Moreover, we believe that the
nature, scope, and volume of problems we identified during the course of
our review necessitates a reassessment of the IPP program to ensure that
limited program funds are directed to the scientists and institutes of
highest proliferation risk. DOE also disagreed with the need to ensure
compliance with the statutory restriction on the percentage of IPP program
funds spent on oversight activities at the DOE national laboratories to no
more than 35 percent. However, we note in our report that DOE is deviating
from its IPP program guidance and standard practices by placing no
restrictions on the amount of IPP program funds that can be spent at DOE
national laboratories for oversight of projects in Libya. In addition,
State concurred with the 1 recommendation directed to both DOE and State.
DOE and State also provided technical comments, which we incorporated in
this report as appropriate.
Background
Historically, IPP projects were placed in one of three categories--Thrust
1, Thrust 2, and Thrust 3. DOE now only supports Thrust 2 projects.
Specifically:
o Thrust 1 projects were geared toward technology identification
and verification and focused on "laboratory-to-laboratory"
collaboration, or direct contact between DOE's national
laboratories and weapons institutes and scientists in the former
Soviet Union. These projects had no industry partner and,
according to DOE, were entered into to quickly engage former
Soviet weapons scientists and their institutes. DOE funded 447
Thrust 1 projects, 378 of which were completed. DOE no longer
supports Thrust 1 projects.
o Thrust 2 projects involve a U.S. industry partner that agrees to
share in the costs of the project with DOE to further develop
potential technologies. The U.S. industry partner is expected to
match the funds DOE provides, either by providing in-kind support,
such as employee time and equipment, or by providing cash. Through
October 2007, there were 479 IPP projects in the Thrust 2
category.
o Thrust 3 projects, with the exception of 1 project, did not
receive any financial support from DOE and were intended to be
self-sustaining business ventures. DOE no longer supports Thrust 3
projects. There were only three Thrust 3 projects and the last
project was completed in 2001.
All proposed IPP projects are reviewed by DOE's national
laboratories; the IPP program office; and other agencies,
including Defense and State, before they are approved for funding.
Initially, a national laboratory proposes a project for
consideration. As the national laboratory prepares the proposal,
the laboratory project manager, generally referred to as the
"principal investigator," is responsible for including, among
other things, a list of intended participants and for designating
the WMD experience for each participant. The proposed participants
are assigned to one of the following three categories:
o Category I--direct experience in WMD research, development,
design, production, or testing;
o Category II--indirect WMD experience in the underlying
technologies of potential use in WMD; or
o Category III--no WMD-relevant experience.
If the IPP project is approved, DOE transfers funding to the
project participants using payment mechanisms at CRDF, ISTC, or
STCU. To be paid by any of these entities, the project
participants must self-declare whether they possess weapons
experience and indicate a more specific category of WMD expertise,
such as basic knowledge of nuclear weapons design, construction,
and characteristics. The weapons category classifications these
scientists declare are certified first by the foreign institute's
director and then by the foreign government ministry overseeing
the institute. See appendix III for a more detailed list of the
WMD categories used by DOE, CRDF, ISTC, and STCU.
After the project passes an initial review within the proposing
national laboratory, it is further analyzed by the ILAB and its
technical committees, which then forward the project proposal to
DOE headquarters for review. DOE, in turn, consults with State and
other U.S. government agencies on policy, nonproliferation, and
coordination considerations. The IPP program office at DOE
headquarters is ultimately responsible for making final decisions,
including funding, on all projects.
DOE Has Overstated the Progress Made on Key Performance Measures,
Raising Doubts about the IPP Program's Nonproliferation Benefits
DOE has not accurately portrayed the IPP program's progress,
according to our analysis of two key measures used to assess the
program's performance--the number of WMD scientists receiving DOE
support and the number of long-term, private sector jobs created.
Many of the scientists in Russia and other countries that DOE has
paid through its IPP program did not claim to have WMD experience.
Furthermore, DOE's process for substantiating the weapons
backgrounds of IPP project participants has several weaknesses,
including limited information about the backgrounds of scientists
proposed for an IPP project. In addition, DOE has overstated the
rate at which weapons scientists have been employed in long-term,
private sector jobs because it does not independently verify the
data it receives on the number of jobs created, relies on
estimates of job creation, and includes in its count a large
number of part-time jobs that were created. Finally, DOE has not
revised the IPP program's performance metrics, which are currently
based on a 1991 assessment of the threat posed by former Soviet
weapons scientists.
DOE Has Supplemented the Salaries of Many Scientists in Russia and
Other Countries Who Did Not Claim Direct Experience with WMD
A major goal of the IPP program is to engage former Soviet weapons
scientists, engineers, and technicians, and DOE claims to have
supplemented the incomes of over 16,770 of these individuals since
the program's inception. However, this number is misleading
because DOE officials told us that this figure includes both
personnel with WMD experience and those without any WMD
experience. We reviewed the payment records of 97 IPP projects,
for which information was available and complete, and found that
54 percent, or 3,472, of the 6,453 participants in these projects
did not claim to possess any WMD experience in the declarations
they made concerning their backgrounds. Moreover, project
participants who did not claim any WMD experience received 40
percent, or approximately $10.1 million, of the $25.1 million paid
to personnel on these projects. For example, in 1 project to
develop a high-power accelerator that was funded for $1 million,
88 percent, or 66, of the 75 participants who have received
payments did not claim any previous weapons-related experience.
On a project-by-project basis, we also found that DOE is not
complying with a requirement of its own guidance for the IPP
program--that is, each IPP project must have a minimum of 60
percent of the project's participants possessing WMD-relevant
experience prior to 1991 (i.e., Soviet-era WMD experience).
According to our analysis of the payment records of 97 projects
for which information was available and complete, we found that 60
percent, or 58, of the 97 projects did not meet this requirement.
A factor contributing to this outcome may be a poor understanding
of the IPP program guidance among the ILAB representatives of the
12 national laboratories participating in the program. During our
interviews with national laboratory officials, we heard a range of
opinions on the appropriate minimum percentage of WMD scientists
on individual IPP projects. For example, ILAB representatives from
5 national laboratories indicated that they strive for a minimum
of 50 percent of WMD scientists on each IPP project; the ILAB
representative from the Pacific Northwest National Laboratory
indicated a goal of 55 percent. The ILAB representative from the
National Renewable Energy Laboratory indicated that he was not
aware of any DOE policy establishing a minimum percentage of
participants with WMD backgrounds on an IPP project.
Finally, many IPP project participants that DOE supports are too
young to have supported the Soviet Union's WMD programs. Officials
at 10 of the 22 Russian and Ukrainian institutes we interviewed
said that IPP program funds have allowed their institutes to
recruit, hire, and retain younger scientists. We found that 15
percent, or 972, of the 6,453 participants in the payment records
of the 97 projects we reviewed were born in 1970 or later and,
therefore, were unlikely to have contributed to Soviet-era WMD
efforts. This group of younger participants received approximately
14 percent, or about $3.6 million, of $25.1 million paid to
project participants in the 97 projects we reviewed.
While DOE guidance for the IPP program does not specifically
prohibit participation of younger scientists in IPP projects, DOE
has not clearly stated the proliferation risk posed by younger
scientists and the extent to which they should be a focus of the
IPP program. The absence of a clear policy on this matter has
contributed to confusion and lack of consensus among national
laboratory officials involved in the program about the extent to
which younger scientists, rather than older, more experienced WMD
experts, should be involved in IPP projects. For example, the ILAB
representative at the Argonne National Laboratory told us that it
would be appropriate to question the participation of personnel
born in the mid-1960s or later since they most likely lacked
weapons-related experience. A representative at the Los Alamos
National Laboratory who has been involved with the IPP program for
over a decade said that the program should engage
"second-generation" scientists born in 1980 or later because doing
so can help create opportunities for "third- and
fourth-generation" scientists at facilities in Russia and other
countries in the future. Senior officials at the Lawrence
Livermore National Laboratory told us that scientists in Russia
and other countries, regardless of their age or actual experience
in weapons-related programs, should be included in IPP projects
because weapons expertise can be passed from one generation to the
next.
DOE Lacks Necessary Information and a Rigorous, Formalized Review
Process to Assess the WMD Credentials of IPP Project Participants
In 1999, we recommended that, to the extent possible, DOE should
obtain more accurate data on the number and background of
scientists participating in IPP program projects. DOE told us that
it has made improvements in this area, including development of a
classification system for WMD experts, hiring a full-time employee
responsible for reviewing the WMD experience and backgrounds of
IPP project participants, and conducting annual project reviews.
DOE relies heavily on the statements of WMD experience that IPP
project participants declare when they submit paperwork to receive
payment for work on IPP projects. However, we found that DOE lacks
an adequate and well-documented process for evaluating, verifying,
and monitoring the number and WMD experience level of individuals
participating in IPP projects.
According to DOE officials, all IPP projects are scrutinized
carefully and subjected to at least 8, and in some cases 10,
stages of review to assess and validate the WMD experience of the
project participants. Responsibility for verifying the WMD
experience and backgrounds of IPP project participants rests not
only with DOE, but with the national laboratories, other federal
agencies, and the entities responsible for transmitting funding to
the scientists in Russia and other countries (CRDF, ISTC, or
STCU). However, the ultimate responsibility for this assessment
rests with DOE's IPP program office. Table 1 provides an overview
of the different stages involved in DOE's assessment of IPP
project participants' WMD backgrounds.
Table 1: Multistage Process for Assessing IPP Project
Participants' WMD Backgrounds
Stage number Review
1 Assessment by the national laboratory principal investigator
2 Assessment by ILAB representatives and ILAB technical
committees
3 Review by ILAB Chairperson
4 Preliminary DOE review
5 U.S. interagency review
6 Approval and certification by DOE
7 Validation by project funding mechanism (CRDF, ISTC, or STCU)
8 Secondary review by DOE following project approval but prior
to project implementation
9 End-of-year review by DOE prior to release of 2^nd- or
3^rd-year funding (for multiyear projects only)
10 Audits of selected projects by the Defense Contract Audit
Agency
Source: GAO analysis of DOE data.
In reviewing project documentation and in our discussions with
officials responsible for conducting these reviews, we found
limitations throughout this multistage assessment process.
Specifically:
o DOE has limited information to verify the WMD experience of
personnel proposed for IPP projects because government officials
in Russia and other countries are reluctant to provide information
about their countries' scientists. For example, ISTC officials
told us that the Russian government refuses to provide resumes for
scientists involved in projects funded by the Science Centers
program, including IPP projects that use the ISTC payment process;
while CRDF officials indicated that both the Russian and Ukrainian
governments have shown increasing resistance to the policy
requiring the scientists to declare their WMD-related experience.
Three national laboratory officials stated that it is illegal
under Russian law to ask project participants about their
backgrounds, and that instead they make judgments regarding the
WMD experience of the project participants on the basis of their
personal knowledge and anecdotal information.
o Some IPP project proposals may advance from the national
laboratories for consideration by DOE with insufficient vetting or
understanding of all personnel who are to be engaged on the
project. Contrary to the process DOE laid out for the review of
the WMD scientists' backgrounds, senior representatives at five
national laboratories told us that they and their project managers
do not have sufficient time or the means to verify the credentials
of the proposed project participants. Furthermore, they believe
that DOE is primarily responsible for substantiating the weapons
experience of the individuals who are to be engaged in the
projects.
o DOE does not have a well-documented process for verifying the
WMD experience of IPP project participants, and, as a result, it
is unclear whether DOE has a reliable sense of the proliferation
risk these individuals pose. DOE's review of the WMD credentials
of proposed project participants relies heavily on the
determinations of the IPP program office. We examined the proposal
review files that the program maintains, and we were unable to
find adequate documentation to substantiate the depth or
effectiveness of the program office's review of the WMD experience
of proposed IPP project participants. DOE officials noted that
they do not usually check the weapons backgrounds of every
individual listed in an IPP project proposal, but only the key
project scientists and a few of the personnel working with them.
Specifically, in none of the IPP project files that we reviewed
did we find formal, written documentation analyzing and
substantiating the WMD backgrounds and proliferation risks of the
personnel to be engaged in those IPP projects. Each of these files
did, however, contain a comprehensive formal assessment by DOE's
Office of International Regimes and Agreements analyzing export
control issues and compliance with U.S. nonproliferation laws.
o Officials at the three organizations DOE uses to make tax-free
payments for IPP projects--CRDF, ISTC, and STCU--also downplayed
their organizations' ability to validate the backgrounds of the
scientists participating in IPP projects. CRDF officials stated
that their organization has not independently validated any of the
weapons backgrounds of the participating scientists, and they do
not consider that a responsibility under CRDF's contract with DOE.
Similarly, ISTC officials told us that their organization cannot
verify the backgrounds of scientists in projects funded by the
Science Centers program, including IPP projects that use the ISTC
payment process, and instead relies on the foreign institute's
certification of the project participants. Finally, STCU relies on
the validation provided by the foreign institute's director, and
verifies this information in annual project reviews during which a
sample of project participants are interviewed to confirm their
WMD experience.
o Because it can be a matter of months or longer between
development of an IPP project proposal and project implementation,
the list of personnel who are actually paid on a project can
differ substantially from the proposed list of scientists. For
several IPP projects we reviewed, we did not find documentation in
DOE's project files indicating that the department was notified of
the change of staff or had assessed the WMD backgrounds of the new
project participants. For example, 1 IPP project--to discover new
bioactive compounds in Russia and explore their commercial
application--originally proposed 27 personnel and was funded at $1
million. However, 152 personnel were eventually paid under this
project, and we did not find an updated list of the project
personnel or any indication of a subsequent review of the
additional personnel by DOE in the IPP project files. In another
project to develop straw-fired boilers in Ukraine funded at
$936,100, DOE reviewed the backgrounds of 18 personnel who were
part of the project proposal. However, CRDF payment records
indicated that 24 personnel were subsequently paid on the project,
only 5 of whom were listed in the original proposal DOE had
reviewed and approved. As a result, it is unclear whether DOE
conducts sufficient oversight on changes in the number or
composition of the workforce involved in IPP projects. For its
part, CRDF informed us that when an institute requests a change in
project staff and that change is approved by the participating
national laboratory, CRDF does not report these changes to DOE,
but relies on the national laboratory to notify relevant DOE
officials.
The limited information DOE obtains about IPP project participants
and the weaknesses in DOE's review of the backgrounds of these
individuals leave the IPP program vulnerable to potential
misallocation of funds. In our review, we found several examples
that call into question DOE's ability to adequately evaluate IPP
project participants' backgrounds before the projects are approved
and funded. For example:
o A National Renewable Energy Laboratory official told us he was
confident that a Russian institute involved in a $250,000 IPP
project he oversaw to monitor microorganisms under environmental
stress was supporting Soviet-era biological weapons scientists.
However, during our visit to the institute in July 2007, the
Russian project leader told us that neither he nor his institute
was ever involved in biological weapons research. As a result of
this meeting, DOE canceled this project on July 31, 2007. DOE's
cancellation letter stated that the information provided during
our visit led to this action. It further stated, "it is well
documented in statute and in the [IPP program's] General Program
Guidance that our projects must engage Russians, and others, with
relevant weapons of mass destruction or strategic delivery means
backgrounds. Violation of this requirement is an extremely serious
matter."
o In November 2006, DOE canceled a project in Ukraine intended to
develop a new type of fuel combustion system, 18 months after
approving the project and after spending about $76,000. DOE
canceled this project when it discovered an inadequate number of
personnel with WMD backgrounds involved in the project and after a
Defense Contract Audit Agency (DCAA) audit revealed other
irregularities, including a conflict of interest between the
primary Ukrainian institute and the U.S. partner company. During
the interagency review of the project proposal, State officials
questioned the primary Ukrainian institute's involvement in WMD.
However, in our review of DOE's project files, we did not find
evidence that these concerns triggered a more-intensive evaluation
of this institute by DOE prior to the project's approval.
o A 2005 DCAA audit found that 90 percent of the participants on
an IPP project administered by the Pacific Northwest National
Laboratory lacked WMD experience. This project, which was designed
to develop improved biological contamination detectors, was funded
at $492,739. Officials at the national laboratory insisted that
DCAA "was just plain wrong." DOE and national laboratory officials
asserted that the project participants were under instruction not
to discuss their weapons involvement and, on the basis of their
personal knowledge of the Russian project leader and the
institute, they believed the project participants constituted a
proliferation risk. However, according to the payment records we
reviewed, the Russian project leader and other scientists involved
in the project were not prevented from declaring their WMD
backgrounds to CRDF. Such conflicting accounts, the absence of
clear information, and the judgments made by IPP program officials
in assessing the proliferation risks posed by IPP project
participants underscore the difficulties the program faces and the
possibility that the program is funding personnel who do not
constitute a proliferation risk.
DOE Has Overstated the Number of Former Weapons Scientists Reemployed
in Long-term, Private Sector Jobs
Although a senior DOE official described commercialization as the
"flagship" of the IPP program, we found that the program's
commercialization achievements have been overstated and are
misleading, further eroding the perceived nonproliferation
benefits of the program. In the most recent annual report for the
IPP program available at the time of our review,^9 DOE indicated
that 50 projects had evolved to support 32 commercially successful
activities.^10 DOE reported that these 32 commercial successes had
helped create or support 2,790 new private sector jobs for former
weapon scientists in Russia and other countries.^11 In reviewing
these projects, we identified several factors that raise concerns
over the validity of the IPP program's reported commercial success
and the numbers of scientists employed in private sector jobs. For
example:
o The annual survey instrument that USIC distributes to collect
information on job creation and other commercial successes of IPP
projects relies on "good-faith" responses from U.S. industry
partners and foreign institutes, which are not audited by DOE or
USIC. In 9 of the 32 cases, we found that DOE based its job
creation claims on estimates or other assumptions. For example, an
official from a large U.S. company told us that the number of jobs
it reported to have helped create was his own rough estimate. He
told us he derived the job total by estimating the amount of money
that the company was spending at Russian and Ukrainian institutes
and dividing that total by the average salary for Russian
engineers in the company's Moscow office.
o We could not substantiate many of the jobs reported to have been
created in our interviews with the U.S. companies and officials at
the Russian and Ukrainian institutes where these commercial
activities were reportedly developed, due to conflicting
information and accounts. For example, officials from 1 U.S.
company we interviewed claimed that 250 jobs at 2 institutes in
Russia had been created, on the basis of 2 separate IPP projects.
However, during our visit to the Scientific Research Institute of
Measuring Systems to discuss one of these projects, we were told
that the project is still under way, manufacturing of the product
has not started, and none of the scientists have been reemployed
in commercial production of the technology. Similarly, during our
site visit, officials at the Institute of Nuclear Research of the
Russian Academy of Sciences could not confirm the creation of 350
jobs they had reported as a result of several IPP projects
relating to the production of radioisotopes. They indicated that
no more than 160 personnel were employed at their institute in
commercial activities stemming from those IPP projects, that most
of these jobs were only part time, and that they could not account
for jobs that may have been created at other institutes previously
involved in the projects.
^9On September 5, 2007, DOE provided us with preliminary data that will be
published in its fiscal year 2006 IPP program annual report. This report
has not yet been issued. As a result, for purposes of this report, we used
the most up-to-date published information available during our review,
which was DOE's Fiscal Year 2005 IPP Program Annual Report.
^10In some cases, more than one IPP project was connected to a commercial
success. See appendix IV for a complete list of the IPP projects reported
by DOE as being commercially successful.
^11We found that DOE made a mathematical error in totaling the number of
new jobs created and in migrating data from the USIC survey to the Fiscal
Year 2005 IPP Program Annual Report. As a result, the actual total of new
jobs that DOE should have reported is 2,780.
Moreover, we found differing views among DOE and national
laboratory officials on what constitutes a commercially successful
IPP project. For example, an Oak Ridge National Laboratory
official told us an IPP project could be considered a commercial
success if the project participants become employed full time in a
private business and are no longer employed by the WMD institute.
A National Renewable Energy Laboratory official defined
commercially successful IPP projects as those that lead to new
products or new production capabilities in the former Soviet Union
with significant sales in the marketplace. DOE guidance for the
IPP program does not provide a standard definition or criteria to
determine whether an IPP project should be judged commercially
successful. However, in response to our request, DOE offered the
following definition of a commercially successful IPP project:
"A product, process, or service is generating revenue from sales
or other economic value added in the [former Soviet Union] or the
U.S., based on an IPP project (either completed or ongoing);
and/or there is a private contractual relationship between the
U.S. industry partner and the [former Soviet Union] institute
covering research and development work to be done by the institute
for the U.S. industry partner growing out of an IPP project."
The lack of consensus among DOE and national laboratory officials
involved in the IPP program on a common commercialization
definition has created confusion and disagreement on which IPP
projects should be considered commercially successful. For
example, DOE counted as a commercial success one IPP project
administered by the Pacific Northwest National Laboratory to
facilitate biodegradation of oil spills. However, the national
laboratory officials responsible for this project disagreed with
DOE's characterization, in part because the project has not
generated any commercial revenues.
Furthermore, DOE's broad-based definition of commercialization has
allowed it to overstate its commercialization accomplishments to
include part-time jobs created from and revenues derived from
grants or contract research. Specifically:
o DOE counts part-time private sector jobs created, even if the
scientists employed in these part-time jobs also continue to work
at the former Soviet weapons institute.^12 DOE policy does not
require scientists employed in a private sector activity resulting
from an IPP project to sever their relationship with their
institute. In fact, in our review of the 2,790 jobs created, we
found that 898, or nearly one third, of these jobs were part-time
jobs, meaning that the scientists in some cases may still be
affiliated with the institutes and involved in weapons-applicable
research.
o The sources of revenue for some commercially successful IPP
projects also call into question the long-term sustainability of
some of the jobs created. DOE reported that $22.1 million in total
revenue was generated by the foreign institutes or their spin-off
companies as a result of commercial activities stemming from IPP
projects. Of this total, approximately $4.5 million, or 20
percent, consisted of grants (including grants from the Russian
government); contract research; and other sources of income that
appear to be of limited duration, that are not based on commercial
sales, and that may not offer a sustainable long-term source of
revenue. For example, DOE reported that 510 jobs were created at
the Kurchatov Institute and other Russian institutes as the result
of an IPP project to develop thorium-based fuels for use in
nuclear reactors.^13 However, we found that over 400 of those jobs
were supported by a separate DOE contract to evaluate the use of
thorium fuels for plutonium disposition. The Russian project
participants told us that over 500 workers were supported while
receiving funding from the 2 DOE sources, but the project is now
completed, it has not been commercialized, and there are no more
than 12 personnel currently involved in efforts related to the
project.
DOE Has Not Revised the IPP Program's Performance Metrics to Reflect
Updated Threat Information
The IPP program's long-term performance targets do not accurately
reflect the size and nature of the threat the program is intended
to address because DOE is basing the program's performance
measures on outdated information. DOE has established 2 long-term
performance targets for the IPP program--to engage 17,000 weapons
scientists annually by 2015 in either IPP grants or in private
sector jobs resulting from IPP projects, and to create private
sector jobs for 11,000 weapons scientists by 2019. However, DOE
bases these targets on a 16-year-old, 1991 National Academy of
Sciences (NAS) assessment that had estimated approximately 60,000
at-risk WMD experts in Russia and other countries in the former
Soviet Union. DOE derived 17,000 scientists as its share of the
total target population by subtracting from the NAS estimate the
number of WMD scientists engaged by other U.S. government and
international WMD scientist assistance programs (such as State's
Science Centers program) and making assumptions about attrition
rates in the former Soviet WMD workforce.
^12According to DOE, there is no IPP program requirement to exclude former
weapons scientists employed on a part-time basis from the total number of
jobs created as a result of IPP projects.
^13Thorium is a naturally occurring radioactive metal, and it is
considered an alternative nuclear fuel to uranium.
DOE officials acknowledged that the 1991 NAS study does not
provide an accurate assessment of the current threat posed by WMD
scientists in Russia and other countries. A 2005 DOE-commissioned
study by the RAND Corporation estimated that the population of
unemployed or underemployed weapons scientists in Russia and other
former Soviet states had decreased significantly. The RAND study
provided rough revised estimates of the number of WMD scientists
in the former Soviet Union, and DOE acknowledged in 2006 that the
target population of WMD experts in the former Soviet Union had
dropped from the 1991 NAS estimate of 60,000 to approximately
35,000 individuals. However, DOE has not formally updated its
performance metrics for the IPP program and, in its fiscal year
2008 budget justification, continued to base its long-term program
targets on the 1991 NAS estimate.
Moreover, DOE's current metrics for the IPP program are not
complete or meaningful indicators of the proliferation risk posed
by weapons scientists in Russia and other countries and,
therefore, do not provide sufficient information to the Congress
on the program's progress in reducing the threat posed by former
Soviet WMD scientists. The total number of scientists supported by
IPP grants or employed in private sector jobs conveys a level of
program accomplishment, but these figures are broad measures that
do not describe progress in redirecting WMD expertise within
specific countries or at institutes of highest proliferation
concern. DOE has recognized this weakness in the IPP program
metrics and recently initiated the program's first systematic
analysis to understand the scope of the proliferation risk at
individual institutes in the former Soviet Union. DOE believes
that setting priorities for providing support to foreign
institutes is necessary because (1) the economies in Russia and
the other countries of the former Soviet Union have improved since
the program's inception, (2) former "at-risk" institutes are now
solvent, and (3) the threat of mass migration of former Soviet
weapons scientists has subsided. However, DOE believes that a
concern remains over the "targeted recruitment" of scientists and
former WMD personnel. DOE officials briefed us on their efforts in
September 2007, but told us that the analysis is still under way,
and that it would not be completed until 2008. As a result, we
were unable to evaluate the results of DOE's assessment.
DOE Has Not Developed an Exit Strategy for the IPP Program, but
Instead Has Expanded Efforts to Iraq and Libya and Is Using the
Program to Support the Department's Global Nuclear Energy Partnership
Russian government officials, representatives of Russian and
Ukrainian institutes, and individuals at U.S. companies raised
questions about the continuing need for the IPP program,
particularly in Russia, whose economy has improved in recent
years. However, DOE has yet to develop criteria for phasing-out
the IPP program in Russia and other countries of the former Soviet
Union. Meanwhile, DOE is departing from the program's traditional
focus on Russia and other former Soviet states to engage
scientists in new countries, such as Iraq and Libya, and to fund
projects that support a DOE-led initiative on nuclear energy,
called the Global Nuclear Energy Partnership (GNEP).
Russian Government Officials, Russian and Ukrainian Scientists,
and U.S. Industry Representatives Questioned the Continuing Need
for the IPP Program
Officials from the Russian government, representatives of Russian
and Ukrainian institutes, and individuals at U.S. companies who
have been long-time program participants raised questions about
the continuing need for the IPP program, given economic
improvements in Russia and other countries of the former Soviet
Union. Specifically:
o A senior Russian Atomic Energy Agency official told us in July
2007 that the IPP program is no longer relevant because Russia's
economy is strong and its scientists no longer pose a
proliferation risk. Additionally, in September 2006, the Deputy
Head of the Russian Atomic Energy Agency stated that Russia is no
longer in need of U.S. assistance, and that it is easier and more
convenient for Russia to pay for its own domestic nuclear security
projects.
o Officials from 10 of the 22 Russian and Ukrainian institutes we
interviewed told us that they do not see themselves or scientists
at their institutes as a proliferation risk. Russian and Ukrainian
officials at 14 of the 22 institutes we visited told us that
salaries are regularly being paid, funding from the government and
other sources has increased, and there is little danger of
scientists migrating to countries of concern. However, many of
these officials said that they are concerned about scientists
emigrating to the United States and Western Europe, and that IPP
program funds help them to retain key personnel. Furthermore, many
of these officials noted that the program was particularly helpful
during the difficult financial period in the late 1990s.
o Representatives of 5 of the 14 U.S. companies we interviewed
told us that, due to Russia's increased economic prosperity, the
IPP program is no longer relevant as a nonproliferation program in
that country. Some of these company officials believe that the
program should be reassessed to determine if it is still needed.
In economic terms, Russia has advanced significantly since the IPP
program was created in 1994. Some of the measures of Russia's
economic strength include the following:
o massive gold and currency reserves, including more than $113
billion in a stabilization fund;^14
o a dramatic decrease in the amount of foreign debt--from about 96
percent of Russia's gross domestic product in 1999 to about 5
percent in April 2007; and
o rapid growth in gross domestic product--averaging about 6
percent per year from 1998 to 2006.
In addition, the president of Russia recently pledged to invest
substantial government resources in key industry sectors,
including nuclear energy, nanotechnology, and aerospace
technologies and aircraft production. Many of the Russian
institutes involved in the IPP program could benefit substantially
under these planned economic development initiatives, undercutting
the need for future IPP program support. In fact, officials at
many of the Russian institutes with whom we spoke told us that
they hope to receive increased government funding from these new
presidential initiatives.
In another sign of economic improvement, many of the institutes we
visited in Russia and Ukraine appeared to be in better physical
condition and more financially stable, especially when compared
with their condition during our previous review of the IPP
program. In particular, at one institute in Russia--where during
our 1998 visit we observed a deteriorated infrastructure and
facilities--we toured a newly refurbished building that featured
state-of-the-art equipment. Russian officials told us that the
overall financial condition of the institute has improved markedly
because of increased funding from the government as well as funds
from DOE. In addition, one institute we visited in Ukraine had
recently undergone a $500,000 renovation, complete with a marble
foyer and a collection of fine art. Furthermore, we found that
many institutes we visited have been able to develop commercial
relationships with Russian, U.S., and other international
companies on their own--outside of the IPP framework--leading to
increased revenues and commercial opportunities. For example,
officials at one Russian institute met with us immediately
following their successful negotiation of a new contract for
research and development activities with a large international
energy company. However, DOE officials noted that the economic
recovery throughout Russia has been uneven, and that DOE believes
there are many facilities that remain vulnerable. Even so, DOE
officials told us that their intent is to reorient the IPP program
from assistance to cooperation, especially in Russia, given the
recent improvements in that country's economy.
^14Russia's Stabilization Fund was established by resolution of the
Government of Russia on January 1, 2004, to serve as an important tool for
absorbing excessive liquidity; reducing inflationary pressure; and
insulating the economy of Russia from volatility of raw material export
earnings, which was among the reasons of the Russian financial crisis in
1998.
DOE Has Not Developed Criteria to Determine When Individuals or
Institutes Should No Longer Receive IPP Funding
DOE has not developed an exit strategy for the IPP program, and it
is unclear when the department expects that the program will have
completed its mission. DOE officials told us in September 2007
that they do not believe that the program needs to develop an exit
strategy at this time. However, DOE officials acknowledged that
the IPP program's long-term goal of finding employment for 17,000
WMD scientists in Russia and other countries does not represent an
exit strategy.
DOE has not developed criteria to determine when scientists,
institutes, or countries should be "graduated" from the IPP
program, and DOE officials believe that there is a continued need
to engage Russian scientists. In contrast, State has already
assessed participating institutes and developed a strategy--using
a range of factors, such as the institute's ability to pay
salaries regularly and to attract funding from other sources--to
graduate certain institutes from its Science Centers program.
State and DOE officials told us that the Science Centers and IPP
programs are complementary and well-coordinated. However, we found
that the programs appear to have different approaches regarding
continued U.S. government support at certain institutes.
Specifically, DOE is currently supporting 35 IPP projects at 17
Russian and Ukrainian institutes that State considers to already
be graduated from its Science Centers program and, therefore, no
longer in need of U.S. assistance. For example, according to State
documents, beginning in fiscal year 2003, State considered the
Kurchatov Institute to be graduated from its Science Centers
program and, according to the Deputy Executive Director of ISTC,
the institute is financially well-off and no longer needs U.S.
assistance. However, we found that since fiscal year 2003, DOE has
funded 6 new IPP projects at the Kurchatov Institute and a related
spin-off company. DOE officials acknowledged that coordination
between State and DOE's scientist assistance programs could be
improved.
Part of State's exit strategy involves enhancing commercial
opportunities at some institutes through the Commercialization
Support Program. This program, which began in October 2005, is
administered by ISTC with funding from the United States, through
State's Science Centers program. State aims to facilitate and
strengthen long-term commercial self-sustainability efforts at
institutes in Russia and other countries by providing training and
equipment to help them bring commercially viable technologies to
market through the Commercialization Support Program. According to
ISTC officials, 17 commercialization initiatives at institutes in
Russia have been supported through the program, 2 of which were
completed as of July 2007. DOE, State, and ISTC officials told us
the IPP program and the Commercialization Support Program have a
similar goal of finding commercial opportunities for weapons
scientists in Russia and other countries of the former Soviet
Union. According to ISTC officials, a key difference in the
programs is that the Commercialization Support Program can support
infrastructure upgrades at foreign institutes, but, unlike the IPP
program, it is not used to support research and development
activities. DOE and State officials insisted that the programs are
complementary, but acknowledged that they need to be better
coordinated.
DOE Expanded IPP Efforts to Iraq and Libya and Is Working with
Its Global Nuclear Energy Partnership to Maintain the IPP
Program's Relevance
DOE recently expanded its scientist assistance efforts on two
fronts: DOE began providing assistance to scientists in Iraq and
Libya, and the IPP program is working with DOE's Office of Nuclear
Energy to develop IPP projects that support GNEP--a DOE-led
international effort to expand the use of civilian nuclear power.
These new directions represent a significant departure from the
IPP program's traditional focus on the former Soviet Union.
According to a senior DOE official, the expansion of the program's
scope was undertaken as a way to maintain its relevance as a
nonproliferation program.
DOE has expanded the IPP program's efforts into these new areas
without a clear mandate from the Congress and has suspended parts
of its IPP program guidance for implementing projects in these new
areas. Specifically:
o Although DOE briefed the Congress on its plans, DOE officials
told us that they began efforts in Iraq and Libya without explicit
congressional authorization to expand the program outside of the
former Soviet Union. In contrast, other U.S. nonproliferation
programs, such as Defense's Cooperative Threat Reduction program,
sought and received explicit congressional authorization before
expanding their activities to countries outside of the former
Soviet Union. DOE officials told us they plan to ask the Congress
to include such language in future legislation.
o In Libya, DOE is deviating from IPP program guidance and its
standard practice of limiting the amount of IPP program funds
spent at DOE's national laboratories for project oversight to not
more than 35 percent of total expenditures.
o Regarding efforts to support GNEP, DOE has suspended part of the
IPP program's guidance that requires a U.S. industry partner's
participation, which is intended to ensure IPP projects'
commercial potential.
Iraq
Since 2004, DOE has been working to identify, contact, and find
employment for Iraqi scientists in peaceful joint research and
development projects. DOE's efforts were undertaken at the request
of State, which has overall responsibility for coordinating
nonproliferation activities and scientist assistance efforts in
Iraq. DOE and State coordinate their activities through regular
meetings and correspondence, participation in weekly
teleconferences, interagency proposal review meetings, and
coordination on strategic planning and upcoming events. Through
May 2007, DOE had spent about $2.7 million to support its
activities in Iraq. DOE has approved 29 projects, the majority of
which are administered by Sandia National Laboratories. These
include projects on radon exposure, radionuclides in the Baghdad
watershed, and the development of salt tolerant wheat strains.
However, owing to the uncertain security situation in Iraq, DOE
and national laboratory officials told us that these are
short-term projects. Sandia National Laboratory officials
acknowledged that most of the projects DOE is funding in Iraq have
no commercialization potential.
Libya
Similarly, DOE expanded its efforts to Libya at the request of
State.^15 DOE spent about $934,000 through May 2007 to support 5
projects in Libya, including projects involving water purification
and desalination. However, DOE is deviating from its IPP program
guidance and standard practices by placing no restrictions on the
amount of IPP program funds that can be spent at DOE national
laboratories for oversight of these projects. DOE limits spending
at the national laboratories for IPP projects in all other
countries to comply with section 3136(a)(1) of the National
Defense Authorization Act for Fiscal Year 2000, which states the
following: "Not more than 35 percent of funds available in any
fiscal year after fiscal year 1999 for the IPP program may be
obligated or expended by the DOE national laboratories to carry
out or provide oversight of any activities under that program."
DOE officials acknowledged that more than 35 percent of IPP
program funds for projects in Libya have been and will continue to
be spent at the national laboratories. We found that through May
2007, DOE spent about $910,000 (97 percent) at the national
laboratories, while spending about $24,000 (3 percent) in Libya.
In a written response to us on September 7, 2007, DOE noted that
the IPP program "will continue to operate in Libya on this basis
[i.e., spending more than 35 percent of funds at the DOE national
laboratories], while working with our legislative office to
eliminate any perceived ambiguities [in the law]." DOE informed us
on October 24, 2007, that these efforts are currently under way.
DOE officials estimate that about 200 scientists in Libya have WMD
knowledge and pose a proliferation risk. However, in contrast with
its activities in Russia and other countries, DOE's focus in Libya
is not on engaging individual weapons scientists, but rather on
converting former WMD manufacturing facilities, because, according
to DOE, the Libyan government has made clear that it will continue
to pay the salaries of its former WMD scientists and engineers. In
collaboration with State, DOE is working to help scientists at
Tajura, formerly the home of Libya's nuclear research center, set
up and transition to research in seawater desalination and
analytical water chemistry. DOE and State coordinate on strategic
planning for and implementation of scientist engagement efforts in
Libya. According to State, coordination mechanisms include regular
e-mail correspondences, weekly interagency and laboratory
teleconferences, and quarterly meetings. DOE officials told us
they plan to complete their efforts in Libya by 2009.
^15Launched in March 2004, State's Libya Scientist Engagement Program aims
to reduce the risk of WMD expertise proliferation and, simultaneously,
demonstrate Libya's return to the international community by supporting
the transition of former Libyan weapons scientists to civilian careers
that will enhance Libya's economic development.
Global Nuclear Energy Partnership
In fiscal year 2007, DOE also expanded the efforts of the IPP
program to provide support for GNEP--a DOE-led international
effort to expand the use of civilian nuclear power.^16 In October
2006, a senior DOE official told us that the department planned to
use IPP projects to support GNEP as a way to maintain the
program's relevance as a nonproliferation program. On December 13,
2006, the IPP program office brought together national laboratory
experts to propose new IPP projects that could support GNEP.
Currently, six active or approved IPP projects are intended to
support GNEP. According to IPP program officials, DOE's Office of
Nuclear Energy and Office of Science will be providing some
funding to three of these projects.^17 According to DOE officials,
because these funds will come from other DOE offices and programs,
they would not be subject to congressionally mandated limitations
on the percentage of IPP program funds that can be spent at DOE
national laboratories. As a result, DOE officials told us they
plan to use funding provided by the Office of Nuclear Energy and
the Office of Science to increase the amount spent at DOE national
laboratories for technical review and oversight of GNEP-related
IPP projects.
DOE has suspended some key IPP program guidelines, such as the
requirement for a U.S. industry partner, for IPP projects intended
to support GNEP. DOE officials told us that most GNEP-related IPP
projects do not have immediate commercial potential, but could
attract industry in the future. Furthermore, they said that
GNEP-related IPP projects are essentially collaborative research
and development efforts between Russian institutes and DOE
national laboratories. DOE has yet to develop separate written
guidance for GNEP-related IPP projects, but told us it is planning
to do so. As a result, national laboratory officials we
interviewed told us that implementing procedures for GNEP-related
IPP projects has been piecemeal and informal, which has created
some confusion about how these projects will be managed and
funded.
^16GNEP, which is managed by DOE's Office of Nuclear Energy, is part of
the department's Advanced Energy Initiative and seeks to develop worldwide
consensus on enabling expanded use of nuclear energy to meet growing
electricity demand. GNEP would achieve its goal by having nations with
secure, advanced nuclear capabilities provide fuel services--fresh fuel
and recovery of used (spent) fuel--to other nations that agree to employ
nuclear energy for power generation purposes only.
^17Specifically, the Office of Nuclear Energy plans to provide $600,000 to
two projects ($300,000 per project) dealing with spent fuel disposition,
and the Office of Science plans to provide funds of an amount yet to be
determined for one project dealing with the environmental consequences of
spent fuel storage.
Multiple DOE and Contractor Reviews and Delays in Project
Implementation Contribute to the IPP Program's Large Balances of
Unspent Program Funds
In every fiscal year since 1998, DOE has carried over unspent
funds in excess of the amount that the Congress provided for the
IPP program, primarily because of DOE and its contractors' lengthy
and multilayered review and approval processes for paying former
Soviet weapons scientists for IPP-related work and long delays in
implementing some IPP projects. DOE and national laboratory
officials told us they are attempting to improve financial
oversight over the IPP program, in part, to address concerns about
unspent program funds. To that end, DOE is developing a new
program management system, which it expects to fully implement in
2008--14 years after the start of the program.
DOE Has Carried Over Unspent Funds Greater Than the Amount the
Congress Has Allocated to the IPP Program Each Fiscal Year since
1998
Since fiscal year 1994, DOE has spent about $309 million to
implement the IPP program, but has annually carried over large
balances of unspent program funds. DOE officials have recognized
that unspent funds are a persistent and continuing problem with
the IPP program. Specifically, in every fiscal year after 1998,
DOE has carried over unspent funds in excess of the amount that
the Congress provided for the program the following year. For
example, as of September 2007, DOE had carried over about $30
million in unspent funds--$2 million more than the $28 million
that the Congress had appropriated for the IPP program in fiscal
year 2007. In fact, as figure 1 shows, for 3 fiscal years--2003
through 2005--the amount of unspent funds was more than double the
amount that the Congress appropriated for the program in those
fiscal years, although the total amount of unspent funds has been
declining since its peak in 2003.
Figure 1: Appropriations and Unspent Balances for the IPP Program from
Fiscal Years 1998 through 2008
^aAs of November 30, 2007, DOE is operating under a continuing resolution.
As a result, we used projected IPP program budget data, which DOE
officials provided to us in May 2007, to estimate the fiscal year 2008
appropriation for the IPP program shown in this figure.
The IPP Program's Persistent Annual Unspent Balances Have Resulted Primarily
from Multiple Layers of Review and Delays in Project Implementation
Two main factors have contributed to DOE's large and persistent carryover
of unspent funds: the lengthy and multilayered review and approval
processes DOE uses to pay IPP project participants for their work, and
long delays in implementing some IPP projects. DOE identified three
distinct payment processes that it uses to transfer funds to individual
scientists' bank accounts in Russia and other countries--ISTC/STCU, CRDF
subcontract, and CRDF master contract. These three processes involve up to
seven internal DOE offices and external organizations that play a variety
of roles, including reviewing project deliverables, approving funds, and
processing invoices. DOE officials told us that these processes were
originally introduced to ensure the program's fiscal integrity, but they
agreed that it was time to streamline these procedures.
Regarding the first payment process, as figure 2 illustrates, before
payment reaches project participants' bank accounts, it passes from DOE
headquarters (which includes the IPP program office and NNSA's Budget
Office), through DOE's Energy Finance and Accounting Service Center, which
records the obligation of funds. DOE then transfers funding to the Oak
Ridge Financial Service Center, which pays the invoice by transferring
funds to ISTC or STCU. The funds arrive at ISTC or STCU, which disburses
them in quarterly payments to IPP project participants, upon receipt of
project invoices, quarterly technical reports, and documentation from the
participating former Soviet Union institutes that deliverables were sent
to the national laboratories. However, DOE and national laboratory
officials told us that this payment process has limitations. Specifically,
these officials told us that if there is a problem with a deliverable, it
is usually too late for DOE or the participating national laboratory to
request that ISTC or STCU stop the payment to the project participants for
the current quarter.
Figure 2: ISTC/STCU Payment Process
The other two processes that DOE uses to make payments to IPP project
participants involve CRDF. In most cases, DOE administers the CRDF payment
process through a subcontract with the participating national laboratory.
In some rare cases, DOE contracts directly with foreign institutes through
a CRDF "master contract."^18 For projects that use CRDF to process
payments, the entire amount of project funding is first transferred to the
participating national laboratory, where it is placed in two separate
accounts. The first account consists of no more than 30 percent of project
funding for oversight costs incurred by the national laboratory. The
second account has all funding for the foreign project participants, which
is at least 70 percent of project funding.
As figure 3 illustrates, before IPP project participants receive payment
from CRDF, invoices and approvals of deliverables from the national
laboratories, as well as CRDF forms, are sent to DOE headquarters for
approval. DOE headquarters reviews the invoices against the contract and,
if the amounts match, approves them and sends documentation to the DOE
Procurement Office. DOE headquarters also notifies the participating
national laboratory of its approval, and the laboratory sends the funds
listed on the invoices to DOE's Energy Finance and Accounting Service
Center. The DOE Procurement Office approves payment on project invoices
and notifies CRDF and DOE's Energy Finance and Accounting Service Center
that payments should be made. Funds are then transferred from the Energy
Finance and Accounting Service Center to the Oak Ridge Financial Service
Center and then to CRDF. Once CRDF has received the funds and the
necessary approvals from DOE, it makes payments to the project
participants' bank accounts.
^18According to DOE officials, CRDF "master contracts" between DOE and
foreign institutes were only used for 12 projects and are being phased
out. The process is very similar to the CRDF subcontract process shown in
figure 3.
Figure 3: CRDF Payment Process
DOE officials acknowledged the enormity of the problem that the lag time
between the allocation of funds, placement of contracts, and payment for
deliverables creates for the IPP program and told us they are taking steps
to streamline their payment processes. In addition, Russian and Ukrainian
scientists at 9 of the 22 institutes we interviewed told us that they
experienced delays in payments ranging from 3 months to 1 year. Among the
207 projects we reviewed, we found several examples of payment delays. For
example:
o In one project on the development and testing of a device to
detect hidden explosives, the Lawrence Livermore National
Laboratory official who heads the project told us that the U.S.
industry partner had to pay Russian scientists' salaries until IPP
funding could be released. Lawrence Livermore officials involved
in this project noted that delays in payments to project
participants slowed the project's completion.
o Officials at another Russian institute told us about two
projects that experienced payment delays. On the project to
develop nuclear material container security devices, they had
shipped a deliverable to Sandia National Laboratories in October
2006, but it took more than 4 months for them to receive payment.
On the project to produce a new computer modeling code for use in
Russian nuclear reactor simulators, Russian institute officials
told us payments were delayed 3 to 4 months. Officials said that
when they asked Brookhaven National Laboratory officials about the
delay, they were told it was due to DOE's complex payment
processing systems.
Delays in implementing some IPP projects also contribute to DOE's
large and persistent carryover of unspent funds. According to
officials from U.S. industry partners, national laboratories, and
Russian and Ukrainian institutes, some IPP projects experience
long implementation delays. As a result, project funds often
remain as unspent balances until problems can be resolved. For
example, the ILAB representative from the Argonne National
Laboratory told us that, in his experience, IPP projects do not
finish on schedule about 60 percent of the time owing to a variety
of problems. These problems include implementation issues due to
administrative problems, the withdrawal or bankruptcy of the U.S.
industry partner, and turnover in key project participants. In our
review of 207 IPP projects, we found several examples of projects
that had experienced implementation delays. For example:
o One project to produce a low-cost artificial leg for use in
developing countries had $245,000 in unspent funds as of April
2007--19 percent of the $1.3 million DOE allocated for the
project. Because a testing device needed for the project was not
properly labeled when it was sent from the United States, the
Russian Customs Service rejected the device. Sandia National
Laboratory officials told us that this rejection had delayed
project implementation for nearly 1 year.
o About 3 years into a project to create banks of chemical
compounds linked with computer databases for industrial use, the
project's U.S. industry partner was bought out by a larger
company. The amount allocated for the project was nearly $1.4
million. The larger company lost interest in the project, and,
according to the DOE project manager, the project sat idle for 3
or 4 years while DOE tried to get the company to take action.
Ultimately, the project was finished 8 years after it began.
o Officials at one Russian institute we visited told us another
IPP project to improve a material to help neutralize radioactive
waste had experienced delays when the original U.S. industry
partner went bankrupt, causing the project to be temporarily
suspended. According to these officials, it took 2 years to find a
new U.S. industry partner.
o Brookhaven National Laboratory officials described a delay of
more than 6 months on a $740,000 project intended to develop new
pattern recognition software. According to Brookhaven officials,
these delays were caused by significant personnel turnover at the
participating Russian institute, mostly through the loss of key
personnel who found better, higher paying jobs outside of the
institute.
DOE Is Implementing a New IPP Program Management System, in Part,
to Address Problems with Large Balances of Unspent Funds
DOE is implementing a new system designed to better manage IPP
projects' contracts and finances. DOE officials told us that this
action was undertaken in response to a recommendation we made in
2005 to improve the management and internal controls at NNSA.
Specifically, we recommended in our August 2005 report, among
other things, that NNSA's program managers maintain quick access
to key contract records, such as deliverables and invoices that
relate to management controls, regardless of whether the records
are located at a national laboratory or headquarters.^19 Following
our 2005 report, in 2006, DOE initiated an extensive review of IPP
financial and procurement procedures at participating national
laboratories. DOE and national laboratory officials told us that
representatives from the IPP program office visited all of the
participating national laboratories, except for the Kansas City
Plant, and worked with each laboratory's financial department to
find ways to reduce unspent funds.^20 DOE officials told us that,
as a result, they were able to redirect about $15 million in
unspent program funds for immediate use on existing IPP projects.
^19GAO, Nuclear Nonproliferation: Better Management Controls Needed for
Some DOE Projects in Russia and Other Countries, [53]GAO-05-828
(Washington, D.C.: Aug. 29, 2005).
In addition, DOE officials said that they have imposed new
management controls to address project delays and reduce balances
of unspent funds. These controls include implementing a management
reengineering plan and enforcing control mechanisms, called
"sunset" provisions, which require national laboratory officials
to justify continuing any IPP project that experiences an
implementation delay of 6 to 8 months. DOE has also begun to
implement its new Expertise Accountability Tool (EXACT), a project
and information management system that it launched in October
2006. DOE expects to fully implement the EXACT system in 2008-- 14
years after the start of the IPP program. According to DOE
officials, EXACT will allow instant sharing of IPP project data
between DOE and the participating national laboratories. DOE
officials believe that the EXACT system will allow the IPP program
office to better monitor and oversee the progress of IPP projects
at the national laboratories, including reviews of IPP project
participants' WMD backgrounds and tracking unspent funds at the
national laboratories.
Conclusions
In our view, the purpose and need for the IPP program must be
reassessed. We believe that DOE has failed to clearly articulate
the current threat posed by WMD scientists in Russia and other
countries and has not adjusted the IPP program to account for the
changed economic landscape in the region and improved conditions
at many of the institutes involved in the program. Instead, DOE
has continued to emphasize a broad strategy of engagement with
foreign scientists and institutes, much as it did more than a
decade ago, and it has not developed comprehensive plans for
focusing on the most at-risk individuals and institutes or for
developing an end-game for the program. We believe that DOE's
inability to establish a clear exit strategy for the IPP program
has contributed to a perception among foreign recipients that the
program is essentially open-ended, represents an indefinite
commitment of U.S. support, and serves as a useful marketing tool
to attract and retain young scientists who might otherwise
emigrate to the United States or other western countries.
^20According to DOE officials, the Kansas City Plant was not visited
because it did not have any issues with unspent funds.
We believe that it is time for DOE to reassess the program to
explain to the Congress how the program should continue to operate
in the future or to discuss whether the program should continue to
operate at all. Without a reassessment of the program's
objectives, metrics, priorities, and exit strategy, the Congress
cannot adequately determine at what level and for how long the
program should continue to be supported. We believe that such a
reassessment presents DOE with an opportunity to refocus the
program on the most critical remaining tasks, with an eye toward
reducing the program's scope, budget, and number of participating
organizations.
Beyond reassessing the continuing need for the IPP program, a
number of management problems are negatively affecting the
program. Specifically:
o The fact that DOE has paid many scientists who claimed no WMD
expertise is particularly troubling and, in our view, undermines
the IPP program's credibility as a nonproliferation program. The
lack of documentation of DOE's review of IPP project participants
also raises concerns.
o DOE does not have reliable data on the commercialization results
of IPP projects or a clear definition of what constitutes a
commercially successful IPP project, preventing it from providing
the Congress with a more accurate assessment of the program's
results and purported benefits.
o Regarding its efforts to expand the IPP program, DOE's projects
in Iraq and Libya represent a significant departure from the
program's original focus on the countries of the former Soviet
Union. While there may be sound national security reasons for
expanding efforts to these countries, we are concerned that,
unlike other federal agencies, DOE did not receive explicit
authorization from the Congress before expanding its program
outside of the former Soviet Union. Furthermore, in its efforts in
Libya, DOE is not adhering to its own guidance restricting the
percentage of IPP program funds that can be spent at DOE's
national laboratories on oversight activities.
o The lack of clear, written guidance for IPP projects intended to
support GNEP has led to confusion among national laboratory
officials who implement the IPP program.
o Regarding the financial state of the IPP program, DOE's
long-standing problem with large balances of unspent program funds
raises serious concerns about DOE's ability to spend program
resources in a timely manner and about the method DOE uses to
develop requests for future budgets. Reform of the complex payment
system used by the IPP program to pay foreign scientists could
help address some of these concerns.
o Because Russian scientists and institutes benefit from the IPP
program, it seems appropriate that DOE should seek to take
advantage of Russia's improved economic condition to ensure a
greater commitment to jointly held nonproliferation objectives.
o The absence of a joint plan between DOE's IPP program and ISTC's
Commercialization Support Program, which is funded by State,
raises questions about the lack of coordination between these two
U.S. government programs that share similar goals of finding
peaceful commercial opportunities for foreign WMD scientists.
Recommendations for Executive Action
We recommend that the Secretary of Energy, working with the
Administrator of the National Nuclear Security Administration,
reassess the IPP program to justify to the Congress the continued
need for the program. Such a reassessment should, at a minimum,
include a thorough analysis of the proliferation risk posed by
weapons scientists in Russia and other countries; a well-defined
strategy to more effectively target the scientists and institutes
of highest proliferation concern; more accurate reporting of
program accomplishments; and a clear exit strategy for the IPP
program, including specific criteria to determine when specific
countries, institutes, and individuals are ready to graduate from
participation in the IPP program. This reassessment should be done
in concert with, and include input from, other federal agencies,
such as State; the U.S. intelligence community; officials in host
governments where IPP projects are being implemented; the U.S.
business community; and independent U.S. nongovernmental
organizations.
If DOE determines that the program is still needed, despite the
increased economic prosperity in Russia and in light of the
general trend toward cost-sharing in U.S. nonproliferation
programs in that country, we recommend that the Secretary of
Energy, working with the Administrator of the National Nuclear
Security Administration, seek a commitment for cost-sharing from
the Russian government for future IPP projects at Russian
institutes.
To address a number of management issues that need to be resolved
so that the IPP program operates more effectively, we recommend
that the Secretary of Energy, working with the Administrator of
the National Nuclear Security Administration, immediately take the
following eight actions:
o establish a more rigorous, objective, and well-documented
process for verifying the WMD backgrounds and experiences of
participating foreign scientists;
o develop more reliable data on the commercialization results of
IPP projects, such as the number of jobs created;
o amend IPP program guidance to include a clear definition of what
constitutes a commercially successful IPP project;
o seek explicit congressional authorization to expand IPP efforts
outside of the former Soviet Union;
o for IPP efforts in Libya, ensure compliance with the statutory
restriction on the percentage of IPP program funds spent on
oversight activities at the DOE national laboratories to no more
than 35 percent;
o develop clear and specific guidance for IPP projects that are
intended to support GNEP;
o streamline the process through which foreign scientists receive
IPP funds by eliminating unnecessary layers of review; and
o seek to reduce the large balances of unspent funds associated
with the IPP program and adjust future budget requests
accordingly.
Finally, we recommend that the Secretaries of Energy and State,
working with the Administrator of the National Nuclear Security
Administration, develop a joint plan to better coordinate the
efforts of DOE's IPP program and ISTC's Commercialization Support
Program, which is funded by State.
Agency Comments and Our Evaluation
DOE and State provided written comments on a draft of this report,
which are presented in appendixes V and VI, respectively. DOE
agreed with 8 of our 11 recommendations to improve the overall
management and oversight of the IPP program, including augmenting
the department's process for reviewing the WMD backgrounds of IPP
project participants and developing more reliable data on the
commercialization results of IPP projects. DOE disagreed with 2 of
our recommendations and neither agreed nor disagreed with 1
recommendation. In addition, State concurred with our
recommendation to improve coordination between DOE's IPP program
and ISTC's Commercialization Support Program, which is funded by
State. DOE and State also provided technical comments, which we
incorporated in this report as appropriate.
In its comments on our draft report, DOE raised concerns about our
characterization of the IPP program's accomplishments,
requirements, and goals. DOE stated that we did not acknowledge
actions the department was undertaking during the course of our
review and asserted that our report does not provide a balanced
critique of the IPP program because we relied on an analysis of a
judgmental sample of IPP projects to support our findings. DOE
also disagreed with our general conclusion and recommendation that
the IPP program needs to be reassessed. In addition, DOE did not
concur with our recommendation that the department ensure
compliance with the statutory restriction on the percentage of IPP
program funds spent on oversight activities at the DOE national
laboratories to no more than 35 percent. DOE neither agreed nor
disagreed with our recommendation that the department seek a
commitment for cost-sharing from the Russian government for future
IPP projects at Russian institutes.
DOE is incorrect in its assertions that we failed to acknowledge
actions it was undertaking during the course of our review, and
that our report does not provide a balanced critique of the IPP
program. Our report acknowledges actions DOE is taking to improve
program management, such as the development of a new program and
financial management system. Our review identified numerous
problems and raised concerns about the IPP program's scope,
implementation, and performance that we believe should be
addressed by DOE as part of a reassessment of the IPP program.
However, DOE disagreed with our recommendation that the IPP
program needs to undergo such a reassessment and noted in its
comments that the department believes it has already conducted
such an assessment of the program. We were aware that such broad
internal reviews took place in 2004 and 2006, but these
assessments were conducted not of the IPP program exclusively, but
rather of all DOE efforts to assist weapons scientists, including
a complementary DOE program to assist workers in Russia's nuclear
cities that has since been canceled. As a result, we believe these
assessments are outdated because the IPP program operates under a
significantly different set of circumstances today than when DOE
conducted its previous internal assessments.
Finally, DOE disagreed with our recommendation that the department
ensure compliance with the statutory restriction on the percentage
of IPP program funds spent on oversight activities at the DOE
national laboratories to no more than 35 percent. We believe DOE
has misconstrued our recommendation concerning its funding of
projects in Libya. We did not recommend, nor did we mean to imply,
that DOE should allocate 65 percent of total project funds to
Libya for projects in that country. Instead, our recommendation
urges the department to ensure that it complies with existing
statutory restrictions on the percentage of IPP funds that can be
spent on oversight activities by DOE national laboratories.
Specifically, as DOE notes, section 3136 of the National Defense
Authorization Act for Fiscal Year 2000 provides that not more than
35 percent of funds available in any fiscal year for the IPP
program may be spent by DOE national laboratories to provide
oversight of program activities. DOE's IPP guidance and its
standard practice have been to implement this provision of law on
a project-by-project basis, so that no more than 35 percent of the
funds for each project are spent by national laboratories.
However, with respect to projects in Libya, DOE is deviating from
its IPP guidance by placing no restrictions on the amount of IPP
program funds that can be spent at DOE national laboratories for
oversight of projects in Libya. We found that 97 percent of funds
DOE spent on projects in Libya through May 2007 were spent at
DOE's national laboratories for project management and oversight.
(See app. V for DOE's comments and our responses.)
As agreed with your office, unless you publicly announce the
contents of this report earlier, we plan no further distribution
until 30 days from the report date. At that time, we will send
copies of this report to interested congressional committees; the
Secretaries of Energy and State; the Administrator, National
Nuclear Security Administration; and the Director, Office of
Management and Budget. We will also make copies available to
others upon request. In addition, this report will be made
available at no charge on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please
contact me at (202) 512-3841 or [email protected]. Contact points
for our Offices of Congressional Relations and Public Affairs may
be found on the last page of this report. Major contributors to
this report are included in appendix VII.
Sincerely yours,
Gene Aloise
Director, Natural Resources and Environment
Appendix I: Scope and Methodology
To review the Initiatives for Proliferation Prevention (IPP)
program, we interviewed key officials and analyzed documentation,
such as program guidance, project proposals, and financial
information from the Departments of Energy (DOE), Defense, and
State (State). We also interviewed representatives from each of
the 12 national laboratories--the Argonne, Brookhaven, Idaho,
Lawrence Berkeley, Lawrence Livermore, Los Alamos, National
Renewable Energy, Oak Ridge, Pacific Northwest, Sandia, and
Savannah River National Laboratories and the Kansas City
Plant--that participate in the IPP program. Our interviews focused
on general program plans, strategies, and policies as well as
issues associated with specific IPP projects. We also interviewed
and reviewed documentation provided by the U.S. Civilian Research
and Development Foundation (CRDF) in Arlington, Virginia; the
International Science and Technology Center (ISTC) in Moscow,
Russia; and the Science and Technology Center in Ukraine (STCU) in
Kyiv, Ukraine. We analyzed cost and budgetary information from
DOE, DOE's national laboratories, CRDF, ISTC, and STCU.
Furthermore, we interviewed knowledgeable officials on the
reliability of these data, including issues such as data entry,
access, quality control procedures, and the accuracy and
completeness of the data. We determined that these data were
sufficiently reliable for the purposes of this review.
We visited Russia and Ukraine to discuss the implementation of the
IPP program with officials and personnel involved in IPP projects.
While in Russia and Ukraine, we interviewed officials from 15
Russian and 7 Ukrainian institutes that participate in the IPP
program. We met with officials from the Federal Agency for Atomic
Energy of the Russian Federation, which oversees institutes
involved in Russia's nuclear weapons program. We also spoke with
officials from the U.S. embassies in Moscow and Kyiv.
Furthermore, we interviewed officials from 14 U.S. companies that
participate in the IPP program to better understand their
perspectives on the program's goals, benefits, and challenges, and
the results of specific projects for which they have served as
industry partners. We interviewed the principal staff of the U.S.
Industry Coalition, which represents companies that participate in
the IPP program. We also met with 5 nongovernmental experts who
have followed developments in the IPP and related nonproliferation
programs to get their views on the program.
To assess the reported accomplishments of the IPP program, we
judgmentally selected for in-depth review 207 IPP projects,
including draft, active, inactive, and completed projects, in the
Thrust 1, Thrust 2, and Thrust 3 categories. These 207 projects
represented over 22 percent of the 929 total IPP projects through
September 2007. Of the projects that we reviewed, 180 were with
Russia, 21 were with Ukraine, 3 were with Kazakhstan, and 3 were
with Armenia.^1 Because these projects were a judgmental sample,
the findings associated with them cannot be applied generally to
the IPP program as a whole.
We used the IPP information system to identify and select IPP
projects. This database, also referred to by DOE as the "Lotus
Notes" system, was developed and maintained by the Los Alamos
National Laboratory and is considered the program's project
proposal management system. The system contains data on all IPP
projects, from draft proposals to completed projects, and includes
such information as the project description, statement of work,
information on participating scientists in the former Soviet Union
and the U.S. industry partner, and financial expenditures. DOE
notified us that it was developing a new IPP project management
database, known as the Expertise Accountability Tool (EXACT), and
that some IPP project information contained in Lotus
Notes--especially pertaining to project expenditures and the
number of scientists supported--might not be current, accurate, or
complete. However, DOE officials told us that the EXACT system was
not available during our project selection phase, and that it
would not contain information on completed IPP projects. As a
result, we used the Lotus Notes database to make our project
selection.
We selected projects on the basis of a number of criteria, such as
project status, project funding, the type of institute involved in
the project, geographic distribution, national laboratory
representation, and the claimed commercial success of the project.
We also received and used recommendations from DOE on criteria to
consider in selecting projects for review.
The status and dollar size of IPP projects were significant
considerations in our project selection. For example, we focused
primarily on active projects--that is, Thrust 2 projects that were
approved, funded, or under way--regardless of their dollar value.
We also considered draft and inactive Thrust 2 projects where
proposed funding was over $800,000, as well as completed Thrust 1
and Thrust 2 projects that spent over $250,000. We also selected
projects for review across a variety of institutes in the former
Soviet Union, including facilities with backgrounds in nuclear,
chemical, biological, and missile research and development.
^1Some projects involved multiple collaborating institutes and, in some
cases, involved institutes in more than one country. We categorized
projects by country according to the host country where the lead institute
was located.
The foreign countries and institutes where we planned to conduct
fieldwork also played a significant role in our project selection.
Time and cost constraints, as well as Russian government
restrictions on access to some facilities, limited the number and
types of sites we were able to visit. We concentrated on projects
at institutes in Russia and Ukraine because over 90 percent of all
IPP projects are in these two countries. We focused on IPP
projects at institutes in the Russian cities of Moscow, Nizhny
Novgorod, and Sarov because these cities ranked high in our
analysis of several variables, including the total number of IPP
projects, the number of projects supporting commercial activities,
and the total amount of funding proposed in IPP projects in those
locations.^2 We also focused on projects in the Ukrainian cities
of Kyiv, because over 54 percent of IPP projects in Ukraine are
there, and Kharkiv, because of its relative proximity to Kyiv and
the number of projects there. We selected institutes in the
Russian and Ukrainian cities for site visits on the basis of
several criteria, including the total number of projects, the
number of active projects, the type of institute, and the number
of projects commercialized at each location.
We also selected projects administered by each of the national
laboratories and the Kansas City Plant that participate in the
program as well as projects managed by DOE headquarters. The
selected projects included 18 projects at Argonne, 22 at
Brookhaven, 8 at Idaho, 18 at Lawrence Berkeley, 33 at Lawrence
Livermore, 14 at Los Alamos, 11 at National Renewable Energy, 12
at Oak Ridge, 41 at Pacific Northwest, 15 at Sandia, and 2 at
Savannah River; 9 projects at the Kansas City Plant; as well as 4
projects managed by DOE headquarters.
The commercial success of an IPP project also played an important
role in its selection. For example, we selected for review all 50
projects that DOE indicated as having led to commercially
successful ventures identified in its Fiscal Year 2005 IPP Program
Annual Report. We were able to review 48 of the 50 commercially
successful projects with the sponsoring national laboratory,
Russian or Ukrainian institute, or industry partner or some
combination of these three entities. We also reviewed 11 IPP
projects that had been identified as commercially successful in
prior year annual reports, but that were not addressed in the
fiscal year 2005 report.
^2Because Sarov is a closed Russian nuclear city to which DOE officials
told us we were not likely to be granted access by the Russian government,
relevant IPP project managers traveled from Sarov to meet with us in
Nizhny Novgorod.
To assess the nonproliferation impact of the IPP program, we
requested and evaluated available information on the personnel at
institutes in the countries of the former Soviet Union
participating in the projects we selected for review. To determine
the percentage of personnel without weapons of mass destruction
(WMD) experience, we added the total number of project personnel
who did not claim prior WMD experience--based on the WMD
experience codes the project personnel self-declared to one of the
three IPP payment systems--and divided this figure against the
total number of project participants. We followed a similar
process to calculate the percentage of older personnel versus
younger personnel. We classified workers born in 1970 or later as
younger workers because they were unlikely to have contributed to
Soviet-era WMD programs. We also calculated the total amount of
funds paid to these four different categories of
participants--those claiming WMD experience, those who did not,
older workers, and younger participants. In some cases, birth
dates were not available for some participants in the
documentation we received; in those instances, those individuals
and the payments made to them were tracked in separate categories.
We collected this information by providing officials at each of
the 12 participating national laboratories with a template,
requesting that the laboratory project leader provide information
on the personnel involved in each project in our sample, including
each participant's full name, institute affiliation, date of
birth, WMD experience, and amount paid under the project. In
instances where we did not receive complete information from the
laboratories, we used payment records and other information on IPP
project participants maintained by the three payment
mechanisms--CRDF, ISTC, and STCU--to complete data missing from
the templates, or to reconstruct payment records for the project
participants in cases where the national laboratory did not
provide any information on the project participants. Because of
potential data reliability concerns raised by CRDF on older IPP
projects for which it processed payments, we consulted with CRDF
representatives and received recommendations on specific projects
that we should exclude from our analysis.
Among the 207 IPP projects we reviewed, no payments had yet been
made on 42 projects and 14 projects were inactive. Of the
remaining 151 IPP projects in our sample, we determined that 54
projects were too old for evaluation, because DOE did not collect
rosters of individual project participants before 2000, or that
sufficient and reliable information on the project participants
was not readily available. Thus, our review of the backgrounds of
the participants was conducted on 97 of the 207 projects in our
sample.
To assess the commercial results of IPP projects, we reviewed 48
of the 50 projects that contributed to the commercial successes
presented in DOE's fiscal year 2005 annual report for the IPP
program, which was the most recent report available at the time of
our review. DOE provided us with the list of IPP projects
associated with those commercial successes, and we reviewed and
evaluated the raw data collected by the U.S. Industry Coalition
for each of those projects in its 2005 commercial success survey,
which DOE used as the basis for the commercial successes cited in
its fiscal year 2005 IPP annual report. In addition, for the 48
commercially successful projects we reviewed, we interviewed
representatives from the sponsoring national laboratory, Russian
or Ukrainian institute, or industry partner or some combination of
these three entities to understand the commercial activities and
other details associated with these projects. Specifically, we (1)
met or conducted telephone interviews with 12 companies involved
in the commercially successful projects, (2) interviewed
representatives at the national laboratories for 46 of the 50
projects reported to be commercially successful, and (3) visited 6
of the institutes in Russia and Ukraine where IPP projects were
reported to have been commercialized.
To assess the IPP program's future, we interviewed DOE and
national laboratory officials. We also assessed State's planned
exit strategy for its Science Centers program. We discussed
State's strategy with DOE, State, and ISTC officials. Regarding
the IPP program's expansion, we met with officials and reviewed
documentation from DOE, State, and the Lawrence Livermore,
National Renewable Energy, and Sandia National Laboratories
concerning the engagement of former weapons scientists in Iraq and
Libya. Regarding the program's support to the Global Nuclear
Energy Partnership, we reviewed documents and interviewed
officials from the IPP program office, DOE national laboratories,
and DOE's Office of Nuclear Energy.
To assess the extent to which the IPP program has had annual
carryover balances of unspent funds and the reasons for such
carryover, we obtained financial data from DOE's IPP program
office, DOE's National Nuclear Security Administration's (NNSA)
budget and finance office, and the national laboratories
participating in the program. We discussed and reviewed these data
with budget and program analysts at the IPP program office and
NNSA's budget and finance office. In addition, we interviewed
knowledgeable officials on the reliability of these data,
including issues such as data entry, access, quality control
procedures, and the accuracy and completeness of the data. We
determined that these data were sufficiently reliable for the
purposes of this review.
We conducted our review from October 2006 through December 2007 in
accordance with generally accepted government auditing standards.
Appendix II: Additional Information on the Russian and Ukrainian
Institutes That We Included in Our Fieldwork
During our review of the DOE's IPP program, we interviewed
officials from 15 institutes in Russia and 7 in Ukraine in July
2007.
Russian Institutes
In July 2007, we met with Russian scientists and officials from
institutes in Moscow, Nizhny Novgorod, Pushchino, and Troitsk,
Russia, to discuss draft, active, inactive, and completed IPP
projects.
Center for Ecological Research and BioResources Development
The Center for Ecological Research and BioResources Development
was established in 2000 through a $1.5 million grant from the IPP
program. It focuses on the discovery of novel bioactive compounds,
biodiversity collection and identification, and environmental
bioremediation. The center comprises 9 research institutes and is
connected with 30 laboratories, with about 300 scientists. The
center's role is to coordinate the activities of the member
institutes, organize workshops and visits, consult on the
administration of IPP projects, provide report editing and
translation, perform financial reporting and examinations, and
export biomaterials to the United States and elsewhere. The center
has shipped over 50,000 biological samples. We discussed 5 IPP
projects, including 2 completed, 2 active, and 1 draft project.
When we discussed IPP projects with the center, representatives
from 2 partner institutes--the Institute of Biochemistry and
Physiology of Microorganisms and the Scientific Center for Applied
Microbiology and Biotechnology--were also present.
Gamaleya Scientific Research Institute of Epidemiology and Microbiology
The Gamaleya Scientific Research Institute of Epidemiology and
Microbiology was founded in 1891 for research into infectious
diseases in humans and manufactures more than 40 different
pharmaceutical products, including a tuberculosis vaccine.
Gamaleya officials told us that the institute employs 800 staff,
including 120 scientists and 680 technicians and administrative
personnel. We visited the institute during our first audit of the
IPP program in 1999. We spoke with Gamaleya officials about 3
completed IPP projects. The institute is involved in marketing a
veterinary drug and is just starting to market an antiparasite
drug for honeybees. The third project is expected to produce a
marketable product in 2 to 3 years.
Institute for Nuclear Research of the Russian Academy of Sciences
The Institute for Nuclear Research of the Russian Academy of
Sciences, with branches in Moscow and Troitsk, was founded in 1970
to further development of fundamental research activities in the
field of atomic, elementary particle, and cosmic ray physics and
neutrino astrophysics. The institute, with a staff of about 1,300
specialists, was formed from 3 nuclear laboratories of the P.N.
Lebedev Institute of Physics of the former Soviet Union's National
Academy of Sciences. About 600 people work in the Troitsk branch
of the institute. We spoke with institute officials at this branch
about 5 IPP projects--4 completed and 1 active. During the first
audit of DOE IPP programs, in 1999, we visited the Moscow branch
of this institute.
Institute of Applied Physics of the Russian Academy of Sciences
The Institute of Applied Physics of the Russian Academy of
Sciences in Nizhny Novgorod became an independent research
facility in 1977. During this time, its primary focus was working
with transmitting and detecting waves through different matters;
in practical terms, this included work for the Soviet military on
radar tracking of missiles and supporting Russian missile defense,
materials science applications in radioelectronic equipment, and
submarine detection using radar. Institute officials told us that
since the beginning of the 1990s, the institute has reduced its
staff from about 2,000 employees, to roughly 1,100. However, it
has retained a large number of top-level researchers despite the
fact that defense orders plummeted to zero. Officials told us that
the institute was in good shape today, has adapted to the changing
environment, and has created several successful spin-off
companies. We discussed 4 IPP projects with institute officials--1
completed, 1 active, and 2 draft.
Institute of Biochemistry and Physiology of Microorganisms
The Institute of Biochemistry and Physiology of Microorganisms is
1 of 4 research institutes that make up the Center for Ecological
Research and BioResources Development. This institute is not a
weapons institute and never had a role in the Soviet biological
weapons program. However, institute officials noted that some
scientists at the institute had come from other institutes that
were involved in biological warfare research. The institute is
home to the "All Russia Biological Culture Collection." We
discussed 3 IPP projects--1 completed, 1 active, and 1 draft--with
officials from the institute. These were 3 of the 4 IPP projects
we discussed at the Center for Ecological Research and
BioResources Development.
Institute of General Physics of the Russian Academy of Sciences
The Institute of General Physics of the Russian Academy of
Sciences was founded in 1983 by Nobel Prize winner Academician
A.M. Prokhorov, who headed it until 1998 and now serves as the
institute's honorary director. The institute began as Division "A"
of the Lebedev Physical Institute. It currently consists of 13
research departments and 5 research centers: (1) natural sciences,
(2) laser materials and technologies, (3) wave research, (4) fiber
optics, and (5) physical instrumentation. The institute has a
staff of 1,264, including 600 researchers. Its principal research
areas encompass quantum electronics and optics, solid state
physics, micro- and nanoelectronics, integral and fiber optics,
plasma physics and photoelectronics, radio physics and acoustics,
laser medicine, and ecology. We discussed 6 IPP projects with
institute officials--4 completed and 2 active.
Krasnaya Zvezda (Red Star)
Krasnaya Zvezda was established in 1972 to combine other
organizations that employed designers, developers, and
manufacturers of space-based nuclear power systems. Krasnaya
Zvezda officials told us that they continue to do some
defense-related work. However, the institute now mostly focuses on
the civilian sector and work on civilian nuclear energy projects,
including radioactive waste management at civilian nuclear power
plants. The financial situation has been relatively steady over
the past years and officials anticipate that with the
reorganization of the Federal Agency for Atomic Energy of the
Russian Federation, Krasnaya Zvezda will be involved in many
future civilian nuclear energy contracts. Krasnaya Zvezda
maintains a close relationship with the Kurchatov Institute. We
discussed 5 IPP projects-- 3 completed and 2 draft--with Krasnaya
Zvezda officials.
Kurchatov Institute
The Kurchatov Institute is one of Russia's leading nuclear
research institutes. Through the mid-1950s, defense activities
represented more than 80 percent of the institute's budget. By
1965, the defense portion had been reduced to about 50 percent,
and, although Kurchatov has scientists who were involved with
nuclear weapons programs in the past, today there are virtually no
defense-related contracts. The institute conducts research on
controlled thermonuclear fusion, plasma physics, solid state
physics, and superconductivity. It designs nuclear reactors for
the Russian Navy, the Russian icebreaker fleet, and space
applications. Nuclear experts from the Kurchatov Institute have
helped set up and operate Soviet-exported research reactors,
including one at Libya's Tajura nuclear research center. In
addition, the Kurchatov Institute is the subcontractor for DOE's
Material Protection, Control, and Accounting program with the
Russian Navy and icebreaker fleet. We discussed 10 IPP projects
with Kurchatov officials--7 completed and 3 active. In 1999, we
visited the Kurchatov Institute during our first audit of DOE's
IPP program.
Moscow State University
One of the oldest Russian institutions of higher education, Moscow
State University was established in 1755. According to DOE and
national laboratory officials, Moscow State University departments
of physics, chemistry, and biology were involved in research
related to WMD. Specifically, according to DOE, when the Soviet
Ministry of Defense needed certain expertise or research done, it
called upon individuals at academic institutions, such as Moscow
State University. We discussed 1 project DOE subsequently canceled
and 1 draft IPP project with Moscow State University officials.
Radiophysical Research Institute
The Radiophysical Research Institute of the Ministry of Education
and Science was founded in 1956 in Nizhny Novgorod. Since then
outreach efforts have been directed toward (1) supporting research
in the fields of natural sciences and astronomy and (2) expanding
interest in research work in such areas as astronomy, solar
physics, the relationship between the Sun and the Earth, and the
associated geophysics. We spoke with an official from the
Radiophysical Research Institute, who was present during our
interview with officials from the Scientific Research Institute of
Measuring Systems. We discussed 1 project that ended in 2002 with
this official.
Scientific Research Institute of Measuring Systems
The Scientific Research Institute of Measuring Systems in Nizhny
Novgorod, Russia, was established in 1966 to develop and produce
electronics to support industry enterprises, including nuclear
power plants as well as nuclear research and developments. Today,
the institute researches, designs, and manufactures computer and
semiconductor equipment, mostly for use in the Russian energy
industry. The institute also develops and manufactures software
and control systems for gas lines, and thermal and nuclear power
stations. We discussed 3 IPP projects with officials--1 active and
2 completed projects.
Afrikantov Experimental Machine Building Design Bureau
The State Unitary Enterprise I.I. Afrikantov Experimental Machine
Building Design Bureau was founded in 1947 as a component of the
Gorky Machine Building Plant Design Bureau to create equipment for
nuclear industry. Later, as the mission expanded to the creation
of various nuclear reactors, the design bureau was separated from
the Gorky Machine Building Plant. Currently, the Afrikantov
Experimental Machine Building Design Bureau employs about 3,400
staff and is one of the lead design organizations in the industry,
supporting a large scientific and production center for nuclear
power engineering. Since the 1960s, the institute has been the
chief designer of ship-based reactor plants and fast neutron
reactors. One of the institute's significant achievements is the
creation of innovative integral reactors with natural and forced
coolant circulation. The institute actively participates in the
creation of nuclear power installations abroad and has scientific
and technical cooperative arrangements with the International
Atomic Energy Agency, and national laboratories and companies in
China, France, India, Japan, South Korea, and the United States.
We discussed 2 draft IPP projects with officials from the
institute.
Soliton-NTT Research Center
Soliton is a private company that was spun off from the Kurchatov
Institute in the early 1990s. Soliton was formed by scientists
from the Kurchatov Institute to convert defense technologies to
civil purposes and to commercialize these technologies. Before
working for Soliton, many Soliton employees were involved in
weapons-related activities at the Kurchatov Institute, and most
still retain some ties to Kurchatov. Soliton has official
permission to use scientists from other institutes as part of the
effort to commercialize former weapons laboratories. Soliton was
organized so that small-scale nonweapons projects could be
undertaken using the talents of several weapons scientists from a
variety of institutes. We discussed 6 IPP projects with Soliton
officials--5 completed and 1 active.
Russian Federal Nuclear Center--All-Russian Scientific Research
Institute of Experimental Physics
In 1946, the Soviet government established the All-Russian
Scientific Research Institute of Experimental Physics in Sarov,
where the first Soviet nuclear bomb was designed and assembled. In
Soviet times, the institute's mission included the design of
nuclear warheads and the development of experimental and prototype
warheads. Today, the safety and reliability of the Russian nuclear
stockpile are the institute's primary missions. According to
information provided by the institute, since 1990, it has
increasingly developed international collaboration in unclassified
science and technology areas. The institute employs about 24,000
people, approximately half of whom are scientists or engineers,
and is the largest research institution in Russia that
successfully handles defense, science, and national economic
problems. Under the current nuclear testing moratorium, nuclear
weapons research and development activities are concentrated at
computational and theoretical, design, and test divisions of the
institute. During our earlier audit of DOE's IPP program, we
interviewed officials from this institute in 1998. We discussed 10
IPP projects--5 active and 5 completed--with institute officials.
Zelinsky Institute of Organic Chemistry
The Zelinsky Institute of Organic Chemistry of the Russian Academy
of Sciences, founded in 1934, is one of the world's largest
scientific centers in the fields of organic chemistry, organic
catalysis, and chemistry of biologically active compounds. It
employs about 600 people, although it had over 1,300 at its peak
in the 1980s. In addition, about 150 students are engaged in
graduate studies at the institute. Officials told us that until
the early 1990s, the institute was involved in some
defense-related activities, but it has not been involved in any
WMD-related work since the early 1990s. The institute mostly
worked on research related to high explosives and solid rocket
fuel (not chemical weapons). We discussed 3 IPP projects--2
completed and 1 canceled--with institute officials.
Ukrainian Institutes
While in Ukraine, we met with representatives from 7 institutes
based in Dnipropetrovsk, Kharkiv, and Kyiv and discussed 18 IPP
projects with scientists and institute officials.
E.O. Paton Electric Welding Institute
The E.O. Paton Electric Welding Institute was founded in 1934, and
has become one of the largest research institutes in the world,
with about 8,000 employees (3,000 at the headquarters in Kyiv).
The institute is a multidisciplinary scientific and technical
complex involved in fundamental and applied research in the field
of welding and related technologies; development of technologies,
materials, equipment, and control systems; rational welded
structures and parts; and methods and means for diagnostics and
nondestructive testing. The institute undertakes research in all
phases of electric welding and certain specialized related
processes, such as brazing, explosive forming, electrometallurgy,
and friction welding. The institute's work covers welding of
virtually all metals and alloys as well as ceramics in thicknesses
varying from submicron to tens of centimeters. The institute also
develops welding equipment, manufactures pilot plants, and
develops welding consumables. We discussed 7 IPP projects--4
completed and 3 active--with E.O. Paton officials and Pratt and
Whitney Kyiv employees at 3 Paton facilities in Kyiv.
International Center for Electron Beam Technology
The International Center for Electron Beam Technology is a
spin-off institute from the E.O. Paton Welding Institute and is
located nearby in Kyiv. The center derives more than half of its
funding from IPP funds and was created in the early 1990s by Paton
employees specifically to take on projects with international
organizations. According to institute officials, they do not
receive any funding for their activities from the Ukrainian
government. However, they also told us that financially, their
situation is much better than 14 years ago, but that all of their
research equipment is out of date. All of the IPP funds are used
to pay scientists' salaries, and they do not have other funds for
new equipment. We discussed 2 IPP projects--1 completed and 1
active--during the interview.
Institute for Metal Physics
The Institute for Metal Physics is part of the Ukrainian Academy
of Sciences and employs about 600 staff--about half researchers
and half support staff. The number of staff is down from a peak of
1,600 in Soviet times but has been stable for the past 5 to 6
years, according to institute officials. These officials told us
that during the Soviet era, about 80 percent of the institute's
work was related to missile delivery systems. The institute became
completely divorced from weapons work in the mid 1980s. Today,
virtually all work is commercial. During our visit, we discussed 1
active IPP project.
International Institute of Cell Biology
The International Institute of Cell Biology is a nonprofit entity
founded in 1992 by the Ukrainian Academy of Sciences. The
International Institute of Cell Biology employs about 150 people,
about one third of whom have doctorates. It is closely affiliated
with the Institute of Cell Biology and Genetic Engineering,
founded in 1988, and the Institute of Microbiology and Virology
founded in 1928. The Institute of Cell Biology and Genetic
Engineering is one of the key laboratories involved with plant
genetic engineering in the former Soviet Union and offers
substantial expertise in tissue culture initiation, preservation
and maintenance, and gene transfer and expression. The Institute
of Microbiology and Virology, with about 300 scientists, hosts the
second largest collection of microorganisms in the countries of
the former Soviet Union. The official we interviewed told us that
the Institute of Microbiology and Virology was involved in defense
efforts involving biological agents during Soviet times.
Researchers from both of these institutes were involved in the
International Institute of Cell Biology's work with the IPP
program. The deputy director told us that there has been a
significant brain drain over the years. Over the last 15 years, 50
scientists left the institute and went to western-oriented
countries, such as Germany and Australia. We discussed 1 completed
IPP project. However, the deputy director told us that he is
planning to apply for 2 more projects in the future.
Intertek, Ltd.
Registered as a private company in 2000, Intertek, Ltd., was
founded by a man who was a professor of Aircraft Engines and
Technology at the National Aerospace University in Kharkiv until
2004. We discussed an IPP project, at the draft stage, with
Intertek's director and a representative from a partner institute,
the State Design Office Yuzhnoye. The director told us that
Intertek currently employs about 15 people and would expand to 40
if the IPP project starts up. Most of the staff would be drawn
from the National Aerospace University in Kharkiv.
Kharkov Institute of Physics and Technology
Kharkov Institute of Physics and Technology, one of the oldest and
largest centers for physical science in Ukraine, was created in
1928 to research nuclear and solid-state physics. The institute,
located in Kharkiv, Ukraine, currently has 2,500 employees, down
from about 6,500 employees before 1991. Many young specialists
left during the difficult financial period of the late 1990s for
Brazil, Canada, France, Germany, Israel, the Netherlands, Sweden,
the United Kingdom, and the United States. Institute officials are
not aware of any specialists who have either left Ukraine for a
country of concern or provided any information to such a country.
Since 2004, the institute has been under the Ukrainian Academy of
Sciences and is Ukraine's lead organization on scientific programs
for nuclear and radiation technologies. The institute's economic
condition has significantly improved over the past 10 years. It is
receiving more direct funding from the Ukrainian federal budget
and also receives grants from U.S. and European programs.
Assistance partners include STCU and IPP. IPP funding makes up no
more than 2 percent of the total budget. We discussed 6 IPP
projects--1 draft, 2 active, and 3 completed--with institute
officials.
State Design Office Yuzhnoye
The State Design Office Yuzhnoye in Dnipropetrovsk was founded in
1954 for researching and engineering space and rocket technology.
The institute has designed and manufactured many varieties of
ballistic missile complexes, and designed and launched 70 types of
spacecraft. Once Ukraine gained its independence in 1991,
Yuzhnoye, the sole Soviet missile design facility located outside
of the Russian Federation, discontinued its work on ballistic
missiles. However, since 1994, Yuzhnoye personnel, under a
contract with the Russian Strategic Rocket Forces, have continued
to provide a wide range of services aimed at extending the service
life of those missile complexes still in use. In addition, the
institute has diversified its production to include agricultural
machinery, such as combines; a line of food processing
accessories; and trolleys. We met with an official from Yuzhnoye
during our interview with Intertek, Ltd., and discussed 1 draft
IPP project on which the 2 institutes are collaborating.
Appendix III: Classification Systems Used to Assess IPP Project
Participants' Knowledge of Weapons of Mass Destruction
This appendix provides information on the classification systems
DOE and the three entities that make IPP project payments to
recipients in Russia and other countries use to classify the WMD
expertise of the personnel participating in an IPP project.
DOE, for example, classifies personnel into one of three
categories:
1. Direct experience in WMD design, production, or
testing.
2. Experience in research and development of WMD
underlying technology.
3. No WMD-relevant experience.
DOE also requires that a preponderance of staff working on its
projects have had WMD-relevant experience before 1991 (i.e., fall
in categories 1 or 2 above). According to DOE, "the meaning of
`preponderance' is taken to be 60 percent, as a bare minimum. Two
thirds would be better, and anything above that better still."
There is no consistent approach to categorizing the proposed
project personnel by the national laboratories in the lists they
submit in the proposal to DOE for review. In some cases, the
proposed personnel are categorized using the DOE classifications.
But in other cases, the individuals in the project proposal are
classified using weapons experience codes of the intended payment
mechanism. Some IPP project proposals classify personnel using
both the DOE categories and the payment system codes.
Each of the three payment entities have similar but slightly
different lists of weapons experience codes that personnel on an
IPP project use to designate their relevant WMD background. See
table 2 for the weapons codes used by CRDF, ISTC, and STCU, by
general type of weapons expertise.
Table 2: CRDF, ISTC, and STCU Weapons Expertise Classification Codes
General weapons CRDF weapons ISTC weapons STCU weapons expertise
expertise category expertise codes expertise codes codes
Biological 3.1: Design and 1.3: Mass destruction
C1: Design and performance of weapon--bacteriological
performance of missile warheads
missile warheads and rockets for
and rockets for delivery of
delivery of biological weapons
biological weapons
3.2: Biopolymer
C2: Biopolymer production related
production related to biological
to biological warhead
warhead capabilities
capabilities
3.3: Dissemination
C3: Dissemination of biological
of biological weapon agents
weapon agents
3.4: Basic
C4: Basic knowledge knowledge of
of biological biological weapons
weapons design and design and their
their effect on the effect on the human
human system system
Chemical 2.1: Design and 1.2: Mass destruction
B1: Design and performance of weapon--chemical
performance of missile warheads
missile warheads and rockets for
and rockets for delivery of
delivery of chemical weapons
chemical weapons
2.2: Materials,
B2: Materials, facilities, and
facilities, and performance
performance processes needed
processes needed for the production
for the production of chemical weapon
of chemical weapon agents and their
agents and their key precursors
key precursors
2.3: Dissemination
B3: Dissemination of chemical weapon
of chemical weapon agents
agents
2.4: Basic
B4: Basic knowledge knowledge of
of chemical weapons chemical weapons
design and their design and their
effect on the human effect on the human
system system
Missile/Anti-Ballistic A1: Design, 1.1: Design, 2.1: Delivery
Missile Systems construction, and construction, and systems--missile
performance of air, performance of air, technologies
space, surface, and space, surface, and
underwater-launched underwater-launched 2.2: Delivery
missiles. Materials missiles. Materials systems--guiding
and technologies and technologies systems
for these missiles. for these missiles.
Production of Production of 2.3: Delivery
engines, fuels, engines, fuels, systems--others
composites, composites,
integrated integrated 3.1: Anti-Ballistic
elements, elements, Missile
radioelectronic radioelectronic systems--recognition
equipment, and equipment, and systems
different testing different testing
devices for devices for 3.2: Anti-Ballistic
missiles missiles Missile
systems--guiding
A2: Techniques for 1.2: Techniques for systems
guidance and guidance and
control of missiles control of missiles 3.3: Anti-Ballistic
from launching to from launching to Missile systems--others
impact. Includes impact. Includes
optical guidance, optical guidance,
television television
guidance, wire guidance, wire
guidance, present guidance, present
and terminal and terminal
guidance, internal guidance, internal
guidance, command guidance, command
guidance, and guidance, and
homing guidance homing guidance
A3: Missile 1.3: Missile
handling and handling and
launching, launching,
including including
transportation, transportation,
storage, and storage, and
preparation for preparation for
launching; air, launching; air,
space, surface, and space, surface, and
underwater underwater
launching and launching and
support equipment support equipment
and technologies; and technologies;
checkout equipment checkout equipment
and procedures; and procedures;
guided missile guided missile
ranges ranges
A4: Techniques and 1.4: Techniques and
systems for systems for
tracking missiles tracking missiles
as defensive as defensive
measures. Can be measures. Can be
from surface from surface
installations or installations or
air and space-borne air and space-borne
platforms platforms
General weapons CRDF weapons ISTC weapons STCU weapons expertise
expertise category expertise codes expertise codes codes
Nuclear D1: Basic knowledge 4.1: Basic 1.1: Mass destruction
of nuclear weapons knowledge of weapon--nuclear
design, nuclear weapons
construction, design,
characteristics, construction,
and the effect on characteristics,
the human system and the effect on
the human system
D2: Design,
construction, and 4.2: Design,
performance of construction, and
missile warheads performance of
for delivery of missile warheads
nuclear weapons for delivery of
nuclear weapons
D3: Design,
construction, and 4.3: Design,
performance of the construction, and
equipment and performance of the
components of equipment and
Uranium and components for
Plutonium Uranium and
separation Plutonium
separation
D4: Design,
construction, and 4.4: Design,
performance of the construction, and
equipment connected performance of the
with heavy water equipment connected
production with heavy water
production
D5: Design,
construction, and 4.5: Design,
performance of the construction, and
equipment for performance for
development of development of
detonators detonators
D6: Design, 4.6: Design,
construction, and construction, and
performance of performance of
explosive explosive
substances and substances and
related equipment related equipment
D7: Design, 4.7: Design,
construction, and construction, and
performance of the performance of the
equipment and equipment and
components for components for
nuclear testing nuclear testing
D8: Design, 4.8: Design,
construction, construction,
performance, and performance, and
operation of operation of
production-type production-type
nuclear reactors nuclear reactors
for fissile and for fissile and
tritium-content tritium-content
materials materials
production production
(breeding) (breeding)
D9: Design, 4.9: Design,
construction, and construction, and
performance of performance of
nuclear reactors nuclear reactors
and units for and units for
submarine and for submarine and for
military space military space
programs programs
Other E1: Design, 5.1: Design, 1.4: Mass destruction
construction, and construction, and weapon--others
performance of performance of
powerful laser powerful laser 4: Other weapons
facilities for facilities for
military military
applications applications
E2: Design, 5.2: Design,
construction, and construction, and
performance of performance of
accelerator accelerator
facilities for facilities for
military military
applications in applications in
space programs space programs
E3: Other
No Weapons Experience No code for No code for 0: Non-former weapon
personnel not personnel not scientist
claiming weapons claiming weapons
experience experience
Sources: CRDF, ISTC, and STCU.
Appendix IV: IPP Projects DOE Reported to Be Commercially Successful
Table 3 provides information on the 50 IPP projects DOE indicated as
contributing to commercial successes in its Fiscal Year 2005 IPP Program
Annual Report.
Table 3: DOE Projects Listed as Contributing to Commercial Successes in
DOE's Fiscal Year 2005 IPP Program Annual Report
Lead DOE
Project national Lead foreign
Project title number(s) U.S. companies laboratory institute(s)
Nanophase LANL-T2-0148-RU Argonide Los Alamos Institute of
Powders Corporation Petroleum
LANL-T2-0190-RU Chemistry and
Institute of
Strength Physics
and Materials
Science, Russia
Ceramic NREL-T2-0200-RU Argonide National Institute of
Nanofibers Corporation Renewable Strength Physics
NREL-T2-0200a-RU Energy and Materials
Science, and State
Research Center of
Virology and
Biotechnology,
Russia
Positron LANL-T2-0164-RU Technology Los Alamos Institute of
Emission Commercialization Nuclear Research,
Tomography LANL-T2-0193-RU International Russia
LANL-T3-0400-RU
Positron BNL-T2-0306-RU Technology Brookhaven Institute of
Emission Commercialization Nuclear Research,
Tomography International Russia
Molybdenum-99 ANL-T2-0210A-RU Technology Argonne Kurchatov
from Solution Commercialization Institute of
Reactor International Atomic Energy,
Russia
Ferrolectric NREL-T2-0191-RU Paratek Microwave National St. Petersburg
Phase Shifters Renewable Electrotechnical
for Cellular and NREL-T2-0208-RU Energy University, Russia
Personal
Communications
Systems Phased
Array Antenna
Soil and Water ORS-T2-0078-RU Stable Earth Oak Ridge Electro-Physical
Remediation at Technology, and Acoustic
Contaminated Electro-Physical Technologies,
Sites Using and Acoustic Ltd., Russia
Humosorb Technologies,
Ltd.
Land Mine SNL-T2-0194-RU Stolar Research Sandia Spektr-Konversia,
Detectors Corporation Russia
Radar Mapping of KCP-T2-0225-RU Stolar Research Kansas City Measuring Systems
Geologic Corporation Plant Research
Structures from Institute, Russia
Drills
Electron Beam LBNL-T1-0017-RU Phygen Lawrence All-Russian
Welding Corporation Berkeley Scientific
LBNL-T2-0110-RU Research Institute
of Inorganic
LBNL-T2-0110A-RU Materials--Siberia
Branch, Institute
of High Current
Electronics, and
Tomsk State
University of
Control Systems
and
Radioelectronics,
Russia
Thorium Power BNL-T2-0074-RU Thorium Power Brookhaven Kurchatov
Cycle Company Institute of
BNL-T2-0074a-RU Atomic Energy and
Electrostal,
BNL-T2-0074b-RU Russia
Software LLNL-T2-0236-RU No Partner Lawrence Kurchatov
Developer Livermore Institute of
Training DOEH-T2-0003-RU and DOE Atomic Energy,
Headquarters Russia
Copper-Beryllium LANL-T2-0195-KZ RWE Nukem, Inc. Los Alamos Ulba Metallurgical
Alloy and Brush-Wellman Plant, Kazakhstan
Uranium Dioxide BNL-T2-0308-KZ RWE Nukem, Inc. Brookhaven Ulba Metallurgical
Powder and Global Plant, Kazakhstan
Nuclear Fuels
Needleless KCP-T2-0221-RU Felton Kansas City Chemical
Injectors International, Plant Automatics Design
Inc. Bureau, Russia
Turbine Airfoil ORS-T2-0204-UA Pratt and Oak Ridge Paton Electric
Repair Whitney/United Welding Institute,
Technologies Ukraine
Corporation
Unique Russian ORS-T2-0107-RU Rustec, Inc. Oak Ridge Association of
Crusher Design Centers for
for Metal ORS-T2-0180-RU Engineering and
Recycling Automation, Russia
Stable Isotopes LLNL-T2-0234-RU Spectra Gases Lawrence Kurchatov
Carbon-13 and Livermore Institute of
Oxygen-18 for Atomic Energy,
Medical Moscow, Russia
Applications
Electrochemical BNL-T2-0307-RU Fenix Technology Brookhaven Ural Process
Process for International Engineering, Ltd.,
Removal of Heavy and the
Metals from All-Russian
Wastewater Scientific
Research Institute
of Technical
Physics, Russia
Linear Ion BNL-T1-0012-RU No Partner Brookhaven Institute of
Source Electrophysics,
BNL-T1-0012a-RU Russia
Step-by-Step SNL-T1-0084-RU No Partner Sandia Chelyabinsk State
Deformation of University of
Metal Alloys Technology, Russia
Crop Protection PNNL-T2-0194-UA Dupont Pacific Ukraine Institute
Products Northwest of Organic
PNNL-T2-0195-RU Chemistry,
Ukraine, and
Experimental Plant
for the Design and
Manufacturing of
Scientific
Equipment, Russia
Crop Protection LBNL-T2-0193-RU Dupont Lawrence State Research
Products Berkeley Center of Virology
and Biotechnology,
Russia
Explosives BNL-T2-0320-RU Brookhaven Brookhaven Budker Institute
Detection and Technology Group of Nuclear
Other Proton Problems, Russia
Beam Based
Applications
Biodegradation PNNL-T2-0202-RU Dye Seed Ranch Pacific JSC BioKhimMash,
of Oil Spills Northwest Russia
Recombinant PNNL-T2-0217-RU New Horizons Pacific Gamaleya Institute
Luciferase for Diagnostics Northwest of Epidemiology
Photometric and Microbiology,
Detectors and Moscow State
University, Russia
Biosensors for PNNL-T2-0203-RU New Horizons Pacific State Research
Detection of Diagnostics Northwest Institute of
Neurotoxins Organic Chemistry
and Technology,
and Moscow State
University, Russia
Laser Diode BNL-T2-0318-RU Canberra Aquila Brookhaven General Physics
Spectroscopy Institute, Russia
Comprehensive BNL-T2-0131-RU Canberra Aquila Brookhaven General Physics
Asset Tracking Institute, Russia
BNL-T2-0131a-RU
BNL-T2-0131b-RU
BNL-T2-0314-RU
Chemical PNNL-T2-0246-RU Freescale Pacific Kintech Kinetic
Kinetics Semiconductor, Northwest Technologies,
Software for Inc. Russia^a
Reactor and
Process Design
Proprietary One project Not Disclosed Pacific Not Disclosed
Information Northwest
Proprietary Three projects Not Disclosed Lawrence Not Disclosed
Information Livermore
and Pacific
Northwest
Source: GAO analysis of DOE and U.S. Industry Coalition data.
aKintech Kinetic Technologies is a spin-off company of the Kurchatov
Institute of Atomic Energy.
Appendix V: Comments from the Department of Energy
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
See comment 1.
See comment 7.
See comment 6.
See comment 5.
See comment 4.
See comment 3.
See comment 2.
See comment 13.
See comment 12.
See comment 11.
See comment 10.
See comment 9.
See comment 8.
See comment 15.
See comment 14.
The following are GAO's comments on the Department of Energy's letter
dated November 21, 2007.
GAO Comments
1. We are aware that DOE conducted internal assessments in 2004
and 2006 of its overall efforts to engage WMD scientists in the
former Soviet Union and other countries. However, these
assessments did not evaluate the IPP program exclusively and were
conducted at a time when the IPP program was complemented by and
coordinated with a similar DOE program focused on downsizing
facilities and creating new jobs for personnel in Russia's nuclear
cities. This complementary program--the Nuclear Cities
Initiative--has since been canceled. As a result, the IPP program
operates under a significantly different set of circumstances
today than when DOE conducted its previous internal assessments.
Moreover, we note that some recommendations and action items from
DOE's previous internal assessments, such as the development of an
exit strategy, have not been implemented. Finally, during our
review and as discussed in this report, we found numerous
shortcomings and problems with the IPP program. We made a number
of recommendations for improving the program, many of which DOE
agreed with, including issues that should be addressed in the
context of a program reassessment, such as the need to develop a
program exit strategy. For these reasons, we are recommending that
DOE undertake a fundamental reassessment of the IPP program, in
concert with other agencies, to determine the continuing value of
and need for the program.
2. DOE has incorrectly characterized how we collected information
and conducted our analysis of the participants on IPP projects.
Contrary to DOE's assertion, we did not base our analysis of this
issue on responses to questions we posed directly to officials at
Russian and Ukrainian institutes. We used data and statements
provided directly by DOE program officials to determine the total
number of former Soviet weapons scientists, engineers, and
technicians the program has engaged since its inception. Regarding
the level and number of WMD experts involved in individual IPP
projects, as explained in the scope and methodology section of our
draft report, we used a number of methods for assessing these
totals, including analyzing data provided by project managers at
the national laboratories; reviewing payment records provided by
CRDF, ISTC, and STCU; and assessing the reliability of data we
received.
3. DOE has incorrectly asserted that we implied that DOE and State
did not concur on the project in question, and that DOE ignored
State's concerns regarding the primary Ukrainian institute's
involvement in WMD. We used this case as an example of how DOE's
limited ability to assess the proposed participants on an IPP
project can lead to misallocation of funding. In our view, a more
thorough evaluation of the entities involved in the project by DOE
during its proposal review might have uncovered the
conflict-of-interest issues between the primary Ukrainian
institute and the industry partner discovered by the Defense
Contract Audit Agency after the project was under way and funds
had been spent.
4. Our finding was based on an in-depth review of the personnel
involved in 97 IPP projects, representing over 6,450 individuals,
or over 38 percent of the total personnel DOE has reported to have
engaged through the IPP program. We have no way of assessing the
accuracy, reliability, or validity of DOE's assertion that a
majority of IPP project participants have WMD experience. However,
we are skeptical that the department was able to conduct a
thorough analysis of all IPP project payment records during the
time it took to review and comment on our draft report.
5. During our visit to the Russian institute in question,
institute officials told us that they were not the source for the
reported job creation figure and could not substantiate the total
number of jobs created as a result of the IPP projects we asked
about. For this reason, we declined the institute official's offer
to obtain further documentation regarding the number of jobs
created at other institutes involved in these projects. Although
DOE claims to have received additional information from this
institute to corroborate the number of jobs reported to have been
created, DOE did not provide this information to us. As a result,
we cannot determine the reliability or accuracy of DOE's claim
that the number of jobs it had reported as created is correct.
6. We have accurately described what we observed during our visit
to the Ukrainian institute in question. Based on our observations,
this institute clearly was not in dire financial straits or in
poor physical condition like some of the institutes in the former
Soviet Union we have visited in the past. The donation of funding
to improve the physical condition of the institute has no material
bearing on the facts that we presented in our draft report.
7. DOE has mischaracterized our findings and our process for
evaluating the continued need for the program. As we pointed out
in our draft report, officials at 10 of the 22 Russian and
Ukrainian institutes we visited stated that they did not believe
they or the other scientists at their institutes posed a
proliferation risk, while officials at 14 of the 22 institutes
also attested to the financial stability of their facilities.
Moreover, a senior Russian Atomic Energy Agency official told us,
in the presence of IPP program officials, in July 2007 that the
program is no longer relevant. DOE asserted that we did not
include endorsements of the program in our draft report. However,
we do state that many officials at the Russian and Ukrainian
institutes we visited noted that the program was especially
helpful during the period of financial distress in the late 1990s.
8. DOE misstates the number of institutes that we included in our
fieldwork in Russia and Ukraine. The correct number is 22.
Regarding DOE's comment, our draft report clearly stated that DOE
policy does not require IPP project participants reemployed in
peaceful activities to cut ties to their home institute. However,
more than one institute we visited stated that they are still
involved in some weapons-related work, and many institutes remain
involved in research and technology development that could be
applied to WMD or delivery systems for WMD. We do not believe it
is possible for DOE to verify the full extent and intended purpose
of all activities at the institutes where the IPP program is
engaged. Moreover, we believe that DOE misrepresents the IPP
program's accomplishments by counting individuals who have been
reemployed in private sector jobs but also are employed by their
institutes and, therefore, may still be involved in
weapons-related activities. In our view, the reemployment of
former weapons scientists into new long-term, private sector
jobs--one of the primary metrics DOE uses to measure progress of
the IPP program--implies that these individuals have terminated
their previous employment at the institutes and are dedicated
solely to peaceful commercial activities outside of their
institutes.
9. While there is no IPP program requirement to exclude former
weapons scientists employed on a part-time basis from the total
number of jobs created as a result of IPP projects, DOE's reported
job creation total fails to delineate between part-time and
full-time jobs. By not more clearly distinguishing the number of
jobs created in each category, this metric is misleading and also
misrepresents the program's accomplishments regarding the
employment of weapons scientists in commercial activities.
However, we have added information to our report that states that
there is no IPP program requirement to exclude former weapons
scientists employed on a part-time basis from the total number of
jobs created as a result of IPP projects.
10. Our draft report stated that the IPP program does not prohibit
participation of younger scientists in IPP projects. In our view,
however, DOE has a mistaken and naive impression of how institutes
in the former Soviet Union view the benefits of allowing younger
scientists to participate in the IPP program. DOE believes that
participation of some younger generation scientists on IPP
projects must be permitted to successfully implement projects.
This practice has the unintended consequence of allowing former
Soviet Union institutes to use the IPP program as a long-term
recruitment tool for younger scientists and, thereby, may
perpetuate the proliferation risk posed by scientists at these
institutes. As we stated in our draft report, officials at 10 of
the 22 institutes we visited in Russia and Ukraine said that the
IPP program has allowed their institutes to recruit, hire, and
retain younger scientists. In our view, this is contrary to the
original intent of the program, which was to reduce the
proliferation risk posed by Soviet-era weapons scientists. That is
why, among other reasons, we are recommending that DOE conduct a
reassessment of the IPP program that includes a thorough analysis
of the proliferation risk posed by weapons scientists in Russia
and other countries, a well-defined strategy to more effectively
target the scientists and institutes of highest proliferation
concern, more accurate reporting of program accomplishments, and a
clear exit strategy for the program.
11. DOE incorrectly characterized our description of its program
management system. Specifically, we stated in the draft report
"DOE and national laboratory officials told us they are attempting
to improve financial oversight over the IPP program, in part, to
address concerns about unspent program funds. To that end, DOE is
developing a new program management system, which it expects to
fully implement in 2008--14 years after the start of the program."
Throughout our review, numerous DOE and national laboratory
officials expressed concern about the existing systems that DOE
used to manage IPP projects. Our description of DOE's planned
implementation of its new program management system is accurate.
12. DOE officials concurred with our recommendation of reducing
large balances of unspent funds and adjusting future budget
requests accordingly. The data we present are based on DOE's own
financial reporting and accurately reflect the state of the
program's uncosted balances (unspent funds) over the last 10
years. We noted in our draft report that the program's uncosted
balances are declining, but, as DOE officials acknowledge,
uncosted balances remain a serious problem for the IPP program.
13. We are pleased that DOE concurs with our recommendation to
improve coordination between the department's IPP program and
ISTC's Commercialization Support Program, which is funded by
State. In its comments, State also concurred with this
recommendation.
14. We believe DOE has misconstrued our recommendation concerning
its funding of projects in Libya. We did not recommend, nor did we
mean to imply, that DOE should allocate 65 percent of project
funds to Libya for projects in that country. Instead, our
recommendation urges the department to ensure that it complies
with existing statutory restrictions on the percentage of IPP
funds that can be spent on oversight activities by DOE national
laboratories. Specifically, as DOE notes, section 3136 of the
National Defense Authorization Act for Fiscal Year 2000 provides
that not more than 35 percent of funds available in any fiscal
year for the IPP program may be spent by DOE national laboratories
to provide oversight of program activities. As our report
indicates, DOE's IPP guidance and its standard practice have been
to implement this provision of law on a project-by-project basis,
so that no more than 35 percent of the funds for each project are
spent by national laboratories. Our point in our report and in our
recommendation is that, with respect to projects in Libya, DOE has
not followed its IPP guidance restricting national laboratory
expenditures. Instead, we found that 97 percent of funds DOE spent
on projects in Libya through May 2007 were spent at DOE's national
laboratories for project management and oversight. In this regard,
we note that DOE concurred with our recommendation that the
department seek explicit congressional authorization to expand IPP
efforts outside of the former Soviet Union. In seeking such
authorization, DOE may wish to clarify the nature of other
restrictions on the program, such as those set forth in section
3136 of the National Defense Authorization Act for Fiscal Year
2000.
15. DOE has mistakenly asserted that our selection of projects for
review served as the sole basis for our conclusions and
recommendations. As we explained in the draft report's scope and
methodology section, the selection and evaluation of a sample of
IPP projects was one of several analytical tools we employed
during our review. We not only conducted an in-depth assessment of
over 200 IPP projects, but also met multiple times with DOE
officials; analyzed program plans, policies, and procedures;
interviewed representatives at each of the 12 national
laboratories involved in the program; interviewed staff of the
U.S. Industry Coalition and 14 U.S. industry partner companies
with long-standing participation in the program; and had
discussions with numerous recipients of IPP program assistance at
22 institutes in Russia and Ukraine. We also met several times
with State officials who are responsible for funding a similar
program; interviewed and assessed information provided by
officials at CRDF, ISTC, and STCU; and met with nongovernmental
experts familiar with the program. As further noted in our draft
report, to develop our judgmental sample of 207 projects we used
project selection criteria supplied by DOE and considered a
variety of factors--such as project status, project funding, type
and location of institutes where projects have been implemented,
and a project's commercial success--to ensure we addressed a broad
cross-section of IPP projects. This comprehensive approach,
consistent with generally accepted government auditing standards,
served as the foundation for our assessment which was fair,
balanced, and objective. Our extensive review identified
legitimate questions concerning the IPP program's scope,
implementation, and performance that we believe should be
addressed during the course of the fundamental reassessment of the
program recommended in our draft report.
Appendix VI: Comments from the Department of State
Appendix VII: GAO Contact and Staff Acknowledgments
GAO Contact
Gene Aloise, (202) 512-3841 or [email protected]
Staff Acknowledgments
In addition to the contact named above, Glen Levis (Assistant Director),
R. Stockton Butler, David Fox, Preston Heard, and William Hoehn made key
contributions to this report. Other technical assistance was provided by
David Maurer; Carol Herrnstadt Shulman; Jay Smale, Jr.; and Paul Thompson.
Related GAO Products
Nuclear Nonproliferation: Better Management Controls Needed for Some DOE
Projects in Russia and Other Countries. [54]GAO-05-828 . Washington, D.C.:
August 29, 2005.
Weapons of Mass Destruction: Nonproliferation Programs Need Better
Integration. [55]GAO-05-157 . Washington, D.C.: January 28, 2005.
Nuclear Nonproliferation: DOE's Effort to Close Russia's Plutonium
Production Reactors Faces Challenges, and Final Shutdown Is Uncertain.
[56]GAO-04-662 . Washington, D.C.: June 4, 2004.
Nuclear Nonproliferation: DOE's Efforts to Secure Nuclear Material and
Employ Weapons Scientists in Russia. [57]GAO-01-726T . Washington, D.C.:
May 15, 2001.
Weapons of Mass Destruction: State Department Oversight of Science Centers
Program. [58]GAO-01-582 . Washington, D.C.: May 10, 2001.
Nuclear Nonproliferation: DOE's Efforts to Assist Weapons Scientists in
Russia's Nuclear Cities Face Challenges. [59]GAO-01-429 . Washington,
D.C.: May 3, 2001.
Biological Weapons: Effort to Reduce Former Soviet Threat Offers Benefits,
Poses New Risks. [60]GAO/NSIAD-00-138 . Washington, D.C.: April 28, 2000.
Nuclear Nonproliferation: Concerns with DOE's Efforts to Reduce the Risks
Posed by Russia's Unemployed Weapons Scientists. [61]GAO/RCED-99-54 .
Washington, D.C.: February 19, 1999.
(360770)
GAO's Mission
The Government Accountability Office, the audit, evaluation, and
investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities and to help improve the performance and
accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony
The fastest and easiest way to obtain copies of GAO documents at no cost
is through GAO's Web site ( [62]www.gao.gov ). Each weekday, GAO posts
newly released reports, testimony, and correspondence on its Web site. To
have GAO e-mail you a list of newly posted products every afternoon, go to
[63]www.gao.gov and select "E-mail Updates."
Order by Mail or Phone
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to:
U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
DC 20548
To order by Phone:
Voice: (202) 512-6000
TDD: (202) 512-2537
Fax: (202) 512-6061
To Report Fraud, Waste, and Abuse in Federal Programs
Contact:
Web site: [64]www.gao.gov/fraudnet/fraudnet.htm
E-mail: [65][email protected]
Automated answering system: (800) 424-5454 or (202) 512-7470
Congressional Relations
Gloria Jarmon, Managing Director, [66][email protected] , (202) 512-4400
U.S. Government Accountability Office, 441 G Street NW, Room 7125
Washington, DC 20548
Public Affairs
Chuck Young, Managing Director, [67][email protected] , (202) 512-4800 U.S.
Government Accountability Office, 441 G Street NW, Room 7149 Washington,
DC 20548
To view the full product, including the scope
and methodology, click on [68]GAO-08-189 .
For more information, contact Gene Aloise at (202) 512-3841 or
[email protected].
Highlights of [69]GAO-08-189 , a report to the Chairman, Committee on
Homeland Security, House of Representatives
December 2007
NUCLEAR NONPROLIFERATION
DOE's Program to Assist Weapons Scientists in Russia and Other Countries
Needs to Be Reassessed
To address concerns about unemployed or underemployed Soviet-era weapons
scientists in Russia and other countries, the Department of Energy (DOE)
established the Initiatives for Proliferation Prevention (IPP) program in
1994 to engage former Soviet weapons scientists in nonmilitary work in the
short term and create private sector jobs for these scientists in the long
term. GAO assessed (1) DOE's reported accomplishments for the IPP program,
(2) DOE's exit strategy for the program, and (3) the extent to which the
program has experienced annual carryovers of unspent funds and the reasons
for any such carryovers. To address these issues, GAO analyzed DOE
policies, plans, and budgets and interviewed key program officials and
representatives from 22 Russian and Ukrainian institutes.
[70]What GAO Recommends
GAO recommends, among other things, that DOE assess the continuing need
for the IPP program with input from other federal agencies, including
State and the intelligence community. DOE and State generally agreed with
GAO's recommendations, although DOE disagreed with the need to reassess
the IPP program. However, the nature, scope, and volume of problems GAO
identified during the course of its review necessitates such a
reassessment to ensure that limited IPP program funds are directed to the
scientists and institutes of highest proliferation risk.
DOE has overstated accomplishments forthe 2 critical measures it uses to
assess the IPP program's progress and performance--the number of
scientists receiving DOE support and the number of long-term, private
sector jobs created. First, although DOE claims to have engaged over
16,770 scientists in Russia and other countries, this total includes both
scientists with and withoutweapons-related experience. GAO's analysis of
97 IPP projects involving about 6,450 scientists showed that more than
half did not claim to possess any weapons-related experience. Furthermore,
officials from 10 Russian and Ukrainian institutes told GAO that the IPP
program helps them attract, recruit, and retain younger scientists who
might otherwise emigrate to the United States or other western countries
and contributes to the continued operation of their facilities. This is
contrary to the original intent of the program, which was to reduce the
proliferation risk posed by Soviet-era weapons scientists. Second,
although DOE asserts that the IPP program helped create 2,790 long-term,
private sector jobs for former weapons scientists, the credibility of this
number is uncertain because DOE relies on "good-faith" reporting from U.S.
industry partners and foreign institutes on the number of jobs created and
does not independently verify the number of jobs reported to have been
created.
DOE has not developed an exit strategy for the IPP program, even though
officials from the Russian government, Russian and Ukrainian institutes,
and U.S. companies raised questions about the continuing need for the
program. Importantly, a senior Russian Atomic Energy Agency official told
GAO that the IPP program is no longer relevant because Russia's economy is
strong and its scientists no longer pose a proliferation risk. DOE has not
developed criteria to determine when scientists, institutes, or countries
should "graduate" from the program. In contrast, the Department of State
(State), which supports a similar program to assist Soviet-era weapons
scientists, has assessed participating institutes and developed a strategy
to graduate certain institutes from its program. Instead of finding ways
to phase out the IPP program, DOE has recently expanded the program to
include new countries and areas. Specifically, in 2004, DOE began
providing assistance to scientists in Iraq and Libya. In addition, the IPP
program is working with DOE's Office of Nuclear Energy to develop projects
that support the Global Nuclear Energy Partnership--a DOE-led
international effort to expand the use of civilian nuclear power.
In every fiscal year since 1998, DOE carried over unspent funds in excess
of the amount that the Congress provided for the program. For example, as
of September 2007, DOE carried over about $30 million in unspent funds--$2
million more than the $28 million that the Congress had appropriated for
the IPP program in fiscal year 2007. Two main factors have contributed to
this recurring problem--lengthy review and approval processes for paying
former Soviet weapons scientists and delays in implementing some IPP
projects.
References
Visible links
50. http://www.gao.gov/cgi-bin/getrpt?GAO-01-582
51. http://www.gao.gov/cgi-bin/getrpt?GAO-01-429
52. http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-99-54
53. http://www.gao.gov/cgi-bin/getrpt?GAO-05-828
54. http://www.gao.gov/cgi-bin/getrpt?GAO-05-828
55. http://www.gao.gov/cgi-bin/getrpt?GAO-05-157
56. http://www.gao.gov/cgi-bin/getrpt?GAO-04-662
57. http://www.gao.gov/cgi-bin/getrpt?GAO-01-726T
58. http://www.gao.gov/cgi-bin/getrpt?GAO-01-582
59. http://www.gao.gov/cgi-bin/getrpt?GAO-01-429
60. http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-00-138
61. http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-99-54
62. http://www.gao.gov/
63. http://www.gao.gov/
64. http://www.gao.gov/fraudnet/fraudnet.htm
65. mailto:[email protected]
66. mailto:[email protected]
67. mailto:[email protected]
68. http://www.gao.gov/cgi-bin/getrpt?GAO-08-189
69. http://www.gao.gov/cgi-bin/getrpt?GAO-08-189
*** End of document. ***