The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, Kwame Holman and Gwen Ifill cover today's Senate hearings on the case of nuclear scientist Wen Ho Lee, Terence Smith looks at an unusual "New York Times" editor's note on its coverage of the Lee story, and Ray Suarez tells the Olympics story of Australian sprinter Cathy Freeman. It all follows our summary of the news this Tuesday.

NEWS SUMMARY

JIM LEHRER: Attorney General Reno and FBI Director Freeh defended the case against Wen Ho Lee today. They testified before a Senate hearing about the charges against the nuclear scientist. They said he would have been convicted on all counts had there been a trial. Instead, a deal was made allowing him to go free. He pleaded guilty to only one felony count of mishandling data at the Los Alamos National Laboratory. We'll have more on this story right after the News Summary. The U.S. Supreme Court refused to hear the Microsoft breakup case right now. It said the matter should be heard first by a federal appeals court. The Justice Department wanted it to go directly to the Justices, bypassing lower courts. Microsoft is appealing a U.S. District judge's order that it be broken up for illegal business practices. Yugoslav President Milosevic conceded today he came in second in Sunday's presidential elections. But he said his leading opponent did not win by enough votes, and declared a runoff October 8. The state election commission said preliminary results had announced preliminary results. Kostunica had 48% of the vote, Milosevice 40%. Earlier today at Georgetown University in Washington, President Clinton commented on the election.

PRESIDENT CLINTON: I do not underestimate Mr. Milosevic's desire to cling to power at the expense of people. I have witnessed it, lived with it and responded to it firsthand. But after this weekend's vote, we should not underestimate the people of Serbia's determination to seek freedom in a different and more positive course in the face of violence and intimidation. I am under no illusions that a new government in Serbia would automatically lead to a rapprochement between the two of us, and any new leader of Serbia should pursue first and foremost the will of its own people. But if the will of the people is respected, the doors to Europe and the world will be open again to Serbia. We will take steps with our allies to lift economic sanctions, and the people of Serbia who have suffered so much finally will have a chance to lead normal lives.

JIM LEHRER: Final election results are not expected to Thursday. Kostunica today rejected a runoff. He accused Milosevic of political fraud and blatant stealing of votes. In the Czech republic today, the World Bank and International Monetary Fund opened talks on trade and other issues. Thousands of protesters gathered outside the meeting in Prague. They threw firebombs and rocks at police, who responded with tear gas, water cannons, and concussion grenades. At least 40 people were injured. The number of arrests was not known. In the U.S. presidential race today, George W. Bush vowed to strengthen math and science instruction in public schools. He said future U.S. economic success depended on that. He was at a high school in Redwood City, California, in the midst of a west coast swing promoting his education agenda. Vice President Gore appealed to the youth vote today. He took part in a town hall- style meeting at the University of Michigan in Ann Arbor, for air tonight on MTV. He encouraged young adults to become involved in politics. He also promised he'll be a straight shooter with them. At the Olympics in Sydney, Australia, today, the U.S. women's softball team won its second gold medal in a row, beating Japan 2-1. And the American men's beach volleyball duo also won the gold, defeating Brazil. Again, we did not have video of those events due to the Olympics television contract, but we will have last night's history-making run by Australian Cathy Freeman at the end of the program tonight. Between now and then, the Wen Ho Lee hearing, and the "New York Times" editor's note on the Lee case.

FOCUS - FAULT FINDING

JIM LEHRER: Kwame Holman begins our coverage of the Wen Ho Lee story.

KWAME HOLMAN: Wen Ho Lee became a free man two weeks ago when he was released from federal prison. The nuclear weapons scientist pleaded guilty to one of the government's 59 charges arising from his illegal downloading of nuclear secrets onto personal computers when he worked at New Mexico's Los Alamos National Laboratory. Lee agreed to tell the government why he put the data on computer tapes and what exactly became of several of them that now are missing. In exchange, he received a sentence of nine months, the time he already served awaiting trial. But questions about the conduct of the Lee investigation remain. Today, the Senate's Judiciary and Intelligence Committees held a joint hearing to ask why the government suddenly dropped most of its charges against Lee and why he had to be shackled and kept in solitary confinement during those nine months in custody. But Intelligence Committee Chairman Richard Shelby started by making it clear he believes there was adequate evidence to bring a case against Lee.

SEN. RICHARD SHELBY: It is a fact that Dr. Wen Ho Lee downloaded and stole hundreds of megabytes of classified nuclear weapons information. He pled guilty to unlawful retention of national defense information. Dr. Lee's actions seriously endangered our national security. The classified materials Lee downloaded included nuclear weapons design source codes that model and simulate the complex physics of a thermonuclear explosion; input decks and input files describing the exact dimensions, geometry, and materials of our most modern nuclear devices; and data files containing the results of more than 50 years and hundreds of billions of dollars' worth of hard-earned nuclear knowledge, including the results of more than 1,000 nuclear tests. Dr. Paul Robinson, the director of the Sandia National Laboratory, testified that the information Lee downloaded onto tapes "represents a portfolio of information that would allow one to develop a simple, easily manufactured weapon, such a terrorist weapon, all the way up to the very best that the U.S. is capable of designing."

KWAME HOLMAN: Still, Judiciary Committee Chairman Orrin Hatch said the government has some explaining to do.

SEN. ORRIN HATCH: In particular, the public should hear, one, why the government believed the indictment was justified. Was the case properly charged, and could the government prove all the elements of the alleged offenses or the charged offenses? Number two, was the plea agreement an appropriate disposition of the case? Why does the government feel this represents a just result for the American people? Number three, what were the conditions of Mr. Lee's pretrial confinement, and were they appropriate? What explanation is there for the government's apparent reversal on the need for confinement, such that it agreed to Lee's immediate release following his plea? And four, was there improper targeting of Mr. Lee, based upon the fact that he is ethnic Chinese?

KWAME HOLMAN: Attorney General Janet Reno was not asked to testify, but wanted to, to assure committee members Wen Ho Lee indeed had committed a crime.

JANET RENO: Dr Lee is no hero. He is not an absentminded professor. He is a felon. He committed a very serious, calculated crime, and he pled guilty to it. He abused the trust of the American people by putting at risk some of our core national security secrets. He had one of the highest security clearance levels possible, granting him access to the most sensitive of nuclear weapons information. He had worked at Los Alamos National Laboratory for 20 years. He had access to the Los Alamos computer system that was designed precisely to be secure against unauthorized intrusions.

KWAME HOLMAN: FBI Director Louis Freeh followed Reno and took three quarters of an hour to review, in painstaking detail, the evidence against Wen Ho Lee.

LOUIS FREEH: The crime to which he pleaded guilty was part of a larger series of related crimes that were charged in the indictment. Each of those 59 counts could be proven in December, 1999, and each of them could be proven today. The facts of this case have not changed, although, as we explain below, recent rulings by the trial court pose serious obstacles to proving those facts without revealing nuclear secrets in open court.

KWAME HOLMAN: And Freeh said that concern about trying a case involving national security issues in open court led to the plea bargain agreement.

LOUIS FREEH: The Department of Justice and the FBI concluded that this guilty plea, coupled with his agreement to submit to questioning under oath and to a polygraph, was our best opportunity to protect the national security by finding out what happened to the seven missing tapes and, we found out on the way to the courthouse, the additional copies of the tapes which he has now admitted to having made. This was always the object of this investigation and prosecution: Why did he make them, where are they and what happened to them, and who had access to them? As you already know from press accounts, the plea proceeding was rescheduled at the last moment, and the parties went back to their negotiations with the assistance of the mediator judge. This delay has been the subject of considerable speculation in the media. In fact, the delay rests squarely with Dr. Lee, who made a startling revelation just before the plea proceeding was supposed to begin. For the very first time, Dr. Lee revealed that he had made copies of the tapes he had illegally created in the first place. This was an enormously significant development. What it meant was that instead of seven missing tapes, there could be many others. The plea agreement, which requires Dr. Lee's sworn testimony and requires him to submit to a polygraph, gives him the most powerful incentives to be completely truthful. If he is not, the plea agreement provides that he may be prosecuted.

KWAME HOLMAN: Freeh also responded, without being asked, to the widespread charge Wen Ho Lee may have been a victim of racial profiling.

LOUIS FREEH: There is simply no truth to these allegations. Dr. Lee was not investigated nor indicted nor incarcerated because he is an American of Asian descent. As the attorney general and the director of the FBI, we are honored to head organizations that pride themselves with fair and impartial law enforcement. We would never tolerate racial profiling or selective prosecution. Dr. Lee was investigated and prosecuted because of his actions, not his race.

KWAME HOLMAN: And then questioning began. Nevada Democrat Richard Bryan asked Reno about Wen Ho Lee's treatment while in federal custody.

SEN. RICHARD BRYAN: The manner in which he was confined is, in my view, very difficult to justify, and having the individual manacled, if true, during his exercise period, a light turned on in his room what were the physical circumstances of his confinement? Is the information we've heard accurate?

JANET RENO: Just going beyond the detention decision, which you seem to accept, and let me just talk about the shackles. There is no federal prison or detention facility in New Mexico. The closest are Latoona, Texas and Florence, Colorado, hundreds of miles away from Albuquerque. He was placed in the administrative wing of the Santa Fe County Detention facility, a facility which was under contract to the United States Marshals. He work the shackles not in the cell, but when he was being moved from place to place outside the cell. And that was the same treatment as to any prisoner in administrative segregation at Santa Fe County. We took steps to ease his conditions very early on, and he received special treatment. He got a radio. The FBI made a mandarin interpreter available in case Lee wished to speak mandarin to a family member. The times of his phone calls to his family were changed to accommodate him. Family visitations were changed to Saturdays. His exercise hours were changed and the shackles were ultimately removed during exercise.

SEN. RICHARD BRYAN: Would you agree that was unnecessarily harsh to have him shackled?

JANET RENO: Again, I think we were ultimately successful in getting the shackles removed at the county jail, and I think...

SEN. RICHARD BRYAN: With great respect, that was not the question I asked.

JANET RENO: Well, I agree with you, and I was telling you...

SEN. RICHARD BRYAN: You agree that it was unnecessarily harsh to have him shackled.

JANET RENO: I would agree. I also think there were administrative issues that the jail had to deal with.

KWAME HOLMAN: Pennsylvania Republican Arlen Specter questioned Freeh about the delay in indicting Wen Ho Lee. It finally happened last December, eight months after the government compiled its evidence against him.

SEN. ARLEN SPECTER: In that interim, having access to those tapes and codes, he had a full opportunity to disseminate it to anybody.

LOUIS FREEH: This is a hugely complex case. This is not a matter where we go into a magistrate judge with a complaint and ask for an arrest. We reviewed during that period millions of computers files. We interviewed 1,000 people. We had to know that everybody in division x was not engaging in this behavior, which, as it turns out, nobody us but Dr. Lee was, in fact. This isn't a case where we could dell the department of energy, we're going to bring a prosecution, and we're going to have to maybe litigate whether we can disclose the context of a particular primary because that will be the subject of gray mail in the case. There had to be security reviews. This was an extremely complex investigation and prosecutive process. It could not have been brought, in my view, fairly and accurately before it was.

KWAME HOLMAN: With that, the two Senate Committees ended their round of public questioning. They went into closed session to ask questions touching on national security, issues apparently too sensitive to be discussed in an open hearing.

JIM LEHRER: Gwen Ifill takes it from there.

GWEN IFILL: For more on the government's handling of the Wen Ho Lee case, we turn to two of the Senators who participated in today's hearings: Republican Senator Arlen Specter of Pennsylvania, and Democrat Richard Bryan of Nevada. Joining them are two legal experts: Former Federal Judge and U.S. Attorney Robert Bonner, and a former national security adviser for the Department of Justice, Neal Katyal, who now teaches at Georgetown Law School. Senator Specter, if we can start with you, can you tell me whether Janet Reno and Louis Freeh answered the questions you had for them today?

SEN. ARLEN SPECTER: They started to, but there are a great many more questions to be answered. Judge Parker, for example, said that the government had an opportunity to obtain from Dr. Lee all the information about the tapes back in December of 1999, together with polygraphing, and the judge said that he was very disappointed that the matter had dragged out so long. There was really no adequate explanation as to why that offer was not taken up. Director Freeh said that what was offered in December of '99 was different from what they ultimately got, but that's not what Judge Parker had to say, and the subcommittee on Department of Justice Oversight, which I chair, will go into that matter in much greater detail. Similarly, the answers about the manacles were not satisfactorily answered. There was some special administrative treatment here. And here you have a man who was a very slight man who has his legs, who has his wrists in irons. And they're attached to his waist. And there appeared to be no justification. Plus, an interviewing FBI agent was very unusually strong, which Director Freeh conceded in threatening Dr. Lee with the death penalty, in effect, which was what the Rosenbergs got many years ago. So that there is an inference, a possible inference that these extraordinary measures were designed to try to break Dr. Lee and to force him to plead guilty. And we're going to be looking at that in much greater detail.

GWEN IFILL: Senator Bryan neither the Attorney General nor FBI Director backed down a bit from their prosecution of Wen Ho Lee today. Did you get a sense that the government knows what it did right and what it did wrong? Or did you have an answer to that question?

SEN. RICHARD BRYAN: I think the answer to that is clearly there is evidence, in my judgment, to indicate the kind of conduct that Dr. Lee was guilty of, that should have warranted an prosecution. I have a couple criticisms. One, Dr. Lee's conduct involving highly suspect contact with individuals who were under investigation of espionage, subsequently he denied that contact to the FBI, and only when confronted with the evidence did he correct it and acknowledge it. That dates back to 1983. There were incidents in 1988 and thereafter that were unrelated to this downloading of 400,000 pages of classified information. That would be enough if stacked on top of one another to be the give leapt of a 13-story building. My criticism of the Department of Energy and the FBI, I think his security clearance ought to have been revoked at that time. With respect to the actions of Dr. Lee, as it relates to the downloading, you're talking about 70 hours. So this was not just an accidental thing. You're talking about 400,000 pages of classified information. You're talking about an attempt on 15 different occasions to access the x section, which is the highly classified division, one of which occurred at the early hours of Christmas Eve. All of that, in my judgment, indicates highly suspect conduct. And the information, as the intelligence community has explained to us, taken in its totality, would be extremely helpful to a foreign adversary and indeed might assist them in compromising the integrity of our own nuclear weapons arsenal. Those are serious charges.

GWEN IFILL: But there's no evidence that that did happen.

SEN. RICHARD BRYAN: No, wait. There is evidence that he downloaded that information. There is no evidence that he in fact transferred that as part of... Of course, he's not charged with that.

GWEN IFILL: That's of course what I meant. What do you think about what Senator Specter said about the conditions under which he was confined?

SEN. RICHARD BRYAN: I'm very critical of that. I think Senator Specter makes a very good point of that. I don't know how you can justify that kind of treatment. First, as Senator Specter pointed out, the interrogation by the FBI is wholly inappropriate. In fact, they threatened Dr. Lee with electrocution and made reference apparently to the Rosenbergs. The FBI Director, Mr. Freeh, acknowledges that was improper; that was. The circumstances of his confinement, his being manacled, the limited exercise period, the light that apparently was on in the room 24 hours a day. One simply cannot justify that. I think the both the FBI and the Department of Justice need to be forthright with us as to why that was allowed to occur. They had a responsibility to monitor that. They were concerned and legitimately so that Dr. Lee not have contact with any outside party so that information could be disseminated to that party and potentially result in the destruction or removal of the missing tapes. But they did have an obligation to monitor that more carefully. In that respect, I think they failed. I was not persuaded as to the conduct. I think it was inappropriate.

GWEN IFILL: Senator Specter, today was the day the federal government was supposed to begin debriefing Wen Ho Lee, getting the information of where those tapes went, where the copies went. Yet instead they were testifying before you at congressional hearings. What was the reason for congressional hearings?

SEN. ARLEN SPECTER: Well, the reason is to have congressional oversight as to what the Department of Justice and the Department of Energy did. There are other agents who could debrief Dr. Lee. The debriefing is not going to be done by Attorney General Reno or by FBI Director Freeh. There was really no reason to delay that at all. We are looking even more broadly than the Dr. Wen Ho Lee case and other cases involving espionage. There are many problems. We have found in the Department of Justice. And we need to get at these in a prompt way. One of the grave concerns is that there were many danger signals and the Department of Justice allowed Dr. Lee to have access to these highly classified matters long after they should have. FBI Director Freeh sent one of his top assistants, John Lewis, to talk to Attorney General Reno personally to get a warrant for Dr. Lee under the Foreign Intelligence Surveillance Act. And the attorney general referred it to a man named Dan Seikaly, who had no experience in the field, applied the wrong standard and ultimately the warrant was turned down. And our subcommittee has proposed remedial legislation so that when a matter comes from the director to the attorney general, that she has to have a response in writing.

GWEN IFILL: Okay, Senator. I'd like to bring Robert Bonner into the conversation. What do you think about the government's handling of this case?

ROBERT BONNER: Well, look, I think that there are serious questions that have been raised. I grant you that making a prosecutive decision in a national security case is a very difficult matter. It is a decision ultimately that rests with the Department of Justice. And I think from everything I know about this case, you know, the government had at best evidence to charge Wen Ho Lee with transfer of classified information. Basically mishandling classified information. And so it seems to me, at least based upon what I know, that the Department of Justice made some troubling decision here by overcharging this case, you know, charging that there was an intent to injure the United States or to benefit a foreign power. I mean, that carries a life sentence. It just does not appear there was evidence to support that kind of charge, and it's that kind of charge really that warranted the denial of bail and the detention of Wen Ho Lee. So there... this is... it seems to me this really reflects upon the professionalism and competence of the Justice Department in a fairly profound way in terms of what happened here.

GWEN IFILL: Neal Katyal, you worked at the Justice Department and advise them on espionage matters. Is this business as usual the way this was handled?

NEAL KATYL: I didn't work on this case, but it seems to me that quite clearly the Justice Department did handle this case in the right manner, and I think Senator Bryan hits the nail on the head. We've got evidence of 400,000 pages of highly classified material that's been downloaded by Mr. Lee. We've got... it's downloaded over 70 days, 40 hours, at a point in which Mr. Lee has to cross through perimeter fences, have his palm scanned, has to certify that he has acute clearance, the highest security level clearances. And he does all that and then says that he had... he signed a statement saying that he had not mishandled this information whenthe FBI executes a search warrant just a few days later and finds out that he had mishandled it.

GWEN IFILL: No prosecutorial excess in your opinion? This is the way it happens all the time?

NEAL KATYL: Espionage cases are so rare, and they have so many unique facts that there's no common rubric. But I will say this type of prosecutorial decision is like the prosecutorial decisions that the Justice Department makes routinely, not just in espionage cases, but more generally. When there's a danger to the community, preventive detention is used, as it's been used 22,000 times in a year. This is not unusual when you have highly sensitive material at issue. And remember, here is as Director Freeh said in today's testimony, this was... what Lee downloaded was the electronic blueprint that contains the exact dimensions and the ways in which our nuclear bombs are built.

GWEN IFILL: Was Mr. Lee being treated as it seemed from a distance, especially from critics, as if he were guilty until proven innocent?

NEAL KATYL: I don't... from my outside view of the case, it didn't every look that way. It seemed like from the very early stage, the FBI knew that Lee had engaged in a pattern of deception. They knew that Lee, for example, had said that he hadn't met with foreign agents when he had. Lee said that he hadn't brought classified information home when they knew he had. There are a lot of instances in which Lee's very highly paid defense counsel, his dream team counsel has spun up this story of Lee being unfairly targeted, but this guy is a serious felon.

GWEN IFILL: Your reaction to that, Senator Specter?

SEN. ARLEN SPECTER: Yes, Gwen. While there were very serious infractions here, I disagree totally with what was just said about this is the way you customarily handle people in preventive detention. You don't put them in shackles. You remove them -- you put them in a jail cell so they're not at large if they're a menace to the community. But you do not put them in shackles. And Judge Bonner has put his finger on a very important point, which we intend to explore tomorrow, and that is, what was the evidence that Dr. Lee intended to injure the United States, and what was the evidence that he intended to aid a foreign power? Those are essential elements of proof, and when Director Freeh testified about those today, I do not believe they would stand up. And as judge Bonner pointed out, that was the basis for holding the possibility of a life sentence and for having this extraordinary detention.

GWEN IFILL: Well, Judge Bonner, why don't you respond to that.

ROBERT BONNER: Look, whether it's a national security case, such as this, or any case that the Department of Justice handles, there's one common denominator. That is the Department ought not to bring an indictment against someone on charges that it cannot prove. And it knows that it does not have sufficient evidence to prove. If they had enough evidence to prove the more serious charges here, that there was an intent to injure the United States, they should have prosecuted this case. That's how you get information from someone who you know or you believe has aided a foreign power. If they didn't have that evidence, they shouldn't have brought these charges in the first instance. That's what concerns me.

GWEN IFILL: Senator Bryan?

SEN. RICHARD BRYAN: Let me say there's plenty of blame to go around here. The Department of Energy and the FBI ought to have moved to revoke the classification years and years ago, long before this downloading situation. The FBI in conducting its investigation, it was inept. They provided neither the resources nor the priority nor the competence in this investigation early on. And the Department of Justice clearly made some mistakes. But to put this in context, even with all those mistakes, we have an individual whose activities potentially compromised the security of the United States. Those documents, 430,000 pages in the hands of a foreign adversary would be extremely dangerous, and the intelligence community has agreed with that. So Dr. Lee's conduct is totally inexplicable. It is indefensible. He is, as has been said, a serious felon. There are legitimate questions raised about the confinement and those circumstances, I agree, but I think we do need to put it in context, that the actions taken were correct insofar as prosecuting Dr. Lee.

GWEN IFILL: Mr. Katyal, the controversy of the handling in this case, does it put a damper on future espionage cases? Are people less likely to talk?

NEAL KATYL: Absolutely. Espionage cases are brought at the early stages when prosecutors find out, they have very shadowy information. It's third hand, hearsay, and it's pretty tough for a case to be put together when you now have these very experienced defense counsel who poke holes when you have a rule, which is important for constitutional due process, that information come out in open court, it's going to be very tough to bring these espionage or classified information cases in the future.

GWEN IFILL: Briefly, do you agree with that? Who is that, Mr. Bonner?

ROBERT BONNER: That's why you have the Classified Information Procedures Act that Congress enacted is to prevent gray mail and to protect classified information that has to be introduced into evidence from becoming public or available to the media and the like. I mean, there are some protections in the Classified Information Procedure Act that permit this kind of prosecution. Otherwise, you could inner prosecute an espionage case or the more sensitive the information. That's why we have CIPA or that act, is to help the government prevent the very classified information from becoming public. And there are procedures for doing that.

GWEN IFILL: Gentlemen, thank you all.

JIM LEHRER: Still to come on the NewsHour tonight, a media note on the Lee case and a terrific run.

FOCUS - WEN HO LEE

JIM LEHRER: The "Times" explains; media correspondent Terence Smith now reports.

TERENCE SMITH: The "New York Times" today printed an extraordinary note from its editors about its controversial coverage of the Wen Ho Lee story. It was both a defense of its reporting and an admission of "things we wish we had done differently... to give Dr. Lee the full benefit of the doubt." The newspaper said it felt compelled to review its own work because critics had "contended that our reporting had stimulated a political frenzy, amounting to a witch hunt." On March 6, 1999, the "Times" first reported that government investigators believed that China had accelerated its nuclear weapons program with the aid of stolen American secrets. Two days later, the government announced that it had fired Wen Ho Lee for what it called "serious security violations" at the Los Alamos Lab. Almost immediately some in the media began questioning whether the "Times" aggressive coverage had gone too far. And when Dr. Lee was freed on a plea agreement earlier this month, "Slate," the online magazine, asked "why won't the 'Times' apologize to Wen Ho Lee?" "Salon," another online magazine, headlined its piece, "how the 'New York Times' helped railroad Wen Ho Lee." Today the "Times" said it remains "proud of work that brought into the open a major national security problem of which officials had been aware for months, even years." But it conceded that its coverage "fell short of our standards," and concluded, "we have dispatched a team of reporters... to go back to the beginning of these controversies and do more reporting.... Our coverage of this case is not over."

TERENCE SMITH: For more on the "New York Times" and other coverage of Wen Ho Lee's case, we turn to author David Shipler, who was a "New York Times" correspondent from 1966-1988; and "New York Daily News" columnist Lars Erik Nelson, who was one of the "Times'" earliest critics. We invited editors at the "Times" to join us for this discussion today. They declined. Gentlemen, welcome to you both. Lars, you have been a critic for a long time of the "Times" coverage, which dates back over 18 months. Why do you fault them?

LARS ERIK NELSON: The first story just didn't hold water on its own merits. They were saying that China had stolen the plans for a bomb, W-88 warhead, that the nuclear balance was shifting, this was the worst espionage since the Rosenbergs, that the suspect was a Chinese American scientist at Los Alamos. None of that turns out to be true. They have some information on the W-88. Whether they got it by espionage or some other way, nobody knows. Whether they got it from Los Alamos or some other way, nobody knows. We know it's not Wen Ho Lee, who was named two days later. In the course of this, they accused the White House, in fact, on the first day, of dragging its feet and the Justice Department of closing its eyes to this espionage. And all this was done in the context of those accusations that the President had somehow sold out national security in exchange for Chinese campaign contributions. There was no skepticism.

TERENCE SMITH: In a political context?

LARS ERIK NELSON: Right. There was no skepticism. They seemed to be captive of their sources. There are a lot of people around town who could have told them, wait, it's not that bad. China has always been a nuclear power. A smaller warhead doesn't make their nuclear arsenal any more dangerous than the big city busters they have now. So it was clear that the two reporters involved didn't know the science involved, didn't know the arms questions involved and appear to be being led by the nose by the source.

TERENCE SMITH: And yet the "Times" coverage tended to dive other media coverage, did it not?

LARS ERIK NELSON: Well, the "Times" has got a great institutional clout. People assume the "Times" is somehow graven on stone in the morning and handed down from the top of the mountain. That's the fault of us who take it so seriously and so literally. In this case, they were just wrong.

TERENCE SMITH: David Shipler, in your years at the "Times", do you recall an explanation, an assessment of coverage, a correction, an editor's note, whatever you want to call it, anything like what was published today?

DAVID SHIPLER: Not at this length. This is more space than I used to get for a lot of good stories. But the editor's note idea did emerge during my time at the paper, as a way of explaining lapses in coverage that were... went beyond factual error, where there was unfairness or bias or a bad headline that distorted the truth -- that kind of thing. So I don't think this is completely outside the normal framework of what the "Times" tries to do. You know, I always regarded the "Times" when I worked there, and I still do as a reader, as a self-correcting institution, or one thatattempts to be self-correcting, that is that when, you know, they have very high standards. They're serious people, and they try very hard to be balanced and fair and to get it right. And they don't always do it. And, you know, all of us have made mistakes. When I was a at the paper, I made mistakes, nothing quite this colossal, thank goodness, but when those standards are not met, the paper tends, I think, to try to get back on the track. I mean, this is not always true at other institutions. So I think that that's what was going on here today - that they went back and they looked at that coverage. They found things to defend. They found flaws. And they laid it out as they saw it for the public.

TERENCE SMITH: Do you think they were driven to it by criticism from Lars and many others?

DAVID SHIPLER: I don't know that, but I would assume so, sure. The paper gets criticized all the time for coverage. I got criticized when I was a correspondent in Israel all the time. And normally when you think you're right, when the paper feels it's right and the reporter feels he's right, they don't go to these lengths to defend themselves. So I think it's clear they felt they made some very serious mistakes and they needed to air those mistakes.

TERENCE SMITH: What did you think of this statement today?

LARS ERIK NELSON: I thought it was a partial correction. It ignores the role played by the editorial page and their columnist William Safire who said, based upon the "Times" news reporting, and then they made the direst conclusions about China and the Chinese nuclear arsenal -- Safire said that because of this action by Wen Ho Lee, our cities are at greater risk of nuclear holocaust than they were at the height of the Cold War. It's utter nonsense. There's no mention of that. They say that others echoed and just oversimplified their charges. Well, the others included their own editorial page. Now, institutionally, as you know, the editorial page and the news pages are separate, but I think in the minds of the public, it's the mighty "New York Times" and the public doesn't differentiate.

DAVID SHIPLER: One problem they did not address in the mea culpa today, which I thought was a serious one, and I noticed it when I read the first story in March of 1999, was their identification said as yet an unnamed scientist as Chinese American. The "Times" has always had a pretty strict rule about not identifying the ethnic or racial background of people unless they feel it's relevant.

TERENCE SMITH: Central to the story, if it's gratuitous, you don't do it.

DAVID SHIPLER: It raised the question that the story didn't answer, the question being, is this relevant? Is this person selling or giving secrets to the Chinese because he's Chinese American by background? It was a very explosive insinuation I think in this society to do that without them going on to explain why they were doing it. Were the prosecutors convinced that this was the man because he, in fact, was ethnic Chinese, Chinese American? I don't think that's even clear yet. I mean, they're denying it. We don't know.

TERENCE SMITH: Lars, if this is such a departure, as David is suggesting, then what explains it?

LARS ERIK NELSON: I think they're captive of their sources. The problem with investigative reporters is they get the scent like bloodhounds. And they just sort of go where the scent leads them and they don't stop and think were they chasing the right spore or whatever. Editors tend to go along with them if they've invested a lot of time in the case. Here they had a source, the cachet of this is secret stuff, nobody else has this.

TERENCE SMITH: You're assuming a government source?

LARS ERIK NELSON: They admitted their sources -- I think Trulock, who they now have doubts about the Department of Energy guy. One of the other things they haven't addressed, two other things, they haven't apologized to the Department of Justice officials who would not authorize the wiretap on the grounds of there was no evidence this guy was a spy. That proved to be right. They haven't apologized to the NSC, whom they accused of foot-dragging in this espionage case. That also turned out to be right. There was no espionage case. There's still more to come in this. They owe a little bit more of an explanation.

TERENCE SMITH: There was no apology. You wouldn't apply that word today, would you?

LARS ERIK NELSON: No.

DAVID SHIPLER: Not quite.

TERENCE SMITH: You used the word mea culpa.

DAVID SHIPLER: If you read this, this is from the "Times" statement, we occasionally use language that adopted the sense of alarm that was contained in official reports and was being voiced to us by investigators. In other words, in place of a tone of journalistic attachment... that's a pretty severe self-criticism because that goes right to the heart of what good journalism is all about. You don't, as Lars said, get in bed with your sources and become a mouthpiece for them. One of the problems reporters have when they're writing about issues that have to do with prosecutions is that in effect they have only one source. That's the prosecutor or the investigator. And I always felt as a reporter if I were going to use sources, whether named or especially if unnamed, I had to believe in their veracity because I was given the "New York Times" imprimatur to those words. I think that that idea, that concept kind of failed. Although - then on the other side, you have to say also and recognize that the "Times" did a lot of very good reporting on this later on. For example, William Broad in September of '99 did an excellent piece on the whole perspective, giving a lot of good perspective on the whole question of espionage, doing a lot of scientific reporting. It almost seemed to back off from the original story.

TERENCE SMITH: Well, we should point out that William Broad is a science writer. He approached it from the scientific point of view and suggested that much of the information was readily available in other sources and may not have been all that crucial.

LARS ERIK NELSON: That's right. He was assigned to it after the critiques appeared, including a piece I wrote in the New York Review of Books. They asked the two original reporters to respond to the points; apparently that response was not adequate. So they asked Bill Broad to go over and reinterview all of the sources and rereport the entire story. But then they wouldn't admit that was a correction. They said, we came out with additional information. If they had acknowledged at that time that we made a mistake, then I think they would have been spared this sort of humiliating thing today.

DAVID SHIPLER: What set off alarm bells for me about the first story, and I'm a layman in this area, I know nothing about the subject, was the tone of certainty about it, that is that this espionage happened, that there's no question about it, and all of these government agencies were incompetent in their prosecution of the situation. You know, ambiguity, skepticism, these are the hallmarks of good journalism. And I think that's where the story fell down. I'm surprised actually that editors didn't catchthat, because you would have thought they would have.

TERENCE SMITH: Let me ask you both briefly, if the "New York Times" has stubbed its toe on this story, does that have a ripple effect on investigative reporting and the vigor with which people go after stories like this?

LARS ERIK NELSON: I would hope it does. I mean, investigative reporting can be a gender-driven... the reporting team gets an idea in its head or they find a source, and they cease being skeptical because they're so delighted to have this insider source. Whitewater was a similar case where the "Times" believed the version told by Jim McDougal. I think you'll agree he was not a particularly good source. But I think you'll agree Jim McDougal's version of Whitewater drove that case. Oddly enough, this is the same reporter in that case who did the Wen Ho Lee.

TERENCE SMITH: Ripple effect, David?

DAVID SHIPLER: I would hope it doesn't make the paper or other journalists timid about going after stories that aren't right on the surface. You have to be very careful, double, triple, quadruple check everything. You have to be skeptical. All of those ingredients were missing from the initial stories, but they did come into some of the later coverage.

TERENCE SMITH: All right, David Shipler, Lars Erik Nelson, thanks very much both of you.

FINALLY - GOLDEN MOMENT

JIM LEHRER: Finally tonight, an Olympic gold medal that goes well beyond sports, and to Ray Suarez.

RAY SUAREZ: It seemed all of Australia stopped on Monday to watch Cathy Freeman compete in the women's 400-meter race. In Sydney, and in her hometown MacKay, hundreds gathered before big screen televisions to cheer the indigenous Australian to gold. The slight 27-year-old runner who lit the flame at the Olympic cauldron ten days ago became the first aborigine to win an individual Olympic gold medal; all this after she withstood pressure from some aborigines to boycott the games altogether.

SPORTSCASTER: And they're under way to a giant roar. And Cathy Freeman is out. Cathy Freeman is in lane six.

RAY SUAREZ: It took Freeman 49.11 seconds to fulfill the hopes of her people and her nation.

SPORTSCASTER: Cathy Freeman has a very fluid style... she's run from almost every single lane on the track, and the pressure is on her. But Lorraine Graham is moving into position.

SPORTSCASTER: Lorraine Graham in the black is making up her stagger, but Freeman picks it up a notch.

RAY SUAREZ: She sprinted past her rivals to victory in the final 50 meters of the race before a stadium-capacity crowd of more than 110,000.

SPORTSCASTER: Katharine Mary from great Britain is there. Cathy freemen goes to the lead. Here they come to the line. Cathy Freeman by a good margin for Australia!

RAY SUAREZ: Some Australians called it a defining moment in their country for reconciliation; a term covering a number of aboriginal issues, and a highly charged political debate in Australia. Many aborigines want a formal apology for past government injustices, including land seizures and government-enforced assimilation.

MAN: It means another win for aborigines.

WOMAN: Well, Cathy's just put us right out there with gold and with our flag, so you know, she's put aboriginal Australia right in the spotlight, and she's also helped drag this country right out into the international arena.

RAY SUAREZ: She donned an Australian and aboriginal flag tied together for her victory lap. Freeman's accomplishment made front page news in Australia and around the world. She spoke to the world press corps Tuesday.

CATHY FREEMAN: I mean, reconciliation is an issue that's really quite evident these days, and so it's quite fitting that I've won an Olympic gold medal now, and it's quite fitting that reconciliation is a topic right now. It's a wonderful, wonderful time in my life at the moment, as well as my family and my friends. And anybody who has helped me in my career. And I don't know if it gets any better than this.

RAY SUAREZ: She's gotten repeated questions about whether she'll be running in Athens in 2004, or whether she might next go into politics. Freeman said she's only looking ahead as far as her next race, the 200 meters on Wednesday.

RAY SUAREZ: For a better understanding of the issues surrounding Australia's aborigines, we turn to Diane Bell, a professor of anthropology and chair of the women's studies program at George Washington University. She has written several books on aboriginal women, including "Daughters of the Dreaming" and "Law, the Old and the New: Aboriginal Women in Central Australia Speak out." Well, Australia's had a pretty good politics. Why was this particular event one that set the country on its ear?

DIANE BELL: Well, it comes at a really interesting moment in Australian history, and I think Cathy Freeman lighting the flame and winning gold allows us to imagine ourselves more richly at a very critical moment in our relationship with our indigenous population.

RAY SUAREZ: I guess to understand why her use of the word reconciliation carries so much electric charge on it, we have to understand why Australians need to be reconciled to each other. Tell us about the aboriginal people.

DIANE BELL: Oh, dear me. Well, it's about 2.3% of the population of 19 million -- people living in different situations across the country but suffering grievances that come from the moment of colonization and the way in which people have been put outside the broader society. And 1967 is the constitutional referendum in Australia, which includes aboriginal people in a census and makes them subject to commonwealth legislation. Up until that point they were really outside the new nation that had been created.

RAY SUAREZ: And these are people who have not done well in the modern Australia in many respects?

DIANE BELL: Very different. The aboriginal people have enormous accomplishment in the professions. There are people with whom I have done field work in Central Australia who are accomplished artists and peel in their own communities who are leaders in their own communities. So it's a vast variation across the country.

RAY SUAREZ: And when someone like Cathy Freeman steps up, can she avoid becoming part of this conversation about Australian history, about the status of aboriginal people? Can she just say, "oh, I'm just a runner"?

DIANE BELL: No. I think she encapsulates it. I think she provides a wonderful role model for young aboriginal children. And I think she also provides hope for Australians, because she encapsulates - this wonderful young woman, a brilliant runner, a charming person who can both hold up the aboriginal flag and cause quite a stir in 1994 in the games in Canada -- but also be a proud Australian.

RAY SUAREZ: Let's talk a little bit about that stir, by flying the aboriginal flag. There's a lot of comment at home. This time around there was a lot of comment about whether she would boycott the games. She's being pushed into roles and being used as a lightning rod for people having these conversations?

DIANE BELL: Yes. I think she makes it possible to have the conversation. The flag itself, the symbol of the flag, black for the people, yellow for the sun, red for the land -- a very dramatic statement for people to see that flag. But you'll notice her running shoes are in the aboriginal colors. She's wearing her colors all the time, which I think is a nice little subversive way of making the point.

RAY SUAREZ: When there are populations inside a country that are at odds with the mainstream society, that have an historic grief vans, is there a tendency for people to latch on to models that they find comforting and reassuring while not allowing their success to spill over onto the rest of the people?

DIANE BELL: I think that's inevitable, but I think the way in which we heard Cathy Freeman speaking on that clip, she's casting her victory in the context of reconciliation. So she's immediately evoking things like the stolen generations, which are part of the shame with which Australians who feel their history is important are living at the moment. I think she makes it unavoidable that certain things stay on the agenda.

RAY SUAREZ: Stolen generations, that term means?

DIANE BELL: The stolen generations refers to aboriginal children who were forcefully removed from their family under government policies, different sorts of policies from the 19th century through until quite recently under the policy of assimilation which was formally became policy in the 1940's through to the 1960's, 70'S. So the report is called bringing them home, which was done by the Human Rights and Equal Opportunity Commission in 1997. It was published. It chronicles the histories of the children taken from their families. The estimate runs between one& -pin three to one in ten children taken from their families. That's a dramatic statistic.

RAY SUAREZ: And has there been a lot of movement inside the country? Has the country sort of explained this past to itself and started to, if not make amends, at least be more open about what really happened?

DIANE BELL: I think there's been a move to recast our history, to look the other side of the frontier. I think there's been an honoring of aboriginal languages, not as much as I would like the see, but certainly an honoring of that difference. I think there's been a willingness to say there were inhabitants in this land before we arrived here and our high court, which is equal to your Supreme Court, found in 1992 that the aboriginal populations of Australia had rights, common rights law... common law rights which are good against any other rights. So there's been a recognition by our courts that aboriginal people were the original owners of the land. That's what reconciliation seeks to sort out, that taint of our history -- because can we be a really democratic nation if we come out of this floored understanding of the origins of a nation?

RAY SUAREZ: Can this excitement really accomplish something tangible when a national paper has "our Cathy" on the front page? Just the fact that she can be all of ours -- is that a big deal?

DIANE BELL: I think being able to embrace somebody as wonderful and useful and grateful as Cathy in the context where she is insisting that we look at this in the context of reconciliation, I think that is productive, yes.

RAY SUAREZ: And this talk about...she's been asked several times in the past week about going into politics and has even conceded that there may be some role for her in the public realm.

DIANE BELL: Well, I think she's got a role in the public realm already. As I said, she's a wonderful role model. And she's a wonderful model for young women, too.

RAY SUAREZ: But can you see it becoming something more significant over time when she hangs up the running shoes, as a public figure?

DIANE BELL: Not the flag?

RAY SUAREZ: Not the flag.

DIANE BELL: I think she could be a very powerful voice in the political domain, yes. But she's a very shy person.

RAY SUAREZ: Diane Bell, thanks a lot.

DIANE BELL: It's been a pleasure.

RECAP

JIM LEHRER: Again, the major stories of this Tuesday: Attorney General Reno and FBI Director Freeh defended the case against Wen Ho Lee. The U.S. Supreme Court refused to hear the Microsoft breakup case right now. And Yugoslav President Milosevic declared a second round of presidential elections. The opposition rejected that. We'll see you online and again here tomorrow evening. I'm Jim Lehrer. Thank you and good night.