The name of this program was changed to the Initiatives for Proliferation Prevention (IPP) in 1996. IPP was also expected to promote long-term nonproliferation goals through the commercialization of NIS technologies. Objectives, Scope, and Methodology

The Chairman of the Senate Committee on Foreign Relations asked us to review (1) the costs to implement the IPP program for fiscal years 1994-98, including the amount of funds actually received by NIS scientists and institutes; (2) the extent to which IPP projects are meeting their nonproliferation and commercialization objectives; and (3) DOE’s Nuclear Cities Initiative. As indicated in figure 2.1, an analysis of the program’s expenditures from fiscal year 1994 through June 1998 shows that 51 percent, or $32.2 million, of the $63.5 million spent on the IPP program has gone to reimburse DOE laboratories. In some cases, scientists currently working on Russia’s weapons of mass destruction program are receiving IPP program funds to supplement their salaries. He noted that commercializing a new specialty chemical or polymer can take from 6 to 8 years in the United States. Despite the limited success in commercializing IPP projects, DOE officials told us that the program has been successful because it has at least temporarily employed thousands of weapons scientists at about 170 institutes and organizations throughout Russia and other Newly Independent States. In several instances, information provided by the U.S. national laboratories did not indicate how many scientists were employed on a project. DOE estimates that the Nuclear Cities Initiative may cost $600 million during the next 5 years, with the initial funding set at $15 to $20 million for fiscal year 1999. The 10 nuclear cities were among the most secret facilities in the former Soviet Union. It is uncertain, however, to what extent IPP funds have focused on the most critical scientific institutes and targeted the most important weapons scientists. Given these problems and the limited commercial success evidenced in the IPP program, we believe that the Nuclear Cities Initiative is likely to be a subsidy program for many years, rather than a stimulus for economic development. Recommendations to the Secretary of Energy

To maximize the impact of the Initiatives for Proliferation Prevention program’s funding and improve DOE’s oversight of the program, we recommend that the Secretary of Energy reexamine the role and costs of the national laboratories’ involvement with a view toward maximizing the amount of program funds going to the NIS institutes; obtain information on how program funds are being spent by the NIS seek assurances from the Russian government, either through a government-to-government agreement or through other means, that program funds are exempt from Russian taxes; require that program officials, to the extent possible, obtain accurate data on the number and background of the scientists participating in program projects and eliminate funding for institutes that did not formerly work on weapons of mass destruction; clarify program guidance as to whether scientists currently employed in weapons of mass destruction programs are eligible for program funding; require that project reviewers consider all military applications of projects to ensure that useful defense-related information is not unintentionally transferred; strengthen and formalize DOE’s process for reviewing proposed chemical and biological projects by (1) providing complete project information to all reviewing U.S. government agencies and organizations, (2) developing criteria to help frame the evaluation process, and (3) providing feedback to all of the reviewing agencies about the final disposition of the projects.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) efforts to create jobs for displaced former Soviet Union scientists through its Initiatives for Proliferation Prevention program, focusing on: (1) the costs to implement the program for fiscal years 1994-98, including the amount of funds received by weapons scientists and institutes; (2) the extent to which the program's projects are meeting their nonproliferation and commercialization objectives; and (3) DOE's Nuclear Cities Initiative.

What GAO Found

GAO noted that: (1) the cost to implement the Initiatives for Proliferation Prevention program from fiscal year 1994 through June 1998 are as follows: (a) of the $63.5 million spent, $23.7 million, or 37 percent, went to scientific institutes in the Newly Independent States (NIS); (b) the amount of money that reached the scientists at the institutes is unknown because the institutes' overhead charges, taxes, and other fees reduced the amount of money available to pay the scientists; and (c) about 63 percent, or $39.8 million, of the program's funds was spent in the United States, mostly by DOE's national laboratories in implementing and providing oversight of the program; (2) regarding the extent to which the program is meeting its nonproliferation and commercialization goals, GAO found that: (a) the program has been successful in employing weapons scientists through research and development projects, but it has not achieved its broader nonproliferation goal of long-term employment through the commercialization of these projects; (b) program officials do not always know how many scientists are receiving program funding or whether the key scientists and institutes are being targeted; (c) some scientists currently working on Russia's weapons of mass destruction program are receiving program funds; (d) some dual-use projects may have unintentionally provided defense-related information--an outcome that could negatively affect U.S. national security interests; and (e) chemical and biological projects may not be adequately reviewed by U.S. officials prior to approval; and (3) the Nuclear Cities Initiative may cost $600 million over the next 5 years: (a) the initiative is still largely in a conceptual phase, and it is uncertain how jobs will be created in the 10 nuclear cities because of restricted access and the current financial crisis in Russia; and (b) the initiative is likely to be a subsidy program for Russia for many years, given the lack of commercial success in the Initiatives for Proliferation Prevention Program.