Bogus company got license for nuke materials, report says

Story Highlights
Operation finds holes in the Nuclear Regulatory Commission system
In 28 days, government investigators set up fake company
They obtain a license and buy machines with nuclear materials
NRC says holes found by operation have now been closed
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WASHINGTON (CNN) -- Government investigators created a bogus company to obtain a license for radioactive materials that could have been used to build a dirty bomb, a report CNN has obtained shows.

The report, to be the subject of a Senate hearing Thursday, exposed holes in the Nuclear Regulatory Commission's licensing system, which the NRC says it has since plugged.

Investigators with the Government Accountability Office altered the license and took initial steps a terrorist could have used to build a moderate-sized dirty bomb

Within 28 days, investigators created the bogus company without leaving their Washington offices and obtained a license to buy equipment containing nuclear materials. They changed the license to get access to an unrestricted amount of nuclear material and got commitments from two suppliers for machines containing radioactive material.

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From those machines, enough radioactive material -- americium 241 and cesium 137 -- could have been extracted to create a dirty bomb -- a non-fissile bomb that nonetheless would create chaos by distributing radioactive material over an area, congressional staffers said.

"Although we had no legitimate use for the machines, our investigators received, within days of obtaining a license from NRC, price quotes and terms of payment that would have allowed us to purchase numerous machines containing sealed radioactive source materials," the GAO report says.

Sen. Norm Coleman, R-Minnesota, criticized the NRC, saying it "has a pre-9/11 mind-set in a post-9/11 world --- focusing just on preventing another Chernobyl. The reality is that terrorists are interested in using a dirty bomb to wreak havoc in this country."

Coleman said the GAO could have prolonged their effort, "generating dozens of fake licenses. ... In other words, the amount of radiological materials involved in the sting was but a demonstration amount, and it could have been considerably larger and considerably more dangerous."

The NRC said Wednesday the materials involved in the sting were some of the least dangerous radioactive material but that it has fixed loopholes found by the GAO investigation.

"The GAO pointed out an area where our process could be improved to strengthen these protections on the less risky materials," NRC spokesman Eliot Brenner said. "We moved rapidly to fix this. Now, any new applicant for a license for these far less dangerous materials will get a visit from the NRC or have to come to see us and prove their bona fides."

The sort of bomb the GAO could have put together with the devices it could have bought "would have the radiation equivalent of a CAT scan to the chest and stomach," Brenner said. "The risk posed by these materials is small, but we are committed to seeing that they cannot be used by terrorists."

After the September 11, 2001, terrorist attacks the NRC focused on tightening restrictions regarding the most dangerous nuclear materials, he said. E-mail to a friend