1                 IN THE UNITED STATES DISTRICT COURT
         2                   FOR THE DISTRICT OF NEW MEXICO
         5             Plaintiff,
         6   vs.                             NO. 99-1417-JC
         7   WEN HO LEE,
         8             Defendant.
        12                  TRANSCRIPT OF PROCEEDINGS
                                September 13, 2000
                     United States Chief District Judge
        18                        A P P E A R A N C E S
        19   FOR THE PLAINTIFF:       Norman C. Bay
                                      U. S. Attorney
        20                            George Stamboulidis
                                      Michael Liebman
        21                            Paula Burnett
                                      Laura Fashing
        22                            Asst. U. S. Attorneys
                                      P. O. Box 607
        23                            Albuquerque, NM  87103

         1   FOR THE DEFENDANT:       Mark Holscher
                                      Richard Myers
         2                            O'Melveny & Myers LLP
                                      400 South Hope Street
         3                            Los Angeles, CA  90071-2899
         4                            John Cline
                                      Nancy Hollander
         5                            K. C. Maxwell
                                      Attorneys at Law
         6                            FREEDMAN BOYD DANIELS
                                      HOLLANDER GOLDBERG & CLINE PA
         7                            20 First Plaza
                                      Albuquerque, NM  87102

         1            THE COURT:  Court is now in session.  Please have a
         2   seat.  Let me ask counsel again to state their appearances in
         3   Number 99-1417, United States of America versus Wen Ho Lee.
         4            MR. STAMBOULIDIS:  Yes, Your Honor.  George
         5   Stamboulidis; Norman Bay, United States Attorney; Michael
         6   Liebman, Trial Attorney from the Internal Security Section of
         7   the Department of Justice; Thomas Cooker, Special Agent in
         8   Charge of the FBI in New Mexico; First Assistant United States
         9   Attorney, Paula Burnett; Assistant United States Attorney,
        10   Laura Fashing; and Supervisory Special Agent, Robert Messemer
        11   with the FBI.  Good morning.
        12            MR. CLINE:  Good morning.  John Cline, Mark Holscher,
        13   Nancy Hollander, Richard Myers, K.C. Maxwell, and Dr. Lee is
        14   here as well.
        15            THE COURT:  Okay.  I understand the parties have
        16   finally reached a plea agreement satisfactory to everyone.  I
        17   have reviewed the most recent signed version, and I gather you
        18   are now ready to proceed with a plea hearing and disposition.
        19   Is that correct?
        20            MR. STAMBOULIDIS:  That is correct.
        21            MR. CLINE:  Yes, Your Honor.
        22            THE COURT:  All right.  What I will do is ask that
        23   Dr. Lee and his counsel come up to the microphone at this
        24   time.
        25            At this time I will ask Mr. Jonathan Westen to

         1   administer the oath to Dr. Lee.
         2              (Whereupon, an oath to tell the truth was
         3          administered to the defendant to tell the truth.)
         4            THE COURT:  Dr. Lee, you are now under oath.  If you
         5   give any false answers to questions that I ask you, your false
         6   answers could be used against you in a prosecution for perjury
         7   or false statements or obstruction of justice, all of which
         8   are separate crimes.  Do you understand that, sir?
         9            THE DEFENDANT:  I understand.
        10            THE COURT:  Would you please state your full name?
        11            THE DEFENDANT:  Wen Ho Lee.
        12            THE COURT:  And how old are you, Dr. Lee?
        13            THE DEFENDANT:  I am 60.
        14            THE COURT:  I am aware of your education from having
        15   read a number of documents in the file, but again I will ask
        16   you to state on the record your education, please, sir.
        17            THE DEFENDANT:  I have a Ph.D. in Mechanical
        18   Engineering.
        19            THE COURT:  And that was from Texas A&M University?
        20            THE DEFENDANT:  Yes, from Texas A&M.
        21            THE COURT:  In the last 24 hours, have you used any
        22   alcohol or other drugs?
        23            THE DEFENDANT:  No.
        24            THE COURT:  Are you under a doctor's care?
        25            THE DEFENDANT:  No.

         1            THE COURT:  And are you taking any prescription
         2   medications?
         3            THE DEFENDANT:  No.
         4            THE COURT:  At this time, are you fully alert?
         5            THE DEFENDANT:  Yes.
         6            THE COURT:  If you do not understand any question I
         7   ask you this morning, would you please tell me?
         8            THE DEFENDANT:  I will.
         9            THE COURT:  Are you nervous at this time?
        10            THE DEFENDANT:  No.
        11            THE COURT:  May I see the original of the plea
        12   agreement, please?
        13            MR. STAMBOULIDIS:  Your Honor, I have just handed up
        14   a copy of the original plea agreement.
        15            THE COURT:  Would you hand this to Mr. Cline, please.
        16            Dr. Lee, is that your signature on the original plea
        17   agreement?
        18            THE DEFENDANT:  Yes.
        19            THE COURT:  Now, I notice that you signed Wen Ho as a
        20   single name.  Is that correct?
        21            THE DEFENDANT:  That is correct.  That is the way I
        22   sign.
        23            THE COURT:  In all of the pleadings those names are
        24   shown separately, but your signature is the way you normally
        25   sign?

         1            THE DEFENDANT:  That is correct.
         2            THE COURT:  Let me ask counsel, is that your
         3   signature also on the plea agreement?
         4            MR. CLINE:  Yes, Your Honor.
         5            MR. HOLSCHER:  Yes, Your Honor.
         6            THE COURT:  Dr. Lee, did you read the plea agreement
         7   in its entirety before you signed it?
         8            THE DEFENDANT:  Yes.
         9            THE COURT:  And did you discuss it with your
        10   attorneys before you signed it?
        11            THE DEFENDANT:  Yes.
        12            THE COURT:  Did you fully understand all of the
        13   provisions of your plea agreement before you signed it?
        14            THE DEFENDANT:  Yes.
        15            THE COURT:  You are pleading guilty today to the
        16   charge in Count 57 of the indictment.  Have you read the
        17   indictment?
        18            THE DEFENDANT:  Yes.
        19            THE COURT:  Have you discussed it with your
        20   attorneys?
        21            THE DEFENDANT:  Yes.
        22            THE COURT:  Do you understand all of the charges in
        23   the 59 counts of the indictment?
        24            THE DEFENDANT:  Yes, I understand.
        25            THE COURT:  Are you fully satisfied with all

         1   explanations your attorneys have given you about these
         2   charges?
         3            THE DEFENDANT:  Yes.
         4            THE COURT:  Count 57 charges that on a date in 1994
         5   up through the date of the indictment, within the District of
         6   New Mexico, you had unauthorized possession of and control
         7   over documents and writings relating to the national defense,
         8   which was restricted data that had been gathered onto Tape L
         9   and that you willfully retained and failed to deliver Tape L
        10   to an officer and an employee of the United States who was
        11   entitled to receive it.
        12            Do you understand specifically this charge that is
        13   made against you?
        14            THE DEFENDANT:  I understand.
        15            THE COURT:  Do you understand, Dr. Lee, that Count 57
        16   charges you with the commission of a felony crime?
        17            THE DEFENDANT:  I understand.
        18            THE COURT:  If I accept your plea of guilty to Count
        19   57, it will be the same as though you have been convicted of
        20   that felony charge.  Do you understand that, sir?
        21            THE DEFENDANT:  Yes.
        22            THE COURT:  Are you fully satisfied with the way that
        23   you have been represented by your attorneys, Mr. Holscher,
        24   Mr. Cline and all of the other attorneys who have worked on
        25   you're behalf in this case?

         1            THE DEFENDANT:  Yes.
         2            THE COURT:  At this time, I need to review the plea
         3   agreement with you.  Bear with me because I have before me
         4   three different iterations of the plea agreement, and I want
         5   to make sure that I cover everything in the final version.
         6            First I am going to advise you of the rights of a
         7   defendant.  Some of these are set forth in paragraph 2 of your
         8   plea agreement.  Do you understand, Dr. Lee, that you have the
         9   right to plead not guilty to all of these charges and to have
        10   a trial before a jury on the charges?
        11            THE DEFENDANT:  Yes.
        12            THE COURT:  If you chose to have a trial, your
        13   lawyers would represent you in court.  And they are excellent
        14   lawyers.  They would cross-examine the government's witnesses,
        15   and you would have the right to face or confront the
        16   government's witnesses in court.  Do you understand that,
        17   sir?
        18            THE DEFENDANT:  Yes.
        19            THE COURT:  If you chose to have a trial, it would be
        20   a trial before a jury of your peers.  Do you understand that,
        21   sir?
        22            THE DEFENDANT:  Yes.
        23            THE COURT:  If you chose to have a trial, you would
        24   have the right to make witnesses come to court under subpoena
        25   to testify for you.  Do you understand that?

         1            THE DEFENDANT:  Yes.
         2            THE COURT:  If you chose to have a trial, the
         3   government could not force you to testify at a trial.
         4            THE DEFENDANT:  Yes.
         5            THE COURT:  Whether you testify would be entirely
         6   your choice.  Do you understand that?
         7            THE DEFENDANT:  Yes.
         8            THE COURT:  At this time, you are presumed under the
         9   law of the United States to be innocent of all the charges in
        10   the indictment.  You could not be convicted of any of those
        11   charges unless the government proves your guilt beyond a
        12   reasonable doubt at a trial.  Do you understand that, sir?
        13            THE DEFENDANT:  Yes.
        14            THE COURT:  Now, by pleading guilty to Count 57, you
        15   will be giving up all of your rights of a trial and all of
        16   your rights associated with a trial.  Do you understand that,
        17   sir?
        18            THE DEFENDANT:  Yes.
        19            THE COURT:  Next I need to review with you the
        20   maximum penalties authorized by law that apply to the offense
        21   charged in Count 57.  These are set forth in writing in
        22   paragraph 4 of the plea agreement.
        23            The maximum period of imprisonment authorized by law
        24   is 10 years for this offense.  Do you understand that, sir?
        25            THE DEFENDANT:  Yes.

         1            THE COURT:  The maximum fine is $250,000.  Do you
         2   understand that?
         3            THE DEFENDANT:  Yes.
         4            THE COURT:  There is a mandatory term of supervised
         5   release of not more than three years that would have to follow
         6   any term of imprisonment.  Do you understand that?
         7            THE DEFENDANT:  Yes.
         8            THE COURT:  There is a mandatory special penalty
         9   assessment of $100.  Do you understand that?
        10            THE DEFENDANT:  Yes.
        11            THE COURT:  Now, let me ask counsel for the
        12   government, is there any prospect of restitution in this case;
        13   it's mentioned in paragraph 4(e)?
        14            MR. STAMBOULIDIS:  Not pursuant to the agreement,
        15   Your Honor.
        16            THE COURT:  Paragraph 5 of the plea agreement is the
        17   heart of the agreement.  It provides that you, Dr. Lee, and
        18   the United States of America have made an agreement under Rule
        19   11(e)(1)(C) of the Federal Rules of Criminal Procedure.  That
        20   agreement specifies that the length of your sentence of
        21   incarceration should be 278 days.  I gather today is the 278th
        22   day that he has been held in custody.  Is that correct?
        23            MR. STAMBOULIDIS:  279.
        24            THE COURT:  279.  I was reading from an earlier
        25   version I guess.

         1            MR. HOLSCHER:  No, Your Honor, you have it correct.
         2   We added 278, just to make sure he can leave before the end of
         3   the day today.
         4            THE COURT:  Do you agree with that,
         5   Mr. Stamboulidis?
         6            MR. STAMBOULIDIS:  Yes, I do.
         7            THE COURT:  Mr. Stamboulidis, this is the agreement
         8   of the government; is that correct?
         9            MR. STAMBOULIDIS:  Yes, it is, and that is my
        10   signature on the last page.
        11            THE COURT:  Dr. Lee, this also is your agreement?
        12            THE DEFENDANT:  Yes.
        13            THE COURT:  In addition, paragraph 5 provides that
        14   you will be given credit for all the time that you have served
        15   in custody since December 10, 1999.  It's clear from
        16   statements of counsel that that means that today, upon
        17   completion of this hearing, you will be released.
        18            Next paragraph 5 provides that under the agreement no
        19   fine will be accessed against you, and you will not be
        20   required to forfeit any of your property or assets nor will
        21   you be required to make restitution.
        22            Is that the government's agreement,
        23   Mr. Stamboulidis?
        24            MR. STAMBOULIDIS:  Yes, it is, Your Honor.
        25            THE COURT:  Also the agreement provides that you are

         1   not to have a period of probation or supervised release.  Did
         2   the government also agree to that?
         3            MR. STAMBOULIDIS:  Correct.
         4            THE COURT:  The remainder of paragraph 5 provides
         5   that Dr. Lee must pay the mandatory $100 special penalty
         6   assessment required by 18 United States Code Section
         7   3013(a)(2).
         8            Have you agreed to do that, Dr. Lee?
         9            THE DEFENDANT:  Yes.
        10            THE COURT:  I have been provided with a copy of a
        11   check that indicates this payment has already been made.  Is
        12   that correct?
        13            MR. CLINE:  Yes, Your Honor, it has been.
        14            THE COURT:  The last part of paragraph 5 states that
        15   the parties agree that sentencing may take place today at the
        16   conclusion of the plea hearing without a presentence report.
        17   There was a skeletal presentence report prepared by the
        18   Probation Office.
        19            Let me ask Dr. Lee, have you reviewed that?
        20            MR. CLINE:  Your Honor, I don't know that Dr. Lee
        21   has.
        22            THE COURT:  When we get to that stage of the
        23   proceeding, I think we will take a short break and permit that
        24   to be done.
        25            MR. STAMBOULIDIS:  Your Honor, I have also just

         1   handed up a copy of the written executed waiver of a
         2   presentence report that was executed by the parties and would
         3   allow the Court to also make findings pursuant to Rule
         4   32(b)(1)(A), the finding that is required there, as well as
         5   under (b)(1)(B), the explanation.
         6            THE COURT:  Thank you, Mr. Stamboulidis.
         7            MR. STAMBOULIDIS:  Certainly.
         8            THE COURT:  Paragraph 6 of the agreement provides
         9   that if I refuse to accept the agreement or if I decline to
        10   dismiss any of the other 58 counts of the indictment with
        11   prejudice, then you, Dr. Lee, will be afforded an opportunity
        12   to withdraw your guilty plea.  Do you understand that, sir?
        13            THE DEFENDANT:  Yes.
        14            THE COURT:  Let me make certain I have the last
        15   version of the language of paragraph 7.  Paragraph 7 relates
        16   to Dr. Lee's additional obligations.  Seven (a) is a
        17   definitional section that states the following:
        18            "'Tapes' is defined as the tapes at issue in the
        19   indictment, including any information on the tapes, as well as
        20   any copies, printouts, versions, variants or variations in any
        21   medium whatsoever."
        22            Do you understand that definition of tapes?
        23            THE DEFENDANT:  Yes.
        24            THE COURT:  The second definition is of files.  It's
        25   defined, "...as the files at issue in the indictment,

         1   including any information in the files, as well as any copies,
         2   printouts, versions, variants or variations in any medium
         3   whatsoever."
         4            Do you understand, sir, the definition of "files" as
         5   used in this agreement?
         6            THE DEFENDANT:  Yes.
         7            THE COURT:  Paragraph 7(b) states that you, Dr. Lee,
         8   before the entry of your plea, will make a truthful written
         9   declaration under penalty of perjury that, one, you never
        10   intended to pass, disclose or cause or allow to be disclosed
        11   to any unauthorized person or third person the tapes and never
        12   allowed any unauthorized person or third party access to those
        13   tapes.
        14            Second, that you did not in the past and cannot in
        15   the future pass, disclose or cause or allow to be disclosed
        16   the tapes to any unauthorized person or third party.
        17            Third, that you never intended to pass, disclose or
        18   cause or allow to be disclosed to any unauthorized person or
        19   party -- should that say "third party"?
        20            MR. CLINE:  Your Honor, I think we all understand
        21   that it must mean third party.
        22            THE COURT:  -- the files and you never allowed any
        23   unauthorized person or third party access to those files.
        24            And fourth, that you do not and did not in the past
        25   and cannot in the future disclose or cause or allow to be

         1   disclosed the files to any unauthorized person or party.
         2            My understanding is that you have already executed
         3   that declaration under oath.  Is that correct?
         4            THE DEFENDANT:  Yes.
         5            MR. CLINE:  We have provided it to the government.
         6            THE COURT:  And the government has received it.  Is
         7   that correct?
         8            MR. STAMBOULIDIS:  I received it approximately 10:55
         9   today.
        10            THE COURT:  Next under paragraph 7(c), Dr. Lee has
        11   made in written form, by his signature on the plea agreement,
        12   a factual statement that supports his plea of guilty to Count
        13   57.  At this time, I will ask Dr. Lee to state that orally
        14   here in court.
        15            THE DEFENDANT:  On a date certain in 1994, I used an
        16   unsecure computer in T Division to download a document for
        17   writing relating to the national defense, file 14, on to Tape
        18   L.
        19            I knew at the time that my position of Tape L,
        20   outside the X Division perimeter, was unauthorized and that
        21   under Los Alamos National Laboratory directives, I was not
        22   permitted to have Tape L outside the X Division perimeter.
        23            I retained Tape L and did not deliver it to an
        24   officer or employee of the United States entitled to receive
        25   Tape L.

         1            THE COURT:  Let me ask Dr. Lee, did you do that
         2   willfully?
         3            THE DEFENDANT:  Yes.
         4            THE COURT:  Mr. Stamboulidis, let me ask you on
         5   behalf of the government if the government believes this is a
         6   sufficient factual basis for Dr. Lee's plea of guilty to Count
         7   57.
         8            MR. STAMBOULIDIS:  We do.
         9            THE COURT:  If the matter were to proceed to trial --
        10            MR. STAMBOULIDIS:  Your Honor, may I interrupt?  With
        11   the understanding that, of course, this happened in Los
        12   Alamos, in New Mexico.
        13            THE COURT:  If the matter were to proceed to trial,
        14   would the government be able to offer evidence to a jury in
        15   proof of this factual statement?
        16            MR. STAMBOULIDIS:  Definitely.
        17            THE COURT:  Let me ask Dr. Lee and his counsel, do
        18   you agree that the government could do that?
        19            MR. CLINE:  Yes.
        20            MR. HOLSCHER:  Yes, Your Honor.
        21            THE COURT:  Paragraph 7(d) provides that Dr. Lee will
        22   acknowledge that the United States had and has a legitimate
        23   national security interest in determining what occurred with
        24   respect to the files and tapes at issue.
        25            Do you acknowledge that, Dr. Lee?

         1            THE DEFENDANT:  Yes.
         2            THE COURT:  Paragraph 7(e) provides that after I
         3   accept your plea of guilty, if I decide to do so, and before
         4   you are sentenced, you will provide to the United States a
         5   truthful written declaration under penalty of perjury, stating
         6   the manner in which you disposed of the seven tapes, as well
         7   as how, when and where copies of the tapes were made and the
         8   manner in which they were disposed.
         9            Has that already been done?
        10            MR. CLINE:  Your Honor, it has not been done, but the
        11   declaration is prepared.  As soon as the Court accepts
        12   Dr. Lee's plea, I will immediately provide that to
        13   Mr. Stamboulidis.
        14            THE COURT:  Has the declaration been executed by
        15   Dr. Lee?
        16            MR. CLINE:  Yes, it is.
        17            THE COURT:  Paragraph 7(f) provides that beginning
        18   September 26th, next week, or as soon after that date as the
        19   government requests, you, Dr. Lee, will answer under oath
        20   questions from representatives of the United States for a
        21   period of 10 days within a three-week period for a reasonable
        22   number of hours each day, which the parties understand will be
        23   six hours of questions and answers per day for each of those
        24   10 days.  Have you agreed to do that, sir?
        25            THE DEFENDANT:  Yes.

         1            THE COURT:  7(f) further provides that to the extent
         2   the United States believes that it will need additional time
         3   to complete the questioning, it may ask the Court for a
         4   reasonable extension of this debriefing period.
         5            Let me ask Dr. Lee and his counsel, have you agreed
         6   to that?
         7            MR. CLINE:  Yes.
         8            THE COURT:  The next sentence provides that to the
         9   extent counsel for Dr. Lee conclude at any time during that
        10   three-week period the questioning has become unreasonable,
        11   they may apply to the Court for appropriate relief.
        12            Now, let me ask Mr. Stamboulidis, has the government
        13   agreed to that?
        14            MR. STAMBOULIDIS:  Yes.
        15            THE COURT:  The next sentence of 7(f) states that
        16   during the three-week period, the defendant will identify any
        17   storage spaces other than his home, including, but not limited
        18   to, safety deposit boxes, computers and computer accounts
        19   under his control, and he will agree to allow the United
        20   States to search them.
        21            Is that your agreement, Dr. Lee?
        22            THE DEFENDANT:  Yes.
        23            THE COURT:  Let me ask Dr. Lee's counsel if it
        24   requires also the consent of Mrs. Lee, will her consent be
        25   given as well?

         1            MR. CLINE:  We are confident that it will be, Your
         2   Honor.
         3            THE COURT:  Thank you, Mr. Cline.
         4            Paragraph 7(g) provides that the parties recognize
         5   under the particular circumstances of this case that the
         6   reliability of any future polygraph examination may be subject
         7   to conflicting interpretations.  (Based on what has transpired
         8   before in this case, I certainly agree with that statement.)
         9            However, the United States reserves the right to have
        10   Dr. Lee undergo a polygraph examination administered by a
        11   mutually agreeable polygrapher, if the United States believes
        12   it becomes necessary for national security reasons or to
        13   verify Dr. Lee's declaration or sworn debriefing regarding the
        14   creation, disposition and whereabouts of the tapes and files.
        15            The United States has made that reservation.  Let me
        16   ask Dr. Lee and his counsel to state if you agreed to abide by
        17   that.
        18            MR. CLINE:  We have.
        19            MR. HOLSCHER:  We have, Your Honor, subject to the
        20   limitations on the use below in the paragraph.
        21            THE COURT:  The next sentence states that if the
        22   parties fail to agree on a polygrapher, then, after hearing
        23   from the parties, the Honorable Edward Leavy of the United
        24   States Court of Appeals for the Ninth Circuit, who has been
        25   the mediator judge, will select the polygrapher.  If any such

         1   polygraph examination occurs, it will be conducted after the
         2   Court accepts the defendant's plea and imposes sentence and
         3   after the debriefing that will take place under paragraph
         4   7(f).
         5            Has the defendant agreed to that?
         6            MR. CLINE:  Yes.
         7            THE COURT:  Has the government agreed to that?
         8            MR. STAMBOULIDIS:  Yes, Judge.
         9            THE COURT:  The last sentence of this paragraph
        10   states that the parties agree that the results of any
        11   polygraph examination will not be submitted to this or any
        12   other court in any manner, including, without limitation, in
        13   connection with any proceeding under paragraph 7(h), which we
        14   are about to review now.
        15            Is that the agreement of both parties?
        16            MR. STAMBOULIDIS:  Yes.
        17            MR. CLINE:  Yes, Your Honor.
        18            THE COURT:  Paragraph 7(h) provides that this
        19   agreement, and any plea, sentence, or other action taken in
        20   accordance with this agreement, will become null and void if
        21   the Court determines, by a preponderance of the evidence
        22   admissible under the Federal Rules of Evidence as they would
        23   apply at a trial, that Dr. Lee knowingly provided false or
        24   misleading testimony concerning the disposition or creation of
        25   the files and tapes in the declarations that he is to make

         1   under this agreement or during his debriefing.
         2            Dr. Lee, have you agreed to that, sir?
         3            THE DEFENDANT:  Yes.
         4            THE COURT:  Let me ask his counsel to confirm that.
         5            MR. CLINE:  Yes.
         6            THE COURT:  Paragraph 7(i) provides that for a period
         7   of 12 months following imposition of sentence Dr. Lee must
         8   make himself available to respond to reasonable inquiries from
         9   the United States.
        10            Dr. Lee, have you agreed to do that?
        11            THE DEFENDANT:  Yes.
        12            THE COURT:  Paragraph 7(j) provides that
        13   notwithstanding the other provisions of paragraph 7, any
        14   testimony given by Dr. Lee and his declaration made under this
        15   paragraph will be protected under Rule 11(e)(6) of the Federal
        16   Rules of Criminal Procedure.
        17            Has the government agreed to that?
        18            MR. STAMBOULIDIS:  Yes, Your Honor.
        19            THE COURT:  Paragraph 7(k) states that no statements
        20   made or other information provided by Dr. Lee in connection
        21   with his obligations under paragraph 7 will be used directly
        22   against him in any criminal case brought by the United States
        23   except in the event of prosecution for false statement,
        24   obstruction of justice or perjury arising out of those
        25   statements or other information he provides or except for a

         1   proceeding under paragraph 7(h), as further set forth in
         2   paragraph 13.
         3            Has the government agreed to that?
         4            MR. STAMBOULIDIS:  Yes.  7(h) or as set forth in
         5   paragraph 13, but yes, we have agreed to that.
         6            THE COURT:  The next sentence states that the United
         7   States may make derivative use of and may pursue any
         8   investigative leads suggested by any statements made or other
         9   information provided by Dr. Lee.
        10            Dr. Lee, have you and your counsel agreed to that?
        11            THE DEFENDANT:  Yes.
        12            MR. CLINE:  Yes.
        13            THE COURT:  The next sentence provides that if
        14   Dr. Lee later testifies at any trial or other judicial
        15   proceeding and offers testimony different from any statements
        16   made or information provided during the debriefing, the United
        17   States may cross-examine Dr. Lee about any statements made or
        18   other information provided by him during the debriefing.
        19            Dr. Lee, have you agreed to that?
        20            THE DEFENDANT:  Yes.
        21            THE COURT:  In addition, the next sentence states
        22   that evidence about such statements by Dr. Lee may also be
        23   produced in the United States' rebuttal case in any such trial
        24   or judicial proceeding.
        25            Dr. Lee, have you and your counsel agreed to that?

         1            THE DEFENDANT:  Yes.
         2            MR. CLINE:  Yes.
         3            THE COURT:  The last sentence of 7(k) provides that
         4   despite the provisions of Rule 410 of the Federal Rules of
         5   Evidence and Rule 11 of the Federal Rules of Criminal
         6   Procedure, Dr. Lee waives any objection to cross-examination
         7   and rebuttal as set forth above.
         8            Have you agreed to that, Dr. Lee?
         9            THE DEFENDANT:  Yes.
        10            THE COURT:  Let me ask his counsel to confirm that.
        11            MR. CLINE:  Yes.
        12            THE COURT:  Paragraph 7(i) provides that for a period
        13   of 12 months following the imposition of sentence, Dr. Lee
        14   will give reasonable written advance notice to the United
        15   States of any plans to travel outside the United States.
        16            Have you agreed to do that, Dr. Lee?
        17            THE DEFENDANT:  Yes.
        18            THE COURT:  It continues that if the United States
        19   has any objection to Dr. Lee's travel plans, the United States
        20   will bring its objection to Judge Leavy, the mediator judge,
        21   who will determine whether Dr. Lee should be able to travel
        22   outside the United States.
        23            Have you agreed to that, Dr. Lee?
        24            THE DEFENDANT:  Yes.
        25            THE COURT:  Mr. Stamboulidis, is that also the

         1   government's agreement?
         2            MR. STAMBOULIDIS:  Yes, it is, Judge.
         3            THE COURT:  The last sentence of this subparagraph
         4   provides that it is implemented by a letter dated September
         5   13th, 2000, signed and agreed to by the United States, the
         6   defendant and counsel for the defendant addressed and
         7   delivered to the mediator judge, Judge Leavy, which letter
         8   will be a part of this agreement.
         9            I have read the letter of September 13th, 2000, and I
        10   will ask Dr. Lee to confirm that that is his signature that
        11   appears on the original of the letter.
        12            THE DEFENDANT:  Yes.
        13            THE COURT:  Mr. Stamboulidis, is that also your
        14   signature, on behalf of the government?
        15            MR. STAMBOULIDIS:  Yes, it is, Judge.
        16            THE COURT:  Mr. Holscher, is that your signature, as
        17   counsel for Dr. Lee?
        18            MR. HOLSCHER:  Yes, Your Honor.
        19            MR. STAMBOULIDIS:  Your Honor, I personally delivered
        20   the letter to Judge Leavy.
        21            THE COURT:  Paragraph 8 of the agreement relates to
        22   waivers of rights by Dr. Lee.  Paragraph 8 provides that
        23   Dr. Lee is aware that his right to appeal the sentence that
        24   will be imposed and that, acknowledging that right, he
        25   knowingly waives his right to appeal any sentence that is

         1   imposed in accordance with the parties' agreement.
         2            Have you agreed to that, Dr. Lee?
         3            THE DEFENDANT:  Can I read it one more time?
         4            THE COURT:  Yes, sir.  This says that you have agreed
         5   to waive your right to appeal the sentence that I will impose
         6   in accordance with the agreement between you and the
         7   government.
         8            THE DEFENDANT:  Yes.
         9            THE COURT:  Paragraph 8 also provides that you,
        10   Dr. Lee have waived your right to challenge your sentence in
        11   any manner by any collateral attack, including, but not
        12   limited to, a motion under 28 United States Code Section 2255
        13   relating to petition for writ of habeas corpus.
        14            Is it also your agreement not to attack your sentence
        15   that will be imposed in any collateral manner?
        16            THE DEFENDANT:  Yes.
        17            THE COURT:  Paragraph 9 provides that Dr. Lee waives
        18   any right to additional disclosure from the government in
        19   connection with the plea agreement.
        20            Have you agreed to that, Dr. Lee?
        21            THE DEFENDANT:  Yes.
        22            THE COURT:  Do you understand that at this time the
        23   government is under order of this Court to provide substantial
        24   additional information that could eventually result in a
        25   dismissal of all the charges in the indictment against you.

         1            Do you understand that, sir?
         2            THE DEFENDANT:  Yes.
         3            THE COURT:  Has that been explained to you by your
         4   attorneys?
         5            THE DEFENDANT:  Yes.
         6            THE COURT:  Have you agreed to this provision of
         7   waiving any right to additional disclosure from the
         8   government, knowing that?
         9            THE DEFENDANT:  Can you repeat?
        10            THE COURT:  Yes, sir.
        11            If this case proceeded and the government provided
        12   the information I have already ordered it to provide or
        13   additional information that I may require it to provide in the
        14   future, it's possible that would lead to a dismissal of all
        15   the charges against you.  In view of that, do you agree at
        16   this time that you will not require the government to produce
        17   any additional information?
        18            THE DEFENDANT:  Let me talk to my lawyer.
        19            THE COURT:  Yes.
        20            THE DEFENDANT:  Yes, it's okay.
        21            THE COURT:  The next sentence in paragraph 9 states
        22   that you, Dr. Lee, agree --
        23            MR. STAMBOULIDIS:  Your Honor, your last question I
        24   think was fine, but I think it just should be made clear that
        25   paragraph 9, the first sentence, also includes that not only

         1   will he not require, as you put it to him and he understood
         2   that, but he is waiving any right and cannot complain later
         3   about any lack of disclosure.
         4            THE COURT:  Do you agree with that refinement of my
         5   question, Dr. Lee?
         6            THE DEFENDANT:  Yes.  Yes.
         7            THE COURT:  The last sentence of paragraph 9 states
         8   that Dr. Lee agrees, with respect to all charges in the
         9   indictment, that he is not a prevailing party within the
        10   meaning of the Hyde Amendment, which is Section 617 Public Law
        11   105-119, which became effective November 26th, 1997.
        12            The Hyde Amendment, Dr. Lee, gives persons charged
        13   with crimes by the United States government the opportunity to
        14   seek monetary reimbursement if it's determined that the
        15   charges were frivolous or not properly brought.
        16            By this provision of the agreement, you are agreeing
        17   that you would not be considered a prevailing party on any of
        18   the counts, including the 58 counts that will be dismissed, in
        19   order to afford you rights under the Hyde Amendment.
        20            Have you agreed to that, sir?
        21            THE DEFENDANT:  Excuse me.  Can I talk to my lawyer,
        22   please?
        23            THE COURT:  Yes, you may.
        24            THE DEFENDANT:  Yes.
        25            THE COURT:  You have knowingly given up those rights

         1   under the Hyde Amendment; is that correct, sir?
         2            THE DEFENDANT:  Yes, that is correct.
         3            THE COURT:  The next part of the plea agreement
         4   relates to the government's additional agreements.
         5            Paragraph 10 provides that if Dr. Lee fulfills his
         6   obligations as set forth in this plea agreement, the United
         7   States at the time of sentencing will move to dismiss with
         8   prejudice all remaining counts of the indictment as to
         9   Dr. Lee.
        10            Is that the government's agreement?
        11            MR. STAMBOULIDIS:  Yes, Your Honor.
        12            THE COURT:  Paragraph 11 provides that this agreement
        13   is limited to the United States Attorney's Office for the
        14   District of New Mexico and the United States Department of
        15   Justice and does not bind any other federal, state or local
        16   agencies or prosecuting authorities.
        17            Do you understand that, Dr. Lee?
        18            THE DEFENDANT:  Yes.
        19            THE COURT:  And let me ask Dr. Lee's counsel, is it
        20   possible that any other authority would be in a position to
        21   prosecute Dr. Lee, as far as you're aware?
        22            MR. CLINE:  Not in our view.
        23            THE COURT:  Let me ask Mr. Stamboulidis, are you
        24   aware of any other governmental entity that would be able to
        25   prosecuted Dr. Lee?

         1            MR. STAMBOULIDIS:  Anything is possible, Judge, but
         2   the agreement is the agreement.
         3            THE COURT:  Are you satisfied with this?  Let me ask
         4   counsel for Dr. Lee.
         5            MR. CLINE:  Yes, sir.
         6            THE COURT:  Mr. Holscher?
         7            MR. HOLSCHER:  Yes, Your Honor.  We're satisfied, and
         8   we have absolute confidence that if something were to arise we
         9   would take care of it.
        10            THE COURT:  The last sentence of paragraph 11 states
        11   that this agreement may in no way be relied upon or cited as
        12   precedent by anyone not a party to this agreement.
        13            Has the government agreed to that, Mr. Stamboulidis?
        14            MR. STAMBOULIDIS:  Yes, Judge.
        15            THE COURT:  As I understand this, it's not a matter
        16   of concern to Dr. Lee.  Is that correct?
        17            MR. CLINE:  We don't care.
        18            THE COURT:  Paragraph 12 is entitled Voluntary Plea.
        19   It states that Dr. Lee agrees and represents that this plea of
        20   guilty is freely and voluntarily made and not the result of
        21   force or threats or promises apart from those set forth in
        22   this plea agreement.
        23            Is that the correct, Dr. Lee?
        24            THE DEFENDANT:  Yes.
        25            THE COURT:  I want to make certain that your plea is

         1   truly voluntary and that you're not intending to plead guilty
         2   solely in an effort to get out of jail.  I want to make
         3   certain that you're pleading guilty because you truly are
         4   representing that you are guilty of the offense charged in
         5   Count 57.
         6            Do you understand that, sir?
         7            THE DEFENDANT:  Yes.
         8            THE COURT:  Has anyone threatened you or tried to
         9   force you to plead guilty?
        10            THE DEFENDANT:  No.
        11            THE COURT:  Has anyone made any promises to you that
        12   are different from the promises set forth in writing in your
        13   plea agreement?
        14            THE DEFENDANT:  The answer is no, nobody did.
        15            THE COURT:  Are you pleading guilty in any way
        16   because you feel that you are under duress?
        17            THE DEFENDANT:  No.
        18            THE COURT:  I need to explain further to you, because
        19   I don't think I did this fully, that I have reviewed a great
        20   deal of information that I required the government to provide
        21   to me in this case that has not been seen by you or by your
        22   lawyers.
        23            Under the terms of this agreement, that information
        24   probably will never be made known to you or your lawyers.  I
        25   want to make certain that you are agreeing to go forward with

         1   this plea agreement, knowing that.
         2            THE DEFENDANT:  Yes.
         3            THE COURT:  I need to advise you, Dr. Lee, that
         4   citizens who are convicted of felony crimes lose rights of
         5   citizenship.  Those include the right to hold public office,
         6   the right to serve on a jury, the right to possess a weapon
         7   and the right to vote.  You will be giving up your right to
         8   cast a ballot that would express your opinion of what was done
         9   to you.
        10            Do you understand that fully?
        11            THE DEFENDANT:  Yes.
        12            THE COURT:  Do you have any questions you want to ask
        13   me about your loss of citizenship rights?
        14            THE DEFENDANT:  No.
        15            THE COURT:  I will be required to sentence you under
        16   the United States Sentencing Guidelines, even though this is a
        17   sentence that will be imposed in accordance with your
        18   agreement under Rule 11(e)(1)(C).
        19            I will be required under this agreement to impose a
        20   sentence of 278 days.  Is that correct?
        21            MR. CLINE:  Yes.
        22            MR. HOLSCHER:  Yes, sir.
        23            THE COURT:  I must also make a finding of guilt as to
        24   the felony crime charged in Count 57.
        25            Do you understand that, sir?

         1            THE DEFENDANT:  Yes.
         2            THE COURT:  In making a decision as to whether I
         3   should accept your plea of guilty, under the guidelines, I
         4   must take into account all relevant information about you.
         5            Do you understand that?
         6            THE DEFENDANT:  Yes.
         7            THE COURT:  Dr. Lee, do you fully understand all of
         8   the consequences to you of pleading guilty to Count 57?
         9            THE DEFENDANT:  Yes.
        10            THE COURT:  Let me ask Mr. Holscher and Mr. Cline, do
        11   you believe it's in the best interest of your client, Dr. Lee,
        12   to plead guilty to the charge in Count 57 under the terms of
        13   this plea agreement?
        14            MR. CLINE:  Yes, Your Honor.
        15            MR. HOLSCHER:  We do, Your Honor.  We believe that,
        16   given the opportunity to have a sentence of time served in
        17   exchange for an agreement as to what I believe the evidence
        18   shows that Dr. Lee did in terms of taking a file outside the X
        19   Division, is appropriate.
        20            There are 39 counts in the indictment, Your Honor,
        21   that have a potential sentence of life in prison.  We fully
        22   explained to Dr. Lee the jury process and the potential
        23   vagaries of such a process.  We believe it is in Dr. Lee's
        24   best interest to accept this plea and disposition.
        25            THE COURT:  Both of you and the other attorneys on

         1   Dr. Lee's team are outstanding trial lawyers.  You turned a
         2   battleship in this case.  I would think that at a trial, you
         3   would be extremely effective in his defense.
         4            Knowing all that you know, it's still your considered
         5   judgment that it is in his best interest to proceed with a
         6   plea of guilty to the felony charge in Count 57.  Is that
         7   correct?
         8            MR. HOLSCHER:  Yes, Your Honor.  Under the
         9   guidelines, absent an agreement, the way the indictment is
        10   charged, there is a potential of a guideline sentence of eight
        11   years if there were additional factors added.  So in other
        12   words, if we were to go to trial and prevail on 58 of 59
        13   counts and lose on the 57th, there is a possibility of a much
        14   longer sentence under the guidelines as they would apply to
        15   the way that the case was charged.
        16            In addition, if we were to go forward, there is a
        17   likelihood of either Dr. Lee being in detention or under the
        18   17 conditions of house arrest pending the completion of trial
        19   rather than the current conditions.
        20            So our evaluation, Your Honor, is that there is a
        21   factual basis to Count 57 that Dr. Lee is agreeable and, under
        22   the proper conditions, has been agreeable to provide the
        23   information the government may seek and that this is in his
        24   best interest.
        25            For us, as trial lawyers, to seek a trial and put at

         1   risk Dr. Lee to any potential of what we would view as an
         2   unfair jury verdict on any of the counts is just not an
         3   acceptable risk for Dr. Lee.  We don't believe that is in his
         4   interest.
         5            THE COURT:  Let me ask counsel for the government to
         6   explain why the government considers this plea agreement to be
         7   in the best interest of the people of this nation.
         8            MR. STAMBOULIDIS:  Yes, Your Honor.  There are
         9   various critical components of this plea disposition and
        10   agreement.  I will highlight two of them that bring home the
        11   point of why this disposition and agreement is in the best
        12   interest of our nation and the United States.
        13            The plea and cooperation agreement gives us the best
        14   chance to find out with confidence precisely what happened to
        15   the classified materials and data that the defendant
        16   down-partitioned and downloaded on to unsecured tapes.  As it
        17   has been clear throughout this prosecution, for national
        18   security reasons, the location and fate of the tapes was
        19   always our transcending concern.
        20            Moreover, this agreement allows us to fully explore
        21   with the defendant, through his cooperation as set forth in
        22   the agreement that you just reviewed with him, under oath, all
        23   national security concerns implicated by his conduct.
        24            Had this case proceeded to trial and resulted in a
        25   conviction on all counts, the defendant might have faced many

         1   years in prison, but we might never have learned exactly what
         2   happened to those tapes.
         3            Whereas, under the terms of his cooperation
         4   agreement, at great consequence to the defendant should he be
         5   anything less than truthful, the government will have the
         6   means to test the veracity of the defendant's sworn assurances
         7   that he never in any way intended harm to our nation or in any
         8   way passed, disclosed or allowed access to the tapes and in
         9   fact destroyed them so that they could never compromise our
        10   national security.
        11            Conviction after trial would, not alone, protect the
        12   nation to the degree that this disposition does here today, by
        13   putting us in the best possible position to determine the fate
        14   of the nuclear weapons classified restricted data that the
        15   defendant had mishandled unlawfully.  This guilty plea
        16   disposition, under the strict terms of the cooperation
        17   agreement, puts us in that optimal position.
        18            The second component is that this disposition is a
        19   series felony and in itself carries all that that implies, as
        20   a deterrent to others who are entrusted to work on our nuclear
        21   weapon design codes and to safeguard them in the process.
        22   It's a deterrent that they not violate that sacred oath and
        23   trust for any reason, as unfortunately happened here.
        24            Finally this disposition avoids the public
        25   dissemination of certain nuclear secrets which would have

         1   necessarily occurred on the way towards proceeding towards
         2   conviction in this case at trial.  So for this and other
         3   reasons, this disposition is in our nation's best interest.
         4   Thank you.
         5            THE COURT:  Mr. Stamboulidis, it may be unfair of me
         6   to ask you this question.  You were not in this case from the
         7   beginning, and I acknowledge that.  But if you can answer it,
         8   I would like to know why the government argued so vehemently
         9   that Dr. Lee's release earlier would have been an extreme
        10   danger to the government when at this time he, under the
        11   agreement, will be released without any restrictions.
        12            MR. STAMBOULIDIS:  Your Honor, the answer is simple,
        13   and I can answer it no matter when I came into the case.
        14            The circumstances are dramatically different as we
        15   stand here today than they were even as we were filing before
        16   the Tenth Circuit just a week or so ago.  The circumstances
        17   here today we have already, through this cooperation process,
        18   received sworn assurances and other assurances from this
        19   defendant, as well as his counsel, and will continue to do so
        20   over the course of the next year throughout his cooperation.
        21            Those assurances come, for the first time, at great
        22   risk and consequence to this defendant should they be anything
        23   less than truthful.  He will be facing a whole world of
        24   problems a lot worse than just that indictment that he was
        25   facing should he be untruthful.

         1            With those powerful incentives, he has come forward
         2   and, for the first time, given us these assurances that he
         3   never intended any harm to our nation by his mishandling these
         4   materials in an unlawful way and that he never allowed them to
         5   fall into harm's way and compromise national security.
         6            We stand by, as we always did and will, to the
         7   sensitivity, the great degree of sensitivity, of the materials
         8   that he down-partitioned and downloaded.  And those materials
         9   alone, no matter who was standing in the defendant's position,
        10   having compromised them in the way he did, do threaten, as we
        11   have said in the past, millions of lives, if they fall into
        12   the wrong hands.
        13            This defendant has proceeded, under oath, to give us
        14   assurances that that is not the case and has put us in the
        15   best possible position for the first time, unlike all the
        16   other times when we were addressing detention.  So
        17   circumstances have dramatically changed, and that is a simple
        18   answer.
        19            THE COURT:  Throughout this case, the government has
        20   repeatedly questioned the veracity of Dr. Lee.  You're saying
        21   now, simply because he has given a statement under oath, the
        22   government no longer believes he is a threat to national
        23   security?
        24            MR. STAMBOULIDIS:  Your Honor, what I said I can
        25   repeat, but what I said is it's not simply that, Judge.  It's

         1   not simply that he has given a statement under oath.  It's
         2   that he has agreed to cooperate in ways that anyone who is in
         3   intent on lying to the government would do so at great
         4   personal risk and would be far worse off than he was under the
         5   existing indictment.
         6            There are powerful incentives built into this
         7   cooperation agreement for him to be truthful.  And like many
         8   cooperation agreements, whenever you have a cooperator, they
         9   have committed crimes.  They have decided to try and get
        10   themselves on the right side of the law.  They are
        11   remorseful.  They accepted the responsibility.  You build in
        12   powerful incentives to the cooperation agreement such that
        13   they wouldn't dare lie to you, or if they did so, it would be
        14   with far greater consequences.
        15            THE COURT:  Thank you, Mr. Stamboulidis.
        16            MR. STAMBOULIDIS:  Sure, Your Honor.
        17            THE COURT:  At this time I will ask Dr. Lee, how do
        18   you plead, sir, to the charge in Count 57 of the indictment,
        19   guilty or not guilty?
        20            THE DEFENDANT:  Guilty.
        21            THE COURT:  It's my finding that the defendant,
        22   Dr. Wen Ho Lee, knowingly, voluntarily and intelligently
        23   entered a plea of guilty to the felony charge in Count 57 of
        24   the indictment.
        25            At this time I will accept his plea of guilty under

         1   the terms of his plea agreement.  In doing so, I am bound by
         2   the agreement made between the United States and Dr. Lee to
         3   impose a sentence agreed to under Rule 11(e)(1)(C).
         4            My understanding is that you wish to proceed to final
         5   disposition at this time.  Is that correct?
         6            MR. CLINE:  Yes, Your Honor.
         7            THE COURT:  Do we need to take a break for Dr. Lee to
         8   provide the declaration to counsel for the government?
         9            MR. CLINE:  I will provide it right now.
        10            MR. STAMBOULIDIS:  Your Honor, I am going to read
        11   this declaration, but I also need to go across the hall for an
        12   unrelated reason.
        13            THE COURT:  I understand that.  We will take a
        14   five-minute recess in just a second.
        15            Let me ask first, do Dr. Lee and his counsel agree to
        16   waive the preparation of a full standard presentence report?
        17            MR. CLINE:  Yes, Your Honor.  We have executed a
        18   written waiver.
        19            MR. STAMBOULIDIS:  We similarly waive, Your Honor,
        20   the execution of a full standard presentence report.  We would
        21   ask again that you make the findings under Rule 32(b)(1)(A)
        22   with the explanation under (b)(1)(B).
        23            THE COURT:  Let me state that our outstanding
        24   Probation Department did prepare in this case what is called a
        25   Modified Guideline Presentence Report.  During this short

         1   break, I would appreciate counsel for Dr. Lee and Dr. Lee
         2   reviewing that.  Has the government already reviewed it?
         3            MR. STAMBOULIDIS:  Yes, we have, Judge.
         4            THE COURT:  We will be in recess at this time for
         5   five minutes.
         6                           (Recess taken.)
         7            THE COURT:  Please have a seat.  Let me ask first
         8   Mr. Stamboulidis, have you had an opportunity to review the
         9   declaration provided by Dr. Lee?
        10            MR. STAMBOULIDIS:  Yes, Your Honor.  Thank you for
        11   both opportunities that you just gave me.
        12            THE COURT:  Are there any concerns about the
        13   declaration at this time?
        14            MR. STAMBOULIDIS:  No, Your Honor.
        15            THE COURT:  Next let me ask Dr. Lee, have you read
        16   the Modified Guideline Presentence Report?
        17            THE DEFENDANT:  Yes, I did.
        18            THE COURT:  Have you discussed it with your
        19   attorneys?
        20            THE DEFENDANT:  Yes.
        21            THE COURT:  Are all of the factual statements in the
        22   report correct?
        23            THE DEFENDANT:  Well, except my age.  It says I'm
        24   58.  I am 60.  But I like that number.
        25            THE COURT:  Well, I bet the probation officer, as I

         1   do, think you look younger than 60.  We will correct that on
         2   the first page to age 60.
         3            Are there any other corrections to be made in the
         4   Modified Guideline Presentence Report?
         5            THE DEFENDANT:  No.  Everything is correct.
         6            THE COURT:  Let me ask counsel for Dr. Lee, is there
         7   any need for an evidentiary hearing on any of the factual
         8   statements?
         9            MR. HOLSCHER:  No, Your Honor,  We waive any such
        10   hearing.
        11            THE COURT:  At this time, I will adopt as factual
        12   findings of the Court all of the factual statements in
        13   Dr. Lee's Modified Guideline Presentence Report.
        14            I have reviewed a number of written materials in this
        15   case, as you know.  Are there any specific additional ones
        16   that I should review in connection with sentencing?
        17            MR. CLINE:  No, Your Honor.
        18            THE COURT:  The presentence report indicates that the
        19   total offense level computed under the United States
        20   Sentencing Guidelines Manual is 21.  The criminal history
        21   category is one.  The guideline imprisonment range would be 37
        22   to 41 months for this offense before application of the Rule
        23   11(e)(1)(C) agreement.
        24            Are you in agreement with that?
        25            MR. CLINE:  Yes.  Before application of the

         1   agreement, yes, Your Honor.
         2            THE COURT:  Mr. Stamboulidis, do you agree with that
         3   computation?
         4            MR. STAMBOULIDIS:  I came in a little lower, but
         5   yeah, for our purposes, I think it's fine.
         6            THE COURT:  The presentence report indicates the
         7   subtraction of three offense levels for acceptance of
         8   responsibility, resulting in a total offense level of 21.
         9            Is that agreeable to you?
        10            MR. STAMBOULIDIS:  May I have one moment, Judge?
        11            THE COURT:  Yes.
        12            MR. STAMBOULIDIS:  Yes, there are 21.
        13            THE COURT:  Let me ask at this time if counsel for
        14   Dr. Lee would like to make a statement on his behalf relating
        15   to sentencing?
        16            MR. CLINE:  Your Honor, I think we are prepared to go
        17   forward.
        18            THE COURT:  Dr. Lee, is there anything you would like
        19   to say at this time?
        20            THE DEFENDANT:  No.
        21            THE COURT:  Mr. Stamboulidis, is there anything you
        22   would like to say on behalf of the government?
        23            MR. STAMBOULIDIS:  No, Judge.  Thank you for the
        24   opportunity.
        25            THE COURT:  I will state a proposed sentence, and you

         1   may comment on this.
         2            Now that Dr. Lee has entered a plea of guilty to
         3   Count 57 of the indictment and I have accepted his plea under
         4   the terms of his plea agreement, I will proceed to
         5   sentencing.
         6            As the parties have agreed that I have extensive
         7   familiarity with the defendant's personal history and conduct,
         8   the preparation of a full presentence report is waived and
         9   unnecessary.  A modified report was prepared for purposes of
        10   establishing a guideline range.  The paries have no objection
        11   to the report and the proposed guideline range.
        12            The total offense level is 21.  The criminal history
        13   category is one.  The guideline imprisonment range under
        14   United States Sentencing Guidelines is 37 to 41 months;
        15   however, I have accepted the parties' agreement made under
        16   Rule 11(e)(1)(C) of the Federal Rules of Criminal Procedure
        17   which includes a specific sentence of 278 days of
        18   incarceration, the time Dr. Lee has already served.  I am
        19   satisfied that the agreed sentence departs for justifiable
        20   reasons.
        21            It is the judgment of the Court as to Count 57 of the
        22   indictment and Rule 11(e)(1)(C) of the Federal Rules of
        23   Criminal Procedure that the defendant, Wen Ho Lee, is
        24   committed to the custody of the Bureau of Prisons to be
        25   imprisoned for a term of time served, 278 days.

         1            It is further ordered that the defendant will be
         2   given credit for time spent in official detention in
         3   connection with this case in accordance with 18 United States
         4   Code Section 3585.
         5            A term of supervised release will not be imposed.  I
         6   will not impose a fine.  I will not impose restitution.  The
         7   defendant, however, must pay a special penalty assessment of
         8   $100, which he has already done.
         9            Under the terms of the plea agreement, the defendant,
        10   Dr. Lee, knowingly waived his right to appeal the sentence I
        11   have imposed.  He has also waived his right to challenge that
        12   sentence in a collateral manner.
        13            Let me ask Mr. Stamboulidis, do you have any comments
        14   on that proposed sentence?
        15            MR. STAMBOULIDIS:  I am fine with it, Judge.
        16            THE COURT:  Mr. Cline and Mr. Holscher, do you have
        17   any comments on that proposed sentence?
        18            MR. CLINE:  Your Honor, I believe it confirms with
        19   the agreement.
        20            THE COURT:  Is there any reason why the sentence as I
        21   just announced it should not be imposed at this time?
        22            MR. CLINE:  No, Your Honor.
        23            MR. STAMBOULIDIS:  No, Judge.
        24            THE COURT:  It's my order that the sentence as I
        25   stated it will be the sentence imposed in this case.

         1            Mr. Stamboulidis, at this time do you want to make a
         2   motion?
         3            MR. STAMBOULIDIS:  I want to make a couple, Judge.
         4   First I would like to -- as we discussed earlier, in one of
         5   the earlier sessions here in open court, I, at this time,
         6   would move to withdraw all pending motions that we have, on
         7   behalf of the government.
         8            THE COURT:  That motion by the government will be
         9   granted.  The order will be that all of the pending motions
        10   will be denied as moot.
        11            Let me ask counsel for Dr. Lee, do you want to make a
        12   similar motion at this time?
        13            MR. CLINE:  Yes, Your Honor.  We will move to
        14   withdraw all pending motions.
        15            THE COURT:  That motion will also be granted.
        16            MR. STAMBOULIDIS:  I have a second motion, Judge.
        17            THE COURT:  Go ahead.
        18            MR. STAMBOULIDIS:  Thank you.  At this time we move
        19   to dismiss -- pursuant to the terms and conditions of the plea
        20   and disposition agreement between the United States and the
        21   defendant, Dr. Wen Ho Lee, to dismiss with prejudice Counts 1
        22   through 56, 58 and 59 in the above-captioned indictment.
        23            I have signed it.  I have only one copy of it.  I am
        24   serving it on counsel.  I am going to hand it to you with an
        25   order of dismissal, a proposed order.

         1            THE COURT:  Let me ask counsel for Dr. Lee, is the
         2   form of the order of dismissal acceptable to you?
         3            MR. CLINE:  Your Honor, to tell you the truth, I
         4   didn't see the order itself.  But if it dismisses with
         5   prejudice the counts, I think that's fine.  Yes, Your Honor.
         6            THE COURT:  I have signed the order of dismissal of
         7   Counts 1 through 56, 58 and 59.  At this time I will also sign
         8   the judgment which sets forth the sentence that was imposed.
         9   In addition, I will sign a minute order that orders that the
        10   defendant, Wen Ho Lee, be released from the custody of the
        11   United States Marshal Service forthwith.
        12            MR. STAMBOULIDIS:  Your Honor, to facilitate that as
        13   well, the United States has filed -- I have just signed and we
        14   will file a motion to dismiss our pending appeal and withdraw
        15   our notice of appeal.  I have given a copy to Miss Hollander,
        16   who is going to fax it immediately to where it has got to be
        17   in the Tenth Circuit.
        18            THE COURT:  Thank for you clearing up that detail,
        19   Mr. Stamboulidis.
        20            MR. STAMBOULIDIS:  Certainly.
        21            THE COURT:  At this time I want to compliment Judge
        22   Edward Leavy, who was the mediator judge in this case and who
        23   has continuing potential obligations under the terms of the
        24   plea agreement.  I have never personally met Judge Leavy.  I
        25   recognize him in the audience, simply by having looked at a

         1   photograph of his in the Almanac of Federal Judges.
         2            Judge Leavy, would you mind standing so all will know
         3   who you are.
         4            THE HONORABLE EDWARD LEAVY:  Thank you very much.
         5            THE COURT:  Judge Leavy has worked extremely hard in
         6   this case.  He has been very diligent in assisting the
         7   mediation efforts.  I was informed that he flew back to
         8   Albuquerque from his home in Portland, Oregon yesterday, late
         9   yesterday, and then met late into the night with the lawyers
        10   and Dr. Lee in an effort to revive the plea agreement.  We all
        11   owe him our gratitude.  I want to say personally that I am
        12   both proud and honored to be his colleague in the Federal
        13   Judiciary.
        14            I need to ask counsel if there are any other matters
        15   that they want to bring up before I make a statement?
        16            MR. CLINE:  No, Your Honor.
        17            MR. STAMBOULIDIS:  No, Judge.  Thank you.  We share
        18   your comments about Judge Leavy, as I am sure my colleagues
        19   do.
        20            MR. HOLSCHER:  We would like to, again, thank Judge
        21   Leavy, Your Honor.  He was of tremendous help and had
        22   tremendous patience.
Judge Parker Opinion
        23            THE COURT:  Dr. Lee, you have pled guilty to a
        24   serious crime.  It's a felony offense.  For that, you deserved
        25   to be punished.  In my opinion, you have been punished

         1   harshly, both by the severe conditions of pretrial confinement
         2   and by the fact that you have lost valuable rights as a
         3   citizen.
         4            Under the laws of our country, a person charged in
         5   Federal Court with commission of a crime normally is entitled
         6   to be released from jail until that person is tried and
         7   convicted.  Congress expressed in the Bail Reform Act its
         8   distinct preference for pretrial release from jail and
         9   prescribed that release on conditions be denied to a person
        10   charged with a crime only in exceptional circumstances.
        11            The Executive Branch of the United States Government
        12   has until today actually, or just recently, vigorously opposed
        13   your release from jail, even under what I had previously
        14   described as Draconian conditions of release.
        15            During December 1999, the then United States
        16   Attorney, who has since resigned, and his Assistants presented
        17   me, during the three-day hearing between Christmas and New
        18   Year's Day, with information that was so extreme it convinced
        19   me that releasing you, even under the most stringent of
        20   conditions, would be a danger to the safety of this nation.
        21   The then United States Attorney personally argued vehemently
        22   against your release and ultimately persuaded me not to
        23   release you.
        24            In my opinion and order that was entered December 30,
        25   1999, I stated the following:  "With a great deal of concern

         1   about the conditions under which Dr. Lee is presently being
         2   held in custody, which is in solitary confinement all but one
         3   hour of the week, when he is permitted to visited his family,
         4   the Court finds, based on the record before it, that the
         5   government has shown by clear and convincing evidence that
         6   there is no combination of conditions of release that would
         7   reasonably assure the safety of any other person and the
         8   community or the nation."
         9            After stating that in the opinion, I made this
        10   request in the opinion right at the end:  "Although the Court
        11   concludes that Dr. Lee must remain in custody, the Court urges
        12   the government attorneys to explore ways to lessen the severe
        13   restrictions currently imposed upon Dr. Lee while preserving
        14   the security of sensitive information."
        15            I was very disappointed that my request was not
        16   promptly heeded by the government attorneys.
        17            After December, your lawyers developed information
        18   that was not available to you or them during December.  And I
        19   ordered the Executive Branch of the government to provide
        20   additional information that I reviewed, a lot of which you and
        21   your attorneys have not seen.
        22            With more complete, balanced information before me, I
        23   felt the picture had changed significantly from that painted
        24   by the government during the December hearing.  Hence, after
        25   the August hearing, I ordered your release despite the

         1   continued argument by the Executive Branch, through its
         2   government attorneys, that your release still presented an
         3   unacceptable extreme danger.
         4            I find it most perplexing, although appropriate, that
         5   the Executive Branch today has suddenly agreed to your release
         6   without any significant conditions or restrictions whatsoever
         7   on your activities.  I note that this has occurred shortly
         8   before the Executive Branch was to have produced, for my
         9   review in camera, a large volume of information that I
        10   previously ordered it to produce.
        11            From the beginning, the focus of this case was on
        12   your motive or intent in taking the information from the
        13   secure computers and eventually downloading it on to tapes.
        14   There was never really any dispute about your having done
        15   that, only about why you did it.
        16            What I believe remains unanswered is the question:
        17   What was the government's motive in insisting on your being
        18   jailed pretrial under extraordinarily onerous conditions of
        19   confinement until today, when the Executive Branch agrees that
        20   you may be set free essentially unrestricted?  This makes no
        21   sense to me.
        22            A corollary question I guess is:  Why were you
        23   charged with the many Atomic Energy Act counts for which the
        24   penalty is life imprisonment, all of which the Executive
        25   Branch has now moved to dismiss and which I just dismissed?

         1            During the proceedings in this case, I was told two
         2   things: first, the decision to prosecute you was made at the
         3   highest levels of the Executive Branch of the United States
         4   Government in Washington, D.C.
         5            With respect to that, I quote from a transcript of
         6   the August 15, 2000 hearing, where I asked this question.
         7   This was asked of Dr. Lee's lawyers.
         8            "Who do you contend made the decision to
         9   prosecute?"
        10            Mr. Holscher responded, "We know that the decision
        11   was made at the highest levels in Washington.  We know that
        12   there was a meeting at the White House the Saturday before the
        13   indictment, which was attended by the heads of a number of
        14   agencies.  I believe the number two and number three persons
        15   in the Department of Justice were present.  I don't know if
        16   the Attorney General herself was present.  It was actually
        17   held at the White House rather than the Department of Justice,
        18   which is, in our view, unusual circumstances for a meeting."
        19            That statement by Mr. Holscher was not challenged.
        20            The second thing that I was told was that the
        21   decision to prosecute you on the 39 Atomic Energy Act, each of
        22   which had life imprisonment as a penalty, was made personally
        23   by the President's Attorney General.  In that respect, I will
        24   quote one of the Assistant U.S. Attorney's, a very fine
        25   attorney in this case -- this was also at the August 15th

         1   hearing.
         2            This is talking about materials that I ordered to be
         3   produced in connection with Dr. Lee's motion relating to
         4   selective prosecution.  The first category of materials
         5   involved the January 2000 report by the Department of Energy
         6   Task Force on racial profiling.
         7            "How would that in any way disclose prosecutorial
         8   strategy?"
         9            Miss Fashing responded, "That I think falls more into
        10   the category of being burdensome on the government.  I mean if
        11   the government -- if we step back for just a second -- I mean
        12   the prosecution decision and the investigation in this case,
        13   the investigation was conducted by the FBI, referred to the
        14   United States Attorney's Office, and then the United States
        15   Attorney's Office, in conjunction with -- well, actually the
        16   Attorney General, Janet Reno, made the ultimate decision on
        17   the Atomic Energy Act counts."
        18            Dr. Lee, you're a citizen of the United States and so
        19   am I, but there is a difference between us.  You had to study
        20   the Constitution of the United States to become a citizen.
        21   Most of us are citizens by reason of the simple serendipitous
        22   fact of our birth here.  So what I am now about to explain to
        23   you, you probably already know from having studied it, but I
        24   will explain it anyway.
        25            Under the Constitution of the United States, there

         1   are three branches of government.  There is the Executive
         2   Branch, of which the President of the United States is the
         3   head.  Next to him is the Vice-president of the United
         4   States.  The President operates the Executive Branch with his
         5   cabinet, which is composed of secretaries or heads of the
         6   different departments of the Executive Branch.  The
         7   Vice-president participates in cabinet meetings.
         8            In this prosecution, the more important members of
         9   the President's cabinet were the Attorney General and the
        10   Secretary of the Department of Energy, both of whom were
        11   appointed to their positions by the President.
        12            The Attorney General is the head of the United States
        13   Department of Justice, which despite its title, is a part of
        14   the Executive Branch, not a part of the Judicial Branch of our
        15   government.
        16            The United States Marshal Service, which was charged
        17   with overseeing your pretrial detention, also is a part of the
        18   Executive Branch, not the Judicial Branch.
        19            The Executive Branch has enormous power, the abuse of
        20   which can be devastating to our citizens.
        21            The second branch of our national government is the
        22   Legislative Branch, our Congress.  Congress promulgated the
        23   laws under which you were prosecuted, the criminal statutes.
        24   And it also promulgated the Bail Reform Act, under which in
        25   hindsight you should not have been held in custody.

         1            The Judicial Branch of government, of which I am a
         2   member, is called the Third Branch of government because it's
         3   described in Article III of our Constitution.
         4            Judges must interpret the laws and must preside over
         5   criminal prosecutions brought by the Executive Branch.  Since
         6   I am not a member of the Executive Branch, I cannot speak on
         7   behalf of the President of the United States, the
         8   Vice-president of the United States, their Attorney General,
         9   their Secretary of the Department of Energy or their former
        10   United States Attorney in this District, who vigorously
        11   insisted that you had to be kept in jail under extreme
        12   restrictions because your release pretrial would pose a grave
        13   threat to our nation's security.
        14            I want everyone to know that I agree, based on the
        15   information that so far has been made available to me, that
        16   you, Dr. Lee, faced some risk of conviction by a jury if you
        17   were to have proceeded to trial.  Because of that, I decided
        18   to accept the agreement you made with the United States
        19   Executive Branch under Rule 11(e)(1)(C) of the Federal Rules
        20   of Criminal Procedure.
        21            Further, I feel that the 278 days of confinement for
        22   your offense is not unjust; however, I believe you were
        23   terribly wronged by being held in custody pretrial in the
        24   Santa Fe County Detention Center under demeaning,
        25   unnecessarily punitive conditions.  I am truly sorry that I

         1   was led by our Executive Branch of government to order your
         2   detention last December.
         3            Dr. Lee, I tell you with great sadness that I feel I
         4   was led astray last December by the Executive Branch of our
         5   government through its Department of Justice, by its Federal
         6   Bureau of Investigation and by its United States Attorney for
         7   the District of New Mexico, who held the office at that time.
         8            I am sad for you and your family because of the way
         9   in which you were kept in custody while you were presumed
        10   under the law to be innocent of the charges the Executive
        11   Branch brought against you.
        12            I am sad that I was induced in December to order your
        13   detention, since by the terms of the plea agreement that frees
        14   you today without conditions, it becomes clear that the
        15   Executive Branch now concedes, or should concede, that it was
        16   not necessary to confine you last December or at any time
        17   before your trial.
        18            I am sad because the resolution of this case drug on
        19   unnecessarily long.  Before the Executive Branch obtained your
        20   indictment on the 59 charges last December, your attorney,
        21   Mr. Holscher, made a written offer to the Office of the United
        22   States Attorney to have you explain the missing tapes under
        23   polygraph examination.
        24            I'll read from that letter of December 10, 1999.
        25            I quote from that letter:  "Dear United States

         1   Attorney Kelly and First Assistant Gorence,
         2            "I write to accept Mr. Kelly's request that we
         3   provide them with additional credible and verifiable
         4   information which will prove that Dr. Lee is innocent.
         5            "On the afternoon of Wednesday, December 8th,
         6   Mr. Kelly informed me that it was very likely that Dr. Lee
         7   will be indicted within the next three to four business days.
         8   In our phone conversation, Mr. Kelly told me that the only way
         9   that we could prevent this indictment would be to provide a
        10   credible and verifiable explanation of what he described as
        11   missing tapes.
        12            "We will immediately provide this credible and
        13   verifiable explanation.  Specifically we are prepared to make
        14   Dr. Lee immediately available to a mutually agreeable
        15   polygraph examiner to verify our repeated written
        16   representations that at no time did he mishandle those tapes
        17   in question and to confirm that he did not provide the tapes
        18   to any third party.
        19            "As a sign of our good faith, we will agree to
        20   submit Dr. Lee to the type of polygraph examination procedure
        21   that has recently been instituted at the Los Alamos Laboratory
        22   to question scientists.  It is our understanding that the
        23   government has reaffirmed that this new polygraph procedure is
        24   the best and most accurate way to verify that scientists are
        25   properly handling classified information."

         1            At the inception of the December hearing, I asked the
         2   parties to pursue that offer made by Mr. Holscher on behalf of
         3   Dr. Lee, but that was to no avail.
         4            MR. STAMBOULIDIS:  Your Honor, most respectfully I
         5   take issue with that.  There has been a full record of letters
         6   that were sent back and forth to you, and Mr. Holscher
         7   withdrew that offer.
         8            THE COURT:  Nothing came of it, and I was saddened by
         9   the fact that nothing came of it.  I did read the letters that
        10   were sent and exchanged.  I think I commented one time that I
        11   think both sides prepared their letters primarily for use by
        12   the media and not by me.  Notwithstanding that, I thought my
        13   request was not taken seriously into consideration.
        14            Let me turn for the moment to something else.
        15   Although I have indicated that I am sorry that I was led by
        16   the Executive Branch to order your detention last December, I
        17   want to make a clarification here.  In fairness, I must note
        18   that virtually all of the lawyers who work for the Department
        19   of Justice are honest, honorable, dedicated people, who
        20   exemplify the best of those who represent our Federal
        21   Government.
        22            Your attorney, Mr. Holscher, formerly was an
        23   Assistant United States Attorney.  The new United States
        24   Attorney for the District of New Mexico, Mr. Norman Bay, and
        25   the many Assistant United States Attorneys here in New Mexico

         1   -- and I include in this Mr. Stamboulidis and Mr. Liebman,
         2   who are present here today -- have toiled long hours on this
         3   case in opposition to you.  They are all outstanding members
         4   of the Bar, and I have the highest regard for all of them.
         5            It is only the top decision makers in the Executive
         6   Branch, especially the Department of Justice and the
         7   Department of Energy and locally, during December, who have
         8   caused embarrassment by the way this case began and was
         9   handled.  They did not embarrass me alone.  They have
        10   embarrassed our entire nation and each of us who is a citizen
        11   of it.
        12            I might say that I am also sad and troubled because I
        13   do not know the real reasons why the Executive Branch has done
        14   all of this.  We will not learn why because the plea agreement
        15   shields the Executive Branch from disclosing a lot of
        16   information that it was under order to produce that might have
        17   supplied the answer.
        18            Although, as I indicated, I have no authority to
        19   speak on behalf of the Executive Branch, the President, the
        20   Vice-president, the Attorney General, or the Secretary of the
        21   Department of Energy, as a member of the Third Branch of the
        22   United States Government, the Judiciary, the United States
        23   Courts, I sincerely apologize to you, Dr. Lee, for the unfair
        24   manner you were held in custody by the Executive Branch.
        25            Court will be in recess.

         1                       REPORTER'S CERTIFICATE
         3             I, PAUL BACA, a court reporter for the United
         4   States, do hereby certify that I reported the foregoing case
         5   in stenographic shorthand and transcribed, or had the same
         6   transcribed under my supervision and direction, the foregoing
         7   matter and that the same is a true and correct record of the
         8   proceedings had at the time and place.
         9             I FURTHER CERTIFY that I am neither employed by nor
        10   related to any of the parties or attorneys in this case, and
        11   that I have no interest whatsoever in the final disposition of
        12   this case in any court.
        13             WITNESS MY HAND this 13th day of September, 2000.
                                      Official Court Reporter