On May 22, President Clinton unveiled an ambitious plan to stockpile vaccines at strategic sites around the country so communities could better fight germ attacks. ''We must do more to protect our civilian population,'' Mr. Clinton told graduating midshipmen at the United States Naval Academy in Annapolis, Md. ''We must do more to protect our people.''

While such major initiatives usually result from many months and sometimes years of fierce debate, this one, Federal and private experts said in interviews, was developed in record time, rushed through amid worries of rising threats from Iraq and germ terrorists. But today the multimillion-dollar plan is in jeopardy, a victim in part of the haste in which the decision was reached.

Some Government officials are calling for a different approach that initially plays down vaccines in favor of antibiotics. Others defend vaccines, but concede that getting them quickly is nearly impossible, given industry's production limits and the need to insure vaccine safety and effectiveness. Still others fault vaccines as offering little or no protection against such deadly threats as smallpox and anthrax, seen as likely weapons in germ attacks.

A review of events leading to the Clinton vaccine decision reveals that the proposal was pushed by a small group of scientists, businessmen and policy makers who largely shared the same views as they struggled to do something, anything about a threat whose dimensions were potentially terrifying but frustratingly unclear. Working in Washington's frenetic, often insular world, they tended to overwhelm or sidestep doubters, and failed to see warning signs.

*The apparent consensus on acquiring vaccines masked deep divisions among scientists and military officials.

[Dr. William Capers Patrick III (born 1926)], who made germ weapons for the United States before President Richard M. Nixon outlawed them nearly three decades ago, warned that vaccinations against particular germs could be easily countered by foes, making such safeguards potentially useless.

''It's a hell of a problem,'' Mr. Patrick said. ''Defensive measures are much more difficult than offensive ones. There's no easy way around it. You immunize against anthrax and then an enemy just tries something else.''

Even the Administration's top public health officials have begun to warn that stockpiling is no quick fix.

''My view is that the stockpile isn't sufficient,'' said a senior Administration official, who spoke on condition of anonymity. ''We need an entire care system in place'' to avoid creating a false sense of security.

And Congress, which has strongly supported the Administration's anti-terrorism efforts, is questioning the rationale and structure of the civilian stockpile. A Senate hearing is being considered for the fall.

''The plan,'' said Senator Lauch Faircloth, Republican of North Carolina, ''needs to be more carefully thought out and discussed more publicly.''

The Pentagon -  In Early Debate, Focus on Troops

For decades, scientists and military officials debated the merits of vaccines as a defense against germ warfare. Worries grew after the 1991 Persian Gulf war, when United Nations inspectors found that President Saddam Hussein of Iraq had studied dozens of microbial agents and had placed at least 180 biological bombs and warheads around his country ready to spray lethal germs on enemy troops.

As the Pentagon discussed an ambitious program to make a variety of vaccines, its officials weighed the possibility that enemies would simply choose new deadly germs or modify old ones to outwit American defenses.

''People asked if we were just making it possible for Saddam to pick another agent,'' recalled Stephen C. Joseph, a doctor who at the time was Assistant Secretary of Defense for health affairs.

Dr. Joseph added that he and his Pentagon colleagues nonetheless recommended in the mid-1990's that the military embark on a vaccine effort. They were motivated in part, Pentagon officials said, by intelligence reports of rising dangers outside Iraq of germs being used against American troops.

In 1996, the Pentagon began looking for a company to develop and obtain licenses for 18 vaccines other than the standard one for anthrax. The initial ones were to guard against smallpox, which causes fever, boils and can be fatal; tularemia, which causes chills, aches, fatigue and typhoid-like symptoms, and Q-fever, which causes headaches, weakness and coughing.

In November 1997, the Pentagon awarded a $322 million, 10-year contract for the 18 vaccines to [DynPort Vaccine Company, LLC], a British-American venture. The plan sidestepped the knotty issue of immunizing troops, focusing instead on making and stockpiling vaccines for military personnel.

Exactly how the Pentagon would use its stored vaccines would depend on future events and threats.

Late last year, worry in the Pentagon about biological attacks turned to alarm as United States troops prepared to strike Iraq after President Hussein expelled Americans from international teams investigating his germ arsenal. On Dec. 15, Defense Secretary William S. Cohen announced that all 2.4 million American troops would get anthrax shots. Pentagon officials said the effort would take six years and cost $130 million.

Just at that moment, the theory of enemy countermeasures became real publicly for the first time. In December, Russian scientists stunned the biological world by disclosing that they had used genetic engineering to make a new anthrax microbe. It attacked blood cells and made Russia's vaccine useless.

Whether the organism was a laboratory curiosity or a battlefield weapon was unclear. The Russian scientists gave out no samples, so detailed analysis was impossible. But Western military officials were shaken and wondered whether the American anthrax vaccine was now obsolete, and whether the same was true of other vaccines in development.

''It's not just an academic debate anymore,'' said Jack Melling, director of the Salk Institute in Swiftwater, Pa., a vaccine center that does research for the Defense Department.

The news got worse in February. Ken Alibek, a top Russian defector, went public to assert that Moscow was working on a range of exotic germ weapons, including hybrids of the smallpox virus that cause profuse bleeding. If real, such germs could sow plagues that kill most victims.

The President -  Pushing a Plan To Save Civilians

Around that time, President Clinton became fixated on the emerging germ threat and ways to counter it among civilians, aides said.

Influences are said to have included the Iraqi crisis, the Russian claims, the intelligence reports and a novel, ''The Cobra Event'' (Random House, 1997), about a terrorist attack on New York City with a genetically engineered mix of the smallpox and cold viruses. Mr. Clinton was so alarmed by the book, his aides said, that he instructed his intelligence experts to assess its credibility and urged Speaker Newt Gingrich, Republican of Georgia, to read it.

Aides said the President and his National Security Council increasingly wrestled with the danger of biological attacks not only on troops abroad but also on American cities, states or even the entire country.

In January, in his State of the Union address, Mr. Clinton vowed to confront the hazard of germ weapons obtained ''by outlaw states, terrorists and organized criminals.''

In March, the White House held a secret exercise to play out what would happen if terrorists struck with one of the theoretical smallpox hybrids. The results of the war game were grim and fueled a Federal drive to find better ways to cope with such an attack.

In April, the President explored ways in which modern biology might help. He and his top officials met at the White House on April 10 with seven private scientists in the Truman Room, where Cabinet meetings are held. For an hour, participants say, the scientists discussed the germ topic and pushed for a vaccine stockpile.

Mr. Clinton's attending officials included the Secretary of Defense, the Attorney General, the Secretary of Health and Human Services, the Director of Central Intelligence and the national security adviser.

The scientists present were Dr. Frank E. Young, a former head of the Food and Drug Administration, who moderated the panel; [Dr. Joshua Lederberg (born 1925)], president emeritus of Rockefeller University; Dr. Lucille Shapiro, a biologist at Stanford University; [Dr. Jerome Maurice Hauer (born 1951)], head of emergency management for New York City; and [Dr. Barbara Hatch Rosenberg (born 1930)], a biological arms-control expert at the Federation of American Scientists, a private group.

The scientific panel also had two industry experts, both with financial ties to vaccine work.

One was a pioneer of genetic engineering who had decoded the smallpox virus and other microbes and used the meeting to push his own scientific agenda, participants said. But that researcher, [Dr. John Craig Venter (born 1946)], president of The Institute for Genomic Research, a nonprofit biotechnology group just outside Washington, said he simply urged the Government to step up support for the genetic mapping of deadly microbes. The insights, Dr. Venter added, would aid vaccine development and new methods of germ detection and treatment.

''The argument is that if we decipher these genomes it could be the ultimate deterrent,'' Dr. Venter said, referring to the ability to have so many avenues of defense that germ attacks would become futile.

Over the years, his institute had received millions of dollars in Federal support and is now gearing up to use more Government money to map the anthrax microbe as an aid to germ defense.

At the White House meeting, participants said, the business interests of another scientist were less well known.

[Dr. Thomas Patrick Monath (born 1940)] was identified in a White House announcement as a vice president of Oravax and a former official of the Centers for Disease Control and the United States Army Medical Research Institute of Infectious Diseases, the Government's top body for defensive germ-warfare studies.

A graduate of Harvard College and the Harvard Medical School, a world authority on yellow fever and other epidemics, Dr. Monath had devoted most of his career to public service.

At the meeting, he was viewed mainly through that lens, participants said, who added that they knew little about his company other than it worked on vaccines.

Based in Cambridge, Mass., Oravax was founded in 1990 to tap an emerging multibillion-dollar market in oral vaccines and antibodies to combat infectious diseases. But the small company kept having problems getting beyond research and bringing products to market.

By 1996 and 1997, its survival at stake, Oravax tried to win part of the Pentagon's expanding germ work as a subcontractor to make smallpox vaccines and others. By early this year, that work had failed to materialize and the company's stock price was down 90 percent from $10 a share in the initial public offering.

Memories of meeting participants varied, but no one could recall [Dr. Thomas Patrick Monath (born 1940)] telling the President of his company's financial interest in vaccine stockpiles -- a step he now insists that he took.

''The way to handle it is to be open, so people understand that I may have a potential bias,'' Dr. Monath said. ''I don't make it a business of taking advantage of situations in which I'm asked to participate to push the Oravax agenda.''

Many participants remember [Dr. Thomas Patrick Monath (born 1940)] arguing forcefully for stockpiling, a subject he had been asked by the panel's moderator to discuss.

[Dr. John Craig Venter (born 1946)] said the views of Dr. Monath, while strong, reflected the panel's consensus.

''Even through he was pushing harder than anyone else,'' Dr. Venter said, ''our recommendations to develop stockpiles of vaccines and medicines would have come out the same.''

A retired Army colonel, [Dr. Thomas Patrick Monath (born 1940)] was most likely the only scientist in the room who had deeply studied such problems for germ defense as enemy countermeasures.

That topic, participants say, was discussed little and in any case was overshadowed by [Dr. John Craig Venter (born 1946)]'s repeated assertions that genetic advances in theory had the power to solve these problems.

The Presidential briefing was such a hit that the experts were asked to take it on the road. In the following weeks, the scientists delivered their views to senior officials involved in vaccine issues at the Pentagon and the Department of Health and Human Services, participants said.

On May 6, the panel delivered a follow-up report to the President that, among other things, called for a stockpile of drugs and vaccines to protect millions of Americans against a variety of germs, up to 40 million against smallpox. The total cost over five years was estimated at $420 million.

Such a stockpile, the report said, could help ''reduce the death and illness 10 to 100 fold.''

A White House official who spoke on the condition of anonymity said the recommendation by the scientific panel simply encouraged the Administration to do what it was already contemplating. The official added that he saw no conflict of interest in [Dr. Thomas Patrick Monath (born 1940)]'s participation because his company had signed no Federal contracts for vaccine production.

Government ethics experts say that such private White House advisers are exempt from Federal conflict-of-interest rules and that Dr. Monath, even if he had an undisclosed interest, broke no law.

The White House official called Dr. Monath ''very knowledgeable,'' adding, ''The point of the meeting was to get a wide range of opinions from leading experts.''

The Pharmaceutical Research and Manufacturers of America, a Washington trade group that represents the nation's top 100 drug companies (Oravax is not among them), said it was never contacted by the White House for advice on the stockpile idea.

The Company -   Good News In Stock Market

Oravax at this time was increasingly desperate. In filings to the Securities and Exchange Commission, the company said it had won part of the Pentagon vaccine work.

Its stock price continued to slide. On May 4, the company put out a news release boasting of the contract, and the stock rose that day in heavy trading to $1.31, up from $1.00.

But in fact, Oravax had only a preliminary promise of possible work as a subcontractor to the British-American venture that had won the Pentagon contract, executives from both companies now agree.

Securities lawyers say such misrepresentations in S.E.C. filings are potential violations of Federal securities laws.

Later that month, as rumors and news reports suggested that the President was about to announce a civilian stockpiling effort, Lance K. Gordon, Oravax's president, issued a press release saying the company was prepared to take on the challenge.

''Although there is no guarantee that Oravax will be involved,'' Mr. Gordon said in the May 21 statement, ''the company believes it has the capacity to produce both smallpox and tularemia vaccines for civilian use.''

The next day, a Friday, Mr. Clinton announced the new push to create stockpiles of ''medicines and vaccines to protect our civilian population.'' He also praised gene research as ''very, very important'' to developing new ways of countering germ terror.

The same day, 2,413,100 shares of Oravax changed hands in the Nasdaq market, closing at $1.41, up 28 cents, or 25 percent. It was the stock's heaviest trading day ever. Later, the company issued a statement explaining the sudden activity, which it attributed to the President's action.

For [Dr. Thomas Patrick Monath (born 1940)], who owns or has options on 150,574 shares, the stock's price increase amounted to a profit on paper of $42,160.

The Battle  -   In Shaping Shield, Emphasis Changes

A quiet war erupted as Federal agencies and experts weighed in heavily for the first time. The Department of Health and Human Services, designated to oversee the stockpile, was ambivalent about the project, officials said. The agency faulted the initiative as simplistic, saying the plan put too little emphasis on the costly, painstaking work of improving the nation's public health network to cope with germ attacks.

Significantly, the agency found that no company was making, or would soon be able to make for civilians, the vaccines scheduled to be stockpiled. It therefore switched the emphasis to antibiotics. Though also potentially vulnerable to enemy countermeasures, these drugs were seen as having the benefit of fighting a variety of noxious germs.

Two weeks after the President's announcement, on June 8, the Government quietly began to back pedal. Even though the White House asked Congress for $51 million in the next fiscal year to develop ''a civilian stockpile of antidotes, antibiotics and vaccines,'' that same day Administration officials disclosed that vaccines had been ruled out for the moment. Why? Cheaper and more effective ones might appear in the next few years, the officials told reporters.

The developing plan has yet to address in detail how and where the medicines would be made, stored or distributed in a crisis.

As for Oravax, its stock is down, closing yesterday at 56 cents. And it still has no Federal stockpile work.

Despite the setbacks, many experts continue to back vaccines as important for germ defense and even hold out the possibility of wide civilian immunizations.

''Preventing an outbreak is always preferable to trying to suppress one after it has started,'' Senator Faircloth said.

As for the worry that an enemy might outwit vaccines with new or modified germs, vaccine supporters say that most of these enhanced germs are theoretical and would probably be less available and attractive to terrorists than known strains of deadly, dependable germs like unmodified anthrax and smallpox. If so, they say, vaccines are a good deterrent and a relatively cheap insurance policy.

Whatever their flaws or merits, vaccines continue to draw the interest of small companies eager to gain a foothold in an expanding area of the Federal budget.

On July 7, the State of Michigan approved the sale of the nation's only licensed maker of anthrax vaccine to a company led by Adm. William J. Crowe Jr., a former Chairman of the Joint Chiefs of Staff who was an important supporter of Mr. Clinton in the 1992 Presidential campaign.

Admiral Crowe's newly formed company has individuals with extensive drug industry experience and now has an inside track on at least $60 million in Pentagon contracts, officials of the Defense Department said. And while aiming at the military market, it wants to expand to civilian customers as well, company officials said, if that becomes possible in the years ahead. Companies drawn to the germ-defense business see the emerging civilian market as potentialy dozens of times larger than the military one and much more profitable.

How Vaccines and Antibiotics Work

Vaccines are made of dead or weakened germs. When they are injected -- or, in some cases, swallowed -- vaccines alert the body's immune system, which forms antibodies to fight a particular disease.

In contrast, antibiotics attack invading germs rather than work pre-emptively. Their chemical assaults weaken the invaders to help the immune system fight the infection. Typically, success requires daily doses. Antibiotics can work against a variety of microbes, making them more flexible than vaccines. But they cannot kill viruses, a crucial shortcoming.

To counter germ attacks, both vaccines and antibiotics can be administered in advance. But that step, while potentially effective, is laden with logistic, legal, cost and medical problems, especially with vaccines that in their current state of development carry some risk of causing accidental illnesses.

In theory, stockpiles of vaccines and antibiotics are useful for biological defense because the medicine can be administered quickly to help stop epidemics in progress, just as quick immunizations can help control natural outbreaks.

With vaccines, the Clinton Administration is pursuing a variety of options. It is vaccinating troops against anthrax, preparing to stockpile other vaccines for the military and embarking on a parallel stockpiling effort for civilians. For now, that step is caught up in debate and delay.

No one has come down with smallpox for decades. But in some respects it is potentially more dangerous than ever.

Smallpox killed more people over the ages than any other infectious disease. In the 20th century alone, experts estimate, it took up to a half billion lives, more than all the wars and epidemics put together.

Its scars run deep. As long as three thousand years ago, Chinese records tell of slow deaths and disfigurations. Signs of pockmarks appear on the mummified head of the Egyptian Pharaoh Ramses V. The disease decimated Europe and traveled with colonists to the New World, laying waste to tribes and aiding British soldiers who spread the virus as a biological weapon.

Today, the high fevers, deep rashes and oozing pustules that characterize smallpox are gone -- a feat of disease eradication so far unequaled in the history of public health. This banishment is so complete that recent medical textbooks often skip the disease or give few details of its wrath.

Despite this triumph of modern medicine, Washington and key allies now fear the scourge could strike anew sometime in the future, unleashed by war or terrorism. And that worry is raising new alarms and questions.

What makes the virus so deadly? How well do old vaccinations work? What about new drugs and vaccines? How likely is a smallpox attack?

Some answers are grim. For instance, troubles with quality control are such that no stored smallpox vaccine in the United States can now be used except in emergencies, Federal officials say. Stoppers on vials are deteriorating and a vital ancillary medicine is unusable.

A turning point came on April 22 when the United States -- one of two official smallpox repositories around the globe, along with Russia -- announced that it would delay its intended destruction of the virus, reversing years of planning and Washington's previous stance.

The virus was to have been destroyed this month, the first species driven to extinction by design rather than accident. But the Clinton Administration, after careful study, concluded that clandestine supplies probably exist and could cause the disease to emerge suddenly in war. And it reasoned that living samples might aid the development of new treatments and antidotes.

In the wake of that decision, a host of other actions are now taking shape. Most visibly, top scientists and health experts are now calling for a Federal program to produce new vaccine to protect up to 100 million people in the United States -- enough, in theory, to stop any epidemic in its tracks. More quietly, American and Russian scientists hope to embark on studies to better understand the killer's ways in an effort to perfect a cure. And most stealthily of all, intelligence agencies are stepping up their efforts to better judge the threat of smallpox attacks.

''It's disturbing, extremely disturbing,'' said Dr. Donald A. Henderson, the scientist who led the global campaign that eradicated smallpox and now is dean emeritus of the Johns Hopkins School of Public Health. ''I thought the door had closed on smallpox. I had happily put it away.''

Dr. Joshua Lederberg, a Nobel laureate in biology who advises Washington on germ warfare, called the eradication ''one of the great humanitarian accomplishments of our century.'' But he added: ''We have no idea what may have been retained, maliciously or inadvertently, in the laboratories of a hundred countries from the time that smallpox was a common disease. These would be the most likely sources of supply for possible bioterrorists.''

To the extent that past is prologue, the experts say, the history of smallpox offers clues to the dangers and opportunities that may lie ahead.

Experts warn that if smallpox returns it could be more deadly than ever. The effects of the disease on an unprotected population were underscored by the experience of settlers who set sail from Plymouth, England, landed on the Massachusetts coast in 1620 and found the area remarkably free of Indians because a deadly epidemic had just swept through. Early explorers had already spread the virus.

Over the ages, immunities built up slowly as people survived the infection, with children usually faring better than adults. Later on, vaccinations helped keep the scourge at bay.

Today, experts say, such protections are all but gone and people are generally more vulnerable to the disease, underscoring the need for intelligent debate and possibly protective action.

''We're all Indians,'' said Dr. Elizabeth A. Fenn, a smallpox historian at George Washington University. ''We're approaching 100 percent susceptibility.''

The Murderer :   As Viruses Go, Huge and Vicious

No one knows where smallpox came from. Viral historians say it probably began as an epidemic disease 10,000 years ago when human populations first grew dense. The virus is unusual in that it inhabits only humans, unlike many whose main home is in animals.

''It had to have evolved from its natural forebears,'' said Dr. Lederberg, a president emeritus of Rockefeller University. ''Close relatives like monkeypox are still fairly prevalent in the rain forests, occasionally reaching humans.''

Evidence that the disease has existed for at least three millennia is found in the scars on the head and shoulders of the Pharaoh Ramses V, who died as a young man in 1157 B.C., perhaps of the disease. Deities in India and West Africa are devoted to smallpox, attesting to ages of devastation.

The disease, probably spread by traders, is said by historians to have reached Europe sometime in the first millennium.

In 1520, Hernando Cortes, the Spanish conqueror of Mexico, is believed to have unintentionally brought a smallpox-infected slave with him to the New World. In the next two years, an estimated 3.5 million Aztecs died.

In 18th-century Europe, smallpox killed 400,000 people a year, peasants and monarchs alike, a toll proportionately equivalent to more than a million deaths today. The disease in one 80-year period is said to have taken the lives of a Queen of England, an Emperor of Austria, a King of Spain, a Czar of Russia, a King of France and a Queen of Sweden. And President Abraham Lincoln in 1863 was probably feverish with the disease when he gave the Gettysburg Address. Two days later, he broke out in the gruesome rash.

Modern science has found that the smallpox virus, known as variola, is a monster in size, possessing one of the largest genetic blueprints of any virus. Whether that helps explain its extraordinary lethality is unknown. What is clear is that, unlike most viruses, it is highly stable outside its host and can retain its powers of infection over long periods of time, aiding its spread among victims.

After a person is exposed, the virus multiplies rapidly and spreads unobtrusively through the body's lymph system for about two weeks. Suddenly the symptoms come on. The head, back and muscles ache. The temperature spikes as high as 104 degrees, leaving the victim drained. In these hours, little distinguishes smallpox from garden-variety flu.

In about two days, fever and aches give way to pockmarks. At first they dot the tongue and roof of the mouth and then, over a few days, break out over the face and spread to the arms and legs. Flat and red at first, the pox over two weeks or so turn into small blisters and fill with pus, after which scabs form. Sometimes the entire rash becomes bloody.

In its early stages, the disease is often confused with chicken pox, and one way to distinguish them is that the smallpox rash often spreads farther, covering the palms and soles.

About a third of the victims die, mainly from blood loss, low blood pressure, cardiovascular collapse and secondary infections. Many survivors are scarred and blinded. Others have shortened bones and other complications.

Smallpox spreads easily once the rash appears in the throat or skin, and studies have shown that each infected person typically passes the virus to three or four others in close contact, often by coughing. In hospitals, the virus has been shown to travel surprisingly far in the air.

The Eradication :   Hunting Down An Assassin

In 18th-century Europe, one segment of the population -- milkmaids -- attracted medical attention because they escaped smallpox. Surmising that these workers may have developed an immunity from their association with cows, who were prone to a related disease, cowpox, Edward Jenner, a British physician, in 1796 vaccinated a boy with material from an infected cow, Blossom.

Two months later, Jenner inoculated the boy with smallpox virus, but the boy did not get sick. He was immune. Jenner had successfully developed the smallpox vaccine. Jenner sent his report on this breakthrough to the Royal Society, which promptly rejected it. So Jenner published the historic paper on his own.

Like any vaccine, Jenner's worked by alerting the body's immune system to the threat of microscopic invaders, prompting the formation of antibodies to fight them off. The novelty was that Jenner used one virus to protect against another, the first being similar enough to trigger the body's defenses. Cowpox protected against smallpox even though the two viruses, though clearly related, are distinct species.

Jenner dreamed of eliminating smallpox. But no serious efforts were made until the 20th century. As late as the 1930's, smallpox struck up to 50,000 people each year in the United States. The last case occurred in 1949 in Hidalgo County, Texas. Although Jenner had used cowpox virus, a third virus, vaccinia, became the standard vaccine against smallpox. Experts say vaccinia is related to the smallpox and cowpox viruses, but its origin is a major scientific mystery.

Global vaccinations and quarantines began to be envisioned when, after World War II, the World Health Organization was founded as an arm of the newly established United Nations.

In 1959, W.H.O. resolved to eradicate smallpox, largely at Moscow's urging. But little happened until 1966, when the United States and the Soviet Union proposed $2.5 million for an expanded effort. That year two million people died of the disease, mainly in Bangladesh, Brazil, India, Indonesia, Nepal, Pakistan and African countries south of the Sahara.

Mass vaccinations were not enough to stop all viral transmission. So planners added strong measures to hunt down hidden cases and quarantine victims in an effort to create transmission barriers.

In many countries, tribal healers were hired to perform vaccinations, eventually doing much good. ''They were soon out of a job,'' recalled Dr. Henderson, who led the global campaign.

Europe wiped out smallpox early on. But infected foreign visitors still caused outbreaks so severe that hospitals specifically for smallpox were built. As late as the 1960's, West Germany constructed two such hospitals.

India was one of the last major hurdles. In 1975 during a two-week period, 130,000 workers visited 100 million homes there, finding many smallpox cases. Cash rewards produced others. With each sweep, the smallpox count dropped.

Once India was free of the disease, attention turned to Ethiopia. Counts fell and the global effort seemed over. But then cases popped up in Somalia, on the horn of Africa. After another push, W.H.O. recorded the last case on Oct. 26, 1977, putting the Somali victim in quarantine.

With that, the person-to-person chain was broken, defeating the scourge.

In 1980, W.H.O. proclaimed the world free of smallpox and soon asked for all laboratory samples of the virus to be destroyed or sent to central repositories. But it had no inspection powers. The heroes of the eradication effort had to take nations of the world on their word when, one by one, they said the dreaded virus was gone.

The Threat:   Dark Evidence Of Hidden Arsenal

The deadliness of smallpox has long beckoned to military minds and was exploited in the New World with relative ease. Settlers and soldiers from Europe often had immunity because of childhood exposure. And Indians did not. So the virus tended to kill selectively, overcoming a general drawback of germ weapons.

During an Indian uprising in 1763, Sir Jeffery Amherst, commander of British forces in North America (and namesake of the Massachusetts city), suggested that the disease be sown deliberately. ''Could it not be contrived to send the Small Pox among those disaffected tribes of Indians?'' he wrote a subordinate, encouraging the use of ''every stratagem in our power to reduce them.''

In fact, his men at Fort Pitt, today Pittsburgh, had already forged ahead without his encouragement, giving Indians infected blankets and a germ-laden handkerchief. Epidemics ensued, but historians are unsure to what extent the spread was due to natural or deliberate exposure.

Dr. Fenn, the George Washington historian, who is finishing a book on smallpox epidemics in America, said Amherst and his men's independent pursuit of smallpox weapons showed the idea's prevalence and wide appeal, which continued into the Revolutionary War.

''They were willing to use it in nasty ways,'' she said of British forces. ''But it's almost impossible to determine how effective it was.''

Still, she said, George Washington was suspicious enough of the British using smallpox as a weapon, and had lost so many troops to the disease, that in 1777 he ordered his men to undergo crude inoculations. The Americans, in contrast to English soldiers, had typically grown up without exposure to the disease. Thus, like the Indians, they had no acquired immunity.

Despite its apparent disuse in the last two centuries, the idea of smallpox as a weapon has never disappeared. Indeed, evidence has recently surfaced that many such armaments were made, if not used.

In 1992, a Soviet official named Kanatjan Kalibekov, now known as Ken Alibek, defected to the United States. In secret debriefings, Mr. Alibek, formerly a top player in Soviet germ warfare, told Washington that Moscow had made tons of smallpox for war, and he suggested that the virus might have been sold or secreted away as the Soviet state collapsed and Russian scientists sought new ways to support themselves.

Last year he went public, and he followed this year with a book, ''Biohazard'' (Random House), which details a nightmare of smallpox weapons that he says the Soviet Union made, including warheads for long-range missiles.

W.H.O.'s announcement of the disease's eradication in 1980, Mr. Alibek wrote, had prompted the Soviets to redouble their smallpox efforts. ''Where other governments saw a medical victory,'' he said, ''the Kremlin perceived a military opportunity.''

Federal officials say they have confirmed many of Mr. Alibek's smallpox claims and have also found signs that the virus is now hidden in Iraq and North Korea, although they report seeing no evidence of smallpox arms or planned strikes. The intelligence, they say, helped drive Mr. Clinton's April 22 decision to forgo destruction of American stocks.

Officially, destruction of the virus has been put off three years, until at least June 2002, as world health authorities debate the stay.

The Vaccine :   Nagging Doubts About a Life Saver

In 1972, the United States stopped routine vaccinations of civilians against smallpox, nearly a decade ahead of much of the world. Thus, about 114 million Americans born since then, 42 percent of the population, are completely vulnerable.

For people age 27 and older who were vaccinated, the degree of protection is unclear because scientists have never systematically measured the duration of immunity. Protection probably drops with time, but how much is unknown. Lifelong immunity is unlikely, some experts say. But old vaccinations may lead to milder attacks.

At the end of the eradication program, W.H.O. and a number of countries independently stored enough smallpox vaccine for 60 million people and kept a safeguarded supply of the vaccinia virus to make vaccine in case more was needed.

With its cache, the United States in theory could protect up to 14 million people if each vial of stored vaccine was used to its maximum potential of 100 doses. The manufacturer, Wyeth Laboratories, holds the supply of vaccine in Marietta, Pa., under the control of the Centers for Disease Control and Prevention in Atlanta.

Smallpox vaccine is still needed at C.D.C. for scientists who work with the virus. But serious problems with quality control have stopped vaccinations, creating an acute problem for a very select group of scientists in the United States and, in the event of an emergency, a much wider group of people.

Crumbling rubber stoppers on vials are letting in moisture, and a brilliant green dye is inexplicably losing its color, but the vaccine remains near normal potency, Federal experts say. The bigger problem is that the American supply of a colorless liquid medicine, known as vaccinia immune globulin, which is needed to counteract adverse reactions to the vaccine, has turned pink for reasons no one understands. Federal rules say the medicine must be on hand before vaccinations are given, and the Food and Drug Administration has barred its use until the mystery is solved.

A further complication is that new batches of vaccine cannot be made with the old process, since today that process would fail to pass the F.D.A.'s more rigorous standards.

In late 1997, prompted in part by Mr. Alibek's revelations, the Pentagon embarked on a $322 million program to make new vaccines for the military, including smallpox. The earliest it will be ready, officials say, is 2005 -- if it can pass F.D.A. muster. That will be difficult. Because the disease no longer exists and the virus is too lethal to unleash on people, clinical trials cannot be conducted to test whether or not the new vaccine actually helps humans resist smallpox.

''Ultimately, they're going to have to make a fairly substantial judgment call,'' Steve Pryor, president of Dynport, the Pentagon's vaccine contractor, said of F.D.A. officials.

Civil authorities in Washington want at least 40 million doses of new smallpox vaccine, and health experts like Dr. Henderson, who now heads a center for the study of bioterrorism at Johns Hopkins, are calling for 100 million. Talks are under way for Dynport to produce vaccine for civilian use as well, but nothing to date has been worked out.

Meanwhile, some experts question the whole vaccine approach as a germ warfare safeguard. Foes, they say, knowing well in advance about vaccinations, might counter them by switching to a different germ or a different variant, perhaps genetically engineered.

''Defensive measures are much more difficult than offensive ones,'' said William C. Patrick 3d, who made germ weapons for the United States before President Nixon outlawed them three decades ago.

Such threats are helping fuel a search for new ways to combat smallpox and related viruses, including the development of new kinds of anti-viral drugs. Unlike vaccines, such drugs, if found workable, might be administered long after exposure to save infected victims, attacking the virus directly rather than relying on the body's immune defenses.

In March, the National Academy of Sciences released a 108-page report listing new research frontiers, many of which American and Russian scientists are already pursuing, such as trying to understand the genetic secrets that make the virus so deadly. Combined with the intelligence assessment that other countries were harboring smallpox for military use, the academy report influenced the Clinton Administration's decision to forgo destruction of the virus.

The great unknown, experts say, is whether the benefits of such planning will ever be needed in a crisis and, if so, whether the protections will work as envisioned. But the consensus is that action is nonetheless needed.

Early this month, Federal experts meeting in Atlanta reviewed the germ threats facing the nation. Smallpox came out on top. Second was anthrax, which causes high fevers and death but is not contagious. In comparison, smallpox spreads like wildfire.

''It was unanimous that smallpox is the primary threat,'' said Dr. Henderson, who attended the Federal meeting. ''The likelihood of an attack is small, but were it to occur it would be a real catastrophe.''

With each new confirmed anthrax infection raising fears of a wider bioterror attack in the U.S., pressure is mounting on the Defense Department and the Food and Drug Administration (FDA) to give the green light to Michigan-based [BioPort Corporation], the nation's lone anthrax-vaccine manufacturer, to ship new lots of the vaccine to the Pentagon.

Anthrax vaccine shipments from BioPort have been suspended by the FDA since 1998 because of questions about the facility's quality control, forcing the Pentagon to dramatically reduce its program to vaccinate all 2.4 million U.S. soldiers and reservists against anthrax. Now the lack of the vaccine threatens to become a scandal, as the U.S. is sending thousands of soldiers overseas and calling up reserves, and as the public is clamoring for access to protection from the deadly bacterium.

After three years of getting bailed out by the Defense Department, BioPort could be poised to make a fortune -- as its CEO [Yahia Fuad El-Hibri (born 1958)] did working with the British seller of anthrax vaccine, Porton International, during the Gulf War a decade ago. But only if the FDA approves the company's renovated plant, as expected, sometime in the next week. The decision could open the door for BioPort to market the drug to a worried public, as new anthrax scares are reported daily.

The story of the troubled U.S. anthrax-vaccine program is a tangled saga of science, politics, private-sector deal-making and national security. There have been persistent questions about the vaccine's safety and effectiveness. Critics say Defense Department studies have never proven the vaccine works against the more dangerous inhaled form of anthrax, only against cutaneous, or skin anthrax. Some military personnel have complained of mysterious illnesses after taking the vaccine, and at least 400 have been disciplined for refusing the mandatory inoculation. But the Pentagon insists the vaccine is both effective and safe. Even now, some researchers say the vaccine is seriously outdated, as BioPort gears up to ship more.

Then there are questions about BioPort's role as the nation's only anthrax-vaccine maker. How did Fuad El-Hibri, 43, a German-born entrepreneur and former director of British vaccine-maker Porton Products, come to have so much control over the West's supply of anthrax vaccine? Why didn't the Pentagon turn to a larger, more established drug maker for the crucial anti-biowarfare weapon? And how could it let BioPort remain the sole maker of the vaccine after it failed repeatedly to gain FDA approval for its renovated facility?

"It speaks to DoD culture more than anything else," says a congressional staff aide who asked not to be named. "The Pentagon just does not have a corporate culture. Once they decided to go with this program (BioPort), they stuck with it, even though oversight indicated they had built their biodefense program on a foundation of sand, and they had an unreliable producer. The DoD is simply incapable of admitting a mistake. They genetically just can't back out."

The Pentagon and BioPort deny they made a mistake, of course, and they believe their problems will be solved, perhaps next week. Government sources close to the process say as early as Monday, the FDA will approve BioPort's renovated facility, and enable it to resume shipments of the vaccine it has been stockpiling since 1999.

A government official who asked not to be named says while BioPort is "70 percent on the way there" in terms of improvements in quality control demanded by the FDA, political pressure due to the terrorism scare is playing more of a role than quality control in expediting FDA approval. But BioPort officials say FDA approval for their renovated facility is long overdue.

"We have heard the process will be speeded up, and it has taken an incredibly long time," said Jay Coupe, a longtime aide to Adm. William Crowe, who with Fuad El-Hibri serves as one of BioPort's owners, and who served as chairman of the Joints Chiefs of Staff during the Reagan administration. (Fuad's father, Ibrahim El-Hibri, also well-connected to the defense establishment, is a third partner in the venture.) "While BioPort certainly supports the FDA, and doesn't want any special consideration and wants a safe and effective vaccine, the approval process has gone on for a very long time for most vaccine manufacturers. This is one of the reasons people are getting out of the vaccine business."

"We have been manufacturing vaccine," BioPort spokeswoman Kim Brennan Root said. "As we submit final documentation for approval from the FDA, we have been manufacturing vaccine and contributing it to the stockpile so when approval comes we can be in a position to release the vaccine."

But critics of BioPort say that repeated FDA inspections have shown the company has failed to prove it can produce the same dose of vaccine twice.

"The most fundamental problem has to do with the quality of the process of vaccine manufacture," a congressional aide, who asked not to be named, told Salon. "They cannot show they can produce the same vaccine of the same potency and consistency twice in a row. The quality of the process is not validated. That means they don't have the data to show that, within this process, within this heat range, this process produces this vaccine. They are trying to retrofit a modern inspection and validation process on an old system."

"BioPort has tried to say it didn't know how much it would cost to bring the company to 2001 FDA standards," another congressional staffer told Salon. "But that is kind of a hard pill to swallow. They consistently showed deviations from good manufacturing practices. Some of the FDA complaints are substantive. There were contaminants in the lot. There were some deficiencies in packaging. There were problems with paperwork and record keeping. There was an inability to show consistency from one lot to the next."

"They have come a long way," he added, "at significant taxpayer support."

Even if BioPort gets FDA approval to resume vaccine sales, anthrax vaccine will be available only to the military, not to the general public. That is, unless BioPort can step up production, and get the Defense Department to agree to sales to federal health agencies. If the current anthrax scare in New York and Florida grows, some members of the public are certain to pressure their political leaders for access to the vaccine.

"I will tell you right now, I wish I had access to the vaccine myself, I can tell you," says [Dr. Zsolt Paul Harsanyi (born 1944)],, a former business partner of Fuad and Ibrahim El-Hibri who is president of the Washington office of Porton International.

BioPort's Kim Brennan Root would not disclose how much vaccine the company had stockpiled while awaiting FDA approval for their renovated facility since renovation was completed in 1999. But a congressional aide who has researched the matter estimates that approximately 5 million doses are stockpiled. Vaccination requires six doses over 18 months, and a yearly booster shot.

In testimony to congressional committees, BioPort CEO Fuad El-Hibri has indicated BioPort's viability depends on being able to sell anthrax vaccine to a much larger market than to just the Defense Department, which he said is getting "rock-bottom prices."

"It has become clear to us that the prices paid by the Department of Defense for anthrax vaccine are significantly below BioPort's costs for producing anthrax vaccine," El-Hibri told the House Government Reform Committee in June 1999, a year after he purchased the Defense Department's former anthrax vaccine supplier. "Traditionally vaccine manufacturers have been able to offer lower prices to the government by recovering a substantial portion of their costs through commercial sales. Because of the current unavailability of product, the commercial sales market has not materialized as anticipated. Without a second market, the government cannot expect the rock-bottom pricing it enjoys with some of the other vaccines it purchases."

"As a commercial entity," el-Hibri added, "BioPort cannot continue to subsidize the DoD."

Critics of BioPort are outraged at El-Hibri's contention that BioPort has subsidized the Defense Department. Chief among them is U.S. Rep. Walter Jones, R-N.C., who sits on the House Armed Services Committee. Jones estimates that the Pentagon has paid BioPort almost $150 million since BioPort purchased the state-owned Michigan Biologics Products Institute (MBPI) in 1998, giving it the exclusive U.S. license to make anthrax vaccine -- with no new shipped vaccine to show for the money.

"My whole concern has been that this company cannot meet FDA requirements to produce the product," Jones told Salon Thursday. "So how long does the government continue to put taxpayers' money into a company that cannot produce the product?"

"Since former Secretary of Defense Bill Cohen raised the concern about the possibility of anthrax being used on the military or civilians," Jones added, "the Clinton administration made the decision to go with BioPort."

As his comment suggests, partisan politics may at least initially have played a part in Jones' troubles with BioPort, and its co-founder, Adm. Crowe. Alone among top military brass, particularly those who served Republican administrations, Adm. Crowe endorsed the election of "draft-dodger" Bill Clinton, who was widely despised by the Republican-leaning military establishment. Clinton rewarded Crowe for his endorsement, Jones suggests, with a plumb ambassadorship to England from 1994 to 1997.

And England in the years during and after the Gulf War is key to understanding the close links between the half dozen people who have come to dominate the sale of vaccines against deadly bioweapons in the U.S. and the U.K. Only two countries, the U.S. and Britain, make anthrax vaccine, and El-Hibri has been involved in both, first at Porton International in Britain during the Gulf War, and now with BioPort in the U.S., as the world faces a new terrorism scare. Sources say El-Hibri remained involved with Porton International up until the firm partnered with defense contractor DynCorps in 1997 to get a new Defense Department contract to make a second generation of vaccines against bioweapons. The new company is named [DynPort Vaccine Company, LLC], and its license to make second generation vaccines to protect against small pox, anthrax and other bioweapons was publicly announced Thursday, although the contract appears to date from 1997.

It was in Britain that Ambassador Crowe resumed his acquaintance with an old family friend, Ibrahim El-Hibri, a wealthy Venezuelan citizen of Sunni Lebanese descent, and his son Fuad. Ibrahim El Hibri had made a fortune in the telecom business with Phillips Company, working in the Gulf states.

Crowe and Ibrahim el-Hibri were first introduced decades ago by a U.S. Naval Academy classmate of the admiral who, like Ibrahim El-Hibri, lived in Venezuela. They had stayed in close contact during the 1970s when Adm. Crowe was posted to head the U.S. Central Command in Qatar, in the Middle East, where Ibrahim El-Hibri was active in his businesses. And in England during his ambassadorship, they met again.

The mania for privatization in Margaret Thatcher's England made it a great place for entrepreneurs like El-Hibri. In the 1980s, an El-Hibri acquaintance named [Dr. Zsolt Paul Harsanyi (born 1944)],, an American Ph.D. in genetics who had spearheaded an early report on biotechnology for the U.S. Office of Technology Assessment, became involved in what would become in its time the largest private biotechnology firm in the world, Porton International. Porton got the rights to sell vaccines and other products developed by the U.K.-government run laboratory, the Centre for Applied Microbiology and Research (CAMR), on commercial markets. CAMR had done the early research into products like botulinum toxin, or botox, a bacterium that can be injected to stop spasms (as well as prevent wrinkles, its most popular use in the U.S., at least until now) and anthrax vaccine.

The marketing relationship between Porton and CAMR ended in the 1990s, Dr. Harsyani said, and CAMR now markets its own products.

"At the time of Mrs. Thatcher, there was a philosophy in the U.K. supporting taking public works to the private sector," Harsyani told Salon. The spirit of public-private partnership that existed in Thatcher's England in the 1980s then moved to the States, Harsyani explained. "A lot of U.S. government and military research was not commercialized because there was no mechanism for it. One of the things that has changed in the United States in the last 20 years is that intellectual property that came out could in fact be owned by the institution where the researchers worked. The U.S. has now taken steps towards that kind of privatization."

In 1989-1990, with Persian Gulf tensions heating up and the U.S. and Britain preparing to lead a war against Saddam Hussein's invasion of Kuwait, El-Hibri became a principal silent investor in Porton, while his Yale and Stanford-educated son Fuad was installed as director of a Porton subsidiary, Porton Products. Their Middle East connections were put to use, as Porton sold tens of millions of dollars worth of anthrax vaccine to Saudi Arabia and other countries -- deals all approved by the British Ministry of Defense.

(A U.S. government investigator says Porton sold vaccine to Saudi Arabia at the insanely high price of $300-$500 per dose -- some 30 to 50 times what the U.S. Defense Department agreed to pay BioPort per dose.)

The Gulf War was a boon to businesses like Porton, as well as its officers, the el Hibris and Dr. Harsyani. Increasingly, they started to look for similar business opportunities in the U.S., particularly in areas that revolved around biodefense. They gravitated to opportunities where the government-run defense industry meets the private sector.

After the Gulf War, with concerns mounting in the U.S. about reports of Iraq's production of anthrax, Adm. Crowe was posted as ambassador to England. There, he resumed his friendship with the El-Hibris. About the same time, the El-Hibri family was hearing that the U.S.'s lone anthrax vaccine manufacturer, the state-owned Michigan Biologics Products Institute (MBPI), was financially troubled and looking for a buyer.

In 1970, the Michigan lab had received the only U.S. license to make anthrax vaccine, but its facility was antiquated. By the late 1980s, according to Judith Miller's "Germs," Michigan's Biologic Products Institute was making small batches of the vaccine -- 15,000 to 17,000 doses -- every four years, and selling them mostly commercially, to people in the animal hides business who came into contact with anthrax. But in 1988, the U.S. Army went to the lab and signed a contract to buy 300,000 doses in five years. The order was ambitious. By the time Gulf War troops assembled in early 1991, there was only enough vaccine to protect 150,000 of the half million troops assembled there, and none for civilians or allies, though the Saudis were able to buy some from the U.K.'s Porton International.

After the war, as worry increased over Iraq's biowarfare capacity, some in the Pentagon proposed that the military build its own vaccine factory, but officials thought it best left to the private sector. By 1996, however, concerns were mounting that the Michigan facility, already inadequate to the challenge of producing enough vaccine for the entire military, was having new problems. After several years of troubling inspections, the FDA threatened to close the lab in 1997, citing problems with sterility and equipment maintenance as well as scientific procedure. The only other facility producing a vaccine, Britain's CAMR, which at one time had a marketing relationship with Porton, now terminated, was using a different anthrax strain, and wasn't licensed for U.S. use anyway.

The el-Hibris and Crowe came up with the idea for BioPort, which they thought could do in the U.S. what Porton had done in Britain: bring private-sector methods (and profits) to a public research lab. As Fuad el-Hibri testified to Congress in 1999, "When BioPort was originally conceived, we believed that Admiral Crowe's background would be important in ensuring that we did everything correctly in establishing a company that would best serve DoD's needs."

El-Hibri and Crowe also partnered with two former managers of the state-owned facility, Robert Myers, who serves as BioPort's COO, and Rob van Ravenswaay -- a deal former Michigan state Sen. Linng Brewer, a Lansing Democrat, has long charged was ethically suspect, because Myers and Ravenswaay as employees of MBPI "knew the identities of at least two bidders (El-Hibri and Crowe) and the substance of their bids, information not made available to the general public. It appears they used information not available to others to enhance their financial position relative to the other bidders, a clear violation." The BioPort partners have long denied the charges.

In June 1998, BioPort's $24 million bid for MBPI -- $17 million upfront and the rest in loans to be paid over five years -- beat out competitors, including a $16.6 million bid endorsed by the Defense Department by Gruppo Marcucci, that involved no debt. Some expressed concern about selling the sensitive national security facility to a foreign company. (Brewer says the Marcucci bid lost out because it had failed to partner with managers of the Institute, but he has been unable to bring his ethical violations against Myers and Ravenswaay to court.)

A former Porton employee who asked not to be named says the company was looking to make a fortune on the Pentagon contract. "When El-Hibri bought the Michigan plant, he thought they would make a killing. The lab was already knocking out this product. The vaccine was already FDA approved. It's an essential business but no one wanted to talk about bioweapons back then, even though they knew Iraq and other countries had anthrax."

But it didn't turn out to be so easy.

Despite El-Hibri's experience marketing anthrax vaccine at Porton, Crowe's strong ties with the defense establishment, and growing interest from the Pentagon in protecting troops from anthrax, BioPort's problems quickly mounted after it acquired the MBPI facility.

Troubles seemed unlikely, because in May 1998, shortly before BioPort's bid for MBPI was finalized, Defense Secretary William Cohen announced plans to require all 2.4 million U.S. soldiers and reservists to be inoculated against anthrax, which looked like a windfall for the new venture.

In testimony to Congress, Adm. Crowe has adamantly denied that he had any insider knowledge that led to his purchase of the anthrax vaccine facility. "It has on occasion been rumored that the decision to inoculate all service personnel was made to benefit BioPort Corporation and indirectly me, presumably because of my past associations with the military and the administration," Crowe told the House Committee on Government Reform in October 1999. "If this charge were not so ridiculous, it would be offensive. It outrageously exaggerates my influence. Let me be completely clear. I never, repeat never, solicited any official of this administration to install or promote a mandatory inoculation program."

Despite the Pentagon's decision to require anthrax vaccination for all troops, which clearly could have been lucrative for the new firm, BioPort was struggling. Only three months after their acquisition of MBPI, El-Hibri and Crowe were prevented from shipping any new vaccine, by a scathing FDA inspection that found over 40 items wrong with the plant, the vaccine, its consistency, the firm's accounting, and other problems. Indeed, by September 1999, BioPort was already appealing to the DoD for relief from a contract requesting BioPort's delivery of some 8 million doses of anthrax vaccine. It simply could not deliver, and certainly not at that price.

A Defense Department audit from July 12, 2000, shows that shortly after BioPort bought MBPI, the DoD awarded it a $29.4 million contract to supply 8.7 million doses of anthrax vaccine at the price of $4.36 a dose. But a year later, unable to ship product, BioPort requested and the DoD granted $24.1 million in relief to BioPort, reduced the number of doses demanded from 7.9 million to 4.6 million, and agreed to raise the price per dose from $4.36 to $10.36.

Even after a full-scale yearlong renovation of its manufacturing facilities, and significant efforts to meet FDA requirements to get its new facility reapproved, BioPort continues to wait for FDA approval to ship doses of the vaccine it has been manufacturing all this time. Problems have been found not simply with BioPort's process, but with the doses of the anthrax vaccine already produced. FDA tests found a lack of consistency in dosage and other problems with the finished product.

The delay has prevented the Pentagon from vaccinating all but the troops it is currently sending abroad, and has forced some soldiers to actually suspend vaccination mid-process.

"Now we're in a situation with the terrorist attack that we still have this company that has still not met FDA approval," Rep. Walter Jones says, "and we're spending almost $3 million per month on this company that is still months away from having FDA approval."

So why did the DoD stick with BioPort all these years of their failing to get final FDA approval -- until now, when the U.S. faces a real anthrax crisis?

"I blame everybody," says a congressional staffer well versed in the BioPort controversy. "The buyer -- the Pentagon -- kept BioPort alive. The DoD should have pulled the plug on this outfit a long time ago."

To be fair to the Pentagon and BioPort, however, it's not as if major pharmaceutical companies have been clamoring for the contract. A reliable anthrax vaccine has proven hard to make, and questions about its safety have likely scared off other manufacturers (although the Defense Department agreed to protect BioPort against lawsuits by military personnel.)

Even now, just as BioPort seems set to perhaps overcome its long regulatory and financial difficulties, many in the industry and government are coming to consensus that the anthrax vaccine BioPort produces is outdated.

Increasingly, the government is also supporting research into a second generation of vaccines that can protect against multiple bacteria -- perhaps all in one shot. The government has also turned to the well-connected defense contractor, DynCorps, known for its involvement in the drug war in Colombia, and sending retired U.S. cops to Bosnia and Kosovo to serve as U.N. police, to subcontract vaccine research. (DynCorps was implicated in the accidental killing of an American Baptist missionary and her infant daughter by the Peruvian military earlier this year.) In 1997, DynCorps partnered with the El-Hibris' old company Porton International, to form [DynPort Vaccine Company, LLC] (DVC), just in time to beat out four other bids for a $322 million, 10-year contract.

Under the award, "DVC acts as a prime system contractor for the management of the existing stockpile of biological defense vaccines (except anthrax vaccine) and the advanced development, testing, production, FDA licensure, and storage of up to 18 new biological defense vaccines, including new vaccines against anthrax, small pox, plague, botulism and tularemia," according to Pentagon spokesman Jim Turner.

Why did the Pentagon turn to the unknown DynPort over more established companies? Some in the industry say not a whole lot of pharmaceutical companies want to get into bioweapons vaccine research, because the capital costs to build a dedicated lab safe from airborne toxins are so high, and the market -- at least until now -- has been so small, primarily just the Pentagon.

"No one else wants these contracts," insists Ron Rader, who leads an industry research firm called BioPharm.com. "Spore-forming microorganisms, because of FDA regulations, require totally separate facilities. Botulinim toxin, anthrax -- the facilities have to be dedicated. No one wants to have a dedicated, one-product facility. The trend now is to have multiple suites, and/or large manufacturing facilities. That way, you can switch from product to product every few months. No one wants to deal with spore-forming organisms.

"Also back then, anthrax vaccine was just not an attractive product. It's associated with biological warfare -- and that's not a positive thing. It's not the kind of thing you want to put in your brochure. Mainstream pharmaceutical companies had no interest. And you're also talking about being absolutely dependent on one customer. Very few companies are willing to take that risk. Any day, the Defense Department could just walk away." But P.W. Singer, a scholar at the Brookings Institution who has studied private military companies such as DynCorps and Military Professional Resources Inc., says the Pentagon seems to be treating bioweapons vaccines as just another weapons system they want to outsource to a trusted private-sector insider.

"The Pentagon is in search of two things: efficiency, and expediency," Singer said. "They either think they can get a better product in terms of quality or price or rapidity, or for expedient reasons. DynCorps provides a disconnection, when they would rather not have the government involved in some activity."

"My concern," he added, "is that the company in Michigan [BioPort] is actually a government lab that was privatized. It strikes me that for something so important for societal security, that you don't want to leave it in private hands. There are just some things that are too important."

And indeed, for BioPort CEO Fuad El-Hibri, BioPort is not an exclusive priority. El-Hibri, who became a U.S. citizen around the time of the BioPort purchase of MBPI, does not work out of the Michigan company, but out of the Rockville, Md., offices of his company East West Resources Management. His secretary there, Sheila Glick, says BioPort is one of 15 different companies El-Hibri runs, including some mobile phone operators in El Salvador, Venezuela and Jamaica. El-Hibri did not respond to numerous requests by Salon for an interview, and his secretary later referred questions to back to BioPort.

[Dr. Zsolt Paul Harsanyi (born 1944)], president of Porton International, which has now been bought by the French pharmaceutical company Ipsen, and who is now involved in the DynPort vaccine contract with the Defense Department, said there is nothing sinister about the way the El-Hibris have approached the business of anthrax vaccine -- as a business opportunity.

"Mr. Ibrahim El-Hibri is a wonderful gentleman," Harsyani said Friday. "He started a charity for orphans." A scan of the Internet shows Mr. El-Hibri on the board of a Beirut-based Sunni charity, Dar Al Aytam Al Islamyah, that provides relief to orphans and widows, and espouses "commitment to the humanitarian principles of Islam such as justice, tolerance, and abhorrence of confessionalism or sectarianism."

[Dr. Zsolt Paul Harsanyi (born 1944)] said he had not spoken with Ibrahim El-Hibri in over a year, but that the two parted on good terms. The El-Hibris divested from Porton International about three years ago, about the time when DynPort got the Pentagon contract to begin work on a second generation of bioweapon vaccines.

The former Porton employee, who asked not to be named, says the El-Hibris should be viewed as defense contractors, and their relationship with the Pentagon is not unique. "You have to realize: BioPort and now DynPort, these are arms dealers. They are part absolutely of the military industrial complex. This is their business. They are selling to a captive audience: the Defense Department. That's all-American. All these defense contracts -- they are boondoggles -- and that's the American way, to make as much money as possible. There's not that much unique about BioPort."

In late September, in the days before a series of anthrax-tainted letters made bioterrorism a reality in the United States, President Bush decided that the federal government should acquire enough vaccine to protect every American against an even more menacing biological threat: smallpox.

Although smallpox was eradicated as a disease in the 1970's, American intelligence had suspected for years that Iraq and North Korea, and possibly other rogue nations, had maintained clandestine stocks of the deadly smallpox virus.

But officials say it was the attacks on the World Trade Center and the Pentagon, and not any new information, that prompted the president's decision to greatly expand the nation's smallpox vaccine stockpile.

The decision, which was not publicly announced, gained urgency when letters containing potentially lethal anthrax powder began arriving at news organizations and on Capitol Hill. The anthrax scares produced widespread fears that the nation would run short of the antibiotic Cipro. So senior administration officials quietly sped up their timetable for acquiring the smallpox vaccine.

Last Wednesday, [Tommy George Thompson (born 1941)], the secretary of the Department of Health and Human Services, announced the plan, which calls for stockpiling the vaccine so that it can be used in the event of an outbreak of smallpox, a highly contagious disease for which there is no treatment, and that kills one-third of all people infected with it.

''I think the American people will feel much more comfortable knowing they have their name on a vaccine shot in our inventory,'' Mr. Thompson said in an interview. ''It's the security of knowing you have enough for every American.''

The decision to buy 300 million doses will vastly accelerate an existing vaccine program that, in the view of many scientists and federal officials, was hampered by bureaucratic inefficiency and was moving much too slowly. It also illustrates just how concerned officials have become about the nation's preparedness for a bioterrorism attack.

Despite [Tommy George Thompson (born 1941)]'s public pronouncements on Sept. 30 that the government ''can handle any contingency right now,'' interviews with nearly a dozen administration officials, scientists and bioterrorism experts make clear that in the aftermath of the Sept. 11 attacks, both the health secretary and the White House privately were acutely aware of the nation's vulnerabilities.

Even so, it was not until Oct. 4 -- just hours before Mr. Thompson announced to the nation that a Florida man had become sick with pulmonary anthrax -- that he secured Mr. Bush's commitment to pay for his entire $1.6 billion bioterrorism preparedness package.

''It was the double whammy of the World Trade Center and the anthrax attack that made everybody realize that these are real problems that need to be dealt with,'' said [Dr. Peter B. Jahrling (born 1946)], an Army scientist who is one of the nation's leading smallpox researchers. ''In all my years of government service, I have never seen anything move this fast.''

Mankind's triumph over smallpox is considered public health's greatest accomplishment. After the World Health Organization officially declared in 1980 that the disease had been eradicated, countries were supposed to destroy their stocks of the smallpox virus and transfer any samples of it two repositories, one in Russia and the other in the United States, at the Centers for Disease Control and Prevention in Atlanta.

By the early 1990's, the United States had about 15 million doses of aging smallpox vaccine that had been made by Wyeth Laboratories. It was too little to protect civilians and military forces, but few civilian scientists believed that the disease would ever re-emerge.

The military, however, thought otherwise. In 1989, Vladimir Pasechnik, a top Soviet biologist, defected to Britain. In briefings later shared with American military intelligence analysts, he described the Soviet Union's empire of thousands of scientists and dozens of secret cities and facilities devoted to turning germs and viruses, including smallpox, into weapons. And he said Moscow was trying to modify smallpox into an even more efficient killer.

These accusations, bolstered by the 1992 defection to the United States of Ken Alibek, the No. 2 scientist in the secret Soviet program, led American scientists at the Army's biological defense laboratory at Fort Detrick, Md., to press for the development of a more modern vaccine.

In 1997, the Pentagon awarded a contract to [DynPort Vaccine Company, LLC], an American-British company, to do just that.

The next year, a special panel of experts urged President Bill Clinton to start a vaccine program for civilians. Because vaccination was stopped in 1972, and immunization against smallpox lasts only 15 to 20 years, Americans are especially vulnerable, experts say.

At the Department of Health and Human Services, [Dr. Margaret Ann "Peggy" Hamburg (born 1955)] oversaw the smallpox effort. Administration officials worried that they would not get support for the plan in Congress. ''A lot of people thought this was a crazy idea, to make new vaccine when the disease didn't exist,'' Dr. Hamburg said.

At the White House, Richard A. Clarke, President Clinton's counterterrorism coordinator, wanted the Pentagon and the health agency to join forces. But the Pentagon refused to share the seed strain for its program with the civilian program.

In an interview last summer, a spokesman for the office charged with making the vaccine, the Joint Vaccine Acquisition Program, said there were legal impediments to cooperating with a civilian contractor. Among other factors, he said, product liability was a concern.

''These were two diametrically opposite bureaucracies that had no history of dealing with one another,'' said Mr. Clarke, who now leads Mr. Bush's office to protect the nation against Internet threats.

The result was two separate smallpox vaccination programs. The military contract with [DynPort Vaccine Company, LLC] called for 300,000 doses at a cost of $22 million, or initially about $70 a dose, to be delivered around 2005 or 2006. The civilian contract, which was awarded to OraVax, a Massachusetts-based company that has since been acquired by Acambis, a British concern, called for 40 million doses to be delivered by 2005, at a cost of $343 million, at about the same time as the military vaccine.

One senior administration official called the situation ''an utter mess.''

Even before the Sept. 11 terrorist attacks, the Bush administration was determined to straighten the problem out. In June, a team of bioterrorism experts, led by the Johns Hopkins University Center for Civilian Biodefense Studies, conducted an exercise code-named Dark Winter that simulated an outbreak of smallpox in the United States. As the imaginary epidemic spread, growing grimmer and grimmer, the government quickly ran out of vaccine.

''After Dark Winter, there was a whole spate of briefings, so that a whole lot of people suddenly began to realize just how serious an epidemic of this sort could be,'' said Dr. Donald A. Henderson, who directs the center at Johns Hopkins and led the global effort to eradicate smallpox.

On Sept. 16, [Tommy George Thompson (born 1941)] brought Dr. Henderson into his inner circle of advisers. The men met for the first time that day.

''This was a man deeply troubled and very worried,'' Dr. Henderson recalled. Mr. Thompson acknowledged as much. ''Where will they hit us if they're going to hit us again?'' he remembered thinking.

By this time, Mr. Thompson was already pressing the White House to improve the nation's bioterrorism defenses. He found allies there among several officials who were steeped in biodefense.

[Irving Lewis "Scooter" Libby (born 1950)], a top Pentagon lawyer in the first Bush administration who is now Vice President Dick Cheney's chief of staff and national security adviser, arranged for his boss to see a video of the Dark Winter exercise on Sept. 20. Lisa Gordon-Hagerty, who directs a National Security Council program to defend against weapons of mass destruction, was also supportive.

Officials said the vice president was so alarmed by the exercise that he raised the smallpox vaccine issue at a National Security Council meeting later that day. ''The vice president was pushing it, and the president was going along with it,'' a senior administration official said.

Within [Tommy George Thompson (born 1941)]'s circle of advisers, however, there was serious debate about whether 300 million doses were actually needed. Dr. Henderson's group at Johns Hopkins had estimated that only 100 million to 135 million doses would be needed to curtail an outbreak, and people familiar with the discussion say Dr. Henderson argued that money might be better spent on improving the public health infrastructure.

Others argued that the government needed a dose for every American, if only to avert panic. Among them was Michael T. Osterholm, a public health expert who is also advising Mr. Thompson. He declined to talk about the deliberations, but said, ''There is a certain psychological benefit to knowing that, in this country, there is a dose of vaccine for everybody if we need it.''

The secretary agreed and, sometime after Sept. 20, secured verbal approval from the president for the program. On Oct. 3, Mr. Thompson announced that his agency had arranged for Acambis to speed up its work and deliver the doses by the end of next summer.

The next day, anthrax hit America.

As the news was breaking in Florida that a man there was sick with pulmonary anthrax, a disease not seen in this country for a quarter-century, [Tommy George Thompson (born 1941)] was at the White House, briefing the president and vice president on his bioterrorism plans.

Officials say that briefing was a pivotal moment. The president committed the $1.6 billion for the broad antibioterrorism package. When it was over, Mr. Thompson briefed the press about the anthrax infection. Over the next several days, it became clear that the case was a deliberate attempt at anthrax poisoning.

''When the anthrax hit, it was like, whoof!'' Dr. Henderson said. ''Sort of like a blow in the stomach.'' The next Monday, Oct. 8, Dr. Anthony Fauci, director of the National Institute for Allergy and Infectious Diseases, received an order from Mr. Thompson's chief deputy, Claude Allen. His mission, Dr. Fauci said, was ''to determine the scientific and technical feasibility of rapidly expanding the production of smallpox vaccine.''

That Friday, a collection of the nation's top scientists and public health officials gathered in Dr. Fauci's office on the campus of the National Institutes of Health in Bethesda, Md. They included representatives from the Food and Drug Administration, the disease control centers and Dr. Fauci's institute, as well as [Dr. Peter B. Jahrling (born 1946)], the Army scientist.

''It was a high state of adrenaline,'' Dr. Fauci recalled. He remembered telling the assembled scientists: ''We have been given a task. We are going to get it done, and we are going to get it done on time. Failure is not an option.'' One concern, he and others said, was that the administration was taking a risk by relying on just one company, Acambis, to make the smallpox vaccine. So by this time, officials from Mr. Thompson's office were already meeting with other vaccine manufacturers, including Merck and Baxter International, which has a 20 percent stake in Acambis, to determine whether they would help in the effort.

''I think you want to diversify the risk,'' [Dr. Peter B. Jahrling (born 1946)] said. ''In a world where planes hit trade centers and the whole thing comes crashing down, I think you probably want to make this stuff in more than one place.'' And while Dr. Fauci's institute was already running tests to see if the existing stockpile of 15 million doses could be safely diluted to create 75 million, everyone at the meeting agreed that was not good enough. By the time it was over, they had agreed to get a draft proposal for buying 300 million doses to [Tommy George Thompson (born 1941)] by Oct. 17.

''We were on a very fast track,'' Dr. Fauci said.

So fast, in fact, that Mr. Thompson did not even wait for the draft to announce his plans. He did not need to, he said. The decision had already been made.

Protection against biological and chemical attack was never very high on lists of national priorities -- until the days after Sept. 11, when it collectively occurred to Americans how vulnerable they were.

An envelope that might (or might not) be filled with ominous powder, the possibility that someone might slip across a border with a jar of viruses, the impossibility of guarding every subway entrance and roof ventilator against a terrorist with a spray can: ''In these times,'' said Dr. Frank Bia, an expert on infectious diseases and microbiology at Yale, ''the unthinkable has become thinkable.''

Here are assessments of the nation's ability to defend itself against germ warfare from a variety of perspectives, covering what has been done, what is being done, where gaps remain, what might be done to fill them -- and how quickly.

Seeking a Better Vaccine

While drugs are useful in treating infections by some potential germ agents like anthrax, vaccines are prized by medical experts because they can prevent infections altogether or, in the case of anthrax, work with antibiotics to combat an infection.

The present anthrax vaccine is not ideal -- it requires six separate injections with an annual booster -- and is in any case reserved for military use.

Only one company, BioPort of Lansing, Mich., is licensed to make anthrax vaccine. But BioPort inherited an antiquated plant that has had trouble meeting Food and Drug Administration standards. Because of these problems, BioPort has been unable to make any vaccine since 1998.

A new anthrax vaccine is being developed by the DynPort Vaccine Company under contract to the Department of Defense.

Last week the Centers for Disease Control and Prevention applied for permission from the F.D.A. to use the stockpiled military vaccine for anyone allergic to antibiotics or who failed to respond to them in the event of anthrax exposure.

''Not only would some people be given just the vaccine but it might be something used in combination with antibiotics,'' said a spokesman for the C.D.C.

Military doctors who have considered the threat of deliberately spread anthrax concluded several years ago that people who may have been exposed to the spores should both take antibiotics and be vaccinated.

In a 1999 article, two military medical experts at the Army Medical Research Institute of Infectious Diseases, Dr. Theodore J. Cieslak and Col. Edward M. Eitzen, recommended that everyone exposed to anthrax in a bioterrorism attack should be given the antibiotics ciprofloxacin or doxycycline and that in addition, ''exposed persons should be immunized.'' At least three doses of vaccine should be given, they wrote, before stopping the antibiotics.

But the Advisory Committee on Immunization Practices, a group of outside experts that advises the C.D.C. on vaccine use, concluded in December that a sustained course of antibiotics was the best protection for people who might have inhaled spores, and that vaccination was not necessary.

''You can do pretty darn well with antibiotics alone,'' said Dr. Charles M. Helms of the University of Iowa, a panel member. ''Particularly if you have limited doses of vaccine to offer, there is no reason to get hung up on the issue of using both.''

But Dr. Helms said there was always the risk that bioterrorists ''would recognize the usual antibiotic and may create an antibiotic-resistant strain.'' He added, ''I think we should clearly have more vaccine available.''

Health experts also worry that large-scale use of antibiotics will hasten the rise of antibiotic-resistant diseases.

Another advantage of a vaccine is that it would allow people to quit the 60-day course of antibiotics much sooner than otherwise.

Three small vaccine manufacturers that lost out in the first round of bidding for a government contract for smallpox vaccines complained today that they could supply the vaccines for a price that large drug makers still in the running say they cannot meet.

The dispute over vaccine pricing reflects a split in the pharmaceutical industry. Some small biological research companies that have done considerable work on smallpox vaccines over the last two years say that they have the viral seed stock to produce the vaccines and could do so quickly and cheaply by renting space at larger laboratories.

Two of the three finalists in the bidding for the vaccine contract, Merck and GlaxoSmithKline, have done little work in recent decades on smallpox vaccines, but have their own big laboratories. The third finalist is a partnership between Acambis, a small British biological research company, and Baxter International, a large pharmaceutical company with many labs.

Tommy G. Thompson, the secretary of health and human services, told reporters on Tuesday evening that the three finalists' bids were ''much higher than I had anticipated.'' He added that he had just warned the Office of Management and Budget that the contract could cost more than the $509 million he had previously predicted.

Mr. Thompson said this evening that the government was not just looking for the lowest bidder, but for the company or companies that could provide the safest, most effective vaccine earliest. ''As far as the price is going, I hope it's going to go down,'' he said.

Louis Potash, the director of vaccine technologies at Novavax, one of seven companies that sought the vaccine contract and were eliminated in a first round of bidding a week ago, said his company could have met the government's target price of about $2 a dose for 250 million doses. ''Our price was around $2 a dose, and when I look at this, I'm sick,'' he said.

An official at Dynport, a company developing a smallpox vaccine under an Army contract, was equally critical. ''We've already produced some, so we know how to do it, we can do it under the budget, under the $509 million,'' said the official, who insisted on anonymity.

The big drug companies ''are going to have to spend a couple months figuring out what to do,'' the official said, adding that Dynport had just been told by the Army to hand over to Merck the viral seed stock it had developed.

Bavarian Nordic, based in Copenhagen, said that it could have provided a different, European kind of smallpox vaccine for $2 or less a dose. But Peter Wulff, the company's chief executive, said that he thought it was ''reasonable that the U.S. would like to take one of the larger pharmaceutical companies.''

The controversy over the price coincides with a partisan rift in Congress over drug makers' liability for the smallpox vaccines. The vaccines had a high rate of side effects before their civilian use ended in 1972. Doctors predict that inoculating every American now would kill hundreds of people and leave another 1,000 or more with brain damage. Drug makers want complete immunity from liability, with any lawsuits directed at the federal government instead.

Representative Billy Tauzin, the Louisiana Republican who is the chairman of the Energy and Commerce Committee, endorsed the drug makers' position in an interview today. Shifting any and all liability to the federal government is the fastest and simplest approach, at least in the short term, he said.

Two Congressional Democrats who have played a leading role for decades in vaccine legislation, Senator Edward M. Kennedy of Massachusetts and Representative Henry A. Waxman of California, are drafting bills to create a federal fund to compensate victims of bioterrorism vaccines. The fund would be modeled on an existing fund to help children hurt by childhood vaccines. As is the case with the childhood vaccines fund, people harmed by bioterrorism vaccines could still sue vaccine makers, but only in cases of gross negligence or fraud.

But Mr. Tauzin said he doubted ''whether in the middle of a bioterrorism crisis we can have a tort reform debate.''

Six months after last fall's deadly anthrax attacks, the Pentagon is scrambling to develop a new generation of vaccines to protect troops and perhaps the American populace from biological weapons. 

But it will be years before any new vaccines are ready. And many experts inside and outside the armed forces say the rush could have been avoided if military planners had not ignored repeated warnings that the vaccine program was woefully inadequate, had not allowed the program to deteriorate for lack of funding and had avoided missteps in the few attempts that were made to develop, test and win approval for vaccines.

"There seemed to be no mechanism so that a good vaccine idea could be manufactured and clinically tested with all the assurances we associate with that," said Franklin H. Top Jr., executive vice president of Medimmune Inc., a Gaithersburg biotech firm. Top chaired a Pentagon-funded panel that produced a highly critical report on the vaccine program just two

months before Sept. 11. "You needed to set up some sort of management structure," he said. "It was incoherent."

The result is that the nation has only two vaccines licensed for use: a smallpox vaccine that was used to immunize every American until the naturally occurring disease began to disappear in the 1970s and a cumbersome anthrax vaccine that even supporters agree should be replaced. 

Supplies of an imperfect plague vaccine have all but disappeared and there are no approved vaccines for a host of other "threat agents," including botulism, tularemia, and many encephalitis viruses and hemorrhagic fevers. The failure to develop vaccines, experts say, has left the nation unnecessarily vulnerable to bioterrorists. 

"Vaccines should be your bedrock; they give you solid protection against solid threats," said [Dr. Donald Scott Burke (born 1946)], director for the Center for Immunization Research at Johns Hopkins University. "The decisions for management for this were badly run and could have been much better. Our vaccine vulnerability is much higher than it needs to be."

The Pentagon declined comment, although Col. Edward M. Eitzen Jr., chief of the U.S. Army Medical Research Institute of Infectious Diseases at Fort Detrick, the Pentagon's research arm for biodefense vaccines, acknowledged, "There's a new environment post-Sept. 11."

The anthrax attacks that killed five people last fall imposed new urgency on military efforts to develop and test vaccines, win approval for vaccines that have languished for years as experimental remedies and explore ways to produce vaccines reliably and in large amounts.

It was not that planners were unaware of biological warfare. Worries that Iraq would use biological agents during Operation Desert Storm prompted the Pentagon in 1991 to distribute 300,000 doses of anthrax vaccine and 8,000 doses of botulism toxoid to U.S. forces in the Persian Gulf.

The Pentagon also had a civilian company under contract to produce limited supplies of vaccines classified as "investigational new drugs" -- remedies that had not obtained FDA approval.

Most of the experimental vaccines, however, were doomed never to win FDA license because the human trials required by law were impossible. Injecting people with experimental vaccines and then challenging them with lethal biological warfare agents is an ethical taboo. Still, experimental vaccines can be administered in emergencies as long as the patient gives written informed consentand accurate records are kept. The Pentagon relied on this regulatory loophole for years and used it during the Gulf War.

"The attitude was, 'We'll never use these vaccines, and if we have to use them, the risk would be so high, the benefit would far outweigh the risk,' " said Army Col. David L. Danley, project manager of the Pentagon's Joint Vaccine Acquisition Program.

But that changed soon after the war, when some veterans complained of unusual illnesses they attributed to their Gulf service and suggested vaccines may have caused them. Investigators found the Pentagon had neither obtained informed consent from all of those injected nor kept accurate records.

By 1992, the Defense Department had all but abandoned the experimental drugs. Henceforth it would seek FDA approval for all its vaccines. This new policy, however, was not accompanied by adjusted regulatory requirements. As a result, the human trial ban became a Catch-22 that curtailed, and, in some cases, halted Pentagon-contracted vaccine research for years.

Nevertheless, in 1994, Pentagon biodefense researchers at Fort Detrick asked the civilian contractors at a now-defunct division of the Salk Institute for Biological Studies to seek FDA approval of experimental vaccine for tularemia, which causes flu-like symptoms and sometimes pneumonia.

"We had terrible misgivings," said Ron Arndt, a former Salk scientist. Researchers hadn't done enough trials or testing of the vaccine and "we never got to first base," Arndt said.

In the mid-1990s, Fort Detrick scientist Michael Langford thought he had devised a way to circumvent the restriction on human trials by demonstrating that botulism toxin could be neutralized in mice using human antibodies. The experiment foundered, however, because Langford could not demonstrate measurable levels of immunity in the mice after one year.

"People may well have been protected," said Langford, now chief scientific officer at Frederick-based DynPort Vaccine Co. "But we couldn't show it." The research was abandoned.

Similarly, a new generation anthrax vaccine has never been approved because of the FDA's arduous and time-consuming requirements for testing and data collection. People "didn't consider that to license [a new vaccine] you would have to to do a number of things, and there was no strong data," said Michael Gilbreath, former medical project officer at the Pentagon's Joint Program Office for Biological Defense who is now a vaccine specialist at the National Institutes of Health. "There was also a lot of evidence of a safety profile with the old vaccine, something that would have taken years to get for a new one."

The old vaccine is impractical because it requires a six-shot injection regime. Pentagon scientists suspected they could get by with fewer shots but they had not done the research "because the attention was always on the new vaccine," said one scientist with direct knowledge of the program.

Closer attention to licensing over the past decade also led the FDA to look more carefully at existing vaccine facilities to see whether they were complying with guidelines. Often they weren't. 

BioPort Corp., of Lansing, Mich., nearly went bankrupt and needed a four-year renovation before the FDA allowed it to resume making anthrax vaccine in January.

Other vaccines disappeared altogether. In 1995, the FDA demanded that Greer Labs Inc., of Lenoir, N.C., retest its plague vaccine, a remedy licensed as a treatment for infectious disease but also used by the armed forces in biodefense. Greer closed the facility after the Defense Department refused to help with funding.

"They lost plague . . . because of really shortsighted decisions," said Alexandria-based consultant James G. Kenimer, a vaccine specialist.

To avoid these problems, Defense planners after the Gulf War proposed that the Pentagon build its own vaccine factory. It would take five to seven years to complete and would cost nearly $400 million, but it would guarantee vaccine supplies.

The idea was approved but then discarded in late 1993 when Congress and the Pentagon decided it was "not cost-effective," said Anna Johnson-Winegar, deputy assistant to the secretary of defense and a leading advocate of the plan.

Instead, the Pentagon in 1997 hired DynPort as an outside contractor for $322 million, giving the company the task of moving as many as 17 different vaccines to licensing. Four years later, after staggering in its initial stages, DynPort has seven vaccines in research. The closest to being licensed is a new smallpox remedy, projected for 2005.

But Top's committee report damned the DynPort approach as "insufficient," and Top called it "a high-risk strategy."

"If you want a vaccine in five to seven years, you go with the big guys," Top said. "If you have 15 years, then you can do it small."

 Meanwhile, Johnson-Winegar is chairing an interagency panel examining the desirability of a government-owned facility, but Defense Secretary Donald H. Rumsfeld told Congress in January "I don't know of a time frame" on the panel's making a decision.

In the meantime, anthrax vaccine research appears finally on track. New generation vaccines are in development again, although FDA licensing is years away, and government scientists are testing the old vaccine with the aim of reducing the shot regime, perhaps beginning in 2004. Studies have also resumed on tularemia and botulism vaccines in hopes that both will be licensed -- tularemia in 2009 and botulism in 2012.

And finally, the FDA is readying a new regulation that will describe how researchers might substitute animal test data for human trials, thus circumventing the regulatory bottleneck that discouraged biodefense vaccine licensing. The first draft of this "animal rule" was written five years ago.