This marked the end of his formal relationship with the government of the United States and generated considerable controversy regarding whether the treatment of Oppenheimer was fair, or whether it was an expression of anti-communist McCarthyism.

These associations were known to Army Counterintelligence at the time he was made director of the Los Alamos Laboratory in 1942 and chairman of the influential General Advisory Committee of the AEC in 1947.

The proceedings were initiated after Oppenheimer refused to voluntarily give up his security clearance while working as an atomic weapons consultant for the government, under a contract due to expire at the end of June 1954.

On December 16, 2022, United States Secretary of Energy Jennifer Granholm nullified the 1954 decision, saying that it had been the result of a "flawed process" and affirming that Oppenheimer had been loyal.

[17] Oppenheimer rejected the overture, but failed to report it until August 1943, when he volunteered to Manhattan Project security officers that three men at Berkeley had been solicited for nuclear secrets on behalf of the Soviet Union, by a person he did not know who worked for Shell Oil, and who had communist connections.

[18] In any case, Groves had considered Oppenheimer too important to the ultimate Allied goals of building atomic bombs and winning the war to oust him over any suspicious behavior.

[20][21] The McMahon Act that established the Atomic Energy Commission (AEC) required all employees holding wartime security clearances issued by the Manhattan Project to be investigated by the FBI and re-certified.

[22] This provision had come in the wake of the February 16, 1946 announcement in Canada of the arrest of 22 people exposed as a consequence of the defection the previous September of Soviet cipher clerk Igor Gouzenko.

[22] AEC chairman David Lilienthal and Vannevar Bush discussed the matter with Truman's sympathetic aide Clark Clifford at the White House.

[30]This came on the heels of controversies about whether some of Oppenheimer's students, including David Bohm, Ross Lomanitz and Bernard Peters, had been Communists at the time they had worked with him at Berkeley.

[50] On November 7, 1953, J. Edgar Hoover was sent a letter concerning Oppenheimer by William L. Borden, former executive director of Congress' Joint Atomic Energy Committee.

In the letter, Borden stated his opinion "based upon years of study, of the available classified evidence, that more probably than not J. Robert Oppenheimer is an agent of the Soviet Union.

The evidence indicating that: (a) He was remarkably instrumental in influencing the military authorities and the Atomic Energy Commission essentially to suspend H-bomb development from mid-1946 through January 31, 1950 [the date of President Truman's public announcement that the United States, in answer to the new Soviet atomic bomb, would seek to build an H-bomb] (b) He has worked tirelessly, from January 31, 1950, onward to retard the United States H-bomb program; (c) He has used his potent influence against every postwar effort to expand capacity for producing A-bomb material; (d) He has used his potent influence against every postwar effort directed at obtaining larger supplies of uranium raw material; and (e) He has used his potent influence against every major postwar effort toward atomic power development, including the nuclear-powered submarine and aircraft programs as well as industrial power projects.

[62][63][64] The other members of the hearing panel were Thomas Alfred Morgan, a retired industrialist, and Ward V. Evans, chairman of the chemistry department at Northwestern University.

[68] The AEC's former general counsel Joseph Volpe had urged Oppenheimer to retain a tough litigator as his attorney; Garrison's demeanor was gentle and cordial, but Robb was adversarial.

[71] As outlined in the 3,500-word Nichols letter, the hearing focused on 24 allegations, 23 of which dealt with Oppenheimer's Communist and left-wing affiliations between 1938 and 1946, including his delayed and false reporting of the Chevalier incident to authorities.

Under cross-examination by Robb, who had access to top-secret information such as surveillance recordings, Oppenheimer was "often anguished, sometimes surprisingly inarticulate, frequently apologetic about his past and even self-castigating.

"[74] Much of the questioning of Oppenheimer concerned his role in the hiring for Los Alamos of his former students Ross Lomanitz and Joseph Weinberg, both members of the Communist Party.

[90] Starting on June 7, 1954, led by physicist Fred Ribe, 494 scientists at Los Alamos Scientific Laboratory signed a petition in protest of the security board's decision.

[92] The petition acknowledged that it was up to the government to decide who they wanted as advisors, but said that "it is inexcusable to employ the personnel security system as a means of dispensing with the services of a loyal but unwanted consultant.

"[92] The petition then asserted that "this poorly founded decision ... will make it increasingly difficult to obtain adequate scientific talent in our defense laboratories.

[116] Time magazine literary critic Richard Lacayo, in a 2005 review of two new books about Oppenheimer, said of the hearing: "As an effort to prove that he had been a party member, much less one involved in espionage, the inquest was a failure.

"[117] In a lengthy analysis of the security case published in the Stanford Law Review in 1990, Cold War historian Barton J. Bernstein posits that the remarkable thing about Oppenheimer was that he was ever able to hold a high-level security clearance in the first place, given his past associations and record of evasions, and that he had been given special treatment and protection by the U.S. government to allow him to work in the classified nuclear area for as long as he did.

[123] Over the years, the physicist Fred Ribe, who had organized the 1954 petition, worked towards having the Oppenheimer charges undone,[124] as did other scientists at the Los Alamos National Laboratory.

[128][129] Despite the assistance of Senator Jeff Bingaman of New Mexico, their effort was rebuffed by two secretaries of energy in the Obama administration, Steven Chu and Ernest Moniz.

[130][128][131] Tim Rieser, a senior congressional aide to Senator Patrick Leahy of Vermont, played a key role in moving the action through the federal government.

[131][128] On December 16, 2022, Jennifer Granholm, the Secretary of the United States Department of Energy (DOE) – the successor organization to the AEC – vacated the 1954 revocation of Oppenheimer's security clearance.

Security clearance adjudication proceedings necessarily depend on sensitive judgments regarding the credibility of oral testimony and other evidence best evaluated within its own context.

[138] Haakon Chevalier fictionalized the affair, and his self-exculpating view of the whole preceding history, in the roman à clef The Man Who Would Be God in 1959; the Oppenheimer-like protagonist was renamed "Dr. Sebastian Bloch".

Oppenheimer objected to the play, threatening suit and decrying "improvisations which were contrary to history and to the nature of the people involved", including its portrayal of him as viewing the bomb as a "work of the devil".