Secrecy and Candy, Expensive Habits

“The United States is the world’s largest candy consumer,” reported an article yesterday in the online Christian Post (“Halloween Treats Can Be Tricky for Parents,” October 19).  And that may well be true.

But the article went on to state that the U.S. spent “more than $8.8 billion on various sweets in 2009, according to the Information Security Oversight Office.”  That is a dizzying misunderstanding.

The Information Security Oversight Office (ISOO), led by director John P. Fitzpatrick, is the government agency responsible for oversight of the national security classification system.  It does not gather data on candy consumption.  (As far as we know.)  The $8.8 billion figure — which must be far more than Americans actually spend on candy [not so; see correction below] — was presented in ISOO’s 2009 report on security classification costs as the total cost within government (excluding industry) for protecting classified information.

In 2010, the annual classification cost figure reported by ISOO reached $10.17 billion.

Update / Correction: It appears that Americans spend even more on sweets than on secrecy, including $13 billion per year on chocolate alone, according to the California Academy of Sciences (h/t Jameel Jaffer). And the National Confectioners Association reported (.ppt) retail candy sales of $29.3 billion in 2009.

White House Nominations to Oversight Panels Lag

“I would be remiss if I did not express my concern over this Administration’s inexplicable failure to fully appoint and staff the privacy oversight board that we created as part of our 2004 act [on intelligence reform],” said Sen. Susan Collins (R-ME) at a hearing last week.

She was referring to the Privacy and Civil Liberties Oversight Board (PCLOB) that was established by Congress to independently oversee the conduct of information sharing within government and to ensure the protection of privacy and civil liberties interests.

“I am truly baffled by the Administration’s slowness in this regard because it is an important check as we seek to expand information sharing,” Sen. Collins said on October 12.

A coalition of public interest groups recently asked the President to complete the process of nominating members to the PCLOB.  “We urge the administration not to delay any further in nominating individuals for the remaining three slots on the Board, so that we may proceed to Senate confirmation and finally allow the PCLOB to begin its important work,” they wrote in an August 25 letter to the President.  (Two nominees to the Board, James X. Dempsey and Elisebeth Collins Cook, were named by President Obama in December 2010.)

Background on development of the Board was provided by the Congressional Research Service in “Privacy and Civil Liberties Oversight Board: New Independent Agency Status.”

The White House has also lagged in appointing five new members to the nine-member Public Interest Declassification Board, as the terms of its previous nominees have expired.  The four remaining PIDB members listed on the PIDB website are congressional appointees.

The PIDB was directed by the White House in 2009 to help “design a more fundamental transformation of the security classification system.”  But the PIDB has not yet reported its recommendations, and the loss of its White House-appointed members will tend to complicate the completion of that task.

“It is not an easy or fast process to find those with the appropriate background willing to serve (to include securing a clearance, etc.),” said one official, who added that “vacancies have been a challenge for the PIDB from the start.  I am not sure it has ever been without a vacancy.  While this is not without consequence, the Board has nonetheless remained balanced and effective.”

Geospatial Intel Agency Releases Declassified Budget Docs

The National Geospatial-Intelligence Agency (NGA) hired 600 to 700 new employees each year between 2005 and 2008, newly released budget documents indicate.  Still, “the coming wave of retirement… presents significant risks that the program will lose valuable institutional knowledge and critical skills and capability.”

These observations were presented in NGA’s annual budget justification materials for fiscal years 2009, 2010 and 2011 (pdf).  Unclassified excerpts of the budget documents were released by NGA last week in response to Freedom of Information Act requests from the Federation of American Scientists.

NGA is an intelligence agency that provides all manner of imagery, mapping and other “geospatial intelligence” (GEOINT) products for national security as well as other applications.  It is funded through the National Intelligence Program (NIP) and also through the Military Intelligence Program (MIP).

NGA products “support mission planning, mapping, environmental monitoring, urban planning, treaty monitoring, safe navigation, management of natural resources, homeland defense planning, emergency preparedness, and responses to natural and manmade disasters worldwide,” the budget documents say.

Only a fraction — perhaps 10% or so — of the classified NGA budget documents survived the declassification process and were released under FOIA.  Some of the coherent themes that emerge from the declassified documents include the transition to a new Agency headquarters at Fort Belvoir, which was completed last year, and the continuing integration of commercial satellite imagery into the NGA product line.  The Agency’s classified programs and activities (and spending levels) were not disclosed.

But many unfamiliar fine details of Agency operation and management were described.  The National GEOINT Committee was established as an Intelligence Community body chaired by NGA to promote cross-discipline collaboration on GEOINT issues.  Beginning in FY 2010, a program or process called “LEAR JET” was introduced as “a CI [counterintelligence] network monitoring tool to combat the cyber insider threat.”  And so on.

These budget justification materials are the first such documents to be released by NGA.  The move invites the question:  Why did the Agency release them?  (This in turn is a subset of a broader question:  Why and how does secrecy policy ever change?)

In this case, several factors leading up to release can be identified.  First, there was a “demand” for the documents; they would not have been spontaneously released.  Second, the Agency might have attempted to withhold them anyway, but a ruling by Judge Reggie B. Walton in a 2006 lawsuit against the National Reconnaissance Office found that such documents are subject to the FOIA.

But even that might not have been enough without an indispensable measure of good faith on the part of the Agency.  “NGA wants to make it easy for the public to understand who we are,” said NGA Director Letitia Long earlier this month.

Intelligence Community Anticipates Budget Cuts

U.S. intelligence agencies are anticipating budget reductions of billions of dollars, said Director of National Intelligence James Clapper yesterday.  He said he had just submitted a draft budget to OMB (presumably for FY 2013) that involved “double digit” cuts to the intelligence budget over ten years.  See “U.S. Spies Facing Tens of Billions in Budget Cuts” by Sharon Weinberger, Wired Danger Room, October 17.

“In the last 10 years,… all we had to do essentially was preside over handing out more money and more people every year,” DNI Clapper told a joint hearing of the House and Senate Intelligence Committees last month.

But “now we’re in a ‘we’re-running-out-of-money-so-we-must-begin-to-think’ mode,” he said.  “I think that is serving as the stimulus, if you will, to do some more creative thinking. I think this would do wonders in terms of saving money, efficiency, and promoting integration.”

“Everything we do in intelligence… is not of equal merit. Some things are more valuable than others, particularly as we look to the future. I think it’s very important to try to protect that valuable and most valuable resource we have, which is our people. We must continue some way of hiring every year, which we didn’t do in many cases during that seven-year hiatus period [in the 1990s]. We must try to sustain healthy R&D for the future. And I think we have to be rather cold-hearted and objective about the real contribution the various systems make. So that’s kind of the approach we’re going to take,” DNI Clapper told Congress last month.

“I don’t want anyone to be under the mistaken impression that we are going to sustain all the capabilities we have today, because we’re not,” he said.

Documents shed important light on Viktor Bout case

By Matt Schroeder

As the trial against alleged arms dealer Viktor Bout gets underway, we thought the following documents from the case might be of interest:

(1) Handwritten notes that Bout reportedly took during the meeting in Thailand. The notes include short-hand references to various weapons, including “AA” or anti-aircraft (believed to be a reference to Igla missiles), “AK-47,” “UAV” (unmanned aerial vehicle), 10,000,000 “7,62 x 54” (ammunition used in Russian Dragunov sniper rifles and PKM machine guns), RPG-7 and RPG-22 rocket launchers, and “AG-17” – presumably a reference to the AGS-17 30 mm automatic grenade launcher. Some of the notes are more cryptic, including references to 500 “60 mm”, 200 “82 mm” and 40 “120 mm.” Presumably, these are references to mortars since 60mm, 82mm and 120mm are all common calibers for mortar rounds.

(2) A print-out of an email that Bout allegedly sent to one of the DEA’s confidential sources. This email is mentioned prominently in other court documents made public shortly after Bout was arrested. Oddly, the email was reportedly sent from an address linked to an account set up by a “Victor But.” Use of an alias so close to his own name when setting up an email account intended for negotiating arms transfers seems uncharacteristically careless for Bout.

(3) Excerpts from pamphlets on Soviet-era cargo planes that Bout allegedly recommended for delivering weapons to the FARC. According to investigators, the weapons were to be air-dropped from these planes. The same delivery method was used by the orchestrators of a 1999 plot to divert to the FARC 50,000 Jordanian assault rifles intended for the Peruvian military. The traffickers managed to drop 10,000 of the rifles into FARC-controlled areas of Colombia before the government of Jordan learned of the scheme and canceled the deal. In their book, Merchant of Death, Doug Farah and Stephen Braun suggest that Bout was linked to the diversion. They claim that the plane used to deliver the rifles “…belong[ed] to one of Bout’s front companies…”

(4) One of several articles on the FARC that describes their criminal activities.

(5) A map of South America that Bout reportedly used in discussions about the locations of American radar stations.

(6) Technical documents on anti-tank missiles that Bout allegedly offered to sell to the FARC. The documents were reportedly taken from a memory stick provided to the DEA during the sting. It appears that missile on offer was the AT-4 Spigot, a wire-guided Russian missile system that has a maximum range of 2000-2500 meters and can penetrate up to 400-460 mm of armor, depending on the type of missile used.

The documents (and the above assessments) were originally posted on the Strategic Security Blog in 2009. The original post, which contains additional analysis, is available here.

Ruling Implies That Espionage Act Could Cover Unclassified Info

Updated below

A court ruling that interpreted the term “national defense information” expansively to include unclassified, non-governmental information could open the door to a new series of anti-leak prosecutions under the Espionage Act, warned a petition that was filed in the Ninth Circuit Court of Appeals this week.

There is no statute that outlaws the mishandling of “classified information” generally.  That term is not used in the Espionage Act (18 USC793), which instead prohibits the unauthorized disclosure and transmission of information “relating to the national defense.”  To fall within the scope of the Espionage Act, information must pertain to the national defense and, previous court rulings have explained, it must also have been “closely held by the United States government.”  In practice, this limitation has almost always meant that only classified U.S. government information can be subject to the Espionage Act.

But in the case of Dongfan Greg Chung, who was convicted on charges of economic espionage, a court ruled (and an appeals court last month upheld) that Chung would be sentenced under the guideline for “gathering national defense information” even though none of the information he handled was classified or even held by the government.

“For the first time in any reported case, the panel decision construes the phrase ‘national defense information’ [in the sentencing guideline] to include unclassified material produced by, and in the possession of, a nongovernmental entity,” wrote attorney John D. Cline in an October 10 petition for rehearing.  “If permitted to stand, the panel decision will dramatically expand the scope [of this sentencing guideline].”

Furthermore, “The decision logically extends to the parallel language (‘relating to the national defense’) of [18 USC 793] as well, and it thus invites prosecutions under the Espionage Act for mishandling unclassified, nongovernment information, as long as that information has some bearing on the national defense and has not been made public,” wrote Mr. Cline, an experienced litigator of national security cases.

In affirming Mr. Chung’s conviction, an appeals court last month said the National Defense Information guideline was applicable in this case.  “Defendant [Chung] gathered and gave to Chinese officials nonpublic information related to the X-37 space vehicle, the Delta IV Rocket, the F-15 Fighter, and the Chinook Helicopter.  When transmitting that secret information, which related to the national defense, Defendant had the intention to advantage China,” said the September 26 appeals court ruling (appended to the Petition).

But that description “is wrong in two crucial respects,” Mr. Cline argued.  “First, most of the material to which the panel refers was not ‘secret’ in any respect, and none of it constituted a government secret.  None of the material was classified at the Secret (or any other) level, nor was there evidence that it was otherwise ‘closely held by the United States government’.”  (Moreover, “the record contains no evidence that Chung ‘transmitted’ any ‘secret’ material to China,” he wrote.)

“Every reported decision applying [the national defense information sentencing guideline] has involved classified information, as has virtually every § 793 [Espionage Act] prosecution for the last sixty years,” the petition said.  “The panel decision marks a sharp and unjustified departure from this unbroken line of authority interpreting [the sentencing guideline] and § 793.”

The court’s expanded interpretation of “national defense” information “requires correction by the en banc Court, before the government seizes on it as a basis to expand the scope of the Espionage Act and the harsh sentencing guidelines that accompany it.”

“The issue has particular significance now,” the petition stated.  “The government has recently launched a spate of § 793 prosecutions against persons inside government who allegedly leaked classified information to reporters.  That use of the Espionage Act is itself controversial.  Armed with the panel decision, however, the government can now use § 793 and its accompanying sentencing guidelines to prosecute nongovernment persons who disclose (or even have unauthorized possession of) nongovernmentunclassified material, as long as a grand jury concludes that the person acted ‘willfully,’ the material is nonpublic, and it has some relationship to the national defense.”

“If such a dangerous and unprecedented expansion of the Espionage Act… is to be undertaken, Congress and the Sentencing Commission should do so — not the courts,” the petition concluded.

Update: The government filed its opposition on November 22, and on December 16 the Court of Appeals denied the petition.

Open Source Center Views China’s Huawei Technologies

The DNI Open Source Center produced a report this month profiling Huawei Technologies Co. Ltd., China’s largest telecommunications company.  See “Huawei Annual Report Details Directors, Supervisory Board for First Time,” October 5, 2011.

The report is based primarily on Huawei’s own website, which released new details earlier this year about the company’s management team.  “The release of this information may be intended to counter media accusations that the company lacks transparency,” the OSC said.

The OSC profile of Huawei was reported in “Chinese Telecom Firm Tied to Spy Ministry” by Bill Gertz, Washington Times, October 11.

The Open Source Center is a component of the Office of the Director of National Intelligence and is managed by the Central Intelligence Agency.  Although the Huawei report is unclassified and derived exclusively from public sources, the CIA does not permit public access to this report or similar OSC products on an authorized basis.

New Report on Iran’s Nuclear Program

Iran’s controversial nuclear program has been front and center on the international stage for more than eight years. Despite negotiations, sanctions, and political tug-of-war, the United States and its allies have yet to tame Iran’s atomic phoenix. At the center of this nuclear standoff is Iran’s controversial uranium enrichment program and efforts to obtain full nuclear fuel-cycle capabilities. To alleviate concerns about the intended nature of these activities, the United Nations Security Council (UNSC) has demanded -through six resolutions – that Iran suspend enrichment activities as well as construction of a heavy-water research reactor. Yet, Iran has opted to pay no heed to these resolutions and despite numerous proposals from different sides, the stalemate persists.

Dr. Charles D. Ferguson, President of the Federation of American Scientists, and Dr. Ali Vaez, Fellow for Science and Technology, authored a FAS report (PDF) analyzing the outstanding issues regarding Iran’s nuclear program, and provide recommendations to the major stakeholders in this debate including Iran, the United States, Russia and the International Atomic Energy Agency (IAEA).

Additionally, the report proposes a multipronged approach to resolving this deadlock, including enhanced safeguards and positive-sum diplomacy with incentives for Iran and other aspiring nuclear states.

Read the report Towards Enhanced Safeguards for Iran’s Nuclear Program (PDF).

Letter Urges Super Committee to Reduce Nuclear Weapons Spending

FAS joined 48 organizations in signing a letter to United States Representatives asking them to cosign Representative Markey’s letter to members of the Super Committee. Markey’s letter urges Super Committee members to increase U.S. security by reducing spending on outdated and unaffordable nuclear weapons programs.

Additionally, this support letter offers specific suggestions to Congress on how to scale back new nuclear weapons programs and help close the budget deficit. Continue reading

Presidential Directives Withheld From White House Website

Last Friday, White House officials made at least two public references to Presidential Policy Directives (PPDs).  PPD 1 was cited in a new executive order on computer security and PPD 8 was cited in a White House blog posting on disaster preparedness.  Each Directive is a significant expression of national policy.  Neither one is classified.  And yet neither of them — nor any other Obama Presidential Policy Directive — can be found on the White House website.

The White House decision not to make these documents available is a stark reminder of the incoherence of the Obama Administration’s transparency policy, and its inconsistent implementation.

“Information maintained by the Federal Government is a national asset,” President Obama wrote in his January 21, 2009 memo on transparency and open government. “My Administration will take appropriate action, consistent with law and policy, to disclose information rapidly in forms that the public can readily find and use. Executive departments and agencies should harness new technologies to put information about their operations and decisions online and readily available to the public.”

But as the withholding of the presidential directives illustrates, not even the Obama White House itself complies with this policy, and so its impact in the farther reaches of the executive branch has been muted.  Those who seek access to Presidential Policy Directives must look elsewhere.

“I think it’s general policy that we can release a detailed summary of [PPDs],” said deputy national security adviser Michael Froman at a September 22, 2010 White House press briefing, “but as I understand the policy, [it is] not to release the PPDs themselves.”

In accordance with this PPD non-disclosure policy, the Department of State last month denied a FOIA request from Gavin Baker of OMB Watch for a copy of PPD 6 on global development policy.  The document was exempt from release, the State Department said, based on “the Presidential communication privilege.”

On the other hand, the full text of PPD 8 on national preparedness has been made available online by the Department of Homeland Security, despite the White House refusal to release it directly and notwithstanding any “Presidential communication privilege.”

Where secrecy has prevailed, unauthorized disclosures have also helped to fill the void in public access.  PPD 1 on the Organization of the National Security Council System was obtained from a confidential source shortly after its issuance in February 2009.  (The National Security Staff did release a copy of the directive after it was made available online.)  PPD 2 on Implementation of the National Strategy for Countering Biological Threats was obtained by the website Public Intelligence through an inadvertent disclosure on a server for U.S. military personnel.

Although no Presidential Policy Directives have been published on the White House website, one Obama Presidential Study Directive — PSD 10 on preventing mass atrocities — was in fact published by the White House last August.  This otherwise unremarkable step tends to confirm that there is no serious question of principle or privilege at stake in the decision to publish such directives.  Instead, the Obama Administration’s broader anti-transparency policy on presidential directives appears to be driven by an old-fashioned imperative of secrecy for its own sake.