MAY 11, 2000

Mr Chairman, Mr. Vice Chairman, and Members of the Committee, I am pleased to appear before you today to discuss State Department security issues of concern to this Committee. I will be as forthcoming as possible, given the sensitive and classified nature of aspects of the information requested by the Committee.

Concerning the missing State Department laptop computer, I want to ensure the Committee that the FBI's investigation of the missing computer is being afforded the highest FBI priority. As you are aware, I am prohibited from discussing the matter further as it is the subject of a pending criminal investigation.

The Committee has asked that I comment on the sufficiency of State Department security procedures in connection with the bugging of the 7th floor conference room by the Russian Foreign Intelligence Service. The FBI was asked by State Department in late August 1999, to conduct an environmental technical survey, in other words a review of neighboring properties to determine whether a hostile intelligence service might have acquired such property. This survey was specifically requested in connection with pending renovations at the Department. We were also pleased to have our Washington Field Office work with the Office of Diplomatic Security in 1998 to survey access to State Department by Russian intelligence officers. Beyond these narrow surveys, conducted with or at the request of State Department, the FBI was not called upon to review physical security procedures at the Department. Those matters were, however, addressed by the Office of the Inspector General in its September 1999, report.

The FBI believes the State Department acted swiftly during August 1999, to limit the number of unescorted foreign nationals visiting State Department following the discovery of the listening device in the seventh floor State Department conference room. On August 23, 1999, the State Department implemented policy that requires all foreign nationals to be escorted within the building at all times. As noted by the Committee, there is an exception for foreign media correspondents issued unique but permanent badges that allow unescorted entry, without passing through metal detectors.

There is reportedly an understanding the media is not to go above the second floor, where the press office is located. This exception affords unescorted access to the State Department by a number of known foreign service intelligence officers. The FBI does not customarily provide other agencies, to include the State Department, with lists of intelligence officer identities, to protect both sensitive cases and sources, unless there is specific reason or if asked. If asked, the FBI would be willing to identify to the State Department permanent media badge holders identified as hostile intelligence officers so that their access could be restricted or their visits monitored.

Historically, hostile intelligence services have utilized media cover for intelligence activities in the United States. However, because intelligence officers under media cover do not have diplomatic immunity, they normally perform in-depth but overt intelligence collection. Clandestine handling of agents or other covert activity is usually assigned to intelligence officers under diplomatic cover. In addition to overt intelligence collection, intelligence officers under correspondent cover have been engaged in active measures campaigns designed to support their national interests and to influence United States policy makers. Active measures campaigns take the form of oral persuasions or the dissemination of written information favorable to their national policy--both of which are facilitated by intelligence officers under media cover. Hostile intelligence services use active measures as an inexpensive and relatively low-risk way to advance their international positions.

Over the last fifteen years, no foreign intelligence service officer under media cover has been declared persona non grata for engaging in espionage activities. This is attributed, as I previously noted, to the fact that these officers are not accredited diplomatic immunity, and thus normally do not engage in clandestine agent-handling activities subject to interdiction.

With respect to your inquiry regarding the use of laptop computers, the FBI uses only specified laptop computers that carry appropriate safeguards for classified data, to include both use of passwords and encryption. These laptops are maintained by automation personnel and are available for short period loans to FBI employees. The laptop computers are periodically examined and the stored information purged; when they are turned in by one employee, and before being loaned to another individual, the hard drive is purged and reprogrammed. The laptop computers are also subjected to an audit and forensic checks to ensure they have not been compromised.

The FBI views the protection of classified information in a computer environment as a problem that is not unique to the State Department. It is a security issue that will continue to present problems to all members of the Intelligence Community.

1. Has the State Department done everything it possibly can since the chair rail incident to minimize security problems and threats?

2. Does the gentlemen's agreement of no enforcement that badged foreign press officials should not have access to Main State without escorts pose a serious security threat?

3. The State Department's IG report of September 1999 cites the following "A recent FBI report stated that suspected foreign intelligence were granted unescorted access. The policy of unescorted access poses a significant security vulnerability etc etc." Has that problem been totally addressed at the State Department? Are there any foreign fellowship programs that result in foreign nationals being allowed in the State Department unescorted?

4. Shouldn't the State Department be vetting the foreign correspondents building access badge requests to ascertain if they are in fact intelligence officers of a foreign power before granting this privilege?

5. What is the Bureau's experience with foreign press officials using media positions as cover for espionage activities here in the USA?

6. What is the record of foreign press officials being declared persona non grata (PNG) over the last 15 years for engaging in forms of espionage using their media positions as cover?

7. How bad were State Department security procedures that allowed a Russian intelligence officer or its recruit to enter a seventh floor conference room at the State Department, and physically alter the structure of the room and implant a listening device?

8. How does the Bureau treat the use of lap tops for classified data? Is there use controlled and are user sign sheets mandated? Must they be pass worded?