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Issue Number 45
March 1995

New Order on Security Clearances Pending

The White House is putting the finishing touches on a new executive order entitled Access to Classified Information that will govern the federal personnel security program.

In response to Congressional direction in the aftermath of the Ames espionage case, the order includes increased requirements for financial disclosure as a condition of obtaining a security clearance.

But in what is bound to be a disappointment to large numbers of federal employees, enhanced due process procedures for those whose clearances are denied or revoked were not adopted in the new order.

The December 6, 1994 draft of the new executive order, which has not been released to the public, was obtained by S&GB. A copy of the 27 page draft is available for $2 to cover postage and copying.

Increased Financial Disclosure Required

Startled by Aldrich Ames' profligate spending habits and the fact that they went practically unremarked by the CIA, Congress directed the Administration in the 1995 Intelligence Authorization Act to issue new requirements for granting access to classified information, and specifically to require financial disclosure from those employees who have access to "particularly sensitive classified information." (Other employees would also have to grant consent to investigators to search relevant finan cial records.)

The poorly considered Congressional directive threatened to create an enormous cost and management burden whose benefit was questionable, since most traitors are unlikely to declare their financial rewards on their tax returns or to leave them otherwise exposed to scrutiny. Aldrich Ames himself advised Congressional investigators that annual disclosure statements would not make any difference in deterring or detecting espionage (House Intelligence Committee, The Aldrich Ames Espionage Case, App. 3, p. 27).

To reduce the burden of processing the mandated financial disclosures, the Security Policy Board staff, which coordinated the draft of the new Order, considered requiring financial disclosures only from randomly selected employees, or requiring disclosures from everyone but not analyzing them until an espionage case comes to trial, and other variations. January revisions of the draft finessed the issue by leaving it to agency heads to determine the degree of disclosure required.

Due Process Reforms Blocked

Because the denial or revocation of a security clearance is often based on subjective factors (and sometimes on inaccurate information), and because it can have devastating effects on an employee's career, there have long been calls for improvements in "due process," i.e. increased employee opportunities to appeal adverse agency decisions regarding security clearances.

"In a matter as important as a person's livelihood, an individual faced with the loss or denial of a security clearance should have the right to be confronted with the evidence against him or her, the opportunity to challenge that evidence, and the opportunity to present witnesses and evidence in the person's own behalf to an impartial decider," wrote George E. Bushnell, Jr., the President of the American Bar Association in December 20 letters to Abner Mikva, Counsel to the President, and Deputy Attorney General Jamie Gorelick.

Curiously, contractor employees do have the right to such an evidentiary hearing when a (non-special access) clearance is denied, but government employees do not, although they are still supposed to receive written notification and an opportunity to reply in writing.

"Despite the fact that DoD is conforming with policy, the system may be viewed as unfair from the perspective of DoD personnel, who receive fewer protections" than contractor employees, acknowledged a 1993 study prepared by the Department of Defense Personnel Security Research Center (PERSEREC) in Monterey, California.

But PERSEREC, which does careful and compassionate research in the field, also indicated that providing evidentiary hearings for government employees may not make a practical difference in the outcome of contested cases. Specifically, the study found that the same proportion of adverse clearance decisions for both government and contractor employees were overturned on appeal in 1992-- about 22%-- whether full hearings were granted or not. Moreover, the full hearing process was ten times more expensive and took far longer. PERSEREC recommended various other steps to increase the fairness of the adjudicative process.

Federal employee unions, representing hundreds of thousands of members, universally contend that fairness dictates that some form of oral hearing should be granted when clearances are withheld. (See the recently published hearing record "Due Process in Security Clearance Determinations", House Judiciary Committee Serial No. 56, May 5, 1993.)

Likewise, the Joint Security Commission, which opposed full evidentiary hearings, affirmed that every government employee should at least have "an opportunity to appear personally" before an adjudicative authority that is considering whether to deny or revoke his clearance. (Redefining Security, p. 57)

But government agencies strongly resisted allowing government employees even to make a personal appearance to defend themselves, nevermind allowing them to confront their accusers or to present and cross examine witnesses.

With typically syncopated logic, the National Reconnaissance Office argued that personal appearances by employees would undermine the supposed objectivity of the security clearance process: "The physical presence of the individual at the hearing introduces certain subjective factors which cannot be easily evaluated," according to the NRO. "For instance, the individual's personal powers of persuasion, debating skills, physical appearance, level of intelligence and other similar factors, although irrelevant, could not be excluded from the appeals decision process." The basic procedural safeguards of American jurisprudence, in other words, can not be tolerated.

The Security Policy Board, which so far has taken pains to insulate itself from anyone who advocates a larger public interest, ignored the Joint Security Commission in this case, as well as the ABA and the employees' unions, and yielded to pressures from the NRO and the military services against expanding due process provisions for government employees.

In fact, the new draft includes a waiver provision (borrowed from the CIA) which grants senior officials authority to totally deny even the due process procedures that currently exist if they believe national security warrants such a denial.

Proponents of individual rights can only be thankful that at least the due process rights of contractor employees-- which were granted in 1960 by President Eisenhower-- are apparently not rescinded by the new draft order.

How the Security Policy Board Works

The new draft order is among the first achievements of the new Security Policy Board (SPB) staff, and has been presented as evidence that "the system works." According to an internal staff memorandum that was obtained by S&GB, "The SPB structure has demonstrated expediency in coordinating and finalizing [the draft order]. That E.O. was successfully handled from start to finish ...within 60 days.... In sum, the process works as envisioned."

The way the process works, however, is in secret. And by excluding the voices of the public at large, including many thousands who will be directly affected by the Board's decisions, the Board has produced a draft executive order that does not even rise to the level of the conventional wisdom (as represented by the Joint Security Commission) and instead upholds some of the narrowest and most self-serving of agency views.

One hesitates to imagine what the Board will do to classification management or controls on "sensitive but unclassified" information, which are two other policy items on its proposed agenda.

"The word we hear all the time," said SPB staff member Pete Grau at a February 9 luncheon meeting of the National Classification Management Society, "is that we want to take over this, and we want to take over that. We're twenty people in a DIA space in Crystal City. I mean, we're not taking over the world. For goodness' sake." In fact, Mr. Grau added for good measure, "Everybody wants to take over the Security Policy Board."

Old Satellite Imagery Declassified

President Clinton signed an executive order in late February that will lead to the declassification of more than 800,000 spy satellite photos collected between 1960 and 1972.

"This is the first declassification of national security satellite imagery," said Vice President Al Gore at a February 24 ceremony at CIA Headquarters announcing the decision, adding that "It won't be the last."

The Vice President emphasized that "This release today is part of a process" of opening up classified resources to broader civilian applications. The new executive order defines an objective of "making available to the public as much imagery as possible consistent with the interests of national defense and foreign policy."

The declassification action is the result of a process begun nearly three years ago by then-DCI Robert Gates (see S&GB 42). The old archived imagery, which is widely believed to have great value for environmental research, is the product of the first generation of spy satellite technology, and is far behind the current state of the art.

Over the next eighteen months, the imagery will be transferred to the National Archives where it will be publicly accessible. Copies will be available for purchase from the EROS Data Center in Sioux Falls, SD, and will also become available over the Internet (URL address: http://edcwww.cr.usgs.gov/dclass/ dclass.html). Fact sheets providing further details of the declassification are available from S&GB.

NISP Tied Up in Knots; Can't Be Implemented

Due to a first rate bureaucratic snafu, it may be impossible to legally implement the National Industrial Security Program (NISP), defense and industry officials say.

The NISP was officially established by President Bush to provide a "single, integrated, cohesive" security program for protecting classified information in industry. It was intended to replace numerous conflicting security standards and, in particular, to supersede the Industrial Security Manual. An initial edition of the NISP Operating Manual (NISPOM), which contains the new security standards, was completed in early October 1994, well behind schedule.

But now it may be illegal to implement the new standards, officials say, because the binding Federal Acquisition Regulation (FAR) says that contractors are required to adhere to the old Industrial Security Manual.

Even though President Bush instructed the Defense Department back in 1993 to seek an appropriate amendment to the FAR which would permit use of the NISPOM (see EO 12829, sec. 202e), nobody at the Pentagon ever got around to carrying out that instruction. The process of amending the FAR, which remains to be accomplished, is considered to be arduous and time-consuming.

The alternative option of individually modifying each of the thousands of classified contracts with industry is unrealistic. "If you were to amend each contract to adopt the provisions of the NISPOM," said a Pentagon official, "that alone would cost more money than we are now spending on industrial security altogether."

Needless to say, the NISP process was supposed to significantly reduce security costs, not increase them. (A 1990 NISP Report to the President notoriously estimated that the cost of protecting classified information in industry reached $13.8 billion in 1989.)

Still, the NISP is such an intrinsically good idea, according to determinedly optimistic security officials, that somehow or other the Program is going to work out. "Even if we keep on being bunglers," said one, "market forces are gonna make it turn out alright."


Secrecy and Government Bulletin is written by Steven Aftergood and published by the Federation of American Scientists, 307 Massachusetts Avenue N.E., Washington, DC 20002. For more information call (202)675-1012 or send email to [email protected]


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