Costs of Secrecy Skyrocket to $9 Billion

08.25.06 | 2 min read | Text by Steven Aftergood

The annual financial costs attributable to the national security classification system reached a record high of $9.2 billion in 2005 according to a new report (pdf) from the Information Security Oversight Office (ISOO).

Classification-related costs include not merely the direct costs of classifying information, which are modest, but also the derivative costs of the personnel security clearance system, physical security for classified material, classified computer security, and more. Most of these costs are incurred within government, but some are due to the handling of classified information within industry.

“The Government cost estimate for FY 2005 is $7.7 billion, which is a $420 million, or 5.8 percent increase above the cost estimates reported for FY 2004,” the Information Security Oversight Office reported. “The industry estimate is up by $696 million.”

“This makes the total 2005 cost estimate for Government and industry $9.2 billion, which is $1.2 billion more than the total FY 2004 cost estimate for Government and industry.”

These figures do not include classification cost estimates for the Central Intelligence Agency, because the CIA has classified its cost data.

See “2005 Report on Cost Estimates for Security Classification Activities,” Information Security Oversight Office, August 2006.

If the classification system were functioning properly to enhance national security, these billions of dollars might all be money well spent. But there is abundant reason to doubt that such is the case.

“There’s over 50 percent of the information that, while it may meet the criteria for classification, really should not be classified in terms of what we lose,” said ISOO director William Leonard at an August 24, 2004 hearing of the House Government Reform Committee.

“The price we pay for classification outweighs any perception, any advantage we perceive we gain,” he told the Committee.

The Information Security Oversight Office, which was established by Executive Order, reports to the President on national security classification policy.

Mr. Leonard criticized the Washington Post in a remarkable letter to the editor today for reporting “irrelevant” negative information about the personal history of a critic of the classification system.

“Publishing it served no useful public purpose and could, in fact, discourage citizens who take seriously their civic responsibility to lodge complaints regarding the activities of their government,” he wrote.

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