NOTE TO JMM FROM LLM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP73B00296R000300230017-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 16
• Document Creation Date: December 12, 2016
• Document Release Date: January 10, 2002
• Sequence Number: 17
• Publication Date: April 23, 1971
• Content Type: NOTES

Approved For Release 2002/06/17: CIA-RDP73BOOOt 000300230017-6
,?i
23 April 1971
25X1A
OSD REVIEW
COMPLETED
1. For your signature - our views on
proposed Executive order to establish a legal
basis for a security clearance program for
direct hire employees of NATO, SEATO,,and
CENTO who are U. S. citizens.
2. The program responsibility will be
under the Secretary of Defense. The Agency's
position was arrived at through coordination
with the Director of Security, via the DDS; CI,
via the DDP; OGC; and the CIA
Control Officer for Cosmic SEATO and CENTO
documents, via the DDI.
3. In essence, the proposed Executive
order will satisfy outstanding security clearance
requirements for these international organiza-
tions for U. S. citizen direct hire employees and
will be used primarily for secretaries, nurses,
and supply personnel recruited from U. S.
dependents living abroad.
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
2 6 APR I7T
*i 13 :A...Vrit 1911 r,q :$tlug m~eer
1 d order . i4*4 ' e:r~arl r -,
~-
s3 +31roc:31~ ' Y` the _
-
&t!. s!s TrsmtJ r$?
C.*tra1 k#g*sC4
order.
hots no 04J*C-tiO&
25X1A
...stir
Orig&I_A.dse
1 Subject File
Distrtbuti
OLC CkrOnQ
25X1A
OLC s
(22 April 197' 1)
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 25X1A
L Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 ApproEXECUTIVE OFF CE5OF THE PRE I0 R000300230017-6
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON. D.C. 20508
7LC 91- o.24/7
April 13, 1971
Mr. Richard Helms
Director
Central Intelligence Agency
Washington, D.C. 20505
Attention: Mr. John Maury
in accordance with the provisions of Executive Order
No. 11030, as amended, relating to proposed Executive
orders and proclamations, this office has received the
following papers (copies enclosed):
(1) Draft Executive order entitled "Security
clearance program for United States citizens
employed directly by the North Atlantic
Treaty Organization, the South-East Asia
Treaty Organization, and the Central Treaty
Organization."
(2) Transmittal letter of the Deputy Secretary
of Defense, dated March 30, 1971.
The Director of the Office of Management and Budget
would appreciate receiving an expression of your views
with respect to this matter as soon as possible.
.Sincerely yours,
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
DRAFT EXECUTIVE ORDER*
Security Clearance Program for United States Citizens Employed
Directly by the North Atlantic Treaty Organization, the South-East
Asia Treaty Organization, and the Central Treaty Organization
Whereas, the United States has signed the North Atlantic
Treaty and the South-East Asia Collective Defense Treaty, and has
established permanent liaison beginning in 1956 with the Central Treaty
Organization and is participating in the activities of the North Atlantc
Treaty Organization (NATO), the South-East Asia Treaty Organization
(SEATO), and the Central Treaty Organization (CENTO), by virtue
thereof;. and
Whereas, the security regulations of these three international
organizations provide that each member nation shall be responsible or
the security screening and security clearance of all its citizens before
they are authorized access to the Organization's TOP SECRET, SECRET,
or CONFIDENTIAL information; and
Whereas, there is no existing program under which United States
civilians, hired directly by the organizations, can be screened and
cleared for access to such Organization's TOP SECRET, SECRET, or
CONFIDENTIAL information while employed by them; and
Whereas, in the participation by the United States in the activities
of NATO, SEATO, and CENTO, it is in the interest of the United States
that United States citizens who are direct hire employees of the civil
*This proposed order is as transmitted to the Director of
the Office of Management and Budget by the Deputy Secretary
of Defense March 30, 1971.
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
e'
or military agencies of NATO, SEATO, or CENTO shall be reliable,
trustworthy, of good conduct and character, and of complete and
unswerving loyalty to the United States; and
Whereas, it is a fundamental principle of our Government to
protect the interests of individuals against unreasonable or unwarranted
encroachment; and
Whereas, I find that the provisions and procedures prescribed
by this order are necessary to assure the preservation of the integrity
of the classified information of NATO, SEATO, and CENTO, and to
protect the national interest; and
Whereas, I find that these provisions and procedures recognize
the interests of individuals affected thereby and provide maximum
possible safeguards to protect such interest;
NOW, THEREFORE, under and by virtue of the authority
vested in me by the Constitution and statutes of the United States, and
as Commander-in-Chief of the Armed Forces of the United States, it
is hereby ordered as follows:
Section 1. The Secretary of Defense shall establish a program
and, by regulation, shall prescribe specific requirements, restrictions,
and other safeguards as he considers necessary for the administration
of procedures whereby "Certificates of Security Clearance" for the
United States citizens directly employed by civil or military agencies
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
3
of NATO, SEATO, or CENTO may be provided to these international
organizations when they so request. Such program shall also provide
for the denial, revocation, or suspension of such "Certificates. "
Section 2. The procedures established by the Secretary of
Defense shall, insofar as is practical, be similar to those established
by him pursuant to the authority vested in him by Executive Order
No. 10865, as amended.
Section 3. The substance of the criteria, safeguards, and
procedures provided in Sections 2, 3, 4, 5, 6, 7, and 9 of Executive
Order No. 10865, as amended, shall be incorporated in the regulatiorns
of the Secretary of Defense governing the program established
hereunder.
Section 4. Any authority vested in the Secretary of Defense
by this order may be delegated to the Deputy Secretary of Defense or
an Assistant Secretary of Defense.
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 Approved For Rc.lsgR/~/~~1)~-Epp~00296R000300230017-6
WASHINGTON, D.C. 20301
MAR 3 0 1971
Honorable George P. Shultz
Director, Office of Management and Budget
Washington, D. C. 20503
Dear George:
In compliance with the provisions of Executive Order No. 11030, there
is transmitted herewith a proposed Executive Order entitled "Security
Clearance Program for United States Citizens Employed Directly by
the North Atlantic Treaty Organization, the South-East Asia Treaty
Organization, and the Central Treaty Organization. " It is requested
that this proposed Executive Order be submitted to the President for
his approval and signature.
The proposed Executive Order is needed to permit the United States
to help resolve the employment problems of the NATO International
Staff and SHAPE resulting from a critical shortage of secretaries,
stenographers, and nurses, which exists in Belgium. This shortage
could be diminished if United States citizens living abroad, such as
American dependents, could be hired directly by NATO or SHAPE.
A similar problem exists in NATO agencies, such as the NATO Main-
tenance and Supply Organization, now located in Luxembourg, where
a need for personnel experienced in supply and technical fields exists
which could be filled by former U. S. military personnel.
The legal need for the Executive Order arises because (1) the Supreme
Court in the case of Greene v McElroy (79 S. Ct. 1400, 360US474)
has made it clear that the executive branch cannot operate a security
program that affects people's employment rights without explicit
authorization from either the President or the Congress; (2) as the
direct hire employees concerned will not be employees of the United
States Government, their security clearances cannot be processed
under Executive Orders Nos. 10450 or 10501; (3) likewise, such direct
hire employees are not employees of a United States contractor doing
classified work for the United States Government whose security clear-
ances are processed under Executive Order No. 10865; and (4) Executive
Order No. 10422, relating to United States citizens employed by public
international organizations, provides only for a loyalty determination
which would not meet the requirements of NATO, SEATO, or CENTO
for a security clearance determination.
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
The present arrangement the United States has with NATO regarding
the service of U. S. citizens on NATO civilian staffs does not provide
for direct hire by NATO. Instead, all such U. S. civilians must be
employees of the U. S. Government, who are "seconded" to positions
on the NATO International Staff, normally, by the Department of
State. The use of this procedure for the level of employee indicated
above is not appropriate. Existing procedures would be continued
with respect to middle and upper grade NATO positions, i. e. , those
categorized by NATO as A-3 and above.
The present arrangement stems from the requirement that the United
States Government furnish security clearances for its citizens employed
by NATO. This requirement is set forth in Enclosure "C" to NATO
RESTRICTED Document C-M(55)15(Final), dated March 8, 1955, as
amended, which established uniform security procedures for the
protection of NATO classified information. Paragraphs 15 and 16(e)
require each member nation to establish a National Security Authority
with responsibility for providing assurance that a security determination
of eligibility has been made in respect to all its citizens who are
required to have access to NATO information classified CONFIDENTIAL,
and above. Paragraph 28 makes each member nation responsible for
accomplishing security clearances for all its citizens before they are
authorized access to NATO information classified TOP SECRET,
SECRET, or CONFIDENTIAL, either in national or NATO military
formations or civil agencies.
The United States regulation implementing C-M(55)15(Final) is USSAN
Instruction 1-69, signed on December 20, 1969, for the "United States
Security Authority for NATO Affairs" (USSAN). Paragraph 28(a) of
this Instruction reads as follows:
"Each department or agency will be responsible for
screening all its personnel in consonance with Executive
Order 10450 and Section 7 of Executive Order 10501
before they are authorized access to TOP SECRET,
SECRET, CONFIDENTIAL, or RESTRICTED information
either by the United States or NATO military commands
or civil agencies. "
This language, restricted as it is to U. S. Government "personnel"
does not cover those U. S. citizens who are to be hired directly by
NATO under the contemplated arrangement.
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
Paragraphs 36 and 37 of the Instruction provide for U. S. department
or agency sponsorship of experts or consultants attending NATO
conferences and meetings, and the issuing of security clearances by
those departments and agencies. However, these persons are defined
as holding positions outside regular NATO employment," and U. S.
Government sponsorship would be inconsistent with their direct
employment by NATO.
From the above discussion, three important conclusions emerge:
First of all, the United States Government is obliged under an existing
NATO Agreement to provide a certificate of security clearance for
any U. S. citizen who is proposed for direct employment by a NATO
civil or military organization, and who will thereby have access to
NATO classified information, which includes classified information
of U.S. origin.
Secondly, the United States has a national defense interest in the
effective functioning of the NATO International Staff, and the staffs
of SHAPE and other NATO agencies, which require access by U.S.
citizens serving on these staffs to classified information of the
United States and other origin; and, only the United States Government
is in a position to determine the trustworthiness of its citizens.
Finally, no legal authority exists to process security clearances for
U. S. citizens directly employed by NATO.
It is believed that a solution to the problem presented can be found
in the extension of one of the existing security programs, the Indus-
trial Personnel Security Clearance Program established by the
Secretary of Defense pursuant to the authority vested in him by
Executive Order No. 10865, as amended by Executive Order No. 10909.
The job rights of a U. S. citizen hired directly by NATO for a position
in which a security clearance is required are similar to those of a
U. S. citizen hired for a position in U. S. industry where a security
clearance is needed. It is proposed that the attached Executive Order
be issued, by which the Secretary of Defense is authorized to establish
procedures, similar, insofar as practical, to those established by him
pursuant to the authority vested in him by Executive Order No. 10865.
It is contemplated that the proposed "Security Clearance Program for
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 Approved' For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
United States Citizens Employed Directly by the North Atlantic Treaty
Organization, the South-East Asia Treaty Organization, and the
Central Treaty Organization" will not require any additional personnel.
or that any additional funds will be needed to implement it, inasmuch
as the on-going program already established within the Department of
Defense will be able to absorb it.
Under the direct hire procedure, which will be used only for lower
grade NATO positions, i.e. , those classified by NATO as A-2, A-1,
B or C, the U. S. citizens involved would receive their salaries
directly from NATO. In order to comply with the terms of Article XIX,
Agreement on the Status of the North Atlantic Treaty Organization,
National Representatives and International Staff, Ottawa, September 20,
1951, and Article VII.2 of the International Military Headquarters
Protocol, such salaries would be immune from taxation by the Govern-
ment of any member nation of NATO. Pursuant to Section 911 of the
United States Internal Revenue Code it will be necessary to limit NATO's
direct hiring of American civilians in the aforementioned lower grade
positions to those "not ordinarily resident in the United States," that
is, persons who have been outside the United States for a period of at
least 510 days within a period of 18 consecutive months, and whose
NATO salary for any taxable year does not exceed an amount computed
on a daily basis at an annual rate of $20, 000. 00.
While our immediate problem relates to NATO, the proposed Executive
Order includes CENTO and SEATO, as the very same circumstances
exist with respect to these two organizations.
Sincerely,
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 25X1A
L Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
Next 1 Page(s) In Document Exempt
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 25X1A
25X1A
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
20 APR 1971
MEMORANDUM FOR: Office of Legislative Counsel
SUBJECT . Draft Executive order entitled "Security
clearance program for United States citizens
employed directly by the North Atlantic Treaty
Organization, the South-East Asia Treaty
Organization, and the Central Treaty Organization.
In response to your request, dated 16 April 1971, this is
to advise that this Office imposes no security objection to the
issuance of subject Executive Order.
o-ward s Porn
Director of S urity
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
2 0 APR 1971
MEMORANDUM FOR: Office of Legislative Counsel
25X1A
SUBJECT Draft Executive order entitled "Security
clearance program for United States citizens
employed directly by the North Atlanti=: Treaty
Organization, the South-East Asia Trey
Organization, and the Central Treaty C>rganization."
In response to your request, dated 16 April 1971, this is
to advise that this Office imposes no security objection to the
issuance of subject Executive Order.
Howard J. .born
Director of Security
25X1A
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
2 1 APR 1971
MEMORANDUM FOR: The DDP
ATTENTION : The EA/DDP
SUBJECT
Draft Executive Order entitled "Security
Clearance Program for United States
Citizens Employed Directly by the North
Atlantic Treaty Organization, the South-
East Asia Treaty Organization, and the
Central Treaty Organization"
25X1A
The above draft has been reviewed
is no objection to its provisions.
Counter Intelligence Staff
CONFIDENTIAL
25X1A
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
 25X1A
L Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6
Next 1 Page(s) In Document Exempt
Approved For Release 2002/05/17 : CIA-RDP73B00296R000300230017-6