U.S. COUNTERINTELLIGENCE AND SECURITY CONCERNS: A STATUS REPORT, PERSONNEL AND INFORMATION SECURITY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89T00234R000100050001-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 29
• Document Creation Date: December 23, 2016
• Document Release Date: September 18, 2012
• Sequence Number: 1
• Publication Date: October 19, 1988
• Content Type: MISC

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LOU,$ LTU.LS Owe GAMIN"
SA"em t SEILEMSoN. CAUFOSM1A
MOMENT W 0.111"W44, WISCONSIN
1100ERT A MOEMEW .Was"
WTYNEW N MCNUGN. NEW TO1R
51ANIA0D J DWYER. NEW JERSEY
CNAALIS WILSON. TEXAS
SA00AAA S KENMEILT. CONNECTICUT
DAN GLICKMAN. KANSAS
NKNOLAS MAVROULES, MASSACHUSETTS
MU 0KNAN DSON. NEW MEXICO
NENSY J NUDE. ILLINOIS
DICK CNENEY. WYOMING,
MOM LMIIKSTON. LOUISIANA
MOM MCEWEN. 0600
MNIEL E. LUNGIIEM. CALIFORNIA
MUD SNUSTEII. PENNSYLVANIA
YIIOMAS S. FOLLY. WASNINGYON. EX OFFI=
000101 N. MICNEI. 4UNOIS. EX OFFICIQ
F1MDM F-406. U.S CLmoi
42021226-4121
NNOMAS 11 LATIMER. STAR DINECTOR
U.S. HOUSE OF REPRESENTATIVES TNCOMAS II SME[TON'A SOOCCUNIR COUNSI
PERMANENT SELECT COMMITTEE
ON INTELLIGENCE
WASHINGTON. DC 20515-64 15 OCA 3484-88
PRESS RELEASE
Release of Subcommittee Report: U.S. Counterintelli ence and
Security Concerns: A Status Report, Personne and Information Security
FOR IMMEDIATE RELEASE; October 19, 1988
FOR FURTHER INFORMATION, CONTACT RICHARD GIZA (225-5657) uR BERNARD TOON
(225-0788)
The house Permanent Select Committee on Intelligence voted unanimously on
October 4, 1988 to release a puolic report of its Subcormittee on Oversight
and Evaluation entitled, U.S. Counterintelligence and Security Concerns: A
Status Report, Personnel and Information security. This report summarizes
findings derived from hearings conducted in the Subcommittee on May 18 and
June 15, 1988, as a follow-up to the full Committee's report issued in
January, 1987 entitled, U.S. Counterintelligence and Security Concerns
1986. The Subcommittee report assesses executive branch progress in
implementing the recommendations of this Committee and other Congressional and
executive branch study panels which issued recommendations for improvements in
the Government's counterintelligence programs as a result of several damaging
and highly publicized espionage. cases over the past several years.
The Subcommittee on Oversight and Evaluation is chaired by Representative
Anthony C. beilenson (0., Calif.).
The Subcommittee chose personnel and information security as a point of
departure for its inquiry because.these areas seemed to have suffered from
considerable neglect over the past several years.. Despite the fact that
virtually all of our most damaging espionage losses in recent years have been
the result of the actions of individuals rather than the result of physical or
technical penetrations of sensitive facilities, personnel security continues
to receive less attention than other security disciplines, such as electronic
countermeasures and physical security.
The, SucaNaittee'1sprincipal findings were as follows:
ehilo Defense and in elli qe amity agencies have .illitiit*d
steps to iuulprove personal security progralass, their efforts have
suff*M fru:w a look of serrion attention at the wlevel and
the lock of a dedicatso taant of uuuuanargeurra . to provide the
necessary leadership and resources required.
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The large numbers of personnel security clearances and the volume of
classified information noted in the Committee's report of last year
continues. while the Department of Defense claims to have
significantly reduced the number of its security clearances, this
accomplishment appears to have been partially cosmetic and is now
being undermined by an upward trend. The accuracy of the
Department's claims of clearance reductions is also questionable.
While improvement in personnel security practices in the executive
branch has proceeded slowly, the situation is no different on Capitol
Hill. There is currently no central repository of clearances so that
one can determine the level of access granted to individual
Congressional staff. This is an area Deserving increased attention
by both the House of Representatives and the Senate.
Many of the attempted improvements thus far have focused on making
the existing personnel and information security system work better at
the margin anc have emphasized incremental steps rather than
innovation and fresh thinking on new ideas. There is a serious need
to consider whether the underlying philosophy, focus and methods of
our current systems are adequate. The usefulness and relevance of
current security screening methods require thorough reexamination.
The continued emphasis on pre-employment background investigations
for the purposes of granting clearances appears. misplaced since it is
extremely rare that clearances are denied on the basis of these
investigations.
The security evaluation of current employees in both the defense and
intelligence agencies requires increased attention. The quality of
programs for assessing an employee's reliability and suitability for
continued access to classified information after gaining employment
varies widely among the defense and intelligence agencies.
Increased efforts are especially required in the area of assessing
financial vulnerability among personnel holding security clearances.
Recent espionage cases show an increasing tendency toward espionage
for the sake of greed or relieving financial distress.
One area of particular importance is that of the damage that can be
caused by former employees. W.S. personnel security Program must
begin to pay attention to the ,who Leave gyve t service under-
adverse circumstances who have once had acmes to highly sensitive
information. my agencies have no existlra propm to address this
._.1 ortant area.
Strict adherence to the nerd -tom prlr clple still to be
receiwlnp little serious attention a&WV. the dglfw a ark intallige ce
agencies. The prevailing culture in this area is lax, allowing
casual 1eacr ange of information wt u _""Y +ess.
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Upon release of the Subcommittee's report, Representative Louis Stokes
(D., Ohio), Chairman of the House Permanent Select Committee on Intelligence,
noted:
"Chairman Beilenson's Subcommittee has done. an excellent joo in its review
of personnel and information security. The timely filing of this report is
underscored by the onslaught of espionage cases, the most recent being the
Dolce matter. The findings of the report will provide the next
administration, whether Democratic or Republican, with a strong set of
guidelines to improve what has often been a.neglected aspect of our national
security structure."
Congressman Anthony Beilenson (D., Calif.) noted at the release of the
Subcommittee's report:
"Although we have known for several years now that serious weaknesses in
our personnel security system are at the heart of our espionage crisis, we
have failed to make important changes that could significantly improve our
aoility to identify and catch spies. We are hopeful that the Subcommittee's
report will help encourage the next aoministration to naKe personnel security
a top national priority."
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100TH CONGRESS
2d Session
U.S. COUNTERINTELLIGENCE AND SECURITY
CONCERNS: A STATUS REPORT
PERSONNEL AND INFORMATION SECURITY
REPORT
.x,777 1 ~ ~
By THE
ON OVERSIGHT AND EVALUATION
d~.l+oril~t ~.
PERMANENT SELECT COMMITTEE ON
INTELLIGENCE
HOUSE OF REPRESEN'TAT'IVES
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S-08Q545 0002(00)(13-OCT-88-02:06:271 F0496 04/06/889-545
PERMANENT SELECT COMMITTEE ON INTELLIGENCE
Established by H. Res. 658, 95th Congress. Ist Session
LOUIS STOKES. Ohio. Chairman
ANTHONY C. BEILENSON. California HENRY H. HYDE. Illinois
ROBERT W. KASTENMEIER. Wisconsin DICK CHENEY. Wyoming
ROBERT A. ROE. New Jersey BOB LIVINGSTON. Louisiana
MATTHEW. F. McHUGH. New York BOB McEWEN. Ohio
BERNARD J. DWYER. New Jersey DAN LUNGREN. California
CHARLES WILSON, Texas BUD SHUSTER. Pennsylvania
BARBARA B. KENNELLY. Connecticut
DAN GLICKMAN. Kansas
NICHOLAS MAVROULES. Massachusetts
BILL RICHARDSON. New Mexico
Txoiess K. LAnwx. Staff Director
MICHABL-J. O'Ncu.. Chief Counsel
TtwatAS R. Sxeerox. Asa sate Counsel
BnNAao R. Toox U. Professional Staff Member
SUBCOMMF TEE ON OVEUIGKT AND EVALUATION
ANTHONY C. BEILENSON. C_hairown
DAN GLICKMAN. Kansas BOB McEWEN, Ohio
MATTHEW F. McHUGH. New York BUD SHUSi'ER. Pennsylvania
BERNARD J. DWYER. New Jersey HENRY J. HYDE. Illinois
CHARLES WILSON, Texas
BARBARA B. KENNELLY. Connecticut
Rrcxaan H. Gm&. Praflalatal Staff Member
Dunc S. I3omAn. fwfinieeel Staff Mistier
wnar _
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71'171 1 1 1
S-089545 0003(00K13-OCT-88-02:06:28) -10486 04/06/87
CONTENTS
1. Introduction ............................................................................................................
II. Findings ...................................................................................................................
Pre-Employment -Security Concerns .............................................................
Security Evaluation of Current Employees .................................................
Post-Employment Issues ..................................................................................
III. Pre-Employment Security Concerns ..................................................................
The National Agency Check ...........................................................................
Improving Background Investigations ..........................................................
The Subject Interview ......................................................................................
Security Clearance Adjudication ...................................................................
IV. Security Evaluation of Current Employees ......................................................
Periodic Reinvestigation .................................?........?.......?............................
Continui Evaluation ............... .........?....................................................
Offices ofrity ............................................................................................
Resource Shortages ..........................................................................................
Proliferation of Cleared Personnel ................................................................
Need-to-Know .....................................................?.............................................
V. Post-Employment !Response to to the Howard 'la Case .nes .........?
........................................?...........?.....
the
Information Security .............?......?.....................................................................
VII. Special Access Programs ......................................................................................
VIII. Research: The Need for Now Approaches ........................................................
IX. conclusion ....... .?..?? ..............?.......?..........?...............?.................?......................
LIST OF WITNESBffi
WmxroAY, MAY 18, 1998
Mr. Jelin F. Dooeelly, niofaat Depooty Ldaolrr T of +Dsioeea (Camber,
intelligence aces B !, I1q ent of Dalsome.
Yo Do seususe. J. Dfireftr, Ddlense investigetive 8anDepart resit
Dr'
Qsreae '~YUMM --&
:aioi 11io~
a gin Omar,
Dr . Mii raw IwA=W. CA
1 Aniltlla l mom
Ior as awwiY.
W ut. Jan 1% 1111
Mr. ____ 'i . 'It ID, *AMd a +OilW Rees, Sur + MRAMMMi;?
Itr. 086M IF MbINWAN opwedm for lamb.
18rt`IT 8.~~ 8.
Page
AiAT A
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7 7 1
I. INTRODUCTION
The Oversight and Evaluation Subcommittee of the House Per-
manent Select Committee on Intelligence recently completed hear-
ings held in executive session to assess intelligence and defense
community progress in addressing the findings and recommenda-
tions contained in the Committee's report entitled "U.S. Counterin-
telligence and Security Concerns-1986." That report highlighted
numerous security problems throughout the defense and intelli-
gence agencies of the U.S. Government which were discovered
during the Committee's examination of several damaging and
highly publicized espionage cases which occurred over the last sev-
eral years.
The security problems identified included:
-Weaknesses in the process of selecting personnel for initial em-
ployment;
-An inattention to the security consciousness of current employ-
ees;
-A lack of appreciation for the security risks posed by former
employees who had previous access to sensitive secrets; and
-The fact that f nancial gain,. not ideology, is the primary moti-
vation among most spies apprehended in the United States in
recent years.
The Committee also found that:
-Too many security clearances are granted by the government;
and
-Too much information is classified.
In this first of a sense of into resnadilia
sallm by the a keanch t a 8~ ssilise ,iow ra per-
Pavoctuale is
in ins beve bm tin' It sf do atfissia- of on and not a erolt of a physical or tsslMisel persee a of a 'seati-
dw' -bya li
peees^r
orris of libmi arse ad i r
e snow 4000 is P- Mdft~
,111s d
do W=*MM" 40 66a a
b
as iitiet
- WMW 01180111110% iba -t do
soda SAW he rr sir In ssriiiert
ew i i~ibriaetis 4 be
b for t'
"1'!? aftwsessiltse raosi+~sd 'fir the vowd Am di-
how B010101 aiisid 961i seff"d Is ;O-
and sserrigpeebrtoi ;psMriilsil a +ersiMNt< wd e"Mi +f
the "D su ssefa - eswrity pegeosffA this in-
guir; . - idboser.ttitus sintssererts to en WWWr
way ie tle evae~eiw to eidtess pu uu d b i-
tta
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ous congressional reports and executive branch study panels over
the past few years. While some positive steps have been taken,
progress has been limited to improvements within the context of
the government's existing programs.
The evaluation of an individual's ability to protect sensitive na-
tional security information currently focuses on two distinct peri-
ods-a preemployment investigation phase, followed by routine se-
curity evaluations while that person is employed. The record of
previous espionage cases and testimony from government witnesses
indicated that a third area may be of equal importance-that of
the former employee who once had access to classified information
and is now out of the direct control of the government's personnel
security system. While the executive branch has attempted to im-
prove its programs in the first. two areas, the third has been ad-
dressed only in a limited way.
This report addresses each of these areas and makes the follow-
ing findings.
GENERAL
? The Subcommittee found that both the Department of Defense
and the intelligence community'have initiated steps to improve the
scope and quality of personnel security programs. Many of these ef-
forts, however, have suffered from a lack of attention at the work-
ing level and the lack of a dedicated commitment of management
to provide the necessary leadership and resources.
? The 1985 "year of the, spy" spurred some initial improvements
in the poor state of U.S. counterintelligence, although witnesses ac-
knowledged there is still a long w~a~ytogo Moreover, at least in the
area a# 'geraoaasl security, the 19/6-87 :burst of ~IV,Md
has largely diraiputed. M -tum is being lost numerous
initia-
tives are stalled or slowed and as plans prograsaWly are trimmed
6ML
? A pted speo~- ta thus far have iocrr l an making the
111, Om awst b at Iba =fts ad O5
ss~lMsr tieea as ies miss- and t N&
IBM and ssslthsils Of this ' sae dsge
av1 ssisrerass of wrwsrt a~rrreirw~iir~ srNies~ie and
I NO
w.
stss e
? .edarl wsiaa~
{_rtisa -- Misr O stlrMr' is
ir9 frwls d f fa ttis issaw aswi dilss r
pwatef -- bh aewfim laiglimek- ~- a to w
as. all
is^sss In tie UMMd I ss is spit Ywa am
hi ? s~rrritc Mrw~ea s~a>:aurrr iii c ?r ? t+s '
i ?r ate is M11111 s f loss.
?'fsep aaabees it psessoasi b leas+aaass asd
aaisas 9i alss^Nlisd a astd In the Clsmreiltss!s lop" 'St
1@4 ow sssManss. WMM the wtsesat it tisdluess lrss saris
is eaisie? aiessaaass rse^ i at ages is
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have been partially cosmetic and has been undermined by an
upward trend this year. Effective oversight within the Department
is nonexistent, and the accuracy of the clearance reductions report-
ed is questionable. Continued management attention to this prob-
lem will be required to assure that any past achievements are not
reversed.
? Security clearances can no longer be considered an infinite re-
source with no limit on their number. Management must carefully
review and justify each request for a security clearance. Granting
clearances based on the information requirements of the fob,
rather than tying them to individuals, would be a critical first step
to enforcing this notion.
been clarified, the military services, particularly the Air Force,
continue to resist security inspections by an independent oversight
entity.
? Turf consciousness and resistance to centralization long have
plagued the U.S. counterintelligence community and continue to
impede consideration and implementation of different methods of
organization.
? Improvement in personnel, security practices on Capitol Hill
remains an important priority. At present, there is not a central
repository of clearances so one can determine the level of access
granted to individual staff. The Senate has begun to implement
some changes, and the House should make imprvreemeats as well.
TRi-ZNWL0TMINT sacUW OONCWfa
? Many of the government's existing personnel and information
security programs are outmoded and require revisio. Continued
emphasis on p employmatt background investigations appears
misplaced, since it is fly ran that clearances are denied on
the basis of these inf.
? Security cI ae taaliuras sad Min to a
lei 1 0916 in the DOPONON" Of IDW
fim-W ha Emy bowwas, , =owtmaft is are
act : kI ou . i 26Wiasiie Vby se
pa7r_I as at -appiisrts sae irif - ac d aNerrsa. Ilk
low, 0: doonaft =,s racrM --atlata Owe IN Ofiw o
t aurae, Maiairf1-- w 4lirliwal iglM=d W
61111 do~t ir^rss aril iu r ass uoild-
5.
s - i?1
Iisu I d: -i i y i rr ib~a six
-Ar #W VwAbg assess to vowel rrri>?. weewr^ear
those hr an eapnaI of its sop by nu sasous panob over the
wsiss 10180 liiRiri~tW Ir
. pia the 'aerrias, G 'boy ?i tie
base base i~aead. AIth * tbh asuld 'rice only abort
$lo 'sillies yssry, nronro- fx such an GEPWW as hove NNW
bonabeft"L
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in=
? The Director of Central Intelligence, in cooperation with the
Department of Defense and Office of Personnel Management,
should finally implement as recommended by numerous panels a
"single scope" background investigation for access to top secret and
sensitive compartmented information [SCI]. Such a step might drop
the current requirement for a 15-year life history review and add a
more productive interview with the subject, while reducing costs.
Intelligence agencies may wish to retain the 15-year personal histo-
ry investigation. Interviews with relatives, now avoided, could also
make background investigations more effective.
SECURITY EVALUATION OF CURRENT EMPLOYEES
? Recent espionage cases have highlighted the importance of
"continuing evaluation"-the process of assessing an employee's re-
liability and suitability for continued access to classified informa-
tion after gaining employment. The quality of such programs
varies widely among the defense and intelligence agencies, and
they are not receiving the attention they deserve.
? Increased efforts are required especially in the area of assess-
ing financial vulnerability among personnel holding security clear-
ances. With recent espionage cases showing an increasing tendency
toward espionage for the sake',of greed or relieving financial dis-
tress, employees' financial health must receive increased scrutiny.
The executive branch needs to be more skillful in utilizing the
automated data bases at its disposal that go beyond mere credit re-
ports, such as reports of casino transactions, currency transactions,
and foreign bank and financial accounts.
? The Subooenmitbe found that strict adherence to the "need-to.
know" principle still appears to be receiving little serious attention
among defense and intelligence agendas. Fear of leaks and espso-
nage has sometimes led to near oompartmea-tai' taon that impedes
effleis icy and bwers the quality of analysis and of staffing for
lanky Ewa, In g nsral. larwewt, the preve"g culture is la:, a1-
awai of mformation and unnsoarsa'y access.
is isne k to ,Rowena .tj- awseensse.
orriUs t o affil sllsrr to neat a iieaw
rise ter valor of awareness by
b twills 11 Mrs. Iss^sr taeee~R -
A&W =ad
esiss lies late dYswlil
l Pd . tLait Miii^rt war {ads mail 06ea ate
sa1Mn. ells bw bm'I'Vely as do.
aril aarw~sii/ l - L.l.. - as ?e
i'M-lrlara aria.
l'llr t^ra~ wtl* boas of =Wft us
iq- eaelleye~a bm dawns s"t"un it all smear
miss. Toe dba aaoh !lla~a 'in s heoaa~ss of innisgratMs
te+sini^tl. we lserrbsI is aai^ite wirs1 ti'v-
arc on ** it' s ara.ilow 'd
wll- e~
lirM~ a~^oart wti~ - h* 4, b*
rjee pr l.a~ that to a'aeNe .mss .
ae^rt M leeeliei srss~ rerr srt~ili~s aa~
to newt pi i -- ssaeelgr cameras laieivin tties^sotwr er a w
wuhm
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? Given the damage that can be caused by former employees,
the personnel security system must begin to pay attention to those
who leave government service under adverse circumstances. Many
agencies have no existing program to address this important area.
The CIA has expanded an already existing post employment follow-
up program, and their approach deserves attention throughout the
intelligence and defense communities.
III. PRE-EMPLOYMENT SECURITY CONCERNS
The National Agency Check [NAC] is currently required for
access to information classified at the confidential or secret level.
The NAC is also the first step in background investigations that
are -conducted for higher level clearances. It involves a routine
review of FBI fingerprint files and a review of holdings at other
agencies which might indicate previous employment, immigration
status, foreign travel, or the prior holding of a security clearance
with another federal agency.
Defense Department witnesses suggested that a more sophisticat-
ed National Agency Check is needed. The Director of the Defense
Investigative Service [DIS] pointed out serious problems in using
the current NAC as the basic investigative requirement for a secret
clearance. He noted,
The National Agency Check is not sufficient in my opinion
for a secret clearance. While a NAC costs about $10, we
... spend thousands for physical security measures in
some programs (to protect) secret material, but for the
people part of it, we are only willing to spend $10. All of
our losses have come from people.
by this Cossao ibm the Bd1wsU CaMuninim
and ether study panels for the addition of a credt , -h 4 and writ-
ten =a f zbrsaar ae oya to be added to the NAC have scat
yrt i~pl^aMind. It is the arrr YNOU
who q same is elasaed iafeermtisn ass elsae+od at the
sars:+et fewd, mad far thee. i s. the ;
anly a NIA' M. gone" or
*up* ftbrub,
tine. The ila this ;ra eat ii1a. ~~
sy fa low now-, wee uawd^atr tint am
11" bans ban araia .& i + dr MW
Suv r. -toosw
The 'Wd h i is utiiiaad in setesoft t
br a to d at the UP as"
wliiim I is if we r idwMasm'T" Ibm a %W _o
. d tars 8psaiel round lava~tipton t L TTWU
arm do'lut i Own of
the 'a iUi ar ll~o. hie Imo- _
whioirser is it a NAC, i at haul law
? ampWUMA, and credit ahsoh% sad an
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a I a 1 1 I i I I I I I l, i
interview with the subject being investigated. It does not include a
neighborhood check but requires investigators to interview charac-
ter references. The SBI covers the last 15 years of an applicant's
life, including all points covered in a BI-except a subject inter-
view. It also includes neighborhood investigations and a credit
check. The scope of the SBI is determined by Director of Central
Intelligence regulations, since it is required for clearances granting
access to sensitive compartmented information [SCI] which involve
intelligence sources and methods.
The Committee is concerned that the various pre-employment
background investigations now in use are not effective in identify-
ing security-related problems before employment. In testimony
before the Subcommittee, a senior official of the Defense Depart-
ment noted that,
With regard to personnel security, we realize . that
background investigations do not catch spies. That is not
their ..purpose. Their purpose is to identify human vulnera-
bilities that can be exploited by hostile intelligence serv-
ices.
The record of past espionage cases illustrates that the current in-
vestigations process fails dismally in this objective. It was discon-
certing to hear the same official comment, "I do not see where
there is a great deal to be gained by new approaches." The Sub-
committee's conclusion is precisely the opposite given the fact that
over 54 DOD personnel in the last 5 years have been identified and
punished for espionage or serious security breeches, not including
those involved in the recent Conrad case.
Concerning the screening of military personnel for sensitive posi-
tions, a former DOD official with 25 yaars' experience in pe
screening and. security frees noted, prucedurss
vary c om iderahiy in scope and quality.... marry people foand
ruitable 7- aeatitiw post ieaa ... v ,IsA i for
umuitahle bsb.vior." aroRad further,
Tbm fir a SUN"
a s y
avii^eee her 4 "Dug till"
ANNE" -s thsss p ions srlrss f r~
'ate '. P , 'ice ~
I? i ' eral psi e
. ,
Mewdo ' bw 0-aft ,!alts
t~lfi~^sr It ,~ ~rasltwrlew a~aryMsi
i mss b'
? all is Deeial aael - awkiliss ,ems floe dki OW
rle I L w40, - ter most shlsss^sss fill ;fps
wnr 400 `Pie !ID.
11111mesoidoe eleanwass the rsMOOisl~sn eaM1a'Yrs
town '11 pereeat in !lead year 111$ L4 pees . t 1 year
1W. OMM d Me ales? do and mud elan So
-spill of the f ssoou ty ~l*ad i i~se^li lYrn
AM! I
i.b-i?wlso,m..~wsc
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 Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1
data indicating the reasons given for denial or revocation of clear-
ances.
Because. most of the intelligence agencies require a polygraph
interview as a part of their security investigations, it is not possible
to precisely determine the number of security disapprovals based
solely on the background investigation. An example cited by CIA of
contractor rejection rates indicated that for one sample the rejec-
tion rate based on a BI alone was 3 percent-another indication
that the emphasis placed on the pre-employment BI deserves reex-
amination.
Concerning the actual information gathered in background inves-
tigations, intelligence community witnesses noted that positive in-
formation about an individual frequently is as valuable as deroga-
tory information. At present. DIS reports contain largely derogato-
ry information. This is a failing in current DIS reporting. It should
be corrected, since the addition of positive information provides a
good benchmark for later determining changes in an individual's
attitudes and behavior.
Testimony also highlighted the need for investigations to contact
a broader base of individuals who are not currently interviewed.
Relatives, for example, have traditionally not been interviewed be-
cause of the presumed bias of any information they might provide.
Relatives, however, often can be an excellent source of information.
The Walker case demonstrated that relatives may have informa-
tion of serious security concern which may not be available from
other sources. The most recent example of this is the case of Naval
reservist Glen Michael Souther, in which Souther's former wife
was the first to raise allegations that he might be a spy. These alle-
gations were initially ignored by Naval investigators, and unbeliev-
ably, Souther's former wife was not. intsrvirw+sd during the :coatrse
of his spspal background investigation for access to sensitive com-
partonted infarmation.
ra suss= w+ramrE .
~eei fir es Me qrs i ar%__ _as Vier t of
niiea-. oo mosey was vnwd~ cwt ass is ial
with 6s MAina of a amedty w
me of ties 'net tosb for i~Orrares~i~sah t r.
tad. 1S virti~^r aeaMi. "" Ewa it w +r- ,1- b 11W.
3t ae~eiAs." &a& 1-0 low view it aim at i
lr haeii~er_d dae~ieerd iier ass ,r wer-
_ ifaw !1 itwleNl *A it -
'1 rs.Vilileftr of W,0664 it is aw oeeeftagisrr the
asap E
;w i0 i".di lesmra.... `~[ :iI deer
aeee t ~dltrtea^ao .was des d it
' _!M-i1
shop W iMWaIL b auL
No sow endnetsd ihr areesss is top
aaw~te irre+le~ds r ireeti aeil~aat iarwraiener. 1+1~rr-
ors }^watr leave soa^asaisi over the Ys 64 a UdVend
00 'A k a new- --- air a* at obab" i
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 Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1
by isiiiariiaais ass &AMAW WoulaMed =ft An lased MMMW .of
of coverage, interview requirements. etc.) be formulated for both
top secret and SCI. This concept, known as a "single scope" back-
ground investigation, would provide more consistent standards for
granting access to highly classified information. No action has been
taken by the executive branch to implement a single scope back-
ground investigation. The Subcommittee believes this issue should
receive high priority, and urges the Director of Central Intelligence
to reinvigorate efforts to reach agreement among the relevant
agencies for a single scope BI, incorporating a subject interview. for
access to top secret and SCI information.
SECURITY CLEARANCE ADJUDICATION
Security clearance adjudication refers to the process whereby in-
dividuals analyzing data acquired in a personnel security investiga-
tion attempt to reconcile that data with standards for granting a
clearance. If derogatory information is acquired during the conduct
of an investigation, it is the adjudicator's responsibility to provide
feedback to investigators to determine if this data can be reconciled
or to make a recommendation not to clear the individual for access.
The Subcommittee found that while criteria for the granting of
clearances are generally consistent with the protection of national
secrets. their application across, agencies vary widely. In many in-
stances, the criteria and guidance are not being followed. Defense
Department security professionals testified that the adjudication
process has become the major bottleneck in the clearance process,
and that the current methods used to accomplish the task are anti-
quated and in dire need of revision. Most personnel security inves-
tigation files currently are still maintained as paper dossiers and
are processed through the mail or by courier systems which take
cola elabie time and adtttiaie~stlMe effort.
The utilisation of automated data proc-hig gaol and cen-
tralised elassance data bases a desperately aeeast A~t
rf Detfae^e fenearch R is + tise isssispsssat of an
auto^ated system that will provide ae~rla- iessn of asses
wbiah is sat eV.- prsisstiad M im ar t ha
aan ,tom tie symbift 111111 s 4"d skom?Nme as
Nit ?? ,~ cores wbib asses tiers Ser eergdsis
sme-and sees w& u6i
ants ai acnwsa~as,
ir~satei ~ttiaR a abtd! i? 'itar ~arws- br 7 ~itesr-
vim. it seas asslad dlart "me" atma
doss it is asses a tw se ,&W as
~i aiaistt
Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1
aaaarttes ta-. aaeAt 1t, a+wtrMrwt.'~lrir MAW
atatislisa wows of :aNJse~lad as a i- k" MV4PW
eMartn bt rea a aatasr3tyr -
off
Now M hm "its"
itiMd. sit I_m OMINK IN , r a
aalsbw st the Departseat of Dolrwe has )VA b"Im to s hr
tradi id aj"MM.. ~tw tab, salt
dfrae Fatah D *tsiiatliaa 'e+aeaas
 Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1
fense is considered by many personnel security professionals to be
seriously flawed. . . . Many adjudicators lack an appropriate back-.
ground for making complex personnel assessments.
Until recently, numerous components of the military services
and many of the defense agencies maintained their own adjudica-
tion offices. This often led to the inconsistent application of criteria
for granting clearances, and a lack of control on the granting of se-
curity clearances. A consolidation of adjudication facilities among
the military services has proceeded with limited success, with the
Navy still not fully on line in consolidating its adjudication process.
Numerous defense agencies continue to resist this concept, largely,
it appears. for bureaucratic turf reasons. The concept of centralized
adjudication, a key recommendation of the Stilwell Commission,
has moved slowly in the DOD and will continue to do so unless
high level management attention is directed at the problem.
IV. SEcuErrY EVALUATION OF CURRENT EMPLOYEES
PERIODIC REINVESTIGATION
izing the need to focus attention on the security conscious-
ness of current employees, the defense and intelligence agencies
have for some time conducted periodic reinvestigations 1PR7 of
those personnel holding top secret and SCI clearances. This rein-
vestigation involves a NAC, inquiries to local law enforcement
agencies, a credit check, subject interview, and field interviews
with coworkers and references.
These investigations are required every 5 years after initial em-
ployment, but the executive branch has had considerable difficulty
maintaining this schedule. Recommendations by various panels to
extend the coverage of PRIs to those holding secret clearances have
not been implemented due to ranoatve coestTainta. i titmeaq indi-
cated that them investigations may have some deterrent effect on
an ampbr~+ee omtssplatirai
It ii wvkwm that the Est ism so Ih
this an a o +e skiosted MW ,the ,perartilreos Sri-
An
bWW stile to de 0 IN-11
s d the 'f sit i. eI , `the
.h.ai itl^ M. nseu 0 to +abo
a" no" :at Pasibliants W WW aw be go sat WW-
14
mmiank do twelound 0
"Cagier I ~*A
wwr
hat - set _ i hi It
vatier th an e 699W 4&y
low so IYiM~rrt it do it rriwe 1a ilMor
the ban been M6 of !#Je we andeal-
ie tlwa INAMON& tie die and brine AtW_ 4W
s be raviews pests to tom, CZA. said do
Naha 'irwarMdr A jar >h PWP= of ,MnrMrj am teak
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 Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1
S-O$Q 44 101 i(0O)(11-nCT-NK-O?:00:411 F6633.LOC 06/11/N$
logs, but they are not expected to be eliminated until 1990. For ex-
ample. at the end of May 1988, the Defense Department had a
backlog of 101.000 periodic reinvestigations. The estimated re-
sources necessary to alleviate this deficiency and also conduct peri-
odic reinvestigations on those employees holding secret clearances
would have required an additional 1.300 positions and $50 million.
The availability of such resources is highly unlikely given current
resource constraints.
Officials from the Defense Manpower Data Center [DMDC], a
central repository of personnel records on DOD employees, have of-
fered numerous proposals in which automated data bases not cur-
rently used could assist personnel security professionals in "target-
ting" currently cleared personnel for periodic reinvestigations.
Funds should be made available for selective testing to determine
if such a concept is feasible.
CONTINUING EVALUATION
Continuing evaluation programs assess an employee on a daily
basis and not just at the time of the PRI or during annual job per-
formance reviews. They require a sensitive and enlightened man-
agement, cooperative employees and an office of security that is
viewed as a positive force in the workplace-not the negative con-
notation in which it is normally viewed.
The Defense Department currently operates such a program for
personnel involved in the handling of nuclear weapons. This pm
gram. known as the Personnel Reliability Program [PRP], offers a
structured approach to evaluating an individual's performance on
the job and briny together information from supervisors, cowork.
ers and other sources relating to the individual's behavior and ,per.
formance. Personnel who do not most MP standards are subject to
temporary or permanent motion from the program- While
'the PRP is. fiend ' es on ,
these aleadarrds seed (Sr ssatriRy eles~mes '- Par"
'When arft,!!l+ew~si, e~1+~ss ssah ash be sa-
tssMied +1ae s sell hii rralna-
bio sn t5 .o ~,
t ___ *am
1. i tiaa. ~w f visa e
JW ha
- pssvI _ ~ duath ASA- 9L_
~ mad me 'IN messes a disr.
srlae^ssst a1f r
'fib be a11be., I Wsssr -VUl zovellWo a y
sls ear a aM '
+sbSSS 00 OdbM
~~~ ~~ 1~'lrs^r, i ~~
Y* Nib . Wd $ Met Yes be w
awarasees. llfeee atteatisa should be p" to sees, since _
arses densasereft to '
thr , &64116rc is ow+
MOMW of 010 60001010 =""L
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 Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1
7 fit. ~.? ./ ?? 1 i a a a
properly. The Pollard case demonstrated the value of a complemen-
tary approach. that of encouraging security awareness by fellow
employees, who can report patterns of work activity potentially as-
sociated with espionage.
A number of recent espionage cases also raise the possibility that
U.S. intelligence agencies should have picked up clues that sensi-
tive information had been compromised and investigated them. The
tendency to wait for defector or other corroborating information
rather than carefully analyzing more ambiguous indicators and
narrowing them down to specific programs or individuals, is unfor-
tunate.
A critical area requiring attention is that of how offices of securi-
ty are viewed by employees. In many agencies, security personnel
are viewed as "cops" who carry out a sanctions-oriented process in
which the investigation of a security-related incident is viewed as a
career damaging event that will follow one throughout his or her
career.
The Committee is convinced that to effectively attack the prob-
lem of espionage, a system that requires incentives as well as sanc-
tions is required. A senior DOD personnel security research official
noted:
Among the cleared population, especially among that
group cleared for the most sensitive information. we
should encourage management and command sensitivity to
their people, both on and off the job. There should be more
support, lees coercion. There should be an opportunity to
share problems at ear4y stlegas with a supervisor or,coua-
selor who might be able to help, before the problem be- .
comes desperate, u . and a motive for ili gal be-
havior Me arpimp Mss a).
Th
e ieoal. of individ
l
l i
e p ua n perso e a 9
was also '
as+tad firs of
rra erf aster ,*. T amt ;,bM
UL,-
to in ONNNOuT
lasraico, a aamw 3s aperrrsty is srst ds gar a Mb to
estrior v =L A man i a liW
l
est t:l fa
seed
. ?fir
s
i
,+om~sruii lyt~
s
~ptags- - twV40e4'"d aw
gi~rtliar tfs.
sr as
-' 06- -66 3s
i
ail
rp
'
-
g
s
s
,
>
;psr+sers
1
- aa~tiaw S. s!aasl
i
i
'JI
M
M 41
~
r
vea i s
s
_
WO let
sr,
'fir A
attssr ~[
OW
Milo. W a
ariltioa -1 - 0- 1
. 1.1
pataranawl, ow OM 1L000 Pal- MW .lo Illb-
-4N sf- firs arm it Yet DAM it ash it pse
she" a,s
amt dial Wm^r*ty
Z is a srs wri^i M w,
asr
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 Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1
~_ gar ^ si, ^ i
proach considering these personnel' have access to the Nations
most sensitive data, especially those involved in designing, procur-
ing and building our future weapons systems.
The Subcommittee has a keen appreciation for the importance of
physical security and other counterintelligence disciplines to DOD
and intelligence installations and facilities worldwide. Technical se-
curity remains especially important at our overseas missions. as
evidenced by the problems at the new Moscow Embassy construc-
tion project and the discovery several years ago of bugged typewrit.
ers in the old Moscow Embassy complex. Emphasis on these disci-
plines alone, however, fails to recognize that a large majority of
recent intelligence losses have resulted from the actions of a
cleared individual who decided to betray his country, and not from
hostile intelligence officers penetrating a secure facility.
While recent espionage cases point to obvious deficiencies in the
DOD's personnel security program, witnesses confirmed that "per-
sonel security programs are not being given a higher priority in
the DOD budget process." One indicator of this fact is the roller
coaster fashion in which the Defense Investigative Service has been
funded. After obtaining increased resources over the last several
years, DIS experienced in 1988 a $9 million budget cut and a 13.1
percent cut in personnel. This, action has resulted in the discon-
tinuance of training, and the loss of experienced personnel to early-
out retirement.
While a portion of this cut was due to reductions mandated in
the defense agencies by the Goldwater-Nichols Military Reform
Act, these decreases went well beyond those ionally man.
dated reductions. As the Director of DIS noted before the Subcom-
mittee, "Rather than moving forward, we are currently undergoing
a significant r hmachment." This trend occurs in the lase
draft executive ceder on personnel security awaiting action at the
National Security Council wbith would require Ware reed efbrts by
D$ and sailer s~enoi~s in the eo a and of their bast-
___L out ;phy Paeiessnei secu-
as 40910900 hodas, br wotiLA ado wk6iritq- of
sled NOW VON" owta
AIM ar Cana aroew,tr.
A fem. "son d tie onmodan it fle RE ir7- l
1i g! 1.1 a fto teiN-,
Mae.; lo jieet o-eieeeri - rw tl s eg-
aw~t'' r of W kr W" 6100A .i
a fly U adDho ft a 0 U ;c lu
ds- i e~3rraveseoit ,~ ilr tless^ritMwr wlr shit .
meet iamb last year in 'Dre 12-1112* at Lira hook 3'AM b!
IN -00 i A t tie UWft of as
of Dr edenres, Dumr1 host aee^ebeee of this
boT- tt sgene7 olfid~'h: a bile No lard erriieaoo
hot net I&e " is a Pwonaw ? I? 10800kAks
id
inikrtes a wiwn cucroat and tuaeer y have
bean Mw s of ,rla.rhiai . aa~isrrviiL" AI .
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 Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1
other agency official stated, ". . I don't think there is a question
I think it came from within the agency. There is no question
about that."
The agency has finally brought its investigation to a conclusion.
Agency officials initially told the Subcommittee that these leaks
were of utmost concern, and they admitted their frustration that.
"To date, we have not devised a way to deal promptly and effec-
tively with people who have violated the trust reposed in them."
VII. SPECIAL ACCESS PROGRAMS
Related to the issue of controlling classified information in the
aggregate is the oversight of Special Access Programs, known as
SAPS. These controlled access programs are primarily utilized by
the military services to protect procurement programs involving es-
pecially sensitive technologies. A recent DIS study of security over-
sight in SAPS notes that security is often lax and does not meet
high standards. Deficiencies noted included inadequate security in-
spections, poorly qualified inspection personnel, an over-emphasis
on physical security measures, and a deference to contractors in
doing their own security inspections.
DOD has taken action to improve the security administration of
SAPs, but some of these .improvements have been cosmetic. ca-
tions have been rewritten, a security manual published, an SAN
must now be approved by the Secretaries of the military depart-
ments or the Deputy Under -Secretary of Defense for Policy. Imple-
mentation, however, has been less than effective. DIS testimony
noted, "In practice, the neoosaary improvements in the implemen-
tation of policy have still not been made at the level where the in-
formation is most vulnerable--when entrusted to the contractor."
It was the brought to the attention of the S ubaos hose that a
rsew phenomenon known as "gray programs" is she causing consid-
ersbis asafirooa. This. peograama are so calked Yaaarrao they eccnpfr
the ca awn :baM s n :aae as=r*y pree!d esa aai aatiaria
v as la raaaw to . I en, was _ lac
a
.8>5.A-? a s 1 1 4 1 1 A I a 6 1#, i
~~- ~b-, as ara ~aaar
~~~ aait?
pie ~i fir, 'a filt~erarlar iaa as tr alraq VIM
al~arr - : angler rr1ra _ fir
'liar Der !ha
gt ltar^1~i -, +ab ~a #W fir. t 7 of
rie.aMr1i 1I 1 ae1irl~a aw iilra !r ? -- lei / .
?::=_> V1Q. >Ra~aaax T~ Ns eca New wwasi~o~s
f =Mod 9 a a[ ai ft
trash adt~a fae~ar 1&, Ink wait
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 Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1
will require extensive research, as well as renewed attention by
management. The creation of the Defense Personnel Security Re-
search and Education Center [PERSEREC] by the Department of
Defense is a highly positive step. Prior to the creation of this
center, no agency of the Federal Government performed research
which challenged the conventional wisdom of existing personnel se-
curity systems. The Subcommittee views this research as critically
important and commends DOD for implementing the recommenda-
tion of the Stilwell Commission for increased research in this area.
While this is a DOD research agency, its work has relevance for
personnel security programs throughout the intelligence
community.
DOD and the intelligence community should be supportive of
PERSEREC's work, and provide the resources necessary for re-
search to proceed. However, PERSEREC's research must be closely
monitored so that proposed changes or modifications will have
practical utility. To benefit from this research, the executive
branch must be attentive and receptive to implementing proposed
changes-even when those changes challenge the viability of the
current system. The Committee stands ready to be supportive of
senior intelligence and defense, agency managers in this regard.
IX. CONCLUSION
Today's spy becomes involved in espionage as a result of both
personal and situational factors, and most importantly, access to
classified data. l are amateurs, -and few, if-any, enter the mili-
tary or civilian employment with the intent to commit,aspi?nage,
Neither do they necessarily behave at the time of entry in ways
considered unsuitable. These individuals are not identified as ,pcs
tential spins bssrrd en information. Varying en-
?irenmsntal finandal k job disc t-
menin or pacer a eioss in smaional interaft
via is to MUM* i>ibe aee1iarstio am
eesa:7 IN9 i babe a with a foes n iaisili oe tee.
!bass iM +=t be tlesiirlrrl ass at Airs am 4f OR
W" b ~ ! e^ est ass be
r t7 isrris+as. r the 41"
d - w1[ ~isswi
~ htd' ftrr
srtsssswi t a> ~'... assMi>rsi a?s~~t
dbsMba*w wbe
rh t:i :a 'lse!sile:'' go , Ma 11
do
aft ibM&4M I! di dwa at ibN *W" emb.
*s1Wwp- 1widm Ud ices -bwe of iMetis md j6
ohm ble onim" of alst wrr iaiaar?l Id no'
b.w blew bm aa*.. j eases ift
th. )i Oios
AlhA."M-= Alm AaaWa LAM 1&
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 Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1
i i F i 7 1? U a a?
significant. In both. the background investigation and reinvestiga-
tion process failed dismally. It is well proven that hostile intelli-
gence services are actively attempting to procure sensitive intelli-
gence information and sophisticated military technologies. The gov-
ernment must do a better job in assuring that our cleared popula-
tion will keep the highly important trust placed in them.
The attention of senior management must become more focused
and sensitized to the importance of personnel and information se-
curity programs. Despite verbal acknowledgment that some espio-
nage losses have been truly devastating and have. negated enor-
mous defense investments, top managers remain unwilling to
budget relatively modest sums for improved counterintelligence
and security measures that would help protect much larger invest-
ments. The U.S. Government as a whole still is not comprehensive-
ly addressing past counterintelligence and security problems, al-
though consciousness has been heightened in some quarters. No
substantive improvements can be accomplished if the most senior
officials continue to ignore the warning signals that something is
fundamentally wrong. In most cases, this does not require a large
investment in resources. As CIA Deputy Director Robert Gates has
noted. "When it comes to human counterintelligence, my view is it
is primarily a management and people problem, and not a dollar
problem.
The true catalyst for change rests with those senior officials who
have the power to give these programs higher virility and the
will to aggressively pursue needseI changes. Only then. aicRg with
the support of the bent and the Gongr'ass, will the government
be able to meet the human counterintelligence challenges facing us
in the 1990's and beyond.
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cdd,,iona/
kEPNESENTATIVES ActWEN, SHUSTER, rYDE, LIVINGSTON AND LUNGREN
to the
REPORT BY THE
HUUSE PERMANENT SELECT COMMITTEE 'UN INTELLIGENCE
U.S. COUNTERINTELLIGENCE AND SECURITY CONCERNS
These hearings toucned only lightly upon the subject of unauthorized
disclosures of classified information. Such disclosures have become rampant
and. cause enormous damage to U.S. intelligence collection, intelligence liason
relationships and U.S. foreign policy interests. In 1987, for instance,
scores of confirmeo, first-time intelligence leaks pertaining to CIA work were
identified.
Vigorous steps should be. taken to reverse this permissive, widespread
culture.'. TheCrngress should pass legislation establishing criminal penalties
for intentional ,. t ri'zed disclosures of classified inforeation.
Nnetheless, this old have little effect if investigations remain as
perfunctory as they are at present.
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-2-
Intelligence agencies often have ciaimea that only other executive
agencies and the Congress are guilty of unauthorized disclosures. During the
course of these investigations, we became convinced that even the Central
Intelligence Agency has displayed a profound lack of interest in policing its
own demonstrated problems, especially when these may involve prominent
officials.
In response to the Howard espionage case, the CIA has made some
much-neecea improvements in its proceaures and organization. We would not
wish to imply, however, that the long-overdue creation of a
Counterintelligence Center is necessarily an adequate or final answer.
Protection of "turf" has been an impediment to-optimization and
centralization of the entire U.S. counterintelligence effort. We remain
concerned, for instance, about whether CIA's Counterintelligence Center has
been given adequate authority over regional offices and about whether its
location within the Directorate of Operations accords it sufficient
independence within CIA.
The Counterintelligence Center probably is the only existing institution
which can help centralize counterintelligence operations that cross agency and
departmental lines. It has made some progress in this area,,, in part due to
currently dominant personalities and an increased awareness of the gravity of
the threat. ftweverv its formal charter , . this respect is very week.
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-3-
All agree that some salutory steps have been taken since 1985, both in
personnel and. information security and in overall counterintelligence policy.
But we are greatly concerned that this is just a start, and that even the
steps taken thus far are subject to reversal unless there is aggressive
support at the highest levels both within departments and in the white House
itself. As one witness observed with regard to personnel security:
"Therefore, although many initiatives were undertaken in 1985 and much
progress was made during 1986 and 1987, those initiatives have now, for
the most part, stailea. Rather than moving rorwarc, we are currently
undergoing a significant retrenchment."
The depth of past losses has been theoretically acknowledged, but has not
penetrated to the extent that we are willing to take determined and consistent
action. Investment in counterintelligence often is not seen as
cost-effective. Major portions 'of the U.S. government still are not
fundamentally serious about counterintelligence, although consciousness has
been heightened in some quarters.
Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1
 Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1
dob McEwen 3u--d Shuster
Ranking minority member Member, Subcommittee on
Subcommittee on Oversight Oversight ano Evaluation
Henry J. lRy.06
Ranking Minority Member of
mall Committee
Member, Subcommittee on
Oversight.and Evaluation
6 /064
4e.4 W,
E300 Livingston
Jary ungren
-"/ j ! / I
Declassified and Approved For Release 2012/09/18: CIA-RDP89T00234R000100050001-1