U.S. GOVERNMENT PRINTING OFFICE

66–789 CC WASHINGTON : 2000

DEFENSE SECURITY SERVICE OVERSIGHT

HEARING

BEFORE THE

SUBCOMMITTEE ON NATIONAL SECURITY,

VETERANS AFFAIRS, AND INTERNATIONAL

RELATIONS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

FEBRUARY 16, 2000

Serial No. 106–152

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

BOB BARR, Georgia

DAN MILLER, Florida

ASA HUTCHINSON, Arkansas

LEE TERRY, Nebraska

JUDY BIGGERT, Illinois

GREG WALDEN, Oregon

DOUG OSE, California

PAUL RYAN, Wisconsin

HELEN CHENOWETH-HAGE, Idaho

DAVID VITTER, Louisiana

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

CHAKA FATTAH, Pennsylvania

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

HAROLD E. FORD, JR., Tennessee

JANICE D. SCHAKOWSKY, Illinois

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

DAVID A. KASS, Deputy Counsel and Parliamentarian

LISA SMITH ARAFUNE, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON NATIONAL SECURITY, VETERANS AFFAIRS, AND INTERNATIONAL

RELATIONS

CHRISTOPHER SHAYS, Connecticut, Chairman

MARK E. SOUDER, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

DAVID M. MCINTOSH, Indiana

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

LEE TERRY, Nebraska

JUDY BIGGERT, Illinois

HELEN CHENOWETH-HAGE, Idaho

ROD R. BLAGOJEVICH, Illinois

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

JOHN F. TIERNEY, Massachusetts

THOMAS H. ALLEN, Maine

EDOLPHUS TOWNS, New York

BERNARD SANDERS, Vermont

(Independent)

JANICE D. SCHAKOWSKY, Illinois

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

LAWRENCE J. HALLORAN, Staff Director and Counsel

J. VINCENT CHASE, Chief Investigator

JASON CHUNG, Clerk

DAVID RAPALLO, Minority Counsel

(III)

C O N T E N T S

Page

Hearing held on Febaruy 16, 2000 ......................................................................... 1

Statement of:

Cunningham, General Charles, Director, Defense Security Service; and

General Larry D. Welch, chairman, Joint Security Commission .............. 36

Schuster, Carol R., Associate Director, National Security International

Affairs Division, U.S. General Accounting Office; Christine A. Fossett,

Assistant Director, National Security International Affairs Division,

U.S. General Accounting Office; and Rodney E. Ragan, Senior Evaluator, National Security International Affairs Division, U.S. General Accounting Office .............................................................................................. 2

Letters, statements, et cetera, submitted for the record by:

Chenoweth-Hage, Hon. Helen, a Representative in Congress from the

State of Idaho, prepared statement of ......................................................... 118

Cunningham, General Charles, Director, Defense Security Service, prepared statement of ........................................................................................ 39

Schuster, Carol R., Associate Director, National Security International

Affairs Division, U.S. General Accounting Office:

Budget for investigations and other missions of the DSS ..................... 27

Contract costs for Personnel Security ...................................................... 29

DSS cost breakdown .................................................................................. 31

Personnel Security Investigation workload ............................................. 25

Prepared statement of ............................................................................... 5

Welch, General Larry D., chairman, Joint Security Commission, prepared

statement of ................................................................................................... 66

(1)

DEFENSE SECURITY SERVICE OVERSIGHT

WEDNESDAY, FEBRUARY 16, 2000

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON NATIONAL SECURITY, VETERANS

AFFAIRS, AND INTERNATIONAL RELATIONS,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 10 a.m., in room

2247, Rayburn House Office Building, Christopher Shays (chairman of the subcommittee) presiding.

Present: Representatives Terry and Mica.

Staff present: Lawrence J. Halloran, staff director and counsel;

J. Vincent Chase, chief investigator; David Rapallo, minority counsel; and Earley Green, minority staff assistant.

Mr. SHAYS. I call this hearing to order.

The Department of Defense [DOD], relies on personnel security

investigations to determine whether individuals should have access

to classified information. It is a process critical to safeguarding the

national security. Currently, more than 2 million military, civilian,

and Defense contractor/employees hold confidential, secret, and top

secret security clearances; all of which require periodic re-investigation.

The agency responsible for policing access to national secrets,

DOD’s Defense Security Service, referred to as DSS, has encountered very serious, very persistent problems. In October, the General Accounting Office [GAO], reported that, ‘‘DOD personnel security investigations are incomplete and not conducted in a timely

manner. As a result, they pose a risk to national security by making DOD vulnerable to espionage.’’ GAO reported a backlog of more than 600,000 re- investigations

and deviations from investigative standards in the vast majority of

completed cases. How did so vital an element of the national security apparatus fall into such disrepair? Based on a widely publicized case of espionage in 1997 by a DOD employee holding a

clearance, our colleague, Representative Ike Skelton from Missouri,

ranking member of the House Armed Services Committee, asked

GAO to reassess the rigor and consistency of DOD’s personnel security investigations.

Their findings portray an agency mismanaged and reinvented to

the point of corrupting its core mission to provide timely thorough

background investigations upon which clearance granting agencies

could confidently rely. New leadership at DSS has a plan to address the backlog: increase the quantity and quality of personnel

security investigations, and maintain investigative standards.

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Today, we will examine the particulars of that plan, ask how realistic DSS projections are, what it will cost to implement them,

and when we can expect to see real progress. Despite the end of

the cold war, threats to our national security remain, more diffused, but no less determined to do us harm, our foes will seek to

exploit any lapse in vigilance and any lack of caution.

The DSS stands guard at a critical post in the New World Order.

It must be able to perform the mission. I would like to welcome all

of our witnesses and guests today. In the months ahead, we will

convene again to measure DSS progress against the goals and

benchmarks that I think will be discussed today.

At this time, I would call our first panel and invite them to stand

and be sworn in. Carol R. Schuster, Associate Director, National

Security International Affairs Division, GAO; Christine A. Fossett,

Assistant Director, same division; Rod E Ragan, Senior Evaluator,

at the same division, if all three, thank you.

[Witnesses sworn.]

Mr. SHAYS. Thank you very much. I note for the record that all

witnesses responded in the affirmative to that question. Ms.

Schuster, we welcome your testimony. Thank you. The bottom line

is we have 5 minutes. Then we will roll over another 5, and we will

roll over again if we need to. So, you take what you need to. Our

other witnesses will have that same privilege.

STATEMENTS OF CAROL R. SCHUSTER, ASSOCIATE DIRECTOR,

NATIONAL SECURITY INTERNATIONAL AFFAIRS DIVISION,

U.S. GENERAL ACCOUNTING OFFICE; CHRISTINE A.

FOSSETT, ASSISTANT DIRECTOR, NATIONAL SECURITY

INTERNATIONAL AFFAIRS DIVISION, U.S. GENERAL ACCOUNTING OFFICE; AND RODNEY E. RAGAN, SENIOR EVALUATOR, NATIONAL SECURITY INTERNATIONAL AFFAIRS DIVISION, U.S. GENERAL ACCOUNTING OFFICE

Ms. SCHUSTER. Mr. Chairman, we are pleased to be here today

to present our findings related to background investigations conducted on DOD employees by the Defense Security Service. With

your permission, I would like to briefly summarize my statement.

Mr. SHAYS. I am very sorry. I am very sorry. We have a vote.

I think rather than interrupting you, so you all have about 10 or

15 minutes if you want to go get a coffee or something, I will be

back.

[Recess.]

Mr. TERRY [presiding]. We will come to order again. As I understand, we were just beginning testimony. We might have been a

few sentences into it. Ms. Schuster, pickup where you left off, or

start at the beginning, whatever you feel comfortable with.

Ms. SCHUSTER. All right. We appreciate this opportunity to

present our findings on our background investigations conducted on

Department of Defense employees by the Defense Security Service.

With your permission, I would like to briefly summarize my statement and ask that the entire statement be submitted for the

record.

Mr. SHAYS. Yes, please, without objection.

Ms. SCHUSTER. First, let me underscore that safeguarding sensitive national security information is one of the most important reVerDate 11-MAY-2000 11:09 Oct 11, 2000 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\66789.TXT HGOVREF1 PsN: HGOVREF1
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sponsibilities entrusted to public servants. It is therefore critical

that only those individuals who have passed the scrutiny of rigorous background investigations be granted security clearances.

While it now appears that DSS is making positive steps to improve the thoroughness and timeliness of its investigations, our review conducted last year found serious lapses in both the thoroughness and timeliness of these investigations. This raises questions

about the risks such lapses pose to national security. First, let me

briefly summarize the findings with respect to the completeness of

DSS investigations.

A complete investigation should cover all of the investigative

areas required by Federal standards. Following these standards is

important to ensure uniformity among the many entities involved

in investigations and to provide reciprocity among agencies that

grant clearances.

Yet, we found from our detailed analysis of 530 personnel security investigations, that the vast majority did not comply with Federal standards, such as verifying residency, citizenship, and employment. For example, 92 percent were deficient in at least one of

the required areas. Seventy-seven percent did not meet the standards in two or more areas and 16 percent contained derogatory information that was not pursued, such things as past criminal history, alcohol and drug abuse, and financial difficulties.

All 530 individuals were granted top secret security clearances.

The primary areas where we identified lapses were in confirming

residency, corroborating birth or citizenship of foreign-born subjects

and their spouses, verification of employment, interviews with

character references, and criminal record checks at the local level.

Of particular concern to us were the cases where leads were not

pursued. For example, one individual working in the Joint Staff

had a credit report that showed that his mortgage was $10,000

past due and foreclosure proceedings had begun. Because this subject denied knowledge of this matter, it was not pursued. In another case, the subject’s credit report revealed a bankruptcy, yet

there was no followup.

In still another case, the subject claimed to be a citizen of another country and a member of a foreign military service. Character references alleged that he had been involved in a shooting.

None of these matters were pursued. With respect to timeliness, we

found that DSS investigations simply take too long. Defense agencies and contractors want investigations done within 90 days to

avoid costly delays.

We have found that over half of the 530 investigations we examined, took over 204 days to complete. Less than 1 percent took less

than 90 days, and 11 percent took more than a year. There are several problems with this. First, contractors have to wait too long to

begin their work. This jeopardizes meeting performance, cost schedules, and drives up costs.

Second, individuals having their clearances updated continue to

work with classified materials, even though their personal circumstances may have changed, rendering them unfit to retain their

clearances. Third, central adjudication facilities, who evaluate the

collective information to decide whether a clearance should be

granted or denied sometimes rule favorably, even though informaVerDate 11-MAY-2000 11:09 Oct 11, 2000 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 C:\DOCS\66789.TXT HGOVREF1 PsN: HGOVREF1
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tion is incomplete, because it could take another 6 months if the

case was sent back for further investigation.

Finally, the backlog of cases awaiting periodic reinvestigation, as

you pointed out, Mr. Chairman, has grown to at least 500,000. At

the time of our review, it was 600,000. To put this into perspective,

the total number of Defense employees who have clearances is

about 2.4 million. We found several weaknesses that we believe

contributed to the incomplete investigations that we found.

For example, we found that DSS relaxed its investigative requirements to give investigators greater discretion in how they

might meet Federal standards. Because this guidance was not always consistent with Federal standards, investigators became confused as to what constituted a thorough investigation. DSS also

eliminated two important quality control mechanisms: supervisory

review of completed investigations and its Quality Assurance

Branch.

DSS also provided almost no formal training on the new Federal

standards to its investigators between 1996 and early 1999. DSS

spent $100 million to implement an automated case management

system that simply did not work. The problems that ensued added

to the already large backlog of cases waiting to be investigated.

Another $100 million to $300 million may be needed to correct

the problems. Importantly, because DSS had been named a re-invention laboratory under the administration’s Reinventing Government Initiative, DSS was allowed to operate with much latitude

and without the normal degree of oversight that would normally be

expected.

Our October 1999 report makes several recommendations to the

Secretary of Defense to fix these problems. For example, we recommended that the Secretary increase oversight of DSS operations,

provide the necessary funding and priority to deal with the case

backlog, bring policy guidance on DSS investigations in line with

Federal standards, establish effective quality control and training

mechanisms, take corrective action on the case automation problems, and direct adjudication facilities to grant clearances only

when investigative work is complete.

We also recommended that the Secretary report the DSS Investigative Program as containing material internal control weaknesses under the Federal Managers Financial Integrity Act, and

that a strategic plan, with measurable goals and performance

measures be developed.

I am pleased to say that General Cunningham began taking corrective actions on these matters the very moment he assumed leadership of DSS in June 1999. I will leave it up to General

Cunningham to outline the specific actions his agency is taking to

correct these problems and ensure the integrity of the investigative

process.

This concludes my statement. I would be pleased to respond to

any questions that you might have.

[The prepared statement of Ms. Schuster follows:]

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Mr. TERRY. Thank you very much.

Mr. Shays is the real chairman of this subcommittee. Would you

please start?

Mr. SHAYS [presiding]. I will be happy to start. I ask unanimous

consent that all members of this subcommittee be permitted to

place any opening statement in the record, and that the record remain open for 3 days for that purpose. Without objection, so ordered.

I further ask unanimous consent that all witnesses be permitted

to include their written statements in the record, and without objection, so ordered.

I have a number of questions that the staff has written out that

I want to go through because I really want to cover those in some

sequence. First, let me ask you, re- investigations occur how often?

Ms. SCHUSTER. It depends on the level of the clearance. For a top

secret clearance, which was the focus of our investigation, it is

every 5 years. For a secret clearance, which is the next level down,

that is currently now 10 years. For a confidential clearance, which

is one step below that, it is every 15 years.

Mr. SHAYS. The number was approximately 2 million people with

any of these three, the top, the secret, and the confidential. What

would be the breakdown of the top secret? Do you know that? I

could ask the next panel if you do not have that.

Ms. SCHUSTER. Yes. We have 500,000 top secret, 1.8 million secret, and 100,000 confidential. That is a total of 2.4 million. These

are rough numbers.

Mr. SHAYS. I understand. Did you evaluate the logic of every 5

years? Did you look at that and say, could it be 6? Could it be 7?

Ms. SCHUSTER. No. We did not include that in our review. The

only things that were in our review were top secret clearances. So,

that is what we focused on. Those are the people who handle the

most sensitive information. So, we focused our efforts on just the

top secret ones.

Mr. SHAYS. Has it always been 5 years? Has that just been kind

of what we do?

Ms. SCHUSTER. Top secret has been every 5 years for a long time.

The new time limits on confidential and secret are relatively new.

I think that was 1997. Those requirements are in the force now.

DOD had been doing the secret clearances every 15 years. Now,

they will be doing them every 10 years. They had not been doing

the re- investigations on the confidential clearances until the new

requirement came into being.

Mr. SHAYS. In the 530 cases that you reviewed for top secret

clearance, you basically said 92 percent of the 530 investigation

cases were deficient and that they did not contain information in

at least one of the nine required investigative areas. Then you said

77 percent of the investigations were sufficient in meeting Federal

standards in two or more areas.

Was there any one of those nine areas that was mostly ignored?

Ms. SCHUSTER. Yes. There were some that were more prominent

than others. The one that was most frequently omitted was establishing residency, going out to the neighborhoods and making sure

that the person really lived at the address that he did, verifying

birth and citizenship, checking birth records.

19

Mr. SHAYS. I do not understand. If I would logically make an assumption, I will be the devil’s advocate here, that if they had been

investigated once, that was determined. It is like if they were born

in the United States, what is the point of checking 5 years later

that they were born in the United States.

Ms. SCHUSTER. Right. You are making a distinction between the

initial investigation and the periodic re- investigations. For the

periodic investigations, they do not have to go back and verify certain things that were already verified the first time. They just have

to cover the period since the initial one.

Mr. SHAYS. There is logic to it that way.

Ms. SCHUSTER. Absolutely.

Mr. SHAYS. You also said 16 percent not pursued when something like a drinking problem or a financial problem. I basically

thought the whole point of doing these re- evaluations was to identify a problem area. I mean, to me that is the most shocking thing

that you have told me today.

Ms. SCHUSTER. I would agree with that, yes. I believe that there

is really not too much of an excuse for not following up when you

come up with derogatory information. The guidelines do call for

going beyond just getting the basic information. When there is derogatory information that seems significant, it should be pursued

under the guidelines.

Mr. SHAYS. It reminds me of a cartoon I saw in a newspaper

years ago and it showed an investigator and he was looking for a

bank thief. He got into this house, and he opened the closet, and

all of this money came cascading down on top of him. He said,

nothing here but money, and then went on to the next thing. So,

that you would clearly identify.

How has the mismanagement of the agency contributed to the

weakness found in your review of the Personnel Security Investigation Program?

Ms. SCHUSTER. I think the management problems that have

come to light have been very well-documented, including testimonies as recent as last week, I believe, when the Secretary of Defense acknowledged that there were a lot of problems there. We

found the weaknesses in several areas. The first area was relaxing

the standards below the Federal standards, and also allowing perhaps too much latitude with their investigators as to how far and

how deeply they went into the investigative areas.

The second area was doing away with some of the quality control

mechanisms they had on those investigations. They did away with

the Quality Assurance Branch, and supervisory review, for instance. In the training area, they just really were not giving very

much training to the investigators.

Because there were new investigative standards, there was a

need for such training. They also did away with the Security Institute, which was training not only DSS investigators, but investigators throughout the Government.

Mr. SHAYS. Did this happen during the Clinton administration or

did this happen before the Clinton administration?

Ms. SCHUSTER. This occurred primarily between March 1996 and

very early 1999, but primarily between 1996 and 1998.

20

Mr. SHAYS. Frankly, I find this pretty astounding. I was thinking

if I was asked to come in, as General Cunningham has come in,

to remedy this, I mean, to think that you would eliminate the

training of your employees who go out, as one example of what you

mentioned, to me just frankly boggles the mind.

What would attribute to that? Did we in Congress just give lots

less money? I mean, what ultimately happened that made that

occur?

Ms. SCHUSTER. What appears to have occurred is that leading up

to 1996, there were several groups that were bringing up problems

with the Personnel Security Program across the board. They were

saying it was taking too long to do the investigations, and that the

whole process was fragmented and needed to be streamlined. So,

the Joint Security Commission, and the Defense Reform Initiative,

the Quadrennial Defense Review, all of those bodies were saying

that something needed to be streamlined and done to try to improve that whole personnel security process.

So, at that particular time, the Director decided to take up the

mantle and try to do something to streamline the procedures, and

got approval to become a re-invention laboratory and streamlined

some of the procedures.

Mr. SHAYS. In the beginning of this, I was trying to think. Well,

you know, once you have gone through a clearance, I think of myself. I am not really going to change that much. So, I think once

they have done a clearance, why would we keep doing it every 5

years? That is why we have these hearings. The answer is quite

evident here.

What I had realized is that the value of the re- investigation is

that as people are in the system, they gain more authority. They

have really an opportunity to see things that are far more precious,

and important, and sensitive. So, the logic, it seems to me, is that

the re- investigation is two things. Then I want you to comment.

It is really your statement. So, thank you for it. It is an excellent

statement.

You have a more important job and you are seeing more sensitive

information. Also, you can fall on hard times. You can have a financial problem. You can start to have a drinking problem, both

of which would, potentially, to tremendous compromise. So, I am

pretty comfortable with why we want to re-investigate.

Ms. SCHUSTER. I am in full agreement with what you have said,

yes. As a matter of fact, many of the people who are experts in this

arena have emphasized that periodic re-investigations are probably

more important than even the initial investigations. So, you are absolutely right.

Mr. SHAYS. I think I will just yield back my time, and if other

Members want to ask questions.

Mr. TERRY. Yes. I have got a couple of mop-up questions, if you

do not mind. I appreciate it. The field that you investigated from

the 530 cases, I apologize for maybe asking questions that are already involved in your statement. I assume those 530 were random.

Ms. SCHUSTER. Yes.

Mr. TERRY. They were not particularly pulled out of a field that

was waiting to be investigated.

21

Ms. SCHUSTER. Right. If I could just explain our methodology.

Mr. TERRY. I would appreciate that, yes.

Ms. SCHUSTER. We took all of the cases that were sent four of

the adjudication facilities, in January and February 1999. Those

four adjudication facilities were the Army, Navy, Air Force, and the

National Security Administration. We included all of the cases that

went there for adjudication, which means they were going to decide

whether to approve or deny a clearance at the top secret level.

We took a statistical sample of those cases. I think there were

1,698. We took 530 of those.

Mr. TERRY. That is a pretty good percentage.

Ms. SCHUSTER. The size got us to certain tolerance levels. To be

able to project results to that universe of cases that were there.

Now, those four adjudication facilities were selected because they

represent 73 percent of all the cases that are adjudicated in the defense area. So, it does indicate, I think, that our findings are representative of a systemic problem. So, that is how we selected

those.

Mr. TERRY. The phrase ‘‘systemic,’’ shall we assume that it was

equally weighted from the four adjudication centers or was it one

that was predominantly the problem while one was doing an excellent job?

Ms. SCHUSTER. What we found was that all had problems. The

lowest one was 88 percent in the Army. That statistic that I gave

you about 92 percent had one thing. It was 88 percent in the Army,

91 percent in the Navy, 94 percent at the National Security Agency, and 95 percent in the Air Force. So, all of them were pretty deficient.

Mr. TERRY. Well, that is incredibly depressing.

Ms. SCHUSTER. I did not come here to depress you.

Mr. TERRY. No, but it is disturbing. It really is, especially the 16

percent with derogatory information that lacked any follow-through

and followup. It really speaks volumes. You have done an excellent

job, I think, in your report about learning where the problems lay;

identifying that there is in fact a problem that we need to address.

Now, let us look toward the solutions.

You mentioned that General Cunningham has already started

addressing them. That became obviously the shorter part of your

report and presentation here today, but I think that is where we

need to focus on now, since you have done an excellent job of identifying the problems.

Let us focus now on the solutions. What has he been able to implement to-date? Where can we help out? Where have been the obstacles that you have been able to identify toward doing a better

job?

Ms. SCHUSTER. Let me first compliment General Cunningham.

He has really taken the bull by the horns and has taken actions

on every single item that we recommended in our report. GAO is

not used to the agency coming back and agreeing with us 100 percent. But in this particular case, the Department did agree with all

of our recommendations.

Some of the things that he has done on the management front:

we asked for a strategic plan, and for performance measures to try

to measure how much progress they are trying to make to meet

22

their goals. He has developed a strategic plan. They are working

on it and a performance plan to set milestones for trying to correct

some of the problems there.

They are designating this investigation program, as a material

weakness to the Department of Defense under the Federal Managers Financial Integrity Act. He has brought the standards back

in line with the Federal Standards so that the investigators will be

following the same standards that other investigators throughout

the Government are following, and has created a new manual for

them to follow, and will be providing them training.

He has re-established the Quality Control Unit within DSS.

These staff will be periodically tested on the standards to try to

maintain the quality of the investigations. In terms of the backlog,

this is a real difficult problem for them to solve. I understand that

what they have done is to go back and try to re-evaluate the backlog to see whether in fact all of the people that were in the backlog

really in fact needed an update.

Some people, for instance, retired. Some people were separated.

Some people were no longer working in classified areas. So, they

are trying to get a better fix on exactly the extent of the backlog.

Because there were quotas established on how many could be sent

to DSS for investigation, there is sort of a pent-up demand. The

statistical data base was not really very good at capturing the total

universe of this backlog.

They are taking several actions. One in particular, I think, is

very promising. They are working on an algorithm that will try to

identify those cases that are most likely to result in a denial of a

clearance, based on their past experience. That will allow them, if

they can get this to work, to identify those cases that are most

risky to the Government and be able to process those in a priority

manner.

Mr. TERRY. Let me interrupt. What do they need to make that

work so that we do not run into the same problem that you identified in your testimony as spending $100 million on automation that

has not worked?

Ms. SCHUSTER. Right. Well, that is a fair question. I do not know

the answer to that question because we have not really gotten into

the details of how they are developing that algorithm. The idea is

certainly a good one. They also are contracting out for some of the

backlog. They have put some Reservists on active duty to temporarily work on the backlog. They have OPM working on some of the

civilian investigations. They are thinking about also having a contract that would do some end-to-end investigations from the very

start to the very end with contractors who would be focusing on

some of the cleaner cases, the ones that do not seem to be as risky.

They would contract those out.

So, they are doing a lot of things on that front. As you alluded

to, they have a lot of problems with the Automated Case Control

Management System. That, to my mind, is the biggest challenge

that they face. That automated system just was not planned properly. It was not implemented properly. The people who were trying

to procure that system and manage it really were not totally qualified to do that.

23

They did not have the background in a major acquisition program. They did not have the information technology expertise to

really do that. I think all of these weaknesses have been acknowledged. So, they are at a juncture now where they have got to decide

whether they are going to try to patch up the system, or if they

are going to just give up on it and try to replace it. That is going

to be a major decision for them to make.

Regarding past evaluations, there was a DOD red team that

came in, and evaluated what they should do with that system, and

what went wrong with the system, and what they would recommend. A TRW contractor evaluation also looked at it from a

technical standpoint.

Both of those groups pointed out numerous problems with the

way the thing was put together, the lack of documentation, the lack

of checks and controls, just what you would expect of an automated

system, to the point that the TRW investigation did not feel like

it was salvageable.

Mr. TERRY. I was curious if any of the people from the outside

that have reviewed this made any suggestions. You are saying

TRW has made a suggestion that you walk away from it. I assume

that there are probably people on the inside, for want of a better

word. When you invest $100 million and a lot of reputation, that

is probably emotionally hard to walk away from, but that is what

TRW is recommending?

Ms. SCHUSTER. That is what they recommended in their evaluation. Now, I understand that there is another evaluation going on

right now. I am not sure who is conducting that. But that evaluation is supposed to come up with a recommendation to the Secretary, I think it is May 1st of this year, who would make the decision: Are we going to try to fix this system or are we going to consider an alternative?

One point that should be brought out is that if they do go with

a new system, that would fall under the Clinger-Cohen Act, which

would mean that they would have to look at things like: Is this an

inherently Governmental function? Does it have to be done by the

Government? Should it be governmental or could it be privatized?

Are there other alternatives out there, such as OPM’s system

that might be an alternative? Is a new system by the Government

needed and should one be procured? So, all of those decisions.

Make this sort of tough. It will take awhile to work through that,

if the decision would be made to go with a new system.

Mr. TERRY. But they are moving toward that direction. So, that

is movement and that is appreciated.

Ms. SCHUSTER. They are at least considering all of the alternatives now, and a decision is going to be made apparently the first

of May.

Mr. TERRY. All right. Thank you very much.

Mr. SHAYS. Mr. Mica.

Mr. MICA. Thank you. Just a couple of questions, if I may. Tell

me about the numbers of personnel that we are dealing with, with

DSS. How many full-time equivalent employees?

Ms. SCHUSTER. The employees that we are talking about that do

investigations are 11,075, roughly, at the time of our review, and

112 case analysts who also work in this area. The total number of

24

DSS employees is 2,500 or thereabouts. I could get the exact numbers for you for the record, if you would like.

Mr. MICA. Well, wait a second. Now, 2,500?

Ms. SCHUSTER. Total DSS employees.

Mr. MICA. That is total DSS. The 11,000 are those conducting the

investigations?

Ms. SCHUSTER. I am sorry, 1,175. I misspoke.

Mr. MICA. OK. They conduct how many background investigations?

Ms. SCHUSTER. They conduct about 150,000 investigations. That

would include secret, confidential, and top secret. I would like to

check that number and get back to you on that exact number.

Mr. MICA. I would like to know the figures on that.

[The information referred to follows:]

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Mr. MICA. Then I am curious, OK, then they do a rash of other

sort of renewable?

Ms. SCHUSTER. Right. There are other kinds of investigations.

Mr. MICA. Maybe you could give us a breakdown of figures on

that.

Ms. SCHUSTER. OK.

[The information referred to follows:]

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Mr. MICA. The budget was $320 million. Is that right?

Ms. SCHUSTER. It was $320 for fiscal year 2000.

Mr. MICA. 2000.

Ms. SCHUSTER. Right.

Mr. MICA. Now, did that include any of the—how much of that

is personnel? Was any of that capital $100,000?

Ms. SCHUSTER. No.

Mr. MICA. Was that already spent?

Ms. SCHUSTER. Yes. I think that $100 million is what has already been spent to-date. Then they have estimates of what additional funds might be needed to try to fix things.

Mr. MICA. I am trying to get a handle on what it costs to operate

this, as far as personnel. Another big item, you said they contract

out work. How much in dollars is contracted out for conducting

these activities?

Ms. SCHUSTER. I would have to get those details for you. I do not

have those with me today.

Mr. MICA. OK.

[The information referred to follows:]

Defense Security Service Fiscal Year 2000

Contract Costs for Personnel Security In Millions

Investigation Backlog $45.4

Source: Defense Security Service

Ms. SCHUSTER. I can say that the investigations are an important part of DSS, but they also have other missions that these

2,500 people conduct. One is the Industrial Security Program. Then

they also do security training and education.

Mr. MICA. Do they do this also for contractors, for private contractors?

Ms. SCHUSTER. Right. It is for civilian, military, and contractors.

Mr. MICA. Is there any way for the contractors to reimburse for

the cost of that service? Are they billed for that?

Ms. SCHUSTER. I am just not familiar with the way they are paid.

I know they are trying to move toward a fee-for-service kind of a

thing. It has not gotten off the ground. I think that has been put

on hold right now because they have not made much movement toward that fee-for-service.

Mr. MICA. Because people do not want to pay for it. I think that

is something we ought to look at. As chairman of Civil Service for

4 years, kicking and screaming of course, we were successful in reducing the Office of Personnel Management from nearly 6,000 to

about 3,000.

Of the 3,000 we eliminated, we privatized all of the investigators

into an ESOP, Employee Stock Ownership Plan. If you think that

was not controversial, Mr. Shays, they did everything to subvert

that possibly. But it was actually most successful. Do you know if

they contract with our ESOP at all to, yes, I see your shaking of

the head. Are they doing a good job? I see another shake of the

head. We are getting affirmative shakes of the heads from the audience, just for the record.

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I know privatization strikes fear into the heart of anyone on a

Federal payroll, but it does work and it is a great example of it.

I am not sure what could be privatized, or what portion of this

could be done, or how much could be contracted out to the entity

already privatized. I think it would be good to look at the number

of people, what we are producing.

Who is paying for the services? The Government picking up the

tab for private contractors who are doing business with the Government. There ought to be some reimbursement in it. Certainly, the

way it is operating now, just the information from your initial

study seems that we have to be able to do a better job doing this. Possibly a little innovation might be in order. $320 million is a

pretty big sizable budget. If possible, maybe you could submit for

the record and also for me, I would like to see both a flow chart

of the organization, and then I would like to see a breakdown of

the expenditures. I do not see it. I looked through here and did not

see it of how much is in these different categories for personnel, for

contracted services, and other expenditures. Maybe we could get a

handle on that.

Ms. SCHUSTER. We can provide that for the record. That was not

part of the scope of our investigation, but we can certainly get

those numbers for you.

[The information referred to follows:]

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Mr. MICA. I noticed in your recommendations, one of the things

is prioritizing. That they need some better system of prioritization.

I would imagine some of those would be of the utmost urgency and

highest level of security clearance, which would have to be done in

a certain fashion by a very secure personnel to start with. Then as

it filters on down, maybe some change in procedures in the way

that is done. I guess that is a part of your recommendation.

Ms. SCHUSTER. Yes. Our recommendation was that they try to

work on that backlog as a priority matter. What they have done is

they have found several different means to try to catch up with

that backlog. Then they are also working on this algorithm that is

going to try to identify those cases that, from their past experience,

tells them that they might be most likely to be denied a clearance.

They have an automated personnel questionnaire that flags certain items. Based on their past experience, if there is derogatory

information on certain elements, it tells them that the likelihood

this clearance might be denied is higher than another. So, that is

what they are working on internally to try to find a means of

prioritizing the workload. That seems like a good idea.

Mr. MICA. The other final question that deals with $100 million

spent on the unsuccessful computerization.

Ms. SCHUSTER. What they did was they took the long questionnaire that probably all of us have filled out and they automated

that into an electronic form. The whole idea was that everything

would be paperless.

Mr. MICA. Right.

Ms. SCHUSTER. Throuigh this Case Control Management System,

they would be assigning the cases to the investigators.

Mr. MICA. What basically went wrong? I mean, was it something

in the specifications that the agency provided, or was it something

that the vendor did not produce?

Ms. SCHUSTER. Just about everything that you can imagine that

could go wrong did go wrong, I think.

Mr. MICA. Was the vendor held liable or did we pay the whole

thing?

Ms. SCHUSTER. I am not so sure it was the vendor’s fault although maybe some of it was the vendor’s fault. But the basic underlying factors are that it really was not planned very well as an

acquisition program. The people were not very well qualified in either IT or acquisition management.

A lot of the basic planning steps that you would go through for

a major procurement program, such as determining your requirements, and drawing up a plan, and developing a testing plan, those

basis just were incompletely followed. So, when they got to the

point where they wanted to implement this, the electronic questionnaire was only being used about 50 percent of the time. Because

it was designed as a totally automated paperless system, and you

still had paper, then you were trying to keep two systems going;

one with paper and one without paper.

It just caused all sorts of delays because they could not get the

cases to the investigators fast enough. So, that really did contribute

to the backlog that we are seeing today.

Mr. MICA. Thank you, Mr. Chairman.

Mr. TERRY [presiding]. Mr. Shays.

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Mr. SHAYS. Thank you. As I fully grasp what you are saying, and

I am not fully there yet, it is astounding. I do not know how DSS

could be in worst shape, or how they could have done a worst job,

given the backlog. I want to ask a few more questions. Their budget was $74 million and then it went to $84 million?

Ms. SCHUSTER. For the whole agency?

Mr. SHAYS. Yes.

Ms. SCHUSTER. $340 million.

Mr. SHAYS. Where am I getting this $74 million?

Ms. SCHUSTER. $320 million for fiscal year 2000 was their budget.

Mr. SHAYS. OK. It must be just one part. Was that the contractors?

Ms. SCHUSTER. Total budget.

Mr. SHAYS. We had an AIA member company survey. They tried

to estimate what its impact, what the backlog was on the companies. These are some of the companies. Boeing had 570 employees

that were zero to 90 days. I want to take the 90 days beyond; 1,161

employees. They believe it cost them $52.1 million.

Honeywell, 31 employees. They think it cost them $1 million.

Northrup-Grummend, 735 employees. They believe it cost them $27

million. Lockheed-Martin. Now, they divided in technical services

58 employees, 4.8; LMTAS, I do not know if they call it LMTAS or

what, but 529; employees, $28.4 million. Skunk Works, 540 employees, $26.6 million.

United Defense, 145 employees and they did not give a cost in

that one. Aero Jet General, 40 employees, $4 million. General Dynamics Information Systems 8 employees. They did not give us a

cost. Where we have the cost $143 million, which is basically almost half of what the budget is. Now, I make an assumption, and

maybe you can answer this, that the cost that these companies incurred ultimately gets passed on in terms of the cost of the project

to the Government.

Ms. SCHUSTER. I would assume that is correct, that is the information you are bringing to light. While I do not know those figures,

I do know that during the course of when this backlog was building

up, there was some association of these contractors—I forget the

name of it—that complained to DSS about this and emphasized

that it was costing them a lot of money to have these delays.

Mr. SHAYS. But just 3,247 employee backlog, the private sector

of these companies has basically determined it cost $143 million.

We are talking about potentially hundreds of thousands. So, it is

the kind of thing I begin to wonder about the $600 toilet seat. We

do know it cost the Government money. We do know that somehow

we have not factored that in.

Ms. SCHUSTER. Right.

Mr. SHAYS. That is a strong argument to provide the resources

necessary to DSS to get the job done. To the extent Congress has

not done it, and it may be that we privatize more. My understanding is that when we hear from DSS that they are basically going

to tell us that they have a 50 percent assistance from the private

sector, ultimately when they get their number down from contractors, those employees disappear.

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I am basically wondering this question. They had a tremendous

backlog so they were to find ways to streamline. It strikes me that

the streamlining not only did not streamline, it did the exact opposite. It created even more backlog and it provided a less acceptable

quality of result, such as ignoring a large percent, was that 16 percent, of indications you should look at something. That was ignored. Am I correct here? Reinventing got the backlog larger and

it compromised the system. I am not looking for a big answer.

Ms. SCHUSTER. OK. There were several reasons that led to this

backlog. The first thing is back in 1995, the Assistant Secretary of

Defense put quotas on the number that could be sent forward. So,

you got sort of a pent-up demand that is now a part of that backlog

that was not submitted. Then we had new requirements that were

instituted during this period for re-investigations on secret and

confidential clearances. Those had not been requirements before.

So, this added to the periodic backlog.

Mr. SHAYS. So, when you said the 5 has been there for years, the

10 and the 15 were?

Ms. SCHUSTER. New.

Mr. SHAYS. OK, fair enough.

Ms. SCHUSTER. Right. Also this automated system that we were

talking about just did not work. So, the caseload was not going

through there like they really wanted to. That contributed to the

backlog. Then DSS, also point to a couple of other factors. One is

that they feel that there are more people requesting clearances.

Their customers are requesting more clearances because of information technology jobs that may require clearances and a couple

of other factors. One was that there was a reduction in the number

of investigators that they had. So, all of those factors collectively

contributed to that problem. The re-invention part certainly had an

impact on the quality of the investigation.

Mr. SHAYS. I did not want a long answer, but I needed it because

you needed to clarify that there were a whole lot of factors.

Ms. SCHUSTER. A lot of factors.

Mr. SHAYS. I know we have a vote, but I just want to just get

into this last area. If you go into a company and you try to determine, well, they got bad and so on. You really want to face up to

really how bad it is. This is so bad that you could almost be tempted to say, well, it could not be worse. But it could be worse in one

respect. It could be that we have a larger backlog.

When you go into a company and they say, well, you know, our total IOUs are $10 million and then you look further and you find

it is $20 million, that is a shock. Can you tell me with 100 percent

confidence that the backlog is not larger than we think it is?

Ms. SCHUSTER. No. I cannot tell you what the size of the backlog

is. I would really question whether they have an exact fix on it.

Mr. SHAYS. OK. Let me ask you, how was the backlog determined?

Ms. SCHUSTER. Each customer that comes to DSS with a need for

an investigation has a fix on the number of clearances that they

need investigated. But these inputs are not put into a data base

that is reliable enough to the extent that you really know the totality of it. So, all they know is what is coming in to DSS to be investigated.

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Mr. SHAYS. So, you do not know, in a sense, your liabilities?

Ms. SCHUSTER. I would guess that they are probably just estimating the backlog, but you will have to ask General Cunningham

exactly how they are estimating that.

Mr. SHAYS. So, potentially it could be double or it could be half

of what it is. We at least know that it is this number, but it could

be worse.

Ms. SCHUSTER. It could be worse. It could be better. I do not

think they really know.

Mr. SHAYS. How could it be better? We have a number of actual

people, do we not?

Ms. SCHUSTER. Well, what General Cunningham has said is they

have been trying to look at that backlog with more scrutiny and determine whether all of those people that are in the backlog really

need to be investigated, because some may have retired, been separated, et cetera.

Mr. SHAYS. OK, fair enough. You are telling me I should have

some question about the number.

Ms. SCHUSTER. Yes.

Mr. SHAYS. That it is an estimate.

Ms. SCHUSTER. I agree.

Mr. SHAYS. And it could go in either direction. So, we have to determine whether it was a conservative or a liberal estimate. In

other words, you get the point. One last and final question. There

were 11 recommendations. Is that right?

Ms. SCHUSTER. I think there were 14.

Mr. SHAYS. So, they agreed to 11.

Ms. SCHUSTER. I think they agreed to all of them.

Mr. SHAYS. Twelve.

Ms. SCHUSTER. Twelve.

Mr. SHAYS. In fact, in every one that I see in the letter they

wrote on October 13th, uncharacteristically but thankfully, they

are succinct. They give you a recommendation and then they say

‘‘concur.’’ In ever instance, it is ‘‘concur.’’

Was there any additional recommendation that they did not concur? Was there any area where you had disagreement or can I basically accept the fact that all of your recommendations they concurred with and now the issue is how do you remedy it? In fact,

you suggest how to remedy it.

Ms. SCHUSTER. Yes.

Mr. SHAYS. They are following your guidelines in many cases.

Ms. SCHUSTER. Right. From their official response, we can conclude, at this point, that they are doing something about all of

those recommendations, and that they do agree with them.

Mr. SHAYS. And that is a very positive thing. So, the bottom line

for me, though, is I should take a second look at the number. The

committee should take a second look at how is the number determined and is it reliable, the backlog.

Ms. SCHUSTER. Right. I am sure General Cunningham can address that.

Mr. SHAYS. OK. Mr. Chairman, thank you. I am finished.

Mr. TERRY. Thank you, Mr. Chairman. We will be in recess

until—— Mr. SHAYS. I think we have a couple of votes.

36

Mr. TERRY. Then we will talk to the Generals.

Mr. SHAYS. It will probably be at least a half hour. So, I would

say 20 minutes.

Mr. TERRY. We will take a 20-minute recess.

[Recess.]

Mr. TERRY. Yes.

Mr. SHAYS [presiding]. I call our second panel, our two witnesses,

General Charles Cunningham, Director of Defense Security Service, and General Larry D. Welch, chairman, Joint Security Commission. I appreciate you remaining standing. I will swear you both

in. Thank you.

[Witnesses sworn.]

Mr. SHAYS. Thank you very much. It is very nice to have both

of you here. I know both of you have testimony. You can have your

testimony as long as you find it necessary. I think we will start

with you, General Cunningham. I know we will start with you.

Thank you.

STATEMENTS OF GENERAL CHARLES CUNNINGHAM, DIRECTOR, DEFENSE SECURITY SERVICE; AND GENERAL LARRY D.

WELCH, CHAIRMAN, JOINT SECURITY COMMISSION

Mr. CUNNINGHAM. Thank you very much, Mr. Chairman. I made

a statement and I would like to submit that for the record. If it is

agreeable with you, sir, I would just like to abbreviate that in the

interest of time.

Mr. SHAYS. Sure. That testimony will be in the record.

Mr. CUNNINGHAM. Thank you, sir.

Sir, as the GAO reported, the agency did agree completely with

the report. In fact, we have used it as a very, very helpful road

map to fix the discrepancies and to go beyond those actions. So, I

want to start by thanking the GAO. It is working very well in recovering the agency. I would quickly like to go through why we are

in this situation. What are the problems? What are the solutions?

Of course, I will not be able to cover all of the problems or all of

the solutions, but I want to quickly get through this part.

Mr. SHAYS. Feel free to be quick, but do not speak fast.

Mr. CUNNINGHAM. All right, sir. The situation that we found ourselves in was caused by very much a breakdown in our management effectiveness as reported by the GAO. In fact, a substantive

part of the effort made by management, those efforts by management were caused by a work force reduction. It is well-understood

that the Defense Security Service was not the only activity in the

Department of Defense being reduced in size.

That was happening across the Department. Nevertheless, work

force reduction was a major factor in that we reduced almost 40

percent of the work force. Investigative requirements increased as

the GAO had testified. In fact, the quotas imposed all led to a

buildup in the backlog of periodic re- investigations.

A major factor in this was that in an effort to compensate for the

reduction in personnel, information technology in the form of the

Case Control Management System was seen as a major way to reconcile the difference in achieving our mission. Nevertheless, the

Case Control Management System, as the GAO reported, was managed in such a way that it did not deliver.

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You will recall that the Case Control Management System was

turned on in October 1998. Immediately it ran into problems. It

was barely able to function at all for the first 6 weeks that it was

in being. That was a major part of causing the situation we are in

because: of the turbulence that it caused beyond just not getting

the work done; the turbulence that it caused in the organization.

Thus, the management decided, and I do not agree with it at all,

the management decision to relax standards and cease the many

of the quality control activities that were ongoing. I would hasten

to add that the Security Policy Board also did not agree with that

action.

So, the problems, as they were seen inside the agency, were that

there was an un-achievable task to be accomplished. The work

force became demoralized. Training had been reduced. There was

great fear of out-sourcing in the agency. All of that is not gone.

There was a growing backlog. That becomes the definition or the

metaphor for a larger problem.

The agency, in fact, was trying to work with both the information

technology, the electronic personnel security questionnaire and

with a paper questionnaire. So that at the time that technology

was supposed to be solving the problem, the old method had not

gone away. There was the continuing false starts that occurred in

the Case Control Management System because that program management was not organized, as reported by the GAO.

Very quickly on solutions. The solutions for DSS have had to derive from a comprehensive change in how the agency operates.

Quickly, the agency had to return to standards and quality. Training had to be emphasized. The timeframe that I am in now is the

summer of 1999. Resources had to be organized to task. That is

done. Training is reestablished in the DSS academy.

Standards are reestablished in the agency, and operating instruction on August 16th achieved that. An investigations manual had

to be redone, approved, and fielded in December. Our quality management activity has been reestablished and is staffed. We have returned to basics and sound management practices.

By that, I mean we communicate as openly as possible. We have

put our organization in a condition that has a unity of command

in it. Everybody now knows their boss. We have reduced the span

of control. We are still in the process of this. Be careful how I say

that. We are in the process of reducing span of control in the field

to where in situations where we had as many as 36 personnel

under one first-line supervisor.

In March, that will all be reduced across the board to 11:1. It has

been an essential factor in how we bring our people along. Especially, we have now put in something called standardization and

evaluation. Standardization and evaluation is an activity whereby

new investigators we call them agents after they complete appropriate academic training, which we now give in our academy that

has been reestablished, they are given an initial qualification check

by a standardization and evaluation examiner.

After that, we have periodic and a periodic examinations or

checks of what our agents are doing. We have begun hiring. We are

going to increase across the board from about 2,450 people on

board now. We will go up over the next year to about 2,600 people.

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That will include about 100 more agents, taking us from 1,200 to

over 1,300 agents.

Augmentation is a major part of what we are looking at. Before

I arrived at the agency, the Deputy Secretary of Defense had ordered that augmentation begin. That was done. The decision was

made in May. That augmentation came in the form of getting the

help of OPM.

Mr. SHAYS. Let me ask you. Who ordered that?

Mr. CUNNINGHAM. The Deputy Secretary.

Mr. SHAYS. The Deputy Secretary?

Mr. CUNNINGHAM. Excuse me, sir, the Deputy Secretary of Defense. Thank you very much. It is hard to leave the Pentagon.

Thank you. The augmentation that we are into now, then, has that

first phase that Secretary Hamrey ordered in May, which uses

OPM. In addition to that, letter contracts with a company named

OMNISEC and a letter contract with a company named MSM.

OPM’s contractor is USIS. That was the one that Mr. Mica had

mentioned earlier.

In addition to that, and this has much higher potential for us,

the phase two augmentation will consist of larger contractor support capabilities that we intend to align, as much as possible, with

each of the military departments and with industry so that unique

requirements can be best met. Those activities begin with the first

contract coming on board as early as the end of this month. Four

of those contracts we hope to have on board by the beginning of the

summer.

Sir, I will stop with that and standby for your questions.

[The prepared statement of Mr. Cunningham follows:]

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Mr. SHAYS. OK, thank you. I am going to ask you question now.

I do not want you to answer it, even if you want to answer it, right

yet, because I want you to think about it. I am going to ask you

how confident you are in the backlog. I want you to know that I

am going to be writing a letter of request to GAO that they verify

the backlog number. That we not work with guesstimates.

So, I want you, and frankly this could be a help to you because

if the backlog is greater and you set out an agenda based on the

backlog, you are dead before you start. Then somebody else will be

taking your place saying the mismanagement that preceded them.

So, General Welch, thank you. You are on.

Mr. WELCH. Thank you, Mr. Shays. The Joint Security Commission Report II is in the public record. That is really our report for

the record. I do not have an opening statement. Let me take 1

minute and remind you of what the Joint Security Commission was

about.

Mr. SHAYS. Yes. I know nothing about the Security Commission.

So, you feel free to really educate me.

Mr. WELCH. The first Joint Security Commission, one, was asked

by the Department of Defense and the DCI for a set of recommendations to address what was seen as an incoherent and perhaps sometimes chaotic set of security guidelines. There was seen

a need for much more coherent and security guidelines, both to increase effectiveness and to reduce cost.

We reported out in 1994 with a set of recommendations. It eventually led to a Presidential Decision Directive to implement the key

recommendations of the Joint Security Commission. The Joint Security Commission II convened 5 years later at the request, again,

of the Department of Defense and the DCI. It was asked specifically to give a grade on how the Government was doing implementing the direction of the PPD and the recommendations of the first

Joint Security Commission.

The primary focus, or one of the primary foci of the Joint Security Commission I, was personnel security. Standards were inadequate and execution was inadequate. Once again, one of the primary recommendations of the Joint Security Commission II was

that we had agreed to investigative and adjudicative standards, but

they were not being followed by all of the Department. So, that was

the background for the Joint Security Commission.

Mr. SHAYS. Anything else you would like to say?

Mr. WELCH. No. That is it.

[The prepared statement of Mr. Welch follows:]

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Mr. SHAYS. OK. Let me just ask you, there was a Commission

in 1986. Is this the same Commission that we are talking about

now or was that a different Commission?

Mr. WELCH. No, sir. The Commission in 1986, whose name escapes me, was one of the three—— Mr. SHAYS. Stillwell, was that it?

Mr. WELCH. Right. It was one of the three earlier Commissions

that lead to increasing concern about the lack of standards, the

lack of coherent standards for personnel, and security, and for security in general.

Mr. SHAYS. So, there was in 1986. Was there one earlier or one

later? There was one in 1994, right?

Mr. WELCH. There was one in 1986. There was one in about

1988. There was another one in 1992. Then we reported out in

1994.

Mr. SHAYS. Then you were established in 1994?

Mr. WELCH. I am sorry?

Mr. SHAYS. You say you were established in 1994?

Mr. WELCH. The Joint Security Commission I reported out their

first report in 1994.

Mr. SHAYS. You reported out your study. You had been in existence for how long.

Mr. WELCH. Then we disbanded. We met for a year and a half.

We reported out. It eventually resulted in a Presidential Decision

Directive, which then established the Security Policy Board, which

was charged with implementing these recommendations. Then 5

years later, we were asked to reconvene, really for two purposes.

One, because it had been 5 years and they wanted to check on

how the Government was doing. Second, by that time, there were

enough indications of problems with personnel security that we

were asked to particularly focus on those issues.

Mr. SHAYS. Well, you are well-aware of what GAO has said.

What is your reaction to what they have said?

Mr. WELCH. I agree with what the GAO has said.

Mr. SHAYS. I want you to characterize it. I mean, is it out of concern? Should I be greatly concerned? Should you be greatly concerned? I mean, I want some characterization of—I will just tell

you up-front. For me, I read it and I find it so astounding. When

I was speaking to someone on the floor before I came back, I said

it is so bad, it is so big that you cannot get your arms around it

in one way.

I mean, if you had told me that when they did the reinvestigation the found 2 or 3 percent where they noticed that they should

do further research, but when you come up with 16 percent, it is

like unbelievable. That is the whole point of the investigation is to

identify your problem and then go after it. So, I want you to tell

me how you characterize it.

Mr. WELCH. OK. It is bad, and big, and you can get your arms

around it.

Mr. SHAYS. You can, c-a-n?

Mr. WELCH. You can. So, let me tell you why I say that. Personnel security is a risk management business. That is the nature of

the business. We are making judgments about the trustworthiness

and the reliability of human beings. We now have, which we did

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not have in the past, a set of standards on which we base those

judgments. Understanding that we are always talking about risk

management and we are always talking about making judgments.

So, the Government has agreed across all of the agencies of the

Government, which is an immensely difficult task, that there is a

set of standards that we can apply that will give us reasonable confidence that based on our knowledge of past behavior and current

circumstances, we have a satisfactory standard for access to classified material.

So, the standard is in place. The standard is implementable. The

standard is quite reasonable. I do not think there is any question

that we can achieve those standards. But we did not. Now, you

have heard a lot of reasons why we did not achieve the standard,

but the solution is very straightforward. The solution is enforce the

standards. We have all agreed that those are the right standards.

Mr. SHAYS. Are those standards different than what the report

presented in 1994?

Mr. WELCH. The standards are quite different. When we entered

the effort that was reported out in 1994, the going-in emphasis was

on the cost of this largely incoherent system because there was a

lot of county option. Each agency set their own standards. Just to

give an anecdote to help understand it, at that time, I had three

separate top secret clearances. I had four separate compartmented

clearances.

As we were meeting, I happened to, be undergoing three separate

background investigations. My neighbors suggested to me that perhaps we should have a neighborhood barbeque and invite all of the

investigators at one time. That was what we characterized. As we

began to do our work, that 18-months’ worth of work, we became

very concerned about personnel standards.

Our concern was that in the area of personnel security, some of

the agencies had standards that we were so lax that we understood

why many agencies would not accept those standards.

Mr. SHAYS. You mean, so some agencies required more than others. So, that is why you had more than one check. Is this kind of

like, I used to think that, you know, when you went from red,

green, brown, and then black belt, when you reached black belt you

were done. Then I learned later on that you had 10 elements to

black belt.

Are you saying that we have different elements in our top secret,

or are you saying that different agencies just would not accept the

review of other agencies because of different standards?

Mr. WELCH. Both. Each agency set their own standards. The Department of Energy had a set of requirements to grant a ‘‘Q’’ clearance, which is the equivalent of a top secret clearance. It is the

equivalent of a DOD top secret clearance. The DCI had a different

set of requirements for clearances that went by the same name. So,

there was no reciprocity, but more important we did not have an

agreement on what was an adequate standard.

Mr. SHAYS. That was 1994.

Mr. WELCH. That was 1994.

Mr. SHAYS. So, the focus then was, let us have one review. Let

us have common standards among the various departments and

agencies.

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Mr. WELCH. Yes.

Mr. SHAYS. But you, in no way, were not suggesting that you

relax the standards like what took place. I mean, could someone

who had been with DSS go back and say listen, we were being motivated by the report that you all submitted? Could they blame

your report for a part of the problem?

Mr. WELCH. Well, I suppose anyone can do that.

Mr. SHAYS. Are they?

Mr. WELCH. No. Let me comment on a couple of issues that complicated it a bit. In the end, for the Department of Defense, the

standards went up. They went up considerably. This was an interagency effort under the Security Policy Board. So, it took a number

of years. I cannot even remember how many, I guess until 1997,

for all of these Government agencies to agree on what the standard

would be.

That is when we came to the definition of what is required to

grant a secret clearance, and what is required to grant a top secret

clearance, and what the time period would be for re-investigations.

Those standards were more stringent than had previously been

practiced by the Department of Defense.

They were perhaps less stringent than someone’s standards, although I do not know whose those would have been. So, from a

DSS standpoint, the result of that effort was to raise the standards

that DSS was expected to follow in their background investigations.

Now, that would be demoralizing only if you then did not get the

resources to do that.

Mr. SHAYS. But you were also suggesting that they not have to

do double and triple reviews.

Mr. WELCH. That is right. That is correct.

Mr. SHAYS. So, there should have been some advantage there.

Mr. WELCH. Our hope was that, that would result in a significant

cost savings. But our report did not suggest that we could reduce

the cost of personnel security. We suggested you could reduce the

cost of physical security and the cost of document security because

of the change to electronics.

Mr. SHAYS. You did not suggest lowering the standards. You did

not suggest ignoring one of the nine elements. Is that true or not?

Mr. WELCH. Not at all. In fact, our whole emphasis was that we

need an agreed-to Government standard, and then you simply must

follow the standard. There are two reasons for that. One is you

need an agreed-to bar, some standard of judgment based on behavior and circumstances. Second, the real essence of security is security awareness.

Security does not just come from someone jumping over the bar

and getting access. Within the organization, everybody in the organization has to be aware of security issues. You cannot have security awareness if the people that you are trying to persuade to have

this kind of awareness do not see you adhering to standards.

Mr. SHAYS. Thank you. General Cunningham, before I ask you

the question, I said I was going to ask you, I want you to spare

me this problem. If you say you have total confidence, then I would

want to pursue under what basis you would have total confidence.

I would have you try to explain to me, in some detail, how the

number was derived.

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You may have total confidence. I just want to say that up front.

I do not want to find that you have total confidence, but you do not

know how they did it and so on. Bottom line question is do you

have total confidence? First, what is the backlog?

Mr. CUNNINGHAM. The backlog has been assessed by an integrated product team operating in OSD at 5,005.

Mr. SHAYS. Do you have intricate knowledge of how they determined that? Are you accepting their number based on their expertise?

Mr. CUNNINGHAM. I am accepting their number. However, I do

not have total confidence in it.

Mr. SHAYS. Fair enough. So, it is their best estimate as far as

you are concerned.

Mr. CUNNINGHAM. Yes, sir.

Mr. SHAYS. What do you think we can do to nail down that number?

Mr. CUNNINGHAM. Sir, the best way to nail down that number

is to have very disciplined ‘‘scrub and prioritize,’’ scrub in this case,

on the part of the military departments, industry, and other smaller entities in the security community. To that end, we, DSS, are

working with the military departments to have them embrace the

idea and resource the capability to have a central requirements facility on the front end of the process in the same way that there

is a central adjudication facility on the back end of the process.

Mr. SHAYS. If I were to ask you for your confidence level that the

number would be higher or lower, if you have no sense either way,

I do not want you to pick a direction. Do you think it is likely to

be underestimated, or overestimated, or do you simply do not

know?

Mr. CUNNINGHAM. Sir, while I think it could be overestimated,

I think the number is higher.

Mr. TERRY. Will you repeat that?

Mr. CUNNINGHAM. While the number could be lower, I think the

number is higher. That is my professional judgment.

Mr. SHAYS. In other words, it could go either way, but if he was

a betting man.

Mr. TERRY. It is or it is not, and that is your professional opinion.

Mr. SHAYS. No, no. Since it was my question, what I hear you

telling me is that it could go in either direction, but if you were

a betting man, it would be higher.

Mr. CUNNINGHAM. Yes, sir. That is it.

Mr. SHAYS. Mr. Terry.

Mr. TERRY. I want your help in coming to a full understanding

of an issue. So, I am going to ask you to apply what you are going

to perceive as fairly elementary questions, but I have to admit that

I am somewhat lost on the role of quotas. As I am perceiving from

the some of the testimony and reading the report that some of the

backlog, I do not want to say ‘‘blame’’ or ‘‘excuse’’ but the causal

relationship of the backlog to these quotas.

Can you explain to me when these quotas were implemented and

what they are in their direct relationship toward the backlog?

Mr. CUNNINGHAM. The quotas were implemented about 1994 in

an effort to discipline the clearance requests that were coming in,

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in an effort to motivate those making their requests to indeed request the clearances they really needed to have. We no longer have

those quotas.

Mr. TERRY. Did you do away with those?

Mr. CUNNINGHAM. No. Those were done away with in early 1999,

I believe, before my arrival.

Mr. TERRY. But the damage had been done?

Mr. CUNNINGHAM. Quotas were basically saying, out of a certain

percentage of the re-investigations, I do not know what the exact

quota is. So, maybe 10 percent or the real high priority ones, so we

are only going to make you do 10 percent.

Mr. TERRY. Is that a good generalization? Is that a ballpark generalization?

Mr. CUNNINGHAM. Let me tell you what I think I heard you say.

Mr. TERRY. All right.

Mr. CUNNINGHAM. The quotas were put on to try to get the number that were really needed, 10 percent or whatever.

Mr. TERRY. Yes.

Mr. CUNNINGHAM. But it was a large number. It was a reasonable number. However, it also, without intending to do so, created

what the GAO was discussing as a pent-up demand. That pent-up

demand finally becomes manifest in a backlog when the quotas are

dropped.

Mr. TERRY. From my perspective, it looked like the quotas set a

minimum bar that everybody strived to meet. Then just like the

backlog built up from there and you used the quotas as the excuse

to do that. So, I am pleased that the quotas have been dropped.

Unfortunately, that puts you in a very tough position to deal with

that.

Could you discuss, as my last question, and you did hit on it during your statement, but I would like you to expand on the automation of the caseload and what steps you are taking now to review

the current system that I think everyone agrees is not adequate.

Where are you in that process of reviewing it? Where do you feel

the direction is going?

Mr. CUNNINGHAM. Yes, sir. The Case Control Management System was, as the GAO reported, in need of proper program management. Last summer, we asked for a Program Management Office,

and properly trained people to run the program and run the recovery. Our judgment at that time was that it made prudent business

sense to continue the system, to continue with the Case Control

Management System until we knew that it was recoverable.

There was nothing in any study that said that the system was

not recoverable. Our mission is security and this was central to the

system. So, it made good sense to continue. When we continued, we

committed to get a Program Management Office to indeed have a

test capability for the system, which was not in the original architecture; to develop a concept of operations; to identify the priority

requirements, support, and concept of operations to do a baseline

architecture; and to do a schedule and a budget.

Those things had never been done before. They are now in the

process. We will have our first look at those on March 1st. We have

our Program Management Office up. It now manages all contractors. The DSS manages none of the contractors. In fact, it has idenVerDate 11-MAY-2000 11:09 Oct 11, 2000 Jkt 000000 PO 00000 Frm 00116 Fmt 6633 Sfmt 6633 C:\DOCS\66789.TXT HGOVREF1 PsN: HGOVREF1
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tified time lines for the recovery of the system, in terms of stabilizing the system by June 1, 2000, improving the system by June 1,

2001. From June 1, 2001 through June 1, 2003, enhancing the system to meet those requirements that cannot now be foreseen.

Mr. TERRY. Thank you. Mr. Chairman, that concludes my questions.

Mr. SHAYS. Thank you very much. I have a number of other

questions; some that my staff wants me to get on the record as

well. I would like to clarify the budget issue. My sense was that

I was being accurate in saying your budget of $74 million went up

to $84 million. That the difference of that number of the $300-

something is money that goes into a fund that looks at the private

sector employees. So, maybe you need to help me sort out your

budget a little bit.

Mr. CUNNINGHAM. The budget includes everything that we are doing this year. It is $324 million. The discrete breakout of what

each one of those, each part of that composing that $324, I would

like to submit that back to you in detail.

Mr. SHAYS. Sure.

My understanding is that basically your Government budgets, $84 million, and then you have a trust fund budget that really is

contributed from the employers.

Mr. CUNNINGHAM. Yes, sir. It is a working capital fund.

Mr. SHAYS. Right.

Mr. CUNNINGHAM. It is a financing capability by which the requesting entities that we, say essentially the military departments,

identify what level of investigations will they need to have done.

Then they put the money in to cover that for the year. They budget

in advance. Then they move the money to us with their clearance

requests.

Mr. SHAYS. I realize that money is fungible. I mean, it may be

the same person that pays ultimately. My sense is that a chunk of

your budget is associated or tagged to a private company like Boeing or Honeywell, and that they then pay that cost.

Mr. CUNNINGHAM. Sir, I am not aware of that. I would have to

answer you back on that.

Mr. SHAYS. OK.

We will get into that later. It raises some interesting questions

that I have. Ultimately, if the private sector is paying some of it,

we end up paying for it in the final product we buy. It does raise

some interesting questions as it relates to the question I asked earlier. If the AIA member companies’ survey has taken Boeing and

said they have a backlog of 90 days in November 1999.

This is what it was. And it was 1,161 employees and it cost them $52 million, and when I went through the list, you came up with

3,247 employees costing $143 million. This is a wasted expenditure,

as far as they are concerned. It would be an expenditure, if they

were done in a timely basis, would not occur. Have you been presented that type of information from anyone?

Mr. CUNNINGHAM. Yes, sir. I have a copy of that correspondence.

Mr. SHAYS. Now, this is where my mind starts to work. I say,

you got a backlog of hundreds of thousands, and just 3,247 cost ultimately, I believe the Government, $143 million. I mean, if anybody has a good case for arguing that you get the backlog done and

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we invest in it, you do. I hope OMB has been exposed to this. Is

this a document I should have comfort that is credible?

Mr. CUNNINGHAM. Sir, I think that the private sector entities

who identified that problem are in the best position to state what

that is costing us collectively. You are right about that. So, I appreciate the urgency that must go against that kind of a problem.

Mr. SHAYS. Have we, in the private sector, tried to estimate the

cost? I mean, in other words, this same logic occurs. I mean, you

have someone who is not given clearance. So, you cannot get the

job done. You have people waiting in line. The job does not get

done. It gets delayed. Well, that happens in the public sector as

well.

Mr. CUNNINGHAM. Yes, sir.

Mr. SHAYS. Do we have people in the public sector that have

tried to put a cost to this?

Mr. CUNNINGHAM. Not to my knowledge, sir. In fact, you are

highlighting what I am seeking on behalf of the agency to have

‘‘scrub and prioritize’’ from everybody.

Mr. SHAYS. Can you tell me how many of the clearance re-investigation checks are the private sector versus the public sector?

Mr. CUNNINGHAM. Yes, sir. In general terms, about 75 percent of

our work is in the military departments and otherwise public sector and about 25 percent is in the private sector.

Mr. SHAYS. Thank you. What kind of risk assessment has been

developed to determine the danger the backlog poses to national security?

Mr. CUNNINGHAM. Sir, the GAO mentioned the algorithm that we

have been working on and we have now completed. I will be most

pleased to provide a copy to you and your committee. It is aimed

at risk management. Our plan is to go into the total population of

the backlog, apply the algorithm, identify which records come up

as high risk from the algorithm, which we believe and have had

scientific support will predict 89 percent, based on a 6.5 percent

sample size, that we use it against the backlog while we are bringing the backlog down.

So that we both work the backlog down and, in the process, go

after those that are identifiable as highest risk in the backlog.

Mr. SHAYS. Is that document ultimately going to be a public document or will it be a secured document?

Mr. CUNNINGHAM. Sir, it is a public document. I will be happy

to provide it.

Mr. SHAYS. I am going to ask you two benchmark issues. What

is your timetable for eliminating the backlog? There is another

question that I want to ask. That relates to what timeframe has

been established to enhance the Case Control Management System? So, timeframes, benchmarks.

Mr. CUNNINGHAM. Yes, sir. Sir, we believe that——

Mr. SHAYS. And I am going to interrupt you. I am sorry. This is

based on the number that has been presented to you as the backlog.

Mr. CUNNINGHAM. Yes, sir. We believe that we can bring the

backlog, as we now know it, we can eliminate the backlog by the

end of calendar year 01. Sir, that is a hard task, and I will say that

right up front, but I believe, as I have come to know the agency

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and the ability of private sector contractors who are seeking the

work to augment us, that we will be able to do that.

I believe that we can do it in good form in protecting our standards and our quality because we are requiring proper training, certification, applying our standardization and evaluation checking,

our quality management, our operations research so we can do the

trend analysis that goes along with it, and other activities.

It is important, sir, if I may add, it is important that we are

going to use our algorithm to determine which cases should go to

those contractors so that cases that we predict we will have problems, we will keep those right in the agency. We intend that all

problem cases, issue cases, derogatory information uncovered, that

those cases revert back to the DSS.

Mr. SHAYS. Is the integral of success, will you get so many each

from this point on or will you see the vast bulk of them done from

July 2001 to December 2001? In other words, by the end of this

year, what do you anticipate you will have done? Will you have 50

percent of it done?

Mr. CUNNINGHAM. By the end of this year, I think it will be fair

for us to expect in the neighborhood of 15 to 20 percent of it. The

reason that the rest of it is achievable in the next calendar year

is because the contractors will have spun-up. Our timetable for the

Case Control Management System, which I have mentioned before,

will have taken root.

So, that major constraint will be less so. And because all of the

four contractors that we intend to put as major efforts, and they

will have the opportunity to bring others in with them, that the

way they manage their cases will be managed independently of our

Case Control Management System.

So, it will take the agency from complete dependence on this

Case Control Management System over onto another capability, all

of which will be visible to us so we know that they are being done

properly. In other words, we are going to have belts and suspenders.

Mr. SHAYS. I was with you until that last part. In other words,

you are going to have what?

Mr. CUNNINGHAM. Well, in this hearing term, ‘‘belts and suspenders.’’ You know, we will have it both ways. It is not a trivial

point because we had all of our eggs in one basket and we are getting out of that.

Mr. SHAYS. It begs the question of whether you get greater productivity from the private sector or from the public? I realize you

have to work with both sides. I understand one reason why we do

the private is that we ultimately will have phased down that unusual number. So then you do not want to buildup your bureaucracy. So, it makes sense to farm it out. Does the private sector have

some inherent advantages that allow them a greater productivity?

Mr. CUNNINGHAM. Yes, sir. They have agility. They are able to

hire and remove people quickly. They are able to locate easily.

They are able to spinup fast with a great deal of focus. They are

able to marshal resources almost instantaneously, if they decide to

go after the business.

Mr. SHAYS. That is a very good answer and one that I would appreciate. One of the things that we have learned on the subcommitVerDate 11-MAY-2000 11:09 Oct 11, 2000 Jkt 000000 PO 00000 Frm 00119 Fmt 6633 Sfmt 6633 C:\DOCS\66789.TXT HGOVREF1 PsN: HGOVREF1
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tees of Government Reform is that in the private sector, three people make a decision. Ultimately, in the public sector it is 11. What

that must do for ingenuity, and creativity, and timeliness is mindboggling.

Mr. CUNNINGHAM. Sir, if I may tag onto that. We will be watching very closely what happens with these private sector contractors. Where there are better methods and applications of IT, we intend to adopt those same things ourselves.

Mr. SHAYS. Now, there are only two benchmarks so far I have

heard. So, give me a few more. We are going to want to come back,

I mean, whoever is chairman of this committee next year, I would

imagine, and someone will pursue this issue. We will want to meet

with you to determine that. We frankly would want to meet with

you probably later on.

Mr. CUNNINGHAM. Yes, sir. Let me give you a few of those. When

we worked with the Program Management Office and the contractors, and we saw the way they went about considering progress on

the Case Control Management System, those timeframes I mentioned for the Case Control Management System, we identified the

same phasing for the overall recovery of the agency.

We have a target right now for August of this year to be making

the number of cases closed per day, on average, to hit that target.

It happens to be 2,500 cases a day closed for the DSS. To hit that

target in August, and to hit it in a sustainable way, and to hit it

in a way that we are continuing to build capability.

To be able to not only take care of the backlog, but also be prepared to be able to do more than that should that arise. We expect

that it will arise because of what the security environment is becoming. Therefore, the date to stabilize the agency is September

1st.

It will be manifest in the data of output exceeding input for August in a sustainable way. That we will improve the agency, not

just the CCMS, but the whole agency, through June 2001. And that

we will enhance our capabilities from June 2001 through June

2003. We are tying them all together, and a very good measurement will be when we hit that target in August.

That is one that I am happy to see the agency held accountable

to, and would be more than happy to come back when you say.

Mr. SHAYS. Is that the first key date, as far as you are concerned?

Mr. CUNNINGHAM. Yes, sir. The whole agency right now is marshaling to hit that target in a sustainable way.

Mr. SHAYS. Just a few more questions here. What do you consider to be the most pressing problem confronting DSS? You have

got lots of challenges, lots of problems. What would be really the

most?

Mr. CUNNINGHAM. I am often asked this by my boss, the

ASDC3I, and the answer is——

Mr. SHAYS. Wait a second.

Mr. CUNNINGHAM. The Assistant Secretary of Defense for Command, Control, Communications and Intelligence.

Mr. SHAYS. Thank you.

Mr. CUNNINGHAM. Thank you, sir. Art Money asks me this question a lot. And the answer from the beginning was our people.

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Today, the answer is the same. It is our people. This work force

has had a tremendously difficult time. To bolster their morale, and

we are making progress on this, to ensure they get the right training, proper preparation, proper response from their systems, those

are the kinds of things we have to work on, but it all centers on

the people.

Mr. SHAYS. You know, I have a few other questions. What I will

do is submit them, if we feel it is necessary to followup. I will have

the committee to submit it in writing and just have you respond

to one or two others. I am happy to have either of you make any

comment. Is there a question you wish I had asked you, General

Cunningham that you could wax eloquently on?

Mr. CUNNINGHAM. Wax eloquently, sir.

Mr. SHAYS. You do not even have to wax eloquently. Is there a

question you were really prepared to answer that you want to answer, or is there a question I should have asked?

Mr. CUNNINGHAM. Yes, sir. You asked the question. The question

that is sometimes not asked, but is the right one to ask is, what

is your biggest problem?

Mr. SHAYS. Do you want me to ask you what is your second biggest problem is?

Mr. Cunningham. Yes, sir.

What is it?

Mr. CUNNINGHAM. It is the Case Control Management System

because it becomes the pacing item for everything else that happens in the agency in investigations.

Mr. SHAYS. Thank you. General Welch, is there a question that

you would have liked me to ask or something that you want to say?

Mr. WELCH. Well, I am very happy with your questions.

Mr. SHAYS. That makes me very concerned.

If either of you have a closing comment, we can adjourn.

Mr. CUNNINGHAM. Thank you very much.

Mr. WELCH. Thank you.

Mr. SHAYS. Thank you very much. We appreciate you being here.

We appreciate your cooperation and we wish you well.

The hearing is closed.

[Whereupon, at 12:25 p.m., the subcommittee was adjourned.]

[The prepared statement of Hon. Helen Chenoweth-Hage follows:]

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