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CAN YOU CLEAR ME NOW? WEIGHING FOREIGN

INFLUENCE FACTORS IN SECURITY CLEARANCE

INVESTIGATIONS

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

JULY 13, 2006

Serial No. 109–255

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

JEAN SCHMIDT, Ohio

BRIAN P. BILBRAY, California

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

DAVID MARIN, Staff Director

LAWRENCE HALLORAN, Deputy Staff Director

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

(III)

C O N T E N T S

Page

Hearing held on July 13, 2006 ............................................................................... 1

Statement of:

Andrews, Robert, Deputy Under Secretary, Defense Counterintelligence

and Security, U.S. Department of Defense; and J. William Leonard,

Director, Information Security and Oversight Office, National Archives

and Records Administration ........................................................................ 12

Andrews, Robert ........................................................................................ 12

Leonard, J. William ................................................................................... 21

Zaid, Mark S., esq., managing partner, Krieger & Zaid; Doug Wagoner,

chairman, Intelligence Subcommittee, Information Technology Association of America, on behalf of the Security Clearance Coalition; and

Walter S. Nagurny, director, Industrial Security Office, EDS U.S. Government Solutions ......................................................................................... 41

Nagurny, Walter S. ................................................................................... 95

Wagoner, Doug .......................................................................................... 80

Zaid, Mark S. ............................................................................................. 41

Letters, statements, etc., submitted for the record by:

Andrews, Robert, Deputy Under Secretary, Defense Counterintelligence

and Security, U.S. Department of Defense, prepared statement of .......... 15

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland, prepared statement of ............................................................ 110

Davis, Chairman Tom, a Representative in Congress from the State of

Virginia, prepared statement of ................................................................... 4

Leonard, J. William, Director, Information Security and Oversight Office,

National Archives and Records Administration, prepared statement of .. 23

Nagurny, Walter S., director, Industrial Security Office, EDS U.S. Government Solutions, prepared statement of ................................................. 97

Porter, Hon. Jon C., a Representative in Congress from the State of

Nevada, prepared statement of .................................................................... 114

Wagoner, Doug, chairman, Intelligence Subcommittee, Information Technology Association of America, on behalf of the Security Clearance

Coalition, prepared statement of ................................................................. 83

Waxman, Hon. Henry A., a Representative in Congress from the State

of California, prepared statement of ........................................................... 8

Zaid, Mark S., esq., managing partner, Krieger & Zaid, prepared statement of ........................................................................................................... 45

(1)

CAN YOU CLEAR ME NOW? WEIGHING FOREIGN INFLUENCE FACTORS IN SECURITY

CLEARANCE INVESTIGATIONS

THURSDAY, JULY 13, 2006

HOUSE OF REPRESENTATIVES,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The committee met, pursuant to notice, at 9:40 a.m., in room

2154, Rayburn House Office Building, Hon. Tom Davis (chairman

of the committee) presiding.

Present: Representatives Davis of Virginia, Gutknecht, Platts,

Duncan, Dent, Foxx, Waxman, Maloney, Cummings, Kucinich,

Watson, Van Hollen, Higgins, and Norton.

Staff present: Larry Halloran, deputy staff director/communications director; Patrick Lyden, parliamentarian; Rob White, press

secretary; Andrea LeBlanc, deputy director of communications;

Brien Beattie, professional staff member; Teresa Austin, chief

clerk; Michael Galindo, deputy clerk; Kristin Amerling, minority

general counsel; Michael McCarthy, minority counsel; Andrew Su,

minority professional staff member; Earley Green, minority chief

clerk; and Jean Gosa, minority assistant clerk.

Chairman TOM DAVIS. Committee will come to order. Before beginning the hearing, I want to dispense with some quick committee

business. I thank the gentlewoman from Florida, Ileana RosLehtinen, for graciously agreeing to step down from the subcommittee on energy and resources so that our newest committee member,

Brian Bilbray, can have a seat on that subcommittee. And with

that, I would ask unanimous consent that Mrs. Ros-Lehtinen be removed from the subcommittee on energy and resources and Mr.

Bilbray be assigned to the subcommittee on energy and resources

and federalism and the Census. Is there objection? Without objection, so ordered.

Now, on with the hearing.

Today we continue the committee’s oversight of efforts to modernize and streamline the security clearance process, a slow cumbersome and fragmented system out of sync with current national

security needs. Today we focus on one key aspect of that process,

implementation of new standards to weigh the significance of foreign preferences or foreign influences on the trustworthiness of security clearance applicants.

Consistent assessment of those factors across all clearance granting agencies is one important aspect of the broader effort to upgrade and standardize the security clearance process. An increasVerDate 11-MAY-2000 12:34 Oct 16, 2008 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\44769.TXT KATIE PsN: KATIE
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ingly globalized economic and political environment, our Nation depends on immigrants for a wide range of functions, including some

of the most high tech and sensitive factors in government work.

Naturalized citizens from every continent have come here and

been successful in businesses that support U.S. troops in every theater around the globe. Others provide language expertise that is

absolutely critical in our efforts to thwart the next terrorist plot

against the American people.

This is the kind of work that requires a security clearance, and

the ability to distinguish loyal naturalized citizens from those who

might pose a security risk is an essential part of getting that work

done quickly and effectively. Cold war standards and practices that

broadly at times automatically denied clearances to those with extensive foreign contacts have to be refined to meet the new realities. Toward that end, the President’s national security advisor on

September 29, 2005 issued a revised set of parameters designed to

guide decisionmaking by security clearance adjudicators from

across government. The revised guidelines give needed flexibility to

clearance grantors in evaluating risks posed by foreign contacts

and considering factors that minimize or mitigate the risks.

Standard uniforms apply to adjudicative guidelines are one element of the larger effort to centralize and unify the process so

clearances granted by one agency will be honored by others.

Achieving that clearance reciprocity is mandated by the provisions of the 2004 Intelligence Reform Act authored by this committee. It appears some departments, including the Department of Defense, have been slow to embrace the new standards.

I look forward to hearing from or distinguished first panel today

about efforts to implement the revised guidelines. At a time when

we need unique technological and cultural language expertise of

the foreign born, increased security concerns have made it harder

than ever for some with family and business interests abroad to

qualify for a clearance. That paradox is compounded by a still broken investigative and adjudicative system plagued by delays and

backlogs.

So we asked our second panel of witnesses to discuss foreign influence factors in the context of the end to end clearance process.

In May, we heard testimony about a complete meltdown at the defense security service, which briefly stopped processing contractor

clearance applications all together. As that incident illustrated,

previous efforts to fix security clearance process have produced

what can only be charitably characterized as mixed results. Delays

persist, and agencies still don’t trust clearances granted by others.

A numbers of agencies, including some in the intelligence community have chosen to avoid the lengthy delays and inefficiencies

of an OPM DSS system still addicted to paper and shoe leather. Instead, they deal directly with the same contractors hired by OPM,

but allow them to use more modern Web-based investigative tools.

That approach appears to achieve significant savings of time and

money.

I look forward to hearing today’s recommendations for process

improvement in the handling of foreign influence factors in the

overall security clearance system. Again, I want to welcome all our

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witnesses today at this hearing on a critically important national

security issue.

I ask unanimous consent that recent correspondence between the

committee and the Department of Defense regarding implementation of the adjudicative guidelines be inserted into the hearing

record. And hearing no objection, so ordered.

And I ask further unanimous consent that the hearing record include a statement and exhibit submitted by Sheldon I. Cohen, an

attorney who represents clearance applicants and who has analyzed the clearance appeals process. Without objection so ordered.

[The prepared statement of Chairman Tom Davis follows:]

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Chairman TOM DAVIS. I would now recognize our distinguished

ranking member, Mr. Waxman, for his opening statement.

Mr. WAXMAN. Mr. Chairman, I am glad we are holding another

hearing on problems with the security clearance process. Earlier

this year, we heard from national security whistleblowers whose

clearances had been revoked in retaliation for reporting illegal activities occurring in their agencies. Six weeks ago, we heard about

the problems caused when the Defense Department stopped processing clearance applications because they ran out of money.

And today’s hearing highlights yet another serious problem, the

arbitrary and inconsistent weighing of ties to foreign nations when

determining whether to grant or deny clearances.

In making security clearance decisions, the first priority must be

maintaining our national security. Yet some of our most talented

citizens who are willing to place their knowledge of foreign cultures

and languages at the service of the United States often have family

and other connections to foreign nations.

Disqualifying such individuals and losing the valuable analysis

and information they could provide may pose more of a risk to our

national security than the theoretical security risk posed by their

connection to foreign relatives.

Protecting national security requires us to strike the right balance and calls for a consistent transparent process.

The process in place now is anything but consistent. According

to attorneys who handle security clearance cases, cases where applicants have similar ties to the same countries of origin reach different results without apparent rhyme or reason.

The administrative judges who hear appeals nearly always rule

in favor of the government, and their decisions are not reviewable

by the independent judiciary.

And ties to some countries are subject to heightened scrutiny

without any rational process for assessing the true risks.

I am especially concerned about how ties to Israel are considered.

In several cases that have been brought to my attention, government investigators have moved to revoke clearances of persons who

have held high level clearances for years, even decade, because

they have family or religious ties to Israel. Why these long standing connections which were fully disclosed to the government years

ago suddenly cause the government to revoke clearances is unclear.

It’s similarly unclear why ties to some U.S. allies like Israel are

disqualifying while ties to other allies like Great Britain or Canada

are not.

And the problem is not just limited to Israel. Ties to other U.S.

allies like South Korea also face heightened security.

What is most disturbing is that there seems to be no more formal

process to consider input from the State Department or the intelligence community in weighing the risks posed by ties to particular

nations.

Rather, the decision appears to be left to the whim of each administrative judge to decide whether a foreign country is a friend

or foe without regard to official U.S. foreign policy.

I hope that today’s hearing will guide us in what action Congress

can take to inject some consistency and reason into the security

clearance process.

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Chairman Davis and I have been working together on these

issues. After our previous hearing that revealed retaliation against

national security whistleblowers, we introduced a bill that would

restrict the arbitrary revocation of clearances, and it passed out of

this committee on unanimous bipartisan vote, though it has not yet

been allowed to go on the full House for a vote. I hope we can also

work together to fix the problems identified in today’s hearing.

I would like to thank the witnesses testifying today. I look forward to hearing about the progress that has been made in addressing the issues raised at our prior hearings and a full discussion of

the problem that remain. Thank you.

[The prepared statement of Hon. Henry A. Waxman follows:]

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Chairman TOM DAVIS. Mr. Waxman, thank you very much.

Members will have 7 days to submit opening statements for the

record. We now recognize our first panel.

You know we like to swear you in, if you would just raise your

right hand, our first panel is Mr. Robert Andrews the Deputy

Under Secretary for Defense Counterintelligence and Security, U.S.

Department of Defense and Mr. J. William Leonard, the Director

of Information Security and Oversight Office, National Archives

and Records Administration. Raise your right hands.

[Witnesses sworn.]

Chairman TOM DAVIS. Thank you, please be seated. Your entire

statement is part of the record. You will have a light in front of

you. It turns green when you start, it will go orange in 4 minutes,

it is red at 5. If you can try to keep your comments so we can get

on the questions. We can put men on the moon. There are so many

things this country can do but the security backlog continues to

grow and it’s hurting us. Our ability to get things done as from Mr.

Waxman noted, and it’s costing taxpayers a lot more money. I

know people now with security clearances who don’t have the

skills, but they have the clearance so they are hired for the clearance and then they are trained and it’s so inefficient and the taxpayers end up footing the bill. So I think you understand the problem.

Mr. Andrews, we will start with you, thank you for being with

us,

STATEMENTS OF ROBERT ANDREWS, DEPUTY UNDER SECRETARY, DEFENSE COUNTERINTELLIGENCE AND SECURITY,

U.S. DEPARTMENT OF DEFENSE; AND J. WILLIAM LEONARD,

DIRECTOR, INFORMATION SECURITY AND OVERSIGHT OFFICE, NATIONAL ARCHIVES AND RECORDS ADMINISTRATION

STATEMENT OF ROBERT ANDREWS

Mr. ANDREWS. Good morning, sir. I am Bob Andrews, the Deputy

Under Secretary of Defense for Counterintelligence and Security.

My office is responsible for implementing personnel security policy.

I know that this hearing focuses on the impact of foreign influence in security clearance investigations, but I do want to point out

that there are other factors that go into the decision about a person’s suitability to handle classified information.

But before I address that issue, I would like to share a few highlights on the status of the defense security service since my last appearance before this committee.

First, Congress approved our reprogramming request for $80 million. DSS has developed a spend plan for these funds to ensure we

can continue to process clearances, and this plan ensures industry

clearances through the end of the year.

Second, we have asked the DOD inspector general in conjunction

with the OPM inspector general to conduct an audit of the investigation billing process. That audit is ongoing.

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Third, we are conducting a baseline review of our automation

systems to ensure they are meeting our needs and the needs of industry now and in the future.

Fourth, we have teamed with the information technology association of America on a pilot project to process clearances with greater

efficiency.

And fifth, I am very confident in our new DSS leaders and their

ability to strengthen the organization.

Now, back to the topic of the hearing, and let me give you some

background.

There are approximately 3.2 million cleared personnel in government. Of that total, nearly 2.5 million are in DOD.

On an annual basis, DOD may handle over 600,000 clearance actions.

Security clearance process begins when a senior official determines that an individual requires access to classified information.

The individual completes a questionnaire and it’s submitted for investigation.

When the investigation is completed, results are sent to an adjudication facility. The Department of Defense has 9 facilities, adjudication facilities or CAFs. These are staffed by over 400 trained

adjudicators. To ensure we have as much consistency as possible

among the 9 facilities, my office chairs an oversight and policy review board made up of representatives from each CAF.

The adjudicator reviews the completed investigation and makes

a determination whether or not to grant, deny or revoke access to

classified information.

The adjudicative process examines a person’s background to determine whether or not the that person’s access to classified information poses a risk to national security.

I want to emphasize two points. First, that we make each decision on a case-by-case basis; and second, that we consider mitigating issues and circumstances as an integral part of the clearance

process.

If the adjudicator decides to deny or revoke a process based on

information review, the individual is afforded due process through

the right of appeal.

The President, in 1997, issued the first guidelines used by adjudicators. This last December, as you pointed out, Mr. Chairman,

the President issued a revised set of guidelines.

There are 13 of these guidelines which the adjudicator considers,

the results of security investigation.

Two of these guidelines deal with foreign influence.

Now an investigation that turns up dual citizenship or close associations in foreign countries will trigger a closer examination to determine whether that individual has a foreign preference or allegiance.

I cannot, too strongly, emphasize that access to national security

information is decided on a case-by-case basis based on a reasonable assessment of the risks to national security.

There are no automatic denials based on country.

An individual’s religious affiliation plays no part in security

clearance process.

We simply do not do that.

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In the matter of foreign passports, I would further note that in

August 2000, DOD issued a clarifying guidance concerning cases

involving individuals’ possession or use of a foreign passport.

Revised guidelines we are now implementing state that the possession of a current passport, current foreign passport may—I want

to emphasize ‘‘may’’—be a disqualifying position. The guidelines

provide, however, that an individual can sufficiently mitigate the

risk of national security by doing one of two things, voluntarily

choose to surrender the passport or obtain official approval for its

use from the appropriate agency of the U.S. Government.

The Department has taken several steps toward implementing

the revised adjudicative guidelines, including the development of

training coordination of new guidelines with the adjudication facilities to ensure a common and consistent understanding.

In the interest of time, I will elaborate on these steps during our

question-and-answer period.

Mr. Chairman, we are making every effort to ensure the determinations of access to classified information are adjudicated fairly

and balance the interest of the individual with the need to protect

our national security interest.

Mr. Chairman, this concludes my statement.

Chairman TOM DAVIS. Thank you very much.

[The prepared statement of Mr. Andrews follows:]

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Chairman TOM DAVIS. Mr. Leonard.

STATEMENT OF J. WILLIAM LEONARD

Mr. LEONARD. Thank you, Mr. Chairman, Mr. Waxman, I want

to thank you for holding this hearing on efforts to improve personnel security process. The classification system and its ability to restrict the dissemination of information, the unauthorized disclosure

of which could result in harm to our Nation and its citizens represents a fundamental national security tool at the disposal of the

government and its leaders to provide for the common defense.

The protocols governing access to classified information are established by Executive Order 12968. Pursuant to this order, such

access shall be granted only to, ‘‘individuals who are United States

citizens for whom an appropriate investigation has been completed

and whose personal and professional history affirmatively indicate

loyalty to the United States, strength of character, trustworthiness,

honesty, reliability, discretion, and sound judgment, as well as freedom from conflicting allegiances and potential for coercion and willingness and ability to abide by regulations governing the use, handling and protection of classified information.’’

In order to ensure consistent eligibility determinations from

agency to agency, this Executive order required the issuance of investigative standards and adjudicative guidelines. Revisions to the

adjudicative guidelines were approved by the President in December 2005 for immediate implementation. These revisions represented the result of an interagency process which recommended

that all of the basic considerations for approving access to classified

information be retained.

However, based upon the changing national security environment, it was recommended that the criteria be elaborated both in

terms of the actions that could raise security concerns and the factors that could mitigate such concerns. It should be noted that a

number of the revisions included in the adjudicative guidelines

were intended to address a concern expressed by this committee

and others with regard to personnel security applicants with certain foreign connections.

Specifically, a number of per se criteria such as the use of a foreign passport or voting in a foreign election that previously rendered an applicant ineligible for a security clearance have been

modified to take into account additional factors that could mitigate

such issues under certain circumstances. These and other changes

were implemented, in part, in recognition of the increasing

globalized environment in which our national security concerns

must be addressed.

The revised adjudicative guidelines are intended to provide sufficient flexibility to accommodate this reality without compromising

national security.

In addition to the above, Executive Order 12968 contains two

fundamental principles, reciprocity of access eligibility determinations and the authority of agency heads or designated senior agency officials to grant exceptions to eligibility criteria in order to further substantial national security interests, two imperatives that

contain inherent tension but are not necessarily incompatible.

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While reciprocity of access eligibility determinations require

strict adherence to investigative standards and adjudicative criteria, classification and personnel security policy clearly recognizes

that it may be in the national interest to grant access to classified

information to limited individuals who are otherwise not authorized or eligible for access.

Executive Order 12968, in particular, recognizes the authority of

an agency head to waive requirements for granting access to classified information to further substantial national interests.

An example of this is the frequent challenge many agencies confront today in developing and maintaining cadres of cleared linguists in many specialty languages. The key is that each time a

waiver of exception is granted, it should be an informed judgment

which takes into account the advantage to the national interest

that may accrue, as well as the potential increase in risk to national security information.

Such latitude, of course, could come at a price and included in

that price could be reciprocal recognition of security clearances. As

such, what is required is proactive management and oversight by

individual agencies in order to achieve reciprocity by ensuring

strict adherence to the standards in the vast majority of cases,

while at the same time, allowing sufficient latitude to meet unique

national security demands in other areas.

In order to enforce the imperative reciprocity while recognizing

the need to allow latitude in addressing other national security demands, a number of initiatives have been started under the direction of the Security Clearance Oversight Group, led by the Office

of Management and Budget.

I have detailed some of these initiatives in my written testimony.

In closing, I want to emphasize the ongoing interagency efforts

that are currently underway in order to strengthen the processes

relating to determining eligibility for access to classified information. Included in these is a need to focus on leveraging technology

to the point that through greater reliance on automated data bases,

we can diminish dependence on the current half century-old process of conducting field investigative work.

Research and pilot efforts to this end are currently underway in

a number of such agencies. These efforts will ensure continuing

process and improvements even after the current statutory case

completion goals are achieved.

Again, I thank you for inviting me here today, Mr. Chairman. I

would be happy to answer any questions that you or Mr. Waxman

may have.

[The prepared statement of Mr. Leonard follows:]

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Chairman TOM DAVIS. Thank you. I am going to start questioning on our side with Mr. Duncan.

Mr. DUNCAN. Well, thank you very much, Mr. Chairman, and I

have just a couple questions. No. 1, I am told by staff that this

190,000 backlog while that sounds very high 2 or 3 years ago it

was much higher, is that correct? That it reached 300,000 at one

point?

Mr. ANDREWS. It was yes, sir, it was very high.

Mr. DUNCAN. And what is the, lowest it’s been in, say, the last

5 years?

Mr. ANDREWS. Mr. Duncan, I can’t give you that answer right

now. I could provide it for you for the record. I think it would be

of great interest to have that.

Mr. DUNCAN. Let me ask you this: The title of this hearing is,

‘‘Can You Clear Me Now?’’ weighing foreign influence factors in security clearance investigations.

Do either one of you feel there is undue foreign influence in these

investigations at this time?

Mr. ANDREWS. I don’t, sir.

Mr. LEONARD. Mr. Duncan, I mentioned in my prepared, my oral

remarks that, the President recently approved revisions to the adjudicative guidelines since December of last year. A significant part

of those revisions to the guidelines was actually to provide greater

flexibility with regard to clearing individuals who may have foreign

connections. And again, this is in recognition of the increasing

globalized environment that we operate in, not only as a government, but as a Nation, but as our industry as well, too. So there

is greater flexibility today than there was just 6 months ago with

respect to the adjudicative criteria.

Mr. DUNCAN. Well, I also understand that there is some concern

about whether those revised guidelines are being applied, and specifically, there was at least one report that said that the Department of Defense Office of General Counsel has possibly instructed,

given instructions not to apply those revised guidelines. Is that correct in any way?

Mr. ANDREWS. No, sir that is not correct.

Mr. DUNCAN. So that is not happening?

Mr. ANDREWS. No. We are pushing as fast as we can to implement those guidelines, sir.

Mr. DUNCAN. When you say pushing as fast as you can, does that

mean some of they have implemented or all of them or none of

them?

Mr. ANDREWS. We are in the process of implementing them now,

sir.

We have been—there are 4 factors that we are working on right

now, first is training our adjudicators. As I mentioned, we have

over 400 adjudicators, and a training program for them we have

the Department of Defense is implementing or accommodating the

Smith amendment into the guidelines which we have to do which

no other department has to do.

And, we are making certain that our automated desk reference,

the on-line system that adjudicators use is up and running. We

have a target date of full implementation by first of September, sir.

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Mr. DUNCAN. Well, I am also old told that part of the impetus

for this hearing is the Legal Times, a major legal publication, highlighted a case in which a Korean American defense contractor had

what are described as tremendous difficulties obtaining his security

clearance. And he went through, went through the whole system,

the whole process and an administrative law judge ruled in his

favor.

Are you familiar with that case and is that just an unusual case,

or what is the ordinary situation? How long does it take in an average type case to get these clearances? Or is there such a thing?

Mr. ANDREWS. I am not familiar with that case, sir. I will have

to research it.

Mr. DUNCAN. Well, what, is there an average length of time that

this process is taking or does it just vary widely from case to case?

Mr. ANDREWS. It’s going to vary, Mr. Duncan. Generally, the secret and top secret clearances, top secret clearances may take over

as long as a year. And they shouldn’t.

Mr. LEONARD. If I could add to that, Mr. Duncan, one of the

things that this committee was responsible for was some statutory

timeframes, one of which is the adjudication process, and if I recall

correctly, 80 percent of all clearances are required to be adjudicated

within 30 days by a certain date.

That recognizes that, you know, 20 percent of the cases will be

the complex cases. So the simple cases should be able to be adjudicated in 30 days, those with issues they will take longer periods

of time.

Mr. DUNCAN. Is that requirement fairly accurate? As far as those

percentages?

Mr. LEONARD. Agencies are not at those goals yet but they are

making process toward getting there.

Chairman TOM DAVIS. Let me just, before I recognize Mr. Waxman, pursue, Mr. Andrews, you are not familiar with a case of the

Korean American defense contractor who went through the adjudication system at DOHA, the administrative law judge ruled in

his favor, and then the Department of Defense appealed the decision, which then went to a three-judge appeals panel, which also

ruled in the contractor’s favor, and again, DOD threatened to appeal the case.

Finally the contractor received the clearance, but it seems in this

case, the bar was set extraordinarily high for someone whose only

offense seemed to be that he had relatives in South Korea, which

I might add, is a very strong ally of this country and North Korea

to the north is a huge problem in the world.

If you are not familiar with the case, there is an article in The

Legal Times. I would like you to come back and just find out where

why the Department is so concerned in a case like this, why it so

doggedly pursues appeals when the expert judges rule that no significant threat was posed by granting the clearance. There may be

something we don’t know about.

Mr. ANDREWS. We will come back to you, sir.

Chairman TOM DAVIS. We will do that. We will hold you to that.

Mr. Waxman.

Mr. WAXMAN. I mentioned in my opening statement that I was

concerned about how a sudden change to family ties to Israel are

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being considered in the clearance process. And I would like to describe a few cases and ask about the policies that govern these

types of cases. One engineer received a security clearance more

than 7 years ago to work on a fighter jet project. He has lived in

the United States for 25 years, but was born in Israel and has dual

citizenship. All of this was fully disclosed when he first applied for

a security clearance 7 years ago.

Earlier this year, the government moved to revoke his clearance

citing his dual citizenship and the fact that his mother and siblings

lived in Israel.

In two other separate but similar cases, long-time State Department employees had clearances revoked with officials citing concerns about travel to Israel in past years.

But it had been fully disclosed. And there have been more cases

with similar circumstances, people have always had ties to Israel

that were fully disclosed a year ago, who have maintained security

clearances without any incident for years are suddenly having

clearances revoked.

And according to several lawyers, government attorneys have

cited the indictment of two employees from the American Israel

Public Affairs Committee as a grounds for revoking clearances for

people with family and religious ties to Israel.

Mr. Andrews what has prompted this sudden scrutiny of connections to Israel and are these reports about the AIPAC issue accurate?

Mr. ANDREWS. Mr. Waxman, I would like to ask that the individual cases that obviously concern you and other members of the

committee, be sent to us for you know; for analysis. I can’t sit here

and tell you about each individual cases. I don’t know the details.

Mr. WAXMAN. This is the first time that it’s been brought to your

attention that there have been increases in security clearance withdrawals on the grounds that there were ties to Israel by people who

had security clearances?

Mr. ANDREWS. The first time it was brought to my attention, sir,

was to—my attention was a letter from Mr. Dent of this committee,

who sent to us an article out of Insight Magazine, in which claimed

that the Department of Defense imposed loyalty tests on American

Jews, and that is really the first.

Mr. WAXMAN. And did you respond to his letter?

Mr. ANDREWS. Yes, sir.

Mr. WAXMAN. Could we have a copy of that response, certainly,

for the record, if you don’t have it with you right now.

Mr. ANDREWS. I don’t have it with me, and I know that Mr.

Dent, probably, has a copy.

Chairman TOM DAVIS. Could you make a copy of that available

to the committee? That would be great. Specifically this one.

Mr. WAXMAN. What was he told? Was he told it wasn’t true? It

looks like I do have a copy of the letter. It says this is a followup

to our recent conversation concerning the accuracy of media reports, the allegation is untrue, as I promised, enclosing a copy of

the standardized Federal adjudication guidelines, guidelines are

not country specific, and then people get due process.

I am not reading it precisely, but that is generally the answer

that I see, that it’s not true, the allegations aren’t true, and they

30

have a right to appeal and that it appears from this answer from

you, that it’s not a problem.

But did you check into it to see whether there was, in fact, a

problem that brought about the concerns expressed by Congressman Dent?

Mr. ANDREWS. Yes, sir, I have.

Mr. WAXMAN. And you found it not to be true?

Mr. ANDREWS. I found it not to be true.

Mr. WAXMAN. I am going to give you the information that we

have received.

Mr. ANDREWS. Please.

Mr. WAXMAN. Because I think it’s more important that if we

raise the issue, we get an investigation by you, not just a letter

saying it’s not true.

The AIPAC case, do you know of any reason why that should be

invoked to deny people security clearances?

Mr. ANDREWS. I am not certain that it was invoked to deny security clearance.

Mr. WAXMAN. Was it invoked not to grant a security clearance?

Mr. ANDREWS. I am not certain that it was, sir.

Mr. WAXMAN. Do you know whether it has been involved at all

in security clearance questions?

Mr. ANDREWS. I am certain it probably has.

Mr. WAXMAN. And why would it be?

Mr. ANDREWS. I think it would be involved, sir, as a indication

that you have to look at ties and the relationships of each individual case, not on the basis of religion or country, but what was substantively happening in that case.

Mr. WAXMAN. You are talking about the case of the applicant?

You are talking about the case of the applicant himself or you are

talking about the AIPAC case?

Mr. ANDREWS. No, I am talking about the case of the applicant

himself.

Mr. WAXMAN. Why would the AIPAC case that involves an indictment and trial that hasn’t even yet been held on allegations

that they did something improper affect another person who happens to have ties to Israel or was Jewish?

Mr. ANDREWS. I don’t think it did.

Mr. WAXMAN. I thought you just said that you thought that it

would be relevant.

Mr. ANDREWS. No. The issue of whether anybody’s foreign relations and contacts have relevance in security clearance investigation, these are relevant things to talk about and important to think

about.

Mr. WAXMAN. Well, if the ties to Israel which is one of our allies,

why would it be relevant.

Mr. ANDREWS. The ties to any foreign country are relevant. We

do not, Mr. Waxman, as I said before, have a list of good countries

and bad countries.

Each case of a foreign relationship, whether it’s with Israel or

with Ireland, is looked at in a way to determine that the applicant

is not going to be put in a position of getting pressure put on him

or irresponsibly giving away national security information.

31

Mr. WAXMAN. So would that mean that anybody who has a foreign relative, close foreign relative, might be—should be denied a

security clearance?

Mr. ANDREWS. No, it doesn’t. It means that relationship will be

examined and looked at to see if it poses a risk.

Mr. WAXMAN. Give me an example of a relationship that you

think would raise a red flag.

Besides the two I’s, Ireland and Israel, tell me examples you can

think of that would raise a concern about a security clearance.

Mr. ANDREWS. I think I would be concerned if I were an adjudicator, and I don’t like to play hypothetical questions, but I would

have to be concerned if I were an adjudicator and opened the file

and found out that Sheehan McFagus had relatives in the IRA.

Mr. WAXMAN. And how about in Israel? I don’t know of examples

of—I know someone in Israel. Give me an example of something

that would raise a red flag.

Mr. ANDREWS. I think perhaps financial ties to an Israeli company that is competing for a U.S. Government contract. I mean,

there are all kinds of things. All this does is illustrate my contention that it’s a case-by-case basis, sir.

Mr. WAXMAN. But is there a consistent standard? I know my

time has expired. Is there a case-by-case feeling?

Mr. ANDREWS. I know what you are reaching for, but you get

into, this we get caught in this thing of consistency is the hobgoblin

of small minds. We can’t have a checklist for these adjudicators

and say if this guy has X amount of dollars involved in a defense

contract in Cairo, I mean, you just can’t do that in the name of consistency.

In the name of consistency, though, sir, I think you are entitled

to see some guidelines of these are the general baskets in which

we put things and look at them when we make an individual decision.

But one size doesn’t fit all, is what I am saying.

Mr. LEONARD. Can I contribute something just from an overall

policy point of view, Mr. Waxman? The recent revisions to the adjudicative guidelines that the President approved in this particular

area were intended, as I said, to increase flexibility and, in essence,

what they want to focus on is there a situation where we can expect that an individual will have to choose between the interests

of the United States and the interests of a foreign interest.

That is the focus. And even still, even if there is a possibility of

that, the guidelines were further modified to provide a mitigation—

and this goes to maybe some of the examples you cited—where

there is every indication that the sense of loyalty to the foreign interests is minimal or that there are deep and long-standing relationships and loyalties to the United States that is expected to resolve any potential conflicts in the interests of the U.S. interest.

Those are two examples of how the policy, the guidelines have

been specifically revised back in December, to try to address these

issues and to provide greater flexibility and greater guidance and

do away with the per ses.

Mr. WAXMAN. May we just get the guidelines for the record?

Chairman TOM DAVIS. Frankly, what Ralph Waldo Emerson said

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sistency. There is a difference there. And that is the difference that

Mr. Waxman is trying to ask, is how is this carried out, Mr. Dent.

Mr. DENT. Thank you, Mr. Chairman I came in during Mr. Waxman’s interrogation, and we had spoken yesterday, Mr. Andrews,

Secretary Andrews, regarding just a blog site that was pointed out

to me by some constituents who had said that the DOD, for whatever reasons, was denying clearance to American Jews who may

have had ties to Israel. You and I had spoken, and you said that

is really not the case and that there is no specific bias against

American Jews, for example, when it comes to security clearances,

we have no specific prohibition against any particular set of people

in this country, as I understand it.

Mr. ANDREWS. Well, I think any religion, no.

Mr. DENT. The other question deals with a general issue, if somebody, for example, would adopt a child from another country, China

or Russia, fairly common, seeks a security clearance, you would

probably investigate that issue, would you not?

Mr. ANDREWS. I think it would be noted, Congressman, and in

the case of the child himself or herself, obviously the citizenship of

the child would be irrelevant in a case like that.

Mr. DENT. I have been told that is an issue, at least a point of

tension.

Mr. ANDREWS. Well——

Mr. DENT. There is nothing wrong with it, I just want to point

that out.

Mr. ANDREWS. It’s a case of we want to know if we’re going to

give you access to classified information we want to know about

your foreign contacts and your foreign trips, travels, relationships,

in toto.

And if part of that is, I went to China, I went and adopted a

child, that would be in there.

Mr. DENT. Another question, too, I guess as it related to the

Israeli situation, and I just want to be able to get back to my constituents and allay them that there is not a specific bias or prohibition against Jewish Americans who may have ties or family or

friends in Israel that seek security clearances, that they can go

through the process and be treated like every other American. Is

that a safe question?

Mr. ANDREWS. Yes, when I got the invitation to come down here,

I asked some of our people, I said is it possible to build a profile

of how we look at people by religion, and we don’t. We don’t do

that.

So it’s hard to find out who is Jewish, who is Irish, who has an

Israeli background.

Mr. DENT. And I guess some other questions I have in response

to the committee’s June 14th inquiry about implementation of new

guidelines, you said that before DOD can apply those guidelines to

adjudication of clearances for contractors, DOD had to take appropriate actions to comply with the Administration Procedures Act.

You use that phrase twice. What are those appropriate actions

and do they include formal rulemaking?

Mr. ANDREWS. I was talking about the Smith amendment that

applies only to the Department of Defense, which sets up certain

adjudication considerations that don’t apply to other departments

33

of government. And, so that, we have had to work that in to our

implementing those guidelines as well, so it’s sort of a different

kettle of fish for us. And as I mentioned before, of the 3.2 million

people who have security clearances in America, 2.5 million of

them belong to us. So it’s a big job to do that.

Mr. DENT. And just one other thing too, with respect to that rulemaking, how long does that usually take, on the rulemaking side?

You were talking about those appropriate actions, I asked you

about the, does that include a formal rulemaking and how long

about will that take ordinarily?

Mr. ANDREWS. About 30 days.

Mr. DENT. 30 days?

Mr. ANDREWS. Yes, sir.

Mr. DENT. And during that time, will DOD use one set of standards for government employees and another for contractors?

Mr. ANDREWS. No, we don’t.

I will point out, however, that in the appeals process the government people, both military and civilian, do not have the—are not—

cannot bring outside counsel in; however your civilian contractors

can bring outside counsel in.

Mr. DENT. Thank you Mr. Andrews, and I did want to thank you

for your letter you sent to me dated today the 12. I appreciate that.

Mr. ANDREWS. We are also including full copies of the adjudication guidelines too with that. That will be coming in.

Mr. DENT. Thank you very much, and Mr. Chairman, I yield

back.

Chairman TOM DAVIS. Thank you. Mr. Van Hollen.

Mr. VAN HOLLEN. Thank you, Mr. Chairman and let me also

thank the witnesses here today.

And I am interested in following up maybe beyond this hearing

in terms of the criteria, I know we are going to get a list of the

criteria, I do remember a number of years ago I had a constituent

who was a Greek American who had a dual citizenship which is

also permitted by Greece and ended up going through really a terrible process here. And I am interested I guess, I guess before looking at the guidelines, let’s say you do have somebody who is a dual

citizen, has dual citizenship. How do you determine, I mean, someone a dual citizenship obviously has connections to more than the

United States. But that doesn’t mean that they have any less of a

loyalty to the United States. There are various reasons people

would want to maintain a dual citizenship. I guess the question is,

what factors would, in fact, disqualify you under those circumstances?

Mr. ANDREWS. Right now, the fact of dual citizenship is a disqualifier.

Mr. VAN HOLLEN. So if you choose you have to choose

between——

Mr. ANDREWS. You have to choose your country, sir.

Mr. VAN HOLLEN. I understand that. But there are obviously advantages in terms of being able to hold another passport things like

that, but the rule right now is you choose your citizen, period.

Mr. ANDREWS. On the passport issue, you can hold another passport provided the U.S. Government agency to whom you are going

to go work, State Department, DOD or whatever, permits that.

34

Mr. VAN HOLLEN. In this case, if I recall correctly, they decided

to drop their Greek citizenship, their—that portion of the dual citizenship.

Is that disqualifying if you had once held dual citizenship?

Mr. ANDREWS. If you give up your passport or you give up your

dual citizenship in that other country——

Mr. VAN HOLLEN. You then become eligible.

Mr. ANDREWS. You are all right.

Mr. VAN HOLLEN. Just on the general issue of the backlog and

security clearances and the recommendations that were made by

the 9/11 Commission and others, and I’m sorry I missed your opening comments, but where are we on that? In other words, the recommendations I understood it was to try to have some kind of uniform standard policy, so we don’t have multiple agencies with their

own standards and none of them trusting the degree of competence

of the others, it just seems to make sense as a national government

to have these uniform standards. Where are we on that?

Mr. ANDREWS. Well, you have two real questions on that one is

the backlog, which is sort of like the elephant that is always in the

room when everybody meets on these issues. And I have to defer

to my colleagues at OPM, because they are the keepers of the backlog.

In terms of consistency across the board, we are still working on

that.

I don’t think the issue of reciprocity is as big a problem as people

make it out to be.

We do have, our NSA does have different investigative requirements for its people.

But I think that is probably very wise thing, given the sensitivity

of what, some of the things they do.

Mr. LEONARD. If I can add something, one of the things I do have

an opportunity to do is actually chair an interagency working group

on reciprocity to focus on that one particular issue. And I can say

we are making process. As a matter of fact, just within the past

week, I believe, we have been able to narrow down to the bare minimum the authorized exceptions to reciprocity with respect to special access programs which has been one toughest nuts to crack.

The challenge is to get that guidance now down to the implementation level. The next several months will tell, in terms of how successful we are at that. But we have been making progress. I believe

there is clear guidance now with respect to what is an authorized

exception to reciprocity and what is not, and they have been narrowed. And we should see the, what I still think is an inordinate

number of instances of non reciprocity to be reduced in the future

but there is still a ways to go.

Mr. VAN HOLLEN. Mr. Andrews’ response was he didn’t see it to

be that many obstacles in the way to this. Can you give us a

timeline when you would be able to have, with the exception of

NSA, Mr. Andrews mentioned may have a special status, can you

give us a time line as to when you will complete that work?

Mr. LEONARD. Well, again, from a guidance point of view, the

work is completed. What is left is the hard part, the implementation part. And that is then up to the agencies to get that down to

the working level and make sure that they understand, they comVerDate 11-MAY-2000 12:34 Oct 16, 2008 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 C:\DOCS\44769.TXT KATIE PsN: KATIE
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prehend, they have access to, they have knowledge of and they understand the latest guidance. I would expect that should not take

more than several months, a couple of months. That would be my

expectation.

But then again, I don’t have an agency that I am responsible for.

Mr. VAN HOLLEN. How are things going at DOD in terms of the

implementing that, implementing the reciprocity agreements?

Mr. ANDREWS. Well, the new guidelines as I mentioned we are

hoping to have those implemented by the first of September, the

adjudication guidelines.

In terms of total reciprocity, sir, I think that you will probably

always have something to work on and gnaw on. There will always

be some cultural and organizational things that get in the way.

One of the things that impressed me coming back into government was when I was at CIA in the 70’s, I had about five or six

different badges for different parts of building out there at Langley,

and I came back into government, and I have this one badge here

that gets me into DIA, that gets me into CIA and, who knows

where else? I certainly—they won’t tell me. But it’s one badge, one

pin number, and to me that is the heart of success.

Mr. VAN HOLLEN. That is some progress. I think you would agree

we have a ways to go.

Mr. ANDREWS. We do.

Mr. VAN HOLLEN. I thank you, Mr. Chairman.

Chairman TOM DAVIS. Thank you. That is it.

I have a few questions. In testimonies submitted for the record

that we put in today by Sheldon Cohen, who is an attorney who

represents clients before DOHA, he cites a study that he has just

completed and he analyzes 898 appeals before the appeals board at

DOHA between 2000 and 2006.

He found a statistically incredible slant in favor of government

appeals.

Of appeals submitted by applicants, whose clearances were denied, less than 1 percent of the decisions were reversed; whereas

in cases where DOD appealed in granting a clearance, it sees 74

percent were reversed.

He goes on to note that a foreign preference influence case where

DOD appealed the granting of an appeal, 92 percent were reversed.

Any thoughts on that?

Does that seem right to you?

Mr. ANDREWS. Sir, we will have to get back to you on that, on

the analysis of that.

Chairman TOM DAVIS. Industry has expressed concern that since

GAO criticized DOD for favorably adjudicating some cases where a

minimal amount of investigative information was missing, the socalled closed pending cases, DOD no longer adjudicates any other

such cases, but rather sends them back to OPM where they pile up

and add to the backlog. OPM testified before this committee on

May 17th that its backlog of closed pending cases has been growing, and at a time, stood at 70,000.

What is your understanding of what currently happens to investigative files where just a minimal amount of information is missing? Are they being adjudicated by DOD on a risk management

basis, or are they just send them back pending approval.

36

Mr. ANDREWS. Sir, again it—I have to come back to you with an

answer. It depends on what is missing.

Chairman TOM DAVIS. Minimal, we are talking minimal things.

We are not talking about big major gaps. We are just talking

about, I would like to get your impressions on the record and you

can get back to me on this.

Mr. ANDREWS. Yes, sir, I will.

Chairman TOM DAVIS. I think it’s important just to remind you

I know from where you sit and other people sit. It’s kind of a job,

you want to make sure these applicants, all the I’s are dotted and

T’s crossed, but for taxpayers, for industry, but particularly at the

end of the day for taxpayers, what they are doing is they are paying a huge premium for people who have security clearances. And

they are doing that because the backlog is so great that just the

clearance itself adds a premium to their hiring.

And we end up paying for that.

And in other cases, just means the mission isn’t going forward,

and in some cases, these are vital missions and in some cases, that

we are talking about in the contract area where there is some foreign country involved, it can be language interpreters, it can be

people who, people who can listen in on conversations and aren’t

available, this can be very, very vital. So I want to stress how important this is that this backlog get cleared and that we walk into

this with a can do attitude. When I hear reports which—you have,

I think, alleviated our fears today, but when I hear reports that the

DOD office of general counsel says don’t apply these new guidelines

and that is, by the way, is what DOHA chief administrative judge

is reported to have said, that they had been specifically instructed

not to apply the new guidelines, it gets disturbing because we want

to do this in a can-do attitude, how can we get through this, if

there are issues and you are not getting the tools you need, we

need to move forward because at the end of the day, there is a

huge frustration and the taxpayers end up picking up the tab.

Mr. Leonard, we let you off the hook, so I am going to ask you

a couple of questions. In looking at the revised adjudicative guidelines that were issued by the NSC, it seems there is additional

flexibility granted to government adjudicators might improve the

quality of the clearance decisions being made. For example, the

new regulations allow adjudicators to distinguish between foreign

countries rather than just treating them as black boxes equal in

threat.

In your reading of the revised guidelines, what has changed from

the old version vis-a-vis foreign influence and preference?

Mr. LEONARD. Yes, Mr. Chairman, you are absolutely correct.

Previously, there were some provisions in the old guidelines that

were interpreted as a per se situation, possession of, a mere possession of a foreign passport could be per se a disqualifier, voting in

a foreign election could be per se disqualifier. For all intents and

purposes those per se language has been done away with, greater

flexibility has been introduced. And as I mentioned before the key

that we try to focus on in these guidelines with respect to foreign

connections is, is there a basis to believe that this individual will

be in a position where they will have to choose between the U.S.

interests and a foreign interest? And but even in that case, there

37

is a further mitigator that allows that if, through a recognition,

that their foreign connection is so minimal or the ties and loyalty

and connections to the United States run so deep that there is

every expectation that the individual will resolve the potential conflict in the U.S. interests, that is a mitigator for the foreign connection would allow issuance of a clearance.

Chairman TOM DAVIS. Now I understand the two passport issue,

because you can’t, if there is another passport you can’t always account to where they have been to, and that raises other issues.

They are resolvable, but it is obviously a red flag.

We will be hearing from the second panel more about industry’s

proposals for reengineering the entire clearance process. In particular, ITAA has proposed in its written testimony the implementation

of a pilot program utilizing latest IT and industry best practices.

This program would involve feeding the same cases both into the

pilot system and the existing OPM-DOD system in order to compare their effectiveness.

What recommendations can you make regarding such a reengineering of the clearance process? And are there any potential

pitfalls in moving that direction, for example, reciprocity?

Mr. LEONARD. Definitely, Mr. Chairman, we need to, as I mentioned in my statement, move away from the half century old process of shoe leather on the ground, especially some of the dubious

checks we do in the field such as neighborhood checks and things

along those lines. Increased reliance on automation is the key. The

challenge is at what point in time are we going to be there. I will

give you just an anecdote.

My 23-year-old daughter just took advantage of going online to

try to procure her first auto insurance policy, which is great, and

the fact that you can sit at home on a weekend and apply for auto

insurance is an advantage of technology. The challenge is she spent

the rest of the weekend trying to disprove negatives that came up,

and it highlights the unreliability of many of these data bases that

are routinely accessed. That’s the limitation.

As those data bases become more and more reliable and we can

be more confident in false positives and things along those lines,

I think we will be a long way to replacing the shoe leather.

Chairman TOM DAVIS. Which leads me to my next question. In

the old adjudicative guidelines, applicants with family members living abroad were asked to prove the impossible; namely, that foreign family members who have never been before pressured by a

hostile government as a means of obtaining classified information

will never be pressured in the future.

Do the new standards change that standard of proof in this respect or are we like your daughter with insurance, trying to prove

a negative.

Mr. LEONARD. Again, the adjudicative guidelines, the way I read

them, is that these types of potential scenarios that you described

need to be more than just an assertion. There needs to be some

sort of demonstration of the potential for coercion and it cannot be

a theoretical. So it would be highly situational. Not to say that

would never be the situation, but again looking at the primary

focus of the adjudicative guidelines, it should not be a frequent occurrence.

38

Chairman TOM DAVIS. Is it realistic to expect that the new guidelines will have any impact on the number of applicants with the

foreign influence, preference issues, getting clearances if there is

any more realistic burden of proof expectation?

Mr. LEONARD. Yes, I fully believe that with the new adjudicative

guidelines individuals that may have been found ineligible for a security clearance under the prior guidelines would be found eligible

today.

Chairman TOM DAVIS. We just push to you and move people

through the process and all you need to do is make one mistake

and we will have you up here. But right now the backlog is a huge

problem.

Mr. LEONARD. Absolutely, sir. I am hard pressed to come up with

anything. You know, security investigations and clearances are the

one thing that permeates almost everything this government does

from fighting wars, from doing intelligence, to getting the best

technology from industry. It permeates everything, and I am hard

pressed to come up with something that is analogous that is so

ubiquitous.

Chairman TOM DAVIS. It is not as if there are not enough people

in the pipeline that can do the job. That is the other thing, is that

there are people to do this. It’s not a scarcity of people. It is basically a failure of government to be able to put the resources in and

get these out in a timely manner.

Mr. LEONARD. And it is also a failure to get a handle on requirements, and we add to those requirements every day not just in the

classified national security arena, but investigations are now being

done much more frequently for other purposes, for homeland security, for access to information systems that are purely unclassified,

for hazardous materials truck drivers, for airport tarmac workers.

The requirements are burgeoning and the inability to get a handle

on these requirements and to project them and to manage them is

making it exceedingly difficult to work that issue.

Chairman TOM DAVIS. Thank you. Mr. Waxman, do you have any

questions?

Mr. WAXMAN. Yes, I do, Mr. Chairman. I want to go back to this

discussion that we have all been touching upon. I know you treat

each applicant on a case-by-case basis, as you should, but the problem seems to be that the risks posed by a particular nation are also

handled on a case-by-case basis, which does not really make a lot

of sense.

For example, in his written testimony Mr. Zaid, who is going to

testify in the next panel, cites the example of one judge finding

Pakistan to be a U.S. ally that presents little security risk, while

another judge finding that Pakistan has terrorists links and was a

high risk country.

Should administrative law judges have the authority to disregard

the official U.S. foreign policy of the State Department and base

decisions on their own impressions of a foreign country? The new

guidelines for adjudication security clearances provide—that the

President issued last December state that the adjudicators can and

should consider the identity of the foreign country which the foreign contact or financial interest is located.

39

Mr. Leonard, explain to me how this works in reality. What additional guidelines or training are adjudicators given to help them

consider the identity of the foreign country and what steps are

being taken to ensure that these considerations are consistent

across agencies.

Mr. LEONARD. Well, one of the things that the guidelines were

also revised to take into account or to acknowledge is the fact that

oftentimes the basis for a decision may be based upon classified intelligence and things along those lines. And I mention that from

the point of view to indicate that decisions along those lines, again

not getting into any of the specific cases but decisions along the

lines of which you outline, should be based upon official intelligence, not based upon the impressions of a single adjudicator.

Mr. WAXMAN. Let’s assume it’s not based upon additional classified information. But look at the case of Pakistan. One judge says

Pakistan is a terrorist country and the other says no, they are an

ally of the United States.

Mr. LEONARD. That is my point. If those are the basis of decisions as opposed to individual situations with respect to an individual’s background, you are absolutely right, they are required to be

consistent decisions and should be based upon representation of

issues emanating from the foreign interest, should be based upon

official positions, again, not assumptions or impressions on the part

of the individual adjudicator.

Mr. WAXMAN. Is there a way to use the appeals process to introduce more consistency? Even then different judges reach different

decisions, but is there a way to develop consistent precedents that

judges are bound to follow so there is another judge looking at it

and they can——

Mr. LEONARD. That is one of the things—speaking as an outsider, that is one of the things that I admire about the DOD system, especially the DOHA system, is their system is highly transparent, more so than the rest of the government. And just about

anybody can research precedence, can research cases and look for

precedence, which quite frankly no other agencies do. And so from

that point of view, that is a part of the DOD process quite frankly

that I admire.

Mr. WAXMAN. Let me give you a factual situation just to get your

judgment on it because we talk about a preference for another

country. Let’s assume there is an American citizen, Jewish, daughter moved to Israel, living in Israel permanently, has dual citizenship, married to an Israeli who serves in the Israeli Army in a high

position and she works for a number of Israeli corporations trying

to advance their interests. Would we assume that the father should

be looked at with greater care or maybe even denied a security

clearance because he may have more concern about the benefit of

his children?

Mr. LEONARD. Obviously, again from other theoretical point of

view that is an issue that would be examined. Should we assume

anything as a result of those examinations? I would say not. And

in fact I would point out that again the two key issues that should

be the basis of a decision would be is there a basis to expect that

individual would be in a position where they would have to choose

between the U.S. interests and a foreign interest and even if that

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is the case, is there enough evidence in terms of long-standing ties

and loyalty and commitment and everything else that there is

every expectation that if the individual was given such a conflict

that they would invariably decide in the U.S.’s interests, then that

clearance should be granted.

Mr. WAXMAN. Well, the son-in-law could be captured, held hostage by Lebanon or the Palestinians, Hamas group as a military

person.

Mr. LEONARD. My son is in the U.S. military. He served in Iraq.

He could be captured as well, too.

Mr. WAXMAN. You would be annoyed if you were turned down for

a security clearance then?

Mr. LEONARD. Interestingly enough——

Mr. WAXMAN. But that is not a foreign preference. But you see

what I am talking about. We are getting reports from people who

say why are we being singled out because of longstanding ties to

Israel, family ties or religious ties or whatever, especially when we

have people who have already had security clearances and they

haven’t abused it. If you’ve got somebody who abuses a security

clearance something ought to be done about it. I have been trying

to get the chairman to pay some attention to the fact that Karl

Rove had a security clearance and violated it by disclosing information about a CIA agent and yet he maintains a security clearance.

That is a case where a clearance ought to be revoked. But if somebody has done something wrong, they should not have their security clearance revoked because they suddenly found out information

that had already been disclosed.

Mr. LEONARD. With respect to people who have had long-standing clearances, I would point out that is particularly one of the revisions to the guidelines where it was changed to indicate that the

individual has such deep and long-standing relationships and loyalties in the United States that the individual can be expected to resolve any conflicts in the interest or favor of the United States.

Clearly if someone has a long-standing history of a security clearance already, that’s exactly why that provision in the adjudicative

guidelines was modified to allow that flexibility.

Chairman TOM DAVIS. Mr. Van Hollen.

Mr. VAN HOLLEN. Just a quick followup to one of the responses

to Mr. Waxman’s question on this consistency issue because I think

it is important for the process and the integrity of the process for

people to have some idea of what the guidelines are. Obviously

each case is different and has to be weighed on its own facts.

You mention the DOHA process as being one that actually provided greater transparency. In every case do you have to have a

written decision that sets forth the basis for a particular finding

across the board? In other words, does the person who is denied get

a written decision?

Mr. LEONARD. As a minimum the individual needs to be provided

a statement of reasons which outlines the reasons why they have

been deemed ineligible and an opportunity to reply to that statement. The extent to which the individual can reply, that’s what

varies from agency to agency. And again I defer to Bob about the

DOHA, but they are much more elaborate than most other agencies.

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Mr. VAN HOLLEN. But across every agency there is a written explanation they can respond to?

Mr. LEONARD. Yes.

Chairman TOM DAVIS. Thank you very much. Why don’t we take

a 2-minute recess and we will call our next panel. Mr. Andrews,

Mr. Leonard, thank you.

[Recess.]

Chairman TOM DAVIS. We move now to our second distinguished

panel. We have Mr. Mark Zaid, esq., managing partner at Krieger

& Zaid law firm. We have Mr. Doug Wagoner, the chairman of the

Intelligence Subcommittee, Information Technology Association of

America, on behalf of the Security Clearance Coalition. We have

Mr. Walter Nagurny, the director of the Industrial Security Office,

EDS U.S. Government Solutions. Thank you all. Thank you for

your patience in getting through the first panel. It’s our policy that

we swear you in before you testify. Please rise and raise your right

hands.

[Witnesses sworn.]

Chairman TOM DAVIS. Mr. Zaid, you know the rules. We have

gone through the first panel. Your entire statement is in the

record. We appreciate your being here. Go ahead.

STATEMENTS OF MARK S. ZAID, ESQ., MANAGING PARTNER,

KRIEGER & ZAID; DOUG WAGONER, CHAIRMAN, INTELLIGENCE SUBCOMMITTEE, INFORMATION TECHNOLOGY ASSOCIATION OF AMERICA, ON BEHALF OF THE SECURITY

CLEARANCE COALITION; AND WALTER S. NAGURNY, DIRECTOR, INDUSTRIAL SECURITY OFFICE, EDS U.S. GOVERNMENT SOLUTIONS

STATEMENT OF MARK S. ZAID, ESQ.

Mr. ZAID. Good morning, Mr. Chairman, members of the committee. It is a pleasure to testify here today on such an important

topic. I have been handling cases involving national security now

for more than a decade, represented nearly 100 individuals in security clearance cases before numerous Federal agencies.

This is a period in our history when our country desperately

needs individuals with foreign language expertise and intimate experience with other cultures to assist in the war against terror. The

logical population from which to recruit individuals are those

Americans citizens with foreign backgrounds. Yet our agencies are

losing the ability to utilize numerous loyal Americans simply because they brazenly admitted to affection from their parents residing overseas, dared to telephone their siblings back in the home

country, or through no action of their own hold dual citizenship.

The disqualifying conditions of foreign influence and foreign preference especially are often arbitrarily and inconsistently applied.

Whether the country involved be ally, such as Israel or the United

Kingdom, or an enemy and hostile, such as Iran or China, there

is typically little rhyme or reason why a clearance is denied or

granted.

In recent years it has become common for the Department of Defense to revoke an individual’s clearance after having held one for

years or even decades. Oftentimes these individuals have never

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misled or lied about their foreign relatives or origins, but DOD has

suddenly decided that the person poses a risk that never previously

existed before.

At the CIA individuals have wasted months through the application training process only to eventually be informed that their foreign background, which had neither changed nor been hidden from

the outset, prevented the granting of the clearance.

Though my testimony is more critical than positive, I do wish to

highlight that there are many shining examples of how some agencies and individuals employed therein implement their security

clearance programs. Indeed, I would rate DOHA as one of the better, if not best, venues for challenging a denial or revocation.

Executive Order 12968, issued by President Clinton in 1995, created the current framework. In response, adjudicative guidelines

were issued in March 1997 in order to establish a common set of

standards. These were revised last December and in the cover

memo from Mr. Hadley they were to be implemented immediately.

As far as I know, DOD is the only agency not to have done so. This

posture is, disappointingly, not surprising.

It was not until April 1999 after publication in the Federal Register, a useless act, that DOD adopted the March 1997 guidelines,

and actual application only commenced beginning July 1, 1999.

Thus we might not see until 2008 that DOD implements the 2005

guidelines notwithstanding what we heard earlier, and that is unacceptable.

Only DOD likely knows how many revocation denials have been

based on foreign influence or preference concerns, but the number

has increased in the last few years. For decisions posted on

DOHA’s Web site this year alone approximately 25 percent involved foreign influence.

How significant an impact can there be between the application

of the old and new guidelines? Let me focus on foreign influence,

and I’ll address foreign preference during the Q and A if desired.

Under the 1997 guidelines one of the more common disqualifying

conditions is whether an individual or his family member may be

potentially vulnerable to coercion, exploitation or pressure by a foreign power. To mitigate this concern, one can seek to prove the contrary, yet it is virtually impossible for any individual to truly affirmatively prove a negative and to demonstrate that a foreign relative or contact is not in some way possibly subject to exploitation

by a foreign power.

Another available mitigating factor is that contact and correspondence with the foreign citizen are casual and infrequent. Unfortunately, the terms have no standardized definition or application.

Consider one case in particular I had in 2004 where I unsuccessfully represented a defense contractor originally from Pakistan.

This is the case Congressman Waxman referenced. My client provided unrefuted testimony that he had infrequent contact with his

siblings three to four times a year. Although the judge ruled that

there was nothing in the record to indicate that the family members were agents of a foreign power, she concluded that there is no

evidence to show that he is not in a position to be exploited that

would force him to choose between the two countries and be disVerDate 11-MAY-2000 12:34 Oct 16, 2008 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 C:\DOCS\44769.TXT KATIE PsN: KATIE
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loyal to the United States. Yet, at the same time the judge also

concluded that can there was nothing in the applicant’s testimony

or demeanor that suggested he was not a loyal American and credit

to his adopted country.

What was behind the judge’s rationale? She believed that ‘‘Pakistan is on the front lines in the war against international and regional terrorism and despite the efforts of its government there are

individuals and groups within Pakistan who have acted and continue to act in a hostile manner to U.S. Security interests.’’

Beyond the fact that in today’s world this description fits dozens

of countries, including even the United States itself, it was completely inconsistent with factual findings reached in numerous

other DOHA cases and contrary to the official position of this administration. For example, just 3 months after 9/11 another DOHA

judge had held Pakistan is not a country hostile to the security interests of the United States, but a country whose political institutions, while not democratic at present, are specifically aligned with

our own traditions, which include the rule of law to absolve the applicant of any foreseeable security risk.

Under the 2005 guidelines I have no doubt that my client would

have had a much greater chance of attaining a security clearance.

Even a casual comparison between the 1997 and 2005 guidelines

should leave a reader with the notion that the revisions are more

relaxed and flexible. They fit a moralistic environment. They legitimately raise the bar or, more precisely, perhaps set a more appropriate bar for the government to revoke or deny a clearance based

on foreign influence or preference.

The most frequently cited disqualifying condition now requires a

heightened risk of exploitation, inducement, manipulation, pressure

or coercion. And the country is taking into account the nature of

the relationships and the fact that it has to be unlikely the individual will be placed in such a position to choose between their native

country or country where their relatives might live. If DOD denies

a security clearance based on application of the 1997 guidelines

when a favorable result could have been attained under the 2005

guidelines, then DOD will have harmed the national security interests of the United States.

I won’t talk about the appeal process, Mr. Chairman. You referenced my colleague Sheldon Cohen’s conclusions. They are quite

damming regarding the appeal process. With respect to foreign connection since 2000 the Appeal Board has affirmed all 144 of applicants’ appeals of decisions that denied a clearance and reversed all

but four of the appeals granting a clearance.

In my testimony I submitted 15 recommendations for consideration. Let me just take 30 seconds to highlight a few. I would suggest that Congress, one, require DOD to adopt the new guidelines

immediately; two, consider removing DOHA’s ability to appeal favorable decisions unless a more balanced framework can be instituted. Other than the Department of Energy they are the only

agency that can appeal a favorable decision.

Three, task GAO to conduct a thorough assessment of the security clearance appeal process as it is implemented throughout the

Federal Government. There are numerous GAO investigative reports, but they deal primarily with DOD.

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Three, create an administrative hearing system similar to that of

DOHA and the Energy Department across the board at all Federal

agencies. And the final two, either create an independent body outside of the involved Federal agency to adjudicate final appellate

challenges, or grant the Federal judiciary statutory jurisdiction to

review substantive clearance decisions.

Again, I thank you for the opportunity to appear before you, and

I will be very happy to answer any questions or work with you or

your staff.

[The prepared statement of Mr. Zaid follows:]

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Chairman TOM DAVIS. Thank you for your excellent testimony.

Mr. Wagoner.

STATEMENT OF DOUG WAGONER

Mr. WAGONER. Mr. Chairman, it is good to be here today. My

name is Doug Wagoner. I’m the senior vice president of DSA, a

small northern Virginia based information technology business that

requires that all of my employees have clearance. I am speaking

today, however, as the chairman of the ITAA’S Intelligence Committee and as a spokesman for the Security Clearance Reform Coalition.

Thank you for this opportunity to appear before you once again

to discuss the industry perspective on the continued issues facing

the Federal security clearance process. Our coalition is comprised

of the Aerospace Industries Association, FC International Association, Associated General Contractors of America and the Association of Old Crows, Contract Services Association, ITAA, Intelligence and National Security Alliance, NDIA and PSC.

We represent thousands of companies that provide classified

products, services and personnel to the Federal Government. The

coalition compliments the President for extending the authority of

Executive Order 13381 for an additional year and applauds the implementation of the updated December 2005 President’s adjudicative guidelines for determining eligibility for access to classified information. This is a vital reform needed to achieve clearance reciprocity across the government. For too long clearances have not

been reciprocally recognized between departments or even within

agencies within the same department. The root of the problem is

an institutional lack of trust between agency adjudicators, each of

them thinking that only they can determine the person’s trustworthiness for granting access to classified information that they

control. These revised guidelines are the latest iteration of a longstanding effort to get departments and agencies to adopt uniform

clearance adjudications.

Unfortunately, although the President has issued the revised

guidelines in December 2005 they have yet to be uniformly adopted

or applied across government. We continue to experience problems

with the equitable application of adjudicative criteria and reciprocal acceptance of those criteria, and this lies at the heart of the

problem.

If agencies could be confident that all Federal agencies adjudicate the same criteria and standards, they should have confidence in recognizing a clearance issued by another agency. However, there are efforts underway to bring about change and industry would like to recognize and thank Mr. Bill Leonard, the Director of Information Security Oversight Office, for his continued leadership on the issue of reciprocity with clearances.

The application of criteria regarding the foreign influence on an

applicant is especially important to our coalition member companies because of the many gifted technical personnel with foreign

connections who can provide valuable help to national security missions. Other clearance applicants are singled out because of family

or marital status, marital ties to foreign nationals or because they

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may be considered a dual citizen based on their birth abroad to

U.S. parents. America cannot deny itself access to this talent.

There is the anecdotal case of the U.S. General who, upon retirement, applied to have his clearance transferred to his new employer and was rejected because he was married to a Canadian national. His spouse’s nationality was never a disqualifier during his

30-year military career, yet the same person working for industry

apparently was no longer considered trustworthy.

Unfortunately, the more frequent response is to either reject or

forever delay applicants with such conditions without measurement

of actual risks they may pose.

Chairman TOM DAVIS. That was when they had a liberal government I assume, right, before the Tories came in?

Mr. WAGONER. I am sure.

Part of this problem can be attributed to lack of training for adjudicators regarding the degree of risk presented by certain foreign

nations. This measurement of risk should include counterintelligence, infrastructure of a nation and its ability or history of applying coercion to U.S. citizens with relatives or friends residing in

the country.

Evaluating the extent of a person’s foreign connections as part of

the investigative process is one of the weakest links in the entire

effort. Applicants with foreign interaction routinely wait months

before being investigated, thereby creating uncertainty for the applicant and their employer. As part of its investigative process

OPM queues up applications for foreign investigations, waiting for

critical mass for those tied to a particular country to save money.

That is not good enough and other government agencies appear

to agree. The State Department specifically sought and received approval to establish their own investigative and clearance granting

program after they found OPM’s process was unable to meet its

needs. State electronically sends out queries for their international

clearance applications as they are received. The State Department’s personnel security program may already meet or exceed the

ambitious time lines mandated by the Intelligence Reform Act of

2004. Industry suggests OPM contract with the State Department

to utilize their best practice system when foreign checks on an applicant are needed.

Government oversight of adjudication is itself sometimes part of

the problem. As discussed earlier, since GAO has previously criticized DOD for granting clearances on cases that do not fully comply with the national guidelines, DOD has directed OPM to not return any case for adjudication unless all leads have been completed. This development has caused many cases to be held at OPM

that otherwise would have been favorably adjudicated on a risk

management basis, pending completion of some relative minor lead

in the case. While this approach assures complete adherence to the

guidelines, it precludes a clearance based on otherwise favorable

investigation where risk is minimal to non-existent.

Our coalition has two recommendations that we believe will enhance the Federal security process. Both of these steps are within

the clear direction of Congress that Congress provided in the 2004

Intelligence Reform Act.

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First, we recommend the creation of an agency-sponsored pilot

program that would utilize technology with government and industry best practices in each stage of the clearance granting process,

including periodic reinvestigation. This pilot program would provide an opportunity for government and industry to work together

to demonstrate that technology can improve both the efficiency and

even the security of the clearance process. Industry believes that

the efficiencies of such a pilot would provide a clear contrast to current Eisenhower era, paperwork-intensive processes. A statistically

valid sample of investigations could be selected for a parallel test

of the standard OPM investigation versus an investigation utilizing

automated applications, electronic submission of fingerprints and

signatures and verification of investigative criteria using commercial and government data bases. If requested, industry can provide

the committee staff with a detailed proposal, including how it can

reduce the backlog, lower costs, and ensure equitable treatment of

all applicants.

Second, we recommend each agency evaluate every stage of the

clearance process against the 2004 Intelligence Reform Act. We are

not aware that such metrics are being measured nor are there viable mechanisms to identify whether weaknesses persist. This

should be a stoplight grading process much as the President’s management agenda to recognize agencies with best practices and advice to those needing more attention.

On behalf of the ITA Intelligence Committee and the Security

Clearance Reform Coalition, thank you again for this opportunity

to testify before you today and I am happy to answer your questions.

[The prepared statement of Mr. Wagoner follows:]

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Chairman TOM DAVIS. Thank you very much.

Mr. Nagurny, thank you for being with us.

STATEMENT OF WALTER S. NAGURNY

Mr. NAGURNY. Chairman Davis, Ranking Minority Member Waxman and members of the Committee on Government Reform, first,

I would like to commend you and your colleagues for your fast response and action in helping resolve the precarious situation created because of the daunting backlog in the security clearance process.

My name is Walter Nagurny. I am the Security Director for the

U.S. Government Solutions business unit of Electronic Data Systems Corp. I have served EDS in that capacity for 2 years. I have

experience that dates back to 1987 as a government employee and

for the past 10 years as a contractor related to security clearances.

My responsibilities at EDS include oversight of all activities related

to security clearances and support of contracts awarded to EDS by

the Federal Government. EDS has a sizable cleared work force.

As a major supplier of information technology to the Federal

Government, the very significant challenge EDS faces is to identify

and hire capable people who can provide the leading edge expertise

government customers expect from EDS.

One practice EDS utilizes to identify appropriate candidates is to

conduct a voluntary prescreening with respect to the likelihood the

clearance need for access to classified information will be granted.

To this point candidates are not asked to divulge personal information to EDS, but are required to read an EDS internal use document that provides an overview of the clearance process and the

Hadley guidelines. Once educated about the process, some candidates decide they do not want to face the scrutiny of a security

clearance investigation.

Prescreening minimizes drawn out clearance requests and helps

the overarching U.S. Government security clearance infrastructure.

Prescreening also provides EDS hiring managers with an estimated

date the clearance process should be completed. Sometimes having

a cleared employee on the job outweighs the technical qualifications

of other candidates. That’s unfortunate. EDS takes no action and

makes no decisions that will impact an individual’s eligibility for

a security clearance. EDS will submit a candidate for a clearance

under a contract that requires it as long as an EDS hiring manager

made the decision that it is a good business. EDS’s procedures simply provide an estimate about how long it might take to gain an

approval for a security clearance.

EDS has a good track record of getting employees approved for

a security clearance. One troubling area, however, is that some

clearance requests languish for several months without any feedback or end in sight. All too often highly qualified employees leave

because a clearance decision took longer than 18 months.

The overall security clearance process has improved. The Joint

Personnel Adjudication System, JPAS, for example, has shown a

major positive impact on the way contractors interface with government agencies regarding security clearances.

On the other hand, other changes have also made an impact. The

assumption of responsibility for DOD clearance investigations by

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the Office of Personnel Management in March 2005 is a case in

point. I say that because on one hand a DOD interim secret clearance is now being granted to many employees in less than 5 business days, some in fact overnight. Final secret clearances are often

being granted within 60 days.

EDS has many employees who are either naturalized U.S. citizens, have non-citizen immediate family members or hold dual citizenship. Getting a security clearance for them is often difficult.

EDS recognizes the indisputable need to keep classified and

other sensitive information out of the hands of non-citizens. It is

no doubt a huge challenge to distinguish foreign preference individuals who could be blackmailed from individuals who would never

contemplate divulging information. The Hadley guidelines address

such concerns as well as the factors that mitigate security concerns. As significant numbers of naturalized citizens accept positions in the IT industry, the need for government contractors to

submit naturalized citizens for a security clearance will only increase.

Cleared EDS employees who are naturalized citizens have an

outstanding record of filing required security reports, complying

with classification rules and following security procedures. While

the Hadley guidelines speak of dual citizens expressing willingness

to renounce their non-U.S. citizenship as mitigation, these cases

nonetheless always end up at DOHA. A dual citizen who submits

proof that it is his expressed intent to renounce non-U.S. citizenship would seem to satisfy the adjudicative guidelines.

A real time example: A well-qualified EDS employee was recently

denied an interim secret clearance. He is a veteran of the U.S. Marine Corps and retains a dual citizenship in Portugal, where he

was born. Eventually DOHA will ask this employee to renounce his

Portuguese citizenship and he will receive swift clearance approval.

There must be a method to handle cases in which dual citizenship

is the issue more swiftly.

In closing, a few observations regarding the overarching status

of contractors being processed for security clearances. Security requirements issued by user agencies that are well written, clear and

explicit streamline the overall process. Many companies, including

EDS, conduct a comprehensive background investigation and drug

screening of all potential employees as a condition of employment.

It is conceivable that standards could be developed to leverage on

a voluntary basis the information obtained in preemployment investigations done by many national industrial security program

companies, thereby leading to more informed security clearance decisions being made more swiftly.

I thank you and I am happy to answer any questions you might

have, Mr. Chairman.

[The prepared statement of Mr. Nagurny follows:]

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Chairman TOM DAVIS. Well, thank you all very much. Mr. Zaid,

let me start with you. A recent story in the Legal Times reported

of the plight of the Korean American I referred to in the previous

panel. It is a client of yours, I think, the government dropping its

second appeal, the decision that granted your client a security

clearance. Mr. Andrews pled amnesia on the case even though this

was a very highly publicized case. What reason, if any, did DOD

provide for dropping its appeal and why the sudden change of

heart in your opinion?

Mr. ZAID. Thank you, Mr. Chairman. That was in fact my case.

I am not entirely surprised that Mr. Andrews did not know that

specific case. Quite frankly and with all due respect to him, he got

quite a lot of facts wrong about how DOD has been implementing

the security clearance process, especially the new guidelines. That

case started to essentially focus——

Chairman TOM DAVIS. Do you think he is just mistaken or do

you think he’s up here——

Mr. ZAID. I got the impression frankly he just didn’t know the

answers to those questions.

Chairman TOM DAVIS. We will try to followup.

Mr. ZAID. I am sure he has quite a lot of responsibilities obviously and this is just one of them. And he was just misinformed

on quite a bit; for example, like when the guidelines are going to

be approved, the notice and comment period and why that would

be. He kept referring back to the Smith amendment. Well, the

Smith amendment was enacted 6 years ago. It has been long implemented within the DOD process and for the most part it’s culled

out most of the people in DOD who were subject to having a prior

felony conviction in their record. So I am not quite sure why the

Smith amendment is impacting current DOD policies or training,

nor do I know why DOD feels they need to train their adjudicators

any more so than every other Federal agency that’s already adopted the new Hadley guidelines or President Bush guidelines.

With respect to Mr. Moon’s case, on appeal the second time

around it was made known to me that they were a little bit concerned regarding a nonforeign influence question, which dealt with

advertising on the client’s Web site as to whether he had foreign

business contacts. The Small Business Administration had told him

it would be beneficial to him for business development of his minority company to promote his foreign business connections. He hadn’t

had any for about a decade, but he had never updated the Web

site. So the department counsel had argued that he was lying

about the extent of his business contacts. The administrative judge

did not agree with that, thought it was somewhat absurd. And I

made it analogous to as a lawyer, I often say, well, I represented

X person; I don’t any longer but I did at one point. And in fact it

was very interesting to note in the case specifically that Mr. Moon

was not just any individual contractor. He was the contractor who

did the wiring, the computer wiring for the entire DOHA new

building. The courtroom we sat in was all his handiwork. And I

thought it quite ironic when we walked in for that morning his

daughter testified, Korean American, born here in the United

States, can’t even speak Korean because her father wanted to make

sure she was American more than Korean, and every security

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guard in the building, which she is a young attractive woman, was

saying hi, how are you? We missed seeing you around the building.

It is unclear and Sheldon Cohen, as you referenced, has put in

this analysis, excellent analysis of the appeal process. It is unclear

what motivates or the intent of department counsel as to why they

appeal some favorable rulings and not others. All that is known is

that it is quite clear that if you as a lawyer or an applicant prevail

in a foreign influence case and that case is appealed, the odds are

you might as well kiss that victory goodbye the way the current

system is. And if you are denied a clearance at that initial stage

you might as well forget trying to appeal it.

Chairman TOM DAVIS. You don’t tell your clients that, do you?

Mr. ZAID. I have started recommending to clients don’t waste

your money paying me to have a worthless appeal.

Chairman TOM DAVIS. You think Mr. Cohen’s analysis is essentially correct?

Mr. ZAID. It was absolutely consistent with my anecdotal experience. It’s dead on.

Chairman TOM DAVIS. You note in your testimony that DOD and

DOE have the authority to appeal favorable clearance determinations and you recommend abolishing DOD’s authority to do so.

What’s your understanding of the historical origins of that unique

authority?

Mr. ZAID. I don’t know. In fact, I posed that to some senior government officials in the security field and they didn’t know about

it either. It’s very interesting, most of the agencies really don’t

know how the other agencies conduct their own clearance processes. There is a basic framework, of course, but they have all implemented them differently. And in fact they not only implement

them differently, but there are different factors that are taken

more seriously at one agency versus the other. For example, the

CIA is one of the worst agencies to take a clearance appeal to. If

you did a statistical analysis, although you will probably never get

the data because they refuse to give it to GAO, every time you ask

them to get it you probably will find they have the lowest percentage of having applicants overturn a clearance decision, including

foreign influence cases.

I don’t know why some agencies have implemented it differently.

DOHA clearly proves as well as the Energy Department that, one,

you can have a seemingly transparent process by publishing your

decisions with privacy concerns redacted of course, and that you

can have live witnesses, no other agency does that, and sworn

statements and all sort of a more formal judicial process. There are

nuances of the DOHA process. We don’t have subpoena ability. We

can’t obtain additional documentation from the agencies if we think

it is relevant. We can’t utilize classified information, and I would

say in fact that the DOHA judges I believe don’t even have generally access to classified information.

Chairman TOM DAVIS. You know, we wouldn’t be here complaining about DOHA if there weren’t such a backlog. If they were denying people and we still had plenty of people in the pipeline, I suspect that congressional interest, there may be some rights issues,

but the fact is we have such a huge backlog at this point and it

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looks like a lot of qualified people for important jobs just aren’t

being qualified and cleared to do it and that’s a huge burden.

Mr. ZAID. That’s a huge problem. Every agency has a different

backlog. The CIA process will take 2 to 3 years to get somebody

through. DOHA process now is probably within a year you will get

a hearing. A decision will take 4 to 6 months depending on the

judge’s individual backlog, and the appeal can take anywhere from

6 to another 12 months. If the government appeals, you are stuck

in a process for 2 to 3 years if not longer.

Chairman TOM DAVIS. So you’re going to be doing something else

for your employment.

Mr. ZAID. As we are sitting here today, I checked my trusty

BlackBerry, I got an e-mail from a high level DOJ official whose

daughter it took 45 months to get a clearance approved by DOHA

in a foreign influence case.

Chairman TOM DAVIS. And that is not atypical, right?

Mr. ZAID. That’s a little bit longer than I have seen but doesn’t

surprise me.

Chairman TOM DAVIS. Mr. Wagoner, you have a small company,

right?

Mr. WAGONER. Yes, sir.

Chairman TOM DAVIS. You depend on clearances?

Mr. WAGONER. Yes, absolutely. Everyone has to have a clearance.

Chairman TOM DAVIS. Do you have trouble keeping people because of the scarcity of just—the clearance is like a commodity

itself outside of the qualifications, isn’t it?

Mr. WAGONER. Absolutely, and we do have a hard time keeping

people, and what’s ironic is a lot of the proposals these days they

want to talk about describe your ability to retain people and we are

all losing people because of another broken government process.

One part of the government says, hey, you got to keep your turnover low but the other side is not doing anything to help us out

there.

Chairman TOM DAVIS. You are caught in a Catch–22 because of

the government’s own regulations?

Mr. WAGONER. Absolutely.

Chairman TOM DAVIS. Now, I hear from large companies because

of the scarcity, but the smaller companies if your clearance expires

or you need a clearance you can’t afford sometimes to put people

on another job while you’re waiting for clearance.

Mr. WAGONER. We can’t. Obviously, that’s why we are small. We

don’t have enough jobs just to move those people around while

we’re waiting, putting people on the bench, so to speak. We can’t

afford that. But even the larger companies, they have margin

issues as well. They have a hard time keeping people on the bench

as well.

Chairman TOM DAVIS. What do you think the premium is in payment? I will ask Mr. Nagurny the same thing. What is the clearance premium that somebody is paid today because of the backlog

and the scarcity versus if we had plenty of—if clearances weren’t

a problem?

Mr. WAGONER. ITAA, we have just finished our third; second or

third survey of industry. This last time we went through Federal

Computer Week Magazine so we have many more respondents this

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time, and the premium for a top secret clearance was somewhere

between 15 and 25 percent. I know even in my company we give

special bonuses to those people, special incentives to those people,

again, treating them like a whole different class of citizen, which

I don’t want to do, but I have contractual commitments to my customers where I have to keep these people.

Chairman TOM DAVIS. Mr. Nagurny, what do you think? Do you

have a premium you pay? If somebody loses a clearance are they

worth as much at EDS without a clearance?

Mr. NAGURNY. Salary information is generally not something I

have exposure to. Candidates tell us, just like Mr. Wagoner said,

15 to 20 percent is what they were offered in the marketplace.

Chairman TOM DAVIS. If you had two candidates in front of you

for the same job and one had a security clearance and one didn’t,

which one are you going to hire, all things being equal?

Mr. NAGURNY. The one with the clearance. And from my own

personal experience certainly, and the salary would be higher for

the person with the clearance.

Chairman TOM DAVIS. They’re more mobile with that, right?

Again you can train them for anything. If they’ve got that clearance it ends up being a premium. So the real question, and nobody

can answer it accurately, is how much is this costing American taxpayers because they’re afraid to spend a few dollars on the front

end; how much is this costing us up the back end because of these

premiums that we are having to pay, let alone the inefficiencies

that you have to do in shuffling people around and everything else,

and the answer is you are better off paying upfront.

Mr. WAGONER. Absolutely. And there’s a cost that our missions

are not getting done. Our missions are being delayed.

Chairman TOM DAVIS. And some critical missions in some cases.

And that’s why this foreign influence, why we’re talking about that.

Some of these jobs are so specialized. This isn’t just somebody who

wants to get in line for a security clearance and happened to live

in a foreign country or had a foreign relative. In many cases these

have a language expertise or a specific expertise. Why else would

you sit through 3 years waiting for a clearance when you can go

out and do something else? I am saying you can put a man on the

Moon but you can’t move a security clearance through in a reasonable time and it just shows priorities. Somebody needs to pay full

time and attention to get this done and all we can do, we can legislate until the cows come home, the Smith act 6 years ago, and they

are using that as an excuse. We mandated in the Intelligence Reform Act certain things, and it’s just very difficult. So we can hold

hearings. We can hold our feet to the fire. We can beat them up.

We can penalize them a little bit on the budgetary side.

We had the State Department up here and the head of OMB

didn’t know this was a problem until they said we’re not moving

ahead with security clearances. There’s just no coordination. It’s

got to be a priority. It just needs full time and attention and supervision.

Mr. Wagoner, what are some of the new technologies available

that allow the private sector to improve on the current investigative approach employed by OPM?

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Mr. WAGONER. Again, what’s ironic is that they’re not even necessarily new technologies, Mr. Chairman. These are technologies

that have been out there, they’re proven. The private industry uses

them. Two key areas, one is trying to use digital signature and digital fingerprints. We think that would speed up the process. We

also think that it would lead to a lot more accuracy. Additionally,

related to that, we’re going to have a huge tidal wave coming of additional investigations for HSPD–12; as Mr. Leonard said, additional investigations coming down for transportation workers. And

I believe they are using digital fingerprints, digital signatures. So

we would like that to be part of the pilot.

Additionally, we think a lot of data collected with that shoe

leather can be acquired and analyzed through commercial government data bases. And that is what I would like to do with the pilot,

to do the math and see what is the accuracy. I mean the entire consumer credit, consumer insurance industry relies on the exact same

kind of data to verify a person’s identity, previous addresses, creditworthiness. We would like to see a pilot and do the math and see

if we could be just as accurate with the security clearances.

Chairman TOM DAVIS. Let me ask you both, and I don’t want to

get company specific because I don’t want to put your company in

a situation that somebody could somehow misconstrue that, so

without naming names but in a generic basis, do you think companies are sometimes forced to settle for employees that are perhaps

less qualified for a particular position than others who have been

unable to obtain a clearance because of foreign preference and influence issues?

I’m asking generically.

Mr. WAGONER. May I answer that? In that situation the security

clearance is the No. 1 priority.

Chairman TOM DAVIS. So the end result would be that the person with the clearance, even if they have less qualifications, is the

one that is going to be utilized?

Mr. WAGONER. Certainly we would not hire a nonqualified person

because that would be in conflict with the contractual requirements, but the security clearance would be the No. 1 priority in

that situation.

Chairman TOM DAVIS. But if you want Alfonso Soriano in the

outfield and he has a clearance, that’s who you would rather have

and you would put me in left field. And I only mention myself because I did have an RBI single in the congressional baseball game.

Mr. WAGONER. What if Soriano is on second base though?

Chairman TOM DAVIS. He still would be better than me. I can

fill in the holes for a couple of innings if I got the clearance.

Mr. Nagurny.

Mr. NAGURNY. I think indeed, yes, it would depend somewhat if

we had some place for the person to work, if they could do productive work, billable work while the clearance was in process. Several

of our largest sort of basic ordering agreement contracts, the people

can go to work on that contract when they are cleared. Perhaps

there are task orders that don’t require a clearance, but generally

yeah, the person with the clearance would be looked at more favorably than the person without.

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Chairman TOM DAVIS. When employees have left EDS because of

the delays in getting a clearance, what happens to them? Where do

they go? Are they simply heading to other companies to try the

process all over again or do they just drop out of that sector of the

labor market or do they just go where they can get a job that

doesn’t require but maybe suits their needs better?

Mr. NAGURNY. I think the largest number get out of the Federal

sector, if you will. State and local government is another business

area of EDS. But something no one has mentioned was the public

trust position which also requires the investigations OPM conducts

and also taxes the same resources at OPM. So few people not able

to get a clearance will be eligible for a public trust approval for

nonclassified IT work. So generally they are leaving the Federal

sector.

Chairman TOM DAVIS. In your testimony you mentioned a

prescreening document that EDS has perspective security clearance

applicants reviewed to prepare them for the process. You stated

that this document is geared to the adjudicative standards that

now are in the Hadley memorandum. Does EDS prepare clearance

applicants using the revised adjudicative guidelines issued in December 2005?

Mr. NAGURNY. We’re prohibited from—until we’ve actually made

an offer to someone we can’t review their personally sensitive information. What we can do with them is explain the process and the

considerations the government looks at, the aggravating, the mitigating factors.

Chairman TOM DAVIS. Let them know that if you give them an

offer and they have something that could delay them it may not

happen as quickly?

Mr. NAGURNY. And that they may be let go very quickly if they

don’t get the clearance.

Chairman TOM DAVIS. OK. That’s how it works.

Mr. ZAID. Mr. Chairman, if I might add to this a little bit with

respect to the inefficiency of the system and the cost effectiveness.

In fact, I give recommendations or advise defense contractors on

how to best put their employees or perspective employees through

this system. Part of the problem is that with respect to foreign

preference and foreign influence cases, from an anecdotal perspective at the very least, the majority of the potentially derogatory or

disqualifying information comes not from the background investigation, not from the computer checks, nothing like that. It comes

from the applicant themselves. It comes from either the filling out

of the SF–86 where you say I am a dual citizen or I have a foreign

passport or where you list your relatives or during the security

interview process that may take place months later. So there needs

to be a way in which to streamline some of the transfer, the initial

transfer of information. The SF–86 is not detailed enough. There

are terms that are very confusing that are misapplied or differently

applied from agency to agency. And clearly many of the individuals

filling out the SF–86 do not understand what that agency may

wish.

I had a foreign influence case with the CIA, an Iranian American, a lawyer whose actually family member had worked in intelligence services under the Shah when we had a good relationship

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obviously with that country. One would think given her language

experience we would want her to be able to contribute to the U.S.

national security interests. One, among several, issues that came

up was she did not indicate that she had been married to an Iranian American? Why didn’t she indicate that? Because she had had

the marriage annulled. She was a lawyer. She was going, the marriage is annulled, there is no legal record that this marriage took

place. It is a legitimate argument but the agencies don’t look at it

that way. The CIA said, no, you were married. I don’t care if you

had it legally annulled. You were. Now, that could have been an

easy issue to resolve if the instructions were a little bit more clear.

Chairman TOM DAVIS. I got you. Thank you all very much. It has

been very, very helpful to us. We will continue to proceed, try to

prod the executive branch. Mr. Zaid, we will take some of your recommendations and see if we might try to do something legislatively

with them.

Mr. ZAID. I will be happy to help in any way, sir.

Chairman TOM DAVIS. Thank you very much. The hearing is adjourned.

[Whereupon, at 11:35 a.m., the committee was adjourned.]

[The prepared statements of Hon. Elijah E. Cummings and Hon.

Jon C. Porter follow:]

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