Counterintelligence Reform at the Department of Energy: Policy Issues and Organizational Alternatives
Released: 2005-03-08T00:00:00

Introduction

Lapses in the Department of Energy's (DOE) security and counterintelligence program haveplagued DOE since 1977, when the Department was established through the merger of 40government organizations, including the Energy Research and Development Administration and theFederal Energy Administration. (1) Some policymakers expected the new agency to focus thegovernment's energy-related enterprises almost solely on the energy crisis. Others saw DOE as anunsuccessful attempt to fuse vastly diverse organizations, many with significantly different, if notconflicting missions.

One legacy of its origin is that DOE has struggled to balance open scientific inquiry with thesecurity under which some of those scientific inquiries must be conducted. This inherent tension hasled many observers to question whether DOE's highly classified weapons-related program hasreceived sufficient attention, particularly with regard to counterintelligence (CI). Due to numerousproblems with the CI program, the Clinton Administration issued Presidential Decision Directive61 (PDD-61), which fundamentally restructured DOE's CI program. Among other changes, PDD-61mandated that the Federal Bureau of Investigation (FBI) assume leadership of DOE's CI program,an initiative which continues to this day. In 1999, Congress took a further step and established thesemi-autonomous National Nuclear Security Administration (NNSA) to manage DOE's nationalsecurity-related programs, including DOE's sensitive weapons laboratories. Particularly concernedabout CI, Congress provided NNSA with its own CI office, but maintained a separate CI office inDOE. Though representing separate organizations, the two CI offices share resources, funds, andpersonnel for some programs.

DOE and NNSA facilities have been and will continue to be a major target of foreignintelligence services, friendly, as well as hostile, according to the President's Foreign IntelligenceAdvisory Board (PFIAB). (2) Although Energy Department officials are taking steps to confront this challenge, the current DOEand NNSA bifurcated CI structure continues to raise questions about the effectiveness of such anapproach to address such threats to the U.S. national security. (3)

DOE CI Management Prior to the 1999 Reorganization

In 1998, President Clinton was so troubled by intelligence evidence that the PRC hadsuccessfully stolen secrets from DOE's weapons laboratories that he issued Presidential DecisionDirective (PDD) 61. (4) Inan effort to improve quality and accountability, the Directive established for the first time in DOE'shistory an independent CI office under the direction of a senior FBI executive. Previously, theDepartment's CI effort had been highly decentralized and widely dispersed throughout variousprogram offices, and was, according to some observers, grossly underfunded. (5)

PDD-61 stipulated that a senior FBI official (the FBI is the primary U.S. government agencyresponsible for domestic CI) be named director of the office and report directly to the EnergySecretary. The PDD also directed that existing DOE contracts with the labs were to be amended toinclude CI goals and objectives, as well as CI performance measures to evaluate compliance. Counterintelligence oversight functions previously assigned to DOE operations and field officeswere to be consolidated under the Director's control. Under a follow-on implementation plan, issuedin 1999, the Director gained authority over programming and funding as well as personnel authorityover counterintelligence activities at all DOE field offices and laboratories. By 1999, however, amajority in Congress decided that Secretary Richardson's PDD-61 inspired reforms were insufficient.

The Turning Point

March 1999 marked a turning point in DOE's CI program when Energy Secretary BillRichardson fired Los Alamos National Security Laboratory scientist Wen Ho Lee because Leeallegedly had failed a polygraph. (6) (Other allegations included that Lee failed to notify officials aboutcertain contacts with people in the People's Republic of China (PRC), to properly safeguardclassified material and to cooperate on security matters. Lee pled guilty to one felony count ofunlawful retention of national defense information; the government dropped 58 additionalcounts. (7) ) In May, abipartisan House Select Committee released a declassified version of its report charging the PRCwith having stolen nuclear weapons secrets from the United States. Finally, in June, the President'sForeign Intelligence Advisory Board (PFIAB), for the first time in its more than 38-year history ofproviding the President counsel on intelligence matters, publicly released one of its reports. Itcriticized DOE for the "worst" security record on secrecy that Panel members said they hadencountered. (8) Althoughdismissing assertions of wholesale losses of nuclear weapons technology through espionage, thePFIAB panel did concur, on balance, with the Intelligence Community's assessment that the PRC had obtained by espionage classified U.S. nuclear weapons information that probably acceleratedits program to develop future nuclear weapons. (9) In response, Congress and the President approved legislationestablishing NNSA (10) to manage the department's national security-related nuclear programs. (11)

As part of the restructuring, Congress proposed creating dual CI offices in DOE and NNSA.Within DOE, the already-existing Office of Counterintelligence (OCI) was codified and maderesponsible for developing CI policy for both DOE and NNSA; but, was only authorized to implement that policy at non-NNSA facilities. Within NNSA, the Office of Defense NuclearCounterintelligence (NNSA/ODNCI) was created to implement CI policy, but only at NNSAfacilities. Conferees stipulated in the statute that a presidentially appointed, Senate confirmed UnderSecretary for Nuclear Security was designated to serve as NNSA Administrator. The NNSAAdministrator would report to the Energy Secretary.

In urging reorganization, conferees cited the report by the President's Foreign IntelligenceAdvisory Board (PFIAB) that blamed poor organization and a failure of accountability for DOE'sCI failures. The report also criticized DOE for being a dysfunctional bureaucracy incapable ofreforming itself. (12)

One result of this dual office is a partially bifurcated CI structure (the two offices shareresources, funds, and personnel for some programs (13) ) that has sparked debate over its effectiveness, particularly inlight of emerging non-traditional counterintelligence threats. Specifically, critics have warned thatinadequate communication and coordination between the two offices could threaten sensitive CI investigations. Supporters argue that a separate, dedicated CI office within NNSA is necessary ifcounterintelligence is to receive the focus it warrants.

Policy Issues For Congress

Observers have focused on two inter-related questions. First, are DOE and NNSAaccomplishing their CI missions? Second, is the current partially bifurcated CI managementstructure within DOE and NNSA the most effective approach to CI management?

Are DOE and NNSA Accomplishing CI Missions?

One study has questioned DOE's managerial approach to CI effectiveness. The Commissionon Science and Security, established by then-Secretary Bill Richardson, concluded in a 2002 report,that because of DOE's continuing management dysfunction, security, including CI, lacks clarity,consistency, and broad strategic planning. Specifically, the Commission said DOE lacked asystemwide approach for assessing risks to its assets and for determining priorities for the protectionof those assets; adequate investments in tools and technologies for its counterintelligence programs;and sufficient priority for cybersecurity. (14) With respect to CI, the Commission said the dual office structureled to fragmentation and prevented the establishment of a single, strong, CI program. (15)

Another study, however, points out that DOE and NNSA have made some progress in theirCI programs, although the current dual office structure exposes DOE and NNSA to the possibilityof future CI missteps. In January 2003, in a requested unclassified report to the Senate SelectCommittee on Intelligence (SSCI), the Office of the National Counterintelligence Executive (NCIX),an Intelligence Community entity charged with monitoring CI policy across the IntelligenceCommunity, concluded that DOE and NNSA were making progress in accomplishing much of theirbasic CI mission, particularly in the areas of strategic planning, operating procedures andimplementation of information systems, but criticized the bifurcated CI structure. (16)

NCIX blamed the current dual-office format for numerous day-to-day problems, includingduplicative and, at times, contradictory messages to field sites; mis-routing of sensitive CIinformation related to investigations; uncoordinated communications to the FBI and the IntelligenceCommunity; and dual, sometimes, inconsistent, tasking of program managers. (17)

Although manageable under the current structure, NCIX suggested that these problems posedthe potential for more fundamental missteps in the future. According to one law enforcement officercited by NCIX, the two-office configuration "might some day lead the department to miss a seriousCI breach or prevent the conduct of an effective investigation." (18) The Directors of CentralIntelligence and the Federal Bureau of Investigation (FBI) endorsed the NCIX findings in separateletters to the SSCI Chairman and Vice Chairman. (19)

Is The Bifurcated Structure Most Effective?

With regard to a bifurcated structure, two general views prevail. According to one view,espoused by the PFIAB and others, real and lasting CI reform is "unworkable within DOE's currentstructure and culture. To achieve the kind of protection that these sensitive labs (DOE's nationalsecurity laboratories) must have, they and their functions must have their own autonomousoperations structure free of all the other obligations imposed by DOE management." (20) The PFIAB, in 1999 recommended the establishment of a semi-autonomous agency within DOE, with its own coherentCI structure. (21)

The contrary view holds that CI must be a unified, integrated DOE-wide function. TheCommission on Science and Security concluded:

Counterintelligence must be an enterprise-widefunction, responsible for counterintelligence issues anywhere within the DOE complex. Furthermore, counterintelligence investigations, analysis, and all other counterintelligenceinformation must be developed within a unified organization and provided to the Secretary and othersenior officials without bureaucratic delays. This vital function necessitates one organization withone chief of counterintelligence reporting to the office of the Secretary. (22)

NCIX, in its report, concluded, "'this partial bifurcation' of CI responsibilities at DOE notonly served to further complicate the formidable challenge of managing CI at DOE, but alsoendangered the goals and implementation of an effective CI program." (23) NCIX further noted that,"In light of the history of CI investigations that foundered because of mis-communications withinwell-established agencies, the two-office arrangement has raised the odds of missteps andproblems." (24) NCIXrecommended that the two offices be consolidated under one senior CI officer with DOE-wideresponsibility for all aspects of the program and that would report directly to the Secretary ofEnergy. (25)

Former DOE Secretary Spencer Abraham, after completing his own review of the bifurcatedCI structure, concluded in 2003 that the structure was "not optimal"and proposed to Congress thatthe Department's two CI programs be consolidated under DOE's control, and that the combinedoffice report directly to the Energy Secretary. (26) Instead, however, the Senate Armed Services Committee, as partof the fiscal year (FY) 2005 defense authorization bill, authorized the DOE Secretary to consolidatethe two offices, but under the control of the NNSA administrator. (27) The House took no actionin its version of the same bill. The Senate receded, and House and Senate conferees retained thebifurcated structure, stating in the conference report:

The conferees note that the NNSA was originally set up as a semi-autonomous agency, inlarge part, to ensure that there would be adequate focus and priority placed oncounterintelligence activities. The conferees urge the counterintelligence offices at DOE andNNSA to work together to ensure security of both DOE and NNSA programs andfacilities." (28)

Possible Organizational Alternatives

Congress, of course, could choose to maintain the current organizational structure. (29) If Congress, however,ultimately decides to modify the structure, a number of organizational approaches have beenproposed. The range of alternatives currently being discussed include the following: (1) maintainthe status quo; (2) completely separate DOE and NNSA; (3) consolidate CI implementation underNNSA, and leave CI policymaking in DOE; and (4) consolidate all counterintelligence -- bothpolicymaking and implementation -- either within DOE, or, conversely, within NNSA.

Alternative One: Maintain the Status Quo

DOE's Office of Counterintelligence would continue to be responsible for developing CIpolicy across DOE (including the NNSA) but implementing that policy only at non-NNSA facilities. (NNSA/ODNCI) would continue to implement CI policy at NNSA facilities.

Proponents of the status quo point to congressional concern in 1999 that DOE was failingto focus necessary and appropriate attention on CI. The semi-autonomous NNSA and its Office ofNuclear Counterintelligence, they argue, was established for the express purpose of having one entityoutside of DOE focus on, and be held accountable for, implementing CI policy at DOE's sensitivenuclear and national security programs, including its weapons labs. The current structure, it issuggested, accomplishes that goal while maintaining a reasonably close integration of programactivities. Opponents counter that the current structure produces "inefficiency, confusion,unnecessary contention, and mis-communication." (30) They also suggest that in some areas, the NNSA structure withinDOE has exacerbated the general problem of too many layers in DOE, particularly with respect tocounterintelligence. (31)

Alternative Two: Completely Separate DOE and NNSA

This approach is a complete separation of DOE and NNSA counterintelligence programs,with OCI providing CI support to DOE, and NNSA/ODNCI providing CI support to NNSA. Proponents suggest that this approach would establish clearer lines of authority for CI within DOEand NNSA, which would improve communication and coordination. Opponents counter that suchan arrangement would produce chaos at the field level and could lead to future problems ofredundancy, coordination, communications, and relations with law enforcement. (32)

Alternative Three: Consolidate CI Implementation Under NNSA

The third approach consolidates all DOE CI implementation under NNSA, leaving DOE'sOffice of Counterintelligence in charge of formulating all CI policy. Proponents suggest that thisapproach would support an integrated and coordinated CI operational activity and result in a moreeffective allocation of resources by permitting NNSA to focus its resources on CI implementationand DOE to target its efforts on policy formulation. They also argue that NNSA oversees the mostsensitive classified activities within DOE and therefore is best suited to implement all CI activitiesacross DOE. Opponents counter that this approach would leave in place two CI offices, one withpolicymaking responsibilities and one with operational responsibilities, thereby contributing tocontinuing confusion as to roles and mission.

Alternative Four: Consolidate All CI Within DOE

The final approach consolidates the two CI programs, either under the control of the EnergySecretary, or under the control of the NNSA administrator. Proponents of DOE consolidation assertthat the importance of CI argues for a consolidated effort controlled by the Energy Secretary. Theyalso contend such a consolidation would highlight CI as a department-wide mission that includesprotecting leading-edge technologies, critical infrastructure, and national nuclear weapons secrets,as well as protecting DOE facilities against international terrorist attacks. They point out that muchof DOE's national security-related work focuses on issues other than just those related to nuclearweapons and, therefore, is not limited to NNSA sites. (33)

Opponents counter that consolidating CI under DOE control would be inconsistent withCongress' intent to maximize NNSA autonomy in all areas, and particularly with regard to CI,because of DOE's perceived deeply rooted anti-security culture. They trace DOE's anti-security biasto the longstanding tension between science and security, and assert that only a semi-autonomousagency such as NNSA can establish a cultural environment that values security. (34)

Although both sides dispute where a consolidated program should be housed, neitherproponents or opponents question that consolidation will improve accountability, administration,communication, and coordination, all essential qualities, they suggest of an effective CIprogram. (35)