Secrecy News -- 07/02/12

Steven Aftergood saftergood at fas.org
Mon Jul 2 07:23:11 PDT 2012


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SECRECY NEWS
from the FAS Project on Government Secrecy
Volume 2012, Issue No. 62
July 2, 2012

Secrecy News Blog:  http://www.fas.org/blog/secrecy/


**     FINANCIAL COSTS OF CLASSIFICATION SOAR
**     THE DNI AS SECURITY EXECUTIVE AGENT
**     ROLE OF INTELLIGENCE COMMUNITY CONTRACTORS QUESTIONED
**     SECOND THOUGHTS IN CONGRESS ABOUT DOMESTIC DRONES
**     HYDROPOWER, HIGH SPEED RAIL, HAITI, AND MORE FROM CRS


FINANCIAL COSTS OF CLASSIFICATION SOAR

At a time when "leaks" are said to be running rampant, the government is
spending more money than ever before to protect classified information.  
The estimated cost of securing classified information in government
increased last year by at least 12% to a record high level of $11.36
billion.  An additional $1.2 billion was spent to protect classified
information held by industry contractors.

These figures were reported to the President last week by the Information
Security Oversight Office.

	http://www.fas.org/sgp/isoo/2011costs.pdf

The ISOO report breaks down the expenditures into six categories
(personnel security, physical security, etc.).  But it does not provide any
explanation for the rapidly escalating cost of secrecy.

One factor in the rising costs may be the continued growth of the secrecy
system.  While some essential security costs are fixed and independent of
classification activity, the failure to rein in classification and
especially overclassification is a likely contributor to marginal cost
growth.  The ISOO report itself provides a stark illustration of the
overclassification problem when it notes that the classification costs of
several intelligence agencies -- CIA, DIA, ODNI, NGA, NRO and NSA -- are
excluded from the new report because they are classified.

"The cost estimates of these agencies are classified in accordance with
Intelligence Community classification guidance and are included in a
classified addendum to this report," the ISOO report states.

But the classification of this information, which is almost certainly
illegitimate, defies credulity for several reasons.

First, the secret intelligence cost numbers are estimates, not actual
expenditures.  ("Requiring agencies to provide exact responses to the cost
collection efforts would be cost prohibitive," ISOO said.)  The potential
intelligence value of such estimates to a hostile intelligence service is
vanishingly small, particularly since their accuracy is variable and
uncertain.

Second, the disclosure of the cost estimates for non-intelligence
agencies, which has had no adverse effect on the security programs of those
agencies, is a strong indication that no damage can result from release of
such information.  If publication of the non-intelligence classification
cost estimates had caused any kind of harm over the years, those estimates
would not be published.  But of course they haven't, and so they are.

Thus, one is led to conclude that the classification of the intelligence
agency classification cost estimates is not threat-driven, but instead is
"culture"-based.  The disclosure of the estimates would not cause
identifiable damage to national security, which means this information has
been classified in violation of executive order 13526.

Unfortunately, there seems to be no one to tell the DNI that his
classification policies are mistaken.  Congress could perform critical
oversight of classification policy, inquiring into the basis of particular
classification decisions, but it almost never does so.  If anything,
congressional leaders favor more aggressive and unforgiving enforcement of
existing classification policies.  The Obama Administration's Fundamental
Classification Guidance Review was supposed to challenge the habits of
reflexive classification, but in this case at least it has not had the
desired effect.

If some rogue employee leaked a copy of the classification cost estimates
for the intelligence agencies, he or she would be subject to new procedures
announced by the Office of the Director of National Intelligence last week
to combat unauthorized disclosures, including polygraph testing and
inspector general investigations.

	http://www.fas.org/irp/news/2012/06/dni-leaks.pdf

In the absence of leaks, the estimated cost of implementing the DNI's new
anti-leak procedures will be classified and unavailable to the public.


THE DNI AS SECURITY EXECUTIVE AGENT

The anti-leak procedures announced last week by the Director of National
Intelligence apply specifically to intelligence community employees.  But
the DNI is also responsible more broadly for security policies that affect
almost everyone who holds a security clearance for access to classified
information, whether or not it pertains to intelligence, as well as other
government employees who are candidates for "sensitive positions."

The DNI's role as "Security Executive Agent" was described in a March 2012
directive, according to which he is responsible for oversight of
"investigations and determinations by any agency for eligibility for access
to classified information and eligibility to hold a sensitive position."

The DNI's authority extends to every individual who has or seeks access to
classified information with only a handful of exceptions:  the President,
the Vice President, Members of Congress, Justices of the Supreme Court, and
Federal judges appointed by the President.

In this capacity, the DNI is responsible for developing standardized
procedures for security questionnaires, financial disclosure forms,
polygraph policies and practices, and foreign travel and foreign contact
reporting requirements.  See "Security Executive Agent Directive (SEAD) 1,"
effective 13 March 2012:

	http://www.fas.org/irp/dni/sead-1.pdf

"SEAD 1 applies to all departments and agencies performing investigations
or adjudications of persons proposed for eligibility to hold a sensitive
position whether or not requiring access to classified information," said
Charles B. Sowell of ODNI in congressional testimony last month.   "The
ODNI also led the interagency efforts to revise the National Security
Adjudicative Guidelines" -- which are used to evaluate a person's loyalty,
reliability and trustworthiness -- "which we expect to issue later this
year," he said.

	http://www.fas.org/irp/congress/2012_hr/062112sowell.pdf


ROLE OF INTELLIGENCE COMMUNITY CONTRACTORS QUESTIONED

Persistent questions about the U.S. intelligence community's reliance on
contractors to perform or support core mission functions were explored in a
partially closed hearing of the Senate Homeland Security Committee last
year.  A redacted transcript of the classified session of the hearing was
included in a hearing volume which was recently published.

Among other things, "questions have been raised about whether some IC
contracting firms hold undue influence within the IC because senior
intelligence officials are often recruited from, and often return to, these
firms," according to a background paper prepared for the hearing (citing
author Tim Shorrock) and included in the appendix to the PDF version of the
new hearing volume.

"A 'revolving door' where employees move between public and private sector
service increases the risk that decisions made by either contractor or
government employees could be influenced by past professional relationships
or potential future employment opportunities."

"Some have also highlighted concerns about contractors who immediately
return to their former IC agency [as private sector employees], but serve
in the same capacity and at greater expense," the background paper stated
(citing reporting by Julie Tate of the Washington Post).

"In addition to clear conflicts of interest, the different incentives of
corporations and their employees versus federal agencies and their
employees create the need for robust oversight.  For example, the need to
make corporate profits could create an incentive to provide analysis or
decision support services in a manner that is likely to increase future
business opportunities."

"Additionally, because contract employees owe a duty of loyalty to their
employers rather than the U.S. government, they may have incentives to act
in the interest of their employers rather than in the interests of the
government where those interests differ," the background paper said.

At first glance, the questions seemed more interesting than the answers
that intelligence community officials were able to provide at the hearing,
but it was remarkable to see those questions raised at all.  The hearing
was held not by the Senate Intelligence Committee, but by a subcommittee of
the Senate Homeland Security and Governmental Affairs Committee chaired by
retiring Senator Daniel Akaka (D-HI).

See "Intelligence Community Contractors: Are We Striking the Right
Balance," September 20, 2011:

	http://www.fas.org/irp/congress/2011_hr/contractors.html


SECOND THOUGHTS IN CONGRESS ABOUT DOMESTIC DRONES

Some members of Congress are having second thoughts about the future use
of unmanned aerial systems in U.S. airspace, judging from a colloquy on the
House floor last week.

When Congress passed the FAA reauthorization bill, recalled Rep. Michael
Burgess (R-TX), it included "this very simple language allowing for the
expansion of unmanned aerial vehicles in the national airspace."

"None of us really thought that was much of a problem, but our
constituents are bringing it back to us," Rep. Burgess said. "They are
concerned about privacy, and they're concerned about Federal agencies
surveilling normal activities of commerce in which people may be engaged."

Looking beyond privacy concerns, Rep. Burgess proposed an amendment to the
Transportation Appropriations bill that would prohibit the use of armed
drones within the United States.

"If these drones are weaponized, you can--if you've been surveilled
unfairly, you can go to court and perhaps seek a remedy. But if a bullet is
fired from one of these platforms, you don't have any remedy if you're the
recipient of that bullet," he said.

"The amendment that I offer today is preemptive. As to my knowledge, no
actual applications have been filed with the FAA to use armed drones in
U.S. airspace. But I believe it is necessary, as there has been some
discussion in the public media about the ability to arm unmanned aerial
vehicles. I personally believe this is a road down which we should not
travel," Rep. Burgess said.

However, the amendment was rejected for procedural reasons.

	http://www.fas.org/irp/congress/2012_cr/drone-thud.html

Similar legislation sponsored by Rep. Rush Holt (D-NJ) was approved last
month as an amendment to the pending Homeland Security Appropriations bill.

	http://www.fas.org/irp/congress/2012_cr/dhs-uas.html


HYDROPOWER, HIGH SPEED RAIL, HAITI, AND MORE FROM CRS

New and updated reports from the Congressional Research Service that has
Congress has not authorized CRS to release to the public include the
following.

Hydropower: Federal and Nonfederal Investment, June 26, 2012:

	http://www.fas.org/sgp/crs/misc/R42579.pdf

The Development of High Speed Rail in the United States: Issues and Recent
Events, June 28, 2012:

	http://www.fas.org/sgp/crs/misc/R42584.pdf

Haiti Under President Martelly: Current Conditions and Congressional
Concerns, June 6, 2012:

	http://www.fas.org/sgp/crs/row/R42559.pdf

Federal Laws Relating to Cybersecurity: Discussion of Proposed Revisions,
June 29, 2012:

	http://www.fas.org/sgp/crs/natsec/R42114.pdf

U.S. Foreign Assistance to Latin America and the Caribbean: Recent Trends
and FY2013 Appropriations, June 26, 2012:

	http://www.fas.org/sgp/crs/row/R42582.pdf

China's Economic Conditions, June 26, 2012:

	http://www.fas.org/sgp/crs/row/RL33534.pdf

Navy Shipboard Lasers for Surface, Air, and Missile Defense: Background
and Issues for Congress, June 29, 2012:

	http://www.fas.org/sgp/crs/weapons/R41526.pdf

Cluster Munitions: Background and Issues for Congress, June 27, 2012:

	http://www.fas.org/sgp/crs/weapons/RS22907.pdf


_______________________________________________
Secrecy News is written by Steven Aftergood and published by the
Federation of American Scientists.

The Secrecy News Blog is at:
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_______________________
Steven Aftergood
Project on Government Secrecy
Federation of American Scientists
web:    www.fas.org/sgp/index.html
email:  saftergood at fas.org
voice:  (202) 454-4691
twitter: @saftergood

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