At Intelligence Hearing, Harris Highlights Risks of Interim Security Clearances

Statement

Harris: Mr. Phalen, it's important I think for the public to understand why these background checks are so important to determining one's suitability to have access to classified information. Can you please explain to the American public why these background checks are so important to national security?

Phalen: Yes. So in taking a background check in addition to both the investigative piece and then ultimately a decision by a government agency to grant that person access to information or have some level of public trust, we owe it to - I think we as a government owe it to the American people and to the American taxpayer to ensure that people who are working in the national security arena and in areas where there is a public trust that we have done everything we can within reason to determine that that person - that that trust can be placed into that person, and I know in an earlier part of the conversation, earlier hearing, there was a conversation about should we reduce the number of people that have clearances. I think there's not so much a counterargument to that, but when we have people and across this particular environment and in the earlier panel where they have access daily to national security information, secrets that give this country an edge in war and peace and other sorts of things, and at the same time we have our industrial partners that we work with that are building all those tools that help us fight those wars or keep that peace, do you - and this is a very simple thing that I've said in other venues - do you want to have less trust in the guy who is turning bolts on an F-35 assembly line or more trust? My argument is we probably want more trust rather than less.

Harris: And in addition to the trust point, isn't it also the case that the code of federal regulations lays out 13 criteria for determining suitability, not only to determine who we can trust, but also to expose what might be weaknesses in a person's background that make them susceptible to compromise and manipulation by foreign governments and adversaries?

Phalen: That is correct. This is a process that is both looking at history to ask if you have - do you already have a record of betraying that trust and perhaps more importantly both for initial investigations and for the continuous vetting or continuous evaluation portion, to say what is changing in their lives and how do we predict whether they are going to go horribly bad before they get that far?

Harris: So, there are 13 criteria as I've mentioned. One is financial considerations and I'm going to assume that we have these 13 factors because we have imagined scenarios where in each of them and certainly any combination of them could render someone susceptible to the kind of manipulation that we have discussed. So can you tell us what we imagine might be of the exposure and the weakness of an applicant when we are concerned about their financial interest and in particular those related to foreign financial considerations?

Phalen: So in a nutshell it would be an individual who has entangled themselves, whether it's foreign or not, in financial obligations that have put them in over their head and oftentimes this causes people to make bad decisions, bad life decisions, and in some of these cases we've found from the history of espionage it causes them to decide, well, I've got something valuable here. Let me sell it to somebody.

Harris: And how much information is an applicant required to give related to foreign financial considerations?

Phalen: They are required to identify foreign financial investments, foreign financial obligations, foreign property -

Harris: Foreign loans?

Phalen: That would be a financial obligation, yes.

Harris: Of course. And when we talk about foreign influence, and it is listed as a concern, what exactly does that mean in terms of foreign influence? What are we looking at?

Phalen: It would be, how am I or am I influenced by either a relationship I have with someone who is foreign, a relationship I have with an entity that is foreign. It could be a company, it could be a prior or co-existing citizenship I have with a foreign country. It could be a family member who is someone from a foreign country and how much influence any of those things would have over my judgment as to whether I'm going to protect or not protect secrets and trust.

Harris: And given your extensive experience and knowledge in this area, can you tell us what are the things that individuals are most commonly blackmailed for?

Phalen: It is not -- I have to go back and do some more research. The instances of blackmail by people committing espionage is not as substantial as the incidence of people who simply made a bad decision based on financial or other entanglements and they just make poor decisions and decide my personal life is worth more than my country.

Harris: Right. And then I have one final question. And this is for Mr. Payne. According to press reports last fall you said, "If we don't do interim clearances, nothing gets done." You continued to say, "I've got murderers who have access to classified information. I have rapists, I have pedophiles, I have people involved in child porn. I have all these things at the interim clearance level, and I'm pulling their clearances on a weekly basis." This obviously causes and would cause anyone great concern. And the problem, of course, being that the inference there is that interim clearances don't disclose very serious elements of someone's background. So can you please tell us, when we also know according to press reports that there are more than 100 staffers in the Executive Office of the President who are operating on interim clearances, what we are going to do about this?

Payne: I will say that the length of time that someone stays in an interim capacity has to be limited as much as possible. Just to give you an example from DOD standpoint, and my area of jurisdiction right now is industry, cleared industry. Last year we issued 80,000 interim clearances to industry. Currently there's about 58,000 people on interim clearances. If you look at the timeline that they have been involved or they have had their interim clearances, it ranges anywhere from six months to two years. But if you look at just last year in terms of interim clearances, and let me give you a couple of statistics here, 486 people from industry had their clearances denied last year. Their main security clearance, their full security clearance they were denied. Of those, 165 of those individuals had been granted interim clearances. Now, during the process of the investigation, information was developed during the investigation that resulted in us pulling the interim clearances of 151 of those individuals, and the remainder were individuals who did things after they received their interim clearances. So the risk - you could see the risk that is involved with interim clearances, and they need to reduce the amount of time that we have somebody in an interim capacity as much as possible.

Harris: I agree. Thank you.

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