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Opening Statement of Senator Bob Smith

before the
Senate Armed Services Committee

Hearing to review procedures and standards for the granting of security
clearances at the Department of Defense

April 6, 2000

Mr. Chairman, I am delighted that the Committee is holding this hearing today on problems at DSS and DOHA. I think this is a very important and urgent issue, and it touches the core of the longstanding protections set in place to guard the most vital secrets of the nation and of our national security community.

The problems at DSS present a problem for the broader defense community. Companies cannot get their employees cleared in a timely way, which costs them money, and which undoubtedly puts important projects behind schedule. The Aerospace Industries Association has reported that for some major contractors, the cost of DSS' backlog is estimated at well over a hundred million dollars. I look forward to hearing from General Cunningham as to whether the backlog has been independently verified, as requested by the Chairman of the House Government Reform Subcommittee on National Security at a hearing two months ago. You stated at that hearing that if you were a gambling man, you would bet the backlog is even larger than reported.

I have heard from previous employees that you inherited an agency in a shambles, where all the senior people with experience were moved out or shoved aside, and inept personnel were brought in to replace them with the result that eventually DSS imploded. In addition to the clearance backlog, I am told that the industrial security program has collapsed as well. I am also told that high-level DOD officials were informed of the problem and did nothing. GAO notes that there was inadequate oversight, but there is a distinct difference between inadequate oversight and being aware of a major problem brewing and doing nothing about it. That is better characterized as negligent complicity.

This not a new scandal-- it is an old scandal-- by now, I would expect there to be a more-aggressive plan in place to tackle the backlog and resolve it, and an idea of how long that will take and how much it will cost. I would like to be assured that as with other problems and scandals, the Administration doesn't plan simply to run the clock out, to do spin control, and to pass the buck to the next Administration.

At DOHA, USA Today reported that felons, including a murderer, individuals with chronic alcohol and drug abuse problems, a pedophile and an exhibitionist received security clearances. To my mind, one convicted murderer with a security clearance is one too many. I have been told by at least one former DOD official that USA Today's reported cases of felons granted security clearances is probably "only the tip of the iceberg." I am also told that DOHA is the only organization dictated to by attorneys, while in the others, i.e. in the military services, etc., security specialists are in charge. We need to analyze how DOHA can re-order its priorities and restore security as its primary focus.

Additionally, in my questioning, I want to probe into a couple of personnel issues which generated much interest on Capitol Hill and in the press. The first is investigator David Kerno, whom General Cunningham reinstated in his job at DSS, after he was being threatened with suspension without pay for 30 days and suffered a demotion by the previous head of DSS. General Cunningham made the correct decision in reinstating Kerno, but there is still the matter of reimbursement of his legal fees. I would like for General Cunningham and for Mr. Kwalwasser to address this issue.

Second, I would like to ask General Cunningham about DSS' period background reinvestigation of CDR Jack Daly. Daly was involved in a lasing incident off Puget Sound in 1997, ostensibly by the Russian vessel the Kapitan Mann. His case was also widely reported in the press and should not be unfamiliar to you.

I look forward also to heating from the GAO and from the witnesses.

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