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May 31, 1995

The President
The White House
Washington, DC 20500

Dear Mr. President:

We are pleased to submit the Information Security Oversight Office's 1994 Report to the President.

The past year has likely been the most important ever in matters concerning the Government-wide security classification system and program. We are delighted to report tremendous progress on several fronts. Among them:

We are most excited about the challenges and prospects that the new security classification system creates. We are also committed to making it work as effectively as possible. Our next report will highlight our efforts in working with the agencies to bring about these changes.


Steven Garfinkel, Director
Information Security Oversight Office

Summary of FY 1994 Program Activity

The FY 1994 Report to the President is the twelfth to examine the security classification program under E.O. 12356. The following data highlight ISOO's findings.




A Success Story

FY 19944 saw improvement in the security classification programs of many agencies. One agency in particular merits being spotlighted: the Department of the Navy. During the last seven years (1988-1994), Navy has turned the quality of its security classification and declassification programs completely around. A combination of highly competent personnel and senior management interest and involvement came together to achieve Navy's current level of success. ISOO expects this level of performance to continue with Navy's implementation of Executive Order 12958, "Classified National Security Information." Highlights of the Navy turnaround follow.

Commission on Protecting and Reducing Government Secrecy

The Foreign Relations Authorization Act for Fiscal Years 1994 and 1995 established the Commission on Protecting and Reducing Government Secrecy. Senator Daniel Patrick Moynihan chairs the twelve member, two year bipartisan panel. Representative Larry Combest serves as Vice Chairman. The other members of the Commission, listed alphabetically, include:

The Honorable John M. Deutch
The Honorable Martin C. Faga
Ms. AJison B. Fortier
The Honorable Richard K. Fox, Jr.
Representative Lee H. Hamilton
Senator Jesse Helms
Ms. Ellen Hume
Professor Samuel P. Huntington
The Honorable John D. Podesta
The Honorable Maurice Sonnenberg

The Commission'smandate is to review procedures for classifying information and make recommendations to (1) reduce the volume of information classified; and (2) improve procedures relating to the granting of security clearances.

Executive Order 12937

"Declassification of Selected Records Within the National Archives of the United States"

On November 10, 1994, President Clinton issued an Executive order that declassified, in bulk, a selection of classified records within the National Archives. This unprecedented Order declassified approximately 45 million pages or 14% of the National Archives holdings of classified material, including classified holdings through the end of World War II, and an equal number dating into the 1970s.

Executive Order 12937

November 10, 1994

By the authority vested in me as President by the Constitution and the laws of the United States of Amedca, it is hereby ordered:

Section 1. The records in the National Archives of the United States referenced in the list accompanying this order are hereby declassified.

Sec. 2. The Archivist of the United States shall take such actions as are necessary to make such records available for public research no later than 30 days from the date of this Order, except to the extent that the head of an affected agency and the Archivist have determined that specific information within such records must be protected from disclosure pursuant to an authorized exemption to the Freedom of Information Act, 5 U.S.C. 552, other than the exemption that pertains to national security information.

Sec. 3. Nothing contained in this order shall create any right or benefit, substantive or procedural, enforceable by any party against the United States, its agencies or instrumentalities, its officers or employees, or any other person.

William J. Clinton

Records in the following record groups ("RG") in the National Archives of the United States shall be declassified. Page numbers are approximate. A complete list of the selected records is available from the Archivist of the United States.

1. All unreviewed World War II and earlier records, including:

II. Post-1945 Collections (Military and Civil)

 TOTAL								43.9 million pp.	

Executive Order 12951

"Release of Imagery Acquired by Space-Based National Intelligence Reconnaissance Systems"

On February 22, 1995, President Clinton issued an Executive Order that, for the first time, will result in the declassification and public availability of historical intelligence imagery.

Executive Order 12951

February 22, 1995

By the authority vested in me as President by the Constitution and the laws of the United States of America and in order to release certain scientifically or environmentally useful imagery acquired by space-based national intelligence reconnaissance systems, consistent with the national security it is hereby ordered as follows:

Section 1. Public Release of Histohcal Intelligence Imagery.

Sec. 2. Review for Future Public Release of Intelligence Imagery.

Sec. 3. General Provisions.

Sec. 4. Definition.

William J. Clinton

Major step toward full implementation of the National Industrial Security Program

On October 5, 1994, then Deputy Secretary of Defense John Deutch, acting as the Executive Agent, announced the release of the National Industrial Security Program Operating Manual (NISPOM). The product of several years of effort by Government and industry security professionals, the NISPOM is the centerpiece of the National Industrial Security Program (NISP) established by Executive Order 12829, "National Industrial Secuhty Program," issued in 1993. The issuance of the Manual should mark the beginning of full implementation of the NISP.

The rationale for the establishment of the NISP was the desire to standardize security procedures for protecting classified information held by industry. Its aim is to provide for a "single, integrated, cohesive" industrial security program by replacing conflicting, overlapping and unnecessary requirements with uniform standards. The NISPOM gives this aim operational expression. Consequently, the initial test of the effectiveness of the NISPOM is whether it achieves the fundamental purposes of E.O. 12829. The ISOO is presently reviewing the NISPOM for this purpose. The review is not yet completed. Still, some brief comments are pertinent at this juncture.

The NISPOM generally succeeds in providing a logical progression through sections on classification, markings, declassification, safeguarding and other topics. However, some unresolved issues linger and will require a strong commitment on the part of the agencies involved to resolve them. Also, a significant number of contractors have expressed concern about conflicting and confusing guidance on implementation of the program; lack of clarity of some of the provisions of the NISPOM; and considerable delays in its availabilfty. Some of these concerns were raised by industry representatives at the April 1995 meeting of the National Industrial Security Programram Policy Advisory Commiftee (NISPPAC). The NISPPAC, which consists of representatives from both Government and industry, advises the ISOO Director on all matters concerning the program, including recommending changes in policy and proposing solutions to issues in dispute.

The issuance of the NISPOM holds potential for meeting the goals of E.O. 12829. As a major change in the way of doing business, no one should be surprised that there have been some problems following its issuance. What is needed at this time are renewed efforts to continue progress toward a single, integrated industrial security program, For this purpose, agencies should give a strong and fresh emphasis to setting aside parochial interests and demonstrating commitment to achieve the goals of the National Industrial Security Program.


Original Classifiers

Original classification authorities, also called original classifiers, are those individuals designated in writing, either by the President or by selected agency heads, to classify information in the first instance. Under E.O. 12356, only original classifiers determine what information, if disclosed without authority, could reasonably be expected to cause damage to the national security.

For FY 1994, the number of original classifiers throughout the executive branch was 5,461, exactly 200 fewer than last year. This figure, for the fourth consecutive year, represents the lowest number of original classifiers ever reported by ISOO. ISOO attributes the decrease in the number of original classifiers over the past several years primarily to the end of the Cold War and the on-going efforts to downsize Government. Since disparities exist among agencies with comparable original classification authority, ISOO believes further reductions are possible with out having a negative impact on agency operations. The issuance of Executive Order 12958, "Classified National Security Information," offers an excellent opportunity to achieve further reductions. Agency heads and senior agency officials will be reviewing each and every one of the individuals with original classification authority before redelegating authority under the new Executive order. Therefore, ISOO will continue to encourage agencies to use this occasion to limit the number of original classification authorities to the lowest level possible.

In FY 1994, agencies reported decreases in the number of original classifiers for all three levels. At the Top Secret and Confidential levels, agencies reported decreases of 1 %, while the number of Secret original classifiers decreased by an impressive 5%. ISOO wishes to recognize several agencies for their efforts to reduce the number of original classifiers. In particular, ISOO applauds AID and FEMA for reporting decreases of 84% and 73%, respectively. Also reporting significant reductions were DOE, Treasury and DOD, which has been at the forefront in reducing its number of original classifiers for the past several years. Please refer to "A Success Story" on the Navy's progress in this and other areas in recent years.

Original Classification

Original Classification is an initial determination by an authorized classifier that information requires extraordinary protection, because unauthorized disclosure of the information could reasonably be expected to cause damage to the national security. The process of original classification ordinarily includes both the determination of the need to protect the information and the placement of markings to identify the information as classified. By definition, original classification precedes all other aspects of the security classification system, e.g., derivative classification, safeguarding and declassification. Therefore, ISOO often refers to the number of original classification actions as the most important figure that it reports.

For FY 1994, agencies reported a total of 204,683 original classification decisions. This figure represents a decrease of 17% over the number of original classification decisions reported in FY 1993, and is the lowest number of original classification actions ever reported by ISOO. Again, ISOO believes the decrease in the number of original classification decisions over the past several years is a result of on going efforts to downsize Government and the end of Cold War tensions. By classification level, both Top Secret and Confidential decisions decreased significantly by 61 % and 31 %, respectively, while the number of Secret original classification actions remained relatively unchanged. The decrease in Top Secret decisions is most impressive since it reduces the number of classifications that are, by far, the most costly to maintain.

Four agencies, Justice, CIA, DOD, and State, continue to account for almost 97% of all original classification decisions. Ot these agencies, Justice reported the highest number, with a total of 72,880 original classification decisions. However, this number represents a decrease of 8% in original classification decisions at Justice from the figure reported in FY 1993. CIA reported a total of 57,720 original classification decisions, which represent an increase of 15% from the prior year CIA attributes this increase to the agency's reorganization of personnel, which resulted in a modification to the agency's sampling method. ISOO believes the increase is not a matter of serious concern but intends to monitor the situation closely. ISOO applauds DOD for reducing its number of original classification actions by an impressive 47%. State also reported a decrease of 13% in the number of original classification decisions.

For the agencies with smaller programs, the data collected show a decrease of 12% in the number of original classification decisions. In particular, ISOO commends NASA, Treasury, and Commerce, which reported decreases of 80%, 31 %, and 25%, respectively, in the number of original classification actions.

As part of the original classification process, the classifier must determine a time frame for the protection of the information. This is commonly called "duration" of classification, E.O. 12356 provides classifiers with two means of designating the duration of classification for national security information, befter known as declassification instructions. First, the information may be marked for declassification upon a specific date or event. For example, a classifier may determine that the information's sensitivity will lapse upon the completion of a particular project. The event would be noted on the face of the document, and when the project had been completed, the information would automatically be declassified. Only if a specific date or event cannot be determined at the time of classification is the classifier authorized to use the second means, marking the document with the notation "Originating Agency's Determination Required" ("OADR"). "OADR" indicates that the information must be reviewed by the originat- ing agency before declassification action may be taken.

For FY 1994, 8% of all original classification decisions were marked for declassification with a specific date or event, as compared to 3% of all original classification actions reported in FY 1993. Although this represents a very positive improvement, ISOO believes both proportions are too low. Executive Order 12958, "Classified National Security Information," which becomes effective on October 14, 1995, includes provisions specifically designed to address the problem of indefinite classification, including the elimination of the "OADR" provision.

Derivative Classification

Derivative classification is the act of incorporating, paraphrasing, restating, or generating in new form classified source information. Information may be derivatively classified in two ways: (a) through the use of a source document, usually correspondence or publications by an original classffication authority; or (b) through the use of a classification guide. A classification guide s a set of instructions issued by an original classification authority. It pertains to a particular subject and describes the elements of information about that subject that must be classified, and the level and duration of classification. Only executive branch or Government contractor employees with the appropriate security clearance, who are required by their work to restate classified source information, may classify derivatively. For FY 1994, agencies reported 4,569,214 derivative classification actions. This figure represents a significant decrease of almost 26% from that reported in FY 1993, and is the lowest number ever reported by ISOO. Again, ISOO attributes this decrease to the continuing efforts to downsize Government programs, operations, and personnel and the absence of any major international conflict involving the United States, During FY 1994, the four major classifying agencies reported significant reductions in the number ot derivative classification actions. Among these agencies, Justice led the way, reporting a 56% reduction in derivative classification actions. DOD reported a 28% reduction, State reported a 13% reduction, and CIA reported an 8% reduction in the number of derivative classification actions from FY 1993. ISOO applauds Justice, CIA, DOD, and State for their efforts in reducing significantly the number of derivative classification actions.

All other agencies reported 44,768 derivative classification actions, a 20% reduction from the prior year. Among these agencies, ISOO commends the following agencies for reducing the number of derivative classification actions for FY 1994: AID (34%), DOT (28%), 1TC (40%). OPIC (67%), Treasury (1 5%), and USTR (94%).

As in the past, the breakdown of derivative classification actions by classification level differs somewhat from the breakdown of original classification decisions: Secret and Top Secret decisions continue to comprise higher percentages of the total. With respect to the proportion of Top Secret actions, this results from a very few activities that produce a relatively large quantity of derivative documents from classification guidance. Generally, this Top Secret information is highly localized, so that the percentage of Top Secret actions within almost all collections of classified information is much smaller. Nevertheless, if it continues, the significant reduction in Top Secret derivative actions that took place in FY 1994 will have a significant long-term impact in reducing the costs of classification.

Combined Classification FY 1994

By adding original and derivative classification decisions, ISOO arrives at what it calls combined classification activity. In FY 1994, combined classification activity significantly decreased by 1,634,791 (26%) to a total of 4,773,897 actions. Since derivative actions outnumbered original actions by a ratio of more than 22: 1, they had a much greater impact on combined classification activity. Again, both derivative and original classification activity reached all time reported lows in FY 1994. This resulted in an all time reported low for combined classification activity.

DOD accounted for 57% of all classification activity reported for FY 1994, CIA accounted for 31 % of the total, Justice 8% and State 3%. Again, the remaining agencies accounted for only 1 % of the combined classification activity. These agencies run the gamut, however, in the degree of their involvement with classified information. They range from very large departments that possess very liftle classified information, and generate almost none, to very small entities that exist almost exclusively in a classified environment.


Systematic Review

Started in 1972, "systematic review for declassification" is the program under which classified, permanently valuable (archival) records are reviewed for purposes of declassification after the records reach a specific age. Under E.0, 12356, NARA is the only agency required to conduct a systematic review of its classified holdings. NARA ordinarily reviews its classified holdings as they become 30 years old, except for certain intelligence or cryptologic file series, which are to be reviewed as they become 50 years old. While other agencies are not required to establish a systematic review program, ISOO encourages them to do so. With the approval of the originator, agencies, including NARA, may conduct a systematic review of records that are less than 30 years old.

ISOO is pleased to report that during FY 1994, the product of the systematic review program showed its first significant increase since FY 1990. Agencies reviewed 13.3 million pages in FY 1994. This is an increase of 4.3 million pages (+47%) from FY 1993. Of the pages reviewed, 84% were declassified, a significant increase from the 73% rate reported in FY 1993. As a result of the greater number of pages reviewed and the higher dedassification rate, over 11.2 million pages were declassified under the systematic review program in FY 1994. When added to the number of pages declassified under the Executive Order 12937, "Declassification of Selected Records Within the National Archives of the United States," 1994 was a banner year for declassification. Wfth the advent of the declassification reforms in Executive Order 12958, "Classified National Security Information," these numbers should be a prelude to the future of declassification.

Although the efforts of several agencies contributed to the increase, DOD and State account for much of the program's substantial improvement. DOD accounted for the highest volume of pages reviewed in FY 1994. DOD reviewed over 6 million pages, 3 million more than in FY 1993 (+109%). While several DOD components contributed to DOD's outstanding performance, the three military services account for most of DOD's systematic review activity. Particularly noteworthy is Navy's contribution. During FY 1994, Navy reviewed 3.8 million pages, 3.2 million more than in FY 1993, almost a seven fold increase. Of the 3.8 million reviewed, Navy declassified 3.7 million pages.

State accounted for the second highest volume of pages reviewed in FY 1994, State reviewed 4.4 million pages, nearly a 3 million page increase from FY 1993. Of the 4.4 million pages reviewed, State declassified 4 million pages.

In FY 1994, the number of pages NARA reviewed decreased from 3,005,456 to 2,320,531 (-23%), with a declassificatior rate of 95%, a slight increase. NARA's primary explanation for the decline in its systematic review activity was a reduction in resources to conduct systematic review. For the past two years, NARA has reported that special projects, such as the Kennedy assassination files, critically impact the product of its systematic review program. Additionally, in FY 1994, FOIA requests for NARA's classified records increased significantly. Since FOIA reviews are far more time intensive than systematic review, the regative impact on NARA'S total declassified product was substantial.

The lack of sufficient resources to conduct a viable systematic review program has led to a new approach to deal with the build-up of older, permanently valuable classified records. E.O. 12958 substitutes a structured automatic declassification provision for the page by page, line by line burden of systematic review. As envisioned, systematic reviews will be retained to deal only with those relatively few records exempted from automatic declassification under the new system.

Mandatory Review

Under E. 0. 12356, the mandatory review process allows agencies or citizens to require an agency to review specified natioral security information for purposes of seeking its declassification. Requests must be in writing and describe the information with sufficient detail to permit the agency to retrieve it with a reasonable amount of effort. Mandatory review remains popular with some researchers as a less contentious alternative to Freedom of Information Act (FOIA) requests. It is also used to seek the declassification of the presidential papers or records of former presidents, which are not subject to FOIA.

The 4,196 cases processed under mandatory review during FY 1994 comprised 51,976 documents totaling 323,945 pages. The number of pages processed represents a 31% increase from the prior year. The percentage of pages declassified n whole or in part (83%) fell significantly from last year's rate of 93%. Given the high proportion and number of pages declassified, mandatory review remains a highly successful mechanism for the declassification of information. With the advent of an Interagency Security Classification Appeals Panel under E.O. 12958, mandatory review may become even more popular in the future.

E.O. 12356 also provides that agencies or members of the public may appeal mandatory review denials to designated officials of the denying agencies. In FY 1994, the nurnber of documents and pages processed on appeal dropped dramatically. These decreases result from the figures reported by the Department of Justice for mandatory review appeals. During an administrative review of its data collection procedures, the FBI discovered that it had incorrectly included Freedom of Information Act requests in its past reports. Consequently, Justice did not include these requests in its FY 1994 report.

During FY 1994, agencies processed 77 appeals that comprised 386 documents totaling 3,046 pages. Of these, 88% of the pages were granted in whole or in part. This high rate suggests that researchers can continue to anticipate greater returns in declassified information if they pursue an appeal.


Executive Order 12356 requires that each executive branch agency that originates or handles classified information establish and maintain "an active oversight and security education program." Self-inspections are an important part of an agency's program and allow it to identify infractions (minor violations) of the Executive Order, the implementing ISOO Directive or agency regulations. Agencies are required to report to ISOO the number and results of these self inspections each year.

For the fourth year in a row, agencies reported a decrease in the number of self-inspections. For FY 1994, agencies reported 6,513 fewer self-inspections, a 34% decrease from the num- ber reported in FY 1993. This dramatic decrease is largely attributed to DOD, which conducted 5,813 fewer self-inspections in FY 1994 than In FY 1993. Other agencies with significant decreases include CIA, Commerce, DOE, DOT, FEMA, Justice and NASA. These reductions in self-inspections are attributed to downsizing and reorganizations throughout the Government. Those agencies reporting major increases, thus enhancing their oversight capability, include HHS, HUD, NARA, NSF, and State.

In FY 1994, agencies detected a total of 12,961 infractions. Compared to FY 1993, this figure represents a 31 % decrease. Although the overall number of inspections has decreased by a substantial margin, the average number of infractions discovered per inspection increased slightly from 0.97 in FY 1993, to 1.02 in FY 1994. While these figures are encouraging, they are not at a level that indicates that an effective self-inspection program is in place at all agencies. Pursuant to sections 5.2 and 5.3 of Executive Order 12958, "Classified National Security Information," an implementing directive for agency self inspection programs will be issued shortly. ISOO believes that establishing uniform standards for comprehensive self-inspections will improve the quality of agency self inspection programs as well as the accuracy of statistical data that are annually reported to ISOO.

Executive Order 12958 of April 17, 1995

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