i remember wanting to remember them because i had this connection i wanted to hold them in my mind. i wanted that woman to be safe. i wanted their child to be safe. then a couple hours later, i went back out on patrol, i was getting my car and i had completely forgotten their names. the reason that encounter sticks with me so much is that i think that's the first step in the dehumanization, forgetting wha what makes someone an individual. >> sunday night 8:00 eastern on q&a. >> the senate intelligence committee held a hearing on the process for giving security clearances to government employees and contractors. witnesses from the government and private contracting companies testified about background checks. also the time it takes to assess whether someone qualifies for clearance.

[inaudible conversations] good morning. i would like to thank our witnesses for appearing to discuss our government security clearance process and potential areas of reform. intelligence community, department of defense and defense industrial face cleared personnel with our nations most sensitive projects and secrets, in ensuring a moderate process is

paramount and necessary to maintain our national security. the committee will first hear from industry representatives on the process and how it affects their ability to support the u.s. government. our first panel includes president and ceo of man tech, jane chapelle. mr. david patel, president of the services council and brenda farrell from the government account billy office. welcome to all of you. we appreciate your willingness to appear, and more importantly, thank you for the thousands of employees you represent who work every day to support the whole of the u.s. government. many of our nations most sensitive programs and operations would not be possible without your work. i look forward to hearing from you on how your respective

companies view the security clearance process and how it affects your operations, your hiring, your retention and your competitiveness. i also hope you have come prepared with ideas for reform where necessary. our second panel will include representatives from the executive branch. mr. charlie, director of the national background investigation bureau. also mr. dan payne, director of defense security services at the department of defense. they will provide the government's perspective on this issue and we update us on the issue to improve the efficiency and effectiveness of the current system. the purpose of this hearing is to explore the process for granting secret and top-secret clearance to government and industry personnel and to

consider potential better ways forward. the government approach to issuing national security clearances is largely unchanged since it was established in 1947. the net result is a growing backlog which have now reached 537,000 and inefficiencies that could result in the missing information necessary to thwart i insider threat or workplace violence. we should also consider new technologies that could increase the efficiency and effectiveness of our vetting process while also providing greater real-time situational awareness. the system of reciprocity where a clearance is granted by another simply does not work. we would all agree that the clearance process should be demanding on candidates and should effectively uncover

potential issues before one is granted access to sensitive information. clearly the process is not optimal. i'm hoping today's discussion will have good ideas and strategies that we can put into action to reform the process. i want to thank them for the comments they may have. >> i want to thank the chairman for holding this hearing, particularly in an unclassified setting. i believe it's a critical area and as the chairman are ready mentioned, they are born in 1947 and they were sent by

typewriter intelligence and really haven't changed very much. i believe the clearance process is a duplicate of, manual intensive process which relies on investigation. it was built for a time where there is a small industry component and they stayed in their agency for their entire career. the risk is that someone would share pages for classified reports from an identifiable foreign agent. we worry more about insider threats, someone who can remove an external hard drive. and industry that i'm proud to have in my state, and industry is a much larger partner. workers are highly mobile across careers, sectors and.

we have not taken advantage of these advances. last month, director coates said the security clearance process is, in his words, broken and needs to be reformed. in january, they placed a security clearance process on its high-risk list of areas that the government needs broad-based transformation or reforms. the problems with our security clearance process are clear, the investigation inventory is more than doubled in the last three years. never mentioned, 700,000 people currently are waiting on a background check. despite recent headlines, the overwhelming majority of those waiting don't have unusually complex backgrounds or finances to untangle. another the laughs, the cost to run a background check have nearly doubled. timelines to process clearance

are far in excess of standards set in law. these failures on our process impact individuals, agencies, and even our own military readiness. again, either mentioned in virginia, i hear again and again from contractors, particularly from cutting-edge technology companies that they cannot hire the people they need in a timely manner. i hear from individuals who must wait for months and even a year to start jobs they were hired for. i've heard from a lot of folks who ultimately had to take other jobs because the process took too long and they couldn't afford to wait. to compete globally and militarily, the status quo of continued delays and convoluted systems cannot continue. no doubt, we face real threats to our security that we have to address. insider threats like ed

snowden and harold martin compromised vast amounts of sensitive data.

they address concerns are that are here before us today and can participate in this. i would like to thank the architecture and work with you to devise a model with a dynamic workforce and embrace the need of our government and industry partners. thank you, mr. chairman. i look forward to this hearing. >> i think the vice chairman. two members, i will recognize members for up to five minutes. thank you for the opportunity to be here today on the serious challenges. it's a high-risk area and in

january 2018, because it represents a significant management risk, high-quality security clearance process is necessary to minimize the risk of on authorized disclosures of classified information and to help ensure information about individuals with criminal histories or other questionable behaviors is identified and assessed. my written statement summarizes some of the findings in our reports from december 2017 on this topic. i will briefly discuss my topic that's written in three parts. we found the executive branch agencies have made key long-standing initiatives that remain incomplete. for example, agencies still face challenges in implementing aspects of the 2012 federal investigative standards that our criteria for conducting background investigations and fully implement a continuous evaluation program for clearance holders.

efforts to permit such a program go back ten years. we found while th they have taken initial steps to implement continuous evaluation in a phased approach, it had not determine what the future praises occur. no revised milestone has been set for their completion. we recommend they establish a milestone for completion of such measure. we found the number of agencies meeting timeliness objectives for initial secret and top-secret clearances, as well as periodic reinvestigation's decrease from fiscal years 2012 through 2016. for example, while 73% of agencies did not meet

timeliness objectives for initial clearances for most of fiscal 2012, 98% of agencies did not meet these objectives in 2016. lack of processing for applications has led to a backlog of investigations at the agency that is currently responsible for conducting most of the government background investigation. that is a national background investigation bureau. their documentation shows that the backlog of pending investigations increased from about 190,000 to more than. we found the bureau did not have a plan for reducing the backlog. finally, we found potential effects of continuous evaluation on agencies are unknown because the future of the program and the effect on agency resources have not yet been determined. agencies have identified increased resources as a risk to the program.

for example, dod officials told us that with workload and funding issues, they see no alternative but to replace certain clearance holders with continuous evaluation. dod believes that more frequent reinvestigation for certain clearance holders could cost $1.8 million for fiscal year 2018 through 2022. they recently issued directives for continuous evaluation clarified the continuous evaluation is entitled to supplement but not replaced. periodic. also, the top leadership from our top leadership from our counsel responsible for driving implementation of and overseeing the reform effort. we look forward to working with them in addressing this

high-risk area. now is the time for strong top leadership to focus on implementing gao recommended action to complete the reform effort, improve timeliness and backlog. failure to do so increases the risk of damaging unauthorized disclosures of information. that concludes my remarks. >> thank you. mr. chairman, vice chairman and members of the committee, my name is kevin phillips. i'm the president and ceo. we have 700 employees, we support national security and homeland security. i appreciate the opportunity to participate in this industry panel and asked my written statement be entered as part of the record. senator warner, including our initial outreach, 15 companies and six industry associations

have worked collectively over the past 6 - 9 months to increase the importance of this matter and to propose solutions to help improve the process. put simply, the backlog of 700 cases is our industry's number one priority. given the ink creasing challenges we face in providing all five clear talent to meet the mission demands, we consider it a national security issue and all of government issue because it impacts. the average time it takes to get a ts clearance and top-secret clearance is over a year. the time it takes to get a secret clearance is eight months. top professionals are in high demand across the nation. they do not have to wait for over year to get a job.

increasingly, they are unwilling to deal with the uncertainty associated with this process. as a result of this issue, the key support for weapons development, cyber security, analytics, maintenance and sustainment, space resilience support as well as the use of transformational technologies across all of government is being unserved. since the end of 2014, we estimate approximately 10000 positions required from the contract community, in support of the intelligence committee have gone unfilled due to these delays. we offer the following recommendation to help improve the backlog. enable reciprocity. allow for crossover clearances to be done routinely and automatically. today, 23 different agencies

provide different processes and standards in order to determine who is trustworthy and suitable to be employed within their agency. one universally accepted and enforced standard across all of government is needed. second, increase funding. the current backlog shows no signs of improvement. we need to increase capacity, reduce the backlog we have today while our government partners who are working diligently to implement a new system worked to develop the system of tomorrow. third, prioritize existing cases, the amount of backlog of 700,000 cases has not gone down, the timelines have not improved and we may be at the point where we have to prioritize within that backlog of cases that have the greatest mission impact or the highest or pose the highest risk to national security based on the access to data. fourth adopt continuous

improvement and that can be used across all of government and establish a framework for which government and industry can better share information about individuals holding positions of public trust, that this derogatory and better protect the nation against threats from insiders. fifth, from a legislative standpoint we consider this a whole of government issue. we believe a concerted focus from congress is required and the oversight is needed. we support the reinstatement of the timeline with incremental milestones. it is the intelligence reform and protection act. finally, we offer the mobility and portability for clearances among the contractor community is needed. we fully understand the importance of a strong security clearance process. that said, slow security does not constitute good security. time matters to mission.

industry is committed to taking the actions needed to hire individuals and protect the nation from outside threat. we appreciate the leadership and the focus on this important matter. thank you. >> thank you. vice chairman warner, members of the committee, i am honored to recognize them for the select committee on intelligence. our employees understand and take very seriously our obligation to protect the nation secrets. we submit the same clearance process that governs our governments and military partners and we take the same to protect the information establish and entrusted to us. every day, our number one priority is honoring the oath while meeting the needs of our customers. as vice president of the global intelligence solutions business unit, i navigate the

descriptions that backlog in the security clearance process and what they cause on the daily basis. not just for raytheon but for our suppliers and industry peers and ultimately for the war fighters, intelligence officers and homeland security officials who rely on our products and services to protect the united states. the magnitude of the backlog and the associated delay is well-documented and the metrics speak for themselves. what metrics failed to capture other real-world impact of the backlog. new careers put on hold, top talent lost to non- defense industries and programs that provide critical war fighter and cost. the new hires run up overhead cost while they wait for their clearance resulting in program

cost increases. they support the government's efforts to add resources and ease requirements for periodic reinvestigation's. : . >> the executive branch

implement fundamental reforms that streamline the clearance process and increase our nations security by leveraging advances in technology. this effort should be guided by what our industry calls the four ones . the first one is one application which is a digital permanent record forming the basis of all clearance investigations, updated continuously and stored securely. the second is one investigation which would implement continuous investigation and the appropriate use of robust activity monitoring tools to facilitate a dynamic ongoing assessment of individual risk while securing sensitive information on protected systems. the third one is one of adjudication which calls for streamlining the adjudication system so the agency's clearancedecision is respected by other departments and agencies .

this would increase efficiency and promote reciprocity based on a consistent set of standards for access, suitability and fitness. the fourth andfinal one is one clearance . that is recognized across the entire government and is transferable between departments, agencies and contracts. we believe the implementation of these reforms will help eliminate the inefficiencies that hamstring the current clearance system while promoting more effective recruitment, retention and utilization of government employee contractors and most critically, these reforms will help close security gaps that threaten our nation's secrets and personnel. the modern threat environment can no longer be addressed using outdated and infrequent security snapshots that even the most well intended reporting requirements, groups and legislative deadlines have not and will not overcome the fear of change or the comfort of the

status quo. strong, sustained a leadership from congress and the white house will be crucial to the success of these efforts. thank you for the opportunity to be here and i look forward to answering your questions that you miss chapel, mr. berteau? >> thank you vice chairman, members of the committee, we appreciate youhaving this hearing today. i would ask my written statements be incorporated into the record and i'll make a few key points here. you heard the description of the problems in the process , solutions, the four ones. one application, one adjudication and one clearance. it highlights i think the fact that this is a whole government problem and just look at the panel you have following us, you don't have a whole government representation on their as vice chairman warner pointed

out. the government plays a key role in performance accountability and in the fundamental process across the board. in the end, this is a set of processes that exercises judgment . it makes the decision of where to place trust and in that decision is a calculus of how much risk are we willing to accept? if it's zero, we will never issue a clearance. there's a whole level of dynamic back have to go on there and the four ones health you get there. what can this committee and the congress do? keep that requirement in mind. second, within that there's a funding process so all those 23 agencies have separate authorities here have to provide funding to somebody who's going to do the work, typically today at the national background investigation bureau. we can't find from where we sit outside a record of where that funding stands from those 23 agencies becauseit's

across all the appropriations accounts . omb used to track that is no longer available to us. it should be available to you and i think it's important as we look at the fy 18 funding bill that we will see next week, make sure that funding is in there because these systems will not operate without adequate resources. you can't buy your way out of it, there's got to be movement as well my fellow panelists have talked about that but in the meantime you have a requirement for part of its responsibility to be moved from the office of personnel management , over to the defense department and you will hear more about that in the second panel . while that movement is taking place, the plan is it will take years . the system have to keep going as well so there's got to be both funding for the ongoing work and the need for the new capabilities inside the department so that makes it all the more important. >> my fellow panelists have

mentioned reciprocity. this is a critical issue. how can it be that your cleared an acceptable one part of the government a certain level and not clear and acceptable in other parts? records show 23 different agencies but within those agencies there's subcategories. dhs alone has more than a dozen different individual reciprocity determiners who can say you may be good enough for those guys but you're not good enough for me and they don't even have to tell us why which makes it very hard just to figure out how to get out of so industry can quantify its impact, you've already heard some of that. we know there's impact on the governor as well. is not being done are not being done as well as it to be. we don't have that kind of information out of the government but you've got to believe that somewhere, backlog is going to have an impact because this is not justcontractors, this is civilian personnel, military personnel, new recruits . all those have taxes well so i think the single biggest

thing is access to information about what's going on, what the results are. you've got a situation now where it used to be there was information made available to the public that we could rely on, supply it towards our own resources. that's no longer there. we need you to help make that information notonly visible to you as a committee , but visible to the public and to those of us who have to operate within that system in order to do our job. so with that misterchairman, i'll withdraw my remarks and turned back to you . >> thank you. the chair would recognize itself and then we will go seniority for up to five minutes. >> my question is very simple and it's this. let's make an assumption that funding is not an issue. why does it take so damn long? give me the three things that

make this process so long. >> let's start with we have from history a number of agencies who had their own process set up and they have to go through those processes. it's very manual, as mentioned before, process was established during the eisenhower administration. investigators have to go in and personally write notes rather than use tablets. we have to go through the mail to send a request to get an education check. they physically have to visit a person, using social media or other access points when today's technology allows for a much more rapid way of dealing with these issues in our view. changing the trust for the individual. that can be done bravely and significantly. the second part is that people want to walk through

the process and make sure in this environment that people are trustworthy and the timeline is taking longer as the assurances needed and it's impacting the mission. we want to make sure i'm is factored in to the decisions or we will not be able to defend the digital walls from outside. but i think it's the process and i think it's the need to have a more risk based review and give permission requirements and they need to protect our mission combined from inside threats. >> i would echo his comments but i would say it's a little different. we are a nation blessed with very high technology. we are just not using that technology in this process. we talk about people having to physically go and meet people. i think that while that gives

us some level of assurance, i think that continuous evaluation gives us a whole other level of assurance and we use that technology to give us more confidence in the results as well as decrease the timelines. >> basically what you told me is i put more effort into understanding who my interns are then potentially for security clearances. because you go to the areas that you learn most about them which, social media is right at the top of the list. i can't imagine anybody coming into the office that you have thoroughly checked out everything they said online which is to then a protected space and we all know that it's apublic space . and i think what you've done is you've confirmed our biggest fear, that we are so obsessed with processing and very little consumption of outcome, i think that's how you get a backlog and you can let that continue to be the norm and nobody's outraged.

what's the single change that you'd make to the security clearance process you only were limited to one.>>. >> missed feral? >> i think prompt action. this needs to be as some of the colleagues here have said, a high priority and wiki hearing the words top leadership. there was top leadership involvement when the dod program was on the list from 2005 and 2011. we saw that top leadership driving efforts from omb, dod, the dni. that's what we're going to be looking for as we measure their progress going forward to take actions to come off the high risk list. top leadership actions engaging with congress to show that reducing the backlog is a top priority. as well as taking action to

communicate that to the other members of the personnel security clearance community as wellas my colleagues on the panel. leadership is desperately needed in this area. >> . >> immediately, it's funding. but we'vegot to think long term, it's one uniform standard . >> it's a big deal. >> i would say continuous evaluation monitoring. doing that on a continuous basis which reduces the periodic investigations which allows those people to spend more time reducing the current backlog. >>. >> i get to use the three that they've already used data for one to it. i do think reciprocity is the top priority and that process . but i think using technology not just in continuous evaluation what any investigations process itself. i have clearance nearly 40 years and the guy shows up

with a pencil and paper and make sure the questions i've entered into the form which are in many cases the same answers i've given almost 40 years are still what i believe and he writes it down with a pencil and takes it off and put it into a computer system not compatible with anybody else's computer system to get the process down to them or using 21st-centurytechnology . >> my thanks all of you for your responses and i say that with the full knowledge of knowing that this issue is a multi- committee jurisdictional issue on the hill so we got just as much to fix up here i think some of the things that you've expressed are the result of no coordination. legislatively, i think we're going to take that to heart as we move forward . >> again, i think the panel for their accurate description. i think it's important that we all think about and appreciate the gao putting this on the high risk.

but not only are we wasting taxpayer dollars, hiring individual that then cannot do the work or as some of the industry panels indicated will then not take a job, but because of the clearance process and i think we typically been losing on the government side where people will come in and serve at much lower salary than they would on the industry side because of security clearance and i appreciate mr. berteau, your comments about the uses technology. if you could give three throughout our use of the industry, other examples on how technology basis we can improve this process that speaking candidly hasn't been significantly updated since the 1950s. >> you want to start and we will go down? significant technology uses. >> i think the entities involved in both the front end and scheduling process,

investigation process and the adjudication process have all identified a number of places where they can bring that technology to bear. the greatest advantage we can take that integrated data across the government so we got access to everything everywhere. the intelligence community has made more progress here than much of the government has had but they have the advantage of scale and scale is smaller and they've got the funding and motivation to do that. i think we can give you a list of specifics that you could consider as you go forward as well. >> i would say going back to my previous answer, the continuous evaluation. a lot of this data that we go personally and ask these people that are the same questions we've asked for 40 years, a lot of that data is available in open source,

available to anybody. it's a matter of public record. >> rather than having somebody send a letter to an educational institution. could you drill down on continuous evaluation at least four secret clearance level? >> if you go through and look for bankruptcy, if someone files for bankruptcy, that's a matter of public record. he can get back through just trolling the web . without an agent having to physically travel and then go take that information down with his paper for example. >> i'll give you three examples and one desired solution. one of my fellow ceos as a contract where he has people in the green zone doing dod work and they cannot support in that same limited space work for another department. that means they have to file an entire process to do that and it's separate so right across the street, they can't go in and support an

environment for two agencies to do the same thing in a difficult environment. >> separately, we have a separate ceo who's got a contract that does work with information close to dod and somewhere in the hs. that individual had to fill two applications and go to do investigations to do the same job. industry, quite often utilizes public systems that we share that our cloud-based , multilayered security. and we pay for it ourselves and control the data ourselves but with the uniform set of systems available, we can make that decision. i think it establishes a uniform system that every agent who has funding can fund into and do its own processing. it would be very beneficial because in this accesses would be available at the same security level. for people to know what's happening in that crossover with that reciprocity that happens like that. >> one last question for mrs.

farrell, we need the reciprocity and affordability. and one of the things that i think one of the reasons why odi coats is so high on his priority, he lived through this, having sat on his committee for a number of years with access to all types of information. the amount of representing a few weeks later when he was appointed head, it was that short-term gap. he had to go through a security clearance process and it was pretty absurd. mrs. farrell, one of the things that i want you to comment on is what i've heard constantly is speaking from the government side, fdo knows it's a problem. just like much of dna in terms of operations, it's pushed to the back of the line. how do we make sure that we in congress can with appropriate oversight make sure that agencies don't take their security clearance budget and push it to the back of the line?

this is an issue and the problem but these are dollars that we've never seen by be prioritized because they are not old with the mission. >> i think this is something that goes back to the top leadership from the deputy director for management at omb who is the chair of the council that driving the reform efforts and overseeing the reform efforts into send a message that this is a top priority whether it's reducing the backlog or fully implementing fpe and resources will be provided and that the agencies will follow suit. and if i may comment onthe technology , the continuous evaluation is an area that you've heard with great promise that could help streamline the process, perhaps seymour intuition and the efforts to implement evaluation go back to 2008, the implementation expected in 2010 and does not happen. we are encouraged by the dni recent directive expanding on

what it is. however, we still don't really know what continuous evaluation is going to comprise and when it's going to be implemented and i think that's going to be a huge step in dni to develop detailed implementation plan and the agency's expectations to implement that. >> i simply say i think mrs. farrell's comments are clear. it's got to start at the top and i'm disappointed, i know you are as well that omb does not take our intuition to participate. the council, to try to move forward onthis and i think we need to get them back in at some point . >> thank you mister chairman. all three of our private witnesses today have been understandably very critical of the acceptable flaws in the government clearance

process. and the lack of a system of continuous evaluation. inadequate funding has been mentioned. i want you to turn the question around. there have been three widely reported serious reaches at the nsa all three involve contract employees. it that rely fully on a moment in time strategy snapshot of the security profile to determine clearances and secure information and facilities simply not work and i've been a strong supporter of moving to continuous evaluation. particularly following the navy yard shooting. but my question for each of the three of you is what responsibility do contractors

have to identify and report changes in employee behavior that may indicate a vulnerability and should trigger a review of the security clearance? in at least one of the widely reported instances involving an essay leads, employed to work with the individual are very aware of the issues that should have triggered a review of his clearance. so i understand the role that government has and that we need to do much better, but what is your role, particularly in light of those three serious breaches all involving contract employees? mr. berteau, we will start with you and move across.

>> thank you senator, those are critical questions obviously. number one, i know you know this but the process game whether your uniform personnel or a government civilian contractor in terms of investigation and adjudication. >> and i think that the issues that we've been talking about today, some of the process is actually incorporate in them a number of lessons learned from those very examples that you cite area and continuous evaluation being a key piece. so i think that a number of the proposals, some of which are already being implemented although since we don't get insight into that, we don't know how the implementation is. are designed to address those very problems but i think there's a third piece in the examples that you cite, you're right. there are individuals inside and do this. these are people working inside a government facility

and we frequently don't get the information about they member companies don't get the information about employees at the government itself has so there's got to be greater collaboration and cooperation between the government and contract oversight mechanisms. this is where personnel issues, privacy issues, security issues, contract issues come together and we got the design that way in the contract itself. we know how to do it, we just don't do it every time mrs. chapelle, was the race responsibility? >> we have a responsibility to design our employees so that yearly, we go through an employee training series that's mandated across all our employees and in some cases where we have employees get a government facility, they take a second round of training that is required by the government customer as well so that's two. the second thing we do is

what we call a user activity monitoring so when you log on to a system, you are, it's very clear to you. it says on the screen that your activity is being monitored while you are on those systems so we have a process where we used analytics, capabilities to look at what people are doing on the system to monitor their behavior and look at things that are outside their normal patterns or their normal work so that data is then provided to our security operations center and then it triggers an alert, we go do an investigation process. >> if someone comes through and says there's something going on with anemployee , it will trigger an investigation . >> mister philip, very quickly. if there's a group of employees working for the government, on highly

sensitive information and many of the employees of that group sense that one of the employees has gone off the rails, developed a drug problem, has financial problems, what specifically happens? >> specifically, there's an insider threat program identifies high risk employees and individuals whether they're in a position of stress or behaviors track, roles into a process centrifugal to our security executive and coordinated with the legal department and overseen by myself with updates every quarter to make sure we are trying those i dented individuals that have been identified. we report that information and also start monitoring their overall behavior where

appropriate, make sure that individual behavior doesn't provide additional harm to our employees or federal employees or additionally increase trust or breach of data to the government. we spotcheck people coming out for data. we want to make sure that we in the department are doing everything we can and the only thing we suggest is we have to share information better about individuals's thank you. >> i like to follow up on senator collins questions to you, mister phillips. specifically, what changes have been made by yourcompany in the wake of snowden and martin? >> . >> we increased our insider trust process -- >> from what, could you be specific? >> all of government is moving towards mandating, the

industry would be a partner in this process. we already have a process in place but what we're doing is making sure every behavior, because look at our program managers and we tell them to you or your employers the behavior, we need to know . >> where did you miss with snowden? we did not have that within our framework. the snowden component or something like that specifically is the employee is on a federal facility and the company cannot access the government data or see the behaviors. they have to do and be visually seen. we need to better share. >> isn't that an important point right there? because these were big events and it's very hard for us to know the background and how it happened. so could you go into that in a little bit more detail? >> anything that is on a

secured government network or secure government facility is controlled government regardless of whether it's military, federal employee or contract.and the information flow around that is fairly limited for security reasons but also personal reasons. >> the information sharing programthat we think is best long-term , lighting those suppositions of public trust and had agreed to that but the appropriateconnections of privacy if they are on a network , having information, having never collectively check it and behavior is matched to the individual so that we as a contractor can take the appropriate action format. >> as you know both these employees were contract employees with an essay. how closely have you reviewed the procedures and have you made any recommendations to nsa? >> the agency has gone

through significant review and we asa contract community are adjusting to meet the required additional standards . to be responsive to the risk daily that i've seen within the review. >> maybe somebody can add to that because that's a very general statement and it doesn't leave me really with any answer. >> if i could sort of had a little bit to that, not necessarily the snowden case or the martin case but we see time and again the situation where the government will tell a contractor this person is no longer suitable, take them off the contract but they won't tell us why. there will tell us what behavior has occurred, what motivated them to do that. we are left trying to figure out what happened here. >> how often does that happen?

>> i don't have account but i hear about itmore than once a year . and i probably don't hear about it a lot of times that it does happen. you have individuals and it may be that the company releases that individual but the individual can go somewhere else so that information sharing that should occur here between the government and the contractors involved, putting across the securitydomain and the personnel in human resources domain has got to be improved . >>. >> because of the 4 million 80,000 national security clearances, the contractors hold almost 1 million. 921,065 of those. that's a big constituency out there.and because it involves the defense companies of which raytheon is a california company that i'm very proud of as one of them, it seems to me that the private sector has an increased responsibilityto .

miss chappell, how do you view that. how does raytheon specifically view an increased responsibility.? >> we have stepped up our trainingrequirements around this area . more sensitivity to what has happened and making people aware. when it's on our own networks, we have control on what we monitor and where we see risk and how we escalate that and where we investigate . i think mr. berteau is correct and that there needs to be better partnership when our employees sit on government facilities and use government networks so that needs to be more information sharing on what we can do jointly, because we don't have the ability to monitor those networks. i think any insight you can get there is most helpful to

us in making sure we adjudicate through our workforce. >> on pages seven and eight, i'm looking for your written remarks and can't find themat the moment but you make some good recommendations . do you go into them for us please? >> on the written? >> let me find it. >> just one second, please. >> i'm sorry, mister chairman. my hand slipped and i lost the -- help me. >> i think that was around the one application. >> thefundamental reforms . and you began with the

clearance backlog of 300,000 and the one application area and it runs through. this is more than a decade, as you point out since they were first proposed, but you can make immediate progress. you say raytheon encourages the governments, prioritizes and sets incremental milestones or implement government wide reciprocity, continuous evaluation and information-technology reforms. can you be more specific about that? >> so on the one application, that is the one standardized and one standardized, one digitized one which is available can be shared across organizations. you don't have to fill that out more than once. one investigation to make sure that you know, whether it's a dod investigation, and air force, army or a cia investigation, that the same

investigation that they have the same standards, the same use on risk, those can be shared across the different agencies. one adjudication of that so instead of having different adjudications, you have one set of adjudication processes, one set of risk that adjudication is based on so that in that clearance can be agreed to and can be recognized across the different agencies and then clearly, just the one clearance, to make sure that reciprocity moves across organizations so i think they are pretty fundamental, pretty standard, pretty simple processes. one application, one clearance process, one adjudication, recognized by all. >> is there a difference with

the 4 million? >> it would make a huge difference. not only would it streamline the original investigation, or not reinvestigating the same people over and over and the resources required to do the reinvestigation would be focused on the backlog. >>. >> if you would indulge me for one added point. senator feinstein's line of questioning is critical here. one thing important to put on the record but member companies from psc and companies like raytheon are limited in their ability to get information out of the government of the status of the investigation and adjudication going on with the people that they submitted into the process. kevin phyllis or james child all the government agency that doing that, but they will likely be told is we can't tell you anything . go talk to your contracting officer or representative then as a process they have to go through, not the speediest of processes and they may or may not you an

answer back. we seen cases where a decision hasbeen made and not communicated to the company in some cases for more than six months . there's a lot that has to be done in terms of improving communication back and forth. the oversight in this community is getting visible results of that from the agency involved would be helpful. >> would you be willing to write something up as to what most of you or three of you think would be the specifics and ascended to the chairman? >>absolutely . >> you verymuch . >> thank you chairman. in your testimony, you talk about the 12 recommendations i think you made to the director of national intelligence. how many of those did they accept? >> for the majority of those we directed to the dni, they

did not, and whether they agreed or disagreed. we don't know if they're going to take action on the recommendations or not. >> i must have read your testimony wrong. i got the impression they had concurred with some but not all. >> they did concur with some. >> what does that mean they concurred with some but did not accept them? i got a source out here to figure out what that means. >> they concurred for example with taking steps to develop a continuous evaluation policy and then implementation but on other actions, they disagree. they thought they had already had things in place and that no more action was necessary. >> which of the 12 things you recommended do you think would have the most impact on achieving the goal we want to achieve here? >> today, i think it would be the implementation plan for

continuous evaluation . but i also have to note that they put a lot of discussion about reciprocity and reciprocity is statutorily required by the tele intelligence reform and prevention act of 2004 so by that , agencies are supposed to honor investigations that are conducted by an authorized provider as well as adjudications from an authorized adjudicator. there's always certain exceptions, but the reciprocity is in statute, it just hasn't had guidance soit can be implemented . >> and continuous evaluations missed chapel, how does that relate to, you are saying one of the same things. continuous evaluation, using open source data or data that's already been collected rather than going through that process again, do you want to talk about that just a little bit more?

>> what we're saying is instead of waiting from day one when you're given your clearance and having no investigation to that period and then your periodic investigation with extending people out, traveling around the country, doing your investigation, all through that time period, you continuously monitor data to see if there's any adverse data concerning that person and who you need to start, is that person a wrist and do you need to pay more attention to that person sooner rather than wait the normal five years for that background investigation? >> if that person what senator warner mentioned about senator coates in that brief space, when someone has been, has moved on to another job and is coming back, they

have to go through the whole clearance process again area they have to resubmit again everywhere that ever lived and don't we have all that somewhere? if they been cleared once? >>. >> senator, i've lived in the same house for the last 59 years. i've seen neighbors on each side, both are former government employees with suitability terminations in clearance as well. everytime i feel that format, it's the exact same information all the time before that. it's already in their databases, they just made me do it again . >> anybody have a reason that wouldjustify why you have to do this again -mark . >> there's an old saying, the chief cause of problems is solutions and in almost every case, these elements of the process that are built in here was a fix to a previous problem. what we've never done is end-to-end analysis of what results are we trying to get

out of this and how do we get a process to get that result? what you will hear from the second panel is some of the efforts of the background investigation panel has underway and dod is developing a plan for which they can manage of that opportunity area. >> it's just going to take a long time and we'd like to see it speeded up . >> on one of the other questions, small companies rather are treated differently when it comes to getting their employees cleared? >> unfortunately, they go through the same process and they haven't had a disadvantage. the company has a substantial amount of work in the government. they may be able to make a job offer to a new employee and say we got something we can have you do while we're waiting a year or two years to get this clearance through the process. it's very much harder for a smaller business that doesn't have the business base for the overhead capacity to be able to do that. they may make a continuous offer. if this is a critical skill,

say a security expert, you're asking him put your career on hold for an indefinite period of time.don't get paid, do something else while you're figuring out what to do and then maybe will get a clearance at some point and then will hire you.it has two negative standards. it's going to reduce the people who are going to want to do that and they're going to lose their technical edge because the system is moving on. security is moving on while they're not working it. and i mentioned the importance of balancing risk here. there's a risk that we often don't take into account. it's not just the risk of awarding a clearance to somebody who ends up doing something wrong. there's a rest to government function in every step of the way by not doing it in a timely way and by not having the best and brightest people on board. that's part of the calculus, nobody want to do that. >> determined. >>. >> you and it's been a good handle. i'm going to ask one question and this is for you. it seems to me one of the

central issues here is there is a culture where hypocrisy is valued and there's no accountability for secrecy so we end up with 4 million people with security clearances. and i've heard my colleagues talk about backlog question. i know it's very important to our companies but i think we really have to get at the guts of this issue. we've got to deal with this over secrecy kind of question. i'd like to ask you, what in your view is the government doing that is most helpful in terms of reducing that 4 million number which i think reflects that there are too many secrets out there and too many people are sitting on.

what's the government! about that? >> i like to start with the gao.>> thank you. we have in the past recommended that dod and its components, services as well as agencies evaluate their positions that require clearances. i'm sure that the clearances are required in the first place. and then have procedures in place where they periodically reevaluate those positions, see if those clearances are still necessary. that would be a way to make sure that the requirement is correct and most people think clearances follow people, clearances don't follow people. >> i want to be respectful, i know of your recommendation. i'm curious as to whether you think the government is moving effectively and expeditiously on actually doing somethingabout it because this strikes me ,

this excessive number of security clearances. >>. [audio lost] you're calling into question.>> i like to submit some questions in writing as well.>> in the quarter. >> thank you mister chairman. with the hack of opium a

couple years ago reportedly by how hostile foreign power, countless americans have had their privacy violated and personally identifiable information obtained by that foreign power. do any of you have any observations or comments about what impact that sort of lack of security? or that sensitive information, what effect that's had on the best and brightest people who we would like to serve in these important positions? >> i'll start with that because my personal information was some of that information that was leaked. not only my information but the people i have down as references. my family members also. their information was also compromised. so i think it's incredibly

important that this data is secured and that it goes through the same cyber process that the programs that we support. >> mr. berteau, you were saying how you have to fill out the same information on repetitive applications for security clearances. i guess we know that foreign nations have that information. but the us government apparently doesn't keep it in a place where they can use it without having to ask each time. >> is my understanding that a number of the steps taken inside the office of personnel management would provide greater security. it's a question i think for the second panel on the status of those steps.but what we also have to recognize that will never be 100 percent secure is on being able to do that, we have to mitigate against that as well. i would also note that it's not just the central

databases that come into play here. it's all the individual maintenance agencies as well. >> we are probably in a situation where were going to have to be able to recognize and mitigate as rapidly as possible. >> i'm probably a little less concerned about that particular, i got a letter and my wife got a letter, my kids and i all got a letter as well. i had a possibility inside the od to actually oversee the mailing of those 22 million letters, we mailed out a bill about 1 million a week and it took the better part of the year to notify everybody. i noticed that that occurred year and a half after the breach we need to be able to letpeople know in a more timely way that their data has been compromised . >> i don't know anything about that, so we can be proud of it. there just seems to be embarrassing and obviously people are at risk as a result. >> i'm going to move on to

askabout entering clearances, the role of interim clearances . >> what i don't understand is how can somebody have a sufficient background investigation and get an interim clearance and what limitations are put on the clearance that would not be available or not apply to a complete, so to speak , and how does that actually work in practice? the role of interim clearances in the background investigations that are conducted to approve those? >> senator, thanks for the question. consider a year of supporting national security this year and we have forever had interim clearances being an integral part of moving people into supporting the federal government. as you know the process is a decision that a government decision . it's not something we as

contractors can decide, we have to inform the government and let them make those adjudications we have not seen as a company issues with the process. that said, one of the issues is the time it takes to get a security clearance. the interim security clearance timeline is longer now than it was three years ago and part of our succession is we need to move that timeline back so that by the time people have interim clearances, there is a process itself is the background investigation is done on the individual to, from the company standpoint. forms are reviewed in total about the employee to make sure the potential applicant, to make sure all their information is available the government employee or official can make a decision whether sufficient grounds to grant an interim clearance based on those facts before the more manual investigation takes place. in our district, there's a

company, less than one percent a year has been identified in that sequence as not being supportable to doing security work in the future. >> senator. >> thank you mister chair. i'm going to follow up a little bit on those good questions from my colleague from texas. for those of you in the industry, and i'll start with you mister phillips, how often have you seen a tss i interim clearance? is that a common thing? >> for our industry, it is not uncommon but out of 150 people during interim status, the vast majority of them are secret, for the type of work we perform so i can't compare it to any other application requirements. those who are in an interim secret status have already received a secret clearance so it's a fairly narrow

thing. >>. >> from my personal knowledge, i don't know if interim clearances on a tss ei clearance. those are usually finalized on interim clearance, they are more on the secret side and quite frankly, with the backlog of clearances that we have right now, i think the rest of not doing that and not being able to perform the mission is very high so. >> that's very helpful. >> in my experience, i don't know if there's data collected on this but in my experience it was more common in the past, it's a lot less common today and it's been less common over the last few years. it's one of those examples that we've learned for good reason. >> does the government track how many interim security clearances are achieved by title and by agency? my personal type? and is there a process in

place to make sure that when that temporary access is expired, that there are reviews to say red flag, this comes to anend and we should look at this again ? >> i take it you want me to answer that. >> that information might be at the agency level and their management systems but it was not at the levels that we looked at in our reviews when we worked with odie and i to collect data on the investigation time for those adjudications for those agencies. >> obviously, the whole of government on the agency's art here right now that that's something we should probably pay a lot of attention to. >> for any of you who want to offer your advice on this, it seems to me from some of the previous testimony that it sounds like continuous evaluation is really important but it shouldn't necessarily supplant the

periodic review. itshould supplement it . is it that you review across the board and any of you want to offer your advice on that, i'd be curious. >> so technology allows for continuous evaluation where two years ago you really couldn't do it so let's start with that. it's a thing being utilized over time and it will become more important thing because we can be depended on and in fact it will identify things five years and from now along the way between now and five years . we consider the use of technology to the benefit of national security. within that framework, depending on the level of trust in the process itself, periodic reinvestigation percentages can come down. i don't see it going away but it can be like the irs.

going to audit you a while as opposed to the interim period. >> and there can be sample rest three investigations. >> i would just say it slightly different. i would say it focuses where the higher risk is and where you should focus periodic investigations on. >> i want to ask you one more question before i run out of time here. you testified that the national background investigation bureau is trying to decrease the backlog, that has huge challenges in achieving this. one of the stories that i'm intrigued by that seems to be working is in the iv is taking and deploying teams of investigative personnel to specific sites for two month period where they will set up shop in the workspace, they tried to crack through some of those time tentative clearance investigations

without the back-and-forth that we've heard about in some of the testimony, the travels, the inefficiencies this is happening right now in a couple labs . in new mexico. it seems like a rare good news story of increasing efficiency. do you agree with that and is it a model that we should be potentially applying more broadly. >> what we found during the review was his bureau did not have the capacity to carry out their investigative responsibilities and reduce the backlog. we looked at four scenarios of different workforces to try to tackle this backlog. they look at do things stay the same, they look aggressive hiring of contractors. they decided it was not feasible for the plan where they would put so much emphasis on thecontractors and the two plans that they did look at , the backlog still would not be reduced for several years. there hasn't been a selection though of which plan they're

going to go with in order to reduce the backlog. so that is going to be key. you can't reduce the backlog if you don't have a workforce. >> i disagree, i don't think you answered my question but mytime is over so were going to have to move along . >>. >> mr. berteau, i want to congratulate you but you made a key point of this whole hearing for me isthe opportunity cost that we should be talking about. it's the good people lost and that's what brings me here today because i know too many stories of people who gave up . who spoke arabic, who visited and lived in the middle east and because of that couldn't get there clearance. it was a kind of catch-22 and those are the very people we want that's what we have to keepfocusing on is those in measurable people lost , the opportunity cost that it's made such an important inquiry. >> was in charge? if john mccain were here to be saying who can we fire.

this is a cure management problem. >> this is a management problem and i referred to the performance counsel because those are the principles that are in charge, implementing the reformat and. >> who is on that counsel? >> the deputy director for management at omb. it's the director for national intelligence is also a security executive agent which means that person sets the policy. >> my problem with that is anytime you have counsel, i'm sick of that term. that means none of government. that's what people say when nobody's in charge. is there one person who has the responsibility for fixing this problem and who are they? >> i would point to the chair of the performance accountability counsel because that person has the authority to provide direction regarding the process and carry out those functions. >> is that person going to be here today? >> i believe that person

declined. >> well, that's kind of ridiculous. the one person in the government that's in charge of thisissue isn't here because , did they have to wash their hair? what's the deal? that's really disappointing, okay. again, for you mrs. farrell, the private sector has moved on from the 1940s island doing these things. the financial sector does it much more quickly. >> ..

many of the recommendations they had were recommendations they had been working on since the reform began. >> i would hope we could try to learn something from the private sector. they appear to be doing this much more efficiently. a technical question, do people who come to interview you to redo security clearances, do they carry a clipboard. >> i think they do and it is legal size so it has more room. >> to me the clipboard is the sign of not being in the 21st century. >> i'm sorry here that i own a couple clipboard and use them. >> i used to say it was a universal authority symbol of authority. >> that is really within my expense. i can add something on who's in charge. i think you hit a key point.

they are divided response abilities. some spill into question that senator wyden raised about focusing on, we been focusing on the supply side. there is a demand side as well. the previous day and i did a substantial introduction in the number of bills that required a clearance. goes around 700,000 that eliminated the requirement for parents. what we see in overtime, this is a question of who's in charge, responsibilities to other incidences, the navy arch shooting, when i was back in the defense department what i saw was in fact you had to

practically get a clearance to the past to get on the base even though there was nothing you would ever touch in the way of classified material once you got on. that is under an abundance of caution that we don't want someone to come on base and kill our people. there are other ways to do that than to expand and list the background information process and using 21st technology is key. >> will ask one more question. am i correct in taking from this panel that the security clearances are not transparence, not transferable to very spread the parts of the government there are areas where it's pretty robust and it doesn't take too long, maybe only a day or two. there are others where i believe the average to move from one to another is almost 100 days. >> i can't believe what you decide. person with in-home ancillary who has clearance to move from

one job in homeland security to another takes one other day. >> yes or. >> you could even mean a contractor, sitting at the same desk, moving to a different contract has to go through a different process. >> that's preposterous. >> i think that is a very nuanced and subtle words to use for it. >> i want to be able to pick up or you left off. that was one of my key questions about the reciprocal agreement for clearances but what have you seen about why the agencies don't trust each other to handle clearances. >> is probably a combination of things but i think the three things you could do about it is force a set of common standards and even within dhs, there is only statutory standards for one part of dhs.

but happens to be the transportation security ministration. setting common standards for making sure the deviations are minimized and have to be approved by top leadership. >> what is currently not aligned? >> i think it tends to be more on the agency side than the intel community and defense department. we as contractors often don't know what standards will be applied to the individual. >> what would be, could we get a list from anyone to say where we deviate standards? civilians, defense contractors, whatever it may be. >> the standard should be the same. the federal standards do not differ by category of the workforce.

there are no, there's no data, no measures to the extent that reciprocity works or does not work. this is something we recommended before, there should be a baseline to determine if reciprocity is working or not working on to pinpoint the issues on why it's not working. many years ago was believed was not working because agencies do not trust the quality of the investigation is notre dame but we don't know what the issue is today. >> when i meet with the chief human capital officers called chicos, those folks tell me a key area that slows down federal hiring which is over 160s on average is this reciprocity issue. this issue is not only slowing down and creating a bigger backlog, and as you mentioned, a demand issue that we have to

go through this again and again for the same person and an incredible nuisance for present going for the third time when trying to drill down on is, is this where agencies have a standard but they had one more and because they batted one or two more, then we have to redo the whole thing rather than trusting someone else who has already done it. this is an issue of the dmi not issuing the policy on how reciprocity should be applied. >> it's already required. >> by statute. >> so it's required but you're saying it's just a matter of releasing a document on how to actually apply what his current law. >> prologue does state with certain exceptions, it's up to the dmi to know what those are

to that the agencies will be able to determine if an investigation can be accepted as well as adjudication. >> at this point who is determining what that certain exceptions are. >> the agencies. >> so they can determine, i don't trust him, i don't know them or whatever it may be. >> correct, there is some guidance out there but it's not clear. the dmi is working on a reciprocity and we are waiting for the policy to be issued. >> what is the key information gathering that is needed? you also mention this as well as individuals getting onto a facility that may not need security clearance because they're not going to touch documents or see elements they should be able to see. what is the lower level that could be done faster to make sure those individuals can get access. there is a second set of standards for fitness to be in the job and credentials to

access a variety. those are governed by the office of personnel management not dmi. it frequently needs to be better mapping to train these two. when i'm required to send you a report on how i'm doing i'm gonna pay more attention to what i am doing and what i'm not. >> who, in the united states government who is eligible for a security clearance? >> usually at the agency of the employee applying for it. usually they take it and

determine if someone is eligible or not. >> thank you. >> sometimes there are easy decisions made at a lower level in the adjudication process and sometimes their harder calls that have to go higher up. this have to do both with the characteristics of the individual case but also the dynamic of the job and how fast it's needed. it can actually be calibrated in terms of who comes into play here. that's also good question to ask presented as on the panel. >> this is something i been working on for some time. getting more members engaged, i think we are losing good people but. the closer we can get at least at the secret level on one standard, one form, one adjudication seems like it is

common sense. >> they could all the members. more importantly i think those of you. i walk away more optimistic than i came. can we put the right people in the room that understand when you talk about reciprocity, what is that.

there are about 3700 different pieces that we move from different areas of government. given that there was baptism by fire of the secretary, it's not unrealistic to believe they still operate like the core agencies they came out of, they just happen to be under a new banner. i think these are all things that are doable, we have to have the right leadership in the room talking about real solutions and i think it's the commitment of this committee that we will start and complete that process and at the end of the day, hopefully a year from now you'll come back and tell us what great things have happened within government and it will be because of your testimony today. with that of the first panel is dismissed and i would call up the second panel.

[inaudible conversations] [inaudible conversations]

would like to officially call into session the second panel. i would like to welcome our witnesses over for the second panel, we just heard from the industry on the challenges that face, and some potential solutions moving forward, we will now have an opportunity to hear from the executive branch, their perspectives and their ideas. i understand the daunting task and job before each of you

betting more than 4 million personnel and identifying threats before they materialize. it's not easy. we can do better than we are doing today. as we continue our dialogue, i hope you will speak free freely, and think creatively because this hearing is not only about identifying the problem by uncovering the solutions. i want to thank each of you for being here and i just want to reiterate what i said at the end of the last panel. i'm actually more optimistic than i was for we started. i think we been able to clearly understand the big muscle moves and i think that putting the right people in the room might enable us to try to overcome some of the challenges and replace it with solutions that we would have full agreement are worth trying or that we feel will achieve a different outcome.

i'm not going to turn to the vice chairman, i returned directly to mr. dunbar who i understand will begin and then the floor will go to mr. phelan and mr. reid. >> the floor is yours. >> thank you chairman for, vice chairman warner and members of the committee. thank you for the opportunity to appear before you today, to discuss security clearances, challenges and reform. the director of national intelligence indicated that the executive agent in this role, the dmi is responsible for the development, implement implementation and oversight of uniform and procedures governing the conduct of investigations and if applicable, polygrapher eligibility for access to classified information.

the national counterintelligence and security center has been designated as the lead support element to fulfill the responsibilities. we are responsible for the oversight a policy of governing the conduct of investigations and adjudication for approximately 4 million national security cleared personnel and includes determining if an individual is suitable to receive a security clearance for conducting a background investigation, reviewing investigative results, determining if the individual is eligible for access to classified information or to hold the position. we work closely with the managing other security programs associated with clearances. this ensures our policies and practices are working to affect and protect our

personnel and sensitive information but we have enjoyed some noteworthy progress including the development and implementation of multiple security executive agent directives. examples of which i've outlined, however, has recently noted by the nia and his annual threat assessment, the security clearance is urgent need of substantive reform across the entire enterprise. we must quickly and with laser focus identify and undertake concrete and transformative action to reform the enterprise while continuing to ensure workforce. this must be robust background investigation process which enables federal employees and contractor workforce partners to protect our nation's secrets.

while the process fails or is delayed, mission delivery suffers and the national security is put at risk and our ability to attract and retain the workforce from the 2t century is inhibited. despite the hard work of dedicated patriotic professionals who are working these issues daily, we reached a time of critical mass which demands transformative change. significant challenges with the background investigator program continued adversely to affect their math operations. the current investigative back log is 500,000 cases and the average time for investigating and adjudicating clearances this three times longer than the intelligence reform and terrorism prevention act standards. for the first quarter of 2018, our metrics indicate the fastest 90% for background investigations, governmentwide and took an average of in excess of 300 days. this is four times longer than the standards and goals. in addition, background

investigation related costs have risen by over 40% since 20 fy 14. the suitability, the, all security organizations and industry partners agreed that this is unacceptable. i would like to take the opportunity to provide the committee with more detail regarding our upcoming trusted workforce 2.0 initiative. this initiative was designed to address the transformational overhaul i referenced earlier. it is an enterprise effort sponsored by security executive agent and the suitability agent in concert with our partner of organizations which will bring together key senior leadership, change agents, industry experts and innovative thinkers to chart a bold path forward for the security, suitability and credentialing enterprise. the participants, including all accountability council organizations are committed to

reviewing and analyzing with a clean slate and forward leaning approach, how to accomplish the transformational overhaul which is required. as mentioned my statement for the record, are trusted workforce 2.0 initiative kicks off next monday and tuesday, 12 and 13 march at the intelligence community campus bethesda. we look forward to conceptualizing, implementing and ultimately accomplishing the revolutionary change. we look forward to updating the committee on our progress. the cda have committed a transformational overhaul in at least three areas. first revamping the fundamental approach from policy framework for the current standards are built on decades of layered incremental changes and are not fundamentally changed since 1950s. we accept the ambitious goal that by the end of 2018 we will identify and establish a new set of policy standards

that transforms the u.s. government's approach to betting. our objective must be to ensure protective workforce against government and industry who protect vital national security information with which they are interested. overhauling the enterprise process that is slow and overly reliant on fieldwork and does not leverage advancements in technology and availability of data. finally, we must modernize information technology. we must leverage today's technology for our vital security process and require and ensure we are well-positioned to adapt the technology. after a decade of incremental policy change there is still an unacceptable making suitability determinations.

we all those dedicated professionals a high-performing process that meets the needs of the workforce and the american citizen. we are committed to full transparency in these efforts. thank you for the opportunity to appear before the committee. >> members of the committee, i am the director of the national background inspections at personnel management and i appreciate the opportunity to be here today. we currently conduct investigations across the federal government. the results of this mostly single or supply chain are used by over a hundred agencies to make their adjudicative decisions. even those few agencies who

have their own ability to conduct background checks rely on our services to some capacity. i would like to start by putting some context around the numbers which have been the subject too much media attention. in 2017, we completed our investigation. our inventory is approximately 710 investigator products but they include simple record checks, suitability and national security investigations. it is important to note that the top and number is much different than the number of individuals waiting for their first security clearance to begin working on or with or on

behalf of the federal government. of that total inventory about 106 to 4000 are either simple record checks that move in or out of inventory daily or support determinations. approximately 337,000 of those are for initial investigations about 209 are for periodic investigations. since we stood up 17 months ago, we have worked to increase our capacity and realize efficiencies. the stabilization of the top end inventory has been detained primarily because we invested in the necessary of the structure. we are approaching this challenge on three fronts. first, to recover from the 2014 loss of the u.s. irs contract for investigative. [inaudible] as of today, there are over 7200 federal and contract investigators working on behalf of nbi be.

that is good, that is not enough. second, our investigative capacity can be significantly enhanced through smarter use of our workforce time. to the implementation of our business process reengineering strategy, we have clearly defined the critical process of improvement and technology shortfalls needed to support this requirement and our decisions have been enhanced through better data analytics. we have improved our fieldwork logistics by centralizing and prioritizing cases, first with agencies beginning about 18 months ago and more currently we are beginning to start hubs with industry. we have increased efficiencies of conducting a reporting on enhanced subject interviews and implement it more efficient collection methodologies by leveraging the powers of technology to discover and gather information. to free the investigators focus on those aspects of investigations where human interaction is still critical. third, we are fully supportive of the upcoming executive

agents trusted workforce initiatives. our processes today are driven by the existing policies, some dating back seven decades and we know from our experience that there is much to be gained in this review effort and we are fully behind it. underpinning all of this is a planned transition to a new information technology system being developed by the department of defense for the national department of investigation services will ultimately serve as the it system to support background investigations in the end and process for all agencies. with the support of the interagency will continue to make improvements to the background investigations and processes. as an example for the past year we have offered our customer agencies a continuous evaluation that meets today's guidance for continuous valuation. we will continue to explore innovative ways to meet our customer agencies needs, leveraging their expertise as part of our decision-making process.

we recognize that it includes people, resources and technology as well as partnerships with our stakeholder agencies and changes to the overall clearance investigative and adjudicative processes. has a federal government works to implement the transition of the department of defense sponsored background investigations and fund them, we examine our workforce needs, our capacity for budget and work with our partners to minimize disruptions. we have a shared interest in reducing the amatory, taking steps for a smooth transition of operations we have a shared understanding of this entire process and its ultimate impact on national security. thank you for the opportunity to be here today, i look forward to the next year end look forward to answering any questions you may have.

>> thank you. mr. reid. >> thank you, mr. chairman. mr. vice chairman, on behalf of sector matus, thank you for the opportunity to meet today to discuss a very important topic at hand. i have submitted my statement for the record and with your permission i like to take a few moments to amplify. the department of defense appreciates the necessity for reform. we are committed to doing our part to implement new methods for establishing and sustaining a trusted workforce. in a manner that upholds the highest standards for national security information, safeguarding our people and always ensuring the highest degree of readiness to defend our nation. with the sport of congress and multiple committees and are close interagency partners represented here today from the office of the dni and the office of personnel management.

[inaudible] the chair and vice chair may recall we met briefly about this internally and we been moving out steadily. last august secretary mattis approved a plan which was referred to as section 951 plan and the authorization act to somehow plan. this past december upon approval will do so back to over 2020.

we are well underway to meet this objective, in fact the opposite. the initial phase of the plan and the engine dependencies i will talk about, we prepared to implement this plan later this year server timeframe from current with the next fiscal year end there are some conditions talk about. our team in the interagency team today are all working hard every day to put the resources and procedures in place to make this happen. we'll talk about some of the detail. more than just in line with the intent of the security executive agents that we just talked about the 2.0 initiative, the is actively developing these alternative procedures for conducting background investigations, advantaging ourselves with all available technology, and other things. our fundamental concept is to build on the existing continuation program which the security executive agent has already established, to build around that and supplement that with additional tools such as risk rating tools which analyze individual risk

by position and inform us of where to look and where to focus these processes. we have process for automatic records check. some of this is in use today, to build around that, to take the shell of continuous evaluation, enhance that with other tools that give us a full comprehensive picture and the risk of what we are dealing with in human risk associated with responsibilities, levels of responsibilities and a host of other data connected to other programs we have such as insider threat, user monitoring, base access, facility access, we are in a position to aggregate the data to give us a much more comprehensive understanding of the risk that we currently have. that is the backbone of the

automated process we are referring too. we have worked with our colleagues here and shared it with many of the industry leaders you had on the previous panel and the organizations they represent and there is full agreement of everyone i have briefed that this methodology is viable and sufficient and goes far beyond where we are today in updating our understanding of risk to a more future looking state. we will soon, i said there is a condition about when we will start. we will soon submit to the dni our proposal requesting approval to begin phasing in the use of this process and we will do it in a graduated manner so we can so we can understand what is taking place and understand the results. in terms of the subject to the concurrence, we will formally commence this in october of this year.

this will be a long-term process done in a graduated manner. we will build up capacity and bring everyone with us, industry, government, congressional oversight, we have every ability and full intent and no latitude not to uphold and represent what we are doing. there is nothing below the waterline that folks won't understand. we are very cognizant of the reciprocity issue and how people need to appreciate what is happening so they have trust and confidence in the system. we are prepared to do that. we are equally mindful that we must continue to rely on the national background investigation bureau to process the 500,000 dod cases that are in their inventory. those cases have gone into that system, we are enabling them to do that now, we are the sponsor for the it system and we will continue to do that and build those tools out

all of which will transfer and continue to be available and they will have access to these tools and procedures we are developing. in the later stages of our plan, later into hall next year we will begin working to understand and implement the resource transfers. the financial resources we put in our on a pay-as-you-go revolving fund. the human capital that supports it now, as they ramp down to a smaller population, we are 75% of their business. as we shift back, we are working right now and can provide the plan and they need to be in harmony. we will continue to rely on them and support and enable them to do so. they've done a tremendous job

dealing with challenges and the inventory that he inherited when he took the job and we are appreciative of what they are doing. i can't understand estimate the complexity of this endeavor. it is about a $1.1 billion enterprise, we have 700,000 cases a year that they process for us, there is 8 - 10000 people that do this and all of this will be a motion as we face and implement this plan. we can establish our mission which will be benefited by the fact that we have control of our own initiation process, the submissions piece, the investigations piece in the adjudications and very important, going forward, the follow up. the continuous vetting and evaluation foundations irony discussed. we are working on this every day i'm we have great teamwork and we appreciate the support of congress and thank you again. i look forward to your

questions. >> thank you mr. reid. >> mr. chairman, mr. vice chairman, members of the committee, thank you very much for this opportunity to speak with you on this topic. you have my written statement, i am not going to go into that and i will try to keep my comments as brief as possible. i will say i am the individual who is going to be responsible for executing the mission in dod for background investigations and begin to build that mission. as a result, we have to work very closely with each other and our teams have to work very closely with each other so we do this in a manner that doesn't hinder the ability to work down the backlog while at the same time increasing our capacity to pick up these investigations. that being said, and in view of the previous panel that was

here in the previous comments, i am responsible for industry security. while we do not do the background investigations ourselves, that's mr. phelan's organization that does that, we initiate the background initiations. i am the individual who grants interim security clearances and takes them away. i am also responsible for the execution of dod's continuous evaluation program which, from my perspective has been greatly successful and is the way of the future. we have to go down this route if we are going to make the necessary changes to make this process better. in addition, the insider threat programs for dod, i own the defense insider threat in management center which is all the insider threat concerns in dod come to.

we work with the individual agencies within dod to resolve those particular issues. all of those things combined, as mr. reid outlined a few minutes ago, all those things combined are things we did not have back in 2004, 2051 dod had the initial mission for background investigation. we have them now. that is the way of the future. that is the way we have to go. if we are going to make any progress in making this program faster and more secure , we have got to look at a different methodology of doing this. we have to utilize continuous evaluation and automated processes, many of which mr. reid outlined in his statement, but in addition we

have to look at the standards. we have to change standards. if we are going to do this successfully, we have to change standards for that will result in big decisions on our part. those big decisions pertain to how much risk we are willing to accept. in the previous panel, they stated we are never going to be able to reduce the risks to zero unless we stop hiring. obviously we can't do that. there will always be risk involved in the investigative process. there always be risk involved in the security clearance process. what we have to determine is how much risk we find acceptable. thank you very much. >> thank you. thank you to all of our witnesses. again, we will recognize member statements for up to five minutes. i recognize myself first. i want to tell your story.

it's a story that starts about ten years ago. the 22-year-old graduates college. never plans to work for government. gets offered a job, a civilian at dod. can be more excited. jobs, paychecks, things they hope they will find. in the process of 11 months of security clearance, gets back to some things that were said in the first panel, i don't think that i am an exception. that happened to be my son. here's a kid who is incredibly excited to work for government , ready to go and after 11

months he wonders if he made the right decision. it includes skills like technological, but the question is, how much of that initial passion for working for government you lose for retention down the road. i get it firsthand why we've got to accomplish what you've set out to do. it is unacceptable to this next generation, justice fact that things go slowly and i'm still talking about the federal government and there's some things even government can't change. we can do much better and i think you for your brief a year ago. the timeline is about exactly where you told it was going to be. we are excited to see the

rollout. there's a lot of pressure on your shoulders. i get that. we can go forward unless we do that. i know the commitment of dan coats. are there additional authorities you need to accomplish this rollout and fully move the system to what you have designe designed.

>> it gives us, it reinforces the secretary's authority to conduct background investigations and provides direction. is there anything in federal statutes today that hinders your ability we are wholly dependent on director coats and his leadership to approve, as i outlined our alternative process and the secretary cannot do that unilaterally. we are beholding to the security executive agent and the suitability agent.

ii do not believe there is anything in the federal law that is an impediment. this does make a lot of sense what we are doing over here but you can't do that until you change the statue. if we have things to change, let us know now. then we can implement this on the timeline that is designed. >> i am not adverse to additional investigators. until you change, it's hard to truly evaluate what the need is going to be, what the cost is going to be.

i'm hopeful and i believe this is your intent that this stakes the timeline for security approval and drives it down. can you give us what your goal is from a standpoint of the timeline if today, nine years ago it took 11 months, i can't imagine what it is. >> the established goals for each level of clearance are attainable under our plan but better than that, under our plan, currently for reinvestigation, guideline goal. the cam contemporaneous vetting process will be

necessary. there will be deliberate face-to-face recapping of employees. it's not autopilot but the monitoring and reporting, which we are already doing in our program now will be the back of so in the answer to that, the goal is to eliminate the requirement existing for periodic reinvestigation that all levels but we have some work to do what about that 22-year-old who has never lived anywhere beside school and home. how long will it take to process him for clearance? >> again, under the current process, it ranges from 200 - 400 days. it's perfectly attainable to get down to the guidelines we feel it can be much lower with

the tools i described. we've heard a lot in terms of goals and it's not a new problem. i look at the last, the performance in the last few years we've had a doubling of cost. they have been able to implement tools of evaluation

with increased technology. i get the frustration on the dod side to say we have to split this up before talking about an effort, if we accept some of the industries interests in terms of one application, one investigation , one adjudication one clearance, it seems like we are going in the opposite direction. >> the application, the standards are federally directed. there is one standard.

they talked about everyone getting together and looking at the standards. if they change they will change for everyone. not creating a new standard or new application. we are automating. we are not changing the standards. >> recognizing that you are the vast majority, how will you make sure the goal of reciprocity and portability takes place in the system. >> in the very first incident this will be by adhering to the guidelines. everything we implement, we do not have unilateral authority to change that process without the executive agent's concurrence. we will align our process to their standards. >> respectfully, i know you're trying to had us in the right direction but it sounds like a lot of process words rather

than specific guidelines and timetables and how are going to get ahead. >> while i share the chairman's concern while simply throwing money at it, my understanding is there's an awful lot of agencies that kind of build this into their dna and they don't continue to prioritize funding for the funding that is even supposed to be there isn't there. when i cannot throw more dollars but we need to make sure agencies make this a priority. we came back and said you had to go to this. it is just not acceptable. i would like to know when we are going to start see those numbers driven down on the backlog.

what can you say specifically about using these tools that seem to be working in doe and across other areas where there is concentration of federal employees. >> let's start with how are going to drive that backlog down, not stabilize of the drive down. >> starting one step further behind that, when i joined this organization 17 months ago, the capacity to conduct the work we were required to do was insufficient to conduct

that work, period. that's why you saw in the first few months after we start up that that inventory continued to rise as opposed to stabilize. when we reach the point where we have the same capacity that we had when this all fell apart, that is a way station a long way to stabilization. it's not the end game. in one sense it probably hit that stabilization. i'm not proud that we have not brought that inventory down. our goal is to bring it down. last week i noted to the committee on the other side that we are looking at potentially 15 - 20% reduction by the end of the calendar year. that is still not sufficient. by itself it will begin to drive that number down. it will probably take us a couple years to get down to a level that is more effective. along the way we are trying a number of ways, we talked about technology, we need to

be able to get at information, collect information more reliably, more quickly as opposed to shoe leather as mentioned in the previous session. the problem is getting to some of those sources right now, particularly law-enforcement sources is not as easy as one would hope and we stopped up a lot of people on the street to find police records in relevant areas. we are continuing to work closely with agencies at the state and local and tribal level to continue to do that. he talked about having. it did look very promising, we have since that point, we have done a number of things that are helping and surging. one is more concentrated than the other. most recently we finished one in the patterson air force base. we recognized an increased capacity, increased efficiency somewhere in the low 40%,

positive note. in other words what would normally be an hours worth of work, they are finishing in 36 minutes. that's a rough estimate. there were far more productive in the helping area. you mention the area, were actually beginning on april 1, we've pulled together all of federal agencies and all the dod agencies and pull together all of our accents for contract investigators and we will focus on that area. that is one of probably eight or nine that i could mention just in the last year where we have done the found very positive results. dayton, san antonio, tinker air force base, tidewater and one that i think will be very promising, we will be working with industry directly, not by country but by geography and program.

we will bring it together and work with industry to focus our energies down there. the second part is to follow on to something one of the earlier panelist said. it's current by our work and experience of life industry collects about the data before they put someone in for clearance. before they even decide to hire someone. we need to find a way to leverage the work they have already done, except it and build it into part of the process and not have to go back and ask those questions. that will reduce a lot of time of collection and effort. that sort of a high-level view. i hope it gets to some of those points i mentioned. >> i'm curious you didn't mention national capital of one of those areas since it's the greatest concentration of

the need for clearance. >> interestingly enough, i asked a question yesterday and spoke to the folks in charge in the area. we are in the washington d.c. area for work that has to be done, we are pretty close to being up to speed in the washington d.c. area. other present country where someone's background may take them to other parts of the country where it's not as up to speed. >> i'll be happy to send my friend the contractor community on that. they don't believe that fact. >> understood. >> mr. chairman, has dod done their own investigation work before. >> yes or, prior to 2005 we have response billy for our background investigations in what is now the defense security services. >> what is the lesson learned? why will it be better? last time it was turned over and now it's going back. what are the key lessons learned. >> mr. payne touched on one of those and that is having a comprehensive process in place to deal with the volume and

the scale of investigative items. the continuous evaluation tools in the automated checks and additional tools we are developing to streamline the submission process within the department, if you look at the current process and you look at past practice, there is a high percentage of dragon the system just to get it clean and get all the data. we have tools in place already to improve upon that. i talk about the streamline background investigation and the centrality which did not exist at that time either. we have in place or we will have in place when we move investigations back all three pieces of this enterprise, submissions, investigations and adjudications all under a single organization with the authority and resources and focus. currently debbie secretary shanahan, number one reform agenda for him is the clearance reform.

secretary mattis firmly, actively involved in pushing us to better solutions and to make this functionality not a back-office thing that someone does in the department, not an administrative thing that the security focus that exists in the leadership team now, i can't say what was in 2005, but it could not be any higher today. we have pieces aligned to put this into action. >> give me two goals, the nickels and noses. will this drive down cost and will this speed up the process. >> give me a ballpark. >> current timelines we are experiencing 150 days for the investigation. we will pollinate that completely. her background investigations field activity, fieldwork, our studies in pilots and everything we put into place

right now using aggregated tools that i've talked about can get us 90% of everything we are getting from the field investigation on the front-end, and then the tools can focus on the last 10%. we will still have to go out and do some field work, but 90% of the fieldwork can be handled through automated processing. that will drive down the capacity needed to do those field investigations. : : currently it's about the same for the initial secret at the secret level. >> and use assume it will still be 150 days? >> excuse me? >> currently 150 days and you assume when you transition over it will still be 150 days for new investigation? >> no serb.

i don't know how today how fast we can do it. my anticipation is it will be done in a matter of days. there are processes in place to gain access to facilities even here in the dc area that run automated checks that are thorough and it takes 20 minutes. i don't know that we will be at 20 minutes and you always have things to check. >> when you talk about the 22-year old when he asked you specific how long it would take that's when you gave him the answer of hundred 50 days. >> that's the current standard. >> you are thinking it won't be a hundred 50 days but a couple weeks? >> at the secret level, absolutely. >> mr. payne, do you concur on that? >> i do. i think some things we have in place now again as mr. reid outlined using continuous evaluations may be to finesse that a bit, continuous evaluation as opposed to continuous up that eating, so

continuous evaluation programs set up by the dni to look at the risk in between reinvestigation work when we talk about continue and they have seven sources they are requiring every agency to utilize when they do continuous evaluation. when i talk about continuous vetting, i'm looking at expanding that into other data sources data sources within doj, within the use-- us government and other data sources within the public sector that we can pull those things together, many of which are required already for a secret level reinvestigation and do those on a continuous basis and if we do this on a continuous basis, there's no need to do a reinvestigation on someone at the secret level of mush you come up with derogatory information, so that's where the significant savings will be.

>> thank you, mr. chairman. >> thank you, mr. chairman. i have been surprised that we have not had to talk much about money. mr. phalen and mr. reid, are there adequate resources in terms of people. is this just management and automation or are there shortfalls in terms of the number of people necessary to do these-- to work down this backlog? >> the current process and operation we operate in a working capital fund, revolving fund and agencies that wish to have an investigation done give us the money to have that investigation done, so from our standpoint it's here's the money, do the investigation so we are not short of the funding to on our end. the better question would be are the agencies that need investigations conducted funded appropriately to identified the monies they send to us to do the

investigation. >> are there sufficient personnel? our economy is pretty tight. is there a shortage of qualified people to do this were? >> the high end of folks to do the investigative work as a population is a stressed at this point to hit beyond although we have encouraged suppliers and ourselves to continue hiring, but today there are nearly adequate, but we still have more work to do and if we don't change today's processes of the things you've heard already then we will need to continue hiring beyond all of that and that puts greater stress on the total number of people. >> that's an additional imperative to seek technological productivity? >> yes. making current-- current people more productive. >> i think this could go to any of you also i will address it to mr. reid. is the upward ability we talked about part of this sort of revamped plan to consider that

factor so that we don't have to redo these tests-- let me ask a specific question that we heard about dhs where you might have to have a whole new investigation to go from one job to another at the same agency. please tell me that doesn't happen in the department of defense i meant no, sir, it does not. we have a single duplication facility and we are all under one roof and dhs, independent agencies brought together are operating differently, but we have had for years a single adjudication facility within the department. >> the clearances are portable within the department of defense? >> absolutely, sir. >> is the portability issue another agencies part of this reinvention of going on? >> mostly today it's a singular investigation.

any agency can use the investigation conducted in adjudication, but it's up to the agency within dhs with the same set of the facts they may decide to ask for more information for read adjudication. >> this portability is not part of the overall structure of the new system by agency decision whether they will accept-- whether they will do reciprocity? >> i would say it's less about structure and more about empowering and encouraging them to accept the decisions made by others in previous lives, so a decision made by one agency from one second agency to accept the first agency probably did a good job and was honest about how they approached and to accept the results of the first investigation and not ask a lot more or reinvestigate-- i'm sorry, not reinitiate an investigation. >> mystery, why is it that it's taking so long-- has taken and apparently will take so long to transition from the opm to the

department of defense? we are talking about 20, 20 and think and it started last year. >> so, the defense authorization act requires us to implement the plan by october 2020. we intend to implement the plan in october 18. we project a three-year three-phase plan. >> you will bring an end on time and under budget? >> start by 2020 so we start now it didn't tell us how long to finish, but we submitted a three-year plan so logically the expectation is we take three years when we moved it out of doe last time it took more than five years, but the short answer to your question is we want to do in a phase deliberate and graduated way and keep our partner agency whole pig they support a lot of other agencies in the government and rely on us to do that. it will help them work down there inventory once we process new cases separately. of that will drive down the new

work that goes to mr. phalen and tens of thousands of cases a week we provide them now. we will turn off that speak it and help with the backlog as we build up our own capacity and capability. >> i'm out of time, but mr. payne, quickly you used a phrase that struck me saying we have to change the standards. what did you mean when you say that, do you mean lower the standards? >> not necessarily lower the standards. federal investigators dictate what steps have to be taken to achieve a secret level of security clearance or a top secret level security clearance, so again, as has been outlined-- >> it's the steps that have to be compressed not necessarily-- >> not that the adjudicated standards necessarily. >> thank you. >> thank you, mr. chair. i have a question for you, mr.

phalen, i have made a special focus of my work during this russian inquiry to follow the money kind of questions. i went to ask you a couple questions relating to that. for you, i think mr. phalen, the question is should someone who fails to disclose financial entanglements with a foreign adversary the eligible for a security clearance? that's a yes or no question. >> i'm not sure i have a yes or no answer. i believe it would play a prominent role in a decision as to whether that individual should be granted clearance and it's not an inconsequential question to ask. >> how is it not an up or down yes or no? we are talking about significant financial entanglement with a foreign adversary. shouldn't someone who fails to

disclose it, i mean, it's one thing if it's disclosed and we debate like you say, but failure to disclose seems to me a different matter altogether. so, i gather you don't think necessarily that someone who fails to disclose a significant financial entanglement with a foreign adversary should be denied security clearance? >> that's not what i'm meant to say. >> go-ahead. >> i meant adjudicated standards and i would refer to also mr. dunbar. adjudicated standards, there's nothing that says if you do this you cannot have clearance. it says for that adjudicator to take into account all you know that this individual, make a decision regarding candor, their entanglements, regarding their families, regarding crime in all sorts of things and make a decision. i would say that the scenario you outline would play a prominent-- be a prominent slot

to be considered during adjudication, but those things by themselves are not disqualifying. it would be an important piece to consider-- >> do you believe it should be disqualifying? >> i would have a hard time overcoming that. >> great. mr. dunbar, jared kushner interim access to top-secret fbi information has raised a variety of questions. under what circumstances should individuals with an interim clearance get that type of access? that's for you, mr. dunbar. >> senator, as we have heard earlier today with industry panel interim clearance has been used throughout the government for some time, many years. there are two specific governing documents for interim clearances and the guidance that is out there now allows interim clearances at the secret level as well as the top-secret level. there are situations called out in the guidelines which is speak to urgency of circumstances,

those types of ideas about how when someone might be granted interim security clearance, i believe, an example that would be applicable here is an incoming administration, which has the need to onboard personnel and get them in positions estimates possible in order that they can perform the duties of their function. in regards to mr. kershner specific case the dni sets policy standards and requirements. as mr. mr. phalen has stated each individual adjudication and this is contained in the security number for is treated based on the whole person concept in which every particular piece of information positive and negative has presence-- past, present, all of those things are factored into

adjudication. as mr. phalen has stated, in my opinion, the issues of which you have raised, senator, would be issues that would need to be thoroughly vetted in the course of the investigation. i have no reason to doubt that the federal bureau of investigation would not investigate each and every issue very completely. >> limit ask another question. during our open hearing in fact i think it was worldwide threats and vice chairman to his credit mentioned security clearance as being central to the question of protecting sources and methods. i asked fbi director ray with respect to rob porter how that decision was made when did the fbi notify the white house and it was clear when you listen to director answer it did not

resemble-- example-- resemble a john kelly had been saying to people. i'm still very concerned about who makes decisions at the white house and with regard to write-- white house personnel, in your view, mr. dunbar, who would make the decision to grant an interim clearance holder access to top-secret fbi information? >> senator, that decision would be made in my understanding by the white house office personnel based on investigation conducted by the fbi. >> my time is up. i would only say i'm not so sure as of now who actually makes that decision because we have heard mr. kelly speak on its. i understand the point that was made by, you know, all of you testifying. i think it still remains to be seen who would make that.

thank you, mr. chairman. >> before i turn to the senator, mr. phalen, since you do most of these right now, is it unusual or is it acceptable that if an individual whose file for security clearance finds out they left something out their application, are they offered the opportunity to update that for consideration? >> yes. >> so, if someone left it off, they could added on and that would be considered in the whole of the evaluation? >> yes, it would be in any time during the investigation what we frequently find his two scenarios. number one, i just forgot when i was filling it out to put that on their as an individual issue and there are times when we will go in and conduct the investigation and have a face-to-face conversation--

>> that has actually happened more than the one instance that i have referred to? >> we find it happens with some regularity. >> thank you. >> mr. phalen, i think it's important for the public to understand why these background checks are so important in determining one's a suitability to have access to class but information. can you expand to the american public by the background checks are so important to national security? >> yes. taking a background check in addition to the investigative piece and ultimately a decision by government agency to grants that person access to information should have some level of public trust. we zero it to-- i think we as a government zero it to the american people in the american taxpayer to assure people working in the national security arena and in areas where there's a public trust that we have done everything we can within reason to determine that person-- that trust can be placed into that person and i know in an earlier

part of the conversation and earlier hearings there was conversation about should we reduce the number people that have clearances, i think there is not such a counterargument to that, but we have people and across this environment and the earlier panel where we had access daily to national security information, secrets that give this country on edge in war and peace and other sorts of things and at the same time we have our industrial partners we work at that are building those tools that help us fight those wars or keep that piece. this is a simple thing and i have sent in under-- other venues. do you want less trust of a guy turning bolts or more trust in my argument is we probably want more trust them less. >> in addition to the trust is in it the case the code of federal regulations lays out 13 criteria for determining a 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? >> correct. this is a process that's looking at history to ask if you have a record of the train that trust and perhaps more importantly for initial investigation for the continuous vetting evaluation portion to say what is changing in their lives and how do we predict whether they will go horribly bad before they get that far. >> so there are 13 criteria i have mentioned that one is financial consideration. i'm going to assume we have these 13 factors because we have imagined scenarios where in each of them and certainly any, nation of them could render someone susceptible to the kind of manipulation that we have discussed. can you tell us what we imagine might be the exposure and weakness of an applicants when we are concerned about their financial interests and in particular those related to foreign financial considerations >> in a nutshell, it would be an

individual who has entangled themselves whether it's foreign or not with financial obligations that put them over there head and often times causes people to make bad decisions come about life decisions and in so these cases we have found history of espionage that causes them to decide i have something valuable here let me sell it to someone. >> how much information as an applicant required to give it related to foreign financial consideration? >> they are required to identify foreign financial investments, born financial obligations, foreign property and-- >> foreign loans? >> that would be a financial obligation, yes. >> and when we talk about foreign influence and it's listed as a concern, what exactly does that mean in terms of foreign influence? what are we looking at? >> it would be how am i or am i influenced by either a

relationship i have with someone who is foreign, relationship i have with an entity that is foreign that could be a company. it could be a prior or coexisting citizenship i have with a foreign country. it could be a family member who is someone from a foreign country and how much any-- influence any of those things would have over my judgment in regards to how i will protect secrets and trust. >> given your extensive experience and knowledge in this area, can you tell us what are the things that individuals are most commonly blackmailed for? >> it's not-- i have to go back and do more research. the instances of blackmail by people committing espionage is not as substantial as the incident of people who simply made a bad decision based on financial or other entanglements and they just make poor

decisions that decide my personal life is worth more than my country. >> then, one final question. this is for mr. payne, according to press reports last fall you say quote if we don't do interim clearances nothing gets done. you continue to say i have murders who have access to classified information, rapists, pedophiles and people involved in child tomography. i have all of these things that the interim clearance level and i am pulling their clearances on a weekly basis. this obviously causes and would cause anyone great concern and the problem of course being the inference is interim clearances don't disclose very serious element of someone 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.

>> i will say that the length of time 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 80000 interim clearances to industry. currently, there's about 58000 people on interim clearances. if you look at the timeline that they have been in-- 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 to give these a couple statistics here, 486 people from industry had their clearances denied last year.

their main security clearance, their whole security clearance, they were denied. of those, 165 of those individuals had been granted interim clearances pick during the process of the investigation, information was developed during the investigation that resulted in as pulling the interim clearances of 1501 of those individuals and the remainder were individuals who did things after they received their interim clearances. so, you can see the risk that is involved with interim clearances and the need to reduce the amount of time that we have someone in a interim capacity as much as possible. >> i agree. thank you. >> vice chair. >> i appreciate the panel and i appreciate your answers and in the first panel as well. this is a high high-priority

issue i think for all of us in this room. remarkably, no partisan, we have to get this improved. i will leave you with one-- it's been a long morning outlook already. i will leave you with one question for the record because we did not get to raise this in the first panel and i did not get a full answer from each of you. i would argue that in an era of more and more open source documents that we have to take a fresh look at the need to make-- need to have over 4 million plus people-- actually had to go through a clearance process of any type in particular the tremendous growth of top-secret clearances. i would like to hear back in writing from all of you what can we do and what would be your policy recommendations so that we could not have so we people actually have to funnel through on the demand side on a going forward basis with more and more information going to be out.

thank you, mr. chairman. thank you for holding this an open setting. >> i think the vice-chairman and all of the members. this is one of those issues that membership at this committee has been extremely engaged on and what to think those first-- the first panel members who chose to stay and listen to the government witnesses. you know, i'm always a shock to number of people that have the opportunity to testify and stay and choose not to do that, so i really respected the ones that do take the time to do that. i think-- i think all four of you for not only providing us your testimony today, but for the jobs you do. mr. payne, you have a big job and mr. reid, you have led this charge and mr. phalen, you walked in when not many people would take the job and you have performed as well as one can do and that's faced with losing 80%

of your business down the road knowing that. mr. dunbar, i'm not sure you knew you signed up for this when you were asked to come in, but this is important and as we have chatted up here as members have done and given an opportunity to question you, we are really confident this might be a model we are beginning to see that we can replicate and that the energy between you and mr. phalen, that exchange will happen and that there is a real opportunity then for director coats to coalesce the rest of government towards this model. the one thing that-- one where they did not come up in the second panel might come up once or twice i came up frequently in first one was reciprocity because there's nothing that either one of you are doing

about ends where it's-- it solves the problem of reciprocity within an agency or from agency to agency and i can tell you we have a security officer that got her security clearance at the state department and when she came to be security officer for us the state department said, we don't have a accreditation with the cia, so she had to physically go pick up her paperwork and take it to the agency to be recognized. you would think in 2018, something like that would not exist. it's bad enough that it does, but i think when you look at why are we doing this, really not to solve that problem, but to make sure the next generations of workers that will come to the pipeline actually wanted to do

it and can do it and they do it any time frame that they are accustomed to. it always mystifies me that someone is willing to share their entire life story because they do, right mr. phalen. everything is out there to be exposed because they believe in what they are doing. i want to make sure the next generation has just as much passion about doing this. we wouldn't be quite as involved as a committee if it was of the passion of the vice-chairman. he has been relentless on this and i think it's safe to say that committee and i say this to you, mr. dunbar, i will take up with director coats i will offer to director coats the committee involved in how we bring agencies together it's not the director doesn't have the authority to do it.

i think he's in full agreement with us, but sometimes having a congressional piece involved in those provides the director of an additional stick that he might not have without soi wille involved to that degree. i hope you continue those in this committee will have a real inside look into the success of the model you are setting up, much of what we are able to accomplish from this point forward is because of the investment you have made, not only today, but prior to this end we are grateful for that. with that, this hearing is adjourned. ..

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tonight a senate health committee on what states are doing to combat the opioid epidemic and how the federal government can help. and then tomorrow night, two campaign rallies from the special election in pennsylvania's 18th 18th congressional strict. at 10:00 p.m. eastern on c-span, former vice president joe biden speaking at an event for dep creak candidate conar lamb.

both rallies with former vice president biden and donald president trump are on tomorrow.

coming up in two weeks on saturday, march 24th, the march moore our lives rally calling for gun control in the wake of recent mass shootings. that's on the national mall beginning at noon eastern on the 2nd. you can see live coverage on c-span. up next, senate aging committee hearing on financial fraud targeted at senior citizens. we'll hear from people who have been victims of the scams and a group that seeks to educate senior citizens how to avoid financial fraud.