i think it is exceedingly important an invaluable that the tea party patriots today are heard on this issue. it is the american people sing these opportunities to communicate with their senators, to share with them their views about the need for a system immigration that serves the national interest of the united states, and makes life editor for working americans, not worse. it is not the kind of thing we ought to be doing. i am delighted to be here today. and to share these thoughts, and to hear from our guest. they are also here to share marks.

>> let me just share to thoughts with you. i have been blessed to give a lot of speeches at naturalization ceremonies. when you do that, you look across the crowd and you see these people that have worked hard. they have learned the language pretty known more about our country than the history -- than the rest of us know. i'm not one to do anything that lets someone fast forward in front of them. this is one of my major concerns. i'm the making member of a senate armed services committee. i'm concerned with the national security elements of this. how many of you are aware of the fact that the non-mexican that come across the border any -- have increased a c seven percent. we have something in our law that says that if these decisions -- if the of someone who has committed a crime, the longer they can keep it would be for six years. at the end of that time, they would have to be turned loose enough the country they came from could not repatriate them. we have evolved these problems. . we're going to sort these out. i do not see it happening in

this bill. >> i'm david letter from louisiana. i am pleased to join the tea party patriots here today. i think that in particular, once you hear from their guest, you will see that we all support america is a nation of immigrants. we said oort fixing our broken immigration system. his is where we are with regard to this bill. this gang of eight bill was supposed to come to the senate, and sail through with over 60 votes. then once it was actually introduced, and debated, that support started to erode. a lot of legitimate concerns turn into a rise. i do not think it has those 60 votes right now as we speak. now that an amendment. now we've got onto plan b. plan b is to bring up the amendment very quickly, having

a lot of hoopla about border security. party pass it to then. with that amendment over 60 votes. i think it is important that we look at the details of the amended. it's actually rick -- let's actually read it before we vote on it. once the american people do, they will understand the same thing they came to understand about the underlying bill. it is not truly fix the problem. for two main reasons. because an immediate amnesty, and immediate legalization happens first, and only after that are there promises of enforcement. secondly, i guarantee its inputs, spending money, there is a measurement of success of results of actually securing the border. they have rejected our having any verifiable measurement of actually securing the border.

those are the two big problems with underlying bills, and will remain the big problems with the amendment. will leave pushing for time so we can actually read and understand the amendment. the american people need to be able to read and understand the amendment. and then, let's have a full debate. thank you. >> next we will hear from my neighbor and friend to the south, from the state of evada. >> thank you. hank you senator sessions. i'm the chief strategist for the tea party.net. it is clear here that what a senators have said, and what others have expressed is that we are looking for solutions to the problem of immigration. my reservation -- my rganization issued a series of

principles for comprehensive immigration reform in america. not for dollar -- politics. not for a certain segment of americans, but for all of the american people. you can see these principles and our website. since we launched it a day ago. we have gotten 15,000 grassroots activists from across the country that were in favor of certain aspects of mmigration reform. we are looking for solutions. unfortunately, what is currently being called the gang of eight bill has not been the solution. border security is our first principle. several minutes from the amendment to the -- at either been defeated, or tabled. it seems clear to me that senator schumer and senator reid are not serious about getting a bipartisan

immigration reform bill passed through the senate. they are interested in playing olitics. our tea party organization, other groups, the 15,000 tea party organizations that have signed on to america first immigration policy will not play that game. with that, i'm going to introduce my colleague and friend jenny of the tea party express. >> i am jenny of the tea party patriots. as many of you are aware, tea party patriots and many other groups have tea party or patriots, liberty, 912 and their names have been targeted

by the irs. they interpreted a law, and did not apply that law fairly and equally to everyone. hey interpreted the law in a subjective manner, because there are no objective measurements for it. as we look at what is in this immigration bill, it makes border security subjective, rather than objective. we have seen personally what appens when you allow things that should be objective to be concerned -- become subjective to a person's opinion. our border cannot be an opinion as to whether it is to it you're not. since you're not. -- six you're not. we have people who have joined us, and they are immigrants to america. i feel these people are actually state coordinators for tea party patriots. they have lived under other types of countries with other types of governments, and they love our country, and love the reedom in our country.

they like the rule of law in america. they want to make sure that the rule of law continues to exist in america. the first person i'm going to have to speak is suzanne guggenheim. she is from texas. she was born on d-day. the doctor told her mother -- he was born in france. her doctor -- hungary on d-day. the doctor told her mother the americans have landed before they told her that she had a girl. she has lived under fascism, socialism, communism, and capitalism. suzanne. >> thank you for giving me the opportunity to be here today. was born in 1930 hungary.

became communism. like most of the illegal immigrants, i came to america to find what we look for some freedom, and the opportunity. due to -- after any 1986 law, i lost two years to become citizens of the country i love and respect it because of that making the 3 million illegal immigrants cut in front of the ine. the bill proposed by the gang of eight i think will make the rule of law a mockery. ot only that, but the deep impact that 15-30,000,000 immigrants will have on our ociety will compromise our future in a terrible way.

i hope that things to the senators that are here leading the fight, we will be able to put a stop to this. >> thank you. ext week have pam, who is an immigrant from england. she is our state coordinator in idaho. she is been on the david letterman show. >> thank you for being here. i was born in england. my family moved united states in 1954. we left behind the war-torn nation that was still rationing meat and sugar. we came to a land of plenty, and we did live the american dream. we all worked very hard, and with that, when rebel to -- we were able to live the american dream. as i see the voters being so pen, the senators have

expressed concern for the bill. angry with everything they say. we must secure our borders. we must check our visas. my daughter-in-law is an australian. she left the country after three months because of visa expired green people need to be made to do what our law requires. thank you very much. >> thank you. next we have dr. al biro hasting, from jacksonville florida. she is an immigrant from cuba. >> thank you. i would like to say my maiden name is hernandes. i was born in cuba. i came to the program in 961. a program that brought over 14,000 children to the united states legally. i remember how difficult hat

was on my parents, and how much had to sacrifice. it was all for freedom, and what this off -- country had to offer for our future. i'm very concerned that that is no longer happening. i'm am opposed to these immigration bills. many hispanics will tell you, almost banks are not alike. we really find it very ondescending's when they paint is with the same brush. i have absolutely nothing in common with those who support a group like larocque some -- a far left radical marxist type f group. we do not stand for that. we stand for the rule of law. as for the compassion that senator rubio talks about, where is the compassion for the american citizens?

there should be a number one priority in every bill that our congressman look at. every bill that we support. ither there is no compassion for the legal immigrants -- they are just supporting cheap labor for the special interest. thank you for your attention. > thank you. next, hans marson. he is from the uk. he is on a green card. he is our state coordinator for entucky. >> in case we are being monitored, i just want to prove my green card. came over in 1976 after vacation in california. i figured this was the country i wanted to live in. i came legally read -- legally.

now i find that the government has decided even though it didn't work in the past, they re going to give amnesty and stop illegal immigration. i would like to tell the government, if you give amnesty to millions of people, all you are doing is encouraging millions more to come in. unless the border is secure, you will never stop them from coming in. i would go as far as to say, it is the government does grant this, they are saying to the rest of the world, you are a full to get into the line go to exico. you are eligible for all sorts f programs i'm against it.

i will do whatever i can to support the people like the senators who are against this bill. thank you. >> we have one more coordinator. before we go to him, we are going to have maria espinoza eat. she is with your memories project. -- she is with the remembrance project. > thank you. they keep her being here. i'm the founder of a remembrance project, dedicated to bringing awareness to the forgotten. the victims killed by a legal aliens. behind me is the quote project is going national. we are in 18 states now. we are memorializing the victims killed by illegal aliens.

i'm the president of houston egal reform, and a first-generation american. i oppose this in the strongest possible terms. i plead with lawmakers to oppose this dangerous bill. its authors work hand-in-hand with rich businessman and and the sea -- at this he advocates. their decisions to provide amnesty to criminals, including gang members, as a slap in the face to victims of illegal alien violence. our families are being separated from their loved ones through no part of their own. they will -- who have lied to authorities, who will prove they have nothing about our lives. this that makes it impossible

o deport anyone in the future, guaranteeing criminals are made in our country. our borders will -- this bill will place innocent ivilians in more danger, and allow terminal gangs to continue preying on the nnocent. one american life stolen by illegal alien is one life to many. where are the stars, like eva longoria, who supports legislation that threatens the safety of americans? have they taken the time to speak with the families of victims go by illegal aliens? i think not. this is a disaster in every possible respect. it is evident the american family did not have a seat at this negotiating table. this bill must be shredded.

i'm asking everyone to rise in opposition of this un-american bill. otherwise they will -- there'll be thousands of other victims. thank you for your wonderful work. >> thank you. i'm being called to the floor. we have activities going on. i would just say that the tea party representative -- revisions the expression of the american people. they always did for the national interest as opposed to special interest. special interests wrote this bill. the road in secret. the producer to the floor. all kinds of promotional activity planned and agendas to move forward. he will be the people who need to speak out about it. people need to express

themselves to their senators and congressmen that this is perceived. i believe that we know three things are liable to happen with this bill. it will be amnesty first. amnesty will occur. hat is no doubt. we know that wages will be reduced. the gross domestic product per capita will go down. unemployment will go up. this is not the kind of thought out policy that serves the interest of the american people. the people who are working and struggling today, hoping to have a job with insurance and retirement plan, anyway to take care of their emily's. that is in decline for decades. this will only accelerate it.

i believe it is important for the american people to speak out. these great speakers of shared from their hearts their concerns about the rule of law, and the people of america. ain't you all for participating. others will be speaking. thank you for leading this. i'm sorry active under the floor. >> thank you. we have two more speakers. the next one -- we have our coffee -- - we have arcotti. he lived in the soviet union under communism. he is in california. >> hello. it is a pleasure to be here. i grew up in the soviet union.

i was educated there. i spent years in the soviet military. i took a full gulp of the socialist paradise living under tyranny. i was fortunate enough to be able to immigrate. i lived in austria and italy obama papers were being processed. i was submitting my application forms. i was given medical exams. i provided copies of my diploma and birth certificate, and other papers that were quiet the time. after all that, and i was waiting for a year, i was granted in their be with an merican embassy. two months later, i got a visa. to enter the greatest country known to man.

our country, the united states. after migration,, and working obs, i was having -- i was nterviewed by fbi. they want to make sure the information is accurate. i became a citizen and never looked back. it was then, 34 years ago, it is not what it is now. the government of this country knew everything about me the four i entered this country. today, the said government is letting people into the country without knowing who they are, what a came from, what their intention was coming here. we have had sweet talk from politicians.

the senators are talking about doing legalization first, doing pretty much a lipservice. i can tell you the border can be secured. t must be secured. before we can do anything else. because, you have perpetuated the problem instead of fixing it. i'm not saying on purpose to fix the border first. it has to be mandatory. fixed the border. the border on the north. it is counterproductive to talk about immigration reform without doing number 1 -- plugging the hole. i would like to tell you that this is a wonderful country. exceptional nation. it pains me to see this magnificent ship called the

noses of america failing to get the the destination. we can change it. it is our country. we must change it because there is no other place to run. thank you ray much. -- thank you very much. >> the last week or i'm going to have marie introduced. -- the last speaker i will have marietta introduced. >> sm is brutally murdered last year. the killer was in front of the judge 10 days before he killed joshua. we are wearing the ribbons memorializing the victims. these, -- please,. -- please come up. >> i have been here all of my life. i been married for 25 years, and have three children.

i speaking against this bill because my 18-year-old son was brutally murdered by illegal immigrant. i didn't ask the put here. here i am. i'm asking where is the common sense in all this? just come to washington d c, i had to show my id, and i was earch. all the thousands of people crossing the border were crossing illegally, and no one seemed to care. i'm going to ask each senator voting in favor of this to go home, gather up their kids, and decide which one would you sacrifice. which one would you sacrifice to make a better life? or the ones that continue to break our laws. we do not know what their intentions are coming here.

we can sit here and think that things are going to get -- that things are going to happen. not going to happen, like it did to me. will it take a personal done your family before you get back to common sense government? i ask that you close the southern border first before you make any move for this bill. thank you for your time. >> thank you. thank you everyone. e will take questions. we will just break up now pray hink you for being here. >> coming up, james lacy defense analysts on the situation in afghanistan and syria.

then a look at presidential -- president obama's trip to urope. later, an examination of what drives employment in the u.s. ith john woolford. washington journal is live every morning at 7:00 on -span. >> john boehner says that if the nation becomes a nation of builders again, the nation needs to fix the tax code. is comets came at the -- it is 5 minutes. >> may i have your attention please. that's what i love. rowdy manufacturers.

i have a great privilege right now of introducing to you someone that is no stranger to any of us. probably the greatest friend that manufacturers have in the united states congress. john boehner has been a representative from ohio since 990. we are so pleased that he is speaker of the house. i can tell you that just watching him, i have had the opportunity to interact not only with the speaker, but his incredibly talented staff. the drop of speaker of the house i believe is the hardest one that exists in washington c. imagine if you had 435 cats, and anyone who had a cat knows knows there are no to cats the ame personality.

equally debt to the united states house are presented to us read the speaker is -- equally that to the house of representatives. i wanted to tell you a little bit about the speaker. first of all, one of the reasons that john boehner is one of the greatest people in washington is because it is -- she is from ohio. i appreciate that. he used her present my parents in the house. that was a nice little connection. he was -- when people come to washington, they come with the preconceived values that were instilled in them throughout their entire life. i want you to think about this when you think of john boehner. he was one of 12 children, and those children shared two-bedrooms, and one bedroom

-- one that there. -- one bathroom. if you wonder if he can handle the art of compromise, all you have to know is how he handled the first years of his ife. i'm very proud that before he came to congress, he represented manufacturers. he's one of us. he gets us. some of those manufacturers are members of this organization, founded in 1985 in ohio. i do want to leave you with this. i think this is something i have never forgotten amitai my wife -- from the time i watched john boehner take the oath of office as speaker of the house.

these were his remarks that he made during that time. "economic freedom, individual liberty, personal responsibility -- i hope these values dear because i have lived them. i have said my whole life hasing the american dream. please welcome the help -- the speaker of the house, john boehner. [applause] >> i appreciate the chance to

talk with people who deal with the number one issue on the minds of americans, and that is jobs in our economy. when we look at where we are, e are still seeing growth. it is not just that right now. in america, the people have always had a healthy skepticism bout their government. they read about the irs abuse of power, and targeting americans for their political beliefs. they wonder about what happened in benghazi where americans were killed. they see report the journalists had their phones monitored, and they asked this could happen to them. they are -- in washington there as been no accountability.

only arrogance of power that puts politics ahead of doing the right thing. when government is out of control, and also the people it is supposed to serve, it makes it harder to do our work. to grow our economy. the arrogance we are seeing in the same arrogance that has left our economy plodding along. after four years of watching -- washington knows best, our economy is recovering at the slowest rate since world war ii. the growth numbers barely move. unemployment stays about the same. we are told not to read much into it. experts call this condition the new normal. some even argue it is good enough for now. t is not good enough for me.

i know it is not good enough for you either. how can any of us stay on top with groups that nearly cap 12 million americans out of work future? we are not people who hobble along hoping someone -- things will get better. we are people who chart our own course. who take matters into our own hands. that is why i'm here today. people in this room represent so much of our nations economic success, and our potential for the future. manufacturing represents where things are gone wrong in recent years. america's greatness has always rested on our ability to build things and produce things. we have built the steam ngine. we'll -- rebuild the model t. cyberspace. we are a nation of uilders.

our vision is one of a country where everyone has the opportunity to build something from nothing. a business, a charity, a church, a gadget, the website, a home. it is because we are a nation of builders that we created more prosperity than anyone, anywhere in the world. it is because we are a nation of builders we've been able to pass on to our children a brighter future and a better life. under the obama ministration, it is been harder than ever to build in this nation. red tape, and outdated tax code, shortsighted policies are driving the cost of everything, stifling innovation, and sending jobs and opportunities to our competitors like china. politicians and bureaucrats will bet taxpayer money on pet projects. meanwhile, the hoover dam, the golden gate bridge, even our highway system would be

impossible to build in today's regulatory environment. this administration would have us believe that we can build a great nation on a rain of red tape while operating the service economy by things that my earlier generations. his is not an issue of republicans versus democrats. it is about america. is about the world. our competitors have detailed strategies for growth and high wage jobs. competitor tax codes, and cooperation between the government and the private sector. s result, we are now being displaced by being displaced in the global economy. china now consumes more energy than we did read it now produces -- then we do. it is the world's leading manufacturer. our economy has grown slowly

because we have invested in government rather than in ourselves. the resources that we need. we need a newer roach -- we need a new approach. we need to unleash the nation of builders. to become a nation of builders again, we have to stop picking winners and losers, and focus on expanding opportunities for veryone. we start the foundation for giving more of her kids a chance at a good education. let's empower parents with choices and opportunities to improve access to higher education, job training, so students are emitter -- ready for tomorrow. we must simply fix our tax

code. if we clear out all of these loopholes that make the tax code fair, it is going to be asier to understand. we will keep ideas and resources here in america. we need -- we need to expand markets for american made goods. it will help lower prices for onsumers, create better jobs for workers, and attract new investments to our shores. to become a nation of builders again, we need to reform our broken immigration system. securing our borders and enforcing our laws, and making the process of becoming a legal immigrant fair or will help america remain a magnet for the brightest minds in the world. [applause]

being a nation of builders means fostering innovation, and keeping the internet free for coders developers -- coders, developers, and engineers. they do build the hardware and software, and innovations that power our modern economy. becoming a nation of builders again means finally pursuing a true all of the above national energy strategy. developing america is energy resources is one of the best opportunities for robust and sustained economic growth. it is not just our economic frontiers. it is just that the internet as in the 1990s. america has more combined oil, coal, natural gas resources than any other nation on earth. we are sitting on the gateway to prosperity.

an oil and natural gas renaissance is in full swing. here in washington, we have got an administration that will not let us build the keystone ipeline. big about it this way. the aim -- imagine if the clinton administration had told the budding tech companies in places like silicon valley or west virginia that they need to hold off on plans indefinitely because the federal government, even after review, had to have -- magine that after years of study, the ministration told america's private sector innovators that they needed to hold off on harnessing the internet because one federal department deemed the review of another department to be insufficient. other nations would have laughed at us. all the way to the bank.

just the gas -- instead of researching the velma, we need to greenlight the keystone pipeline. we need to expand production of our resources, onshore and offshore. that is how we become a nation f builders once again. [applause] all of these are the types of policies that can bring us out of the so-called new normal. they help create jobs and deliver sustained growth. it is all part of the republican plan for economic growth. i encourage you to go visit us online at gop.gov. one my colleagues and i do not have a majority in washington, we are going to continue to pursue our plan. i asked all of you to challenge members to join us.

a nation of builders is not just a slogan. i was born in 1949 when america was entering the post-world war ii boom. by that point, my grandfather had opened a bar. my dad took it over and ran it for many years. i work there growing up, worked through school there. then i went on to start my own small business. we always knew that if we worked hard, and sacrificed, we could make a better life. our young people to die -- our young people cannot count on that vision many of us had growing up. because of the lack of leadership in washington, it is slipping away from them. slipping away from us. it doesn't have to be that way. it is times like this week come together, it is times like this

with the come together them -- it is time that is become ogether. where he faced demands nothing less. let's rise above the challenge is of the moment. let us restore ourselves as a nation of builders. good luck. god bless you. [applause]

>> friday senate minority leader is at the american enterprise institute to talk about free speech. you can see it live at 10:00 eastern here on c-span. >> first ladies have a capacity for per son fying if they so choose. this is a pat northwestern american women in politics famous or not. someone they are women, real people who actually do things. but then there is this secondary capacity of being a per son fying figure. i think many first ladies have become a first lady and

realized this was larger than life. that was something dolly figured out. she becomes a figure head for her husband's administration. she make it is white house into a symbol. and all of this is happening in 1808. she doesn't know this but in 1814 the british are going to burn the capital city and all this work she put into the white house is going to pay off. because it's going to give the surge of nationalism around the war. >> our focus on first ladies ontinues every monday night. monday night at 9:00 eastern on c-span. >> government watchdog said the company that did the background check on edward snowden is being investigated. there may be some problems revealed by the investigation.

there was a hearing examining the background check process for secret clearances. the hearing is 90 minutes. >> i call to order this joint hearing of the subcommittee on firblet si of federal programs in the federal work force and the subcommittee on financial and contracting oversight. i want to say thank you to enator johnson for being here. this afternoon's hearing is titled safe guarding our nation's secrets, examining the security clearance process and i want to thank my colleagues as well as their staffs for helping organize this hearing and our witnesses for being here today. thank you for your time.

recent events have forced to us take a look at the programs carried out by this government in the name of national security. as we move forward it is critical for to us examine the scope of these programs to determine if they properly balts our security and liberties. but it is also encome bent to raise critical questions about how the government is velting the individuals, whether they are employees or contractors who have access to our nation's most sensitive data. last week i asked the national security agency a pretty stathe up question. after the out cry of leaks, after improved network security and after spending hundreds of billions of taxpayer dollars, how in the world does a contractor who had been on the job for less than three months get his hands on information detailing a highly classified government program he shared

with foreign media outlets. that will require soul searching. in terms of securing classified information we just don't have an external problem, we have an internal one. today there are nearly 5 million individuals, 5 million individuals inside and outside of our government who have been granted security clearances. 1.4 million hold a top secret security clearance. given an increasing amount of classified information produced and maintained by our government, we have a real problem on our hands if we can't get this right. because of the national security implications involved there is no margin for error. today's joint hearing builds upon the previous work of this subcommittee and the senate arms services committee and the committee on intelligence. we will examine the efficiency and effectiveness of the security process.

we will discuss the oversight of federal employees and contractors tasked with carrying out investigations or granting of clearances. i hope and expect a frank discussion with our witnesses today about the particular roles they play in the security clearance process. we need to know what we are doing right and what we can do better. a lot of process has been made in recent years but we still have a ways to go. i'd like to turn it over to the chairman of the contracting and oversight committee for her opening statement. >> thank you very much. i hope this is the first of many joint hearings hearings wi have with senator portman and senator johnson. i think all four of us have demonstrated problems that are sometimes embedded within our government. i am happy to work with the three of you on this effort today. earlier this month a contractor

edward snowden released classified information regarding the n.s.a. program. mr. snowden had access to this information because he received a security clearance. that was issued following an investigation of his background. over 90% of the background investigations are conducted by the office of personnel management including all background investigations for members of the military and defense department, civilian and contractors. in preparation for today's hearing we received information regarding how the government plans, conducts oversees and pays for background investigations. this information portrays a government agency where there is fraud, limited accountability and no respect for taxpayer dollars. cost the federal government over a billion per year. uses a reinvolving fund struck chure in which federal agencies

pay o.p.m. for the different investigations each agency needs both for its employees and for its contractors. as a former missouri state auditor i was shocked to learn this fund has never been audited. the inspector general will testify that he has tried several times but the agency simply doesn't have or keep the records that would allow him to do an audit. we also learned that at least 18 investigators have been quibblingted of falsifying investigations since 2007. these convictions called into question hundreds of top secret level clearances as well hundreds of lower level clearances. there are more than 40 other active and pending investigations into fabricated investigations and it is possible that there are far more. we also learned that approximately 75% of all the government's investigations are conducted by contractors.

and just one contractor conducts 65% of those investigations. they also have a contract to provide support in managing and overseeing investigations. work which appears to put them in the position of being a contractor to do the investigations and then to be the contractor overseeing their own employees doing the investigations. for its work the office of personnel management has received more than $200 million last year. we have received information they are currently under criminal investigation by the office of personnel management inspector general. we have received information this is related to their systematic failure to adequately conduct investigations under its

contract. they conducted a background investigation for edward snowden in 2011 fart part of the time period under review. we are limited in what we can say because it is an ongoing investigation and we cannot comment. it is a remind they're background investigations have a real consequence for our national security. federal agency rely on these investigations to make assessments of whether people should be trusted with our nation's most sensitive information. this hearing will attempt to answer this question, are we handling background investigations effectively and in a way that is deserving of our trust. i thank the witnesses for being here and i look forward to their testimony.

>> this is timely. it's an important topic given the disclosures and inadequacy of the system demonstrated. we appreciate the witnesses being here. this is a time for us to focus once again on this issue. the security clearance process performed well is critical because it ensures our nation's most valuable information is protected while we have the personnel to conduct the duties we need. done poorly it can be incredibly damaging. we run the risk of damaging leaks as we've seen in cases over the last couple of years harming our allies and ability to build alignses around the world. this committee has had a long history of looking into this issue over the proe sayses that manage almost 5 million government contractor personnel

who are authorized to have some form of personnel clearance, 5 million people. given the many challenges in the past it's portfolio to see how these agencies are progressing in light of what happened to see why it's not working as well as it should be. six years the government accountability office had d.o.d. on the high risk list. it got off the high risk list in 2011. but there is a long list of recommendations for the department of defense for o.p.m. and other agencies involved in the security clearance process and we're still working through those. these include electronic case management systems and other tools across government. ortcomings in metrix for reciprocity, and most trouble ling i think timeliness metrix for investigations.

additionally our inspector general have identified issues the 2 billion. to present the risk proposed by these neglect investigators from cannotting. we must have adequate background investigations. there are many questions as to effect i haveness and efficiency of this process. i look forward to hearing a progress report mr. chairman on meeting these recommendations that were provided and the actions that have been take on the avoid furlingt mismanagement. i thank you to the witnesses for being here. >> thank you. we'll turn it over to senator johnson. welcome senator johnson. >> thank you mr. chairman.

i'd like to thank the witnesses for appearing. i didn't count how many times i background in business there are all kinds of processes that we have standardized. certification works amazing well. there are things like surveillance auddilts on an ongoing basis. as i was reviewing the information prior to this hearing that's what jumped into my mind. if we can apply those processes across the government, we would be in a far better place, probably the best piece of preparation material. there was an article written by former secretary of defense. i'd like to enter that into the record but it describes how this gentleman was going through a clearance process. he had already filed his

electronic version of an sf-86. it was somewhere on a government computer and couldn't get access. had a four hour process and had to do it again. it was a contract employee coming and going through question by question by question where he was in a private sector business in the process of just asking five questions they had a 99% review rate in terms of whether that person was committing fraud. in private sector we can get to a process that works and my question is why can't we get that in government and hopefully this is about coming up with that standardized process that works. i agree with all three of you this is critical if we are going to be able to maintain our national secrets. >> what was the name of that document you wanted enter into the record? without objection. >> now for our witnesses i'd

like to welcome all of you here today. we extended an invite to the director of national intelligence. they were unable to provide us with a witness. i know they are under huge demands now. hopefully it can happen next time because i'm sure there will be a next time. however we are fortunate to have assembled a great panel this afternoon. we'll start with the inspector general of the office of personnel management. he has served in this capacity since 190eu9 making him the longest tenured inspector general. he heads up the audit and investigative programs. i understand you were a police officer in st. louis one time. hopefully your path did not cross

>> only if we were put in a criminal in jail. >> he is also accompanied by michelle smith, the opm inspector general. welcome. merton miller is an associate director of investigation for opm's investigative services. mr. miller is responsible for policy development and contractor oversight. estherjoining opm, miller served along and asked -- distinguished career in the united states air force. we will be looking for pilots and montana. then we have stephen lewis, deputy director for personal, industrial, and physical security policy in the office of the undersecretary of defense for intelligence. welcome. that office exercises policy and planning and strategic oversight over intelligence,

counterintelligence, and security matters including the security clearance process. of the defense security service at the defense department also joins him. the hearing today. thank you for your service. then we have the director of andnse capabilities management of the government accountability office. in that capacity, she is responsible for overseeing military and dod personnel issues including governmentwide security clearance issues. she has worked on a number of national security issues since she began her career at the gao in 1981. welcome, brenda. iq for being here today. . it is a custom to swear in witnesses before us. i would ask you all to stand, including mr. sims and ms. schmitz. repeat after me.

you swear that the testimony will give before the subcommittee will be the truth, the the whole truth, nothing but the truth? but the record reflect that they all answered in the affirmative. each one if you are going to have five minutes for your statements, and i would tell you that your entire written testimony will be a part of the record. to that,dd more complete written testimony cup up until july 8. we will start with mr. mcfarlane. if you can keep it to five minutes, i would appreciate it. chairman tester and mccaskill, ranking members portman and johnson, and other members of the subcommittee, good afternoon. my name is patrick mcfarlane, and i am the inspector general at the u.s. office of personnel management. thank you for inviting me here today to speak about our oversight work related to opm's federal investigative services for a gram office. in 1978, the u.s. congress took

a bold step in creating the inspector general act, old and that it was an experiment born out of the multitude of governmentwide list -- mistakes, serious problems, and wrongdoing. in the face of much opposition from the entrenched government bureaucracy, it was congress's pledge to the american citizen that their expectations of good government and their techs -- their tax money would be protected. the inspector general concept is transparency at its core functionality. it must be transparency without any shades of gray. indeed it is with this understanding that each inspector general's organization honors the independence required of them free of any political influence, which congress mandated. today you have asked me are today because of concerns the lack of transparency in an organization that plays an integral part in protecting our national security and integrity of the government's workforce.

investigative service conducts approximately 90% of these background investigations for the federal government. these are used by agencies to determine whether to grant a federal employee or contractor a security clearance. due to recent events, a key discussion point in recent public debates has become, who should we trust with access to sensitive information related to national security? the very first up the government takes in answering this question is to conduct these background investigations. i am here to inform you that there is an alarmingly insufficient level of oversight of the federal investigative services program. the lack of independent verification of the organization that conducts these important background investigations is a clear threat to national security. if a background investigation is not conducted properly, all other steps taken when issuing a security clearance are called into question.

everyday i have the privilege of leading an organization of people dedicated to a work ethic thatatioodof people dedicated to a work ethic that embodies our pledge to know our business and responsibilities better than anyone else. at the close of the day, to be able to say that we did what was right for the american taxpayer. this having been said, what is most noteworthy for your understanding is that our oversight of opm's investigative program has been thwarted by virtue of an agency funding decision. under current law, the federal investigative services program much price -- must price its products and services and amanda allows it to recover its costs. opm uses a revolving fund as a financing vehicle for these activities. opm hasral years, taken a position that oversight is not considered to be an administrative cost, and thus our office has been denied access to the revolving fund.

herenot think that anyone would argue that oversight, financial audits, performance audits, and investigative activity are not a crucial part of the administration of any government program. to compensate, we have used $3 million we have for non-trust modicumk to maintain a of oversight viability in the revolving fund programs. with special emphasis on the federal investigative services program because of the national security implications. please be assured, even with their resources, it is of recent discussed in my written testimony, we feel compelled to engage our office in a joint initiative between the audit and investigative divisions to thoroughly oversight policies and procedures of the quality review practices of the federal investigative services program. that withed to say the support of former director

john, the administration has included a legislative proposal in the president's fiscal year 2014 budget that would grant us access to the revolving fund. i close by also requesting your subcommittee support -- subcommittees support so that we can have the resources to do the job with which we have been entrusted. thank you. >> we will go to you, merton. >> chairman tester, chairwoman mccaskill, ranking members, thank you very much for the opportunity to testify today regarding opm's role in the federal government see it -- secret clearance process. in response to a 2004 legislation authorizing the transfer of dod's security hassfer to opm, opm continued to enhance the background investigation process by improving timeliness,

quality, and efficiency. our successes are due in large part to our partnership with omb, odni, the department of defense, and other agencies. we have no backlogs. we are meeting timeless mandates. and we have increased automation. our investigative services conducts back rent investigations -- background investigations to support hiring, security clearances, credential determinations, among others. the processes supporting these activities are highly integrated, automated, insistently measured against timeliness and performance quality standards. performance data for these background investigations are odni,ly reported to executive branch agencies, and to congress. these products and services are used as a basis for making security clearance and

credentialing determinations by agencies. since absorbing dod's background investigative or graham in 2005, dod personal security clearances have been removed 'som the government accounting office. opm has conducted over 95% of the background investigations required by the federal government. opm manages, oversees the federal employees and contractors responsible for conducting investigations. pursuant to an executive order, the odni is responsible for directing the oversight investigations and determinations and for developing uniform and consistent policies and procedures to ensure the effective, efficient, and timely completion of investigations and adjudications. actual clearance decisions themselves are adjudications

made by the sponsoring agencies. agency heads apply uniform him adjudicative guidelines which were approved- by president clinton and amended by president bush. conducting background investigations is one of opm's core missions. currently we have more than 2500 federal employees in 6700 contractors that form a network of field investigators, support staff, as well as a cadre of federal agents that we have working abroad. opm manages balance nationwide to provide a flexible, responsive, and cost-effective investigative program. our core federal investigators present us the opportunity to manage highly sensitive and inherently governmental investigation requirements while our contractor workforce

permits us to expand and contract operations as the workload and locations dictate. information technology has been and will continue to be a crucial ability to support us in balancing our timeliness, quality, and cost goals. it plays a key role in reducing costs, streamlining operations, improving efficiencies, eliminating waste, and providing a better service for agencies that require these investigations. we consult with the security community in developing new policies and standards in turning this clearly clearance investigations program to ensure governmentwide reciprocity and address program needs and guarantee superior investigative product. security clearance reform has provided program enhancements particularly in the timeliness and quality of investigative products. the enhancements have strengthened the government's ability to recruit top talent

and effectively put federal and contracted employees to work. working with dod and other federal agencies to establish and implement executive branch wide training adjudicative standards, and processes, and develop reciprocity standards and metrics to gauge improvements and demonstrate savings. i thank you for the opportunity to be here today to discuss this important issue, and i would be happy to respond to questions. >> thank you for your testimony. >> good afternoon. chairman tester, chairwoman mccaskill, members of the committee, thank you for inviting me to testify today. my name is steve lewis, i'm the deputy director of the security policy and oversight dr. within the office of the undersecretary of defense for intelligence. we appreciate the committee's continued interest in the effectiveness of the personnel security clearance process. because of your commitment to this radical function --

critical function of our government and its ability to protect national security, the have achieved major improvements over the years and look forward to more gains in the future. i am here today on behalf of of dr. michael vickers, the undersecretary of defense for intelligence. i would like to introduce mr. stan sims. he accompanies us today. the undersecretary of defense for intelligence is the principal staff assistant to the secretary and deputy secretary for security matters and is responsible for setting overall dod policy to implement national policies for access to and the protection of classified national security information. in addition, he is the senior official for dod's personal security program and has responsibility for policy and procedures governing civilian, military, and industrial based personal security programs.

67 does itorder 134 makes the responsibility to develop uniform policies and effective to assure completion of investigations and determinations of eligibility for access to classified information, as well as acceptance of those determinations on a reciprocal basis across the government. with regard to the oversight roles and responsibilities within dod, the heads of dod components are responsible for establishing and overseeing implementations of procedures to ensure protection of classified information. taking prompt and appropriate management action in cases of compromised classified information. such actions are required to focus on correcting or eliminating the conditions that caused, contributed to, or brought about the incident. this responsibility encompasses

military service members, dod civilians, and embedded contractor personnel. under the national industrial security program, the defense attorney services responsible for conducting oversight of companies companies cleared to perform unclassified contracts for dod and 26 other federal agencies, which use dod industrial security services. has instituted various process improvements that have resulted in greater efficiencies and effectiveness with regard to initiating and adjudicating background investigations. this has helped to result in the removal of the dod from the high-risk list for its personnel security program. we have deployed multiple initiatives to ensure consistent, high-quality

investigative products, highly skilled and professionally certified personal security adjudicators, and robust documentation of adjudicative theseale in support of adjudicative decisions. this helps to ensure appropriate oversight and reciprocity. october 2012, dod consolidated its adjudicative functions and resources except for the dod intelligence agencies in a centralized adjudication facility to realize efficiencies and standardized practices of this critical, inherently governmental function. for theifically asked costs of obtaining secured clearances for the department. paidscal year 2012, dod the office of personnel management a total of $753 million for security clearance investigations and

approximately $471 million for military service members, $30 million for dod civilians, and $252 million for other industries. >> thank you for your testimony. mr. lewis, you may proceed. ,> chairman tester, mccaskill and members, thank you for the opportunity to be here today to discuss the governmentwide arsenal security clearance process. as you know, we have an extensive body of work on issues related to the security process dating back several decades. since 2008, we have focused on the governmentwide effort to reform the security clearance process trade my statement today between on gao reports 2008-2013 about dod's security clearance program and personnel security reform efforts. her smell security clearances allow government and contracted personnel to gain access to

classic of classified information -- classified information. , a high number of clearances continue to be processed and the director for national intelligence reported this year that over more than 4.9 million government and contractor personnel held clearances, making it a formidable challenge for those deciding who should have a clearance. i written statement addresses three areas for improvements to the process. the first area addresses having a sound requirements determination process in place. agencies need an effective process for determining whether positions require a security clearance, and if so, at what level. last year, we found guidance did not exist to help agencies

determine whether or not a civilian position should require a clearance, and importantly, no requirement exists to review existing positions with clearances. he made recommendations to the director of national intelligence who has responsibility for this area to develop such guidance. the second part of my statement addresses having performance measures to measure quality. since the 1990s, we have emphasized the need to build quality and quality metrics into the clearance process. executive branch efforts to reform the process have focused more so on timeliness and quality. we have seen results to speed up the processing of initial clearances, that we have not seen results to finish developing metrics for quality of investigations, implement those metrics, or report on those findings. we have reason for concern about the quality of investigations. for example, in may 2009, gao reported that documentation was

incomplete for most opm investigative reports we reviewed good about 87% of 3500 investigative reports. we have made recommendations in this area, but those recommendations have not been implemented. the last area of my statement addresses the guidance to enhance efficiencies of the clearance process. everman wide personal security reform efforts have not yet focused on potential cost savings even though the stated mission of these efforts include improving cost savings. for example, opm's investigative process which represents a portion of the security clearance process and has significant costs has not been studied for process efficiencies or cost savings. in february 2012, gao reported that opm received over $1 billion to conduct more than 2 million back rent investigations in fiscal year 2012. we have raised concerns about transparency of cost and

investments in technology while maintaining a less ash a less efficient and duplicate it paper-based process. we have made recommendations in this area, but actions have not been realized. this concludes my statement. i would be pleased to take questions. >> thank you all for your opening statements. we will put seven minutes on the clock and we will go from here. i will start with you, mr. mcfarlane. any specificg statements that could compromise the investigation, could you confirm that the office of personnel management's office of the inspector general is currently investigating one of the three major contractors conducting background checks on behalf of the u.s. government? >> we are. theyn you confirm that confirmed -- they conducted the background investigation and mr. edward snowden? >> i'm sorry. >> can you confirm they carried

out the back an investigation on mr. snowden? regarding there question. >> it is my information that there were 2 -- an initial investigation -- >> yes, the reinvestigation, absolutely. >> they did do the reinvestigation? >> yes. >> but you're not sure who did the initial investigation? >> yes. >> are there any concerns that mr. snowden's background investigation may not have been carried out in an appropriate or -- manner?nner yes >> yes, we do believe there could be some problems. >> when more information is available, i assume it will be made public? >> it will depend on the time

and situation, but we will do our best to keep you informed. >> they are under investigation. yet they are given the reinvestigation of mr. snowden. how does that happen? >> excuse me just one moment -- michelle? that is our understanding the periodic investigation was done in 2011, which would have

predated the initiation of our investigation. >> when did you initiate your investigation? >> later in 2011. >> yet this agency, if i'm correct -- i believe it was in one of your opening statements -- 65% of about 6500 the 75% that was contracted out? you said 75 -- i can look it up, but 75% of the investigations are contracted out? is that not correct? >> that question is probably best answered by -- i understand the number varies on whether you're talking about all investigative products or those which include significant fieldwork. >> ok. merton? 45% of thenduct overall contract workload. >> very good. i'm going to go with you, mr. lewis.

i my opening statement touched on how much classified data is being generated and maintained with an increasing number of folks with access to that data. dod currently accounts for a vast majority of that initial personnel security clearances. since 9/11,-security has driven the increased number of checks. -- increased security has driven the increased number of u check. that dodticipate security clearances will decrease in the future or are they going to maintain or get more? >> it is hard to have a crystal ball on that subject. that as theink drawdown occurs that there would be less of a requirement for clearances, and we are engaging

with the military services and others to look at scrubbing the requirements for clearances and validating need more aggressively than we have in the past. but i cannot predict what is going to happen with any degree of certainty with that drawdown. >> i understand that clearances are driven by a need, a specific , is -- is that scrubbing that what you are using to monitor or manage the number of overall clearances for the dod, or what kind of metrics are you using? >> we are looking at the number of clearances and engaging with the military services to validate those needs. we do not have metrics at this point on that issue. >> senator mccaskill? ms.r. miller, have you read

farrel's testimony? >> i heard it for the first time. now,m not going to start but i would appreciate that you would read it and respond to its specificity. thes overwhelming to me amount of recommendations that have been made in this area that have been ignored by your agency. i see no good reason why these recommendations have been ignored. you want to address what they have been ignored, you are welcome too. i have some other areas of want to ask you about also, but it appears to me that -- this is not the first time it has happened, i've spent a lot of time around gao reports and looking at recommendations and whether or not they are implemented -- ethicallyighty ce the worst record. cogente some kind of answer you can give to why all of these recommendations that have been made have been basically wholesale ignored? what gao recommends

through their audits very seriously. >> when is the last time you implemented a recommendation? >> this fiscal year, we have implemented a number of recommendations regarding cost transparency. we have done a number of things to support cost transparency to our customers. we submitted our first annual stakeholder report, the first one, a 33 page report that details not only workload and resources but also talks specifically about where our money goes to support the program. , ms. you would be so kind carroll, to do a scorecard for us, list the recommendations , and give usmade an actual score as to how many of them have been implemented and when by your estimation, and i will have a chance to share that with you, mr. miller, and you can argue as to whether it is accurate or not. how many times has the ig asked to try to audit the revolving

fund that pays for all these background investigations? >> i do not have a number of times they have asked to audit, but we are very cooperative with having the ig actually audit the revolving fund and the issue was determining whether there was a legal basis to provide revolving fund dollars for the audit. >> according to mr. mcfarlane, the documents do not exist to audit the funds. ,> there are lots of documents financial reports. >> i need some kind of agreement as to why these funds have never been audited. it is $1 billion a year. it is outrageous that it is never been audited. what is your rationale as to why this fund has never been audited? >> my understanding is opm, we support the current requests by the oig for revolving fund dollars to support audits in the future. the issue in the past was there was not a legal basis apparently for revolving fund dollars to be given to the ig for audit purposes.

we welcome the ig's oversight. >> these are all public dollars. >> they are public >> they are public dollars. they're not appropriated. >> they were appropriated at some point. >> yes, ma'am, they were. >> because you can't get them unless they were appropriated. >> so all -- you're saying all someone in government has to do is give some of the money to another agency and presto, whammo, no audit? >> no, ma'am. >> well, you're saying there was some question as to whether there are -- the dollars had been given by another ogs -- agency the >> the issue was additional personnel to actually conduct the audit. they could have used appropriated dollars at any point to audit the revolving fund. >> let me see if i understand. what is your view, ms. scommits and mr. mcfarland, as to why audits have not occurred. he seems to think it's the

resources. >> we absolutely have the resources to do it. >> so what is your view of the reason the fund has never been audited? >> when you say the fund, you are speaking -- >> the revolving fund. >> the revolving fund. do you have any idea? one moment, please. this is a bit confusing, i think. but we, our intent as always is to get involved as deeply as we

can in any subject matter. we -- the problem is that did, the problem that we have is that we couldn't identify -- excuse me just a second, please. i want to give you as correct an answer as possible. >> my understanding, and this may be subject to later correction because audits is not my area, my understanding is that there were inmates in -- attempts in the late 1990's and there was insufficient documentation and since that time the o.i.g. has not had the financial resources to pay to do an awedy. >> ok. well, we need to get that figured out because if we are actually saying to the american people that there are not the resources available to audit a fund this holds a billion dollars of public money we've

got real problems. so i'm going to need you to come up with the specific answer that you believe is holding you back from auditing this fund and i would need the same kind of specificity from you, mr. miller, as to your willingness and your capability of being audited. we know the department of defense can't be audited. we're working on that. it's been decades long that we're trying to get them audited. this seems to be -- to me to be a discreet -- discrete fund that ought to be as easy to audit as brushing your teeth the i'm going to talk before my time is up about the number of convictions for falsifications. of those 11 were government employees, seven from contractors. it seems to me the number of convictions, this is since 2007, it seems high to me for an office as smalls is this is. do you believe you're catching most of the fraud, mr. mcfarland? or do you believe there is more? >> i believe there may be considerably more. i don't believe we've caught it all by any stretch the

>> my time is up. i'll wait for my second round. thank you. >> thank you, mr. chairman. one thing we've heard today which is disturbing is that we can't firm -- confirm the quality of mr. snowden's investigation and this leads to a brad -- broader question about whether the pressure that you all feel to speed up investigations and the backlog that occurs is leading to lower quality. and i'm wondering about whether you're measuring those metrics. you've been perhaps as i say, on timeliness, i'm sure, pressed. in 2009 g.a.o. assessed from a sample they had that 87% of investigative reports the d.o.d. adjudicators used to make clearance decisions were missing documentation. they subsequently recommended that they look at the

standards. g.a.o. also notes that o.p.m. is delivering a tool similar to the rapid assessment of security evaluations. in your testimony, ms. farrell, you talked more about that and basically stated that o.p.m. continues to assess quality based on voluntary reporting from customer agencies. so i would just ask in light of what's happened and in light of this information from g.a.o. going back four years, mr. miller, how do you measure quality? >> senator, we have a number of ways we measure quality. if i could address up front the 87% number, you probably saw o.p.m.'s response to that audit

and there are challenges associated with capturing every element of a background investigation. let me just explain very quickly. an employment check was one of the areas where there was the highest number of elements missing in a background investigation. employers can or can choose not to cooperate with the government when we conduct a background investigation. i'm not saying federal agencies, i'm talking all kinds of commercial entities out there where individuals may have previously worked. one of the challenges is actually getting cooperation. if an employer either goes away, doesn't exist any longer or chooses not to provide information to the government, that information has to be documented in a report but you do not get that employment coverage required by the investigation. there's issues regarding the 87% involved subjects,

subjected interviews that were not accomplished. many of those subjects had been deployed into a hospital aisle environment where investigators could not go to conduct those interviews and so there is a documentation in the report investigation saying the subject was not available due to deployment and that case is closed. senator, you are exactly right, every time we initiate an investigation we put what we refer to as a close date, a c.d. date because that date must be met to meted mandated 40-day challenge that we're given for timelyness. so all investigative leads must be accomplished in that period of time and the case is then closed. >> let's follow up on this a little bit. ms. farrell, jump in here but 87% is a high figure of incomplete reports and again, given that we're trying to protect some of our most valuable classified information and we've seen some of the impact of this recently, do you

agree with that mr. miller just said? that the problem is employers on the private sector don't want to answer questions or that people have been deployed to hostile locations? >> the documentation was not in the files. we recognize that it may be challenging to track down people who may be deployed. we funed -- found the same types of incomplete documentation with d.o.d.'s adjudicateation files and recommended that where you have difficulties you document it so that the adjudicator or whoever comes by and does a review will know why that was left blank. >> so if the person was deployed, for instance, and that was the only reason there was an incomplete investigation that would not be port of -- part of 987%? if he simply had that documentation?

>> if they had that documentation. the federal investigative guidelines like the federal adjudicative guidelines look as it as a baseline. so we had our staff attend investigative training. we used educators to help us do these reviews to make sure that the staff have the competencies to see what was missing. >> and your recommendation was? >> we have got quality procedures in our contracts for our contracts, as well as are federal employees. there are several stages of review that occurs when a background investigation is being worked. the contract there are a number of requirements for them to

conduct a full quality review. are federal investigators, there is a review conducted. we have 400 employees whose sole role is quality assurance of our investigation. the most important review, the adjudicated mid decision made by the agency itself read a review the investigation to make a determination whether all elements were there. they can make a decision. running a deviation, meaning there are evidence there. they determine to grant that person federal employment. >> are you providing these

metrics so that when they look at your process the next time, time, they are going to be able to know why somebody was provided all the information? >> we have not provided any follow-up. we would welcome a follow-up on that. to address the quality standards. that is working on establishing a clear and concise standards for evaluating the background. quality is in the eye of the beholder. depending on the adjudicator whether it is complete, whether it is not. there is a lot of gray area that i advocated in standing up this group that may give us the fine roles. give us quality standards that are clear.

we will absolutely meet those. >> thank you for your testimony. >> what does it mean case closed? >> all of the elements have been obtained and completed and passed on to the customer. >> or you have not gotten all of them. >> if they are not obtainable like the employment share, that will be documented in the report investigation. it will be closed. >> how many of those investigations are adjudicated? >> our numbers on metrics, we look at the engagement for a request to reopen.

when a customer comes back to us and says you're missing elements, there is things we do not have here, we're asking you to reopen that. >> what percent do you get back? >> less than one percent. >> do you know how many are granted >> no sir. >> considered case closed come only one percent get kicked back. that is probably what is happening right? something is disturbing in her testimony, there is no guidance in terms of what is required for security clearance being

granted. >> correct. that responsibility falls in and the director of national intelligence. he is responsible for oversight of this security area by >> there is no standard for requesting a security clearance? >> the guidance is under draft. >> there is literally no standard for what circumstances? >> you are correct. it is left up to the agencies to determine how they are going to classify those jobs, and what you find is a consistency. we found that some of the agencies were using an otm tool that helps determine the sensitivity of a job position. the sensitivity of the position

doesn't tell you the classification, but by knowing the sensitivity, you can translate that into whether or not a security clearance is needed. unfortunately, the tool that many of the agencies were using was geared more towards determining sensitivity related to suitability for the job, rather than the job requiring security clearance. they developed the tool without a lot of collaboration with od and nine. that's how you got the till. >> does anyone want to challenge this in terms of no standard, no guidance? help me out here. >> they did create a position that was focused on suitability and determining what type of investigation is required for the position they are asking for. >> is there a guidance and standard? >> the key focuses on what level

of access is required to perform the duties associated with the job rate is going to depend on what those duties are, and for industry it is very carefully scrutinized. with in dod, it is going to depend on what level of access is determined to be required to perform duties. >> some guidance? so we have classifications of secrecy levels. if your job disruptions as you need in a class on occasion, is that a guidance? >> a guidance is not exist is am telling you for government wide determination whether a civilian position needs a clearance. you will find the individual agencies that have developed their own rules or procedures, and what we have found from our

audit last year was an inconsistency of the application. the reviewed use of the opm position that mr. miller mentioned, and found with their review that for the majority of the cases we reviewed, they came up with a different determination. quite alarming. >> security clearance for individuals, we also the contract and facilities. you also are certifying contractors to handle classified material. is that correct? can you just step me through an investigation of the contractor facility versus an individual? >> for an individual, not for facility, i would ask if you can handle that one. for investigator, for investigations of a contractor, there is a determination that

they need a clearance. it is sponsored by dod. the department of defense, they submit the individual. lex i'm more interested facilities right now. i want to find out how often, if the certification is granted, are they surveillance is question mark that is the question with the most recent incident. >> i would like to defer to mr. sims on that. >> thank you. [inaudible] >> i oversee the defense contract for facility. the facility clearance is a

requirement to read if the contractor is operating on a contract that requires a certain level of clearance, a secret or top secret, they submit those requirements to dss. it is possibly a government. we look at the facility in the look of the contract. if there are content requires there is a secret clearance, we evaluate the facility. and then we grant facility clearance first. once the contractor gets facility clearance, that covers the level access a contractor would have in working on that contract. for example, if there is a level of effort of how many are required to perform in the government contract. that facility clearances at the secret level. that is only the level that the access of the individual can apply for. we audit or the security reviews

on a routine basis that we oversee. we look at those and we review. for example, if we find that they have a person that is the top secret, trying to work on a secret contract, we mandate the lower enough for removal. >> how many man-hours does the first certification process take? how many is involved in a surveillance audit. i'm trying to get some sort of how rigorous the certification is. >> it depends on the size of the facility.

they are all away from mom and pops -- >> is the daylong process? >> it could be a day or two. for larger companies, it could take up to 2-3 weeks on-site with a team of security professionals from my agency. >> thank you very much. >> this'll be a question for you mr. miller miller. the testimony goes like this. the problem is that patrick mcfarland's office has encountered oig oversight are not presented. the follow-up on that question, this to be an dollar fund, somebody is made a call that none of that money can be used for things like annual financial audits, or any basic oversight.

who made that call? >> i cannot answer that. >> i can speak to that. this has been the most frustrating and that has happened regarding the fund for us. it has literally taken it out of the picture. i have a limited amount of money for expenses. what we've tried to do is stay tuned into what is going on. it was decided in the general

counsel's office, and supported by the director of opm that we do not fix into the category that would allow us to have funds from the revolving fund. what has transpired him if i may, in order to try and remedy the situation, i suggested a couple of years ago that the suspension that may be the director of opm should suspend his decision in agreement with

general counsel's office that we are not entitled to those funds. then maybe go for a comptroller general's opinion if we had to. >> i got a notion that is going to be a question that is going to be asked right out of the gate. are you going to sport using some of those monies? when you do a -- an oversight. does the cost a for that by the fun that you are doing the audit on? >> everything we do for the health insurance and retirement life insurance is done out of those trust funds.

we are using our salary and expenses to do what we can in the revolving fund. >> when you do any other audits on any other funds, i assume you're getting pay out of those funds in your audited. are there any other that you are not able to get your cost reimbursed? that is why i need to know. the hearing is july 16. i've a question to follow up on. sure of the president of the united states, i'm not sure who is the sponsor will. there are different responsibilities and metrics, different everything.

we shouldn't be surprised at all. where does the buck stop in congress? should we be dictating what you should be doing, or should it be who should be doing this? >> we were encouraged when a government structure was put in place by executive order back in 2008. the executive order established a performance accountability council to drive reform efforts towards effectiveness, efficiency, and keeping it going.

the deputy for -- the order established the director for national intelligence as the security agents. it's established the otm as the executive agent. >> very quickly. should i be concerned about this? i'm concerned there is no apparent metrics or standards. >> there are standards. >> but they have very between each agency.

there is no reciprocity. the standards go from soup to nuts. >> there's been a great deal of effort under the performance accountability council to align standards, and get consistency across federal agencies. >> have we been successful? what we've been better. >> there still work to do. >> [inaudible] what kind of processes are in place as to the investigations that that person was responsible for? >> the federal investigators had integrity service process in

place, which is how most of these are detected. when they suspect that falsification is occurring, they do what they call a recovery effort, which is to identify the scope that they believe the falsifications may have occurred within, and then they have a federally employed investigator go back and redo every investigation assigned to that person. both to make sure that a quality product replaces the possibly defective product, and to identify what is falsified for the criminal investigation and potential prosecution. >> are the accessfor the people who were in the parameters of the investigation around these criminal convictions for falsification, i assume that they are accessed to highly classified materials is done.

>> the individuals who will the security clearance? to my knowledge, they are not affected. >> is that true? they are allowed to keep their classification even though you have discovered that during the course their clearance was given, someone was falsifying? >> that is correct. the recovery process that was just mentioned is top priority. our integrity assurance program is how these falsifications are uncovered. >> by content letters? >> that is one of the processes. three percent a month of all investigations receive recontact activity. that is for every agent we have employed. there isn't any agent that doesn't receive some recontact activity on their investigation. [captions copyright national

cable satellite corp. 2013] [captioning performed by national captioning institute]

to get a fixed rate the borrower has to agree to take down all the funds up front. it's a closed-end loan. they can take all the money out one time butt not an open how much end credit it's a

closed-end credit. the have been because i'm a lender, if you say i want my whole 250,000 today but if you say i want to take $50,000 today and come back at some unknown point in the future for me amount i can't make a rate, it needs a variable rate to where as if you want a fixed rate you have to take it all out and consumers are drawn to that. the execution on the -- on it is better providing renew to the investor, the originalinator and as a result of the investor demands for those products, there's an ability to wave all the feels to the borrower, so the origination fee we discussed

perhaps it needs to be paid in the current market. if someone needs to take a fixed or full loan they may find they don't have to pay all those fees. >> are almost all those loans paid at the time of death as compared to somebody prepaying that loan? >> no. i don't know the current statistics. at the moment people tend to be staying in their homes longer -- or it had been harder to stay in their homes but many ded in a mobility event than a death. >> and two questions, one, can you make a reversed mortgage without the f.h.a. backing? do banks do that? is that legally permissible? >> yes. it's legally permissionible, as

i said there had been a proprietary market emerging back in 2007-2008. my guess is we will begin to see that return late they are year or as we get into the 2014 assuming the home stabilization price continues. >> and finally, do i have no these have state laws? >> yes. many have state laws. >> well, let me take all these witnesses for a pretty complete review of issues. i think this is an important public policy option. we look forward to looking at the houses legislation. ours has a little bit more specificity about some of it but the opportunity to move forward may be one that we will have to consider. the record will remain open for two additional days for any ember who wishes to submit any

comments for the record. e are adjourned. coming up on the next "washington journal," james lacey on the situation in afghanistan and syria. then a look at president obama's trip and meeting with ambassador of the united states. then the bureau of the labor statistics. "washington journal" is live

every morning at 7:00 a.m. eastern on c-span. >> first ladies have a capacity for personify field goal they so choose, and this is a pattern in american women and politics, famous or not. there's sort of two things. one is that there are women, real people who actually do things, but then there's also this second capacity of being a personifying or charismatic figure. and i think many a first lady came to realize this was sort of larger than life and this is what dolly figured out. so she becomes a figure head and makes the white house into a symbol and fostered the attach appellant to the capital sitting and in 184 the british are going to fwurn capital city and all this work she put into

helping the public i have to house as the white house is going to pay off because it's going to give this surge of nationalism around the war. why we study first ladies monday night at 9:00 eastern on c-span. >> as we would march north, he would write to davis. and they had sensed the time had come. it looks like we have a chance, because vicksburg had not been settled yet. this was mafmente in fact in jube and granet tried an all the then. this was our existence to maybe saw, win gain in free a victory that would bring a win to the administration. davis was so taken by a sense

that he formed a three-man commission that would negotiate with the lincoln government upon a confederate victory in pennsylvania. so when lee went north, he went north settle it. >> the 150th anniversary of the battle of gettysburg. live from gettysburg national park on american history tv on -span three. homeland security secretary janet napolitano stayed biggest threats are cybersecurity threats. this is an hour and 20 minutes.

>> gamp, so much for starting on time. welcome to the wilson center. i'm jane harman. director, president and c.e.o., and this is a national conversation of great importance and one i feel i have been living for the last couple decades. imagine the local howard general ration facility in your hometown. you know where it is and it's got a fence and a few guards and it's safe, right? wrong. that facility like many others is probably patrolled by a

system run by a private sector company connected to an internet so it can be panged easily and that automated system runs on software that could have an inadvertent law on it and could cause harm. as a former nine-term member of congress who chaired the intelligence and committees for years and before that served on our intelligence committee for four years i i can tell dwhrow his scenario -- t has kept us up at night. it is very possible. but many members of the congress don't appreciate or even understand what our government especially the homeland security department could do to help prevent cybersecurity attacks.

many also are conflating this issue of cyberattacks with what they have been reading in the newspaper about the n.s.a. programs. there are big differences and maybe that will be explained or maybe not but for anyone listening in on this, believe me, this topic has to be addressed on its own and for those of you worried about compromising privacy, which all of us should be, we have many different issues to discuss. i think this is a reset moment for the department of homeland security. knew the president has released an executive order on cybersecurity and has asked for recommendations from the executive branch, we can help explain and help conduct conversations around d.h.s.'s important role in cyber. not not to launch cyberattacks,

something you may have been reading about in the newspaper and it's not defend us from all cyberattacks, but it is a very significant role, and it relies on an active partnership with the private sector. i had a conversation with omeone on capitol hill and i mentioned him because he was a republican, i was a democratic in the house and that doesn't mean we agree on eh but he has a significant role given his senior status on the senate home land security and we alked about the d.h.a. and tom cobern was very positive. of course i would relate a good news story but this is a guy you might not necessarily think the department of home land security should be ground zero on parts of this issue. and he said, i have notes here

somewhere because i don't want to misstate what he said. he said the process used to crack the executive -- draft executive order should be praised. it was inclusive and the government listened and also said he was impressed by the d.h.s. staff some of whom are in this audience looking right up at us that he met with and that he will work for a bipartisan solution for legislation that could enable his process. and i think that means something and you will hear more in the panel that follows and/or maybe you will hear more from the secretary. i think it's almost like the israel, palestinian peace process. the we all know what the end

needs to be but we just don't know how the get there and how the get flearts so maybe we hould lock the doors and bring janet napolitano whom i have known for decades and decades, she will tell you when we met i had a perm. i have no recollection of this but she was a wrock? politics in arizona, was u.s. attorney, was attorney general and then was governor twice.

she will deliver remarks and hen will be led by in this subject and related subjects. i will not mention he is hired in martha rad its, rock star broadcaster. then michael chertoff, former federal judge and former sistant attorney general who i found to be an exeveryone lary partner. but michael's first question always was what was the right thing to do not what party do you represent. i salute you for that, my friend. d from north earn university who has worn a number of hats

sand a superbly qualified to address that topic and we also have a very abled private sector head of security at general electric. i'll just say one more thing -- this national conversation ollows a lunch we had with d.h.s. and private representatives and i urge that everyone be very candid of their views of each other and some of it wasn't so pretty, but i certainly left that lunch we at the ul and wilson center want to use our powers and expertise to advance conversations like this. we're looking for the best policy ideas to solve the toughest problems and i think on this subject we have made a start -- good start today so

please welcome my friend with a different hairdo but a phenomenal resume and a very wise mind, janet napolitano. [applause] >> good afternoon, veryone. we're here to discuss an incredibly important topic with a fundamental role in homeland security. i thought what i would do this afternoon is briefly talk about the landscape and talk about the president's executive order and his policy directive on critical infrastructure because that also comes into play, and laid out for you what is going on at the department of homeland security. some of which she may have heard in other panels. but to reemphasized the importance within the schematics of the department of

homeland security. this is the third largest department of the federal government and the youngest apartment, covering many missions that were put together under one roof falling the terrorist attacks of 9/11. we have seen the department grow and mature very quickly. over the last 10 years since this was enacted. we just celebrated a 10th anniversary. chertoff is here, he was the first secretary, i am the third. i guess that makes me thomas jefferson. tom ridge -- i guess that you are john adams. i only mention that because -- not only are we changing and growing very fast -- we have seen some things of all over

this short amount of time. when we started we were concerned with terrorist plots and attacks similar to 9/11. terrorists taking over commercial airliners. using them to fly into buildings. aviation attacks and plots have not gone away. this has been part of my time at the department. they continue to change. the sources from where they come continues to change, but they remain with us. but fast-growing alongside is this area of cyber capabilities, connectivity -- and cyber attacks. how do we secure the country in the best possible way while respecting policy and civil liberties and the other values that we hold? this is really the challenge

that is presented to us. so we have been growing very rapidly in the cyberworld. when i started it was a fairly small element of the department, the department was engaged with other threats but as we have grown -- this has probably been the largest area of just pure budget growth. this is located in several areas of the department, much of this in the mppd but this is also the secret service. this is for intellectual property and throughout the epartment, we have units working on different aspects of cyber crime and cyber security. one big challenge has been to organize ourselves to handle

that. the second is to really look at whether the areas that we are most concerned about -- we are concerned about the theft of intellectual property. we have seen a massive transfer of intellectual wealth from the united states and other countries and we are just a filing our intellectual property strategies -- with the congress. for the next year. but this has been an area of concern. all of the countries of the world that need to be engaged in this. and participating and how do we have a connected world and protect the research and development that goes into the creation of intellectual roperty? i think of these crimes -- being used simply committing --

simply using new technology -- the social media available now. identity theft and one area is child exploitation. sex trafficking, and of the like. there was a major operation involving that -- facilitated by the internet. this is cyber-terrorism and attacks, and i think this is what most people think about the war in this room. but there is no doubt that there is a number -- there are a number of those who seek to do us harm in this country ranging from individuals to rganize groups, to groups that you could detect as state or state-sponsored. to have been and are willing to engage in -- attacks against the united states and critical infrastructure using the

cyber-realm, that gives them a new set of ways to go out there. what does this mean? as she was saying, critical infrastructure like utilities could be subject to attacks. and, by the way, if you think this does not have another set of issues, if any of you are in the new york or new jersey area during hurricane sandy and saw what happened when the power tility was down for a number of weeks -- all of the sudden, not only did you not have electricity for people in tall buildings, the 15-story apartments had to be walked ups, but then you did not have electricity, you had to get fuel of tankers in the tanker trucks into gas stations and gasoline pumps, then into ars.

that set of development -- this whole idea of attacking critical infrastructure and the control systems that govern critical infrastructure, we have seen from mother nature -- much less a human after perspective. we have seen this in the financial-services area, the banking area has been a very active area for denial of service -- and we have seen the energy sector. what happened when you had not ust a virus, but a destructive virus entered into the system that actually destroyed -- not just the software, but ardware. we have a range of things we deal with in the department, and responsibilities now to protect the homeland as a concern. so what does this mean? let me give you a brief rundown

of what exactly we are doing within the critical infrastructure and the department, leaving aside cyber crime for right now. we have the national cyber security and communications center -- that has been opened ow about four years. they have responded to a half-million incident reports in that short amount of time, with more than 26,000 actionable alerts to the public and private sectors in that time -- and we have different different agencies -- but we also have private sector representation on the floor. we have the united states computer emergency readiness team, and many countries, by the way, have now developed their own search and now we

have these relationships -- but to give you a sense -- last year we responded to 190,000 cyber incidents, and issued 7400 alerts to the united tates and this was a 68% increase over 2011. that is why this area is so fast growing. we have an industrial control systems search, -- 177 incidents last year. we have 15 teams deployed with significant private sector incidence. so -- this is not imaginary or something that this speculative. this is ongoing right now. we are working very closely with private sectors and these

kinds of partnerships are not new. we work with the private sector where infrastructure is of concern. we now have to guiding fundamental documents we work from, the president's executive order and the president's policy directive. for critical infrastructure. they direct us to take a more broad look at the mission in cyber in a couple of ways, to take the all-hazards approach, to make sure that we include protection of the networks but also resilience and the ability to recover and get back up quickly. he executive order has been -- has three goals, to protect civil liberty, promote sharing and have a voluntary program to encourage critical infrastructure operators to

adopt best practices. let me just stop right there. first -- privacy and civil liberties, from those disclosures about the nsa, this is a different set of things but you should know that in the department of homeland security we have a privacy office and a civil liberties office. those are experts in those fields, whose sole job is to look at what we're doing from he outset, to make sure that we are building into what we're doing with a program protections for personal and private information, for any kind of intelligence that we gather. we consider those values to be paramount as part of the way of life that we are here to

protect. this is from the outset. information sharing. when the legislation failed last year, and i hope congress can come back to this. one thing that failed was the command for real-time information sharing. this is one of the key tensions between us and the private sector. we cannot do anything if we don't know, in real time, what signatures you are seeing and what abnormality -- abnormalities that you are seeing, and we can determine if his rises to an alert level, if this is something that we have to be engaging others on, whether this is a small problem, or a big homeland problem. without real time information sharing we are starting off behind the ball. this has been a problem, part of the bridge building is solving the information sharing aspect of this.

finally, the voluntary program of best practices with the critical industry sectors. his is very interesting -- this is going to be, at this ime, an experiment, and a very important experiment because where security is concerned, law enforcement or security, we do not depend on the private sector. this is a governmental function. we don't depend or outsource national defence to the private sector. we do not outsource intelligence gathering apabilities to the private sector. we do not outsource local law enforcement to the private sector. this is an inherently governmental function. we are proceeding in a different way here, and what his is -- is for the private sector, working with us, -- to et the framework and the

tandards -- to have a system that creates a voluntary program, a voluntary set of incentives, for owners and operators to adopt the best practices, to change their practices for evolving threats. i think -- frankly, i know that some in the private sector are suspicious of the department of homeland security or any government agency's ability to fulfil their functions. i have some question as to the whether the private secter is willing to fulfill its -- if we can make this work and show that there is a satellital, ongoing partnership between our capabilities and your capabilities and needs, we will have succeeded in this

experiment. but let no one have any question, i think we are still in the experimental phase. we're still working with each other, meeting a lot with each ther, all well and good. but i don't think we yet have come to closure on whether this a n appropriate thing to shared responsibility as opposed to a government responsibility. but i just want to set to you as you think about this the fact that this is really the first time in our nation's history that we have approached a major security problem in his way. you have i think already this morning heard about the integrated task force which is up the to help set

implementation plan for the p.p.d., and in april they launched a collaboration community platform on idea scale for critical infrastructure stake holders and all interested members of the public to post and share public comment and feedback regarding how we strengthen our networks and how we better rotect our resilience. in the first 120 days we have already produced a number of deliverables, including analysis with the treasury department a potential government incentive that could be used to promote the adoption of the cybersecurity framework. these are right now at o.m.b. where they are undergoing an interagency review process but the initial work has already been done. we produce a description of

critical infrastructure relationships that illustrate how our current organizational can provide risk management. what does that mean? it means we've shared how these are organized and what the portal of scombris are so you now how to help and get ideas. and respond to significant threats. let me pause i said unclassified. let me put a book mark down. i think one of our -- owners and operators of critical infrastructure to receive classified material and to receive classified material on realtime basis.

goes from mation the classified level from us to you. the enhanced cybersecurity services to allal critical infrastructure sectors to provide for greater viber threat information sharing, and we have provided recommendations on incorporating standards and contract administration to see what steps can be taken now to make existing procurement requirements more consistent with our cybersecurity goals. what does that mean? it means we have to start incorporating thinking about cybersecurity when we're purchasing i.t. and likewise the same needs to happen with the owners and operators refuse

critical infrastructure. what are the security needs and how do you meet and sustain them. the national institute of standards and technology continues to develop the cybersecurity framework. that is due in october. so there's a lot of work that's going on and going throughout summer significant engagement by the private sector and next up for us will be deliverables on the public-private partnership evaluation and cyberdependent infrastructure dentification. what does that mean? it means it is the responsibility of the department of homeland security what is the nation's core for inform? who is included there? and we do that from a risk management perspective.

what kind of infrastructure? should it be rendered inoperable and would have a set of cascading impacts similar to what we see when our infrastructure goes down far period of time and in this case develop warneness ability for infrastructure and develop an infrastructure plan and develop critical infrastructure performance goals that link to he nest framework. so the goals are what? and how do we get there? what is the framework we all set to achieve? so this is a very active process right now, and it's fast-moving. this is a very aggressive timeline when you think about when the policy directive and others were issued and when we

are responsible to have the framework and to have performance goal set the definition of core critical infrastructure set and the public-private partnerships moving. o within d.h.s. we have been busy not just sustaining the capacity we have but building on those. i must say that's somewhat of an interesting subject when off budget and no sequester. if you look at the president's budget request for d.h.s. over the past four years and what congress has actually appropriated including in the most recent fistal year 2013 budget, you will see in the cyberarena we have had dramatic increases in funding. why is that? because i think there's a general recognition that we have to build civilian capacity where cybersecurity is involved. and to do that, if you look

around the government, where is the natural home for this? it will be within the department of homeland ecurity. no is what we should be talking about, how dodd the most we can, the best we can to prevent successful attacks while also dealing with resilience showl an attack succeed. i don't think we should let congress off the hook by the way. i think we need legislation. we need legislation that sets rth things we have set forth as policy and make sure real time information sharing occurs, and we need additional law enforcement tools in the digital age and we need, and

this is peculiar to d.h.s. but very important, we need the same kind of hiring authorities that are held within the department of defense where criber is concerned that allow us not to use the normal civil service hiring and weigh scales so, that we are even more competitive. if people really want to be where the cybersecurity is involved from that aspect and the experiment we talked about, the work is at d.h.s., so the mission itself is a huge recruitment advantage for us. but let me not say that we all understand that there are other

issues that people need to take into account including how much they can get paid. so we want some relief there. hat has to be done by statute. let me just close by saying you're meeting a at a critical time and people are busy in and out and we are moving quickly on our timelines and we cannot succeed and this experiment will not succeed unless there is total buy-in by the nation's operators and owners of critical infrastructure. this is grand experiment. we intend to succeed. i hope you do as well. thank you very much. [applause]

>> hello, everyone. i'm tom from n.p.r. i'm assuming congresswoman harmon will be back after she says goodbye to secretary napolitano. some very provocative thoughts therefrom secretary napolitano. we will have a chance to respond to. let me say on behalf of npr how appreciative we are to jane harman and the wilson center for sponsoring this series of programs. which we call national conversation, and it's a great honor for me, in particular,

personally, to be able to moderate these discussions. it was interesting to me that secretary napolitano talked about a grand experiment. she said, this is the first time i'm talking about the cybersecurity challenge, this is the first time the united states has really depended on the private sector for such an important partnership role. i noticed one word we did not hear at all was the word andate or mandatory. what a difference that is from year ago when mandatory pproaches were very much a

part of the discussion. the use -- the word she used instead was incentive. she did not seem 100% convinced that this approach was going to work. she referred to it as an experiment and said she was not completely convinced the private sector is ready to fulfill its mission. i would like to begin with that. this is a provocative idea that a security problem of the scope and scale we are facing in the cyber domain, the government is depending on the private sector to play a huge role and it seems like the verdict is out on whether the experiment is going to be successful or not. i would like to go down the line and get your thoughts on that and whatever else caught your attention. >> it is kind of a novelty. we are used to the idea that our national defense is largely a public responsibility. we may have private guards, but we do not expect the private sector to defend itself against it tax -- against attacks. you are dealing with assets and people who are largely

distributed throughout the united states in networks. for the u.s. government to own the major responsibility would put the government into everybody's computers and into everybody's networks, which we do not want to do as a people. that means the private sector has to shoulder the major responsibility. it is a two-way street, you have to step up and take that responsibility. if people say, i operate article infrastructure, but i do not want to invest in security because i do not whether -- i do not care whether my business goes off-line for a couple of days, that is not an acceptable answer. what we saw in hurricane sandy, a lot of people depend on the critical infrastructure. there has to be a collaborative effort. the private sector has

indicated that it wants to do that and assuming we can put mechanisms in place, i think it can be done. i do think her message, at the end of the day, if it is not done and the error does not step up and then there is a major event that cuts -- that causes significant loss of life or damage, the public may demand mandates. and they may not be the mandates that are most intelligent or -- in terms of the private sector. >> you have worn both hats here. >> i find the private sector really does understand its responsibilities. the difference may be in scale, the amount of money that is required to be invested, that is always a discussion.

the idea the private sector does not understand from a reputational from a risk or a customer value respective the importance of this, i think we've gotten to that point. the question for partnership is how does that partnership work? there are many definitions of partnership. one is top-down, one is bottom-up. it has to be a partnership of mutual responsibility and respect for what we each bring to the table. >> i guess i would say, there is an element of this that is novel. if we use the cold war after stepping off point, a lot of this is back to the future. we mobilize the academic community. s a stepping off point, this

issue is so sobering, back to the issue of looking at the al qaeda threat, there was some debate about whether this really was a serious threat. while i fell down pretty hard that it was, i could accept there was some disagreement. this particular threat, there is such consensus among the top officials as well as everybody who is an expert on the academic side that it is a real problem. the threat warrants the kind of obilization effort that is required, beyond just saying, hey, government, we want our happiness on the side come a

thank you very much. -- on the side, thank you very much. i'll add one more wrinklal. part of the reason is because these are global. if we take infrastructure, a lot of the power we get from the northern new england area comes from quã©bec. so if you have a conversation amongst local places, we're not going get there from here. private players are already in those markets because the systems work that way and that is another reason the partnership is so critical. >> you mentioned world war ii, i heard the national counterintelligence executive make the point that in world war ii, private sector was very much a support role. it was very much in the rear guard. if there were to be a major cyber confrontation, the private sector would not be in the rear. the private sector would be on

the front lines and that is a very different situation. >> that is exactly what the differences. it is not a question of providing the material and support. in this case, the actual conflict would be in the private network. the secretary mentioned the case in which there was a destructive attack on the computer infrastructure. you have the people operating in the network. the tip of the spear. this requires -- if there were a cyber 9/11, you would want to have the private sector and government working together. you have to have a lot of planning in advance and a mutual understanding of what is operating on the network. both what is coming in on the network and what is already on the network.

it will make some people uncomfortable. except the fact the government will have to be involved in your network -- accept the fact the government will have to be involved in your network. the question is, which overnment? >> i promised jane i would not quote anyone, but there was a lot of concern about the economics of cybersecurity. in order to protect the networks to the degree that we think is necessary, it will require some real xpenditures. whether the private industry was able to come up with that funding is the question, whether the government can come up with that funding is a very big question, whether the government can require private industry to spend that money is a big question. does this mean the risk is something we have to ccept?

>> risk is a part of the world we live in. there is risk in the physical space, cyberspace. the question is, what is your strategy for mitigating that risk? are you going to fire -- are you going to take specific steps to deal with the risk at the right level to ensure you have mitigated it appropriately? this is expensive, but it is not so expensive you cannot do it. there was a discussion earlier on the 80% of things that can thwart the risks that we face are simple patching. so it's not that it's so expensive. it's getting people do it and do it in a consistent way. >> the reference is not to the

threat of a massive attack on infrastructure, but smaller scale attacks. how do you protect against a cyber 9/11? that is a threat of a whole different order. >> the qualitative change we are coming to grips with is moving from the cyber threat, stealing data, or disrupting networks, two, and during those networks. with the risk of sabotage as a result -- networks, to commandeering those etworks. whether it's a generator or high drove electric dam, threes increasingly on the net. some of them are so old, you cannot commandeer, but we will move them into the realm. we are coming late to the game

and we are trying to boilerplate security safeguards. it is a bit like taking -- it will be expensive, ugly, and not work well. everybody is looking at this legacy infrastructure and going, it looks like trying to do that. we need to talk about designing into the systems those safeguards. that is not conversation we have started. silicon valley works because it -- private sector is working hand in glove with the folks developing the ideas and pplications. that security conversation is almost always hanning after those are developed. we have to figure out how we designed this in. the economic case is simple, if

a business wants to continue to provide its service, it does not want to be disrupted. how do you assure the ontinuity of the business? >> secretary chertoff, secretary napolitano referred to the failure of legislative effort. a lot of people were disappointed that a huge effort ended in failure. how do you see the political environment now different? have there been lessons learned? >> i would not say failed as much as it ran out of time. they were migrating to a compromise, it was a pretty broad compromise, and then the session ended. there are challenges on the information sharing side. there are legitimate criticisms and concerns raised.

the enemy of the good is perfect. it is important to understand the urgency. that was the initial point that he secretary made. maybe there's not a real appreciation, this is not a real theoretical discussion but we are dealing with the threat where you are beginning to see destructive behavior. having lived through 9/11 in a position of responsibility, if we had something like that in cyber, you would see legislation passed. he time to think about this is an advance not in the immediate aftermath. >> i remember from covering this last year, a number of

comments made by people on one side that owners of critical infrastructure too often downplay it. there is more sensitivity now to the urgency. would you agree with that? >> we have all come to understand the nature of the threat and how it impacts our business models, how it impacts our ability to do research, protect our intellectual property. i would not say people downplay it, but at what level of risk are we going to be held accountable for managing is maybe a question that someone have. understanding the risks is very clear in the private sector. >> this whole process has ecome mystified.

a lot of engineering discussion. there are a lot of folks. there are a lot of civilians who hear this and they throw their hands up and they feel it is so complicated, we cannot deal with it or we will make it a technical problem. it is not too complicated. you want to manage the risk. if you can translated into plain english, there are things you can do. you have to make decisions. does everybody get to take their own some drive and stick it -- thumb drives and stick it nto the network? >> private entities cut corners? they benefit in the short run by not taking those measures.

>> this is where we are misdirected. we do need standards. if you're a lamp company and doing right thing and incurring some costs, a smaller player can say, i will not do that. i can offer a different price point. if people can have some confidence they are enforced, we have a level playing field. the real issue is a lack of trust between many private players and the public about whether the standards will make sense. the real conversation should be about that. how do we get a two way street in developing standards? there are mechanisms to do this with third parties. we have to stop pretending this is all happiness of best practices. we have been doing that for how many years? the threat is growing.

that was just the best practice to date is a lousy practice. >> steve used the s word, standards. >> i am frank taylor, i work at ge. standards are important, but they have to be realistic. as mike said, often this conversation is so threat mongering, people get turned off. >> what do you mean by hat? >> the world is going to come to an end tomorrow if you do not do this. it is not that dire or drastic, so i think a rational conversation about realistic standards that address the vulnerabilities is what needs to be had. a lot of times the conversation is around, you should not do business in so and so.

companies go where revenues are generated, where their customers, they will sell things. having a rational discussion about what the standard should be to dress the risk, i think most companies would come to the table and have that discussion. >> have you been guilty of threat mongering? >> i think you should open the newspaper. the things i know not publicly reported -- that is one of the reasons i think making classified information available because you declassify or you allow people to be cleared is important.