[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]




 
   STATE DEPARTMENT DOMESTIC SECURITY LAPSES AND STATUS OF OVERSEAS 
                         SECURITY ENHANCEMENTS

=======================================================================

                                HEARINGS

                               BEFORE THE

                              COMMITTEE ON
                        INTERNATIONAL RELATIONS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                        MAY 11 AND MAY 17, 2000

                               __________

                           Serial No. 106-162

                               __________

    Printed for the use of the Committee on International Relations


        Available via the World Wide Web: http://www.house.gov/
                  international--relations

                                 ______

                     U.S. GOVERNMENT PRINTING OFFICE
67-827 CC                    WASHINGTON : 2000



                  COMMITTEE ON INTERNATIONAL RELATIONS

                 BENJAMIN A. GILMAN, New York, Chairman
WILLIAM F. GOODLING, Pennsylvania    SAM GEJDENSON, Connecticut
JAMES A. LEACH, Iowa                 TOM LANTOS, California
HENRY J. HYDE, Illinois              HOWARD L. BERMAN, California
DOUG BEREUTER, Nebraska              GARY L. ACKERMAN, New York
CHRISTOPHER H. SMITH, New Jersey     ENI F.H. FALEOMAVAEGA, American 
DAN BURTON, Indiana                      Samoa
ELTON GALLEGLY, California           MATTHEW G. MARTINEZ, California
ILEANA ROS-LEHTINEN, Florida         DONALD M. PAYNE, New Jersey
CASS BALLENGER, North Carolina       ROBERT MENENDEZ, New Jersey
DANA ROHRABACHER, California         SHERROD BROWN, Ohio
DONALD A. MANZULLO, Illinois         CYNTHIA A. McKINNEY, Georgia
EDWARD R. ROYCE, California          ALCEE L. HASTINGS, Florida
PETER T. KING, New York              PAT DANNER, Missouri
STEVE CHABOT, Ohio                   EARL F. HILLIARD, Alabama
MARSHALL ``MARK'' SANFORD, South     BRAD SHERMAN, California
    Carolina                         ROBERT WEXLER, Florida
MATT SALMON, Arizona                 STEVEN R. ROTHMAN, New Jersey
AMO HOUGHTON, New York               JIM DAVIS, Florida
TOM CAMPBELL, California             EARL POMEROY, North Dakota
JOHN M. McHUGH, New York             WILLIAM D. DELAHUNT, Massachusetts
KEVIN BRADY, Texas                   GREGORY W. MEEKS, New York
RICHARD BURR, North Carolina         BARBARA LEE, California
PAUL E. GILLMOR, Ohio                JOSEPH CROWLEY, New York
GEORGE RADANOVICH, California        JOSEPH M. HOEFFEL, Pennsylvania
JOHN COOKSEY, Louisiana
THOMAS G. TANCREDO, Colorado
                    Richard J. Garon, Chief of Staff
          Kathleen Bertelsen Moazed, Democratic Chief of Staff
               Kristen Gilley, Professional Staff Member
                     Jill N. Quinn, Staff Associate
                    Marilyn C. Owen, Staff Associate




                            C O N T E N T S

                              ----------                              

                               WITNESSES

                      THURSDAY, MAY 11, 2000

                                                                   Page

The Honorable Jacquelyn L. Williams-Bridgers, Inspector General, 
  U.S. Department of State.......................................     6
The Honorable J. Stapleton Roy, Assistant Secretary of State for 
  Intelligence and Research, U.S. Department of State............     8
The Honorable David G. Carpenter, Assistant Secretary of State 
  for Diplomatic Security and Senior Advisor to the Secretary of 
  State on Security Issues, U.S. Department of State.............    12
Timothy D. Bereznay, Section Chief, Federal Bureau of 
  Investigation..................................................    16

                     WEDNESDAY, MAY 17, 2000

The Honorable Patrick F. Kennedy, Assistant Secretary, Bureau of 
  Administration, U.S. Department of State.......................    43
The Honorable David G. Carpenter, Assistant Secretary, Bureau of 
  Diplomatic Security, U.S. Department of State..................    48
The Honorable Jacquelyn L. Williams-Bridgers, Inspector General, 
  U.S. Department of State.......................................    51

                                APPENDIX

                      THURSDAY, MAY 11, 2000

Prepared statements:

The Honorable Benjamin A. Gilman, a Representative in Congress 
  from New York and Chairman, Committee on International 
  Relations......................................................    74
The Honorable Jacquelyn L. Williams-Bridgers.....................    77
The Honorable J. Stapleton Roy...................................    88
The Honorable David G. Carpenter.................................    93
Timothy D. Bereznay..............................................    99

                     WEDNESDAY, MAY 17, 2000

Prepared statements:

The Honorable Benjamin A. Gilman, a Representative in Congress 
  from New York and Chairman, Committee on International 
  Relations......................................................   103
The Honorable Doug Bereuter, a Representative in Congress from 
  Nebraska.......................................................   105
The Honorable Patrick F. Kennedy.................................   107
The Honorable David G. Carpenter.................................   111
The Honorable Jacquelyn L. Williams-Bridgers.....................   116


        CURRENT CHALLENGES TO STATE DEPARTMENT SECURITY--PART I

                              ----------                              


                         THURSDAY, MAY 11, 2000

                          House of Representatives,
                      Committee on International Relations,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10 a.m. In Room 
2172, Rayburn House Office Building, Hon. Benjamin A. Gilman 
(Chairman of the Committee) presiding.
    Chairman Gilman. The meeting will come to order. Good 
morning.
    I regret that we are about to embark on a series of votes 
on the floor. It may take as much as an hour, and it will delay 
our hearing, and they are 5-minute votes based on amendments 
that were adopted last night. I will open the hearing, and then 
we will have to recess until the votes are concluded. I regret 
the delay for our witnesses.
    Today our Committee examines current challenges to State 
Department security. The nature of these challenges is not a 
mystery. Over the last 2 years, there have been numerous well-
known serious security failures at the State Department.
    In 1998, a person in a brown tweed coat grabbed highly 
classified documents from an office in the Secretary of State's 
suite. That man and the documents have not been found.
    Last year, a Russian spy was discovered outside the Main 
State building listening to a bugging device planted in a 
seventh floor conference room. Of course, last month saw the 
revelation of a missing laptop computer that contained highly 
classified information. That laptop has not been found.
    Again, in 1999, we were told that a computer software 
program written by citizens of the former Soviet Union was 
purchased by the State Department on a sole-source contract and 
installed in posts throughout the world without the proper 
security and vetting procedures. That program had to be removed 
from each and every post. To this day, we have not received an 
explanation of just why and how that happened.
    The news media has extensively uncovered each of these 
events. What is less known, however, is that the officials in 
the State department have known for years that security at the 
State Department was vulnerable to just these kinds of 
incidents.
    In a March 1998, State ``town hall meeting,'' Under 
Secretary for Political Affairs Thomas Pickering, called a 
department-wide wake-up call about security issues. Another top 
official noted that promoting individual responsibility is 
going to require more security training and rigorous followup; 
and, of course, that is very true.
    Later that year, a report by the Inspector General 
highlighted problems in the State Department's Bureau of 
Intelligence and Research [INR] and made recommendations to fix 
them. Today, INR has not yet responded to that report.
    Another report by the Inspector General in 1999 recommended 
broader changes to the State's security policy, including the 
transfer of authority over ``codeword'' level material from INR 
to the Diplomatic Security Bureau; and although this report was 
issued in September 1999, its recommendations were at first 
rejected by the Department. They were not adopted until April 
2000, well after the celebrated laptop had been found to be 
missing.
    On November 17, 1998, a new State policy requiring escorts 
for all visitors was announced. It requires ``all visitors with 
the exception of active U.S. Government agency personnel who 
display proper photo identification shall be escorted at all 
times.'' Six days later, that policy was rescinded. Nine months 
later, it was reimplemented.
    Just last week the Secretary of State held another 
Department-wide Town Hall Meeting on security matters; and 
while her tone and words were appropriately tough, we cannot 
help but wonder if they will have any more impact than those of 
Mr. Pickering and other top officials at the 1998 Town Hall 
Meeting.
    A few days before the most recent town meeting, the 
Secretary issued a document that revealed, on close analysis, 
that it had decided not to measure its security performance on 
the basis of the number of security compromises detected. In 
addition, the Department failed to make progress on reducing a 
scandalous backlog of security investigations. It is now moving 
toward, in effect, a 15-year cycle for security updates, rather 
than 5-year government standard.
    The Department did, however, manage to significantly exceed 
the target it set for itself of reducing its inventory of 
overseas vehicles over 5 years old. So we are left to ask: Are 
the Department's priorities appropriate? Should we be surprised 
that a casual attitude toward security is part of the 
Department's culture if its budget priorities practically shout 
that information security is not the Department's major 
concern?
    We have learned that despite recent changes in security 
policy, reporters from foreign news media have access to many 
parts of the State building without any supervision. Indeed, we 
are informed that press personnel with identification cards 
have a 24-hour access to the building, including weekends and 
holidays.
    In other words, the new escort policy has a big hole, a big 
gap. You can lead an elephant through it. It is no secret that 
foreign intelligence agencies do use reporters as agents. 
During the Cold War, the KGB agents routinely used reporters' 
credentials as cover for many of their activities. The recent 
book entitled The Sword and the Shield by Christopher Andrew 
and Vasili Mitrokhin details numerous incidents of Soviet spies 
who have posed as reporters. It is a safe bet that the KGB's 
successor agencies in Russia today use the very same 
techniques.
    No security policy at State will be adequate until foreign 
journalists are appropriately escorted, just like other 
visitors beyond the normal press areas in the State Department.
    A secure State Department, however, is not just a matter of 
changing a few policies. It is the daily culture of our 
diplomats that are going to have to change. Every person in the 
State Department from maintenance personnel to Ambassadors to 
the Secretary of State must reprioritize and make security 
their top concern.
    This does not mean that policymakers in top jobs are off 
the hook. Far from it. Leadership must come from the top, and 
the responsibility for the current, disastrous conditions of 
State Department security lies with the Secretary's office and 
with her top aides.
    I want to quote from an anonymous letter received by this 
Committee just this week from a Foreign Service employee: ``For 
the poor security environment at the U.S. Department of State 
to improve only one thing is required, that being for State to 
seriously and publicly punish several senior officials, 
including at least two current Ambassadors, for security 
violations. The punishments would have to be real and hurt, to 
include firings and criminal prosecutions.''
    I trust that Department of State--and we have several of 
its top officials here today--will give us advice and will 
consider these thoughts that we just expressed. Our Nation must 
not tolerate any further security violations at the State 
Department or at any agencies. Department officers need to 
realize that both the lives of innocent people and national 
security put at risk when they are haphazard in following 
elementary procedures.
    The consequences for compromising national security 
secrets, whether intentional or inadvertent, are great. They 
result in costly investigations, damage relations with other 
Nations and, most gravely, possible mortal danger for Americans 
serving our Nation abroad.
    In closing, I would like to quote a former Ambassador to 
the United States from France, Jules Cambon, who said, ``The 
day secrecy is abolished, negotiation of any kind will be 
impossible.''
    It is no exaggeration to say that the very mission of this 
State Department, to carry out our Nation's foreign policy, has 
been placed in a perilous atmosphere at the present time.
    Is there any other Member--Mr. Smith.
    Mr. Smith. Thank you very much, Mr. Chairman. I want to 
thank you for convening this very important hearing of the full 
Committee on this very, very troubling issue.
    Let me just say I want to welcome our very distinguished 
panel. I see Ambassador Stapleton Roy, who many of us visited 
when he was in China, then in Indonesia, a very accomplished 
diplomat. We are very happy to have you here.
    Secretary Carpenter--I would just note for the record, Mr. 
Chairman, Secretary Carpenter appeared before our Subcommittee, 
the International Operations and Human Rights Subcommittee, 
back on March 12 of last year and gave compelling testimony, 
along with Admiral Crowe, with regard to the growing threat to 
our embassies and assets abroad. He pointed out at the time--
and I would like to quote him--because I think it is very 
timely and is a problem that still exists and has actually 
worsened--the terrorist threat is global, lethal, 
multidimensional and growing.
    Our analysts estimate that during the last 12 months, there 
were 2,400 threats against U.S. interests overseas. As you 
pointed out, Mr. Secretary, that was a 100 percent increase. 
And for the record, I think it is important to give credit 
where credit is due.
    I used your compelling testimony of that day, over the 
course of the next several weeks and months, in support of H.R. 
3427, the State Department Reauthorization Bill. This bill had 
a significant plus-up for overseas embassy security, as a 
matter of fact, we provide in Section 1 and Section 6 $5.945 
billion over 5 years. I have to tell you, and I want to say 
this in gratitude, your testimony was very effective and woke 
up a large number of people who perhaps had not realized just 
how bad things had gotten and how much in need we were of 
providing that important money. So I want to thank you for 
that.
    As you know, the President signed that legislation in 
November, and it is law. It does authorize the money and I 
think in a bipartisan way we will continue to make that money 
available to do this.
    And of course, Mr. Chairman, the issue at hand is the 
laptop computer, the Inspector General's report, and you have 
covered most of the bases as was pointed out in the findings. 
The INR has not effectively discharged its responsibilities for 
the protection of sensitive compartmented information and is 
not well structured or staffed to oversee the management of the 
ESI security.
    I was particularly concerned, and you made note of it as 
well, that on the issue of escorts inside the State's building, 
that the Under Secretary of State for Management, Tom 
Pickering, rescinded on November 23 a policy that was published 
about a week before, on November 17 of 1998. That is very, very 
troubling, and hopefully we can get to the bottom of that. It 
seems to me, if we have people unescorted walking around the 
building that raises very severe questions about who might have 
access to very sensitive information.
    I think, Mr. Chairman, you have outlined the issue. During 
questions and testimony we will certainly delve into it 
further. But I did want to publicly thank Secretary Carpenter 
for that testimony and the good work that he and the others do. 
It did lead, as a consequence, to that legislation, so I want 
to thank him.
    I yield back the balance of my time.
    Chairman Gilman. Thank you, Congressman Smith.
    Mr. Lantos.
    Mr. Lantos. Thank you, Mr. Chairman.
    I want to commend you for holding this hearing, and I want 
to bring to my colleague's attention a development that 
unfolded just a few hours ago which makes security at the State 
Department and throughout our government of extreme importance.
    A few hours ago, in Moscow, agents of the KGB have raided 
the headquarters of the one free media outlet in Russia. This 
should not be surprising in view of the fact that the new 
Russian President Putin spent 15 years in the KGB and has 
surrounded himself with KGB operatives and is singularly 
incapable of accepting criticism of either Russian policies in 
Chechnya or anywhere else.
    I look forward to the testimony of our distinguished 
witnesses and, having had a long-standing professional 
relationship with the Secretary, I can only say that I know 
from my own personal knowledge that no Secretary of State has 
been more intent on maintaining maximum security with respect 
to all sensitive materials than our current Secretary Madeline 
Albright.
    It is always the head of the operation who is responsible 
for anything that goes wrong, and Secretary Albright has 
accepted that responsibility. But as we begin this hearing I 
think it is important for us to realize that, given her 
background and her attitudes and her experience, her own 
personal commitment to maintaining the highest professional 
standards of security within the Department is unquestioned; 
and I know that this hearing will unfold in the context of that 
knowledge.
    I thank you, Mr. Chairman.
    Chairman Gilman. Thank you, Mr. Lantos.
    Since we have a series of votes, the Committee will now 
stand in recess until the votes are concluded. Thank you very 
much for your patience and indulgence.
    [Recess.]
    Chairman Gilman. Committee will come to order.
    I want to apologize for the number of votes that were on 
the floor, which necessitated the recess that we have just gone 
through.
    We are pleased to have with us today a distinguished panel 
and allow me to introduce them.
    Before I introduce the panelists, our Ranking Minority 
Member, the gentleman from Connecticut, Mr. Gejdenson, has an 
opening statement. Mr. Gejdenson.
    Mr. Gejdenson. Thank you, Mr. Chairman. Thank you for 
calling this hearing.
    Obviously, it is always a difficult challenge in a 
democratic society to balance our needs for security and also 
have a society open enough that we can operate in a democratic 
manner. But all of us are alarmed by the disturbing lapses in 
security in the last several years at the State Department, 
potentially compromising national security--listening devices, 
individuals in unauthorized areas, a laptop disappearance, 
workers given maybe too free access to areas important to 
national security.
    We need not simply to figure out there but elsewhere in the 
government, in the post-Soviet era, to recognize there is still 
an important need for security, and we have to make sure that 
we have the resources and the structure in place to make sure 
that our national secrets are protected and at the same time 
that we move forward and make our systems of government 
accessible to the citizens, to the press and to those who are 
authorized to have access.
    I certainly hope that everybody took the Secretary of 
State's statement and her several comments in the town meeting 
with the State Department officials to heart, that we all have 
to participate in this process. She said that, unlike academia, 
a 99 percent success rate just isn't acceptable here. It is a 
difficult challenge, but I think we all recognize that we have 
to be successful 100 percent of the time.
    I thank the Chairman for calling the hearing and look 
forward to hearing the witnesses.
    Chairman Gilman. Thank you, Mr. Gejdenson.
    Now we will proceed with our panelists.
    I am pleased that we have with us the Honorable Jacquelyn 
Bridgers, Inspector General in the Department of State. Ms. 
Bridgers was sworn in as the Inspector General in 1995. She has 
been before this Committee many times, and we appreciate the 
valuable work of your good offices.
    We will also hear from Assistant Secretary for the Bureau 
of Intelligence and Research, Stapleton Roy. Ambassador Roy has 
a distinguished 44-year history in the Foreign Service, having 
served as Ambassador to Singapore, to China and to Indonesia 
before taking over as Assistant Secretary for the Intelligence 
and Research Bureau.
    We also welcome Assistant Secretary for Diplomatic Security 
David Carpenter. Mr. Carpenter assumed his position as 
Assistant Secretary in August 1998 following a 26-year career 
in the U.S. Secret Service. He is the first person to hold that 
position and has a professional background in the protection 
and security fields.
    Finally, we welcome as our fourth witness Timothy Bereznay, 
a Section Chief in the National Security Division of the 
Federal Bureau of Investigation. Mr. Bereznay has been with the 
Bureau for 24 years. In his current assignment he has 
management oversight responsibilities for investigations 
related to counterintelligence and espionage allegations that 
pertain to our Department of State.
    We appreciate the willingness of our panelists to appear 
before our Committee on this very important topic.
    I will ask Ms. Williams-Bridgers to proceed with a summary 
of your statement, and following the statements we will proceed 
to questions. Any of the panelists who want to summarize, we 
will make your full statement a part of the record. Ms. 
Bridgers.

  STATEMENT OF THE HONORABLE JACQUELYN L. WILLIAMS-BRIDGERS, 
          INSPECTOR GENERAL, U.S. DEPARTMENT OF STATE

    Ms. Williams-Bridgers. It is indeed a pleasure to be before 
the Committee again. Mr. Gejdenson, Mr. Chairman, thank you 
very much for the opportunity to testify before the Committee 
on the Department of State's security programs as they relate 
to the protection of sensitive intelligence in national 
security information.
    The Department has implemented a diligent effort to enhance 
the physical security of our overseas missions. Today U.S. 
missions are significantly more secure than they were 20 months 
ago. Based on our overseas inspections we have found that our 
embassies generally do a good job of protecting classified 
information.
    Recent lapses at Main State clearly demonstrate that 
attention must now be given to address vulnerabilities in 
protecting sensitive intelligence and national security 
information on the domestic front.
    The Secretary's recent decision to transfer authority for 
protection of intelligence-related material from the Bureau of 
Intelligence and Research to the Bureau of Diplomatic Security 
implements an important corrective action that we recommended 
to ensure proper safeguards for our most sensitive 
intelligence-related information.
    Mr. Chairman, in your invitation to this hearing you asked 
me to discuss my office's assessment of the security 
environment within INR and the Department overall, the division 
of security responsibilities between INR and DS, the 
Department's security incident disciplinary process, the 
effectiveness of the disciplinary process in deterring poor 
security practices, and the Department's responsiveness to 
OIG's recommendations.
    In brief, OIG has found significant deficiencies in the 
handling of classified information that have perpetuated a lax 
security environment in the Main State headquarters building. 
Specifically, we found that ineffective access controls in the 
Main State headquarters building left offices vulnerable to the 
loss or theft of sensitive intelligence information and 
equipment by unescorted, uncleared visitors and contractors. A 
lack of adequate physical and procedural security measures in 
offices resulted in classified documents not being properly 
controlled and accounted for. INR was not fulfilling its 
security function and unit security officers in other bureaus 
were not enforcing security requirements, leading us to 
recommend a delegation of responsibility to DS for protecting 
highly classified information. Last, OIG found that 
disciplinary actions for security violations did not serve as a 
deterrent for lapses in security practices.
    Let me focus first on the key security deficiencies we 
identified. Our review of the handling of classified 
information found that uncleared maintenance and repair and 
cleaning contractors are not always escorted when in offices 
where classified information is handled, processed and stored. 
This occurred even though there has long been a Department 
policy that escorts are mandatory in controlled access areas. 
Very few contractor personnel have clearances. We found that 
the vast majority of offices did not perform the escort 
function. In cases where escorting was performed, the degree of 
vigilance was inconsistent.
    We also found that INR had not complied with required 
routine inspections of 140 Department offices where sensitive 
compartmented information was maintained or discussed. Also, 
none of the offices had received technical surveillance 
countermeasure inspections to determine whether listening 
devices had been implanted.
    Our review also found that while SCI documents were 
distributed to 46 offices each morning, controls or procedures 
were not in place to ensure that all material was returned to 
an SCI facility and properly secured at the close of business. 
In addition, INR was not obtaining signed receipts to establish 
accountability for the documents and did not verify that all 
the documents were actually returned.
    INR had also not complied with the Director of Central 
Intelligence directive regarding personnel security standards. 
Specifically, we found that INR had not complied with the 
requirements that only individuals with a need to know had 
access to SCI materials and that the results of background 
investigations be considered in making that determination.
    We found that unit security officer [USO] responsibilities 
were not being performed because many USOs were not fully 
informed of their security responsibilities, and they did not 
believe that they had the authority to enforce security 
procedures. In 21 of 23 offices inspected, there was no 
assurance that after-hours checks were performed or that 
classified documents were properly stored. Of 23 USOs we 
interviewed, 17 did not perform office security reviews. Only 5 
of 23 offices escorted their uncleared cleaning staff. Only 11 
of 23 regularly briefed their employees on security.
    INR has not effectively discharged its responsibility for 
the protection of SCI. In our view, INR is not well structured 
or staffed to oversee the management of SCI's security.
    The primary function of DS, however, is to ensure that 
people and information are properly protected. DS is already 
responsible for overseeing Department procedures for protecting 
classified information up to the Top Secret level. Further, DS 
has a cadre of trained security professionals. Therefore, the 
OIG recommended that the duty of safeguarding SCI should be 
delegated to DS.
    Mr. Chairman, my office will be conducting a followup 
review later this year to determine the adequacy of the 
Department's response to all of our recommendations.
    The Department's security incident program also has not 
been effective because security awareness and disciplinary 
actions have not been sufficient. Repeat offenders receive 
letters of warning and, depending on the gravity of the 
situation, they can continue to retain their security 
clearances allowing access to the most sensitive information in 
the Department.
    We recommended that the Department strengthen security 
training and the disciplinary actions associated with security 
incidents.
    In summary, I am encouraged by the actions taken by the 
Department recently to correct the physical and procedural 
security deficiencies at Main State that we have noted in our 
work. It is unfortunate, however, that lapses in security that 
were identified by OIG last year were not addressed in a more 
timely fashion. This delay no doubt may have contributed to an 
environment in which the most recent highly publicized breeches 
occurred. At this juncture, however, it is essential that the 
Department exercise vigilance and commitment to maintain and 
enforce the highest level of security awareness and compliance.
    This concludes my short statement, and I would be glad to 
answer questions at the appropriate time.
    [The prepared statement of Ms. Williams-Bridgers appears in 
the appendix.]
    Chairman Gilman. Thank you, Inspector General Bridgers.
    Assistant Secretary Roy, Bureau of Intelligence and 
Research, please proceed.

 STATEMENT OF AMBASSADOR J. STAPLETON ROY, ASSISTANT SECRETARY 
  OF STATE FOR INTELLIGENCE AND RESEARCH, U.S. DEPARTMENT OF 
                             STATE

    Mr. Roy. I am glad to have the opportunity to appear before 
you today with my colleague, Assistant Secretary Carpenter. We 
will be happy to discuss with you the Department's response to 
the disappearance of an INR laptop computer and other important 
security matters.
    Let me begin by briefly reviewing the basic facts regarding 
the disappearance of the laptop computer. On January 31 of this 
year, a laptop computer containing highly classified 
information was discovered to be missing from a secure area 
controlled by the Bureau of Intelligence and Research at the 
Department of State, or INR, which I head. This matter is under 
active criminal investigation by the FBI and the Department's 
Bureau of Diplomatic Security, or DS. I have asked all 
personnel of INR to cooperate fully with the investigation. 
That is our sole role. We not privy to the investigation's 
focus, its time line, or its findings, so I cannot speak to 
those issues.
    In my testimony today, I will focus on four subjects which 
the Committee asked me to address in its invitation letter: 
First, the disappearance of the laptop. The laptop had been 
purchased in 1996 for the exclusive use of officers from other 
bureaus engaged in counterproliferation work who did not have 
access to classified workstations within INR. It was used and 
stored in an INR secure area because it contained highly 
classified information bearing on the proliferation of weapons 
and technologies of mass destruction and their associated 
delivery systems. Because of the sensitive information on it, 
the computer was not permitted to leave the INR secure area 
where open storage was authorized under applicable regulations.
    On January 31, INR staff could not locate the laptop in 
response to a request by a would-be user from outside the 
Bureau. When a careful search of the office suite failed to 
locate the laptop, the office in question took immediate steps 
to interview all personnel in the office as well as officers 
from outside the Bureau who had been authorized to use the 
laptop.
    Some of those approximately 40 officers were out of country 
on official business. They were queried by phone or cable. When 
these efforts failed to locate the laptop, INR's security 
branch chief launched a formal investigation and requested the 
office director to respond to a detailed list of questions. He 
also interviewed key individuals and developed a summary of 
relevant circumstances. When this internal investigative phase 
failed to locate the laptop, the INR security branch chief 
reported the circumstances to me, along with his recommendation 
that because of the potential compromise of classified 
information the matter be turned over to DS. I immediately 
approved this recommendation, and on February 10 INR requested 
DS to commence an investigation and notified the CIA Center for 
Security that a computer presumed to contain sensitive 
classified material could not be located.
    All matters pertaining to the investigation are under the 
purview of DS and the FBI, and I am not privy to the details. 
We do not yet know how the laptop disappeared, whether it was 
removed by an employee authorized to work in the office, 
whether it was stolen for its material value or whether it was 
taken for the information on its hard drive.
    Regardless of the circumstances, the loss of the laptop is 
inexcusable. It should not have happened. As the Assistant 
Secretary for Intelligence and Research, I am also the senior 
officer of the Intelligence Community in INR and in the 
Department of State. All personnel in INR from top to bottom 
have been indoctrinated and trained to be aware of their 
responsibility to safeguard the Nation's most sensitive 
secrets. Whatever the results of the investigation, it is clear 
that we failed to exercise our responsibility to safeguard the 
computer and the classified information on it.
    I particularly regret that Members of Congress first 
learned of the incident from the pages of the Washington Post. 
This was never our intention. That it happened is most 
unfortunate and is being looked into as part of our effort to 
draw lessons from this unfortunate experience.
    Second, the Secretary's decisions in response to the loss. 
As a result of the circumstances I have just outlined, the 
Secretary took a number of steps affecting the Bureau that I 
head:
    First, after consulting the Director of Central 
Intelligence, George Tenet, the Secretary decided that DS 
should take over from INR the responsibility for protection of 
sensitive compartmented information. I support this decision 
and am confident that DS will do the job well. We are working 
hand in glove with DS and the CIA to effect this transfer. In 
addition to improving security, I believe this will strengthen 
INR's ability to concentrate on what we do best, which is 
analysis and intelligence policy coordination.
    In my view, this transfer of the SCI security function can 
be handled in a manner that will not conflict in any way with 
INR's responsibilities as a statutory member of the 
Intelligence Community. Indeed, since before the discovery that 
the laptop was missing, we had been working closely with DS to 
identify and formalize areas for enhanced cooperation.
    Aside from the transfer of the SCI security function to DS, 
the Secretary also asked that in the investigation of the 
disappearance of the laptop, questions of accountability be 
examined carefully and appropriate recommendations be made for 
decision. Meanwhile, to enhance confidence in the review 
process, two INR office directors have been temporarily 
transferred to other duties. This is not a finding of fault. It 
is to ensure that as the investigation is conducted and 
remedial steps are taken there is full confidence in the 
process.
    In addition, the Secretary directed that a number of other 
steps be taken to tighten security in the Department, which we 
can address at other points in our testimony here.
    The security environment within INR. The Secretary held a 
town meeting at the Department on May 4 to stress once again 
that all Department employees must attach the highest priority 
to their security responsibilities. I had already reinforced 
this message in a meeting with the entire INR staff on April 
26, and I am confident that everyone in the Bureau is conscious 
of the need to maintain a high level of security awareness at 
all times and that security is an inextricable and 
indispensable part of their jobs.
    Mr. Chairman, you inquired in your invitation letter to me 
about the day-to-day procedures of monitoring classified 
information within INR. In accordance with the relevant 
directives, SCI security or control officers responsible for 
Sensitive Compartmented Information Facilities maintain 
records, manual or electronic, of external receipt and dispatch 
sufficient to investigate loss or compromise of SCI documents 
during transmittal.
    Given the volume of classified and SCI material received 
daily in INR, we and DS have recognized the need to strengthen 
procedures for assuring document accountability. Earlier this 
year, we sought and gained approval to hire additional document 
control specialists. Upon their entry on duty, they will work 
to ensure that both the theory and practice of document 
accountability within INR are fully in accord with Intelligence 
Community standards and requirements.
    Following recess of the OIG report last September, the 
DCI's Community Management Staff offered to make available to 
INR a professional document control specialist to evaluate our 
existing staffing and document control procedures and to make 
appropriate recommendations. I understand the individual 
selected to assist us, expected to arrive in INR very soon, 
will come from the Defense Intelligence Agency, whose 
operational milieu is in important respects similar to that at 
State.
    In regard to the management of and security procedures for 
construction or renovation projects at Main State, in INR this 
relates primarily to Sensitive Compartmented Information 
Facilities, or SCIFs. Here DCID 1/21 on Physical Security 
Standards for Sensitive Compartmented Information Facilities is 
the governing directive. The DCID requires that whenever a 
project is contemplated, a construction plan balancing threats 
and vulnerabilities must be reviewed and approved by the 
cognizant security authority. In my view, these requirements 
are time tested and appropriate provided they are, as they 
should be, rigorously observed.
    The fourth subject you asked me to address was the INR 
Assistant Secretary's role as senior official of the 
Intelligence Community.
    First, let me affirm that I see no statutory, regulatory or 
procedural barriers that need interfere with the ability of the 
Bureau of Diplomatic Security to carry out security 
responsibilities within INR. There are some fine points now 
being addressed, but they have not been implemented in any way 
within INR to the Bureau of Diplomatic Security. Nor should 
this impede INR's ability to perform its function as a member 
of the Intelligence Community.
    As Members of this Committee may be aware, the Department 
of State is not a member of the Intelligence Community. Rather, 
it is INR within the Department that is a statutory member. As 
Assistant Secretary of INR, I am the senior adviser to the 
Secretary of State on all intelligence matters and responsive 
to her direction. At the same time, I have certain 
responsibilities to the Director of Central Intelligence that 
derive from my status as the Senior Official of the 
Intelligence Community within INR.
    The authorities and responsibilities vested in SOICs, or 
Senior Officials of the Intelligence Community, are detailed in 
DCID 1/19--Security Policy for Sensitive Compartmented 
Information and Security Policy Manual. This directive states 
that intelligence organizations, as defined in Executive Order 
12333, have the authority and are responsible for all aspects 
of security program management with respect to the protection 
of intelligence sources and methods and for implementation of 
the DCIDs for activities under their purview.
    Hence, INR had previously maintained its own security 
program for intelligence sources and methods, while DS had 
developed and implemented security procedures on a broad range 
of security responsibilities that fall within its purview. 
Pursuant to the Secretary's decision to transfer SCI security 
protection to DS, we are working with DS and CIA to develop the 
necessary procedures within the framework of the DCID.
    In conclusion, let me stress once again that the Department 
of State is undertaking a top-to-bottom review of security 
procedures. INR is a part of that process and, working closely 
with DS, we are moving simultaneously on many fronts to ensure 
better security throughout the Bureau. As the Secretary said, a 
99 percent grade on security is not a passing grade. Thank you.
    [The prepared statement of Mr. Roy appears in the 
appendix.]
    Chairman Gilman. Thank you, Secretary Roy.
    We are now pleased to hear testimony by the Honorable David 
Carpenter, Assistant Secretary for the Bureau of Diplomatic 
Security at the Department of State.
    You may summarize your statement, put the full statement in 
the record, whatever you deem appropriate. Please proceed.

   STATEMENT OF THE HONORABLE DAVID G. CARPENTER, ASSISTANT 
 SECRETARY OF STATE FOR DIPLOMATIC SECURITY AND SENIOR ADVISOR 
 TO THE SECRETARY OF STATE ON SECURITY ISSUES, U.S. DEPARTMENT 
                            OF STATE

    Mr. Carpenter. Mr. Chairman and Members of the Committee, I 
am appearing before you today to answer questions about the 
recent laptop incident. I am also prepared to discuss other 
domestic security issues affecting the Department of State.
    I accepted the position of Assistant Secretary at the State 
Department with the full realization that the job would be 
challenging, but I could never have envisioned the enormity of 
that challenge. I doubt that there are many outside the agency 
who appreciate the magnitude of the task thrust upon DS, the 
complexity of the issues faced in managing a global security 
program responsible for the protection of so many lives, and 
the challenges in facing off against sophisticated espionage 
services as well as transnational organizations focused on the 
destruction of American interests around the world.
    On a positive note, I was extraordinarily gratified by the 
capabilities and professionalism of the people working in the 
Bureau of Diplomatic Security. They are clearly first rate. But 
I was shocked to learn just how much the State Department's 
budget had been cut and, to my regret, how hard those budget 
and personnel cuts had hit DS. I found that DS had people in 
all areas of its responsibilities who, in my experience, were 
second to none in other similar agencies, but it became 
painfully obvious that DS, although challenged and dedicated, 
had far too few people to meet the challenges it was about to 
encounter.
    Following the fall of the Soviet Union, DS was authorized 
to hire only a handful of agents, engineers and civil service 
security personnel. Twenty percent of DS positions worldwide 
were reduced. The worldwide guard program was decreased by 5 
percent. Rules and regulations concerning security were 
loosened to the point that holding employees accountable for 
serious security issues became more difficult.
    It is my assessment that the budget and personnel cuts had 
significantly eroded the Bureau's ability to fulfill even its 
most basic services. They had reached the point that when there 
were major conferences in the United States requiring 
significant manpower to staff protective details, numerous 
operational offices had to be shut down to support this effort. 
In some respects, this type of scenario continues to this day.
    Let me give you a few examples of how DS' programs were 
streamlined during that period. Among the activities affected 
was our office of counter intelligence. The number of positions 
was reduced from 41 to 26 and funding for the program was cut 
from $225,000 to $65,000. Staffing for programs in the 
Department that handle procedural and informational security 
issues was reduced by more than 50 percent. Our technical 
countermeasures programs suffered a similar fate as limited 
funding forced the Bureau to fund only priority life safety 
programs rather than to invest in upgrading its antiquated 
countermeasures program. The Department's reaction to imposed 
fiscal constraints and a popular opinion that the Cold War had 
ended and now the world was a better place had devastating 
consequences for DS programs.
    In 1997, the Bureau's hiring picked up considerably and 
while it appeared that they were making strides in restaffing 
to the point of making it ready to meet its existing 
challenges, the bombings in East Africa occurred. Let me say 
that those bombings have dramatically changed the magnitude and 
intensity of our overseas security programs and the support of 
this Committee in regard to our specific needs has been much 
appreciated. As you are aware, nearly all of our new positions 
acquired since the bombings have been directed at overseas 
staffing or in support of our overseas operations, chiefly with 
antiterrorism in mind.
    The Department is currently reviewing staffing levels in 
other areas that may have been neglected including 
counterintelligence, dignitary protection, and domestic 
facility security which continue to be significantly 
understaffed and underfunded.
    Let me describe to you the universe of our efforts. We are 
in the protection business. We protect people, facilities, and 
classified information. We do this at our posts throughout the 
world.
    Let me give you some idea of the magnitude of our global 
life safety responsibilities. We protect approximately 10,000 
State Department employees in the United States. Overseas, we 
are accountable for the protection of an estimated 75,000 U.S. 
citizen employees and their families. Add to that number more 
than 37,000 Foreign Service employees working for our embassies 
and consulates. Each year we also protect approximately 130 
distinguished high profile foreign visitors to the United 
States and that is an encapsulated view of just our mission to 
protect people.
    Mr. Chairman, in my view the breadth of this global mandate 
is unique in the Federal Government.
    Our missions for protecting facilities and information 
equally demanding. DS has designed programs to counter a global 
array of security challenges presented by elements ranging from 
common criminals to terrorists and spies. Our programs include 
safeguarding classified and national security information, 
personnel investigations, computer and information security 
awareness programs, and the conduct and coordination of 
espionage and counterintelligence investigations.
    In the past year, much has been made of security incidents 
at Main State. Providing security for that building is a 
problem, not impossible but still very challenging.
    The Department of State building is the second largest 
government building in the Nation's Capital. It is occupied by 
8500 employees and receives over 200,000 official visitors and 
tourists each year. The Main State building covers two square 
blocks and has eight stories and a basement. There are 2.6 
million square feet of space. It has 5 pedestrian entrances, 3 
basement entrances to a 900 plus vehicle garage, 2 loading 
docks, 43 elevators, 5,400 windows, 9 acres of roof, and 13 
emergency generators. The building has virtually no setback 
from the street thus affording little opportunity to screen 
either visitors or vehicles at appropriate distances.
    The building serves as the hub for American diplomacy. It 
hosts numerous international conferences and major events 
involving world leaders each year. The building is the platform 
for the Nation's daily press briefing on events around the 
world. It houses the Nation's State dining rooms and unrivalled 
collection of colonial and early Federal decorative priceless 
art objects insured for $100 million.
     The Department has in place procedures and safeguards to 
protect our facilities during construction and renovation. As 
this Committee is aware, Main State is currently undergoing a 
major 10-year renovation project. Security measures such as the 
development of construction security plans, construction 
surveillance, vetting of workers, screening of materials, and 
other precautions are integrated into this project. Other 
construction projects performed within the building are 
routinely scrutinized by DS officers to determine the level of 
sensitivity and ensure that proper security countermeasures are 
utilized.
    In other words, the State Department building is a very 
large and busy institution. Protecting it is an immense 
challenge.
    Three incidents in the Main State building have brought 
home to all of us the need to strengthen domestic information 
security. In February 1998, an unknown male in a tweed coat 
carried away classified documents from the Secretary's suite of 
offices. That case, which was investigated by the FBI, is in an 
inactive status at this time.
    The second incident came to light on December 8, 1999 when 
Russian intelligence officer, Stanislav Gusev, was arrested on 
the street outside the State Department as he listened in on a 
meeting in the State Department's Oceans and International 
Environmental Scientific Affairs' conference room via a bug 
planted in the chair railing. Gusev, who had diplomatic 
immunity preventing his prosecution in the United States, was 
asked to leave the country. The investigation by the FBI 
continues into, among other things how the bug was planted. 
Spinning off the bugging case was an inquiry into how a 
computer software contract was managed and whether the systems 
on which the software was placed had been compromised. That 
inquiry is still ongoing.
    The third incident is, of course, the laptop incident which 
is currently under investigation by the FBI and DS. Ambassador 
Roy has already described for you how the laptop was used, the 
circumstances surrounding its disappearance, INR's referral of 
this matter to DS and the Secretary's five point response to 
the incident.
    Mr. Chairman, we have learned some very valuable lessons 
from these incidents. The fundamental problem which has brought 
the Department to the point at which it now finds itself is not 
an absence of proper policies and procedures, as those are and 
have been in place. The problem is simply carelessness. That 
is, noncompliance and/or disregard for established regulations. 
These incidents have prompted us to take measures which 
complement existing regulations and procedures and are designed 
to change the lax attitude toward security at the State 
Department.
    I believe that substantial progress has been made over the 
past 2 years. We have tightened security in the Secretary's 
suite of offices. We have adopted a rigorous, comprehensive 
escort policy, worked to strengthen computer safeguards, and 
assigned uniformed officers to floor specific patrols inside 
the building. At Main State we have reinstated an after-hours 
inspection program of Department offices, and we continue a 
program of bringing Marine security guards in training into the 
Department 10 times a year to conduct security sweeps. We have 
closed D Street outside the building to traffic and installed 
cement barriers around the entire building, thus lessening our 
physical vulnerability. We have provided security awareness 
briefings to over 4,000 Department personnel. But these are 
only the first steps. Much more needs to be done.
    In March, I convened an interagency review panel comprised 
of senior security representatives from the FBI, the Department 
of Defense, the U.S. Secret Service, the CIA, and the 
Diplomatic Security Service. The panel was asked to review the 
countermeasures currently in place to protect against 
unauthorized access to the Main State building and classified 
information. I also requested that they make recommendations to 
improve security at the Main State building.
    On Monday of this week, I received the panel's report. I 
plan to present the report to the Secretary when she returns to 
Washington and intend to use it to correct systemic 
vulnerabilities at the Department of State. Once the 
Administration has had an opportunity to review the report, I 
will be delighted to share it with you, Mr. Chairman, as well 
as the Members of your Committee.
    This panel confirmed our assessment of known weaknesses in 
our programs and recommended both short and long term solutions 
that it believes will enhance security at Main State. Their 
findings center on Main State's access controls, its physical 
security, information security, security awareness, our 
uniformed protective officer program, and the need to create a 
chemical/biological program. I am convinced that the 
development of a strategic plan to fund and implement these 
findings will result in significant improvements in our 
programs.
    The Secretary's leadership in raising security awareness 
has been invaluable. She has personally emphasized security at 
every opportunity for the purpose of strengthening the culture 
of security at State. As you know, on May 3 she held a 
Department-wide town meeting on security because of the laptop 
incident. In the course of the meeting, she stressed that each 
of our employees must be our neighbor's keeper when it comes to 
security. The position that she has taken with respect to 
individual responsibility among our diplomats, that regardless 
of how skilled you may be as a diplomat, if you are not 
professional about security--you are a failure--has resonated 
throughout the Department. Further, when she told the 
Department employees that the press reports were accurate; and 
she was indeed furious about our security lapses, any misgiven 
belief anyone might have that the Secretary wanted simply to 
let this blow over and be forgotten was forcefully corrected.
    I believe that what we have done and are doing, combined 
with the stark ugly reality of what security failures produce, 
have gone a long way in raising awareness at the Department. I 
think that we have reached the point that where the decided 
majority of State Department employees has recognized that a 
threat exists; that poor practices are unacceptable; that 
security is a high priority with the Secretary, this 
Administration, and this Congress; and that employees will be 
held accountable for lapses. I can assure you that the 
Secretary and I will continue to drive home those points as 
forcefully as possible.
    As I said earlier, I believe that the lax attitude in the 
Department toward security is no longer tolerable. I fully 
expect that we will see that the Department's efforts aimed 
principally at better education, at existing requirements, and 
designation of individual responsibilities will bear fruit and 
there will be substantial and voluntary adherence to security 
rules and procedures, but if I am wrong, we are fully prepared 
to use enhanced disciplinary procedures to further underscore 
the seriousness with which we view this issue.
    Thank you, Mr. Chairman. I would be glad to answer 
questions at this time.
    [The prepared statement of Mr. Carpenter appears in the 
appendix.]
    Chairman Gilman. Thank you, Mr. Carpenter.
    Mr. Bereznay, section chief, National Security Division, 
Federal Bureau of Investigation. You may summarize your 
statement, or your full statement will be made a part of the 
record, as you deem appropriate. Please proceed.

   STATEMENT OF TIMOTHY D. BEREZNAY, SECTION CHIEF, NATIONAL 
       SECURITY DIVISION, FEDERAL BUREAU OF INVESTIGATION

    Mr. Bereznay. Thank you, Mr. Chairman. Members of the 
Committee, I am pleased to appear before you today to discuss 
State Department security issues that are of concern to this 
Committee. I will be as forthcoming as possible given the 
sensitive and classified nature related to the information 
requested by the Committee.
    Concerning the missing State Department laptop computer, I 
want to ensure the Committee that the FBI's investigation of 
the missing computer is being afforded the highest FBI 
priority. As you are aware, I am prohibited from discussing the 
matter further as it is the subject of a pending criminal 
investigation.
    The Committee has asked that I comment on the sufficiency 
of State Department security procedures in connection with the 
bugging of the 7th floor conference room by the Russian Foreign 
Intelligence Service. The FBI was asked by State Department in 
late August 1999 to conduct an environmental technical survey, 
in other words a review of neighboring properties, to determine 
whether a hostile intelligence service might have acquired such 
property. This survey was specifically requested in connection 
with pending renovations at the Department. In 1998, we were 
also pleased to have our Washington field office work with the 
Office of Diplomatic Security to survey access to State 
Department by Russian intelligence officers. Beyond these 
narrow surveys conducted with or at the request of State 
Department, the FBI was not called upon at that time to review 
physical security procedures at the Department. Those matters 
were, however, addressed by the Office of the Inspector General 
as reported in its September 1999 report.
    The FBI believes that the State Department acted swiftly 
during August 1999 to limit the number of unescorted foreign 
nationals visiting State Department following the discovery of 
the listening device in the 7th floor State Department 
conference room. On August 23, 1999, the State Department 
implemented policy that requires all foreign nationals to be 
escorted within the building at all times.
    As noted by the Committee, there is an exception for 
foreign media correspondents issued unique but permanent badges 
that allow unescorted entry without passing through metal 
detectors.
    There is an understanding that the media is not to go above 
the second floor where the press office is located. This 
exception affords unescorted access to the State Department by 
a number of known foreign service intelligence officers. The 
FBI does not customarily provide other agencies, to include 
State Department, with lists of intelligence officers' 
identities to protect both sensitive sources and cases unless 
there is a specific reason or if asked. If asked, the FBI would 
be willing to identify to the State Department permanent media 
badge holders identified as hostile intelligence officers so 
that their access could be restricted or their visits 
monitored.
    Historically, hostile intelligence services have utilized 
media cover for intelligence activities in the United States. 
However, because intelligence officers under media cover do not 
have diplomatic immunity, they normally perform in-depth but 
overt intelligence collection. Clandestine handling of agents 
or other covert activity is usually assigned to intelligence 
officers under diplomatic cover. In addition to the overt 
intelligence collection, intelligence officers under 
correspondent cover have been engaged in active measures 
campaigns designed to support their national interests and to 
influence United States policymakers.
    Active measures campaigns take the form of oral persuasions 
or the dissemination of written information favorable to their 
national policy, both of which are facilitated by intelligence 
officers under media cover. Hostile intelligence services use 
active measures as an inexpensive and relatively low-risk way 
to advance their international positions.
    Over the last 15 years, no foreign intelligence service 
officer under media cover has been declared persona non grata 
for engaging in espionage activities. This is attributed, as I 
previously noted, to the fact that these officers are not 
accredited diplomatic immunity and thus normally do not engage 
in clandestine agent-handling activities subject to 
interdiction.
    With respect to your inquiry regarding the use of laptop 
computers within the FBI, the FBI uses only specified laptop 
computers that carry appropriate safeguards for classified 
data, to include both the use of passwords and encryption. 
These laptops are maintained by automation personnel and are 
available for short period loans to FBI employees. The laptop 
computers are periodically examined and the stored information 
purged. When they are turned in by one employee and before 
being issued or loaned to another individual, the hard drive is 
purged and reprogrammed. The laptop computers are also 
subjected to an audit and forensic check to ensure that they 
have not been compromised.
    The FBI views the protection of classified information in a 
computer environment as a problem that is not unique to the 
State Department. It is a serious security issue that will 
continue to present problems to all members of the intelligence 
community.
    I welcome any questions you may have.
    [The prepared statement of Mr. Bereznay appears in the 
appendix.]
    Chairman Gilman. Thank you very much, Mr. Bereznay, and I 
want to thank our panelists for their testimony. We will now 
proceed with questions.
    Ambassador Roy, in your statement, you note that there are 
appropriate procedures for management's security of renovation 
projects in secure areas of the Department. The question is, 
were these procedures followed in the renovation project that 
took place in the INR suite on the sixth floor?
    Mr. Roy. Mr. Chairman, the investigation will determine the 
exact circumstances relating to that. What I can do is share 
with you my understanding of what happened.
    Chairman Gilman. Well as you share it, can you tell us, did 
the construction plan permit uncleared workers to be in the 
classified area and permit the door to the hallway be open 
during the work day? Can you also note the dates of the 
renovation project for us?
    Mr. Roy. Yes. The construction workers were expected to be 
escorted at all times and the appropriate instructions were 
given to the office where the construction work was taking 
place. At no time was there unsecured access by the workers to 
the controlled areas of the SCIF. When the door was opened in 
areas of the office that were being renovated, either access 
had not been broken through the wall to make it part of the 
SCIF or there were people stationed at the entrance in order to 
provide protection. The procedures were expected to be followed 
and were consistent with our understanding of appropriate DCID 
directives.
    Chairman Gilman. Who is responsible for assuring that the 
repairmen were escorted at all times?
    Mr. Roy. The office where the work was being undertaken 
were charged with that responsibility.
    Chairman Gilman. So whoever was working there would have to 
make certain they were escorted?
    Mr. Roy. Yes.
    Chairman Gilman. And it is also our understanding that INR 
employees were tasked with watching the workers. Did it make 
sense to have employees who had their regular assignments also 
have to watch these workers?
    Mr. Roy. The workers had to be watched, and if INR 
employees were charged with that responsibility it should have 
been carried out. My personal view is that in situations like 
that you need dedicated people who have a 100 percent 
responsibility of monitoring the uncleared workers. That is the 
ideal way to accomplish it.
    Chairman Gilman. How adequate was the oversight of the 
workers at the time of the renovation project?
    Mr. Roy. Most of this occurred before I arrived in INR so I 
cannot speak from personal experience, but what I can share 
with you, Mr. Chairman, is the fact that I have never been 
permitted access to INR work spaces as an ambassador, as the 
executive secretary of the Department responsible for document 
flow to the Secretary of State, as a deputy assistant secretary 
of a geographic bureau in any other way than an escorted 
manner.
    Chairman Gilman. And who did the escorting?
    Mr. Roy. INR employees. Every time that I, as a foreign 
service officer not working in INR, have been to INR spaces, I 
have been escorted 100 percent of the time. So my expectation 
was that the escort duties were taken seriously.
    Chairman Gilman. Mr. Carpenter, who is responsible for 
security of a renovation project at the Main State building 
particularly with regard to projects that take place in 
classified areas?
    Mr. Carpenter. In our domestic operations section there is 
actually a differentiation between the rest of the building and 
INR space. For anywhere else other than INR space and SCIFs and 
the like, INR had that responsibility for the rest of the 
building, our domestic office.
    Chairman Gilman. Who is in charge of the domestic 
operations office?
    Mr. Carpenter. Don Blake.
    Chairman Gilman. Are there security-oriented regulations 
that govern such construction of renovation projects at the 
Main State building?
    Mr. Carpenter. Yes there are.
    Chairman Gilman. Are the regulations different from the 
rules followed for overseas construction for the protection of 
sensitive areas?
    Mr. Carpenter. Yes they do differ yes, sir.
    Chairman Gilman. In what manner?
    Mr. Carpenter. Overseas are much more stringent by virtue 
of the potential for compromise as construction is going on. 
They are also dramatically more stringent.
    Chairman Gilman. Do you think there should be more 
stringent regulations here in the Main State building?
    Mr. Carpenter. Absolutely.
    Chairman Gilman. If work will occur in a classified area, 
can uncleared workers be used?
    Mr. Carpenter. Uncleared yes, unescorted no.
    Chairman Gilman. Does diplomatic security provide security 
technicians for such projects?
    Mr. Carpenter. Occasionally, depending on the amount of 
notice we are given and the availability of our personnel.
    Chairman Gilman. And could INR have requested escorts from 
DS who are trained to watch workers?
    Mr. Carpenter. I suppose they could have requested that. 
Again, the security of their areas is largely--has previously 
been--their responsibilities.
    Chairman Gilman. Ambassador Roy, until the recent 
announcement--you were responsible for the directives governing 
the SCI material, is that correct?
    Mr. Roy. That is correct.
    Chairman Gilman. Have you been able to determine whether 
the laptop computer was used in accordance with the Director of 
Central Intelligence directives?
    Mr. Roy. Yes, sir. My understanding is that it was used and 
stored in consistency with the pertinent directives.
    Chairman Gilman. Are there regulations governing labeling 
or requiring encryption or even a password to protect 
information stored on a laptop? Are there such regulations?
    Mr. Roy. There are regulations concerning labeling. My 
understanding, and we have looked at this in retrospect, is we 
cannot confirm with assurance that there were appropriate 
labels on the laptop, although some people have told me that 
they recall seeing such labels on it.
    Chairman Gilman. Are there now labels being required on a 
laptop?
    Mr. Roy. Yes, there are.
    Chairman Gilman. Ambassador Roy, were your employees 
abiding by the proper visitor escort procedures in the INR 
office where the laptop was lost?
    Mr. Roy. Since the laptop is missing, there had to be a 
lapse somewhere, but insofar as I was aware they were abiding 
by the procedures and they were certainly informed of what the 
correct procedures were.
    Chairman Gilman. And Ambassador Roy, has anyone been held 
accountable for the loss of the laptop?
    Mr. Roy. That is not possible, Mr. Chairman, until the 
investigation is concluded.
    Chairman Gilman. Any disciplinary action under way?
    Mr. Roy. No disciplinary actions have been taken pending 
determination of responsibilities.
    Chairman Gilman. And, Mr. Carpenter, in November 1998, you 
introduced, with the approval of the Under Secretary for 
Management, a policy requiring escorts for many State 
Department visitors. Within a week, that was rescinded; and 
later in August 1999, following a discovery of a bug in a 
conference room at State, the requirement for an escort was 
reintroduced. Can you tell us who requested the rescission of 
that order?
    Mr. Carpenter. Yes, sir. As you properly stated--I answer 
to the Under Secretary for Management. Almost immediately upon 
arriving at the State Department, realizing that there was no 
escort policy for anyone, quite frankly, to enter the building, 
we started to put together a program. We briefed the Department 
as fully as we could relative to how it would work. As you 
said, in November, I submitted it to my under secretary.
    Chairman Gilman. November of what year?
    Mr. Carpenter. Of 1998.
    Chairman Gilman. Yes.
    Mr. Carpenter. My under secretary approved; we proceeded in 
issuing fliers about this new program. I was called within 
hours of it being distributed by Under Secretary Pickering. He 
asked me to explain exactly what was going on. He had not been 
briefed on it. A number of the people that answer to him in the 
geographic bureaus claimed not to have been briefed on it. It 
appeared to be that it was a policy that had never been 
instituted at the Department of State. People felt it would be 
too confining and it wasn't doable and asked me to withdraw it.
    Chairman Gilman. Who asked you to withdraw it?
    Mr. Carpenter. Under Secretary Pickering. We went back to 
the drawing board. We conducted more briefings. We, quite 
frankly, made the escort policy better. We did some marketing--
people better understood what needed to be accomplished. We 
talked to those people who were most concerned, people that 
would be entertaining large groups, how that would work. Some 
of that work, quite frankly, had not been done.
    Chairman Gilman. When did you reintroduce that?
    Mr. Carpenter. In August 1999, less than 1 year ago.
    Chairman Gilman. And has it been in place since August 
1999?
    Mr. Carpenter. Yes, sir, it has and working quite well.
    Chairman Gilman. And, Mr. Carpenter, one of the concerns in 
the current escort policy is the exception for the press corps. 
Understanding they are supposed to be restricted to the first 
two floors of the building, what is to prevent them from moving 
about freely in the other floors?
    Mr. Carpenter. Currently, we realize that the press and 
their ability--the answer to your question is nothing at the 
current time prevents them from going to other floors.
    Chairman Gilman. So they have free access now.
    Mr. Carpenter. They do not have free access. They are 
instructed that they are not to go above the second floor. We 
have guards patrolling the floors, second, third, fourth, 
fifth, sixth, etc., looking for not only press who are 
unescorted but other people who may have left an office without 
escort.
    Chairman Gilman. Unless they are confronted by a guard, 
they can wander around the building; is that correct?
    Mr. Carpenter. It would be possible. Yes, sir.
    Chairman Gilman. Can you tell us how you issue press 
credentials to the American/foreign press? Is there any 
distinguishing process between the two?
    Mr. Carpenter. Yes. There are checks that are made and 
probably this would not be the forum I would want to go into 
what those checks are, but clearly there will be checks done on 
them.
    Chairman Gilman. As part of your new escort policy, are 
random hallway checks done to identify persons not eligible to 
be wandering around a building?
    Mr. Carpenter. Yes, sir. They are.
    Chairman Gilman. I know I have exceeded my time but this is 
such an important issue. To our FBI assistant, since the chair-
rail incident, has the State Department done everything it can 
to minimize security problems and threats, in your opinion, to 
the Main State facility?
    Mr. Bereznay. As I indicated in my statement, Mr. Chairman, 
since that incident, there has been a tightening of the escort 
policy. The only area where I see a need for improvement is one 
you have already addressed, that being foreign media 
correspondents' access at State Department.
    Chairman Gilman. Does the gentleman's agreement that badged 
foreign press officials remain only on the first two floors of 
the State Department unless they are escorted pose any serious 
security threat?
    Mr. Bereznay. In my opinion, it poses a threat. Realizing 
that those media representatives could be working in 
conjunction with other visitors from foreign countries, I 
believe that there is a threat there. As I indicated, we would 
be willing to work with State Department to identify those 
journalists--foreign journalists who we know to be intelligence 
officers so they can be either more vigilant during the visit 
or restrict those visits.
    Chairman Gilman. To your knowledge, are there foreign press 
representatives who are intelligence officers now serving in 
the State Department?
    Mr. Bereznay. Mr. Chairman, yes, there are.
    Chairman Gilman. Thank you. Ms. Bridgers, does the escort 
policy raise any concerns with your office.
    Ms. Williams-Bridgers. Yes, Mr. Chairman, the escort policy 
does raise a number of concerns, specifically those that you 
have just focused your attention on within the past few 
moments. We believe that the escort policy as written is an 
excellent first step in controlling visitors to State 
Department, but it does leave a glaring hole in allowing the 
press, members of the media, free access to the building.
    Chairman Gilman. Thank you. Mr. Gejdenson.
    Mr. Gejdenson. Thank you, Mr. Chairman. Let me just start 
on the computer. Do you need to have a laptop, I mean, was 
there a reason for it to be a laptop.
    Mr. Roy. Let me address that, Mr. Gejdenson. The laptop was 
acquired through funds provided by the intelligence community 
because officers working on non-proliferation issues, outside 
of INR, did not have secure computers within INR that they 
could do their work on. The information had to be stored in 
INR. For that reason, a laptop was purchased with intelligence 
community funds in order to have a workstation available within 
INR that could be used by cleared employees from outside of the 
Bureau who needed to work on SCI material within INR.
    Mr. Gejdenson. Was there a need for the computer to be 
mobile or could the same things have been accomplished by 
having a full-size desktop?
    Mr. Roy. In principle, it could have been accomplished by 
having a full-size desktop and eventually----
    Mr. Gejdenson. Just because it is harder to steal and 
larger----
    Mr. Roy. To be frank, the idea that either a laptop or 
dedicated workstation could have been stolen was not driving 
the decision.
    Mr. Gejdenson. I understand that, but in the field which 
you are, when we take a look at getting a system for outside 
people who are coming to State, we could simply get a desktop 
instead of a laptop. They could still steal the hard drive. 
There are lots of ways to steal information. You can download 
it, send it over a modem, but physically it will be harder to 
remove it if it is not a laptop in the future. So that may be 
one of the things you ought to look at is whether or not you 
need to get smaller systems or whether you need to encase them 
in larger systems just as an additional security measure.
    Mr. Roy. I agree with you entirely; and in practice, INR 
laptops are only used for those mobile situations where only a 
laptop can be used. In other cases, we use dedicated 
workstations.
    Mr. Gejdenson. Mr. Carpenter, do you have enough authority? 
My sense from your answer on the escort issue is you had to 
learn the politics of the State Department so you worked it 
through. Like any institution, institutions don't like new 
people who come in and change the way they have lived. It has 
worked fine before you got here. You tried something, you did a 
pretty good job, but obviously then you had to sell it, refine 
it, as you said. You should be a diplomat, you are very good at 
these things, but basically putting aside the need in any 
institution to learn how to move things along, do we need to 
change the structure in any way so you have the authority 
necessary to take the actions you consider important in an 
expedited and timely manner?
    Mr. Carpenter. Well, they didn't hire me to be a diplomat. 
I think State hired me to look at the security issues with the 
eye that needed to be focused on them. The Secretary has been 
incredibly supportive of the efforts that we have made to try 
to improve the security at State. The issue that was addressed 
earlier about the escort policy, we were clearly aware of a 
hole that is there. There are steps that have been taken to 
mitigate those holes, and I will be glad to discuss those again 
in another forum.
    Your statements about the need to be diplomatic--we could 
not be. The State Department had never had an escort policy, 
never or anything close to it. It was very, very difficult to 
drop the curtain on the Department. It had all sorts of 
ramifications--so we had to do it in phases. This is simply the 
first one. Are there holes in it? Absolutely. We are looking at 
such things as hiring permanent people that do nothing but 
escort. We are looking at converting different parts of the 
building to secure or nonsecure areas only, to better 
facilitate the conduct of our foreign affairs. There are a 
number of things that need to be done. As the Inspector General 
mentioned, this escort policy was only a first step.
    Mr. Gejdenson. Do you have authority enough in the 
structure of the State Department? This is an old system, a lot 
of people around, lots of power centers under the present 
construct, whether it is you or anybody else there. Do you have 
authority to move forward and do the things that need to be 
done at the Assistant Secretary level? Or do you need a 
different title or more staff? Are there any of those things?
    Mr. Carpenter. I am glad you asked. The Secretary is 
working with Congress to establish, as soon as possible, a new 
position for Under Secretary for Security, Counterterrorism and 
Law Enforcement. The genesis of this concept was from the 
accountability review board following the East Africa bombings 
that suggested that the Department of State needed to designate 
one person to be responsible for all security issues at the 
Department of State. This position clearly does not exist.
    The question that was posed is--at what level does that 
person have to be to function. Currently, I have what you would 
call an informal reporting to the Secretary herself. I brief 
her every morning. That certainly gives me a certain profile, 
but I also answer to the Under Secretary for Management. There 
are other elements in the Department that from time to time 
address security issues. The Department is full of security 
experts from time to time. I think it is important that 
security issues be resident under one person so that this body 
and the Department of State in total understand who is 
responsible. I think this would be an excellent step.
    Mr. Gejdenson. Now, and you kind of mentioned this, but you 
sense there is a need to change the operation of the physical 
plan so some areas are basically sealed off to the public, no 
access unless you know a code or some kind of card entry. We 
are using all the modern technology that is available today to 
both limit access to rooms and to have a record of who enters 
and leaves a room. For instance, where this computer was, do we 
know everybody who entered and left that room.
    Mr. Roy. Yes, we do.
    Mr. Gejdenson. And so somebody who entered and left that 
room must have taken the computer, there is no one else that 
could have done that.
    Mr. Roy. No, sir.
    Mr. Gejdenson. Now let me ask the gentleman from the FBI. 
My instincts are that State needs these internal services and 
somebody at a level appropriate to oversee them. Is there any 
argument that says we should have the FBI do this? It might 
cause a little interagency tension, not that that ever happens 
much in Washington, but maybe having an outside agency watching 
the security on a regular basis might be more effective, is 
that your view?
    Mr. Bereznay. I don't believe that the FBI should be asked 
to do that sort of function, for the State Department or for 
any other agency. I think that State clearly has the ability 
through the Office of the Inspector General and diplomatic 
security to undertake those functions.
    Mr. Gejdenson. And Mr. Carpenter, if we know that some of 
the foreign press that are at State are collecting information 
for governments, friendly or unfriendly, to the United States, 
wouldn't it make sense to immediately secure the other floors 
from their--I mean, if I was a reporter for another country, is 
it possible for me to walk in the elevator and push a button 
and go to a floor that I shouldn't be on or walk up a hallway 
that I shouldn't be in.
    Mr. Carpenter. It has been made more difficult but clearly 
not impossible.
    Mr. Gejdenson. And so shouldn't we have some, again, system 
by which they physically can't get there? So it is not just 
their good intentions and our, you know, people in the hallway 
spotting them but that it is physically impossible for them to 
open doors they shouldn't open.
    Mr. Carpenter. Congressman, as I said previously, I am not 
a diplomat. I was hired to be a security officer. If it was 
within my power, I would not have the press actually in that 
building. I would have them offsite somewhere we could more 
easily control.
    Mr. Gejdenson. That is not a bad idea actually. So you 
would have the press outside the actual State Department 
building physically.
    Mr. Carpenter. It would be much easier, either outside the 
building or confined to a lower floor area where they would 
have access only, much less access.
    Mr. Gejdenson. So when they were invited in you could let 
them in. The rest of the time you keep them corralled. I like 
that approach for here as well.
    Now what about the report that the door was being propped 
open while people were working there? Is that correct?
    Mr. Roy. Let me give you my understanding of the 
circumstances.
    The office in question was having an adjacent office 
altered to become part of the office. At the time that the 
alteration work began, they were not connected. They were 
contiguous to each other, but they were not connected. There 
were separate access doors to the new office space. During the 
period that that new office space was being renovated and 
before it had been added to the office in question, the door 
was sometimes propped open so that the workers could gain 
access.
    Mr. Gejdenson. But at that point there was no entry from 
that space to the secure space?
    Mr. Roy. Correct.
    Mr. Gejdenson. And there was no secure information in that 
space?
    Mr. Roy. Correct. And following the knocking through of 
access to the office in question, the passageway was monitored 
full time.
    Mr. Gejdenson. So what we have is we have a laptop missing 
from a room. If you open that door and I walked in with you, 
where would be the record that I was with you?
    Mr. Roy. That particular office did not have a log-in/log-
out procedure at the time, so that you would be under the 
responsibility of the person escorting you.
    Mr. Gejdenson. So no one could enter the room without 
somebody authorized escorting them. But if somebody--if a 
friend of mine worked there and I walked in with him and he 
didn't note that I was him at any point, then----
    Mr. Roy. The procedures followed were that you had to be 
under positive escort. I myself as Assistant Secretary could 
not gain access to the office because I did not know the door 
combination, and you could not gain access without being either 
admitted by somebody from inside or knowing the combination.
    Mr. Gejdenson. So if somebody took you in there, was there 
a record of your presence?
    Mr. Roy. No, sir, not at the time.
    Mr. Gejdenson. So we have everybody who has entered, but 
not everybody who accompanied them, and that is the rub.
    Mr. Roy. Once you were inside, you had to be accompanied--
--
    Mr. Gejdenson. Right.
    Mr. Roy [continuing]. And the personnel in the office were 
indoctrinated to determine whether you had an SCI clearance or 
not when you were admitted to the space.
    Mr. Gejdenson. Now on the gentleman in the tweed jacket and 
the question there is, whose responsibility is that? Mr. 
Carpenter, you weren't there yet, but that would go under your 
responsibility now?
    Mr. Carpenter. Yes, sir, it would.
    Mr. Gejdenson. And basically what happened was there was a 
file left out in the receiving room.
    Mr. Carpenter. There were a number of files set on a desk 
between two secretaries.
    Mr. Gejdenson. And a gentleman came up, looked at the 
files, took some things. And that floor--was that a secure 
floor?
    Mr. Carpenter. Yes, it is. It is the Secretary's suite. The 
Secretary was not in at the time, I might add.
    Mr. Gejdenson. If I come to the State Department, first I 
have got to get past those lines. So if I am a reporter, I 
could get through and go unescorted to my press area, but I 
could also go up in the elevator to the Secretary's floor.
    Mr. Carpenter. To the Secretary's floor but not the 
Secretary's suite.
    One of the things that probably will clarify some of this, 
the person that took these was believed to have a State 
Department pass, wearing a State Department pass, which allowed 
them access through their card swipe into her suite of offices. 
Unfortunately, as Murphy's law would take place, the day that 
this was done, the system that read who came in was down.
    Mr. Gejdenson. That was a coincidence, you think, not 
intentionally done?
    Mr. Carpenter. We see no evidence that it was intentionally 
done. Nothing to indicate that.
    Mr. Gejdenson. So as one of the things--and my time's up 
here--do we need to look at something that, whether it uses, I 
don't know, the thumbprint, eye scan, I mean, this is the most 
important information we have as a country. It seems to me we 
have to have much more positive information on who enters and 
leaves rooms, and I shouldn't just be able to give somebody 
else my card to allow them access. Are you looking at all that?
    Mr. Carpenter. Yes, sir, we are. As a matter of fact, we 
are in the process of purchasing a system for access, not only 
to Main State but other critical areas, that is a combination 
of a card swipe identifier as well as a redundant pin system 
like used in most places throughout this city.
    Mr. Gejdenson. What I suggest is--and I know the Congress 
has not been supportive of the President's and the State 
Department's request for funding and we have kept the pressure 
on you in trying to cut--that incidents like this give you an 
opportunity to get what you need. What I would suggest is that 
you ask for a supplemental amount of money--segregated funds 
based on our security needs at State and other facilities 
around the country--and that you get that up to us as soon as 
you have it.
    You better be able to defend it. But it seems to me we have 
got lots of crises to respond to--we have wars, we have got 
starvation. We have had some trouble in this area in the past, 
but I think you ought to hand up a supplemental request for 
security. Make sure the systems we need are there, here and 
around the country. Obviously, that is going to include 
training personnel, because just having the system without 
changing culture and training isn't going to work.
    Thank you, Mr. Chairman.
    Chairman Gilman. Mr. Rohrabacher.
    Mr. Rohrabacher. Thank you very much.
    You know, I have been trying to get some documents out of 
the State Department for about 2 years. I must have been asking 
the wrong guys to get it for me. Let me get this right. I 
really have. I should have asked some of those intelligence 
officers over there.
    Mr. Roy, let me get this straight. We have had a policy 
where you have to be escorted, but we have the FBI telling the 
security people here that we have got intelligence agents 
posing as members of the press who are running around the 
building unescorted. Something's screwy here. Am I missing 
something?
    Mr. Roy. Let me just make a very quick response to that.
    We have special additional procedures in INR required by 
the Director of Central Intelligence Directives. These 
procedures go beyond the general ones that apply to the State 
Department as a whole which is under a different security 
regime.
    Mr. Rohrabacher. I don't know if that was an answer to my 
question or not. It sounds like the answer to my question is 
that you have testified here today that you can't go unescorted 
and the FBI's already testified that they have complained that 
we have intelligence agents posing as reporters running around 
the building unescorted.
    Mr. Roy. Let me quickly clarify I am not escorted when I 
wander around the State Department. When I was not working in 
INR, I was escorted when I entered INR secure spaces.
    Mr. Rohrabacher. All right. It sounds like, to me, that at 
times you have had to have escorts and foreign intelligence 
agents haven't. But that is a matter of--I don't know how 
important that is, but it just seems to suggest that things are 
out of whack over there.
    By the way, when things are out of whack, there is always 
testimony by someone, let us just hire a czar. In this case, it 
is going to be a new under secretary.
    According to the reports that I have seen, the State 
Department now has more money, taking inflation into account, 
than it has ever had for internal operations which could have 
been directed by the Secretary or the White House to be spent 
for these security reasons. Isn't that right? So we are not 
talking about lack of money here. You have got more money than 
you have ever had before, but yet we have these situations.
    How is hiring on a couple new employees at very high prices 
going to change that? This is an attitude problem. This isn't a 
lack of personnel. This is what I am hearing here, and it is 
real easy to try to think that we are going to solve problems 
by creating a new under secretary for this or that. It seems 
those problems never get answered.
    Let me put it this way. From an outsider--and I want to 
just look at this from a broader perspective. I think this 
Administration has had a lax view toward national security and 
toward these intelligence concerns from day one.
    There was a book by Aldrich Ames called Unlimited Access 
about the security violations that started almost immediately 
after this President became President of the United States. If 
you have an attitude from the White House which ends up 
permitting the transfer of massive amounts of technology to the 
Communist Chinese as well as--obviously, an attitude in this 
White House, where you have campaign contributions flowing into 
funds and then we find out that--coming from the people who 
produce missiles and rockets in Communist China, and we found 
out that there has been problems with a transfer of technology, 
of course people down the ladder are going to have a lax 
attitude toward national security matters.
    Let me just get down to a specific, to our FBI man. The FBI 
complained that there was access to the State Department by 
foreign intelligence officers posing as reporters. That is what 
you have testified today, is that correct?
    Mr. Bereznay. That is correct.
    Mr. Rohrabacher. OK. That was very clear in your testimony. 
When that complaint was made, what was done to act upon that? 
Was there something?
    Let me ask Ms. Williams-Bridgers.
    Ms. Williams-Bridgers. In the course of our audit looking 
at the handling of classified information, we asked to obtain a 
copy of the FBI report that alluded to foreign intelligence 
officers operating under cover of press, and we were denied 
access to that report. So this is the first that I am hearing 
today a positive affirmation that there are media who are, in 
fact, intelligence officers operating in the Department.
    Mr. Rohrabacher. OK, so we have got to find out what 
happened today. But, you actually in your job of trying to 
investigate this didn't have that information.
    Ms. Williams-Bridgers. We did not, sir. That is correct.
    Mr. Rohrabacher. Well, this is----
    Chairman Gilman. Will the gentleman yield?
    Mr. Rohrabacher. I certainly will.
    Chairman Gilman. When did you learn about the report by the 
FBI?
    Ms. Williams-Bridgers. We learned about it during the 
course of our audit which was conducted between August 1998 and 
September 1999.
    Chairman Gilman. Who did you make the request to for that 
report?
    Ms. Williams-Bridgers. To the FBI. I am not certain of the 
exact name of the individual or the unit, but our audit team 
did request a copy of the report, and we were told that we 
would not be allowed to see it.
    Chairman Gilman. Did you followup that report with the 
Secretary of State to make a request of the Secretary?
    Ms. Williams-Bridgers. No, we did not, sir.
    Chairman Gilman. Thank you.
    Mr. Rohrabacher. Let me correct the record. It was Gary 
Aldrich who was the FBI agent who wrote Unlimited Access and 
not Aldrich Ames, who was a spy who has probably applied for 
press credentials over at the State Department.
    Well, let's hear about it. Why wasn't this acted upon or 
was it acted upon? And why is it that the person who is 
supposed to be overseeing this, making sure problems don't 
happen, was not given a copy and even didn't know that this 
report had been made and this complaint by the FBI was present?
    Mr. Bereznay. The report that is being referred to is a 
classified report, and it basically entailed a survey, a joint 
survey, that was done by the Bureau with Diplomatic Security. 
It was done in 1998, and it was done specifically to address 
the issue of visits to State Department by foreign intelligence 
officers.
    Mr. Rohrabacher. And was it acted upon? What happened to 
act upon this report? That is the question.
    Mr. Bereznay. As a result of that I believe Mr. Carpenter 
has testified to the implementation of escort policies and the 
attempt to implement that and----
    Mr. Rohrabacher. But the escort policies have nothing to do 
with the media, right? I mean, is the media now--I thought what 
we were hearing here is that we still have a problem. The media 
still can go around that building unescorted.
    Mr. Carpenter. Let me try to clarify this. Can they--could 
they be there right now? Yes, they could.
    The program is designed so that they can't--and, as I 
mentioned earlier, this is a vulnerability that we are well 
aware of, and there are things that we have done to mitigate 
that that I prefer not to go into in this forum. I would be 
glad to discuss it later because it does involve some other 
issues.
    But the press, Congressman Rohrabacher, are not allowed 
unfettered access above the second floor. Since--in the last 
year since the escort policy has been in place, we have had 
seven incidents--excuse me, one incident of a press person 
caught above the second floor. It wasn't a foreign press, but 
that individual was picked up by our uniform people and 
promptly returned.
    Mr. Rohrabacher. I think the operative word there is 
``caught''--you know, caught.
    Let me just say again, I don't think that we can, Mr. 
Chairman, I don't think that we can just wish and point our 
fingers and blame people at lower levels for having a lax 
attitude, which is what you have been describing today. There 
was been this lax attitude of security, and you are trying to 
do something about it. We can't blame that when we have got, at 
even the highest levels of this Administration, what I see as a 
totally lax attitude toward the national security and toward 
intelligence in the United States.
    I mean, this Administration--considering all the transfer 
of technology and information that we have had to a potential 
enemy like Communist China, this Administration looks like a 
spaghetti strainer. When you go down--and the fact is they have 
known about it, we have known about it, and they make light of 
it. How can you expect people further down the line to take 
their job seriously when we have got this coming from above? I 
think that we need to change the procedures.
    My hat's off to you for the serious way you are trying to 
do it. But it is going to require more than just hiring another 
high-level executive and putting another nameplate on the door. 
It requires a change from top to bottom in terms of people's 
attitude toward this country's national security.
    One last statement, Mr. Chairman. That is, when we talk 
about laptops and we talk about documents that are missing, 
what we are really talking about here is the national security 
of our country has been compromised. Let us not try to minimize 
how important that is. People's lives are at stake with these 
national security issues. Whether or not in the long run people 
may lose their lives we will never know if it was due to 
information on that laptop or how the laptops work, getting 
into the hands of people who are enemies of our country. This 
is a very serious issue; and I appreciate you, Mr. Chairman, 
trying to take the lead and get the word out on this.
    Chairman Gilman. Thank you Mr. Rohrabacher.
    Ms. Lee.
    Ms. Lee. Thank you, Mr. Chairman; and thank you also for 
this hearing.
    Let me just ask first just a general question.
    In terms of trends, have you seen, I guess, an increase in 
security breaches since the end of the Cold War. Did the State 
Department have more stringent security procedures in place 
during the Cold War or how has our security sort of emerged or 
not emerged since the Cold War or since the end of the Cold 
War?
    Mr. Carpenter. I will try to speak to my knowledge--to the 
best of my knowledge since the end of the Cold War.
    Clearly, during the Cold War and those periods prior to it, 
there was a--the perception that the majority of danger of 
either threats from espionage or some other type of penetration 
was primarily overseas.
    The Department of State, again, had no escort policy in 
place in spite of the Cold War ending. The State Department has 
actually gone the other direction. We have instituted an escort 
policy. It makes no sense to have, whether they are Russians or 
other foreign visitors, visitors in the building unescorted. So 
we have taken a very strong position on this, albeit a radical 
change from prior periods of time.
    Clearly, there is an upswing in the espionage activities. I 
don't know of any other Federal building that has been 
penetrated in recent memory by foreign agents in the way that 
the State Department was. I think that this clearly shows they 
have the capabilities, they have the will and the want.
    Ms. Lee. So then would you say that security possibly has 
increased since the end of the Cold War but so have 
counterintelligence activities?
    Mr. Carpenter. Put another way I think I am saying that 
those involved in the mitigation of counterintelligence 
activities have always understood the threat, have always been 
forward leaning on this as well as people charged with the 
security of buildings, the security of individuals and 
classified information. But, quite frankly, in the absence of 
the smoking gun, sometimes it is difficult to get the funds 
that are required in order to do that promptly.
    Ms. Lee. Mr. Chairman, let me just ask another very quick 
question.
    Now, the loss of the laptop and the tweed jacket and 
listening device incidents all reflect major failures in the 
security system, but now do you think that--without breaching 
security, do you think that these are isolated incidents or do 
you think that the dots could be connected? I mean, do you 
think that there could be some actual organized 
counterintelligence activities going on or, again, are these 
isolated incidences unto themselves?
    Mr. Carpenter. At least two of the incidents, two of the 
three, the tweed coat and the INR laptop, I would say to be 
examples of individual failings, carelessness on the people's 
part. The tweed coat--the information taken by the gentleman in 
the tweed coat was taken right out from between two individuals 
who did not report it in a timely fashion or this individual 
probably would have been able to be apprehended. The 
accountability again, the carelessness, and the laptop is an 
individual failing. I don't think security people are in the 
position of making judgments whether this is--I think your word 
was a trend or a--I am sorry, Ms. Lee.
    Ms. Lee. Well, in terms of the second part of my question, 
are there any type of organized counterintelligence activities 
going on or are these isolated incidents as you see them.
    Mr. Carpenter. We don't see these as isolated incidences. 
We see these as ongoing problems with people intent on finding 
out our secrets.
    Ms. Lee. I think as we look at the structure and move 
toward trying to make some major systemic questions, because 
that is what it sounds like, I would hope that if we do have 
another office or another unit responsible for and activities 
and security initiatives become part of the entire culture and 
that we don't hone in on just a few new departments or agencies 
or under secretaries isolated from the entire State Department. 
Because if that's the case, we will have really not done what I 
think we need to do.
    Mr. Carpenter. I couldn't agree more. We are not trying to 
create something new here. We are trying to take advantage of 
the synergies that are between existing bureaus within the 
Department of State and combine them under one person who can 
oversee these issues. That way we gain the values and the 
efficiencies of having, in this particular case, the diplomatic 
security bureau that I represent, the Office of the Coordinator 
for Counterterrorism and the Office of International Narcotics 
and Law Enforcement, combined under one. We are just trying to 
put together the organizations, bureaus, and offices that 
already exist and take advantage of that.
    We think that security has to be core to the Department of 
State and, to that end, it is location, location, location. And 
as the security elements within the Department are currently 
positioned, we are not gaining its full advantage. That is what 
this proposal for an under secretary is geared to accomplish.
    Chairman Gilman. Thank you Ms. Lee.
    Mr. Smith.
    Mr. Smith. Thank you, Mr. Chairman. I apologize for missing 
most of the testimony, although I have read some of it. We had 
markup going on up in Veterans on the GI Bill of Rights, and I 
just could not leave it until it was finished. Let me just ask 
a couple of questions.
    Obviously, it is the sensitive information in the laptop or 
perhaps laptops that matter, although the financial loss of any 
Department asset obviously should be something that concerns 
us. But obviously, again, the highly sensitive nature of the 
secrets, the fact they can compromise our personnel overseas 
and do a whole host of damage to our national and international 
interests makes that information beyond the price--priceless, 
if you will.
    I wonder if you can tell us what are the security 
procedures in place and perhaps even contemplated to ensure 
that secret information isn't compromised, for example, by 
downloading. It is one thing to take a laptop. It is much 
easier to download the information and walk out of the 
building.
    Are there random checks of personnel? Do our former U.S. 
Government employees who worked for State have access--we know 
some of those folks go on to work for foreign governments, as 
do Members of Congress, but we know that U.S. State Department 
people, because of their knowledge, are probably very highly 
prized by foreign governments. Do they have access? What are 
the penalties for security violations?
    If a person is caught, what exactly is triggered in terms 
of investigation and penalty? And do you believe that those 
penalties are sufficiently strong to deter security violations 
so that they don't occur?
    Let me just ask a general question, because I know we only 
get 5 minutes. The culture of the Foreign Service, is it too 
lax, you know, in an attempt to be open and reach out to 
governments? We know that very often even their own physical 
security abroad is not taken as seriously as some of us would 
like. Does that need to be changed?
    A question on the number of months. I believe it was 8 
months that lapsed between the time when the visitation policy 
was changed again after Tom Pickering nixed it in December. I 
just ask our distinguished friend from the FBI--did you advise 
Diplomatic Security when you found that there were foreign 
intelligence officers with access to the State Department and 
what was their reaction?
    I would like to yield for your answers.
    Mr. Bereznay. As I indicated previously, the study that was 
done was done in 1998. It was done in conjunction with 
Diplomatic Security. I believe it was prompted by a report by a 
State Department employee of activity that came to her 
attention which she felt indicated she may be being looked at 
by an intelligence service. So that is what prompted this. It 
was a diligent State Department employee, reporting this 
activity to Diplomatic Security. It was Diplomatic Security 
working with us that surfaced the unescorted visitor problem.
    We did share the results of that survey. It was a very 
limited survey, and those results were shared with Diplomatic 
Security. I believe--and I will defer to Secretary Carpenter as 
to whether or not that report prompted his review. The timing 
of it certainly falls, but I don't know how much impact that 
did have on internal State Department policies.
    Mr. Smith. Mr. Secretary Carpenter--and if you perhaps, 
Ambassador Roy, or Ms. Williams might want to touch on those 
other questions as well.
    Mr. Carpenter. Clearly, as Tim has just said, we were aware 
of this information. It did drive a need for immediacy on the 
escort policy. I think this came, quite frankly, after our 
initial discussions about the need for an escort policy.
    I might add, although I am not sure how pertinent it is to 
this, a lot of the focus that we had--Diplomatic Security had 
during the period that was in question was overseas. We just 
had two embassies blown up. We were up here trying to get more 
money. We were definitely focused in that area; and because of 
that, quite frankly, we moved slower than I would have liked to 
have moved. This escort policy, because it was controversial, 
was something that had never been done.
    Let me correct that. In the early 1990's there were three 
countries that when their diplomats came to the State 
Department, were escorted. The decision was made, and I don't 
know by whom or based on what, to discontinue the escorts. So 
1992 was the last time anyone was escorted. But, again, it was 
only the diplomats from three particular countries. Does that 
answer your question?
    Mr. Smith. It does in terms of the FBI, but in terms of the 
penalties--and maybe Ambassador Roy might be the pertinent 
person to respond to that.
    Mr. Roy. The penalties fall under DS. We have no ability to 
apply penalties.
    Mr. Smith. How about random checks and the like and the 
access of former U.S. Government employees? Do they have access 
to the building in an unfettered way or are there checks there 
as well?
    Mr. Carpenter. They did. We are in the process of working 
with the Director General's Office to discontinue that practice 
and that former employees need to be escorted. If you are not 
currently employed as a State Department employee, you need to 
be escorted in the building. That process should--we have been 
yawing back and forth for weeks now, but that should be in 
place very, very soon.
    As far as your question on penalties, again, Diplomatic 
Security doesn't punish. Are the penalties severe enough to 
deter? It doesn't appear so, quite frankly. I would say that 
the number of violations issued, and I can probably provide 
those to you at a later time, are much too high. It would be an 
indicator to me that perhaps we need to raise the bar as to 
what those penalties for security violations are.
    Now, let me also clarify, a great number of these security 
violations are minor in nature. Quite frankly, no security 
violation--I hate to classify as minor, but these are such 
things as leaving a safe unlocked during a time with perhaps no 
secure information in it. There are certain procedures that are 
prudent but, again, not the crime of the century.
    The more serious incidences, quite frankly, I think the 
Department has dealt with in a very stern manner. I would 
suggest it will deal in a much more stern manner in the future 
as a result of this. This is a very, very embarrassing 
situation for the Department; and if the people in the 
Department don't understand that, they will obviously be made 
to understand it if they commit a security violation.
    Mr. Smith. Excuse me, Ms. Williams. Not to belabor the 
point, how hard is it to download the sensitive information to 
disk, which obviously is a dime a dozen and can be transported 
out of the building with considerable ease?
    Mr. Roy. Let me comment on that briefly.
    On our most secure computer systems, we do not have any 
downloading capability. We do not even have a floppy drive on 
the computers.
    I would like to add a generic comment, however. If there is 
a culture of lax security in the State Department, I have never 
been part of it, and it has not been part of my Foreign Service 
experience, in part because of what I consider to be the superb 
work that DS has done at all the posts where I have served to 
maintain a high standard of security awareness.
    I served in Moscow during the height of the Cold War. I 
have served in high-threat posts like Beijing and in Jakarta 
where the physical threat was high. In Jakarta, the inspectors 
concluded a year ago, after inspecting my post, that security 
is a dominant theme at post and has become an integral part of 
life in Jakarta for all mission employees.
    That is the culture of security awareness that I have been 
part of in the State Department and I think perhaps that needs 
to receive a little more attention.
    Mr. Smith. Ms. Williams.
    Ms. Williams-Bridgers. Thank you, Mr. Smith.
    I would like to add to the point that Ambassador Roy has 
just made.
    What OIG has found in the course of over 200 inspections 
that we have done within the past 4 years is that the attention 
to security overseas and handling of classified information is 
generally quite good. That is because when you have a chief of 
mission who sets a tone for the mission that security is 
important and there is a threat that is dominant, then people 
will pay attention to security.
    When you have Marine security guards and regional security 
officers that make it their business to indoctrinate, to make 
people aware of and to enforce security, then you have an 
environment where security becomes something of importance to 
the people.
    What we have found in the Department of State in the Main 
State headquarters building is that the same environment does 
not exist. Security was overall a very low concern for most 
people in the Department of State.
    Moving on to your question about the penalties and the type 
of disciplinary action, what we found in the Department of 
State is that discipline did not occur as it should when there 
were security violations. The current policy at the Department 
of State is that you must accumulate five violations or 
infractions over an 18-month period before the situation is 
even referred to the Director General to take disciplinary 
action.
    When we looked at approximately 200 cases that had been 
referred to the Director General, we found that 20 percent of 
those cases, as I understand, had at least five violations over 
an 18-month period. In 20 percent of those cases, no 
disciplinary action was taken. For an additional 40 percent of 
the cases, only a letter of warning was issued to the 
individual. Letters of warning are pulled out of staff's 
personnel files after a 1-year period of time.
    In the other cases that OIG reviewed, we found suspensions 
in 6 of the 218 cases we reviewed and 10 letters of reprimand. 
We do not believe that that demonstrates a commitment to take 
very swift and certain action against those people who have 
committed violations of the security policy.
    Mr. Smith. At what point does the information lead to a 
potential of a prosecution and how is that handled? I mean, is 
there a referral to the Justice Department or how is that 
handled?
    Ms. Williams-Bridgers. In the Office of Inspector General, 
and I will defer to the Assistant Secretary for how they handle 
cases in DS, when allegations come to our attention that 
indicate a violation of law or a breach of a regulation 
governing security matters, and if it is a part of a larger set 
of allegations of misconduct against an individual, then OIG 
will investigate. We will certainly inform Diplomatic Security 
about the allegation that exists concerning a breach of 
security.
    If the allegation merely pertains to a breach of security, 
then we would refer the matter entirely to the Bureau of 
Diplomatic Security. If the allegation during the course of a 
preliminary inquiry indicates that there is some evidence that 
a law may have been violated, we will immediately inform the 
Federal Bureau of Investigation and the Department of Justice 
and coordinate with them. They then become the supervisors, in 
essence, of any investigation that we might undertake.
    Mr. Smith. Let me just ask one final question, Ms. 
Williams. Do you feel institutionally the Department is 
sufficiently responsive to your recommendations on security 
issues? Do you receive adequate support from the top levels at 
the Department?
    Ms. Williams-Bridgers. Mr. Smith, thank you for asking that 
question.
    The Office of Inspector General shares the very same goals 
of the Department when it comes to security. Our goal, as is 
the Department's, is the protection of information, protection 
of our people as they work overseas and here on the domestic 
front, and the protection of our facilities. We work hand in 
hand with the Department.
    That is why Congress established an Office of Inspector 
General, to work inside the agency, to collaborate with the 
agency, to share with them the deficiencies as we identify 
them, to identify who should be held accountable for any 
misconduct, any abuse or mismanagement of the funds.
    I am disappointed that the Department all too often 
responds slowly or responds not at all to the recommendations 
that we make. In large part I think our working relationship is 
very good, but when we identify vulnerabilities in our systems 
that breach the very goals that all of us are trying to obtain, 
it is disconcerting that the Department's non-compliance 
results in the continuation of identified security 
vulnerabilities.
    Mr. Smith. Do you feel it is likely that, especially now in 
light of this crisis, that your recommendations--and you might 
want to articulate some of those, dealing with not only new 
procedures but also penalties for those--I mean, nothing deters 
better than knowing that there is a sure and swift and certain 
punishment if one acts in a certain way to compromise U.S. 
security interests. Do you think it is likely that those 
recommendations will be adopted?
    Perhaps anyone else on the panel might want to speak as to 
what really is being contemplated in a top-to-bottom overhaul.
    Ms. Williams-Bridgers. Of the key recommendations that we 
have made, foremost is the transfer of responsibility to the 
Bureau of Diplomatic Security. We consider that matter closed. 
The Secretary took action to first appoint Assistant Secretary 
Carpenter as her senior adviser for security. That was a 
welcome move. I think it places in very prominent view to all 
in the Department the importance that she places on security.
    With regard to the escort policy, which we have discussed 
quite a bit today, we consider the implementation of an escort 
policy and all the variances that have been drafted over the 
course of the past year to be good first steps. Even though 
there are holes, we commend the Department for taking the 
action to enhance escorts.
    We are still waiting for a response and some resolution to 
many of the other key recommendations that we have made 
regarding, for example, the security incident program. We are 
not at all comfortable at this point that the Department has 
moved as quickly as it should have in instituting stronger 
disciplinary actions to attend to security violations.
    We are pleased that the Department has taken action, that 
DS is looking to enhance the card swiping, identification badge 
system that we use, to further comply with the Director of 
Central Intelligence Directives that require some 
authentication of who is actually swiping the card.
    The question was raised earlier of the Secretary's suite--
the access to the Secretary's suite with the cards. Even if the 
system had been working the day that the gentleman in the tweed 
coat took the sensitive intelligence information out of the 
suite, that system did not comply with DCIDs. The current badge 
system does not allow verification that the person who is 
actually using the card is a Department of State employee. DS 
is working to address this vulnerability, possibly by use of 
biometric systems, and we welcome that attention.
    We also understand that DS will be working with INR to 
attend to other DCID directives involving attenuation and 
inspection accreditation of the temporary work spaces, but 
there are some other long-standing recommendations that we have 
made about secure, sensitive, compartmented information access 
that we have not yet heard any response back to, 
recommendations that have been outstanding for a year now.
    Mr. Smith. Thank you very much.
    Chairman Gilman. Thank you Mr. Smith.
    Mr. Hastings.
    Mr. Hastings. Thank you, Mr. Chairman. And, Mr. Chairman, 
thank you for holding this hearing.
    The limited time has been very candid and reflective and 
enlightening. I appreciate very much the witnesses being here, 
particularly Ms. Williams-Bridgers. I read all of your prepared 
statement, and I think all of us on this Committee would be 
wise to become adherents to following the kinds of clarity that 
you put forward in that particular document.
    You know something, Mr. Chairman, and all the rest of us, 
one of the things about this great Nation of ours is our 
openness is a blessing and a curse; and, when put in 
perspective, sometimes those of us that must, because of our 
partisan concerns, try to make political points, it doesn't 
serve usefulness to take things out of context.
    For example, the problems that we are hearing about here 
today are serious and obviously are being addressed. But my 
colleague who isn't here to defend himself, and I will tell him 
on the floor during the next five votes that I talked about 
him, when Congressman Rohrabacher made the comment about there 
being no escort policy and it happening because of the Clinton 
Administration and this is like a spaghetti sieve or what have 
you, he ignores the fact that he served in the Reagan 
Administration when Secretary Shultz was in office and somebody 
carried a gun into the State Department and shot somebody. I 
mean, they didn't have an escort policy then, and they didn't 
have an escort policy until just a little while ago. I would 
just like to at least put the political ball in its proper 
perspective.
    All of us can do it and probably shouldn't, especially when 
we aren't going to talk about all administrations.
    What we have is a problem; and what I hear, particularly 
from Mr. Roy, is that the problem is being addressed from top 
to bottom.
    I guess, Mr. Roy, the key thing is--and I would urge you in 
order to get us policymakers off your back--when you all have 
finished whatever it is that you are doing, when you have 
responded to the Inspector General's--as rightly you should and 
better in a manner that you have in the past--not you but your 
predecessors and those who work with you--that you make that 
information available to us as fast as possible as to how we 
can get on with our criticism our oversight requires. But it is 
heartening at least to know that we are in a position now that 
we have begun to do something about it.
    Also, Ms. Williams-Bridgers, as a counter thesis to your 
response to Mr. Smith, I read your conclusion; and you say, I 
am encouraged by the actions taken by Department management to 
correct physical--the physical and procedural security 
deficiencies at State. I take that as a sign that there is 
progress, and I would hope that that progress would continue.
    I have one question; and it is directed to you, Mr. 
Bereznay, Chief. Is there any evidence that sensitive, 
compartmentalized information has been compromised or revealed 
to a foreign nation while under the Bureau of Intelligence and 
Research?
    Mr. Bereznay. In view of the ongoing aspect of the 
investigation, I respectfully request to decline answering that 
question.
    Mr. Hastings. All right. I just wanted to get it out there. 
Because I can tell you this much also, based on Mr. Roy's 
statement--and I am not an investigator, but I can assure you 
that it is just a matter of days before all of this will be put 
to rest, at least in terms of who did it. Now what they did 
with it is yet another matter, but I will guarantee you and I 
will bet everybody on this Committee within a month somebody 
will be brought to the bar for this particular activity.
    Just as a matter of levity as I close, Mr. Chairman, and 
recognizing that we have votes coming up--Mr. Carpenter, I 
listened to you very carefully. I don't know you, first time I 
have ever seen you in my life. But, I have listened to a lot of 
security people in my life. I hear candor coming from you, and 
I want you to know I appreciate that very much, but I bet as 
you walk in and out of the Rayburn Building, off and on Capitol 
Hill, that you see things you would certainly correct.
    Thank you very much.
    Chairman Gilman. Thank you, Judge Hastings, for your 
nonpartisan----
    Mr. Hastings. You can always count on that, Mr. Chairman.
    Chairman Gilman. In closing, I ask Mr. Gejdenson for any 
closing remarks.
    Mr. Gejdenson. Thank you, Mr. Chairman.
    I just ask two things. One is, I would like to see you 
gentlemen in a closed session, either privately--maybe we do it 
in H139 and invite other Members if they want to come. So we 
ask some questions I felt it wasn't appropriate to ask here in 
a public session.
    The last thing I would say is there are a lot of challenges 
this country faces that are very tough decisions. You have the 
situation in Sierra Leone, whether or not we put American 
personnel in harm's way, what role we are going to play.
    This is actually somewhat simpler. This is--we have the 
resources. As a country, we ought to make sure that the 
national security issues that we have to keep secret are kept 
secret. You have to come and tell us what we need to do, and we 
have to work together to accomplish this. Some of the things I 
have heard today actually still leave me somewhat nervous about 
where we are in the process of protecting our secrets.
    Thank you.
    Chairman Gilman. Thank you, Mr. Gejdenson.
    Mr. Smith. Mr. Chairman.
    Chairman Gilman. Please be brief. I have a couple of 
closing remarks, and time is running. Go ahead, Mr. Smith.
    Mr. Smith. I would just like to ask a very brief question. 
The head of the Civil Service Union at State, Mr. Galloway, 
asserted at the Secretary's town meeting that low-level 
employees were subject to retaliation for reporting security 
violations on the part of their superiors. What measures are in 
place to assure that retaliation does not take place?
    Ms. Williams-Bridgers. Any employee who believes that they 
have been retaliated against has the recourse of seeking 
assistance from the Office of the Special Counsel.
    Generally, the Office of Inspector General only 
investigates allegations of retaliation if the allegant is 
alleging retaliation as a result of having cooperated with the 
Office of Inspector General during the course of an 
investigation, but any other instances we would refer the 
employee to the Office of the Special Counsel.
    Chairman Gilman. Thank you.
    Thank you, Mr. Smith.
    Well, today we have heard about the serious security 
problems at our State Department. We have discussed some of the 
proposed fixes to help avoid future loss of national security 
information and sources and methods and, in some instances, 
innocent lives as well. I am calling upon our State Department 
to become serious and effective about security and to impose 
more discipline and adequate punishment where the evidence 
clearly warrants it in cases of any security breaches by 
Department personnel.
    One easy, effective remedy before us is to promptly end the 
unescorted access possibilities for foreign press and retired 
State Department employees who no longer have security 
clearances. There is no reason why they should be treated any 
different than other ordinary American citizens.
    I would also ask that our Assistant Secretary of State for 
Diplomatic Security promptly come up with a plan to end the 
current practice and to inform the foreign media that their 
gentleman's agreement is over. If they are caught unescorted in 
the building, their privileges should be ended.
    In addition, I would like to ask Secretary Carpenter to 
take advantage of the FBI's offer in its testimony today to 
identify those hostile intelligence officers posing as media so 
that their access could be further restricted and their visits 
monitored.
    With regard to Secretary Carpenter's security review I 
would like to urge your attention to counterintelligence 
efforts, a basic element of security. The Department should be 
prepared to protect itself.
    I also urge an effective use of the possible new resources 
that have been provided through the recent reprogramming for 
personnel to manage security procedures.
    Those are just a few common-sense suggestions that will not 
cost any funds and should have been undertaken long ago, budget 
cuts or not; and there should be no more excuses that these 
simple reforms cannot and ought not be done.
    I want to thank our panelists for your very frank and 
candid review of the problems, and we welcome any further 
comments you might have or constructive suggestions as we 
further pursue these security problems. Thank you.
    The Committee stands adjourned.
    [Whereupon, at 1:10 p.m., the Committee was adjourned.]


            STATUS OF EMBASSY SECURITY ENHANCEMENTS--PART II

                              ----------                              


                        WEDNESDAY, MAY 17, 2000

                          House of Representatives,
                      Committee on International Relations,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:05 a.m. In 
Room 2172, Rayburn House Office Building, Hon. Benjamin A. 
Gilman (Chairman of the Committee) presiding.
    Chairman Gilman. Committee will come to order. Members take 
their seats.
    Today the Committee on International Relations is holding 
its second hearing of recommendations of the Overseas Presence 
Advisory Panel. We will be reviewing the Panel's 
recommendations to create a new government corporation for 
overseas buildings which would replace the Foreign Buildings 
Office in the State Department with an Overseas Facilities 
Authority.
    This new authority will be responsible for building, 
renovating, maintaining and managing the Federal Government's 
civilian overseas office and residential facilities. In their 
November 1999, report the Panel stressed that our overseas 
institutions are not equipped to operate effectively in the 
21st century, and they stated that our overseas presence is 
crippled by insecure and decrepit facilities, by obsolete 
information technology, by outdated human resources practices 
and outmoded management and fiscal tools.
    The Panel concluded that an overhaul of the large property 
management program requires more authority, more flexibility 
and increased participation by other U.S. Government agencies 
with a significant overseas presence.
    Presently, the Foreign Buildings Office manages 12,000 
properties in more than 250 locations. With the infusion of the 
emergency supplemental appropriations and current increases in 
appropriated funds for embassy security enhancements, the task 
for the Foreign Buildings Office has increased dramatically.
    This hearing is an opportunity to discuss the proposal for 
a new corporation that would operate under different rules and 
procedures and presumably would have greater flexibility in 
financing and management practices. Our Committee has heard 
from members of the Overseas Presence Advisory Panel. We will 
now hear from the State Department on this proposal.
    Additionally, this Committee has been closely following the 
progress of enhancing the security of our overseas posts, 
including buying land and initiating new construction. We 
appreciate the staff-level briefings that have been provided 
since the emergency supplemental funds were provided. We look 
forward to hearing from the Department on the current standing 
of the facility enhancement plan.
    Admittedly, the State Department has a tough job of quickly 
trying to harden the security vulnerabilities of overseas 
posts, while also making certain that taxpayers' dollars are 
going to be wisely spent. Recognizing that fact, the Overseas 
Presence Advisory Panel proposed recommendations to leverage 
the overseas building program, which we will explore today.
    Foremost, there should be no compromise when it comes to 
protecting our embassy employees and making certain it is going 
to be a safe physical environment for them. Our Overseas 
Presence Advisory Panel accurately captures the security 
situation at the State Department by emphasizing an integrated 
approach to security and developing a culture of security.
    Establishing this security mindset, as they call it, I 
think will make the job before you, as the executors of the 
physical security program, infinitely easier.
    So we want to welcome our panelists, but before we do that 
let me call on our Ranking Minority Member, the gentleman from 
Connecticut, Mr. Gejdenson, for any opening remarks.
    Mr. Gejdenson. Thank you, Mr. Chairman. Just a couple of 
quick things.
    I think one is that we all agree that any commander----in-
chief that placed military in the field without adequate 
weaponry, protection or intelligence, we would be outraged. If 
you go to some of our embassies around the world, essentially 
we have done the same thing, the commander- in-chief and the 
Congress of the United States placing American personnel, often 
military personnel in those facilities as well, but nonmilitary 
people, we have put them in dangerous situations with 
inadequate facilities, inadequate security. So we have got to 
fulfill our responsibilities if we want them to do the job 
overseas.
    The only thing I would like to kind of throw out there at 
the beginning of this is the possibility that we need to review 
what we do in the field and whether it needs to be done there 
anymore.
    You know, we all grow up with kind of a formative stage, 
and in those years you kind of decide where everything belongs. 
But the world has changed an awful lot, and I really question 
when I look at a lot of these embassies whether we need the 
back office overseas at all. Maybe we need to do it overseas, 
but maybe we need to do it like a lot of businesses, 
centralized, one in Asia, one in Africa, one in Europe, not 
that every embassy and every consulate have a very large back 
office that does everything, payment, disbursements and other 
needs of an embassy, that it may make more sense today with 
modern telecommunications, computer systems, teleconferencing, 
e-mail, that we can get a lot of what we now do in each of our 
embassies, where it may be difficult, we may be able to do it 
someplace else.
    Now one of the considerations may be, if you move it back 
to the United States, it may be a lot more expensive. As we are 
all fighting over budgets, as Americans, we want to hire 
American nationals where we can. We don't want to eat up our 
whole budget in the process. Obviously, it is a lot less 
expensive to have the back office in Africa or in China or in 
India than it is to have it in Washington, DC.
    But it seems to me we have got to make some basic 
decisions. You may want to have regional back offices. You may 
want to do it in the country where there is the least threat 
and the most capability. You may want to take Africa and Asia 
and put it all in India. It is a country that speaks English. 
You may be able to do the same thing for Europe someplace, in 
Ireland or England or Scotland, so that we concentrate, we take 
out the back office from some of the more dangerous areas, and, 
you know, we are able to save money at the same time.
    I look forward to hearing from our witnesses.
    Chairman Gilman. Thank you, Mr. Gejdenson.
    If there are no other Members seeking recognition, we will 
now welcome our panelists who are here to discuss the overseas 
building program and related security matters this morning.
    First, I introduce Mr. Patrick Kennedy, Assistant Secretary 
for Administration at State. Mr. Kennedy has been with the 
Foreign Service for 27 years, probably holds the record for the 
longest service as an assistant secretary for the 
Administration. He deserves a tribute for his outstanding 
service to the Department and to this Committee.
    We again welcome Mr. David Carpenter, Assistant Secretary 
for Diplomatic Security, who appeared in our hearing on State 
Department security just last week. Mr. Carpenter assumed the 
position of Assistant Secretary in August 1998 following a 26-
year career in the Secret Service. He is the first person to 
hold this post who has a professional background in the 
protection and security fields. He assumed this responsibility 
at a very critical time for all elements of security.
    We are happy once again to hear from the Inspector General 
for the Department of State and Arms Control and Disarmament 
Agency, Jacquelyn Williams-Bridgers. Ms. Williams-Bridgers was 
sworn in as Inspector General in 1995. She has been with this 
Committee many times, and we appreciate the valuable work of 
her good offices.
    Chairman Gilman. So whoever would like to start--Mr. 
Kennedy, would you like to start off? You may summarize your 
statement. Your full statement will be made part of the record. 
Please proceed.

   STATEMENT OF THE HONORABLE PATRICK F. KENNEDY, ASSISTANT 
 SECRETARY, BUREAU OF ADMINISTRATION, U.S. DEPARTMENT OF STATE

    Mr. Kennedy. Thank you very much, Mr. Chairman. I will 
submit my statement for the record; and, in fact, with your 
permission, I will cover the highlights.
    It is always a pleasure to appear before this Committee, 
and it gives me a particular pleasure today to update you on 
the many accomplishments the Department has made in improving 
our overseas security posture, facilities infrastructure and 
our worldwide facilities operations.
    Obviously, since the tragic bombings of our embassies in 
East Africa, the issues concerning our infrastructure and 
security of our missions overseas have received great attention 
within the Administration and the Congress. We very much 
appreciate the support of the Congress and particularly of this 
Committee for the Emergency Security Supplemental and the 
Administration's proposals for physical security upgrades at 
our overseas posts.
    I would also like to say a few words today on the Overseas 
Presence Advisory Panel and its recommendations concerning our 
Office of Foreign Buildings Operations.
    As you know, the Overseas Presence Advisory Panel, which 
issued its report last November, described many of our 
facilities abroad as unacceptable in terms of security and 
condition. Fully 85 percent of our facilities do not meet 
optimum security standards. Some are in need of extensive 
renovations. Some are seriously overcrowded. Most, however, 
simply have to be replaced.
    To protect our employees overseas, our goal is to 
expeditiously relocate into safe facilities more than 22,000 
embassy staff in over 220 vulnerable buildings. This is a 
formidable task. Achievement of this task will require an 
enormous initial and sustained level of capital investment.
    Mr. Chairman, quite frankly, during the past 10 years we 
have neither requested nor received sufficient funding to allow 
us to maintain our infrastructure base. Most recently, since 
the 1998 bombings, we are finally beginning to arrest that 
decline in resources, thanks to the support of the President 
and the Congress, and have taken the first steps toward 
rebuilding our facilities infrastructure.
    In fiscal year 1999 alone, the Office of Foreign Buildings 
obligated over $800 million, the most ever obligated in a 
fiscal year, to replace unsafe facilities and improve our 
security at those posts where facilities cannot be replaced for 
several years.
    As part of the Overseas Presence Advisory Panel's overall 
charter to evaluate the way the United States organizes its 
overseas activities, it made 44 recommendations. This morning I 
would like to focus some of my remarks on the Panel's 
recommendation to establish an Overseas Facilities Authority, 
as yourself have noted.
    The Panel advocated replacing the Bureau of 
Administration's Office of Foreign Buildings with a federally 
chartered corporation, an Overseas Facilities Authority. The 
issues that led to the Panel's proposal included the perception 
that A/FBO-managed construction projects took longer and cost 
more than comparable private sector projects, the timelines 
were not always met and that staffing levels appeared to be too 
high. However, I believe that the staff work that underpins 
these perceptions is faulty, as it fails to give due 
consideration to security requirements and special overseas 
needs.
    The Panel proposed creating a government-financed 
corporation. This new authority would exercise responsibility 
for building, renovation, maintaining our overseas civilian 
facilities. The Overseas Facilities Authority, in addition to 
receiving annual appropriations, would have features not 
currently available to us in the Department now, including 
receiving funds from other agencies, levying capital charges, 
obtaining forward funding and loans from the Federal Treasury.
    The Overseas Facilities Authority, again unlike the current 
FBO, would have the ability to apply management techniques 
commonly used in the private sector to include financial 
incentives and performance-based compensation standards. The 
Panel reasoned that higher salaries and incentives would allow 
OFA to attract highly qualified real estate and other 
professionals and further motivate employees.
    We are currently giving serious and careful consideration 
to the Panel's proposal. An Interagency group headed by the 
Director of the Office of Foreign Buildings Operations, Patsy 
Thomasson, is reviewing all aspects. Earlier this year, Ms. 
Thomasson formed six teams to look in and analyze in depth five 
critical areas: organizational structure, financing, business 
process reengineering, customer focus and communications. A 
sixth team manages the overall effort. Together, these teams 
will make recommendations on how the Panel's desired outcomes, 
which we all agree with, can best be achieved. We have also 
contracted with a leading consulting firm to examine various 
options and ways to make FBO a more performance-based 
organization.
    While these efforts are continuing, I believe that creating 
an independent OFA is not essential to accomplish the changes 
that OPAP laid out and which we agree with. Most of the 
proposed attributes of the Overseas Facilities Authority could 
be assigned either administratively or legislatively to A/FBO 
without disrupting or halting the very positive direction in 
which A/FBO is now headed.
    Although we agree with the thrust of the Panel's 
recommendations, we question whether the creation of an 
independently Federal chartered organization is necessarily the 
best approach to meet our infrastructure challenges. 
Principally, we are concerned that such an entity may 
compromise the vital link between foreign policy and facility 
decisions. For example, there are foreign policy issues such as 
reciprocity that are intricately intertwined with overseas 
facilities programs, such as the case with China where we are 
seeking a new site for our embassy in Beijing, and China is 
seeking as a condition a site in Washington. Such is also the 
case with the United Arab Emirates, where we are seeking to 
acquire a parcel of land, and they wish to procure land in 
Washington. These are classic examples where facility decisions 
are affected and sometimes driven by foreign policy 
considerations.
    The Panel also urged that we continue to implement the 
Accountability Review Board--the Crowe Commission proposals. We 
are doing that, and I am pleased to report that Foreign 
Buildings has been particularly successful in responding to the 
mandates of the security supplemental. Interim facilities are 
fully operational in Dar es Salaam and Nairobi, and we are 
moving smartly toward constructing permanent facilities in both 
locations.
    Foreign Buildings Operations conducted a competition for 
its fast track design/build contract and awarded this contract 
last September. The designs of these projects have now reached 
the point where we anticipate giving the contract the green 
light to mobilize onsite in Dar and Nairobi next month. We also 
opened temporary buildings in Doha and are fitting out three 
buildings in Pristina to serve as temporary facilities, and we 
have permanent construction already under way in Doha and 
Kampala.
    Currently, we have 14 new embassies of consulates in 
various stages of development. We are also in the process of 
acquiring several additional new office building sites, and 
since the bombing FBO has completed 15 major rehabilitation 
projects at overseas posts with another 46 major rehabilitation 
projects ongoing at this time.
    We have also relocated many Department and other agency 
personnel to more secure facilities. For example, AID personnel 
have been relocated to more secure facilities in some dozen 
locations around the world.
    Increasing setback from streets and other buildings is 
another way of reducing this threat. During the past year and a 
half, FBO has been extremely active in acquiring 87 properties 
in 25 posts around the world to provide greater security. 
Negotiations and investigations are continuing for another 31 
properties at 14 posts.
    Worldwide security upgrade funding was appropriated and has 
enabled us to approve over 1,000 security upgrade projects at 
overseas posts, and 34 have already been completed. Every 
project will further protect our employees. This program 
includes projects such as the installation of berms and 
bollards and access controls, is being executed by FBO, the 
post itself or by American companies under implementation or 
basic ordering agreements.
    Other components include the installation of shatter-
resistant window film and the installation of ballistic-
resistant doors and windows. The bombings in Africa tragically 
demonstrated the greatest threat to life and injury from a bomb 
is flying glass shards. Since the bombings, we have purchased 
5.5 million square feet of window film. Nearly half has been 
installed, and the remainder is in the process of installation. 
We have also installed or replaced over 500 security doors.
    The FBO's Asset Management Program, which essentially 
acquires properties by using proceeds of sale from excess or 
underutilized properties, has been very successful, purchasing 
18 properties last fiscal year, and in the first half of this 
fiscal year has already disposed of 17 other properties.
    These successes are the result of retorquing internal 
processes, applying new initiatives and introducing innovative 
methodologies. These have been the key factors in achieving 
FBO's high level of productivity. Today's Office of Foreign 
Buildings is not the same as in the late 1980's and early 
1990's under the Inman program.
    A 1991 GAO review of the management of the Security 
Construction Program revealed problems that FBO experienced 
during its efforts to meet the challenges of the Inman buildup 
a decade ago. The most significant difficulties relate to 
inadequate staffing, difficulties with overseas site 
acquisition, contractor performance and the lack of an 
extensive strategic focus. Since those years, however, FBO has 
implemented lessons learned throughout the organization and is 
now well prepared to undertake a large construction program.
    FBO has developed an improved strategy for effectively 
executing a difficult, expanded construction program and has 
augmented its staff to handle the workload. This strategy is 
derived from FBO's Inman experience with the simultaneous 
execution of large, multiyear projects and for implementing 
private sector construction industry best practices. These 
include design/build contracting where you can cut time and 
effort off the project by working with the private sector.
    We are looking into other multiple projects that could be 
packaged into groups for an award to a single large design 
build American contractor as we have successfully done in Dar 
es Salaam and Nairobi. Additional design build projects could 
be awarded for groups of projects in the outyears. These 
efforts are managed by an integrated project management team 
that provides effective controls and added expertise.
    In the staffing area, FBO is much better positioned than in 
the mid 1980's when the Inman program began and its in-house 
work force numbered less than 200. The professionalism and 
depth of the work force has increased as its size has grown to 
over 760 today. Eighty-four new staff members have been or are 
being brought on board for the worldwide security upgrades 
alone. Additional real estate professionals have been hired to 
find and acquire new buildings and sites, and more design, 
engineering, project management and other professionals and 
specialists have been brought on to execute construction 
projects.
    Contract support has been increased, furthermore, by 
teaming with two American companies, the Perini Corporation and 
Brown and Root to assist in security upgrade work and with 
other indefinite quantity contractors that increase FBO's 
capabilities, especially in design review.
    The Accountability Review Board discussed our priority 
setting, and they recommended spending $14 billion on embassy 
construction in the next 10 years. Interagency Embassy Security 
Assessment Teams determined that most of our posts have 
compelling facilities needs such as inadequate setback, 
structural hardening, relocations and other security 
requirements.
    All chanceries, consulates and multi-tenant buildings have 
been evaluated. The analysis assessed the soundness of each 
building's structure and facade, the adequacy of the perimeter 
security, the setback from adjacent properties, the political 
violence threat, and additional security consideration that 
included the capability and willingness of the host country to 
control its internal and border security. The resulting ranking 
was reviewed by stakeholders--regional bureaus, other 
government agencies, Diplomatic Security, the ESA teams and 
FBO. They were also reviewed and concurred in by the Under 
Secretaries for Political Affairs and Management. These 
projects are then planned for different fiscal years based on 
vulnerability, stakeholder input and consideration of other 
factors.
    Other measures developed or enhanced since the 1998 
bombings. Time and space preclude me from a full explanation of 
all these factors which I will submit for the record, but these 
best practices, in their aggregate, add to the intense efforts 
by the Department which have resulted in an outstanding record 
of achievement over the past 18 months and clearly demonstrate 
that today's FBO has the ability to manage a large and complex 
building program.
    Mr. Chairman, we believe that the efforts that we have 
undertaken with your assistance over the past 18 months have 
led to a new paradigm, and we are prepared and able to take the 
funding that you have been so helpful in providing to us to 
expand security of our employees and the employees of all U.S. 
Government agencies overseas.
    I now turn to my colleague, Mr. Carpenter.
    [The prepared statement of Mr. Kennedy appears in the 
appendix.]
    Mr. Manzullo [presiding]. Mr. Secretary, we appreciate your 
comments; and, as you know, Congress did not flinch at making 
the funds available in order to provide for security.
    Our next witness is Assistant Secretary David Carpenter 
with the Bureau of Diplomatic Security at the Department of 
State.
    Mr. Carpenter, if you could summarize your statements and 
keep your talk to around 10 minutes or so, as did Mr. Kennedy, 
we would appreciate it.
    Mr. Carpenter. Yes, sir, I will.

   STATEMENT OF THE HONORABLE DAVID G. CARPENTER, ASSISTANT 
 SECRETARY, BUREAU OF DIPLOMATIC SECURITY, U.S. DEPARTMENT OF 
                             STATE

    Mr. Carpenter. Good morning, Mr. Chairman and Members of 
the Committee. I welcome this opportunity to testify before you 
on the security profile of our facilities overseas.
    On August 7, 1998, our embassies in Dar es Salaam, 
Tanzania, and Nairobi, Kenya, were bombed simultaneously by 
extremists bent on the destruction of American presence 
throughout the world. These tragedies unleashed a massive and 
intense effort to provide much-needed security improvements at 
all of our overseas posts. Although much has been accomplished, 
more needs to be done. Our overseas facilities are generally 
more secure now than in August 1998, but the continuing threat 
environment worldwide requires that we not lose focus, that we 
continue to explore new ways of protecting ourselves and 
support a program for new embassy construction.
    The Department has aggressively upgraded security at 
previously low and medium threat posts to standards that were 
formerly only applied at high or critical level embassies or 
consulates. High and critical level posts also received 
significant upgrades of equipment to better fortify their 
facilities. We no longer believe, in an era of transnational 
terrorism, that we have low or medium threat posts, nor do we 
believe that we will receive tactical intelligence of an 
imminent attack. Simply put, we must be prepared for any 
eventuality that presents itself.
    Our goal following the bombings was to immediately improve 
the security of our threatened consulates and embassies, and we 
have done so. But at the outset let me say that it is important 
for this Committee to know that we still have a very basic 
problem that cannot be fixed quickly. The vast majority of our 
diplomatic posts fail to meet one of the most basic security 
standards, namely, the hundred foot setback standard. Until we 
can build embassies meeting the setback and other security 
standards, our efforts cannot provide the degree of security 
all of us want for our people and facilities.
    Having recognized that we still have grave security 
concerns overseas, it is also important for the Committee to 
know that we have done a lot and that our embassies and 
consulates are more secure now than ever before. In this 
regard, let me review for you what we have done through our 
security upgrade program. Some of these actions have been based 
solely on DS initiatives; others were suggested by the 
Accountability Review Board chaired by Retired Admiral William 
Crowe, the report of the Overseas Presence Advisory Panel and 
the Office of the Inspector General.
    As previously stated, we are aggressively upgrading 
security at low and medium threat level posts to standards that 
previously only applied to high and critical rated posts. We 
have put in place physical security upgrades at our embassies 
and consulates such as reinforced perimeter walls, bollards, 
new guard booths, vehicle barriers and shatter- resistant 
window film. We are upgrading and deploying security equipment 
to include better lighting, cameras, video recorders, bomb 
detection equipment, armored vehicles, alarm and public address 
systems and X-ray equipment. Where possible, we have mitigated 
the lack of sufficient setback by closing streets and provided 
for mandatory vehicle inspections.
    We have also expanded our antiterrorism assistance training 
to aid foreign police in combating terrorism through 
appropriate programs as surveillance detection, border 
security, explosive detection, crisis management and maritime 
security.
    In addition, we have installed alarm systems at embassies 
and consulates to alert personnel to impending emergency 
situations and have instituted a program for the employees to 
duck and cover when the alarms are sounded.
    We have also created a new security environment threat list 
with a modified methodology and criteria for determining threat 
levels. This process now addresses transnational terrorism as a 
distinct category as well as the threats from indigenous 
terrorism and political violence and the threats from 
intelligence services, both technical and human, and, of 
course, crime.
    DS has also changed the focus in training courses for 
regional security officers and special agents to give them 
greater training on counterterrorism methodology, explosive 
ordinance recognition and disposal, chemical/biological weapons 
threats and defenses, and surveillance detection techniques.
    In response to a specific recommendation from the 
Accountability Review Board, we are also working with the FBI 
to better analyze law enforcement information which might have 
a bearing on threats to our missions overseas and to more 
quickly disseminate that information to appropriate posts. To 
that end, a DS special agent has been detailed to the 
International Terrorism Section at FBI headquarters, and DS 
special agents are participating in the FBI's Terrorism Task 
Forces around the country.
    DS has also established the office of The Coordinator for 
Chemical Biological Countermeasures. That office, which is 
conducting a worldwide survey to determine vulnerabilities, has 
purchased and is distributing chemical biological equipment to 
all posts. As part of its educational program, it has 
distributed instructional materials, including pamphlets, 
videos and a series of cables, to alert all posts to the nature 
of the threat and to provide defensive guidance. It has also 
established a comprehensive training program for security 
professionals and first responders.
    The newest addition to our program and of major 
significance has been the establishment in less than 1 year of 
a surveillance detection program at almost all of our overseas 
posts. A critical lesson learned from the bombings in East 
Africa is that there is an intense surveillance conducted 
against our facilities prior to an attack. Since going 
operational in January 1999, surveillance detection teams, most 
of which work with host government security services, have 
observed over 700 suspected incidents of surveillance against 
our personnel and facilities worldwide. It has in a sense 
expanded our security perimeter and zone of control beyond our 
previous limitations. The surveillance detection program is 
clearly a work in progress, but we feel that it is destined to 
become a major aspect of our overseas security defenses.
    Finally, and I believe most importantly, DS has hired 234 
new special agents and 17 security engineering specialists, 
which has allowed for the creation of 140 new security officer 
positions overseas. By the end of fiscal Year 2000, we will 
have 420 DS special agents serving as security officers in 157 
countries. DS has also hired 20 additional diplomatic couriers, 
34 maintenance technicians and 46 civil servants in support of 
overseas security.
    Mr. Chairman, as you know, this is National Police Week. On 
Monday on the very grounds of this Capitol we paid tribute to 
this country's law enforcement heroes who gave their lives in 
the line of duty in the past year. Over the years, Diplomatic 
Security has had its own heroes, some who gave their lives and 
others who have lived to continue the fight. I am positive out 
of this new cadre of special agents and other security 
specialists we will have more heroes.
    I thank this Committee for its support in hiring these new 
people and hope that I can look to you for support as we seek 
additional positions to strengthen our programs. It is people 
that will make the difference, that is, trained, motivated and 
dedicated professionals with the single purpose of ensuring the 
safety of our overseas personnel and facilities.
    Mr. Chairman, with regard to your request for my views 
regarding the creation of a new agency to replace FBO, let me 
assure you that we have enjoyed a positive and close working 
relation with FBO as is necessary to support our diplomatic 
personnel, to improve security and to upgrade our facilities 
worldwide. We have a construction security management group 
working within FBO that helps to strengthen this partnership. I 
do not believe that distancing DS from FBO would enhance our 
security effort. Furthermore, I personally do not see how an 
independent entity would be more capable of overcoming the 
challenges and obstacles that FBO currently faces.
    You have also asked for my views on the OPAP proposal to 
make greater use of regionalization as a means to reduce the 
number of personnel needed at posts and for my views on whether 
any posts would be downsized or closed because of security 
threats.
    OPAP recommended creating a process to right-size our 
overseas presence, reduce the size of some posts, close others, 
reallocate staff and resources and establish new posts where 
needed. State and other agencies formed an interagency 
committee to review how to implement the right-sizing 
recommendation in the OPAP report.
    In early March, a pilot program began at a number of posts 
for the purpose of developing recommendations for right-sizing 
at these posts and to develop criteria that can be applied 
universally. What I have seen thus far, Mr. Chairman, suggests 
that regionalization efforts could result in reducing the size 
of some posts but would inevitably result in increasing the 
size of others. But from a security standpoint, I doubt that 
there would be any measurable savings in such an effort.
    My concerns are primarily focused on decisions related to 
where the regional posts are to be located and assurances that 
the prescribed security standards are in place. Certain 
countries present particularly difficult environments in which 
to work. By that I mean high crime, inadequate infrastructure, 
unstable governments, poor police support and so on. Yet they 
may provide a geographical advantage as they are centrally 
located as hubs for air transportation or viewed as gateway to 
a continent. Believing that security is an important factor 
when entertaining ideas of regionalization, it is critical that 
no decision be made without proper vetting of life safety 
issues related to these regionalization issues.
    Mr. Chairman, this concludes my testimony. As I indicated 
at the beginning, we have been diligent in our efforts to 
upgrade security at our overseas posts, and we have been 
successful in making those facilities safer now than ever 
before. Nevertheless, there is still much that needs to be 
done, and until all of our facilities meet the basic security 
requirements none of us will be satisfied with our security 
posture overseas.
    I appreciate your interest and the Committee's interest you 
have taken in this topic and will be happy to answer any 
questions when appropriate.
    [The prepared statement of Mr. Carpenter appears in the 
appendix.]
    Chairman Gilman [presiding]. Thank you, Mr. Carpenter.
    We will now proceed with testimony by Ms. Williams-
Bridgers, and you may summarize your testimony, and we will 
make the full statement a part of the record.

  STATEMENT OF THE HONORABLE JACQUELYN L. WILLIAMS-BRIDGERS, 
          INSPECTOR GENERAL, U.S. DEPARTMENT OF STATE

    Ms. Williams-Bridgers. Thank you, Mr. Chairman, Members of 
the Committee. I appreciate the opportunity once again to 
testify before this Committee on the Department of State's 
efforts to manage the embassy security enhancement program. As 
demonstrated by the terrorist attacks on U.S. embassies in 
Nairobi and Dar es Salaam in 1998, perhaps no greater challenge 
exists for the Department than providing adequate security to 
protect our people, facilities and information.
    As you requested in your invitation to this hearing, Mr. 
Chairman, I will review the work done by the Office of 
Inspector General on the Department's management of the embassy 
security enhancement program, its use of the Emergency 
Supplemental Appropriations and its compliance with overseas 
security standards.
    Since the bombings of the embassies in Nairobi and Dar es 
Salaam security oversight has become an even more critical 
mission for the Office of Inspector General. We now have 
multidisciplinary teams in OIG to evaluate the implementation 
of physical security initiatives and to monitor the expenditure 
of the $1.5 billion emergency supplemental.
    In the 18 months immediately following the August bombings, 
OIG evaluated the physical security and emergency preparedness 
of 42 embassies.
    The most significant security challenge for the Department 
is the protection of overseas employees lives while at work and 
at their residences. From a physical security standpoint, this 
means upgrading the perimeter security of buildings, especially 
chanceries; building new chanceries to replace those that are 
clearly unsafe; and collocating U.S. Government agencies 
overseas into protected areas. Another significant challenge is 
the protection of classified material, which is increasingly 
becoming electronic information, both on the domestic front and 
overseas.
    It is evident from our examinations of the various elements 
of embassy protection that setback is the preeminent security 
concern for our overseas posts. Setback provides the greatest 
protection from vehicle bombs. The OIG has made recommendations 
that could effectively increase setback, some at relatively low 
cost. For example, we have recommended that embassy officials 
work with the local government to alter traffic patterns around 
the mission, and in other locations we proposed creating 
increased setback by extending control over street parking 
spaces. However, at other missions the only way to effectively 
increase setback is to purchase adjoining properties, and at 
other missions we must move to a new location to achieve a 
meaningful setback. Both options could cost millions of 
dollars. To meet setback requirements and other security 
standards, 34 of the 42 embassies we inspected within the last 
year would require new chanceries and compounds. However, only 
five of the posts have a new chancery under construction or 
planned in the next 5 years.
    The ideal embassy would be protected by at least 100 feet 
of setback. It would be constructed to current security 
standards and have a well-lit, well-constructed perimeter wall; 
and it would be under constant surveillance by closed circuit 
television. Beyond the wall, a surveillance detection unit 
would determine whether possible terrorists were surveilling 
the mission. A local guard force would protect the perimeter. 
Entrance to the mission compound would be well controlled. The 
chancery would incorporate a number of physical security 
measures to protect against bomb blasts and offer safe haven if 
the compound was breached.
    Overseas Security Policy Board standards provided the 
framework for our security oversight inspections. Let me 
emphasize that none of the 42 embassies the OIG inspected met 
all security standards. Incremental security improvements such 
as upgraded walls, doors and windows cannot fully compensate 
for the lack of sufficient setback. In addition, over 50 
percent of the posts we inspected did not meet standards for 
window protection, perimeter wall, vehicle inspection areas, 
chancery wall and door construction or exterior lighting and 
closed circuit television.
    At about one-third of all locations we reviewed, we 
recommended measures to upgrade security barriers, exterior 
lighting and anti-climb fences. We recommended the installation 
of vehicle barriers at entry gates. We recommended revised 
local guard vehicle access control procedures and the upgrade 
of public access control. In addition, we reviewed local guard 
services and recommended program improvements or greater post 
management supervision at about one-third of all locations.
    Further, to mitigate the effects of flying glass resulting 
from a car bomb attack, the Department is replacing old and 
often defective 4-mil shatter-resistant window film with a 
higher standard of protection. While the Department concurs 
with the Accountability Review Board that ballistic laminated 
windows provide superior protection against a car bomb attack, 
the majority of our overseas facilities cannot structurally 
support this upgrade. A more practical solution is to purchase 
and install 8-mil shatter-resistant film on all windows. The 
Department plans to do this by July 1, 2000.
    Our review of the interim office buildings for our 
embassies in Dar es Salaam and Nairobi addressed the management 
challenges to provide secure facilities and better protect 
employees of the Agency for International Development [USAID]. 
Foremost among our concerns for the interim office buildings is 
the lack of collocation and the imminent need for the 
Department to address the security concerns for those agencies 
that are not located on the interim compound. Similar 
collocation concerns have been raised for the new embassy 
compounds in Luanda and Kampala.
    In addition to the physical security initiatives, the 
Department has implemented a number of initiatives that will 
enhance an embassy's ability to handle a crisis situation, 
including emergency alarms and drills, expanded emergency 
planning programs, and emergency communications. In many cases, 
management-supported procedural initiatives can improve embassy 
security without any expenditure of funds. As an example, 
during our inspection of the temporary embassy compound in 
Doha, Qatar in August 1999, we cited the need for a post to 
establish a proactive working relation with the host 
government's protective service to ensure a cooperative and 
timely response to a terrorist threat.
    The Department has also initiated a worldwide surveillance 
detection program to detect and deter potential terrorist 
attack. As Assistant Secretary Carpenter suggested, it is a 
work in progress. But it is a commendable effort. Preliminary 
results of our review indicate a need for the Department to 
improve reporting criteria for regional security officers and 
to make better use of information collected during 
surveillance.
    Some of the most difficult security issues to correct both 
domestically and overseas deal with information security. OIG 
has completed over 20 audits identifying vulnerabilities in 
information resources and security management. In many ways, 
improving information security may be a bigger challenge than 
improving physical security because of the many fixes that 
involve a change in employee behavior rather than the 
procurement of additional technical equipment.
    In my statement before this Committee last week I discussed 
the specific deficiencies that have perpetuated a lax security 
environment in the Department of State. Therefore, I will not 
belabor the point today regarding the need to pay better 
attention to security on the domestic front.
    Overseas, there are many reasons for the vulnerable 
condition of American posts. Lack of funding obviously plays a 
role. The Accountability Review Board estimated that $14 
billion would be needed over the next 10 years. However, as Mr. 
Gejdenson suggested in his opening remarks, the size of our 
presence overseas must also be considered as we examine how to 
best protect U.S. Government officials who reside and work 
abroad. The right answer to ``right-sizing'' lies in providing 
the staffing, the financial support and security required to do 
the job that needs to be done. Regionalization may sometimes 
make sense because of the economies, efficiencies and safety of 
operations that may result. However, regionalizing operations 
does not always make sense from a security perspective. Such 
concentrations sometimes create larger, more inviting targets 
for terrorism. Embassy Nairobi, for example, hosted several 
regional offices.
    Looking ahead. Mr. Chairman, in your invitation to testify 
this morning you asked that I address the ability of the 
Department to manage a security enhancement program and the 
status of various initiatives. I focused my remarks on how the 
Department has responded over the last 18 months in its 
management of emergency security initiatives. The tragedies in 
Africa have captured the attention of the Department, of this 
Congress and the American public. Meanwhile, recent security 
lapses at home have been a wake-up call that other aspects of 
security just as vital to the defense of American interests as 
physical security also need attention.
    The Department has responded well to the need to move 
quickly in the aftermath of the bombings and to use emergency 
funding provided by Congress. The Department's continued 
success is dependent on how well and how long it exercises 
disciplined attention to effective security practices and how 
long the U.S. Government and the Congress remain committed to 
funding the construction, maintenance and continual improvement 
of that infrastructure.
    As we embark on this expensive commitment, the requirement 
for the Office of Inspector General to provide specialized 
oversight of the use of funds also increases. As the Department 
moves from the emergency response to a longer term, more 
strategic approach for the rebuilding of our foreign affairs 
infrastructure, so must the OIG move forward with monitoring 
these initiatives.
    With the exception of a small one-time emergency 
supplemental appropriation in fiscal year 1999, funding for OIG 
has been straightlined since fiscal year 1996. Increased 
funding for security and for those charged with overseeing 
security improvements for you and the Department is only one of 
the ingredients necessary for rebuilding infrastructure and 
changing attitudes toward security, but it is a vital 
ingredient for all of us. As always, Mr. Chairman, the 
continued support of this Committee for OIG in this regard is 
much appreciated.
    That concludes my summary. I will be glad to answer any 
questions you have.
    [The prepared statement of Ms. Williams-Bridgers appears in 
the appendix.]
    Chairman Gilman. Thank you to all of our panelists for your 
good testimony. We will now proceed with questions.
    Mr. Kennedy, the General Accounting Office reported on the 
Emergency Security Supplemental program in March pointing out 
that, as of December 31, 1999, the FBO obligated $360 million 
out of some $627 million, and actual expenditures were $83.6 
million. Have those figures changed much since December?
    Mr. Kennedy. Yes, Mr. Chairman. As of now, if you take the 
funding that was made available and you combine, since this is 
a moving target, the funding that was made available in both 
fiscal year 1999 and fiscal year 2000, we have already 
obligated and committed almost 70 percent of the total funds 
that have been made available to us.
    Chairman Gilman. Of the 70 percent, how much of that has 
actually been spent?
    Mr. Kennedy. Actual obligations are--of the $627 million, 
we have obligated $379 million, and we have committed $62 
million. Under the arcane system that the Federal Government 
uses, when I issue a purchase order or a contract to a vendor, 
I am committing that money in full. I then only pay that 
contractor for the work that is in progress. But the obligation 
rate is the rate that governs exactly how many projects I have 
under way, Mr. Chairman.
    Chairman Gilman. We have only spent some $60 million?
    Mr. Kennedy. No, Mr. Chairman. We have obligated three 
hundred----
    Chairman Gilman. I know what you obligated. I want to know 
how much you have actually spent.
    Mr. Kennedy. I will have to get the liquidation----
    Chairman Gilman. Well, roughly what have you spent? What 
have you spent so far? Forget the obligation. What has actually 
been paid out?
    Mr. Kennedy. I will have to get that for the record.
    Chairman Gilman. Can you give me an estimate?
    Mr. Kennedy. I would say that we have probably liquidated 
on the order of half of that amount.
    Chairman Gilman. Half of what amount?
    Mr. Kennedy. Half of the $379 million that we have 
obligated.
    Chairman Gilman. So you have spent about $150 million to 
date, actually laid out?
    Mr. Kennedy. Cash out of the till, yes, sir, versus 
obligations, yes, sir.
    Mr. Gejdenson. Would the Chairman yield for one moment?
    Chairman Gilman. Yes.
    Mr. Gejdenson. Just so I understand this, so what you are 
saying is if you were to buy a new wall in front of an embassy 
and that wall was to cost $5 million, that means you can't 
spend that $5 million again even though you haven't actually 
handed it to anybody. So now you have this $5 million that is 
obligated but not spent. Then as the contractor finishes one-
fifth of the wall, if you were a prudent manager you would give 
him slightly less than one-fifth of the money, is that correct?
    So the process is what you would normally have in any 
construction project. If you build a house and you go to the 
bank and you borrow $200,000, you don't walk over and spend, 
Mr. Chairman, $200,000 to the builder. You say, here's $200,000 
and say I hope I have a house at the end. What you do is you 
obligate $200,000--it is a very inexpensive house because I am 
a democrat--and then when he finishes--you might give him some 
of it to begin with, and when he finishes, say, half of it, you 
might give him $80,000.
    Chairman Gilman. If the gentleman would yield, I realize 
these basic concepts, but what I am asking about----
    Mr. Gejdenson. It doesn't allow them to----
    Chairman Gilman. If the gentleman will yield.
    Mr. Gejdenson. It is your time.
    Chairman Gilman. Thank you. We approved all of this in 
October 1998. Here it is over 2 years later, 2\1/2\ years 
later, and we still have only spent about $150 million out of 
the $1.5 billion.
    Mr. Kennedy. Mr. Chairman, if I might add, for example, we 
have executed large contracts for the constructions of the 
embassies in Nairobi and Dar es Salaam. Those are significant 
expenditures. Specifically, we asked for those moneys to build 
the new embassies in Nairobi and Dar es Salaam, and you 
graciously assisted us in getting those.
    Chairman Gilman. But--if I can interrupt you, Mr. Kennedy--
but the fact is your obligation is only $600 million. Where is 
the rest of the money and why are we so slow in committing 
these funds?
    Mr. Kennedy. Mr. Chairman, if you take the emergency 
appropriation, the money available to FBO for its part of the 
activity was $627 million. Other parts of it were to pay the 
Defense Department for services that were provided to us during 
and after the crisis, were for medical expenses and other 
people injured in the crisis, were for payments, almost ex 
gratia payments to the governments of Kenya and Tanzania for 
damage done in those cities, funding as Mr. Carpenter has 
outlined for all the new security agents that he has brought 
into place. So the total package of $1.5 or so billion, the 
amount of money that was given to me to expend on bricks and 
mortar was $627 million, and so I am playing with $627 million 
on the books, and that is what I have been working through, Mr. 
Chairman.
    Chairman Gilman. Is that fully obligated, the $627 million?
    Mr. Kennedy. No, Mr. Chairman. Of the $627 million we have 
obligated $379 million.
    Chairman Gilman. All right. So, again, Mr. Kennedy, I am 
asking you, you have had this since 1998. You have only 
obligated half of it. Why has there been a delay in the rest of 
the funding?
    Mr. Kennedy. Because, Mr. Chairman, when we worked through 
this effort, it is divided essentially into the bricks and 
mortar side, which has three parts. The first part is buying 
adjacent properties. Because we have learned, as both Mr. 
Carpenter and the Inspector General has pointed out, one of the 
best things we can do is expand the setback, the distance 
between our building and the nearest point the terrorists can 
reach. So over this period of time we have acquired 87 
properties. We know that one of the major things we need to do 
is buy more property. So in 31 other locations, we are 
negotiating with the landlords right at this moment. So I have 
to set aside money in order to complete those.
    The properties--in many cases, the landlord has let us put 
our barriers around them, so we have achieved the setback 
already, but the cash has not moved out of my hands on behalf 
of the U.S. Government to the landlord until title searches are 
complete. So I have achieved the security purpose, but I will 
only spend the money when he gives or she gives me clean title. 
That is an example in that regard.
    Chairman Gilman. So it's a balance of the unobligated funds 
virtually committed to your land purchases?
    Mr. Kennedy. No, sir, part of it.
    Chairman Gilman. How much of it is for land purchases?
    Mr. Kennedy. A total of $41 million was set aside for land 
purchases. We have spent 27 out of the 41. So there is still 
$14 million. So I have spent about two-thirds of it on land 
purchases, and the other third is pending on the process of 
negotiating with landlords in order to----
    Chairman Gilman. That is beyond money you are going to 
obligate for land purchases. What is the plan for the remainder 
of the money?
    Mr. Kennedy. For example, the total price to stand up 
Nairobi and Dar es Salaam is about $163 million. That is for 
those two buildings there. We have obligated $115 million. 
There is another $94 million yet to obligate. Why is that, Mr. 
Chairman? Because we also furnish the building. We provide 
furniture, we provide generators, we provide telephone systems 
for those buildings. We only buy that equipment at the point in 
time because I wouldn't want to buy a telephone----
    Chairman Gilman. In addition to the equipment and land 
purchases, money remaining for completing construction, where 
is the rest of the money?
    Mr. Kennedy. Then there is the worldwide security upgrade 
which is the berms, the bollards, the new perimeter walls, the 
new security access points. Of the $212 million in that program 
level, we have obligated or committed $159 million of that. 
They have done the architectural engineering work; and they 
have now, for example, submitted the bids which we are 
evaluating so they can build these major additions.
    Mr. Gejdenson. Would the Chairman yield?
    Chairman Gilman. Yes.
    Mr. Gejdenson. Thank you. So let me ask you, your total is 
$627 million that you got to look at to spend for security.
    Mr. Kennedy. For bricks and mortar.
    Mr. Gejdenson. Bricks and mortar. How much of that do you 
have a plan for?
    Mr. Kennedy. We have plans for all of it.
    Mr. Gejdenson. So basically the difference between what you 
have been authorized to spend on bricks and mortar and what you 
have obligated or spent is a function of process. It takes time 
to get architectural drawings, and what we are talking about is 
you have spent 2 years trying to spend this money. I guess my 
question is, or my statement would be, is this Committee would 
cause you serious damage if you ran out and spent that money 
the first day without doing the title search, without getting 
the drawings, without getting the bids.
    I think, Mr. Chairman, they are doing a pretty good job in 
spending money, generally Republicans aren't in a hurry to 
spend money, but I am glad to see we are both committed to 
fixing these security issues. I don't think there is an issue 
here. I think if you look at the normal contracting process, if 
it was the House of Representatives or any other institution, 
that this 2-year period is not an unreasonable length of time 
to go through the process of coming up with plans, to doing the 
bidding, to doing the research on title and to then executing 
contracts.
    Chairman Gilman. Thank you for your testimony, Mr. 
Gejdenson.
    Mr. Gejdenson. You are welcome, Mr. Chairman. The clock 
doesn't seem to be running today. I thought I would get it in 
before the evening news.
    Ms. Williams-Bridgers. Mr. Chairman, may I also offer 
something here?
    I think another reason for what appears to be a fairly low 
obligation and expenditure rate is that the Department did 
experience I believe during the first three quarters of 1999 a 
fairly favorable exchange rate, which meant that the amount of 
funds that they actually had to obligate and expend were much 
less than what they had anticipated.
    Chairman Gilman. So does that mean you have a surplus now? 
I don't think you have to respond to that.
    Mr. Kennedy, before my time runs out, please update us on 
the implementation of these construction projects. My 
understanding was that 119 posts were to be surveyed for 
improvements, but in September surveys were suspended with 75 
posts, then reviewed because of the cost of the project, and as 
of December 1999, only one project had been completed and seven 
were in a construction or design building stage. Have any more 
of the perimeter projects been initiated?
    Mr. Kennedy. Mr. Chairman, the security improvement is a 
four-part effort, and if I could take them in reverse order, 
the fourth part is window improvements and door improvements. 
In that case, 230 posts have already received their funding for 
the window improvements, and all the new window improvements 
will be completed by June of this year, and we have installed 
160 new security doors.
    The second part of it is projects that are under way at 
post. Posts have completed 272 projects at 178 posts. That 
includes examples like closing of streets in Abidjan and 
building barriers in the streets; in Cotonou, installation of 
barriers that push the setback to a hundred feet. In Budapest, 
we leased a park with the concurrence of the local government 
and pushed our security perimeter out, and so there are 272 
projects now completed at 178 posts.
    Then we move down into what we call the mega projects, the 
projects that no post can complete on its own because they do 
not have the architectural and engineering capabilities nor 
does the host nation often have those abilities. So, we can't 
safely turn them over to the posts because you certainly don't 
want to use firms that fall below the level of providing good 
security. In those cases, we do do the security projects. We 
turn to American contractors and have an American architectural 
and engineering firm go to the post and develop the scope of 
work according to the standards that Mr. Carpenter's membership 
on the Overseas Security Policy Board provides to us.
    Those are the security surveys that are being done. We've 
done 72. We have awarded 18 construction contracts to American 
corporations, and we have also done eight additional projects, 
five of which are in design and three are in the design/build 
process. So when you say there is only one completed, there is 
one completed out of one-fifth of all the efforts involved, the 
mega projects. The others are the slides I showed during my 
testimony, which showed that we are under way with the 
bulldozers, the backhoes----
    Chairman Gilman. Mr. Kennedy, let me interrupt. Do you have 
additional funds in your fiscal year 1999 slated for 2000 for 
continuing to work on these projects?
    Mr. Kennedy. Yes, sir, that is the money we have not yet 
spent.
    Chairman Gilman. I am going to reserve the balance of my 
time. Mr. Gejdenson has to attend another meeting. Mr. 
Gejdenson.
    Mr. Gejdenson. Thank you, Mr. Chairman.
    Again, I would just like to say on this anybody who has 
built a home, it takes 10 months once you have got plans, 
approval from the zoning folks, if you have got your drawings 
in place. I think what we want is a good quality project. At 
the end, we want to get our money's worth. I am sure you are 
getting bids that are off the charts because they figure the 
U.S. Government, you have got unlimited money and so it takes 
some time to renegotiate these. I want you to do a good job, I 
want you to do a careful job, and I don't want you to waste a 
lot of money. So don't just rush and dump these buckets out the 
window so you can come become here and say, yes, we have spent 
all the money.
    Let me ask you, Mr. Carpenter. There was a proposal to set 
up a new government corporation to solve all of these problems. 
I am a little skeptical of new corporations. I am like the 100-
year-old man. They told him, I bet you have seen a lot of 
changes in your life. He said, and I have been against most of 
it. I think I am getting to that point. Because we move the 
chairs around, we create a whole new set of bureaucracies, I am 
not sure we solve any problem.
    Putting aside new government corporation, of the 
authorities they say this corporation should have, do you not 
have any of those now and do you need them? You get my 
question? Because it is new corporation, here's the authorities 
the corporation have. If we got rid of the idea of a new 
corporation, we go to your organization and we say, all right, 
here are the authorities we are going to give them. Do you need 
any of those? Do you not have any of those now?
    Mr. Carpenter. I think, if this answers your question, the 
working relationship that the Bureau of Diplomatic Security has 
with the FBO has been extraordinary and, quite frankly, very 
constructive. If a new organization were created, that 
relationship would have to be recreated. An understanding of 
the important elements, ideas, and concepts we bring to the 
table would have to be transferred. Right now, we have a very 
smooth working machine. If you were to create a new institution 
to deal with this, clearly authorities would have to be granted 
to ensure that this would continue.
    Mr. Gejdenson. Let me ask you a question. Are you familiar 
with the attack on the Ambassador's residence in Syria some 
year or so ago and the Ambassador's wife bravely stood in a 
room there calling people, telling them not to show up to work, 
and we finally resolved that situation and the Syrians paid us 
for the damages? How much of your focus is on that Ambassador's 
residences, employees' compounds? Is that a big challenge for 
you?
    Mr. Carpenter. It is clearly a challenge. In some parts of 
the world it is more of a challenge than in others.
    I happened to be in Syria 2 weeks after that particular 
attack, and I saw firsthand the damage that was done, and it 
does give you an appreciation of what can happen and how 
quickly it can happen. We have not been of a closed mind or 
turned our attention away from ambassador residences or the 
residences of our other employees overseas. It is difficult, 
quite frankly, when they are dispersed throughout the cities. 
If they were collocated on a compound, it would be much easier 
to secure. However, the difficulties in securing these 
residences vary from country to country.
    Mr. Gejdenson. Is there a balance between--I hear a kind of 
desire to put them in a compound, but a compound is a much 
bigger target. You take all your employees, you spread them all 
over the town, you know, you have got people living amongst the 
public. That is some danger. On the other hand, there is no one 
place you can go to get 200 Americans or 100 Americans. What is 
your estimate on the advantages, disadvantages, or is it 
country specific? In some countries, it is better to disburse 
them; and, some countries, it is better to keep them in a 
compound?
    Mr. Carpenter. I believe it is country specific. In areas 
where crime is a larger threat than is a terrorist attack, I 
would suggest keeping them on a compound would be preferable. 
When you are looking at a terrorist attack, perhaps dispersal 
would be the better. It is going to be country specific. Quite 
frankly, we are fully engaged in looking at this issue as we 
move down the road toward building new facilities. Do we need 
to collocate on embassy compounds? Do we need to collocate all 
of our employees on compounds separate from our embassies? Or 
is dispersal the proper way to go?
    Mr. Gejdenson. I think it is a tough call. I know you 
obviously spent a lot of time--Mr. Kennedy, what do you think 
about the relationship between your two organizations?
    Mr. Kennedy. I think the relationship is very good. I think 
that what we have done over the past few years, which is taking 
a unit of professional security officers and placing them 
within the Bureau of Administration's Office of Foreign 
Buildings where they oversee, monitor and implement the 
security standards, has worked exceedingly well. That close 
nexus where they are part of the same organizations and we 
bring in the construction, the architectural and engineering 
expertise, and they bring security professionalism, is the way 
to go. We get fast turnaround. We always get the professional 
advice we need on scene.
    Mr. Gejdenson. Let me close by saying two things.
    Most of the embassies I have been to lately have done an 
excellent job showing me when I go there their security 
concerns, their needs, the conditions they are operating under. 
But I would suggest that maybe one of the things you do is you 
send out a memo to our embassies around the world that when a 
congressional delegation shows up, if they already have it, 
they ought to put the security issues at the top of their 
explanation, what their problems are, what changes they have 
made, so that every Member as they go someplace gets a deeper 
understanding for this. Because I think it is not just the 
White House's responsibility, it is our responsibility to make 
sure we have got an adequate system of protection for our 
employees, Americans, serving overseas.
    Second, maybe the Chairman and I and other interested 
Members might take a tour of the State Department, take a look 
at what you are doing there, things you can tell us, give us--
some of the stuff I think is better when you see it than just 
kind of talk about it. Maybe the Chairman and I can get 
together and pick a date.
    I thank the Chairman for his indulgence.
    Chairman Gilman. Thank you, Mr. Gejdenson.
    Mr. Smith.
    Mr. Smith. Thank you, Mr. Chairman.
    I want to thank our distinguished witnesses for the good 
work they are doing on embassy security. I think our Committee 
properly dispatched and fulfilled its responsibilities when we 
passed the Embassy Security Act last year. It was signed by the 
President, and it provided a 5-year predictable amount of 
authorized levels of funding to ensure that there were no gaps, 
no years that might be leapfrogged, which, unfortunately, look 
like might have been the case for fiscal year 2000. So I am 
very glad to see our distinguished witnesses here.
    I think we have more in common than some of our Committee 
hearings, Mr. Chairman, because I think the Administration and 
these particular individuals are trying to really protect our 
embassies, to use all available resources to make a difference. 
So I would like to ask just one or two questions.
    Admiral Crowe had testified, and, Secretary Carpenter, you 
might remember this, when he pointed out that, throughout the 
proceedings, his Accountability Review Board was most disturbed 
regarding two interconnected issues, the first the inadequacy 
of resources to provide security, which, hopefully, is being 
addressed; and if it is not, if more resources are needed, 
perhaps you can tell us today, notwithstanding OMB's looking 
over your shoulder. Second, the relatively low priority 
accorded to security concerns throughout the U.S. Government 
and the State Department.
    The point was made by Admiral Crowe that there no longer 
are any more low threat or missions abroad. You pointed this 
out, Secretary Carpenter, that because of the mobility--of the 
enhanced mobility of terrorists that every site has to be seen 
as a potential threat.
    How are we addressing those issues? And, again, do you have 
money--notwithstanding the amount of the request, and we all 
have the request from the congressional presentation in front 
of us. We know what we have authorized. Is more money needed or 
is this the right amount? Is it too little? Please tell us.
    Mr. Carpenter. Shame on me if I came up here and didn't say 
we needed more money. But, really the answer to your question 
is twofold.
    One, we have received a good injection of funds here, and 
we are most appreciative of that. But in my professional 
expertise, if there were an area where we are wanting, it is 
that we clearly do not have enough personnel to support the 
mission at hand. And I have testified before, sir, regarding 
lack of ``bench strength'' within my Bureau to respond in the 
event of threats to our posts overseas, we are using the same 
cadre of people to support every problem we have. Whether it be 
domestic at the Department of State, whether it be the 
protection of our foreign dignitaries, responding overseas to 
emergency situations, it is the same people. And there are far 
too few of them. This is a process that has been going on for 
over 2 years in a very, very intense way. I am burning up my 
people as we go.
    We will continue to do our jobs, but without more 
personnel, my fear is that over the long haul we will fail. 
These people will wear out and another shoe will drop in 
another area that is as yet unknown to us.
    Mr. Smith. On that point, if you could just suspend 
briefly, how many personnel are we talking about and how much 
money are we talking about? Do you have an estimate?
    Mr. Carpenter. It is difficult to quantify, but we are in 
the process of preparing, as a result of the top-down study 
that was done that we discussed last Thursday at the hearing, a 
strategic plan over a 3-year period asking for somewhere in the 
neighborhood of about 900 people over a 3-year period. These 
people come in all disciplines, including special agents, 
engineers, civil servants, to address our shortfalls in a lot 
of projects in our counterintelligence arena, our uniform 
guards program, etc.
    Mr. Smith. Will a request for that be forthcoming from the 
Department?
    Mr. Carpenter. It is our intention to have this prepared 
within the next 30 days, and it would be my hope to get it here 
soon thereafter.
    Mr. Smith. I appreciate that, and thank you, Mr. Chairman. 
Again I want to congratulate you on an excellent job.
    Chairman Gilman. Thank you, Mr. Smith.
    Dr. Cooksey.
    Mr. Cooksey. Thank you, Mr. Chairman; and we thank you for 
being here. When I walked into the meeting earlier, I walked in 
and said, gee, these are the same people who were testifying 
the other day or is it just deja vu? But it is a slightly 
different topic, but we are glad to have you back. We have gone 
from State Department to embassies.
    I am on the transportation subcommittee that deals with 
public buildings and domestic buildings in this country and 
know some of the issues that have come up on our domestic 
buildings, not State Department buildings, but some of the 
buildings in the Washington area and around the country, and my 
line of questioning will reflect that background.
    First, Mr. Kennedy, you said that of the contractors who 
there have been 18 of these buildings or modifications of 
buildings that have been done by American contractors. Is that 
correct?
    Mr. Kennedy. We have 18 major efforts overseas that we are 
using American contractors. For certain small projects--for 
example, Dr. Cooksey, when you are just building iron beams 
around the perimeter of the embassy, where the local labor and 
materials are available, it is advantageous to the American 
taxpayer to use local labor supervised by an American officer 
from the embassy, using a standard that comes from the Overseas 
Security Policy Board. So those small projects are done by 
local----
    Mr. Cooksey. So are any of the major projects done by local 
contractors or have they all been American contractors, United 
States?
    Mr. Kennedy. The majority of the major projects are done by 
American contractors because we want to use American 
architectural standards, American engineering standards; and we 
use companies such as Brown and Root and Perini which are under 
contract to us, because we know the quality is there.
    Mr. Cooksey. What about Bechtel? Have they done any of 
these?
    Mr. Kennedy. They are not a part of this. Bechtel has 
worked for us before, sir, but we put out for bid these 
indefinite quantity efforts, and the two winning American 
companies were Brown and Root and Perini.
    Mr. Cooksey. When I was in the Air Force many years ago 
Brown and Root did a lot of construction then. Of course, that 
was when Lyndon Johnson was President, which is another story.
    Is there any consideration to using sort of a standardized, 
cookie-cutter type of building construction, and is that done?
    Mr. Kennedy. Patsy Thomasson, who is my director of the 
Office of Foreign Buildings, has a team that is working on that 
now. There are a certain number of I guess you could say small- 
to medium-sized embassies around the world which do have almost 
a standard pattern, sir, an ambassador, deputy chief of 
mission, security officer, consular section, etc. cetera. So we 
are looking at that right now to find out if we can come up 
with an architectural and engineering design that would be 
standard, and then we would maybe have a different facade on 
the building, brick one place, stone in another, in order to 
blend into the local environment. But that is something we are 
looking at very, very closely because we see advantages both in 
time and in cost.
    Mr. Cooksey. Well, I think it is important to consider the 
local environment. I would hate to have all of our embassies 
look like McDonald's hamburger places. I hate to go to another 
country and see a McDonald's because that is a sign that the 
ugly Americans have gotten there before we have. I think that, 
too often, we go in and try to impose our culture and standards 
on other countries, and I warn them not to be inundated by 
Americans, but just so far as the walls, the structure, the 
security----
    Mr. Kennedy. We have security standards. The walls must be 
so thick, they must resist so many pounds per square inch. What 
we do is engage a local architect to work with us on the 
facade, nothing inside, nothing of a security nature, so that 
we can blend into the local environment, as you rightly point 
out.
    Mr. Cooksey. Mr. Carpenter, would you agree that the 
emphasis on physical security and counterintelligence is a 
change in the basic RSOs, regional security officers, job or 
has their job description always been the same?
    Mr. Carpenter. I think that there has been expansion of 
their duties and responsibilities. If I had to put it in one 
category, it would be ``outside the walls.'' We have always 
been focused on counterintelligence issues. However, what we 
are involved in to a much greater extent is relationships with 
host government officials, local police authorities, and local 
military authorities.
    An RSO under duress needs to be able to pick up the phone 
and get the person that he knows can respond. In years gone by, 
the RSOs' responsibilities basically were confined ``inside the 
walls.'' We will lose if we don't extend our reach outside 
those walls. The countersurveillance program that we have 
talked about is a major step in that direction. It gets ``eyes 
and ears'' outside the embassy, one block, two blocks, or three 
blocks away and forces us to engage more with local 
authorities. It forces an RSO to get out of an embassy and make 
these contacts that would be needed in the case of an 
emergency.
    Mr. Cooksey. Good. Well, the State Department security 
people that I have had some contact with on CODELs are 
professionals, that I know are good people, but still they were 
apparently confined to the area within the walls. They need 
someone with your background and your expertise, and I am 
encouraged to hear that.
    With the increase in Diplomatic Security positions you have 
been able to provide posts with assistant RSOs, but are you 
sending out assistant RSOs with different skills to augment 
these people? And are these RSOs former Secret Service 
personnel or are they former State Department security 
personnel? For example, computer security, electronic security. 
Who has the most expertise and who is doing that, Secret 
Service personnel or former State Department security 
personnel?
    Mr. Carpenter. The Bureau of Diplomatic Security has a mix 
of special agents, engineers, technicians, and computer 
experts. We have also used former Diplomatic Security agents 
temporarily. Clearly, and coming from the Secret Service I can 
say this firsthand, Diplomatic Security has the most knowledge 
of how to work in an overseas environment of any Federal law 
enforcement agency. None of the others are even close--and I 
think other agencies would testify to that reality.
    The agents that we have sent out come up through the 
system. We have more senior agents at the larger posts where 
the programs are more demanding. They have assistants who work 
for them. But all receive a substantial amount of training in 
the appropriate fields and disciplines that they will be 
required to use overseas.
    Mr. Cooksey. Good. I have been impressed with the 
professionalism of the people in the State Department and 
favorably impressed. I am concerned sometimes that the 
political appointees don't have the background, the expertise 
or the--they are good people, well-intentioned people, but are 
a little naive, somewhat naive when it comes to these security 
considerations, and I hope that they come up with some level of 
understanding there.
    I used to work in Kenya and East Africa doing--quite 
frankly, doing eye surgery. I am very sensitive to that issue. 
You know, as you well know in Kenya, there was a small bomb 
detonated, the people ran to the windows, looked, and most of 
the injuries that occurred were eye injuries. I know one 
surgeon that works at a Presbyterian hospital that I did 8 or 
10 cornea transplants in about a 24-hour period 1 day, and he 
was involved in taking care of those, and it is a very 
sophisticated hospital for that part of the world.
    I gather from your comments that you are really taking 
major measures to prevent flying glass and blinding injuries.
    Mr. Kennedy. If I might, that is one of the things that we 
are most concerned about. We are pursuing this on two tracks. 
As Admiral Crowe's report so rightly recommended and as the IG 
has pointed out as well, if the structure of the building is 
sound enough for us to put in laminated windows and heavier 
frames, we do that. At the same time if the building structure 
isn't good enough, when the blast goes off what will happen is 
the entire window, the entire big piece of laminate in the 
frame, will go flying through the room like a sieve, wiping out 
the people in front of it.
    Mr. Cooksey. So it's bad either way.
    Mr. Kennedy. Yes. But what we do is we have gone to 
laboratories like Sandia National Laboratories and to the 
private sector and we have doubled the strength of what is 
called shatter-resistant window film. In fact, it is plastic 
wrap that is used now--we used to use 4-millimeter thick. We 
have now doubled that to 8-millimeter strength. We are applying 
that to all the windows on all of our facilities. We will have 
that done by June of this year. When the blast goes off, the 
window shatters, but this 8-millimeter film holds the glass 
shards together, and you get the whole window, the glass part 
in effect, plopping down into the room without any damage.
    In one of our posts in the newly independent States about 6 
months ago a bomb went off, not directed at us but at a 
neighboring facility, and after the bomb went off many of our 
windows shattered, but the entire window was still intact 
because the plastic had done exactly what it was supposed to 
do, not injure our personnel.
    Chairman Gilman. The gentleman's time has expired.
    Mr. Chabot.
    Mr. Chabot. Thank you. I had another committee so I 
apologize for not being here, and you may have already answered 
my question. So I will apologize in advance for that if you 
already did.
    My question is just about the overall--I know we have many 
embassies all over the world, and of course since the terrorist 
attacks some time ago our concern about this has been elevated 
even higher than it always was about the safety of our people 
and the other folks working there. How many of our embassies 
just--and you don't have to specifically name which ones--but 
how many of our embassies still really need to be dramatically 
improved relative to security measures? In other words, do we 
still have some that are out there that may be fairly easily 
attacked or come under some sort of successful terrorist 
attack? And, again, we don't want to broadcast which ones they 
might be, for obvious reasons, but either a percentage or just 
some--without giving specific examples, could you comment on 
that?
    Mr. Carpenter. Yes, sir, I would be glad to. About 85 
percent of our embassies still do not meet the 100 foot setback 
standard that is critical for protection against a large 
vehicle bomb. Set back is really the best protection, and we do 
not have that in 85 percent of our embassies on one or more 
sides of the building. They may meet it on three sides, but one 
side remains vulnerable.
    Mr. Chabot. Can I followup on that then. How does one then 
go about obtaining that goal? Do you have to buy up buildings 
around there and literally tear them down? Is that what you do 
or what?
    Mr. Carpenter. It is a combination of those things. We have 
bought and torn down buildings in some instances. We bought 
adjacent buildings when buildings were available. We have also 
bought parks. We have bought gas stations. We have bought empty 
lots in an attempt to obtain the setback. Long term, the 
solution is to move the facility to a site large enough for the 
setback.
    Mr. Chabot. And then if you do move to another site--I 
mean, at what point do you run into the problem where, you 
know, it is more of a--some sort of fort as opposed to an 
embassy where people can easily come in and do business with 
the representatives of the U.S. Government in that particular 
country? I presume that is a fine line you are always walking 
in these matters.
    Mr. Carpenter. It is a fine line. But let me assure you, we 
have no intention of building forts or prisons or military 
bases. We think you can attain an aesthetically attractive 
building, and still have it be secure.
    Mr. Kennedy. I would just say, sir, in response to your 
earlier question, we have already acquired 87 properties around 
the world at 25 posts, and we are now negotiating on 31 others 
at 14 posts. So we need to push that back. I think that if you 
use clever design work you can create a facility that is safe 
but inviting, and we are partnering with a large number of 
American architectural firms, some of the best, and are also 
engaging at every post where we are doing this one local 
architect who knows the local culture and the local 
environment, and he or she works on the outside of the 
building, never on the inside where there would be technical 
security issues.
    But I think there are cases such as Lima, Peru, for an 
example, where we have built an inviting building, created the 
perimeter but creating sort of controlled pathways for people 
to come in from the walk to the consular section or the public 
diplomacy section. It is not easy, but if you get the right 
architectural and engineering support we can do it.
    Mr. Chabot. Thank you very much. Appreciate it.
    Chairman Gilman. Thank you, Mr. Chabot. I have one or two 
questions, and then I will call on Dr. Cooksey for a few more.
    Mr. Kennedy, FBO is ready to begin construction on their 
new embassy in Luanda, Angola. However, that will require 
waivers for not meeting the 100 foot setback on all sides. That 
seems to be setting the wrong precedent for these important 
standards. Has the FBO searched for a larger plot of land to 
allow for full setback?
    Mr. Kennedy. Mr. Chairman, this is one of the knottiest 
conundrums. We have been searching for a larger part of land in 
Luanda, Angola, for 5 years. We have simply not been able to 
find a plot of land that would give us the full 100 foot 
setback on all sides.
    Our people in Luanda now, some of them are literally 
working out of trailers where, you know, a firecracker might 
blast the walls of the trailer down. So we, in full 
consultation with Diplomatic Security, have been measuring 
this. Given that we have in effect an F in security in Luanda 
and we can move--potentially move with waivers to A minus or a 
B plus, we figure, though that does not meet everything, the 
movement from F to A minus without regard to any precedent it 
is setting would be in the interests of both the U.S. 
Government on the whole and our people there in particular.
    Chairman Gilman. What kind of a setback would be available 
at the land you are looking at?
    Mr. Kennedy. We would have a 100 foot or so on two sides 
and over 65 foot on two sides. So it is significantly better 
than we have now.
    If I might add one other thing, Mr. Chairman, the standards 
that come from the Overseas Security Policy Boards say a 100 
foot setback and a concrete wall of so many inches thick for 
yield blast resistance, and that is a formula: 100 foot plus 
concrete equals safe setback. What we would do on the two sides 
that are 65 foot is to increase the thickness and the strength 
of the concrete wall. So you, in effect, have exactly the same 
setback effect by simply increasing the thickness and the 
strength of the concrete.
    Chairman Gilman. You will be doing that in the front wall 
as well?
    Mr. Kennedy. Yes, sir. So we would achieve the same goal by 
using more concrete and less footage.
    Chairman Gilman. Mr. Carpenter, there are incidents where 
American government employees in Inman-qualified embassies are 
being allowed to move off the embassy space, thereby creating 
new security concerns and security challenges. What is your 
view on permitting employees to leave the Inman embassies for 
less secure facilities and who is granting waivers for that 
kind of movement? Are you being consulted?
    Mr. Carpenter. Mr. Chairman, I am not aware of the specific 
facility to which you refer. I would, quite frankly, not want 
to hear it in this hearing.
    Chairman Gilman. If I may, it is USAID in Bogota.
    Mr. Carpenter. USAID in Bogota? Unfortunately, the most I 
can tell you is that proposal is under review. Quite frankly, I 
am not aware of the specifics of that request on AID's part.
    Chairman Gilman. We would hope you would take a look at 
that and let our office know.
    Mr. Carpenter. I would be glad to.
    Chairman Gilman. Is that a generally good idea, when we are 
being asked to fund so many security projects already, of 
allowing the movement?
    Mr. Carpenter. Again, Mr. Chairman, that is a decision that 
is country and post specific. In some places, dispersal of our 
employees is, in fact, a security enhancement. One of the 
realities, even with an Inman building, is they may be limited 
in functionality, and sometimes very hard decisions have to be 
made. However, let me assure you, before we would move someone 
out of an Inman-style building, we would have to have 
reasonable assurances that what they were moving to would 
provide them maximum security.
    Chairman Gilman. Ms. Williams-Bridgers, do you agree with 
this proposition of allowing such movement?
    Ms. Williams-Bridgers. I do agree with Assistant Secretary 
Carpenter that it has to be a country specific decision.
    But certainly one of the greatest challenges that FBO and 
the Department have faced in building new embassies overseas or 
making major renovations to accommodate increased staff is the 
accommodation of other agencies' requests for either movement 
off the compound or for increasing their staff.
    We saw this in Moscow when other agencies throughout the 
course of the construction decided on significant increases in 
their staff and it made for major reconsideration of 
configuration of space in the embassy. We shall see this in 
many other instances. So whether or not FBO continues to 
maintain the functions as presently structured or if those 
functions are assigned outside of the Department of State, the 
``right sizing'' of mission staffing is going to have to be a 
primary consideration of the new unit held responsible for 
designing and constructing new embassies. Interagency 
communication will be essential during the design phase of 
future embassy facilities.
    Chairman Gilman. Madam Inspector General, your statement 
indicates that the Department spent $77 million in fiscal year 
1999 on the surveillance detection program. Does your initial 
assessment of the value of that program support that kind of an 
expenditure and can that level or more be sustained over time 
when there are so many demands for costly physical upgrades?
    Ms. Williams-Bridgers. I think it is important to note that 
as we have focused our attention on the need for physical 
security improvements in our embassies overseas that there are 
a number of other initiatives, including procedural security 
initiatives and information and intelligence gathering, that 
are as important in contributing to our ability to protect 
Americans overseas where they live and work. The surveillance 
detection program improves our ability to collect information 
about those who may potentially harm our employees in the 
embassy. I think there are improvements that need to be made in 
the surveillance detection program.
    Currently, the principal objectives of the program are to 
collect information about those that might be watching us in 
the embassy and to engage local police services, local guard 
services to spread our eyes and ears outside the embassy 
compound. I think it is most important for us to now begin 
using that information more smartly, sharing the information 
regionally with those that can better assist us in identifying 
who the potential terrorists are and then identifying what 
kinds of assertive action we might take to pursue those 
individuals, beyond just the mere photograph and the recording 
of their name and a photograph.
    Chairman Gilman. Thank you.
    Dr. Cooksey.
    Mr. Cooksey. Thank you, Mr. Chairman.
    Mr. Carpenter, I have got two questions I want to ask you 
and would like you to answer them in 60 seconds or maybe give 
us a written explanation, because I don't want to totally 
ignore Ms. Williams-Bridgers.
    It has been brought to my attention that there is an 
embassy that was actually checking vehicles inside the embassy 
gates and didn't have any type of operational delta barriers to 
prevent this type of access to the compound. Is there a 
standard operating procedure for inspecting vehicles and has 
this been reiterated to the basic security people?
    To elaborate on that, I was at an embassy last year in a 
part of Asia and--good people, but, I mean, the embassy is 
right out on the street. There is no security, and there is 
really no way to check. There is not even a perimeter there. I 
mean, it is on the main street. That is one question.
    No. 2, does DS believe that it can do most--should there be 
some risk analysis made so you can make some informed judgments 
about the spending priorities with this limited amount of 
money?
    Mr. Carpenter. With regard to vehicle inspection, yes, sir, 
there is a standard procedure. I think I was just at that same 
embassy 2 weeks ago that you have had the occasion to visit and 
was appalled when I saw it.
    The reality is that we have to play the hand we are dealt, 
and we have had to do some things in nontraditional ways. 
Sometimes that includes sweeping the vehicle after it is inside 
the gate. That is not our SOP, but we felt it better to sweep 
it even though it is inside the gate than not sweep it at all. 
We can't close the necessary streets or obtain a location 
reasonably close by in which to do these inspections.
    Part of the reason for having a countersurveillance program 
is to try to give us a virtual setback. That program gives us a 
span of control outside the embassy. It gives us early warnings 
of impending problems and the ability to alert a facility that 
a problem is coming.
    We have been dealt a bad hand when it comes to setback. As 
I said earlier, 85 percent of our facilities don't have it. We 
are trying to make adjustments and accommodations to the best 
of our ability. We are going to have to continue to change the 
way we are doing business out there.
    What we have in place is good now. Next month, it is going 
to be better and the next month even better; and certainly a 
year from now, assuming we are still in those safe facilities, 
it is going to be even better, still.
    Mr. Cooksey. Good.
    Ms. Williams-Bridgers, I was on the IG team the last 6 
months I was in the Air Force so I know that all IG people 
aren't terrible, ruthless people, but the job has to be done. 
In my capacity on the Public Buildings Subcommittee of 
Transportation we found that there was some buildings in this 
country, domestic again--of course, this is a domestic issue--
that were built, one as many as 30 years ago or 27 years ago 
for probably 50 to 70 million dollars, I forget the exact 
number, but over the years the lease payments for that building 
are approaching $900 million and nearly a billion dollar. Do we 
own all of these buildings abroad? Do we own all embassies or 
are, in fact, some of them leased out?
    Ms. Williams-Bridgers. I will defer to Assistant Secretary 
Kennedy. However, we do not own all of our overseas property 
holdings.
    Mr. Cooksey. There was some political patronage. Does it 
carry over into our embassies? That is ultimately my question.
    Mr. Kennedy. Dr. Cooksey, I don't think it involves 
political patronage so much as the lack of a capital program. 
If you take----
    Mr. Cooksey. You remind me of Congress, for giving me your 
money, should--I will quote Admiral Crowe who says, there's 
enough blame to go around between the Legislative and Executive 
Branches. I will blame it on Congress.
    Mr. Kennedy. We have some 12,000 buildings overseas. We 
probably own less than 2,000 of them.
    Mr. Cooksey. Really.
    Mr. Kennedy. Basically, we try to own wherever we can. But, 
in many cases, because the funds available to us are simply 
enough to pay the rent but not enough to make the up-front 
payment that is needed to purchase, we are stuck--just as you 
pointed out from your experience on your other committee, we 
are stuck paying the rent every day.
    That is something that the overseas presence panel pointed 
out. It is something we are working with under Ms. Thomasson. 
We are in constant consultation with OMB to see if there were 
some way to move this along so that we could lease to own or do 
some new, inventive, creative way of funding and financing 
which would not be an immediate burden on American taxpayers 
but would put us in a very different position 10 years down the 
line.
    Mr. Cooksey. From a total long-term cost standpoint, we 
would be better off to own these buildings.
    Mr. Kennedy. Absolutely, sir.
    Mr. Cooksey. I want to make one other closing comment. I 
made this to a Republican colleague the other day, and I put 
him on the spot, and I apologized to him, but it is a message 
that I still want to put out, and it is marginally related to 
this Committee.
    I think one of the most disgraceful, cowardly, despicable 
acts of omission that is going on right now by members of both 
parties, the Executive Branch, maybe the State Department, is 
the fact that we are totally ignoring the human rights abuses 
that are going on in Africa. I am talking about Rwanda, 
Burundi, today Sierra Leone. A good friend of mine had a 
wonderful eye clinic with wonderful equipment there that is 
destroyed. And Eritrea, Ethiopia and now Zimbabwe, places where 
they are going in and slaughtering people, cutting children's 
hands and legs off. We are focused on human rights abuses in 
China, and they have got abuses there but not on this scale. I 
think that the politicians in this city who don't have the 
courage to stand up to these human rights abuses when they are 
diverting attention to China should be held to account for it.
    My question, in these countries I mentioned, Sierra Leone, 
where they cut the children's hands off and feet and legs, in 
Rwanda and Burundi and more recently in Zimbabwe, where they 
are shooting people, and today I read in the paper they are 
taking a lumber company out, what kind of security do we have 
there for our embassies and are the embassies able to take a 
position there? Is the fact that we have got a bunch of 
cowardly people in this city a reflection of the fact that we 
don't have embassies there or security there that could address 
this really despicable, cowardly act of omission by the people 
in this city?
    That would be a good one for you, Ms. Williams-Bridgers. I 
didn't mean to ignore you on the other questions, but I am 
concerned about this. Is it because we don't have the embassy 
personnel, the security in these countries?
    Ms. Williams-Bridgers. We do have an American presence in 
the many of the places that you mentioned, and I couldn't agree 
with you more that there is no more despicable act than what we 
see commissioned across too much of the globe as the abuses 
against human beings, against women and children who are 
virtually defenseless.
    The security of our embassies and our embassy personnel are 
established, first and foremost, to protect Americans who are 
working and living to support the business of the American 
embassies abroad. The mission of our embassies abroad is to 
advance human rights issues in many of those locations, and I 
don't believe that it is being ignored at all by the Department 
of State, and its best efforts are being put forward.
    That said, we haven't looked specifically at the 
advancement of human rights policies by any of those particular 
missions that you have mentioned in the course of recent 
inspections.
    Mr. Cooksey. My question then, in summary and in closing, 
Mr. Chairman, if in these countries we had a state-of-the-art 
embassy in terms of construction security, could we have a more 
effective presence in addressing these human rights abuses 
against women and children? That is who the abuses are against. 
I have delivered babies with women who have had female genital 
mutilation. I have taken care of people with land mine injuries 
and AK-47 injuries, some years ago, 8 or 10 years ago. But 
could we do a better job of addressing these problems if we had 
this state-of-the-art security in our embassies that you are 
talking about or could we not?
    Ms. Williams-Bridgers. There is absolutely no doubt that 
without the adequate facilities, without safe facilities to 
house U.S. Government employees who are working overseas to 
advance issues like human rights that we cannot effectively 
execute our mission. I think that it is why it is one of the 
first and foremost priorities of the Department to ensure that 
we have the commitment of funding, that we have all of the 
resources that are necessary to enhance the security and, 
therefore, the viability of our missions overseas.
    Mr. Cooksey. Thank you, Mr. Chairman.
    Chairman Gilman. Thank you, Dr. Cooksey.
    One last question, Mr. Carpenter. The case that Dr. Cooksey 
mentioned in the South American embassy, that delta barrier, I 
have been informed, in front of the vehicle being checked 
inside the compound was not working. The next stop was the 
front door of the Ambassador's residence and the chance for a 
suicide bomber. Has that delta barrier been fixed since that 
inspection?
    Mr. Carpenter. They are still working on it. Like a number 
of other issues out there, we are aware of the problems that we 
have. That clearly is one. Equipment is sometimes slow to be 
installed. It is critical that it be installed. They have taken 
some other measures to mitigate the threat until it is 
installed; but unfortunately, I have to report that it has yet 
to be completed.
    Chairman Gilman. Our Committee called this to your 
attention several months ago. We hoped that that would be taken 
care of properly.
    Mr. Carpenter. I wish it had been. It should have been.
    Chairman Gilman. I want to thank the panelists for your 
time. Committee stands adjourned.
    [Whereupon, at 11:52 a.m., the Committee was adjourned.]
      
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                            A P P E N D I X

                        May 11 and May 17, 2000

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Prepared Statement of Patrick F. Kennedy, Assistant Secretary of State 
 for Administration, before the Committee on International Relations, 
              U.S. House of Representatives, May 17, 2000

    Mr. Chairman: I appreciate the opportunity to appear before your 
Committee. It is always a pleasure for me to be able to update you on 
the many accomplishments that the Department has made in improving our 
overseas security posture, facility infrastructure, and our worldwide 
facility operations. Obviously, since the tragic bombings of our 
embassies in East Africa, the issues concerning our infrastructure and 
the security of our missions overseas have received great attention 
within the Administration and the Congress. We very much appreciate the 
support of the Congress, and particularly of this Committee, for the 
Emergency Security Supplemental and the Administration's proposals for 
physical security upgrades at our overseas posts. I would also like to 
say a few words today on the Overseas Presence Advisory Panel (OPAP) 
and its recommendations concerning our Office of Foreign Buildings 
Operations (A/FBO). Finally, I will give a brief report on what we are 
doing at the Main State headquarters building here in Washington and 
the issue of security clearances for custodial and operations and 
maintenance personnel.
    As you know, the Overseas Presence Advisory Panel, which issued its 
report last November, described many of our facilities abroad as 
unacceptable in terms of security and condition. Fully 85 percent of 
our facilities do not meet optimum security standards. Some are in need 
of extensive renovation. Some are seriously overcrowded. Most, however, 
simply have to be replaced. To protect our employees overseas, our goal 
is to expeditiously locate into safe facilities more than 22,000 
embassy staff in over 220 vulnerable buildings. This is a formidable 
task. Achievement of this task will require an enormous initial and 
sustained level of capital investment. Mr. Chairman, quite frankly, 
during the past 10 years, we neither requested nor received sufficient 
funding to allow us to maintain our infrastructure base. Most recently, 
since the 1998 bombings, we are finally beginning to arrest that 
decline in resources, thanks to the support of the President and the 
Congress, and have taken the first steps toward rebuilding our 
facilities infrastructure. In fiscal year 1999 alone, A/FBO obligated 
over $800 million, the most ever obligated in a fiscal year, to replace 
unsafe facilities and improve security at those posts whose facilities 
cannot be replaced for several years.
    As part of OPAP's overall charter to evaluate the way the United 
States organizes its overseas activities, it made 44 recommendations in 
eight general areas. This morning, I would like to focus some of my 
remarks on the Panel's recommendation to establish an Overseas 
Facilities Authority (OFA).
    The Panel advocated replacing the Bureau of Administration's Office 
of Foreign Buildings Operations with a federally chartered government 
corporation--an Overseas Facilities Authority. The issues that led to 
the Panel's proposal included the perception that A/FBO-managed 
construction projects took longer and cost more than comparable private 
sector projects, that timelines were not always met, and that staffing 
levels appeared to be too high for the number of properties and 
projects being handled. However, I believe that the staff work that 
underpins these perceptions is faulty, as it failed to give due 
consideration to security requirements and special overseas needs.
    The Panel proposed creating a government-chartered corporation that 
would allow the use of management and financing techniques commonly 
found in the private sector. This new authority--OFA--would exercise 
responsibility for building, renovating, maintaining, and managing the 
Federal Government's civilian overseas facilities, including office and 
residential facilities. As envisaged by OPAP, the OFA, in addition to 
receiving annual appropriations from Congress, would have features not 
currently available to the Office of Foreign Buildings Operations, 
including receiving funds from other agencies, levying capital charges 
for new facilities, obtaining forward funding commitments from the 
Federal Budget and loans from the U.S. Treasury, as well as retaining 
service fees from sources approved by the Congress. The OFA, again, 
unlike the current A/FBO, would have the ability to apply management 
techniques commonly used in the private sector to include using 
financial incentives and performance-based compensation standards. The 
Panel reasoned that higher salaries and incentives would allow OFA to 
attract highly qualified real estate and other professionals and 
further motivate employees and contractors to better meet construction 
project schedules.
    We are currently giving serious and careful consideration to the 
Panel's proposals to reinvent the method of funding and administration 
of our overseas facilities' design and construction program. An 
interagency group headed by the Director of the Office of Foreign 
Buildings Operations, Patsy Thomasson, is reviewing all aspects of 
overseas facilities. Earlier this year, Ms. Thomasson formed six teams 
within A/FBO to look in to, and analyze in depth, five critical areas--
organizational structure, financing alternatives, business process 
reengineering, customer focus, and communications. A sixth team manages 
the overall effort. Together, these teams will make recommendations on 
how the Panel's desired outcomes can best be achieved. We have also 
contracted with a leading consulting firm to examine various funding 
options and ways to make A/FBO a more performance-based organization. 
While these team efforts are still continuing, I believe that creating 
an independent OFA is not essential to accomplish the changes that OPAP 
laid out. Most of the proposed attributes of the OFA could be assigned 
either administratively or legislatively to A/FBO without disrupting 
and halting the very positive direction in which A/FBO is now headed.
    Although we agree with the thrust of the Panel's recommendations, 
we question whether the creation of an independent, federally chartered 
organization, comprised of both the public and private sectors, is 
necessarily the best approach to meet our infrastructure challenges 
overseas. Principally, we are concerned that such an entity may 
compromise the vital link between foreign policy and facility 
decisions. For example, there are foreign policy issues, such as 
reciprocity, that are intricately intertwined with overseas facility 
programs. Such is the case with China, where we are seeking a site for 
a new embassy in Beijing and China is seeking, as a condition, a site 
in Washington. Such is also the case with the United Arab Emirates, 
where we are seeking to acquire a parcel of land adjacent to our 
embassy in Abu Dhabi, and they want a new residence for their 
Ambassador here in Washington. These are classic examples where 
facility decisions are affected and sometimes driven by foreign policy 
considerations.
    The Panel also urged that we continue to implement the 
Accountability Review Board's (ARB) proposals providing for security 
upgrades at our overseas posts throughout the world. We are doing that, 
and I am pleased to report that the Office of Foreign Buildings 
Operations has been particularly successful in responding to the 
mandates of the security supplemental that followed the 1998 bombings. 
Interim facilities are fully operational in Dar es Salaam and Nairobi, 
and we are moving smartly toward constructing permanent facilities in 
both locations. The Office of Foreign Buildings Operations conducted a 
competition for a fast-track design/build contract and awarded the 
contract last September. The designs of these projects have now reached 
the point where we anticipate giving the contractor the green light to 
mobilize onsite at Dar and Nairobi next month. We have also opened a 
temporary office building in Doha and are fitting out three buildings 
in Pristina to serve as temporary facilities. We have permanent 
facilities under construction in Doha and Kampala.
    Currently we have 14 new embassies or consulates in various stages 
of development: Dar es Salaam, Nairobi, Abu Dhabi, Abuja, Berlin, Doha, 
Istanbul, Kampala, Luanda, Rio de Janeiro, Sao Paulo, Seoul, Tunis, and 
Zagreb. We are also in the process of acquiring several additional new 
office building sites. Also, since the bombings, A/FBO has completed 15 
major rehabilitation projects at overseas posts with another 46 major 
rehab projects ongoing at this time.
    Since the bombings we have also relocated many overseas Department 
and other Agency personnel to more secure facilities. For example, AID 
personnel have been/are being relocated to more secure facilities in 
Almaty, Antananarivo, Asuncion, Ashgabat, Cairo, Kampala, Luanda, 
Manila, New Delhi, Rabat, Tel Aviv and other locations around the 
world.
    Increasing setback from streets and other buildings is another way 
of reducing the threat to loss of life and injury. During the past year 
and a half A/FBO has been extremely active in acquiring 87 setback 
properties at 25 posts around the world to provide greater security to 
our personnel. Negotiations and investigations are continuing on 
another 31 properties at 14 posts.
    Worldwide Security Upgrade funding appropriated by the Congress has 
enabled A/FBO to approve 1,051 security upgrade projects at overseas 
posts with 34 percent of these projects having been completed. Every 
project will further protect our employees overseas. The Worldwide 
Security Upgrade Program which includes security projects such as the 
installation of berms, bollards, and access controls, is being executed 
at each post by A/FBO, the post itself, and/or by an implementation 
contractor or basic ordering agreement contractor. Other components of 
this program include the installation of shatter resistant window film 
on all office windows and the installation of forced entry/ballistic 
resistant (FE/BR) doors and windows. The bombings in Africa 
demonstrated all too tragically that the greatest threat to life and 
injury from a bomb blast is from flying shards of glass. Since the 
bombings, we have purchased 5.5 million square feet of window film. 
Nearly half has been installed, with the remainder to be installed by 
the end of the summer. We have also installed or replaced over 500 FE/
BR doors and windows.
    A/FBO's Asset Management Program, which acquires essential property 
by using proceeds from the sales of excess or underutilized properties, 
has been very successful, purchasing 18 properties in fiscal year 1999 
and the first half of FY2000, while disposing of 17 properties.
    These successes are the result of retorquing internal processes, 
applying new initiatives, and introducing innovative methodologies. 
These have all been key factors in achieving A/FBO's high level of 
productivity over the past 18 months. Today's Office of Foreign 
Buildings Operations is not the A/FBO of the late 80's and early 90's 
under the Inman program.
    A 1991 General Accounting Office review of the management of the 
Security Construction Program revealed problems that A/FBO experienced 
during its efforts to meet the major challenges of the Inman buildup a 
decade ago. The most significant difficulties were linked to inadequate 
staffing, difficulties with overseas site acquisition, contractor 
performance, and the lack of an effective strategic focus. Since those 
years, however, A/FBO has implemented lessons learned throughout the 
organization and is now well prepared to undertake a large construction 
program.
    A/FBO has developed an improved strategy for effectively executing 
a difficult, expanded construction program and has augmented its staff 
to handle the workload. The strategy is derived from A/FBO's Inman 
experience with the simultaneous execution of large, multi-year 
projects, and from implementing construction industry best practices. 
Included in our strategy are a number of initiatives described below.
     Design/build contracting. A/FBO is placing greater 
reliance on design/build (D/B) contracting. This method has been 
demonstrated in both the public and private sectors to reduce cost and 
save time in project delivery as compared with the more traditional 
two-contract, design-bid-build procurement method. In addition, we are 
looking at other multiple projects that could be packaged into groups 
for award to a single, large D/B contractor, as we did with the Dar es 
Salaam and Nairobi projects. Additional D/B contracts could be awarded 
for groups of projects in the out years.
    D/B contracts are being managed by integrated project management 
teams to provide effective controls and added expertise. From the start 
of a project, these cross-discipline teams are accelerating project 
execution; controlling costs; clarifying lines of authority; and 
carefully defining roles, responsibilities, procedures, project 
priorities, and milestones. Potential risks to project success are 
identified and mitigated early.
     Staffing. A/FBO is much better positioned than in the mid 
1980's when the Inman program began, and its in-house work force 
numbered less than 200. The professionalism and depth of the work force 
has increased as its size has grown to over 760 today. Eighty-four new 
staff members have been, or are being, brought on for worldwide 
security upgrades alone. Additional real estate professionals have been 
hired to find and acquire new sites and buildings; more design, 
engineering, project management, and other professionals and 
specialists have been brought on to execute construction projects. 
Overall, since the bombings, A/FBO has increased on board staffing by 
17 percent.
    Contract support has been increased, with Perini Corporation and 
Brown and Root assisting with security upgrade work, and with 
indefinite quantity contractors increasing A/FBO capabilities, 
especially in design-review services.
     Priority setting. The Accountability Review Boards 
recommended spending $14 billion on embassy construction in the next 10 
years to replace all facilities that do not meet standards. Interagency 
Embassy Security Assessment Teams (ESATs) determined that most of our 
posts have compelling facility needs, such as for adequate setback, 
structural hardening, relocations, and other security requirements.
    All chanceries, consulates, and multi-tenant annex buildings have 
been evaluated for security vulnerability. The analysis assessed the 
soundness of each building's structure and facade, the adequacy of the 
building compound's perimeter security, the building's setback from 
adjacent property, the post's political violence security threat, and 
additional security considerations that included the capability and 
willingness of the host country to control its internal and border 
security relative to external terrorists; as well as other factors. The 
resulting ranking was reviewed by stakeholders, i.e., regional bureaus, 
other agencies, the Bureau of Diplomatic Security, Embassy Security 
Assessment Teams, and A/FBO managers. Projects were then planned for 
different fiscal years based on vulnerability, stakeholder input, and 
consideration of factors that will either inhibit or facilitate a 
project's execution.
     Other measures developed or enhanced since the 1998 
bombings. Time and space preclude a full explanation of all the other 
industry best practices adopted by A/FBO, however, a representative 
listing of these best practices follows:

         Industry Outreach
         Enhanced Partnering
         Security and Blast Research
         Site Search Program
         Pre-qualified A/E Pool
         Generic Statement of Work
         A&E Design Guidelines
         Integrated Building Systems
         Information Technology
         Signage Program
         Standard Delivery Process
         Site Adapted Office Building
         Project Execution Support Contractors
         Reliability Centered Maintenance
         Serviceability Tools and Methods
         Post Occupancy Evaluation

    These ``best practices'' or initiatives, added to intense efforts 
by the Department, have resulted in the outstanding record of 
achievement over the past 18 months, and clearly demonstrate that 
today's A/FBO has the ability to manage a large and complex building 
program.
    Let me turn now to the Department's buildings and facilities in 
Washington and elsewhere in the United States and the issue of security 
clearances for custodial and operations and maintenance personnel.
    The Department of State occupies 58 buildings located throughout 
the United States, totaling approximately 6 million square feet of 
space. The Main State building in Washington, the domestic building you 
are most interested in, comprises roughly 2.5 million gross square feet 
and houses more than 8,000 employees. Given that size and population, 
Main State is similar to a small city in the services that are 
required. As you can imagine services to such a large population must 
include electrical, heating, air conditioning, plumbing, painting, 
carpeting, furniture, communications, custodial services, and all other 
normal maintenance and repair specialties employed on a daily basis. 
There are two major contracts that supply the majority of services in 
Main State, custodial and operations and maintenance (O&M). Those 
contracts are competitively bid and the contractors have corporate 
clearances at the appropriate level for their work; the custodial 
contractor has a corporate top secret clearance while the maintenance 
contractor has a corporate secret clearance.
    In addition each contractor has employees who are cleared at the 
appropriate level in order to perform their jobs within the building. 
For example, the custodial contractor has 20 custodial workers with top 
secret clearance to work in sensitive and classified areas. Ten more 
have top secret security clearances pending. If a maintenance or 
custodial worker must work in a classified area and the worker has no 
clearance, that person is escorted by cleared Department of State 
personnel. Furthermore, it is the responsibility of the occupant of any 
space classified or not, to watch over custodial and maintenance 
workers in their area and protect all material for which they are 
responsible.
    The Department is currently undergoing extensive renovations to 
bring the building up to par. The overall Main State renovation 
project, primarily funded by GSA is a multi-million dollar project. 
That work, which is in its early stages, is being done with GSA 
contractors. GSA's contractors have corporate clearances as well. In 
addition, with the Congressionally mandated reorganization of the 
Foreign Affairs agencies, State is in the process of absorbing the 
former USIA and ACDA staffs and functions. This has led to further 
renovation and construction work in the Main State building at a cost 
that will exceed $80 million and will involve probably 200 smaller 
construction projects, utilizing perhaps as many as 12 different 
contractors. Those contractors will all have corporate security 
clearances and most of the workers will also have clearances. The 
Bureau of Diplomatic Security (DS) is involved in those projects as 
well. DS is a member of each project team in this process and we work 
closely together to ensure that security requirements are met.
    I would be pleased to answer any questions.
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