[Senate Report 105-258]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 489
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-258
_______________________________________________________________________


 
                    GOVERNMENT SECRECY ACT OF 1997

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                 S. 712

  TO PROVIDE FOR A SYSTEM TO CLASSIFY INFORMATION IN THE INTERESTS OF 
     NATIONAL SECURITY AND A SYSTEM TO DECLASSIFY SUCH INFORMATION





                 July 22, 1998.--Ordered to be printed


                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOHN GLENN, Ohio
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              JOSEPH I. LIEBERMAN, Connecticut
SAM BROWNBACK, Kansas                DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico         RICHARD J. DURBIN, Illinois
THAD COCHRAN, Mississippi            ROBERT G. TORRICELLI, New Jersey
DON NICKLES, Oklahoma                MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania
             Hannah S. Sistare, Staff Director and Counsel
                  Richard A. Hertling, Senior Counsel
              Curtis M. Silvers, Professional Staff Member
                 Leonard Weiss, Minority Staff Director
         Sebastian O'Kelly, Minority Professional Staff Member
                       Lynn L. Baker, Chief Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Background.......................................................1
 II. Purpose of the Legislation.......................................7
III. Legislative History and Committee Consideration..................8
 IV. Section-By-Section Analysis......................................8
  V. Regulatory Impact Statement.....................................32
 VI. Congressional Budget Office Cost Estimate.......................32
VII. Changes in Existing Law.........................................35


105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-258
_______________________________________________________________________


                   THE GOVERNMENT SECRECY REFORM ACT

                                _______
                                

                 July 22, 1998.--Ordered to be printed

_______________________________________________________________________


Mr. Thompson, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 712]

    The Committee on Governmental Affairs, to which was 
referred the bill (S. 712) to provide for a system to classify 
information in the interests of national security and a system 
to declassify such information, reports favorably thereon with 
an amendment in the nature of a substitute and recommends that 
the bill as amended do pass.

                             I. Background

    For centuries, governments have been preoccupied with 
keeping secrets. Information is power, and those that have 
access to it are powerful. The democracy of the United States 
is founded, however, on the principle that the people are 
sovereign and must be entrusted with the power of information 
if they are to make informed choices and decisions. 
Historically, the United States Government was perhaps the most 
open of all governments. For example, even during the Civil 
War, troop movements were often reported in the newspapers, 
despite the efforts of military commanders to prevent the 
publication of such reports.
    The 20th century brought change to this historic openness, 
especially as the United States began to play an increasingly 
larger role in world affairs. The importance of preserving the 
secrecy of sensitive information was emphasized by the British 
interception of the famous Zimmerman telegram, which sealed our 
nation's entry into the First World War. In 1917, during that 
war, Congress enacted the Espionage Act. In the aftermath of 
World War I and the Russian Revolution, fear of international 
Communism ran deep. A domestic national security apparatus was 
developed, and the Espionage Ace was used to target domestic 
groups suspected of subversive activity.
    The Second World War thrust the United States into the 
forefront of world nations. The successful conduct of the war 
depended on preventing the enemy from learning sensitive 
information and war plans. Unlike the Civil War, elaborate 
systems were put in place to guard against espionage and other 
means by which the Axis powers could uncover military plans, 
industrial production schedules, scientific developments and 
experiments, cryptographic information, and any other 
information that could help the enemy. Those in power knew the 
importance of secrecy, because they also knew how dependent we 
were on our success in learning sensitive information from our 
enemies, through cryptographic or human intelligence sources.
    Once World War Two ended, however, the secrecy system and 
the bureaucracy that supported it did not recede. Our democracy 
remained at war, although it had become a Cold War against the 
Soviet Union, its allies, and its agents. And the stakes were 
significantly greater than at any time in history, because we 
had entered the nuclear age, and the threat of annihilation 
hung over our nation and the world. A foreign intelligence 
apparatus needed to be retained, and the government had to 
continue to protect information, the release of which would 
legitimately cause harm to the nation's security.
    In order to promote the national defense, Congress enacted 
in 1947 the National Security Act, which not only consolidated 
our military into the Department of Defense, but established a 
statutory basis for our nation's foreign intelligence system, 
which had been developed by the military during the Second 
World War and was preserved after the war by President Truman. 
See 11 Fed. Reg. 1337 (February 5, 1946) (creation of National 
Intelligence Authority). The National Security Act established 
the Central Intelligence Agency and explicitly authorized its 
director to protect intelligence sources and methods from 
unauthorized public disclosure. Act of July 26, 1947, Section 
102(d)(3), Pub. L. 80-253, 61 Stat. 495, 498. This 
responsibility remains to this day. See 50 U.S.C. Sec. 403-
3(c)(6).
    Acting pursuant to the authority of the National Security 
Act and to his constitutional authority as Commander-in-Chief, 
President Truman established the current form of the system for 
classifying national security information in 1951 by issuing 
Executive Order 10290. Since that time, except for nuclear 
secrets, the system for protecting national security 
information has been based on a series of executive orders. 
Since President Truman, five successive executive orders have 
modified the government's secrecy standards, and since 1978, 
only 20 years ago, there have been three different executive 
orders issued revising the handling of national security 
information. The Committee understands that until it began its 
consideration of S. 712, the Administration was considering 
making additional changes to the executive order issued by 
President Clinton just three years ago.
    The development and implementation of a sound system for 
protecting national security information need not depend 
exclusively on executive orders. As an example, one need only 
look to the Atomic Energy Act of 1954, 68 Stat. 940 (Aug. 30, 
1954), currently codified at 42 U.S.C. Sec. 2161 et seq., in 
which Congress established the policy and procedures for the 
handling of information related to atomic energy. This system 
attempts to balance the needs of national security with those 
of scientific and technological development.
    The national security apparatus and the system for 
protecting national security information served the nation well 
for 50 years. The world today is very different, however, than 
it was in 1947 or 1951, or even 1989. The Cold War has ended. 
The Soviet Union, its allies, and its client states collapsed. 
The principles of democracy, liberty, the recognition of the 
inalienable rights of man prevailed. In the wake of the Cold 
War, we have entered a period of rapid globalization. Foreign 
trade among nations is surging. And from the Atomic Age we have 
moved to the Information Age. Computers store vast amounts of 
information and communications systemsto make that information 
immediately available around the world. No longer is information itself 
the key to political, military, and economic dominance. With the vast 
amounts of information available, dominance today depends on the 
ability to analyze information, to determine and separate out what is 
important from what is not, and to act on it. Improved analysis comes 
not from suppressing information, but from making it available and 
subjecting it to broad scrutiny.
    While there is a need for greater openness, it would be 
shortsighted to believe that as a nation we can give up 
entirely on the need to protect sensitive information from 
disclosure. The world remains dangerous, even if the source and 
nature of the threats to our national security are different. 
Some argue the world is even more dangerous today than it was 
during the Cold War because of the greater instability. Along 
with open trade in legitimate goods comes the smuggling of 
drugs, weapons, including the potential for biological and 
chemical weapons, and nuclear materials. Terrorist groups link 
up with transnational criminal organizations and rogue nations 
to attack our national interests and undermine world stability. 
Ethnic and religious differences threaten the peace in many 
parts of the world and local conflicts can always involve the 
world's dominant power. Some nations continue to engage ours as 
a potential enemy, economically and politically, if not always 
militarily.
    A strong U.S. presence, political, diplomatic, military, or 
economic, is needed around the world to combat the forces of 
international lawlessness. To support these efforts to promote 
our vital national interests, our nation must continue to rely 
on military and intelligence services that are second to none. 
The need to protect sensitive national security information to 
support these services remains.
    To adapt to the changes in the world, the federal 
government must reinvent the balance that has been in place 
since the start of the Cold War. A new policy of protecting 
national security information must recognize the new nature of 
both the technological environment, with widespread access to 
hitherto unimagined amounts of information in real time, and 
the threat. The policy also needs to take account of the costs 
and benefits of secrecy. While both can be difficult to 
quantify, the Information Security Oversight Office has 
estimated the total cost to the taxpayers of efforts to 
preserve the security of sensitive national security 
information to exceed $5 billion annually. As government 
struggles to adjust to limited resources, it needs to evaluate 
what portion of these costs continues to be warranted.
    As bureaucracies have a tendency to be self-perpetuating 
and to attempt to contort the missions and focus of government 
in such a way as to invariably place themselves in the center 
of its operations, Congress, the people's body, decided to 
undertake to review the entire federal secrecy apparatus by 
establishing the Commission on Protecting and Reducing 
Government Secrecy (the Commission).
    The Commission was authorized by Title IX of the Foreign 
Relations Authorization Act for Fiscal Years 1994 and 1995, 
signed into law by President Clinton on April 30, 1994. Pub. L. 
103-236. It was charged by Congress with making recommendations 
``to reduce the volume of information classified and thereby to 
strengthen the protection of legitimately classified 
information.''
    The twelve Commissioners (four Members of Congress, two 
government officials, and six private citizens) were selected 
jointly by the President and the congressional leadership. 
Senator Daniel Patrick Moynihan, a former Vice Chairman of the 
Senate Select Committee on Intelligence, served as Chairman of 
the Commission and Representative Larry Combest, then-Chairman 
of the House Permanent Select Committee on Intelligence in the 
104th Congress, served as Vice Chairman. The other 
congressional Commissioner were Senator Jesse Helms, Chairman 
of the Senate Committee on Foreign Relations, and 
Representative Lee Hamilton, Ranking Minority member of the 
House Committee on International Relations and former Chairman 
of the House Permanent Select Committee on Intelligence.
    The other Commissioners brought a variety of experience and 
expertise to the work of the Commission. These included former 
Director of Central Intelligence and former Deputy Secretary of 
Defense John M. Deutch; Martin C. Faga, former Director of the 
National Reconnaissance Office and former Assistant Secretary 
of the Air Force; Alison B. Fortier, former Special Assistant 
to the President and Senior Director, National Security 
Council; Ambassador Richard K. Fox, Jr., a retired career 
Foreign Service Officer and former ambassador; Ellen Hume, a 
journalist; Professor Samuel P. Huntington of Harvard 
University; current Deputy Chief of Staff to the President John 
D. Podesta; and Maurice Sonnenberg, a member of the President's 
Foreign Intelligence Advisory Board.
    The Commission was the first congressionally established 
body to examine the issue of government secrecy in four 
decades. The only prior body, the Commission on Government 
Security, was convened in 1955-57. The recommendations of that 
Commission did not alter significantly the basic structure and 
underpinnings of the security system that had developed over 
the preceding decade. The central finding of the 1957 report of 
the Commission on Government Security, that there existed a 
``vast, intricate, confusing and costly complex of temporary, 
inadequate, uncoordinated programs and measures designed to 
protect secrets and installations vital to the defense of the 
Nation against agents of Soviet imperialism,'' was not markedly 
different from the conclusions of the 1997 Report of the 
Commission on Protecting and Reducing Government Secrecy.
    The new Commission issued its unanimous final report on 
March 3, 1997, after studying the issues in detail. The 
Commission concluded that a new approach to secrecy, one which 
takes into account the insight that secrecy is a form of 
regulation, is needed. As the Commission's final report puts 
it, ``Americans are familiar with the tendency to overregulate 
in other areas. What is different with secrecy is that the 
public cannot know the extent or the content of the 
regulation.'' Overregulation is a continuing theme in American 
public life. Secrecy would be included in that concern were it 
not, by its very nature, highly resistant to public scrutiny. 
Instead, it exists as a parallel regulatory regime with the 
potential for significant damage if it malfunctions.
    The Commission proposed that the system for classifying and 
declassifying information, which for so long has been governed 
by executive order, should be given a new statutory framework. 
A statutory framework would provide for greater congressional 
oversight and public awareness of the system governing 
sensitive national security information. The secrecy system 
would no longer be governed by the views of those charged with 
implementing regulations.
    In addition to recommending a statute to govern the secrecy 
system outside of the atomic energy context, in which secrecy 
is already governed by statute, the Commission recommended the 
following:
    Adoption of the concept of a life-cycle for secrets, to 
enhance the understanding of classification and 
declassification decisions and promote rational decision-
making. Information management practices should take into 
account that information has a life span and must be treated 
according to its stages within that life span. Some information 
may only need to be protected for a few days, such as the 
travel itinerary of a government official, which only requires 
protection before the trip. Other information, however, may 
require protection for generations.
    Establishment of a national declassification center to 
improve declassification procedures and coordinate how 
information that no longer needs to be secret will be made 
available to the public. The Commission reasoned that, if 
secrecy is a form of regulation, declassification should be 
seen as a form of deregulation. A national declassification 
center would coordinate declassification throughout the 
government, using guidelines established by the originating 
agency. A national center for declassifying information could 
use economies of scale to reduce the costs of declassification.
    Establishment of a single, independent Executive Branch 
office responsible for coordinating classification and 
declassification practices and enhancing incentives to improve 
such practices, in order to promote greater accountability. The 
Commission found that the absence of adequate oversight 
throughout the Executive Branch and by the Congress has 
resulted in little accountability for classification decisions 
and wide variation among different agencies in the application 
of executive orders governing secrecy. Many of the problems 
associated with the current system are management problems 
which can only be addressed by a strong central office. Such an 
office could ensure that classification and declassification 
policies are treated as information management issues and not 
merely extensions of security policy.
    Improving the initial classification of information by 
requiring classifying officials to weigh the costs and benefits 
of secrecy and to consider additional factors in the decision 
to make or keep something secret to ensure that classification 
is used more efficiently. The Commission argued that, in 
determining whether information should be classified, or should 
remain classified, an official should weigh the costs 
associated with keeping information secret. Classification 
decisions should weight the vulnerability of the information, 
the threat of damage from its disclosure, the risk of its loss, 
its value to adversaries, an the cost of protecting it.
    Issuance by the Director of Central Intelligence of a 
directive concerning the appropriate scope of sources and 
methods protection as a rationale for secrecy to clarify the 
grounds for classifying information. As was noted above, under 
the National Security Act of 1947, the Director of Central 
Intelligence is charged with protecting intelligence ``sources 
and methods.'' Information is often classified because it is 
provided by an intelligence source or an intelligence method, 
and not because of its content. It is usually the content of 
the information which is the most useful to the pubic and to 
historians; therefore, the Commission found that a more 
thoughtful and discriminating approach to this issue is needed 
to clarify the scope of and reasons for protecting sources and 
methods in particular cases.
    Standardization of security clearance procedures and 
reallocating resource to those parts of the personnel security 
system that have proven most effective in determining who 
should or should not have access to classified information, in 
order to promote the use of personnel security resources in a 
manner that ensures more effective and efficient protection. 
The current personnel security system is still designed to 
prevent subversion by Communist agents, even though few people 
come to work for the federal government with the intent to 
commit espionage. Instead of focusing resources on extensive 
initial security clearance investigations, the Commission 
recommended that resources be allocated more evenly throughout 
an employee's career, as there are many recent examples of 
employees who only decided to commit espionage years after they 
have entered the government. Additionally, many agencies 
continue to insist on their own personnel investigations, and 
do not accept those of other agencies. The Commission found 
that a single system recognized by all agencies would have 
significant personnel security resources.
    Adoption of measures to standardize security practices in 
special access programs to reduce redundancies and costs. The 
Commission found that additional security costs imposed by 
special access programs often fail to yield increased security 
benefits and that, as a result, there is a need for greater 
standardization of security practices in special access 
programs.
    Adoption of measures to focus greater attention and promote 
increased cooperation on the means for protecting such systems 
to promote greater awareness of the threats to automated 
information systems. As the United States relies more and more 
heavily on computer networks, those responsible for the 
protection of national security information face new and 
increasingly difficult challenges. The Commission found that 
there are no standards for protecting and managing automated 
information systems in the federal government, which reflects 
the fact that the subject has not been thoroughly addressed.\1\
---------------------------------------------------------------------------
    \1\ The subject of the security of government information systems 
and computers is a subject of enormous concern to the Committee on 
Governmental Affairs, which has been holding a series of hearings on 
the vulnerabilities of such systems in order to promote greater 
understanding of the nature of the threat and to develop sense of 
urgency among officials to address the shortcomings.
---------------------------------------------------------------------------
    Shortly after the Commission's final report was issued, 
Senator Moynihan and Senator Helms introduced legislation to 
implement the statutory recommendations of the Commission. That 
bill was referred to the Committee on Governmental Affairs.

                     II. Purpose of the Legislation

    The purpose of S. 712 is to provide a firm statutory basis 
for the system of classifying information to preserve the 
secrecy of information whose publication would be injurious to 
the national security of the United States and to specify 
procedures for the classification and declassification of such 
information. The bill is premised on a simple concept: that the 
balance of power among the separate branches of the federal 
government is vital to the proper functioning and the 
preservation of government of, by, and for the people. Our 
liberties depend on the balanced structure created by James 
Madison and the other framers of the Constitution. The national 
security information system has not had a clear legislative 
foundation, but, as has been noted above, has been developed 
through a series of executive orders. It is time to bring this 
executive monopoly over the issue to an end, and to begin to 
engage in the same sort of dialogue between Congress and the 
executive that characterizes the development of government 
policy in all other means. Only through such a dialogue can the 
people, through their representatives, evaluate the costs and 
the benefits of the secrecy system, weight the resources spent 
on the system, and decide which of the costs are worth bearing, 
and in what manner to apportion government resources to 
preserve, restrict, or expand the system.
    In addition, the legislation is designed to promote 
accountability, both by the government and by its officials 
responsible for various aspects of the secrecy system. 
Accountability is enhanced by openness, and is necessary to the 
proper functioning of a democratic state. The bill would also 
promote stability in the classification and declassification 
process, which has known repeated changes under the series of 
executive orders issued by different Presidents.
    The legislation reported by the Committee on Government 
Affairs would supplement the provisions of the National 
Security Act of 1947, as amended, and the Atomic Energy Act of 
1954, as amended, provide greater guidance to the executive 
branch, and promote accountability, while preserving needed 
flexibility, and more certainty to the American public. While 
it might increase costs over the short term, these costs should 
be minimal, as many of the bill's provisions are already in 
effect through Executive Order 12958. The long-term impact of 
the legislation is to reduce costs the government must 
currently bear in creating secrets and protecting them by 
reducing the number of secrets created, while enhancing the 
protection afforded these fewer secrets. The bill is also 
intended to reduce the intangible cost to our society and 
democracy from the cynicism that may be caused by official 
secrecy. The legislation is limited to reforming the 
information security system, and does not address personnel 
security and related issues in any way.

          III. Legislative History and Committee Consideration

    On May 7, 1997, S. 712 was introduced by Senator Daniel 
Moynihan (D-NY) and Senator Jesse Helms (R-NC). The legislation 
reflected the consensus recommendations of the Commission. That 
same day, the Committee held a hearing to review and consider 
the final report and recommendations of the Commission, 
including its legislative recommendations. At this hearing, the 
Committee received testimony from the congressional members of 
the Commission, Senator Moynihan, Senator Helms, Representative 
Larry Combest (R-TX), and Representative Lee Hamilton (D-IN). 
The Committee also heard testimony from the Honorable Lawrence 
Eagleburger, former Secretary of State, David Wise, an author 
and journalist; and Alden V. Munson, Jr., senior vice president 
and group executive of the Information Systems Group of Litton 
Industries, Inc., a government contractor involved in 
classified programs.
    On March 25, 1998, the Committee held a second hearing on 
the classification and declassification system, specifically to 
consider S. 712. The Committee received testimony from Edmund 
Cohen, director of information management, Central Intelligence 
Agency; J. William Leonard, director of security programs, 
Department of Defense, A. Bryan Siebert, director of the Office 
of Declassification, Department of Energy; Steven Garfinkel, 
director of the Information Security Oversight Office, National 
Archives and Records Administration; T. Jeremy Gunn, executive 
director of the John F. Kennedy Assassination Records Review 
Board; and Steven Aftergood, director of the Project on 
Government Secrecy, Federation of American Scientists, a 
private organization that promotes openness in government.
    At its June 17, 1998, business meeting, the Committee 
marked up S. 712. With a quorum present, the Committee 
considered an amendment in the nature of a substitute offered 
by Chairman Thompson and Senator Collins. The amendment was 
adopted by voice vote with no Member of the Committee 
dissenting. After agreeing to the substitute, the Committee 
favorably reported S. 712, as amended, by voice vote with no 
Member of the Committee dissenting.

                    IV. Section-by-Section Analysis

                         section 1. short title

    As introduced, S. 712 was entitled the ``Government Secrecy 
Act.'' The substitute amendment adopted by the Committee alters 
the short title to the ``Government Secrecy ReformAct'' to 
express more accurately the purpose of the law to reform the current 
secrecy regime operated pursuant to executive order.

     section 2. classification and declassification of information

    This section is the core of the Act. It provides a clear 
statutory basis for the classification and declassification of 
information in order to protect national security.

A. General principle

    Section 2(a). As reported, the legislation balances the 
constitutional duties of the executive and legislative branches 
of the government by providing a legislative framework for 
classification and declassification policies, while allowing 
the President to define the specific categories of information 
that may be classified and the procedures for doing so. The 
Committee notes that the Atomic Energy Act of 1954 provides 
considerably less deference to presidential authority than this 
bill by specifically defining what information shall be 
classified as Restricted Data and Formerly Restricted Data.
    The bill would establish the general principle that 
information may be classified only when there is a demonstrable 
need to do so in order to protect the national security of the 
United States. Information may not be classified on the basis 
of a hunch or a whim. Information may only be classified if 
there is a need to prevent its release and that need can be 
demonstrated: there must be a reasoned decision. It is to guide 
this reasoned decision-making that the Act specifies the 
procedures to be followed and criteria to be applied in making 
the decision to classify and declassify information. Through 
the application of the procedures and standards set out in the 
Act, it is the Committee's expectation that less information 
will be classified, more information will be declassified in a 
more timely manner, and better decisions about what information 
actually needs to be protected will be made.

B. Procedures for classification and declassification of information

    Section 2(b). As reported, the legislation adopts the 
recommendation of the Commission on Protecting and Reducing 
Government Secrecy to require the President, to the extent 
necessary, to establish categories of information that may be 
classified and procedures for classifying and declassifying 
information. These categories and procedures are similar to the 
categories of classified information and the procedures for 
classification and declassification encompassed in the series 
of Executive Orders that have been issued governing the 
handling of national security information. The Committee does 
not expect that the President would have to modify, alter, or 
amend the categories and procedures currently laid out in 
Executive Order 12958, except to the extent changes are 
required by the terms of this legislation. The authority to 
promulgate categories and procedures reflects the authority the 
President enjoys through the exercise of his constitutional 
authority as Commander-in-Chief.
    The categories and procedures for classification and 
declassification must be developed through notice and comment 
procedures. The Committee recognizes that the Administrative 
Procedure Act and its notice and comment provisions do not 
apply to the President. Franklin v. Massachusetts, 505 U.S. 
788, 800-01 (1992). The Committee believes, however, that in 
this area the President should solicit input from interested 
persons and organizations with respect to classification 
categories and classification and declassification procedures. 
The substitute requires the President to promulgate final 
categories and procedures no later than 60 days after the 
proposed categories and procedures are published. The 
substitute also requires that if the President ever seeks to 
modify these categories and procedures, he must do so following 
the same notice and comment procedures. Pursuant to section 
6(b) of the substitute, no act or failure to act in accordance 
with the provisions of the substitute are subject to judicial 
review.
    Once the President promulgates categories and procedures, 
the head of each agency of the Executive Branch shall establish 
standards and procedures to implement the presidential 
categories and procedures to permit each agency to classify and 
declassify information. The agency standards and procedures 
will guide each agency's implementation of the Act. Because 
different agencies handle different types of information with 
varying security needs, agencies are given the leeway to judge 
for themselves how to apply the President's categories and 
implement his procedures. Clearly, the needs of an agency that 
does not create or handle significant amounts of classified 
information will differ from agencies like the Central 
Intelligence Agency or components of the Department of Defense, 
which produce and handle massive amounts of classified 
information. Each agency may not however, have its own separate 
classification and declassification system but must adhere to 
the system promulgated by the President in implementing this 
legislation. The Director of the Office of National 
Classification and Declassification Oversight, created by this 
legislation, will be responsible for ensuring that agency heads 
do not overstep--or evade--the intent of this bill's 
provisions.
    Final agency standards and procedures must be published in 
the Federal Register, but agencies do not need to publish their 
proposed standards and procedures for comment prior to 
publication of the final version. Final agency standards and 
procedures shall be published not later than 60 days after the 
publication of the President's final categories and procedures. 
The limited amount of time provided to agencies reflects the 
Committee's assumption that few significant changes from 
current agency practices under Executive Order 12958 will be 
required by the new Act. Pursuant to section 6(b) of the 
substitute, no act or failure to act in accordance with the 
provisions of the substitute are subject to judicial review.
    The substitute specifically directs each agency to ensure 
that its procedures include mechanisms to minimize the risk of 
the inadvertent or inappropriate declassification of 
information. Such procedures will be particularly important in 
light of the balancing test for classifying and declassifying 
information that this legislation requires of agencies. In 
order to minimize the risk of improper disclosure, agencies 
will, in conjunction with the classification guides they will 
provide to their staff, have to adopt procedures to prevent 
low-level employees from making unauthorized classification and 
declassification decisions. The Committee notes inthis context 
that nothing in the legislation amends or limits the effect of federal 
criminal prohibitions on disclosing national defense information 
without authorization as provided in the Espionage Act of 1917, Act of 
June 15, 1917, Pub. L. 65-24, 40 Stat. 217, now codified at 18 U.S.C. 
Sec. 793. See also 50 U.S.C. Sec. 421.
    The substitute also directs the President to require the 
head of each agency with original classification authority, as 
distinguished from derivative classification authority, to 
produce written guidance on classification and declassification 
of information for purposes of guiding the derivative 
classification of information.\2\ Some agencies, like the 
Central Intelligence Agency, currently produce classification 
guidance, in the form of a classification guide, to assist its 
own officials and those of other agencies and contractor 
personnel in determining whether information must be 
derivatively classified. A classification guide is ``a 
documentary form of classification guidance issued by an 
original classification authority that identifies the elements 
of information regarding a specific subject that must be 
classified and establishes the level and duration of 
classification for each such element.'' Executive Order 12958, 
section 2.1(c). Not all agencies which classify information, 
however, currently use such guides.
---------------------------------------------------------------------------
    \2\ Derivative classification is the act of incorporating, 
paraphrasing, restating, or generating in new form classified-source 
information. When government employees or government contractors with 
appropriate security clearances prepare material based on originally 
classified information, or by the use of a classification guide, their 
product becomes derivatively classified.
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    Requiring the preparation of classification guides will 
help those making classification decisions do so in a 
consistent manner which more accurately reflects the threats 
posed by disclosure. Establishing common principles that are 
applied in a standard fashion throughout each agency will help 
ensure that classified information is treated appropriately 
throughout its life cycle. The Committee believes such written 
guidance from agencies with original classification authority 
will not only make derivative classification decisions more 
consistent throughout the government, but may aid in limiting 
the amount of information derivatively classified. Such 
guidance will also subsequently assist in making more 
consistent and appropriate decisions on declassification, 
especially as agencies implement the balancing test for 
classifying information required by this legislation.
    Detailed written guidance will become even more important 
in the regime established under the legislation to require a 
balancing of interests in making classification and 
declassification decisions. Because such written guidance must, 
by its very nature, address and discuss classified information, 
it may itself be treated as classified under the Act. Again, 
pursuant to section 6(b) of the substitute, no issue related to 
the issuance of the written guidance or to the substance of the 
guidance itself is subject to judicial review.

C. Standards for classification of information

    Section 2(c). The Federal government has a legitimate 
interest in maintaining secrets in order to fulfill its 
Constitutional charge to ``provide for the common defense.'' At 
the same time, this interest must be balanced by the public's 
right to be informed of government activities in order that the 
public may intelligently direct the activities of the 
government through their elected representatives.
    The Commission on Protecting and Reducing Government 
Secrecy found a secrecy system out of balance. Consequently, 
information needing protection does not always receive it, 
while innocuous information often is or remains classified. The 
Commission found that ``[t]he best way to ensure that secrecy 
is respected, and that the most important secrets remain 
secret, is for secrecy to be returned to its limited but 
necessary role. Secrets can be protected more effectively if 
secrecy is reduced overall.'' Unless the classification system 
focuses on that which is most genuinely needs protection for 
disclosure, the fact that information is classified serves as 
less of a deterrent to its unauthorized release.
    The initial decision to classify is in many ways the most 
important of this process. A failure to protect sensitive 
information poses great and obvious risks, while a decision to 
classify something unnecessarily can be costly in several ways. 
First, there are the costs of storing, handling, reevaluating, 
and declassifying the information. Then there are the 
intangible costs. Too much secrecy can erode public faith in 
the institutions of government and prevents the public from 
participating in informed debate. It can also have significant 
consequences for the defense and security of our country when 
policy makers are not fully informed because secrecy constrains 
the flow of information.
    The system lacks the discipline of a statutory framework to 
define and enforce the proper uses of secrecy. This legislation 
is intended to provide such a legislative framework. The bill 
will enable greater oversight of the classification and 
declassification system to counter the inherent tendency of 
individuals in government agencies, like any large 
organization, to keep secrets. At the same time, the President 
will retain broad authority and discretion to establish and 
administer the details of the system, consistent with legal 
principles embodied in the statute.
    As noted above, the most recent report of the Information 
Security Oversight Office indicates that the number of 
government secrets is not being reduced. In fact, the report 
notes a 62 percent increase in classification actions in 1996, 
and it estimates the direct costs of secrecy at more than $5.2 
billion for that same year. Notably, that figure does not 
include the presumably substantial secrecy costs incurred by 
the CIA; those remain classified. Nor does it account for the 
vast indirect costs of government secrecy--what economists 
might term ``transaction costs'' and ``opportunity costs''--
that cannot be quantified precisely. While the Administration 
has declassified approximately 400 million pages of previously 
classified information in the last two years, there remain 1.5 
billion pages of documents 25 years or older still classified. 
To paraphrase Justice Potter Stewart's opinion in the Pentagon 
Papers case: when everything is secret, nothingis secret. See 
New York Times Co. v. United States, 403 U.S. 713, 729 (1971). And this 
aphorism supports the notion that limiting the amount of classified 
information so that only information truly needing protection from 
disclosure is classified will promote greater protection for that 
information than is currently the case.
    Classifying officials must also be aware that 
classification means that resources will be expended throughout 
the information's life cycle to protect, distribute, and limit 
access to information that would be unnecessary if the 
information were not classified. Resources have been wasted, as 
Senator Helms testified to the Committee, when Members of 
Congress are given classified briefings which reiterate 
``everything that was in the New York Times and the Washington 
Post that morning.'' Considering sensitive information in terms 
of its life cycle helps illuminate the inconsistencies between 
the protection required by various types of government 
information and the protection it actually receives.
    At the beginning of the life cycle of potentially sensitive 
government information, the classification system is the 
vehicle which provides protection. The current system, however, 
is notable for the absence of clear standards to gauge the need 
for and type of protection required. At the end of that 
information's life cycle, declassification procedures currently 
fail to distinguish between sensitive information and that 
which no longer requires further protection.
    Protection challenges differ as information moves through 
its normal life cycle. There are times when there is no doubt 
that secrecy is urgently needed. In those cases, no cost may be 
too high. There are also many cases in which secrecy creates 
redundancies, squanders opportunities, and wastes resources. 
The costs that inevitably come with secrecy require a careful 
balance in making classification and declassification 
decisions.
    Under Executive Order 12958, as under prior executive 
orders, the initial decision to classify is based solely on the 
potential damage to the national security to the exclusion of 
other factors such as the value of the information to the 
public, the risks incurred from its unauthorized disclosure, 
and the cost of its protection. Since the original 
classification decision is the first and one of the most 
important steps in the life cycle of a document, more emphasis 
must be placed on establishing a more thoughtful process to 
decide whether information should be classified in the first 
place. This will entail more rigorous oversight by the Office 
of National Classification and Declassification Oversight, 
created by this legislation. Additionally, it will entail 
expanding and improving training for classifying officials.
    The bill permits classification only if the harm to 
national security ``outweighs the public interest in disclosure 
of such information.'' This requires an official to perform a 
``balancing test'' in which the need to protect national 
security is weighed against the public's interest in open 
government.
    Under Executive Order 12958, decisions to classify new 
information are made by officials with Original Classification 
Authority. Currently there are 4,420 officials with Original 
Classification Authority, the only individuals designated, 
either by the President or by selected agency heads, to 
``classify information in the first instance.''
    Those with Original Classification Authority determine what 
information, if disclosed, could reasonably be expected to 
cause damage to the national security, and must be able to 
identify and describe the damage. The information must be owned 
by, produced by, for, or under the control of the United States 
Government. According to the Information Security Oversight 
Office, there were 105,163 original classification decisions in 
1996 (7 percent Top Secret, 53 percent Secret, and 40 percent 
Confidential). The Information Security Oversight Office also 
reports 5,684,463 derivative classification actions in 1996 (7 
percent Top Secret, 61 percent Secret, and 32 percent 
Confidential). Ninety-four percent of all classification 
actions are derivative classification decisions, but these 
decisions are less important that the discretionary, original 
classification decisions, which form the basis for all 
derivative classification determinations.
    While the bill is silent about the number of Original 
Classification Authorities, it requires that those making 
original classification decisions continue the directive of 
Executive Order 12958 of identifying themselves on the 
information being originally, as distinct from derivatively, 
classified. The requirement is designed to foster a sense--and 
the reality--of accountability in officials with original 
classification authority.
    Section 1.7(a)(5) of Executive Order 12958 also requires 
original classifiers to justify their decisions by providing a 
``concise reason for classification.'' The bill alters the 
current standard by requiring a ``detailed justification'' of 
an original classification decision. The Committee believes 
that a detailed explanation at the time of original 
classification decision is warranted by the importance of the 
decision. Having a detailed explanation at the outset will also 
enhance the security of the information throughout its life 
cycle by allowing those with access to it to understand the 
nature of the threat classification was designed to prevent. 
Finally, a detailed justification will reduce the costs 
associated with declassifying the information by enabling later 
decision-makers to determine with greater ease than at present 
whether the information continues to require protection from 
disclosure.
    The bill does not address the levels of protection which 
classified information should receive, leaving this 
determination to the President, consistent with historic 
practice. Under Executive Order 12958, the three levels 
distinguish the amount of potential damage if the information 
is released. If the unauthorized disclosure of information 
could potentially cause ``damage,'' it may be classified 
Confidential; if ``serious damage,'' it may be classified 
Secret; and if ``exceptionally grave damage,'' it may be 
classified Top Secret. The Joint Security Commission has 
recommended that the three traditional levels of 
classification--Confidential, Secret, and Top Secret--be 
replaced by a single classification level with two degrees of 
physical protection. The Commission on Protecting and Reducing 
Government Secrecy found no evidence that such a change would 
reduce the amount of classification, though it might simplify 
the system. The Committee would encourage the Director of the 
Office of National Classification andDeclassification 
Oversight, which would be created by this legislation, to undertake a 
systematic study of classification levels to determine whether to adopt 
the recommendation of the Joint Security Commission.
    As with original classification decisions, the legislation 
would impose similar requirements on agency officials or 
contractor personnel who make derivative classification 
decisions. Anyone derivatively classifying information would 
have to identify himself or herself. The purpose again is to 
foster a sense of accountability. Because derivative 
classification determinations ought not require any significant 
analysis of the need to classify the information, the Act would 
require only that a ``concise explanation'' of the decision to 
classify information derivatively be provided. The requirement 
for a concise explanation will generally be satisfied by simple 
reference to the original classification decision or 
classification guidance, or by reference to the appropriate 
national security criteria of the Act's balancing test that 
outweigh the interests of the public in disclosure of the 
information. Nothing in this provision is intended to give a 
recipient of classified information independent authority to 
declassify that information.
    The most significant change from historical and current 
practice that the legislation would promote in the 
classification process is the implementation of a balancing 
test to determine the propriety of classifying particular 
information. Under each of the executive orders under which the 
classification system operated, the sole factor that 
classifiers had to take into consideration was the potential 
harm to national security from the disclosure of the 
information. There was no balancing test; only one side of the 
equation was ever considered. The Committee believes that it is 
appropriate for officials making classification decisions to 
consider not only the potential harm to national security from 
disclosure, but the public interest in disclosure as well.
    To this end, the bill would impose an explicit requirement 
that information not be classified unless ``the harm to 
national security that might reasonably be expected from 
disclosure of such information outweigh the public interest in 
disclosure of such information.'' The bill also makes it clear 
that if agency officials have ``significant doubt'' about 
whether the harm to national security outweighs the public 
interest in disclosure, the information should not be 
classified. The Committee believes that in many cases there 
will be little doubt in the application of the balancing test: 
either the need for secrecy is evident and compelling and 
clearly outweighs any public interest in disclosure or the 
public interest in disclosure clearly outweighs the need for 
secrecy. In many other cases, however, there will be many 
shades of gray in the application of the balancing test. The 
bill does not direct any particular outcome in any specific 
case. If there is doubt, the agency official may still exercise 
reasoned discretion. Only the existence of ``significant 
doubt'' in the application of the balancing test will preclude 
the classifying official from classifying the information.
    The introduction to classification and declassification 
processing of a balancing test is vital. As the Commission on 
Protecting and Reducing Government Secrecy cogently argued, 
classification is a type of government regulation. As with all 
regulation, it imposes costs and achieves benefits. By looking 
only at the benefit side, secrecy policy has skewed the 
equation and resulted in over-classification, which means the 
system is too costly. Decison-makers in agencies must be 
required to consider and address the costs of their decisions 
if they are to make better, more informed judgments, both in 
each particular case and at the macro-level as well. Confronted 
with the explicit requirement that classifying officials 
consider the costs as well as the benefits of each decision 
should lead to better decisions, so long as the balancing test 
is actually applied in good faith.
    As introduced, S. 712 contained a balancing test, 
specifying simply that ``the agency official making the 
determination shall weigh the benefit from public disclosure of 
the information against the need for initial or continued 
protection of the information.'' No indication was given as to 
what criteria should be considered.
    The Committee concluded that any effort to put the system 
for protecting our national security information on a statutory 
footing should incorporate an enumeration of the general 
factors to be considered in making classification and 
declassification decisions. Specifically, the Committee 
believes that requiring agency officials to consider ``costs'' 
and ``benefits'' without providing them with any standards to 
govern the exercise of such judgment would be unfair, would 
shirk the responsibility of Congress to specify the national 
policy of the United States, and would risk opening the door to 
capricious and even dangerous decision-making in this important 
arena. Accordingly, the Committee carefully spelled out the 
various factors that must be considered with regard both to the 
``costs'' and to the ``benefits'' of disclosing information. 
This articulation of discrete ``cost'' and ``benefit'' criteria 
was an integral part of the amendment in the nature of the 
substitute amendment adopted by the Committee.
    The Committee believes that this enumeration strikes an 
appropriate balance. By spelling out what factors must be 
considered in classification and declassification decisions, 
the Committee substitute does not predispose any particular 
outcome in any particular classification or declassification 
determination. The statutory criteria make clear what potential 
``costs'' and ``benefits'' must be considered, but no effort 
has been made to define how much weight any one factors should 
have vis-a-vis another. (Such weights, the Committee 
anticipates, will depend heavily upon the specific nature of 
the information in question and the security environment at the 
time of decision.) The core responsibilities for such decision-
making remain, in other words, firmly lodged in the executive 
branch: agency officials may apply the full benefit of their 
knowledge and experience to classification and declassification 
decisions, and the last word in adjudicating disputes over such 
initial classification determinations is left firmly in the 
hands of the Commander-in-Chief.
    This general approach has ample precedent in U.S. national 
security law and regulation, with analogous--indeed, in some 
respects, even more specific--enumerations having been employed 
in establishing the Restricted Data classification under the 
Atomic Energy Act, in setting declassification guidelines for 
the John F. Kennedy Assassination Review Board, and in 
articulating non-statutory executive branch policy for 
declassification determinations under Executive Order 12958. As 
befits an effort to provide a statutory framework for the 
entirenational security information control system, the 
Committee substitute for the original language of S. 712 is more 
specific with regard to discrete ``cost'' and ``benefit'' 
considerations than are these analogues, but its underlying insight is 
no different.
    In sum, these enumerated criteria perform the invaluable 
function of clearly setting forth Congress' determination as to 
what criteria may appropriately be considered in classification 
and declassification decisions--and, implicitly, what criteria 
may not. The Committee substitute leaves to agency expertise, 
insulated from judicial review, the particular weighing of one 
factor against another in each case, but it provides very clear 
guidance with regard to what factors must be considered in such 
a calculus.
    The American system of governance is predicated upon the 
existence and maintenance of a system of elaborate checks and 
balances intended to harness the ambitions of one branch of 
government in checking the ambitions of another. Particularly 
given the executive branch's continuing responsibility for 
exercising judgment in particular classification and 
declassification decisions, it is necessary and appropriate 
that Congress establish broad national guidelines to ensure 
that agency officials remain clearly focused upon legitimate 
criteria. This should improve both the quality and the 
consistency of classification and declassification decisions 
over time.
    Additionally, the Committee anticipates that in providing 
such statutory standards, S. 712 will function as a public 
document, a national statement of principles about how a free 
country should attempt to balance the requirements of security 
against the imperatives of democracy and accountability. It is 
not sufficient that our national security information control 
system be rational and effective in this regard: it must also 
be understood to be so.
    By definition and design, the system within our government 
that manages classified information is highly resistant to 
outside inspection and public accountability. Precisely because 
classification and declassification determinations are 
reviewable only within the executive branch, it is important 
that the law mandate that these decisions be structured around 
a clear framework of principle visible to all. By writing 
specific classification and declassification criteria into 
statutory form, the Committee hopes to help reassure Americans 
that the national security information system is indeed a 
legitimate one worthy of their trust and continued support.
    The criteria set out in the substitute that are to be 
employed in evaluating the potential harm to national security 
that might reasonably be expected from disclosure are taken 
directly from section 3.4(b) of Executive Order 12958. These 
criteria are generally consistent with the standards that have 
been employed in the series of executive orders that have 
governed the classification system. The Committee is of the 
view that the implementation of the bill's provisions will be 
readily facilitated by taking the national security criteria 
directly from the current Executive Order, as agency officials 
will have an understanding, based on past practice, of the 
content of the criteria and how to apply them.
    The bill would enable classifying officials to consider 
whether disclosure of the information in question would:
    Reveal the identity of a confidential human source, or 
reveal information about the application of an intelligence 
source or method, or reveal the identity of a human 
intelligence source when the unauthorized disclosure of that 
source would clearly and demonstrably damage the national 
security interests of the United States. This criterion would 
protect intelligence sources and methods, whose protection is 
guaranteed by 50 U.S.C. Sec. 403-3(c)(6). This factor focuses 
on whether the information reveals a human source, irrespective 
or whether that source's life or family would be endangered, as 
the mere disclosure of a human source might chill the ability 
of the government to find human sources in the future. This 
chilling effect could exist whether or not there is any 
potential harm or threat to the source or the source's family. 
The Committee assumes that the human intelligence sources 
protected by this provision are those who provide information 
directly to the United States government. Human intelligence 
sources who provide information to foreign governments that is 
made available to the United States by that government would be 
protected by a separate provision of the bill. With respect to 
non-human intelligence sources and methods, the provision would 
only allow consideration of the application of this factor to 
the specific information at hand, rather than, for example, 
consideration on a source-by-source or method-by-method basis. 
This limitation is consistent with the bill's goal of limiting 
classification decisions only to those cases in which secrecy 
is warranted by the individual facts relevant to that decision. 
Accordingly, the Committee does not believe that this 
limitation will impinge on the executive in such a way as to 
prevent or discourage the protection of genuinely sensitive 
information.
    Reveal information that would assist in the development or 
use of weapons of mass destruction. The threat posed by 
nuclear, chemical, or biological weapons has been of the utmost 
concern to the United States for many years. Threats from such 
weapons may actually be increasing today, as more and more 
countries develop such weapons and the means to deliver them. 
The Secretary Committee assumes that the development or use of 
such weapons anywhere is a threat to the national security of 
the United States and expects that this provision will be 
interrupted broadly.
    Reveal information that would impair cryptologic systems or 
activities by preventing the effective use of such systems or 
activities in the future. There are few matters more sensitive 
than these. The United States needs to be able to detect, 
intercept, and interpret communications from around the world. 
It is essential that such capabilities be preserved. The 
Committee notes that this provision seeks to protect not any 
particular method or activity, but rather to protect the 
ability to employ particular systems or activities in the 
future.
    Reveal information that would impair the application of 
state-of-the-art technology within a United States weapon 
system. This provision protects primarily military 
technologicalsecrets. The United States spends billions of 
dollars to develop cutting-edge technology to give our military 
personnel the best possible prospect of accomplishing their missions 
safely and effectively. Our military dominance depends more and more on 
high technology, especially as the size of our military forces shrinks. 
Foreign nations could save billions in their own development costs and 
learn how to defeat weapons systems if this factor were not considered. 
Unlike the provision protecting intelligence sources and methods, this 
one applies only to ``state-of-the-art technology.''
    Reveal actual United States military war plans that remain 
in effect. This provision is limited to ``actual'' war plans 
that remain in effect. This provision will cover contingency 
plans and alternative planning that are in effect.
    Reveal information that would seriously and demonstrably 
impair relations between the United States and a foreign 
government, or seriously and demonstrably undermine ongoing 
diplomatic activities of the United States. This provision is 
designed to allow the executive branch maximum flexibility in 
conducting the international relations of the United States. 
The Committee does not believe it possible to enumerate the 
scope of potential threats to U.S. relations with foreign 
governments. The provision does not, however, give unlimited 
discretion to agency officials to protect information from 
disclosure simply because it may involve a foreign government. 
The information must seriously impair U.S. foreign relations in 
order for this factor to weigh against disclosure. In addition, 
the impairment must be demonstrable, but reasonable speculation 
would satisfy this standard (indeed, it would have to, for 
nothing can be demonstrated unless it has already occurred). 
The Committee believes that this provision may be read broadly 
enough to protect from disclosure any information received by 
the United States from a foreign government, if its disclosure 
would seriously impair U.S. relations with that or another 
foreign government. This criterion also provides, in the 
disjunctive, that the government may protect from disclosure 
information whose disclosure would adversely affect ongoing 
diplomatic activities of the United States. Here, the crucial 
limitations is that the activities must be ongoing. Because the 
provision does not define ``diplomatic activities,'' this 
limitation may be read broadly to sweep within its gambit a 
wide range of activities that implicate the foreign relations 
of the United States, so long as those activities are 
``ongoing.''
    Reveal information that would clearly and demonstrably 
impair the current ability of the United States to protect the 
President, Vice President, and other officials for whom 
official protection services are authorized. This provision is 
limited to preserving the current ability of the Secret 
Service, the Bureau of Diplomatic Security, and other federal 
entities to protect designated federal officials or others for 
whom protection services are, in the interests of the United 
States, authorized. The Committee intends again that the 
limitation to ``current ability'' be read in a common sense, 
functional way so as not to require that particular means of 
protection be disclosed if those means may be reemployed in the 
future.
    Reveal information that would seriously and demonstrably 
impair current national security emergency preparedness plans. 
This provision is designed to ensure that potential enemies, 
either foreign or domestic, are not provided with information 
that would permit them to avoid or evade emergency preparedness 
plans so as to inflict damage or harm as a result of the 
disclosure of the information.
    Reveal information whose disclosure would violate a statue, 
treaty, or international agreement. The Committee intends that 
in this instance the term ``international agreement'' is 
intended to cover a formal agreement, not rising to the level 
of a treaty, entered into by the United States and a foreign 
government or several foreign governments or between the United 
States and a multilateral organization, and not simply an 
informal agreement between an official of the United States and 
an official or one or more foreign governments or entities.
    The Committee expects that these criteria will be applied 
in a flexible and functional manner in weighing whether 
information must be protected from disclosure. If disclosure 
would impair the ability of the United States and its officials 
to protect national security by accomplishing the 
particularized goals recognized by each criterion, that harm 
must be given appropriate weight when balanced against the 
public interest in disclosure.
    Those national security criteria that only protect 
information of ``current'' usefulness are also to be read in 
this light to protect the ability of the government to carry 
out those functions. The Committee intends that historical 
information not be covered by these national security criteria, 
if that historical information is no longer need to fulfill the 
recognized function. Consider the following example. The 
President of France visits New York and stays at a hotel. 
Federal agencies are responsible for ensuring his security and 
make a wide variety of plans for security, including a number 
of contingency plans to evacuate him from the hotel. When the 
President of France departs safely, those contingency 
evacuation plans may still be classified even though the plans 
are not longer ``current,'' because they remain functionally 
useful because the following year the Prime Minister of Great 
Britain may visit New York and stay at the same hotel. Agency 
officials will have to decide whether these plans remain 
``current.'' The decision is left to their reasoned discretion. 
On the other hand, the travel itinerary of a high government 
official may be sensitive at the time of the trip but no longer 
need classification after the trip is complete.
    While these national security criteria are taken directly 
from Executive Order 12958, the public interest criteria have 
been developed by the Committee after careful consideration. 
These criteria are also intended to be read with flexibility to 
promote disclosure and openness and with recognition of their 
functional impact.
    The factors that the bill would allow to be considered in 
gauging the public interest in disclosure of information, 
either at that time of its proposed initial classification or 
at the time of its proposed declassification, are broader and 
less clearly defined than the national security factorsbecause 
they do not enjoy a lengthy history of development and practice. 
Because of their breadth, however, agencies will have wide discretion 
in their interpretation. The Committee expects that agencies will 
interpret these factors in ways consistent with the spirit of openness 
that generated them.
    The criteria agencies will have to consider in evaluating 
the public interest in disclosure of information and balancing 
these criteria with the national security criteria are:
    Whether or not disclosure would better enable citizens of 
the United States to hold government officials accountable for 
their actions and policies. The primary purpose of this 
criterion is accountability. Officials and agencies today can 
too easily hide an embarrassment or failed policy by 
classifying information surrounding it on the basis of some 
trivial national security interest. Accountability of 
government officials is the core of democracy. Requiring agency 
officials to consider this democratic interest will make them 
more mindful of the basic purposes of the government: to carry 
out the will of the majority, consistent with the Constitution 
and laws of the United States.
    Whether or not disclosure would assist the criminal justice 
system in holding persons responsible for criminal acts or acts 
contrary to the Constitution. The rule of law demands that 
those who break the law be punished for it. This criterion is 
already accommodated to some extent by the Classified 
Information Procedures Act (CIPA), which permits criminal 
prosecutions to go forward against defendants even when 
information relevant to the prosecution is classified. As a 
result of the CIPA, agencies have already had some experience 
and familiarity in balancing the need to protect information 
from disclosure against the need to proceed with criminal 
prosecution, so this criterion should be readily integrated 
into agency classification practice.
    Whether or not disclosure would assist Congress or its 
committees in conducting oversight of the executive branch or 
in informing itself of executive branch policies and activities 
in order to carry out its legislative responsibilities. This 
criterion should not be interpreted in any way to limit or 
restrict the ability of any committee or subcommittee of either 
House of Congress, or any Member of Congress or United States 
Senator to gain access to classified information. See also 
section 6(a) of S. 712 and the relevant discussion in this 
report. There are statutory requirements that certain 
classified intelligence information be provided to relevant 
committees of both Houses of Congress. See, e.g., 50 U.S.C. 
Sec. 413 et seq. This criterion is not designed to affect the 
ability of Congress to have such access. Rather, it is designed 
to allow Congress to discuss certain information openly by 
getting executive agencies to consider the legislative 
responsibilities of Congress and the need for an informed and 
open debate to carry out those responsibilities in determining 
whether to classify or declassify information.
    Whether or not disclosure of the information would bring 
about any other significant benefit, including an increase in 
public awareness or understanding of the activities of the 
federal government or an enhancement of government efficiency. 
This criterion is intended to allow the President, executive 
agencies, the Office of National Classification and 
Declassification Oversight, and the Classification and 
Declassification Review Board broad latitude to decline to 
classify information or to declassify information if there is a 
public interest in disclosure not otherwise covered by the 
other public interest specified in the Government Secrecy 
Reform Act.
    None of these criteria, either alone or in conjunction with 
another, will trump the applicable national security criterion 
or criteria in any particular case. The legislation does not 
dictate any particular classification or declassification 
decision in any specific instance. The appropriate weight to be 
accorded each criterion in any specific case is left to the 
head of the agency with classification authority over the 
information, as is the outcome of the balancing process. The 
legislation seeks to focus agency discretion on the most 
relevant factors, but no bill can dictate the proper outcome in 
any particular situation, and this bill does not attempt to do 
so. Agencies will be left with broad discretion, free from 
judicial scrutiny, to classify and declassify information. The 
Committee expects and assumes that agency officials will act in 
good faith to implement the provisions of this legislation, 
subject only to review by other executive branch officials, 
also acting on behalf of the President, the Director of the new 
Office of National Classification and Declassification 
Oversight, and the members of the Classification and 
Declassification Review Board.

D. Standards and procedures for declassification of information 
        classified under the act

    Section 2(d). In addition to establishing new procedures 
and standards for classifying information, the legislation 
provides procedures and a time table for declassification of 
information or categories of information classified pursuant to 
the Government Secrecy Reform Act. The declassification 
procedures set out in detail in section 2(d) of the legislation 
do not apply to information classified pursuant to executive 
order or other authority. The time-table established by this 
legislation is largely based on, and tracks to a significant 
extent, the time-table established under Executive Order 12958. 
Because agencies are already implementing similar time tables 
for review and declassification of information, the legislation 
will impose few additional costs and burdens not already 
required of agencies.
    Section 2(d) sets out the generally applicable time-table 
for declassifying information or categories of information. Any 
information classified pursuant to the Government Secrecy 
Reform Act may not remain classified ten years after the date 
of the original classification of the information. Subsequent 
derivative classifications of the same information do not start 
the ten-year clock running anew. Therefore, information must be 
declassified ten years after its original classification. There 
are three exceptions provided to this general rule.
    The first exception to the ten-year rule provides that 
information or categories of information may be declassified 
less than ten years from the date of the original 
classification. For information to be declassified earlier than 
ten years, the classifying official must provide 
fordeclassification as of a specific date or event earlier then ten 
years after the original classification. This exception is designed to 
cover information that is classified for a specific purpose, or in 
anticipation of a specific event that is known at the time of the 
original classification.
    To facilitate the determination of presumption 
classification dates, paragraph 7 of this subsection of the 
bill requires that every classification decision be accompanied 
on the document by a specification of the date or event on 
which the information may be declassified.
    The second exception to the ten-year presumptive 
declassification rule in the bill would permit the classifying 
official to delay the declassification of information or 
categories of information at the time the information is 
classified until 25 years from the date of classification. 
Thus, life the first exception, this one is to be invoked at 
the time of the classification decision, and not at the time 
the information or category of information is reviewed or 
considered for declassification. This provision is intended to 
cover certain discrete types of information that, at the time 
it is classified, the classifying official is certain will not 
be ready for declassification in ten years. The Committee 
expects that this exception will cover only a narrow category 
of classification decisions. This provision is the exception to 
the ten-year rule; it should not become the rule. In order to 
limit the use of this exception to those circumstances in which 
it is warranted, the bill requires that any decision at the 
time of classification to postpone declassification to 25 years 
must be made by the head of the agency, and not by a 
subordinate agency official. In doing so, the head of the 
agency must determine that there is no likely set of 
circumstances that would permit the declassification within ten 
years. Having made that determination, the head of the agency 
must obtain the concurrence of the Director of the Office of 
National Classification and Declassification Oversight, subject 
to an appeal to the Classification and Declassification Review 
Board. Finally, if the Director of Oversight Office concurs in 
the determination of the head of the agency, a certification of 
that determination must be submitted to the President.
    The third and final exception to the ten-year presumptive 
declassification period rule is the only one that can be 
invoked after the information has already been classified. At 
any time prior to the declassification of the information at 
either the ten-year point or some date provided for in the 
first exceptions to the ten-year rule, an official of the 
agency with original classification authority over that 
information or category of information may determine that the 
information should remain classified beyond the presumptive 
declassification date. In order to stress to agencies that this 
postponement should not become the rule, the legislation 
imposes a set of procedural requirements: first, the 
concurrence of the Director of the Oversight Office must be 
obtained; and, second, a certification must be submitted to the 
President. The bill limits the extension to no more than 15 
years. Thus, the maximum amount of time that information 
classified pursuant to the Government Secrecy Reform Act may 
remain classified is 25 years.
    There will be circumstances, however, in which even 25 
years is insufficient to protect important national security 
interests. By imposing steep hurdles on preserving the 
classification of information beyond 25 years, the Committee 
intends that agencies rely on this option in only the most 
compelling cases. The bill makes clear that this option is to 
be used only if an agency official determines that 
extraordinary circumstances exist. The Committee expects that 
this test will be satisfied only if the disclosure would cause 
grave harm to a person or to the national security of the 
nation. Having made a determination that extraordinary 
circumstances exist and require the continued protection of the 
information from disclosure, the agency official must then 
convince the Director of the Oversight Office of the existence 
of these extraordinary circumstances and secure the Director's 
concurrence. The agency must, if it secures the concurrence of 
the Director of the Oversight Office, notify the President of 
the decision to postpone disclosure beyond 25 years. In such 
cases, which the Committee expects to be few, the President 
must then establish a schedule for the periodic review of the 
information to determine whether protection from disclosure 
remains warranted. The information will have to be 
declassification at the earliest possible time after the 
termination of the extraordinary circumstances.
    The requirement that the Director of the Oversight Office 
concur in determinations to delay the declassification of 
information beyond ten years and 25 years is an important 
safeguard against agency abuse of the process. Agencies will 
have to explain the rationale for continuing the classification 
of the information under review. The need for the concurrence 
of an outside official within the executive branch will promote 
better decision-making and help prevent the agencies from using 
simply boiler-place language to justify decisions to postpone 
declassification. Agencies are protected in cases in which they 
can not obtain the concurrence of the Director of the Oversight 
Office, because they can appeal to the Classification and 
Declassification Review Board, and, ultimately, to the 
President himself, who retains the ultimate authority to make 
classification and declassification decisions as Commander-in-
Chief.
    The Committee substitute also adds a provision to the 
underlying bill that will protect the equities of agencies that 
originate classified information. The substitute makes it clear 
that no information may be declassified without the concurrence 
of the agency that originated that information, except as 
otherwise provided in the Government Secrecy Reform Act. Thus, 
for example, if the Department of State has in its records a 
report of the Central Intelligence Agency or information 
derivatively classified on the basis of a Central Intelligence 
Agency report that is due for declassification at ten years, 
the State Department may not declassify the information on its 
own. It must, instead, obtain the concurrence of the Central 
Intelligence Agency, which originated the information. This 
provision is designed to protect the equities of originating 
agencies, because they will generally have a better sense of 
the entire picture into which the classified information fits. 
The substitute makes clear, however, that this limitation is 
subject to the other provisions of the Government Secrecy 
Reform Act, so originating agencies will not be allowed to use 
this provision to trump the authority provided to the Director 
of the Oversight Office or the Classification Review Board.
    The substitute requires that agencies apply the same 
balancing test to declassification determinations as they do to 
classification decisions. The criteria that will guide agency 
decisions are identical in both instances. The fact that the 
criteria are identical does not mean that their application 
will result in the same conclusion with respect to the same 
information over time.indeed, one of the core concepts 
underlying the report of the Commission on Protecting and Reducing 
Government Secrecy is the concept that secrets have a life cycle. This 
concept underlies the substitute as well. The bill specifically 
provides that in evaluating the criteria in making declassification 
determinations, agency officials must apply the criteria which are 
``current as of the determination.'' Factors that once led ineluctably 
to require that information be classified may change over time; the 
environment in which the information may be used will also change. As 
the circumstances change, the relative weight to be accorded the 
relevant, applicable criteria will also change. The substitute requires 
that any such changes be taken into account when evaluating whether to 
declassify previously classified information.

E. Declassification of information classified prior to adoption of the 
        act

    Section 2(e). The declassification time-tables, standards, 
and procedures laid out in detail by the legislation are 
intended to apply prospectively, only affecting information 
classified pursuant to the Government Secrecy Reform Act. They 
are not intended to cover the billions of pages containing 
classified information that executive branch agencies currently 
have in their possession. The Committee believes that it would 
be too disruptive to superimpose the new statutory scheme on 
agencies with such a huge backlog of classified information.
    Executive Order 12958, however, addresses itself to the 
current backlog of classified information and, as noted above, 
sets out a schedule for the review and presumptive 
declassification of this information. The Committee heard 
testimony from Mr. Cohen of the CIA, Mr. Leonard of the Defense 
Department, and Mr. Siebert of the Energy Department to the 
effect that many agencies with large collections of classified 
documents will not be able to meet the Executive Order's 
deadlines for reviewing such documents and declassifying them 
in bulk. Still, the Executive Order has successfully initiated 
a process within executive branch agencies of reviewing their 
classified documents and will standardize that process.
    Rather than create an entirely new declassification system, 
or impose new statutory requirements on a system that has been 
initiated and is succeeding in establishing a routine process 
for declassifying large numbers of documents that no longer 
require protection, the bill simply directs the President to 
establish procedures for declassifying information that was 
classified on or after the effective date of the Government 
Secrecy Reform Act. These procedures must be, to the maximum 
extent practicable, consistent with the declassification 
procedures and standards established under Section 2(d) of the 
Act. The Committee anticipates that the executive will have 
little difficulty in conforming to these requirements, because, 
as noted above, the procedures and standards of Section 2(d) 
are taken largely from Executive Order 12958, which is 
currently in place. The legislation specifically directs that 
the new procedures provide for automatic, or bulk, 
declassification of information of classified for more than 25 
years on the effective date of the Act. This requirement, too, 
is consistent with the provisions of section 3.4 of Executive 
Order 12958.
    One difference with the current Executive Order provided 
for in the legislation is the method of promulgation of the new 
procedures. As with the procedures for classifying and 
declassifying information under the Act, these procedures for 
declassifying previously classified information must be 
promulgated pursuant to notice and comment procedures, to allow 
for public input into and knowledge of their development.
    The Committee anticipates that, after receiving public 
comment on the development of new declassification procedures, 
the President will issue rules that substantially resemble 
those provided for in Executive Order 12958, as modified by 
worthwhile public suggestions and to the extent required to 
conform to this legislation, particularly the imposition of the 
new balancing test, and that succeeding will follow suit.

F. Amendment to the Freedom of Information Act

    Section 2(f). The only avenue currently available for 
seeking judicial review of the decision to classify information 
is under the Freedom of Information Act. The Freedom of 
Information Act generally provides that any person has a right 
of access to federal agency records, except to the extent that 
such records (or portions thereof) are protected from 
disclosure from one of the Act's exemptions or exclusions.
    The Freedom of Information Act currently provides an 
exemption from disclosure for records that are ``specifically 
authorized under criteria established by an Executive order to 
be kept secret in the interest of national defense or foreign 
policy and [ ] are in fact properly classified pursuant to such 
Executive order.'' 5 U.S.C. Sec. 552(b)(1) (Exemption 1). The 
legislation would make a technical amendment to Exemption 1. As 
amended, the provision would exempt from disclosure under the 
Freedom of Information Act records that are ``specifically 
authorized to be classified under the Government Secrecy Reform 
Act of 1998, or specifically authorized under criteria 
established by an Executive order to be kept secret in the 
interest of national security and [ ] are in fact properly 
classified pursuant to that Act or Executive order.''
    The Committee believes that this change is simply 
technical; it merely clarifies that, in the future, records 
properly classified pursuant to the Government Secrecy Reform 
Act will also be exempt from disclosure under the Freedom of 
Information Act. This change is therefore needed to clarify the 
scope of protection the executive will have in refusing to 
disclose information properly classified not only in the past 
under executive orders, but in the future under the Government 
Secrecy Reform Act.
    In clarifying that records properly classified pursuant to 
the Government Secrecy Reform Act will be exempt from 
disclosure under the Freedom of Information Act, the 
legislation necessarily imports into its new secrecy regime the 
judicial review available under the Freedom of Information Act. 
For example, proper application of the public interest/national 
security balancing test would be within the scope of judicial 
review for Freedom of Information Act requests for classified 
information, under the second clause of Exemption 1. Judicial 
review is otherwise unavailable to review any actions or 
failures to act under the Government Secrecy Reform Act.
    The Government Secrecy Reform Act amendment to Exemption 1 
of the Freedom of Information Act, 5 U.S.C. Sec. 552(b)(1), is 
not intended to alter in any way the applicable standard of 
review, e.g., Halperin v. Central Intelligence Agency, 629 F.2d 
144, 148 (D.C. Cir. 1980); the significant deference currently 
afforded to agency classification decisions, e.g., Maynard v. 
Central Intelligence Agency, 986 F.2d 547, 556 n. 9 (1st Cir. 
1993); Krikorian v. Department of State, 984 F.2d 461, 464-65 
(D.C. Cir. 1993); Young v. Central Intelligence Agency, 972 
F.2d 536, 538-39 (4th Cir. 1993); Stein v. Department of 
Justice, 662 F.2d 1245, 1253 (7th Cir. 1981); Canning v. United 
States Department of Justice, 848 F.Supp. 1037, 1042 (D.D.C. 
1994); Willens v. National Security Council, 726 F.Supp. 325, 
326-27 (D.D.C. 1989); or the special in camera and ex parte 
procedures developed by the courts to handle Exemption 1 cases 
that are currently the hallmarks of judicial review of 
Exemption 1 claims in Freedom of Information Act litigation. 
E.g., Patterson v. Federal Bureau of Investigation, 893 F.2d 
595, 599-600 (3d Cir. 1990); Simmons v. United States 
Department of Justice, 796 F.2d 709, 711 (4th Cir. 1986); 
Salisbury v. United States, 690 F.2d 966, 973 n. 3 (D.C. Cir. 
1982).
    The amendment to the Freedom of Information Act is intended 
by the Committee simply to be a conforming amendment. The 
current legislation is not intended to work any change 
whatever. Even the additional requirement of the new balancing 
test required of agencies by the Government Secrecy Reform Act 
before they can classify declassify information should not lead 
the courts to conduct a more searching inquiry than is 
currently permitted under the Freedom of Information Act. The 
rationale for deference to agency determinations under past and 
current executive orders retains its vitality under the new 
law. Agency officials will continue to have the unique insights 
into these matters by virtue of their expertise and experience 
and their access to the information that allows them to 
consider the complete context of national security and foreign 
relations matters in which classification and declassification 
issues arise. Because the Government Secrecy Reform Act makes 
no substantive change to the Freedom of Information Act, the 
Committee expects that the courts will continue to give 
significant deference to the judgment of responsible agency 
officials entrusted under this law to determine the proper 
outcome of the balancing test established by this legislation. 
Indeed, the Committee believes that with the enhancement of 
independent internal review mechanisms in the executive branch 
through the Office of National Classification and 
Declassification Oversight and the Classification and 
Declassification Review Board, the need for judicial review 
may, over time, actually decrease.
    Because of the prospective nature of the legislation, the 
traditional handling of Exemption 1 cases under the Freedom of 
Information Act in the event of changed executive orders should 
continue to be followed. In the past, as executive orders have 
changed, the courts have assessed the propriety of an Exemption 
1 withholding under the executive order in effect when ``the 
agency's ultimate classification decision is actually made.'' 
King v. Department of Justice, 830 F.2d 210, 217 (D.C. Cir. 
1987). That rule should continue. Information classified under 
an executive order should continue to be reviewed for the 
propriety of the classification decision under the relevant 
executive order. Information classified prospectively pursuant 
to the Government Secrecy Reform Act will be reviewed pursuant 
to its newly imposed standards. Current decisions require, 
however, that when an Exemption 1 case is remanded to the 
agency, it must apply the standards of the executive order in 
place at the time of the remand. The Committee believes that 
that practice too should continue and that Exemption 1 cases 
remanded to agencies after the effective date of the Government 
Secrecy Reform Act should be evaluated pursuant to its 
provisions.
    No other changes to the Freedom of Information Act, as 
amended, are made by this legislation, and none is intended by 
the Committee. The Committee therefore believes that even after 
the adoption of this legislation, agencies and litigants will 
find the territory of Exemption 1 litigation familiar.

   section 3. office of national classification and declassification 
                               oversight

    Section 3(a). In the legislation, the Committee substitute 
creates two entities to oversee the classification and 
declassification process, as well as to report to Congress and 
the President on the implementation of the Act. Establishment 
of these entities is important to a balanced and accountable 
functioning of the classification and declassification systems 
established herein. Given the preclusion of judicial review 
included in this legislation, little new accountability would 
be injected into the system without the establishment of these 
entities. The first new entity created in the Act is the Office 
of National Classification and Declassification Oversight (the 
Oversight Office).
    Section 3(b) and (c). Rather than establishing an entirely 
new bureaucratic structure to serve as the Oversight Office, 
the Committee intends that the current Information Security 
Oversight Office (ISOO) be transformed into the Oversight 
Office. This will require that ISOO be strengthened and made 
more independent, be placed directly in the Executive Office of 
the President, and report directly to the President and to 
Congress. The Director of the Oversight Office is to be 
appointed by the President with the advice and consent of the 
Senate. The Committee expects that nominees to the Director 
will have broad experience in classification and 
declassification procedures, in records management, and in 
information technology. Indeed, one area of significant 
contribution by the Oversight Office should be developing and 
implementing new technologies to assist in the management and 
declassification of classified information.
    Section 3(d). The Oversight Office is to be an independent 
authority to review and coordinate agencies' implementation of 
the Act, review agencies' classification and declassification 
procedures and budgets, consider agency requests to maintain 
classified information beyond the time schedules set forth in 
the Act, assist agencies in complying with the Government 
Secrecy Reform Act by providing advice and technical expertise 
on classification and declassification processes, and to keep 
Congress and the President fully informed of agencies' 
successes and failures in meeting the requirements of the Act. 
To improve government-wide consistency in the application of 
the provisions of this legislation, the Committee expects that 
the Oversight Office will conduct periodic surveys of agency 
practices and determinations to ensure proper and consistent 
compliance with the Government Secrecy Reform Act.
    Furthermore, the Committee has attempted to outline 
declassification schedules which agencies are expected to meet, 
while at the same time allowing flexibility so that truly 
sensitive information can continue to be protected. Allowing 
such flexibility is essential to the protection of national 
security, but the Committee believes that an independent review 
authority is necessary to ensure such flexibility is not abused 
by agencies. The Oversight Office is intended to provide that 
independent authority. Indeed, without the establishment and 
vigorous activity of such an authority, it is unlikely the 
goals of this Act could ever be met.
    The Oversight Office, therefore, is to review all requests 
by agencies to maintain classified information for periods 
longer than prescribed in this Act. Should disputes arise 
between agency heads and the Director of the Oversight Office 
regarding such requests, the matter is to be referred to the 
Classification and Declassification Review Board.
    Section 3(e). The Committee believes that individual 
agencies can not be expected to meet all of the obligations and 
requirements of the Act by themselves. Moreover, when acting 
independently to implement the Act, agencies are likely to 
generate redundancies and inefficiencies. A central 
coordinating authority is necessary to reduce the creation of 
overlapping, or incompatible, information management procedures 
and systems. The Oversight Office is expected to act as that 
central coordinating body and to reduce inefficiencies in 
agency efforts to implement the Act. In order to facilitate the 
operation of the Oversight Office, agencies are required to 
provide information as requested to the Oversight Office.
    Section 3(f). Consistent with his mandate to protect 
national security information effectively, the Director of the 
Oversight Office is required to implement information security 
procedures within the Oversight Office and among Oversight 
Office personnel.
    Section 3(g). Unclassified reports on compliance with this 
Act are to be made by March 31 of each year. Classified 
versions may also be prepared if necessary.

      section 4. classification and declassification review board

    Sections 4(a) and (b). The Classification and 
Declassification Review Board (the Board) is the second entity 
created to oversee the implementation of the Act. The Board is 
to consist of five members to be appointed by the President 
with the advice and consent of the Senate.
    The Committee believes it is very important that Board 
members reflect a wide range of views on classification and 
declassification issues, and that the Board includes 
individuals with experience in the protection of national 
security as well as individuals with an appreciation for the 
historical importance of releasing classified information to 
the public and a commitment to open government. The Committee 
expects each of these qualities to be a factor in choosing 
nominees to the Board. In order to ensure such a balance is 
achieved on the Board, the Committee considered requiring that 
the President nominate individuals from different lists 
prepared by the Director of Central Intelligence, the National 
Security Advisor, the Archivist of the United States, and the 
Office of Management and Budget. In the end, the Committee 
decided the better approach is to allow more flexibility for 
the President and require only consultation with the agencies 
identified in this Act. Should representation of a wide variety 
of views not be present among Board members, the nomination 
process should be reviewed and stricter nomination requirements 
considered. In order to ensure the independence of the Board, 
no currently serving official of the United States may be 
nominated to serve on the Board.
    Section 4(c). The purpose of the Board is to review cases 
in which disagreements develop between the Director of the 
Office of National Classification and Declassification 
Oversight and individual agencies regarding maintaining 
classified information beyond the time schedules provided for 
in this Act, as well as to hear appeals by individuals who have 
filed requests for mandatory declassification review. The Board 
is modeled on the declassification review procedures adopted 
for the John F. Kennedy Assassination Records Review Board and 
is intended to function in a similar manner.
    Section 4(d). All decisions of the Board may be appealed 
directly to the President within 60 days so that no 
classification or declassification decision need be taken 
without the President's approval. This requirement ensures that 
the President's constitutional responsibility to protect 
national security as Commander-in-Chief is not undermined.
    Section 4(e). Again, consistent with its responsibility to 
effectively protect national security information, the Board 
will implement information security procedures as part of its 
operations. The bill requires that Board members and staff have 
appropriate security clearances.
    Section 4(f). Board members are to receive only per diem 
and travel expenses for the periods during which the Board 
meets. It is the committee's expectation that relatively few 
disputes will have to be heard by the Board each year. Numerous 
disputes being taken to the Board requiring lengthy periods of 
work for Board members should be seen as an indication that the 
reforms required in this Act are not functioning as envisioned.
    The Committee recognizes the need for a limited executive 
staff to conduct the day-to-day business of the Board. 
Therefore, the substitute provides the Director of the Board 
with authority to appoint staff. In order to reduce the need 
for unnecessarily increasing government bureaucracy however, 
the Committee expects that the Board's executive staff will be 
limited, and the legislation authorizes the detail of staff to 
the Board from other federal agencies.

       section 5. appeal of determinations of classification and 
                     declassification review board

    The provisions of Section 5 of the Committee substitute 
preserve the President's constitutional authority as Commander-
in-Chief by making explicit that under the Government Secrecy 
Reform Act, he remains the ultimate decision-maker with respect 
to all classification or declassification decisions.
    The substitute provides that if the Classification and 
Declassification Review Board rejects an agency's appeal of a 
decision of the Director of the Office of National 
Classification and Declassification Oversight, the agency may 
appeal the adverse Review Board decision directly to the 
President. In addition, an individual or entity whose appeal to 
the Review Board on mandatory declassification review is 
rejected may also appeal to the President. The substitute makes 
clear that the President's determination is final and not 
subject to review. In order to protect the President's interest 
in the orderly management of his affairs, the Committee 
believes a limitation on the timeliness of appeals to the 
President is warranted. Accordingly, the substitute requires an 
agency, individual, or entity seeking presidential review of a 
decision of the Review Board to file the appeal with the 
President not later than 60 days after the date of the decision 
which is being appealed.

                        section 6. prohibitions

    Section 6(a). This provision is directed to the Executive 
Branch and makes clear that nothing in the Act shall be 
construed to authorize the withholding of any information from 
Congress. As the branch of the national government vested with 
the responsibility of passing laws and formulating national 
policy, Members of Congress must be accorded access to 
classified information in accordance with recognized procedures 
to ensure its safe handling. The procedures and standards for 
protecting information outlined in the bill are in no way 
intended to restrict and may not be relied upon to deny Members 
of Congress access to information.
    Section 6(b). This provision was added to the bill by the 
substitute amendment. Its inclusion was requested by Mr. Cohen 
and Mr. Leonard in response to questioning at the Committee's 
March 25, 1998 hearing. National Security Advisor Samuel 
Berger's May 11, 1998 letter expressing the Administration's 
views of S. 712 reiterated the Administration's position that 
in order to be acceptable to the Administration, any bill must 
``[e]xplicity prohibit conferring any new substantive or 
procedural rights enforceable in the courts.'' Letter from 
Samuel R. Berger to Senator Fred Thompson, May 11, 1998, page 2 
(emphasis supplied). As introduced, S. 712 was silent on 
whether it created new substantive or procedural rights subject 
to judicial review. The courts have held that unless Congress 
evinces clear and convincing evidence that judicial review is 
prohibited, the courts will presume it was intended. Bowen v. 
Michigan Academy of Family Physicians, 476 U.S. 667, 670-73 
(1986); Abbott Laboratories v. Gardner, 387 U.S. 136, 140 
(1967). Accordingly, the substitute adopted by the Committee 
explicitly preserves the status quo with respect to judicial 
review: the Act will create no new right of judicial review, 
either substantive or procedural. Instead, the bill would set 
up an appeals system that is entirely within the Executive 
Branch and subject to supervision by the President, who will be 
the ultimate decision-maker on questions of classification and 
declassification. There would be no judicial review of 
classification or declassification decisions under this Act.
    The only judicial review permissible under the substitute 
will be that available under the Freedom of Information Act, 5 
U.S.C. Sec. 552. See also 50 U.S.C. Sec. 431(f). Judicial 
review of classification decisions under the Freedom of 
Information Act is already provided by law. This Act would 
neither expand nor limit the scope of judicial review currently 
available under the Freedom of Information Act. The intended 
impact of this Act on judicial review under the Freedom of 
Information Act is addressed in greater detail in the 
discussion of section 2(f) above.

                         section 7. definitions

    The definition section is limited. It defines ``agency'' 
broadly to include any executive branch agency as defined in 
title 5, United States Code, any military department as defined 
in title 5, United States Code, and any other entity in the 
executive branch that comes into possession of classified 
information. This latter provision, which is intended to be 
read broadly, is an important addition, as it will cover 
components of the Executive Office of the President, which are 
otherwise not covered within the traditional definition of 
``agency'' under title 5, United States Code.
    The bill also defines ``classify,'' ``classified,'' and 
``classification,'' as well as ``declassify,'' 
``declassified,'' and ``declassification.'' ``Classified'' 
information, including its cognate terms, in simply that which 
is determined, pursuant to the balancing test imposed by the 
Government Secrecy Reform Act, and the procedures provided by 
the Act, to require protection from unauthorized disclosure in 
order to protect the national security of the United States. 
``Declassification,'' including its cognate terms, simply 
covers the process by which information that is or has been 
classified is determined, pursuant to the time-tables or 
standards imposed by the legislation, to no longer require 
protection from unauthorized disclosure in order to protect the 
national security of the United States.

                       section 8. effective date

    The Government Secrecy Reform Act would take effect 180 
days after its enactment. The Committee understands this to 
mean that the Administration would have six months to prepare 
to implement its provisions, and that the promulgation by the 
President of the categories and procedures required by Section 
26(b)(1) and the issuance of agency standards and procedures 
required by Section 2(b)(4) must occur within the 180-day 
period between enactment of the legislation and its effective 
date, so that by the conclusion of that period, the executive 
branch will be able to implement fully the provisions of the 
Act.
    The change to the Freedom of Information Act made by the 
Government Secrecy Reform Act would also take effect 180 days 
after enactment and would apply to pending cases, although not 
to any cases in which a final judgment had been entered prior 
to the effective date. Because no pending case would involve 
information classified pursuant to the legislation, however, 
this change to the Freedom of Information Act should have no 
bearing on any pending Freedom of Information Act case.

                     V. Regulatory Impact Statement

    Pursuant to paragraph 11(b), rule XXVI of the Standing 
Rules of the Senate, the Committee, after due consideration, 
concludes that S. 712 will not have a significant regulatory 
impact upon individuals or businesses or any significant 
economic impact upon them.

             VI. Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 13, 1998.
Hon. Fred Thompson,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 712, the Government 
Secrecy and Reform Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dawn Sauter.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

S. 712--Government Secrecy and Reform Act of 1998

    Summary: S. 712, the Government Secrecy and Reform Act of 
1998, would establish new rules and organizations related to 
classifying and declassifying information. CBO estimates that 
the annual costs of S. 712 would range from about $10 million 
to about $130 million, depending on how the bill would be 
interpreted and assuming appropriation of the necessary 
amounts. The bill would not affect direct spending or receipts; 
thus pay-as-you-go procedures would not apply.
    The Unfunded Mandates Reform Act (UMRA) excludes from 
application of the act legislative provisions that are 
necessary for the national security. CBO has determined that 
all of the provisions of this bill fit within that exclusion.
    Description of the bill: The rules governing information 
classification and declassification are currently established 
by executive order. S. 712 would provide a statutory foundation 
for the classification process established in Executive Order 
12958. It could also change current practices in at least two 
respects. First, S. 712 would preclude the original 
classification of a document unless the agency first determines 
that national security concerns outweigh the public benefit of 
keeping information unclassified. S. 712 would establish 
specific criteria for making this determination, including 
whether disclosure of information would better enable 
individuals to hold government officials accountable for their 
actions and whether disclosure would increase public awareness 
or understanding of government activities.
    Second, S. 712 might affect the protection of certain 
information under existing laws. As under E.O. 12958, S. 712 
would set a 10-year maximum for the initial period of 
classification and would authorize extensions beyond 10 years 
if declassifying the information would harm national security. 
Also, like the current executive order, S. 712 would limit most 
classification periods to 25 years. However, unlike E.O. 12958, 
S. 712 would not specifically exclude information protected 
under the Atomic Energy Act of 1954 or the National Security 
Act of 1947 from operation of its provisions. This aspect of 
the bill could nullify exemptions that some agencies are 
permitted. Thus, the possible repeal of current exemptions 
could dramatically increase the number of documents that 
agencies must review to comply with mandatory classification 
periods.
    The bill would also establish two organizations--the Office 
of National Classification and Declassification Oversight 
(ONCDO) and the Classification and Declassification Review 
Board. ONCDO would standardize the policies and procedures used 
by all federal agencies for classifying and declassifying 
information. The Classification and Declassification Review 
Board would decide appeals by agencies over the classification 
decisions of ONCDO and appeals lodged by individuals over 
agencies' decisions.
    Estimated cost to the Federal Government: CBO estimates 
that the annual costs of S. 712 would range from about $10 
million to about $130 million, depending on how the bill would 
be interpreted and assuming appropriation of the necessary 
amounts. The budgetary impact of S. 712 over the 1999-2003 
period would depend primarily on if and how fast agencies would 
be required to review certain documents, including a backlog 
from several years. If the bill were interpreted so as to deny 
the exemptions from review that are currently granted, costs 
would total about $130 million annually. If the current 
exemptions were continued, the costs of the bill would total 
about $10 million a year due to the costs of establishing the 
two new organizations and handling a slight increase in 
requests for information under the Freedom of Information Act 
(FOIA).

Mandatory classification periods

    Based on the report of the Commission on Protecting and 
Reducing Government Secrecy, about 300 million pages of 
classified information are exempt from mandatory review under 
current law. Other data suggest that the cost to review each 
page amounts to $2 for most agencies, $3 for the Central 
Intelligence Agency (CIA), and about $4 for the National 
Security Agency. Thus, if the bill would repeal current 
exemptions, the number of documents that agencies must review 
and the costs they would incur would increase significantly.
    Assuming that S. 712 would effectively nullify current 
exemptions and that agencies would have between 10 and 15 years 
to work off the current backlog of documents, CBO estimates 
that discretionary costs would rise by about $75 million a 
year. Reviewing the documents that would come up for review 
each year would add another estimated $45 million to agencies' 
annual costs.

Legal challenges to classification decisions

    Enacting S. 712 could raise administrative and legal costs 
for various agencies in response to additional requests for 
information under FOIA and challenges to classification 
decisions under the new test. The new requests could stem from 
heightened awareness of the test an agency would be required to 
apply, and the challenges could arise over disagreements on how 
public benefits and national security concerns were measured 
and balanced.
    The most recent statistics show that in 1992 agencies 
received $75,000 FOIA requests and spent $100 million to 
implement FOIA. The costs to implement FOIA include both 
administrative expenses--the cost of employees and office 
equipment used to process FOIA requests--and legal expenses, 
which may include attorney fees and other litigation costs 
incurred in defending challenges to the denial of a FOIA 
request. Assuming agency costs to implement FOIA have remained 
relatively constant except for inflation, CBO estimates that 
agencies now spend around $120 million annually to respond to 
FOIA requests. CBO estimates that S. 712 would increase FOIA 
requests by around 5 percent and consequently raise 
discretionary spending by $6 million a year, assuming 
appropriation of the necessary amounts.
    Courts have shown deference to agency decisions concerning 
the classification of information. CBO has no reason to believe 
that challenges under S. 712 would be more successful than 
those under existing law. If courts would continue to defer to 
agency classification decisions, the number of legal challenges 
would rise initially but then diminish.

New Organizations

    CBO assumes that ONCDO would grow out of the Information 
Security Oversight Office, which performs many of the functions 
that ONCDO would perform. CBO estimates that the additional 
costs of the new organization would total $3 million a year.
    Under the bill, the Classification and Declassification 
Review Board would consist of a chairman and four other members 
from the private sector who are distinguished historians or 
archivists and experts in national security matters. The 
chairman would have the authority to hire an executive 
secretary and other staff. CBO estimates that the Board would 
cost about $1 million a year.
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: Section 4 of 
UMRA excludes from application of the act legislative 
provisions that are necessary for the national security. CBO 
has determined that all of the provisions of this bill fit 
within that exclusion.
    Estimate prepared by: Federal Costs: Dawn Sauter. Impact on 
State, Local, and Tribal Governments: Pepper Santalucia. Impact 
on the Private Sector: David Mosher.
    Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                      VII. Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 712 as reported are shown as follows (existing law proposed 
to be omitted is enclosed in brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman):

                     Part I--The Agencies Generally

                  CHAPTER 5--ADMINISTRATIVE PROCEDURE

                Subchapter II--Administrative Procedure

[Sec. 552. (b)(1) Public information; agency rules, opinions, orders, 
                    records and proceedings

           *       *       *       *       *       *       *


    [This section does not apply to matters that are--
          [(1)(A) specifically authorized under criteria 
        established by an Executive order to be kept secret in 
        the interest of national defense or foreign policy and 
        (B) are in fact properly classified pursuant to such 
        Executive order;]

           *       *       *       *       *       *       *


Sec. 552. * * *

    (b) This section does not apply to matters that are--
          (1)(A) specifically authorized to be classified under 
        the Government Secrecy Reform Act of 1998, or 
        specifically authorized under criteria established by 
        an Executive order to be kept secret in the interest of 
        national security and (B) are in fact properly 
        classified pursuant of that Act of Executive order;

           *       *       *       *       *       *       *


                          Part III--Employees

                     Subpart D--Pay and Allowances

                   CHAPTER 53--PAY RATES AND SYSTEMS

              Subchapter II--Executive Schedule Pay Rates

[Sec. 5314. Position at level III

    [Level III of the Executive Schedule applies to the 
following positions, for which the annual rate of basic pay 
shall be the rate determined with respect to such level under 
chapter 11 of title 2, as adjusted by section 5318 of this 
title:
    [Solicitor General of the United States
    [Under Secretary of Commerce, Under Secretary of Commerce 
for Economic Affairs, Under Secretary of Commerce for Export 
Administration and Under Secretary of Commerce for Travel and 
Tourism.
    [Under Secretary of State (5).
    [Under Secretary of Treasury (3).
    [Administrator of General Services.
    [Administrator of the Small Business Administration.
    [Deputy Administrator, Agency for International 
Development.
    [Chairman of the Merit Systems Protection Board.
    [Chairman, Federal Communications Commission.
    [Chairman, Board of Directors, Federal Deposit Insurance 
Corporation.
    [Chairman, Federal Energy Regulatory Commission.
    [Chairman, Surface Transportation Board.
    [Chairman, National Labor Relations Board.
    [Chairman, Securities, and Exchange Commission.
    [Chairman, Board of Directors of the Tennessee Valley 
Authority.
    [Chairman, National Mediation Board.
    [Chairman, Railroad Retirement Board.
    [Chairman, Federal Maritime Commission.
    [Comptroller of the Currency.
    [Commissioner of the Internal Revenue Service.
    [Under Secretary of Defense for Policy.
    [Under Secretary of Defense (Comptroller).
    [Under Secretary of Defense for Personnel and Readiness.
    [Deputy Administrator of the National Aeronautics and Space 
Administration.
    [Deputy Directors of Central Intelligence (2).
    [Director of the Office of Emergency Planning.
    [Director of the Peace Corps.
    [Deputy Director, National Science Foundation.
    [President of the Export-Import Bank of Washington.
    [Members, Nuclear Regulatory Commission.
    [Members, Defense Nuclear Facilities Safety Board.
    [Members, Board of Governors of the Federal Reserve System.
    [Director of the Federal Bureau of Investigation, 
Department of Justice.
    [Administrator of the National Highway Traffic Safety 
Administration.
    [Administrator, Federal Railroad Administration.
    [Chairman, National Transportation Safety Board.
    [Chairman of the National Endowment for the Arts the 
incumbent of which serves as Chairman of the National Council 
of Arts.
    [Chairman of the National Endowment for the Humanities.
    [Director of the Federal Mediation and Conciliation 
Service.
    [Federal Transit Administrator.
    [President, Overseas Private Investment Corporation.
    [Chairman, Occupational Safety and Health Review 
Commission.
    [Governor of the Farm Credit Administration.
    [Chairman, Equal Employment Administration.
    [Chairman, Consumer Product Safety Commission.
    [Under Secretary, Department of Energy.
    [Chairman, Commodity Futures Trading Commission.
    [Deputy United States Trade Representatives (3).
    [Chairman, United States International Trade Commission.
    [Under Secretary of Commerce for Oceans and Atmosphere, the 
incumbent of which also serves as Administrator of the National 
Oceanic and Atmospheric Administration.
    [Associate Attorney General.
    [Chairman, Federal Mine Safety and Health Review 
Commission.
    [Chairman, National Credit Union Administration Board.
    [Deputy Director of the Office of Personnel Management.
    [Under Secretary of Agriculture for Food, Nutrition, and 
Consumer Services.
    [Under Secretary of Agriculture for Natural Resources and 
Environment.
    [Under Secretary of Agriculture for Research, Education, 
Economics.
    [Under Secretary of Agriculture for Food Safety.
    [Director, Institute for Scientific and Technological 
Cooperation.
    [Under Secretary of Agriculture for Rural Development.
    [Administrator, Maritime Administration.
    [Executive Director, Property Review Board.
    [Deputy Administrator of the Environmental Protection 
Agency.
    [Archivist of the United States.
    [Deputy Director of the United States Arms Control and 
Disarmament Agency.
    [Executive Director, Federal Retirement Thrift Investment 
Board.
    [Deputy Under Secretary of Defense for Acquisition and 
Technology.
    [Director, Trade and Development Agency.
    [Under Secretary of Commerce for Technology.
    [Under Secretary for Health, Department of Veterans 
Affairs.
    [Under Secretary of Benefits, Department of Veterans 
Affairs.
    [Director of the Office of Government Ethics.
    [Administrator for Federal Procurement Policy.
    [Administrator, Office of Information and Regulatory 
Affairs, Office of Management and Budget.
    [Deputy Director for Demand Reduction, Office of National 
Drug Control Policy.
    [Director of the Office of Thrift Supervision.
    [Chairperson of the Federal Housing Finance Board.
    [Executive Secretary, National Space Council.
    [Controller, Office of Federal Financial Management, Office 
of Management and Budget.
    [Under Secretary of Education.
    [Chief Executive Officer, Resolution Trust Corporation.
    [Administrator, Research and Special Programs 
Administration.]

Sec. 5314. Position at Level III

    Level III of the Executive Schedule applies to the 
following positions, for which the annual rate of basic pay 
shall be the rate determined with respect to such level under 
chapter 11 of title 2, as adjusted by section 5318 of this 
title: Solicitor General of the United States
    Under Secretary of Commerce, Under Secretary of Commerce 
for Economic Affairs, Under Secretary of Commerce for Export 
Administration and Under Secretary of Commerce for Travel and 
Tourism.
    Under Secretary of State (5).
    Under Secretary of Treasury (3).
    Administrator of General Services.
    Administrator of the Small Business Administration.
    Deputy Administrator, Agency for International Development.
    Chairman of the Merit Systems Protection Board.
    Chairman, Federal Communications Commission.
    Chairman, Board of Directors, Federal Deposit Insurance 
Corporation.
    Chairman, Federal Energy Regulatory Commission.
    Chairman, Surface Transportation Board.
    Chairman, National Labor Relations Board.
    Chairman, Securities and Exchange Commission.
    Chairman, Board of Directors of the Tennessee Valley 
Authority.
    Chairman, National Mediation Board.
    Chairman, Railroad Retirement Board.
    Chairman, Federal Maritime Commission.
    Comptroller of the Currency.
    Commissioner of the Internal Revenue Service.
    Under Secretary of Defense for Policy.
    Under Secretary of Defense (Comptroller).
    Under Secretary of Defense for Personnel and Readiness.
    Deputy Administrator of the National Aeronautics and Space 
Administration.
    Deputy Directors of Central Intelligence (2).
    Director of the Office of Emergency Planning.
    Director of the Peace Corps.
    Deputy Director, National Science Foundation.
    President of the Export-Import Bank of Washington.
    Members, Nuclear Regulatory Commission.
    Members, Defense Nuclear Facilities Safety Board.
    Members, Board of Governors of the Federal Reserve System.
    Director of the Federal Bureau of Investigation, Department 
of Justice.
    Administrator of the National Highway Traffic Safety 
Administration.
    Administrator, Federal Railroad Administration.
    Chairman, National Transportation Safety Board.
    Chairman of the National Endowment for the Arts the 
incumbent of which serves as Chairman of the National Council 
of Arts.
    Chairman of the National Endowment for the Humanities.
    Director of the Federal Mediation and Conciliation Service.
    Federal Transit Administrator.
    President, Overseas Private Investment Corporation.
    Chairman, Occupational Safety and Health Review Commission.
    Governor of the Farm Credit Administration.
    Chairman, Equal Employment Administration.
    Chairman, Consumer Product Safety Commission.
    Under Secretary, Department of Energy.
    Chairman, Commodity Futures Trading Commission.
    Deputy United States Trade Representatives (3).
    Chairman, United States International Trade Commission.
    Under Secretary of Commerce for Oceans and Atmosphere, the 
incumbent of which also serves as Administrator of the National 
Oceanic and Atmospheric Administration.
    Associate Attorney General.
    Chairman, Federal Mine Safety and Health Review Commission.
    Chairman, National Credit Union Administration Board.
    Deputy Director of the Office of Personnel Management.
    Under Secretary of Agriculture for Food, Nutrition, and 
Consumer Services.
    Under Secretary of Agriculture for Natural Resources and 
Environment.
    Under Secretary of Agriculture for Research, Education, 
Economics.
    Under Secretary of Agriculture for Food Safety.
    Director, Institute for Scientific and Technological 
Cooperation.
    Under Secretary of Agriculture for Rural Development.
    Administrator, Maritime Administration.
    Executive Director, Property Review Board.
    Deputy Administrator of the Environmental Protection 
Agency.
    Archivist of the United States.
    Deputy Director of the United States Arms Control and 
Disarmament Agency.
    Executive Director, Federal Retirement Thrift Investment 
Board.
    Deputy Under Secretary of Defense for Acquisition and 
Technology.
    Director, Trade and Development Agency.
    Under Secretary of Commerce for Technology.
    Under Secretary for Health, Department of Veterans Affairs.
    Under Secretary of Benefits, Department of Veterans 
Affairs.
    Director of the Office of Government Ethics.
    Administrator for Federal Procurement Policy.
    Administrator, Office of Information and Regulatory 
Affairs, Office of Management and Budget.
    Deputy Director for Demand Reduction, Office of National 
Drug Control Policy.
    Director of the Office of Thrift Supervision.
    Chairperson of the Federal Housing Finance Board.
    Executive Secretary, National Space Council.
    Controller, Office of Federal Financial Management, Office 
of Management and Budget.
    Under Secretary of Education.
    Chief Executive Officer, Resolution Trust Corporation.
    Administrator, Research and Special Programs 
Administration.
    Director, Office of National Classification and 
Declassification Oversight.

                               
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