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(It is to be noted that following this decision the President on February 20, 1960, issued Executive Order 10865, giving authority to certain departments, including the Department of Defense, to issue regulations for the safeguarding of classified information released to United States industry, with express provisions regulating the exercise of the privileges of confrontation and cross-examination. However, no case has reached the courts in which the new regulations relating to cross-examination and confrontation have been called into question.) Relevant provision's in H.R. 15626

The bill (see particularly subsection (k), at page 15) gives express congressional sanction for the application of personnel screening procedures, including the regulation of the privileges of confrontation and cross-examination, in substantially the same form as now prescribed by Executive Order 10865 and Depart. ment of Defense directives. It is believed that the provisions of the bill accord maximum benefits to the individual consistently with the imperative and overriding demands of the national security.



The court in this case temporarily and, after hearing, permanently enjoined the Secretary of Defense from suspending Shoultz's security clearance for access to information classified as secret, on the ground that the particular procedure under which the suspension was applied was not specifically authorized by the President or Congress.

Shoultz, a holder of a security clearance for access to information classified as secret, was employed by Lockheed Missiles and Space Company, of Sunnyvale, California. While thus employed he was notified that the Screening Board of the Department of Defense had some new information affecting his continued eligibility for clearance and that his status was to be reexamined on the basis of this information. He was requested to attend an interview at which he would be questioned on matters germane to his continuing eligibility. He was advised that he could be represented by counsel at the interview and that he would be afforded an opportunity to make a statement on his behalf. He was also advised that his refusal to answer questions relevant to his continued eligibility would result in a suspension of his existing clearance and that further processing of his case would be discontinued.

Shoultz appeared, stated his name, address, and employment, in response to questions propounded by the Department counsel who was conducting the interview, but declined to answer all other questions on the ground that they were irrelevant, incompetent, and immaterial. Thereafter, he was informed by the Department of Defense by letter that his refusals denied to the Screening Board information which was essential to a determination of his continued eligibility for security clearance and that without such information the Board was unable to reach the affirmative finding that his continued clearance would be clearly consistent with the national interest, as required by section 2 of Executive Order 10865.

Shortly thereafter Shoultz was notified by his employer that he would be placed on “prolonged leave of absence” without pay until such time as his clearance status was settled. He then brought his action to enjoin the Secretary of Defense from suspending his secret security clearance.

The court granted a temporary restraining order and, after hearing, permanently enjoined the Secretary of Defense from suspending Shoultz's security clearance.' It did so on the ground that the procedure adopted in this case had not been specifically authorized by the President or the Congress, citing Greene V. McElroy, supra. Pointing out that the “suspension” which entailed a discon

1 The order, however, was subject to the quallfication that it "does not prevent defendants from taking appropriate action to safeguard the national security under section 9 of the Executive Order 10865 or any other provisions of Directive 5220.6, if they be so advised.". (Sec. 9 of E.O. 10865 authorizes the head of the department to exercise a nondelegable power personally to deny or revoke access authorization when he determines that the hearing procedures prescribed in sections 3, 4, and 5 cannot be invoked consistently with the national security. Department of Defense Directive 5220.6. which regulates industrial personnel access authorization, contains hearing procedures similar to those set forth in subsection (k) at page 15 of the bill, to be employed prior to final denial or revocation of access authorization.)

tinuance of the processing of Shoultz's clearance had the same final effect on his livelihood as gave the Supreme Court concern in Greene, the district judge said:

“This Court believes that the teaching of Greene is that an agency of the federal government cannot, without affording the traditional forms of fair procedure, take administrative action which effectively deprives an individual of his means of livelihood on loyalty or security grounds unless, at the least, Congress (or the President, if he is the source of the power) has expressly authorized the lesser procedure."

(The application of the equitable remedy of injunction, rather than a remedy at law, seems particularly objectionable in this case. The exercise of judicial power to order continuing access to classified information, on procedural grounds, prior to a final determination of the access privilege on the merits by agencies responsible for the safeguarding of such information, poses the gravest dangers to the national security, and would seem to constitute a premature intrusion by the judiciary upon executive responsibilities and a judicial usurpation of executive discretion.) Relevant provisions of H.R. 15626

The bill contains provisions authorizing the President (1) to discontinue processing an application for clearance or review thereof, and to deny, suspend, or revoke access authorization, when an applicant refuses to answer relevant inquiries in the course of any investigation, inquiry, or proceeding for determination of the individual's fitness or eligibility, and (2) summarily to deny, suspend, or revoke any individual's access to classified information or employment in or access to a defense facility. The individual is entitled, however, in either case to a prompt hearing upon any such denial, suspension, or revocation under the provisions of subsection (k) (at page 15) of the bill. (See Borrow v. Federal Communications Commission, 285 F. 2d 666 (1960), cert. denied 364 U.S. 892.)

The bill also contains provisions limiting the jurisdiction of courts to grant any restraining order or temporary or permanent injunction having the effect of granting or continuing access to classified information or employment in or access to a defense facility. As to other relief, the jurisdiction of the courts is not limited except that a person adversely affected by the enforcement, execution, or application of the personnel screening programs may not resort to the courts until he has exhausted the administrative remedies provided in the provisions of the bill.



The decision

The opinion for the Court was delivered by Justice Douglas. Justice Black expressed concurrence with the opinion, and with a statement of Justice Fortas, Justice Fortas concurred in a separate opinion with which Justice Stewart agreed. Justice White, with whom Justice Harlan joined, concurred in the result. Justice Marshall took no part in the consideration or decision of the case.

In this case the court held that the Magnuson Act gave the President no authority to set up a personnel security screening program with respect to merchant vessels of the United States.

Under the Magnuson Act, 50 U.S.C. 191(b), the President is authorized, if he finds that “the security of the United States is endangered by * * * subversive activity,” to issue rules and regulations "to safeguard against destruction, loss, or injury from sabotage or other subversive acts * * vessels, harbors, ports, and waterfront facilities in the United States *

Pursuant to this authority, the President promulgated regulations giving the Commandant of the Coast Guard authority to grant or withhold validation of any permit or license affecting the right of a seaman to serve on a merchant vessel of the United States. The Commandant is directed not to issue such validation unless he is satisfied that "the character and habits of life of such person are such as to authorize the belief that the presence of the individual on board would not be inimical to the security of the United States."

Schneider applied to the Commandant for a validation of a permit or license to act on board American-ilag commercial vessels as a second assistant engineer. In connection with his application, he was asked to answer inquiries relating to his membership in various subversive organizatiops, together with the listing of names “of the political and social organizations" to which he belonged, including questions related to his membership and activities therein. He admitted membership in the Communist Party and other organizations on the Attorney General's list, but said that he had quit it and other organizations due to fundamental disagreement with Communist methods and techniques. He would not, he said, answer any other questions with respect thereto.

As a consequence the Commandant declined to process the application, relying upon the provisions of the Executive order authorizing him to hold the application in abeyance if an applicant fails or refuses to furnish the additional information sought. Schneider thereupon brought this action for declaratory relief, praying that the Commandant be directed to approve his application and that he be enjoined from interfering with Schneider's employment upon vessels flying the American flag. A three-judge court dismissed the complaint. The Supreme Court reversed.

The Court held that the Magnuson Act gave the President no express authority to set up a screening program for personnel on merchant vessels of the United States. Nor did the Court agree with the argument of the Solicitor General that such a power was clearly implied in other provisions of the act. Moreover, said the Court, even assuming arguendo that the act authorizes a type of screening program directed at “membership" or "sympathetic association,” this would raise first amendment problems such as were presented in Shelton v. Tucker, 364 U.S. 479, which considered the validity of an Arkansas statute requiring a teacher, who was to be hired by a public school, to submit an affidavit "listing all organizations to which he at the time belongs and to which he has belonged during the past five years.” If there is to be a congressional delegation of authority in the area of associational freedoms, said the Court, the delegation must be specific and narrowly drawn. Relevant provisions of H.R. 15626

The bill expressly authorizes the President to institute a personnel screening program to secure the objectives of the Magnuson Act. To the extent the President deems applicable, he is authorized to extend and apply for such purposes the procedures, standards, provisions, and regulations authorized and provided by section 5A of the bill. With respect to the associational activities into which inquiries are made to determine eligibility and access clearance, the bill establishes specific standards and expressly provides that all inquiries shall be confined to those which are relevant or material to the determination to be made. (See subsection (d), page 5.) The bill also contains a provision regulating the jurisdiction of courts similar to that provided with respect to proceedings for access to classified information and defense facilities under section 5A.

The CHAIRMAN. Our first witness this morning is Mr. Liebling with the Department of Defense. Mr. Liebling, you, and if you have associates, your associates may proceed.

Now I will tell you what would be satisfactory, if agreeable to you. If you have a prepared statement, suppose we insert it at this point, then can you summarize it? It would be easier to follow it.

Could you do that?
Mr. LIEBLING. I would prefer to read it.

The CHAIRMAN. All right, you may read it. It is perfectly all right. And then if there are copies, we can follow.

Mr. LIEBLING. Oh, yes, we provided copies. I believe you have them. Yes, you have them, Mr. Chairman.

The CHAIRMAN. Well, for my part, I will listen to you. Go on. Proceed.



Mr. LIEBLING. Thank you, and good morning, Mr. Chairman, Members of the Committee, Counsel. I am Mr. Joseph J. Liebling, and I am the director for security policy of the Department of Defense and I will address myself to the bills, 15626, 15018, and 15336.

I have with me several gentlemen I would like to introduce, who can address themselves to some technical questions, if required by the committee.

The CHAIRMAN. All right. Mr. LIEBLING. If I may, to my left is Mr. Scanlon, who is the director for the Industrial Security Clearance Review Office.

The CHAIRMAN. Welcome, sir.

Mr. LIEBLING. To my right is Mr. Charles Trammell, who is the director of plans and programs.

The CHAIRMAN. We are glad to have you, sir.

Mr. LIEBLING. Mr. Trammell is a specialist on the regulations and the policies. And at the far end is Mr. Charles Haas, who is the chief of the industrial branch of the Department of the Army, which manages our Industrial Defense Program as the executive agent for the Department of Defense.

The CHAIRMAN. We welcome you.
Mr. LIEBLING. May I proceed?
The CHAIRMAN. All right, go on.

Mr. LIEBLING. I am pleased to have the oportunity to appear before you today to present the views of the Department of Defense concerning three bills pertaining to the Department's responsibilities which are before your committee and which deal principally with the Industrial Defense Program and the Industrial Security Program, both of which are administered by the Department. These are H.R. 15626, H.R. 15018, and H.R. 15336.

Inasmuch as both H.R. 15018 and H.R. 15336 are restricted to just one of these programs, that of Industrial Defense, and are more limited in scope than H.R. 15626, even for the Industrial Defense Program, I believe that I can be most helpful to the committee by briefly giving you the Department of Defense views on those two bills and then proceeding to a detailed discussion of the comprehensive bill, H.R. 15626.

H.R. 15018 expands the definition of "defense facility” in the Subversive Activities Control Act of 1950 by adding criteria to aid the Secretary of Defense in the selection and designation of such facilities.

It repeals the existing section 5 (a) (1) (D), a criminal provision of the present act which was held unconstitutional by the United States Supreme Court in the case of United States v. Robel. It does not substitute a new criminal section under more narrowly drawn legislation as discussed by the Robel case, but it does add an amendment to section

5(b) of the Subversive Activities Control Act which authorizes the Secretary of Defense, under regulations to be prescribed by the President, to develop civil administrative machinery to revitalize and broaden the existing Industrial Defense Program.

It also provides for hearings, both for the facility to be designated and for an individual considered for denial of employment in the defense facility, and it also contains certain other useful provisions, such as the specific authority to enforce administrative decisions by application for court injunction and the granting of rule-making authority to the Secretary of Defense.

H.R. 15336 is much more limited in scope even than H.R. 15018. It is directed solely at redrafting the criminal provisions of section 5(a) (1) (D) of the Subversive Activities Control Act in an attempt to provide the more narrowly drawn legislation suggested as needed by the Supreme Court in the Robel case.

However, with regard to both H.R. 15018 and H.R. 15336, while we support their objectives, we note that each has technical shortcomings and less than desirable scope, as set forth in our detailed reports on these bills to the committee. I believe that our detailed discussion of H.R. 15626 which follows will adequately cover the Department's views on all three bills.

With regard to H.R. 15626, the Department of Defense supports the broad objectives of the bill but we do have objections to some of the provisions as drafted which I will point out in the course of my testimony. We will provide certain comments and suggestions about the bill based on our experience in both industrial defense and industrial security and we hope that they may be useful to the committee.

We do recognize that certain of the provisions of the bill may possibly be construed to raise questions of constitutionality. If that is the case, we defer, of course, to the views of the Attorney General.

Section 1 of the bill contain the provisions which are of primary interest to the Department of Defense, and it is to this section that most of my remarks will be directed.

Subparagraph (1) of section 1 provides a new definition of "facility” for paragraph 7 of section 3 of the Subversive Activities Control Act. The new definition is more comprehensive than the existing law. It adds to the definition such classes as “industry," "educational institutions," "research organizations," "aircraft," and "vehicles”—all of which are missing from the law at present.

We believe that the proposed revision of this definition adequately sets forth the scope of Department of Defense requirements as reflected in modern industry and technology and consequently is to be preferred over the existing definition.

Subparagraph (2) of section 1 eliminates the existing clauses C and D of section 5(a) (1) of the Subversive Activities Control Act and substitutes a new, and somewhat expanded, clause C. The existing clause C now makes it a crime for a member of an organization registered, or required to register, under the act, to conceal or fail to disclose such membership in obtaining or holding employment in a defense facility.

The bill would eliminate an existing criminal sanction, but, in view of additional provisions appearing elsewhere in the bill, we do not believe that this particular deletion would have any significant, prac

94–756 0—68—pt. 1-5

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