Mr. Tuck. I want to make it just as tight as we can make it under the law.

Mr. LIEBLING. We do, in fact, do it now.

Mr. TUCK. I have no sympathy for anybody that would destroy the Government of the United States or give out the defense secrets against our interests.

Mr. CULVER. Mr. Liebling, how many facilities and how many screened individuals would be involved if the proposed legislation were enacted in substantially its present form and if executive authorities administered personnel screening procedures to the maximum extent authorized by the pending legislation? Do you still find it impossible to make a judgment?

Mr. LIEBLING. Yes, I would have to reiterate my previous answer. Mr. CULVER. What categories of facilities that produce goods anyplace in the Nation could not be subjected to the personnel screening requirements to be authorized by the pending legislation?

Mr. LIEBLING. Most U.S. plants would not be so covered. I would say those that would be involved are initially in direct support of industrial facilities that are producing military arms such as, let's presume, the water, power, and dam close by to the facility that would require generation, power units, and so forth, a rather critical item which would require the outside assistance of the particular facility that we are discussing under the program. This would be a critical area. In other words, you could not perform without this water power or generation for your electrical facilities in the area although they might be completely separate. So as I am saying, it is direct support for production of a military arm as such.

Mr. CULVER. As I recall, you made a recommendation in your initial statement to broaden the general categorization of the facilities affected. And I was wondering whether or not it is not true that if we employ the term "national interest purpose" that virtually every product today could be thought to have some "national interest purpose."

Mr. LIEBLING. In regard to broadening the "standard" for making security decisions my answer is "no." If you remember I also indicated that we would obviously use some pretty good sensible judgment in this proposed broadening in the criteria now in play where we define what particular type of facilities we would cover so that we would not use that. Legally, possibly, the Secretary of Defense would have the authority to broaden in these areas that you are alluding to, but it would be completely unlikely.

Mr. CULVER. It might be unlikely, but that is rather broad authority that he is being provided; is it not? Isn't that true?

Mr. LIEBLING. It is broad, but we have got to exercise some judgment. Mr. CULVER. That is right. I agree. We have to exercise judgment, both in the enactment of legislation as well as its administration. Under the proposed legislation would the personnel screening requirements apply to all, some, only a few, employees of the facilities that had been designated, not because of current operations at such facilities, but because at some time in the future such facilities could become engaged in activities that would have the requisite relationship to the national security?

(At this point Mr. Watson entered the hearing room.)

Mr. LIEBLING. My answer is that, I would have to reiterate, would depend on how you prepared the bill. We will carry out the bill as Congress wants.

Mr. CULVER. As presently drafted.

Mr. LIEBLING. As presently drafted, as I said, we don't visualize a substantial change or increase in the number of facilities. As far as clearances are concerned, we would declare certain positions under our administrative machinery as critical or sensitive and we would provide clearance for those activities the same as we do in our industrial security program.

Mr. CULVER. Would designation of such a "standby" facility have, as a prerequisite, any contractual arrangement, tenative or otherwise, between the Federal Government and the owner of such facility?

Mr. LIEBLING. This could be one prerequisite of enveloping the individuals under the clearance program.

Mr. CULVER. Is it at the present time a prerequisite that is employed? Mr. LIEBLING. NO.

Mr. CULVER. I get a nod "yes" from your assistant and a "no" from you for the record.

Mr. LIEBLING. It may or may not be.

Mr. CULVER. It may or may not be.

Mr. LIEBLING. If you got the nod "yes," I would like to hear the clarification.

Mr. HAAS. Well, I meant "yes" only to the extent that many standby plants that can produce military material do have contractual arrangements, but it is not an absolute prerequisite. The inference, as I understand it, is that we are talking about facilities in standby condition. As such, these are facilities which have existing capacity or a latent capability to respond immediately. It is not the kind of thing that existed in World War II, for example, where a wallpaper firm started making ammunition fuses. We are talking about plants that are ready to produce military or supporting services.

Mr. CULVER. The thing that I was interested in determining for the record is this:

Must the facility have clearly expressed willingness to perform work in the future that would affect the national interest, or can "designation" be imposed upon a facility against its will or at least without its consent?

Mr. LIEBLING. No, in response to your first part. It does not necessarily follow that the facility has to indicate its willingness. I would presume that in a critical world situation or because of requirements of the Defense Department we may initiate the designation of a particular facility. The reason you observed the "yes" or "no" is because we may be talking about facilities where a contract has been phased out and we are not using it now, where we have aircraft, let's say, stored or converted to commercial use, or something like that, but the facility has the capability and we could convert it depending on the national requirements.

Mr. CULVER. When a facility comes for the first time within the operation of either the Industrial Defense Program or the Industrial Security Program, are experienced persons already employed at such facilities subjected to the same screening criteria and procedures as are persons who subsequently apply for employment there? I will state it

somewhat differently, if I may. Is any preference or security of employment tenure afforded the people who are already working at the facility and have, for example, been performing their work there in a manner satisfactory to their employer?

Mr. LIEBLING. I would presume this is an employee-employer relationship and if the contract is curtailed obviously it would be an old bunch of employees; if they are required in another facility, for example, if the space program requirement emerged in Houston, Texas, and we curtailed many programs in New York; so the tenure aspect is a labor problem.

Mr. CULVER. It is a labor problem. Would the same be true for future operations under the personnel screening program that would be authorized by the pending legislation?

Mr. LIEBLING. Yes.

Mr. CULVER. If a longtime employee loses his job because "clearance" is denied, would he ordinarily lose pension or retirement rights? Mr. LIEBLING. You are talking about a labor requirement again. Let me say this:

If a longtime employee loses his security clearance, he still can work in the same facility on an unclassified basis. It does not necessarily mean he is curtailed from employment.

Mr. CULVER. I understand. If so, does the Government compensate him at all in any way for any adjustment if he is forced to take an inferior position?

Mr. LIEBLING. I presume the labor laws would be applicable to him as well as anybody else, the security factor nothwithstanding.

Mr. CULVER. Would the pending legislation make personnel screening requirements with respect to-I think this is the point that disturbs me the subcommittee statement of the principle provisions of this bill stated in the second paragraph, paragraph 1, that the bill, "narrows the type of facilitities" which may be designated as defense facilities. On the other hand in your prepared statement at page you say the new definition of "facility" for paragraph 7 of section 3 "is more comprehensive than the existing law" so that you think it will enlarge, contrary to the subcommittee statement, the total number.

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Mr. LIEBLING. Enlarge the number of facilities that would be involved?

Mr. CULVER. And individuals.

Mr. LIEBLING. I can't comment on what the committee's intent is as such in this. I indicated and I would say again that the increase for this would not be substantial and, therefore, I would consider that, as the committtee proposed, it is narrowed in this sense.

Mr. CULVER. Mr. Liebling, I wonder, would personnel screening programs be administered under the proposed legislation in substantially the same manner as they are under your present authority? Mr. LIEBLING. Yes, sir, they would.

Mr. CULVER. In a case where investigation discloses no reason why an individual should not be cleared who would make the initial, and any subsequent, determination that such an individual was cleared?

Mr. LIEBLING. In the case of Confidential clearances, the contractors are authorized under our Industrial Security Program to grant Confidential clearances at the present time.

Mr. CULVER. The contractors.

Mr. LIEBLING. The contractors can do this.

Mr. CULVER. You mean the facility involved makes it?

Mr. LIEBLING. Yes, under the Industrial Security Program for Confidential, in most areas of Confidential. In Secret and Top Secret, the Government makes the judgment on this, but the requirement for the employee to have access is determined by the contractor and then submitted into the system for a judgment by the Government.

Mr. CULVER. Now, in the case you just described, would the same person make the initial determination, assuming the investigative reports warrant it, that the individual should not, at least without further proceedings and inquiry, be cleared?

Mr. LIEBLING. Again it would depend on the limitations that you laid out for us, but I would answer with a broad statement that, if we have presumed as I answered earlier that we will apply the Industrial Security Clearance Program to the Industrial Defense Program, then my answer would have to be yes, we would use the same procedures.

Mr. CULVER. Would this differ depending upon whether the Industrial Defense program rather than the Industrial Security Program was involved?

Mr. LIEBLING. NO.

Mr. CULVER. There would be no difference.

Mr. LIEBLING. No. We would use the same procedures.

Mr. CULVER. All right.

Thank you. I have a few more questions, but we can all relax.

Now, are the persons making such determinations Government employees in all cases except the one you described with regard to the Confidential clearance?

Mr. LIEBLING. Yes.

Mr. CULVER. Do they have any security of tenure?

Mr. LIEBLING. Do they have security of tenure?

Mr. CULVER. The Government employees making the determination.

Mr. LIEBLING. Oh, yes.

Mr. CULVER. Any independence, such as that supposedly enjoyed by hearing examiners under the Administrative Procedure Act. Mr. LIEBLING. Any independence?

Mr. CULVER. Such as that enjoyed by hearing examiners.

Mr. LIEBLING. Our hearing examiners are Government employees under our program.

Mr. CULVER. Do they have a similar independent status as under the Administrative Procedure Act?

Mr. LIEBLING. NO.

Mr. CULVER. Are such initial determinations that an individual should not be cleared made on the basis of the investigative reports alone?

Mr. LIEBLING. No. A clearance action is initiated on the part of the contractor. It goes to a central activity known as the Defense Industrial Security Clearance Office in Columbus, Ohio, which operates the clearance program for the Department of Defense, and clearance. judgments are made there by experienced people. If any serious derogatory information is developed, then the jurisdiction immediately moves into Washington to my office, and screening boards will undertake to review the investigative findings of the case, and we have specific

procedures laid out under that program under DoD Directive 5220.6, which will be available for the committee. In the case where the screening board will find that the derogatory information is such that we want to further inquire into the questionable areas, we will provide a statement of reasons to the individual, and he is afforded complete due process procedures.

The CHAIRMAN. That is the point I want to address myself to. In other words, if a person is, let's say, branded or about to be branded as a security risk, and he objects to it, he has some machinery to defend himself under due process; does he not?

Mr. LIEBLING. Yes, sir. It is quite thorough and quite effective, and he is afforded due process, and the Government's position is pretty well taken, too.

Mr. CULVER. Would he have access to the investigative report?
Mr. LIEBLING. No, sir. He does not.

Mr. CULVER. He does not?

Mr. LIEBLING. NO.

Mr. CULVER. If not, are there any circumstances in which the reports would be made available for inspection-but not for copying or other dissemination to an attorney who might enjoy the necesssary clearance?

Mr. LIEBLING. No. The statement of reasons provides sufficient information which are the conclusions of the screening board. The statement of reasons is made available to an attorney or to the applicant, and there are sufficient details for him to present his case to the Government and, as I say, it would go through the machinery of due process, and so forth.

Mr. CULVER. In what percentage of the cases, Mr. Liebling, where an initial decision has been made that an individual should not be cleared have further proceedings resulted in issuance of a clearance?

Mr. LIEBLING. In the total cases that we had last year, which are 715 cases submitted where derogatory information was involved, of which 577 were processed by the Government, approvals were granted in a total of 50.3 percent of the cases.

Mr. CULVER. 50.3 percent.

Mr. LIEBLING. Yes.

Mr. CULVER. What are the consequences of a denial of clearance to an individual? For example, if he is an employment applicant, can the employer nonetheless proceed to hire him and forego all, or less than all, Government work?

Mr. LIEBLING. As I indicated earlier, if denied clearance he can be used in unclassified areas.

Mr. CULVER. Could he be hired, or continued in employment, but simply be denied access to classified information?

Mr. LIEBLING. Yes, he can.

Mr. CULVER. Must the employer refuse to hire, or refuse to continue to employ, one who is denied a clearance, or can be just be reassigned? Mr. LIEBLING. There is no Government direction to an employer that he must automatically or absolutely bar an employee.

Mr. CULVER. In the single exception of a case where the total operation was strategic or security in nature.

Mr. LIEBLING. Well, in a case like that I presume the employer would consult with the Government.