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Can the Pentagon keep classified information safe?

The Pentagon agency responsible for making sure contractors are properly handling classified information is having a tough time doing its job.

The Defense Security Service (DSS) has had "recurring" troubles overseeing contractors, according to a November 2009 survey of agency employees. The Project on Government Oversight (POGO), a contracting watchdog group, got its hands on an internal agency e-mail, dated Sept. 16, that has employees saying they're concerned about a "lack of resources" at DSS to "accomplish the mission."

According to a source at DSS with whom POGO officials said they talked, the problems at DSS include having a lack of trained and experienced personnel who are "on-the-ground examining what systems contractors have in place to protect classified information."

DSS is said to now be conducting a follow-up survey that asks employees, among other things, questions about having enough pens, paper clips and working copy machines. A source inside the agency has told POGO that the greater concern is not the agency's office supplies but the lack of trained personnel.

With the government using more private contractors to help it do everything from run missile systems, maintain classified databases and analyze intelligence information on terrorist networks, POGO says the DSS report is worrisome.

"As the government's secrets are increasingly placed in the hands of private companies we need to ensure that these companies can protect our nation's crown jewels," said Nick Schwellenbach, POGO's director of investigations.

POGO points out that DSS's outgoing director and the Government Accountability Office have said improvements need to be made at DSS.

Kathleen Watson, the director of DSS, who is expected to leave the agency this week, told Congress in April 2008: "When I came to this agency two years ago, it was broken across the board, and it took a year to figure out where the problems were and design a transformation plan. We just got our resources six months ago.

"This is an agency in transition," she said. "It will be an agency in transition for as long as I am there. We have a lot of work to do; and, in my view, we have just started."

In its audits of DSS, the GAO has raised concerns about DSS's ability to ensure classified information is kept secure as contractors at some 11,000-plus facilities work with the Defense Department and dozens of other top-secret agencies. In one report, GAO auditors said DSS couldn't "provide adequate assurances to government agencies that its oversight of contractor facilities reduces the risk of information compromise."

It also said the agency didn't follow proper procedures in reviewing 93 cases where a contractor reported a violation and possible compromise of classified information.

By Dana Hedgpeth  | October 5, 2010; 1:47 PM ET
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DSS has long being the dumping ground for "entitled" personnel in the DOD that needed to be pushed up (promoted) but were not considered for vital national security positions. Following a push to rid the organization of the "old guard" (former DOD intelligence and security males) the Clinton Administration pushed for and got more women in upper management positions and as new hires. The old system of hiring military veterans from the intel and security arena no longer applied.

Consequently after many mishaps with the new management personnel pushing out the legacy staff, DSS went though a series of Directors, all without a clue to the actual mission of the service. The name was changed on a whim from the Defense Investigative Service to the Defense Security Service or DSS, thereby forcing the DOS's Diplomatic Security Service (DSS) to change their acronym.

The dual mission of the service was never understood by management and the Industrial Security side of the service which had 15% of the service assets and its mission to protect government classified information at contractor facilities were shunted aside for the larger Investigations side of the house.

Only later when after a series of new directors (and new senior staff, usually old friends brought in) came the realization that the investigative side of the service (3,000 agents) would be going to OPM and all that would remain was the 500 or so Industrial Security Representatives. A realization was also made that the number of 500 field representatives could not justify the extremely high amount of SES, GS-15, and GS-14 positions at the headquarters of DSS.

At that point the decision was made to hire more field representatives, but instead allowed transfers from the investigative side to the industrial side.

What was not understood was that the experienced representatives had been pressured to retire early leaving only inexperienced reps and with the influx of investigative agents into the industrial side, there was no one left with any experience.

Also not understood by DSS management was that the years it takes to train a field rep. The industrial reps required years as a physical security, information security, computer security, signals or electronic security, as well as an understanding of business structures and the impact of foreign owners.This requires years of experience (think experience in military service).

What Kathleen Watson inherited was a dysfunctional agency with an inexperienced middle management and unknowing senior management.

The field reps on hand were largely inexperienced and untrained. Coupled with a management with an attitude, security issues were not recognized nor addressed, and unfortunately in many instances, ignored or covered up.

My suggestion would be to go back to the pre70's approach to have each user agency with classified at contractor locations do their own security assessment.

Posted by: dodavatar | October 5, 2010 10:10 PM | Report abuse

Seems most often, "keeping classified information safe" involves oversight of newspaper reporters, homosexuals in the military, and H1B Visa holders rather than contractors.

Posted by: EllEyeBee | October 6, 2010 10:20 AM | Report abuse

forget about classfied information, where will they get money for pens and paperclips?

Posted by: beltwaybandit2 | October 6, 2010 1:41 PM | Report abuse

RECOMMENDATION:A few years ago, the military departments (Army, Navy, Air Force) expressed their concerns about the performance of Defense Security Service (DSS) and proposing the disestablishment of DSS and having the military departments assume the security oversight of the contractors.The USD(I) looked at the proposal and decided to continue security oversight with DSS and to maintain the status quo.At the time, the military departments were not specific in how they would implement the security oversight.Maintaining DSS is the focus of its senior management and not the mission to protect the classified.There needs to be some consideration again to disbanding DSS and having the military administer their classified in the hands of cleared defense contractors. This may be the best alternative if DSS does not return to their stated mission and re-establish their integrity. As a veteran, taxpayer, & concerned citizen, it is recommended that DSS be disestablished and the military departments assume the functions and responsibility for the National Industrial Security Program (NISP) for these reasons:
ABUSE OF POWER:Former agency Dir. Kathleen Watson and her subordinates have successfully rid the organization of knowledgeable personnel. Watson actively participated in the ugly treatment of employees in this process. Her Director of Field Operations, Richard Lawhorn conducted the purge with malice and forethought. He doles out promotions or creates “do little” positions to keep his select employees beholden or “loyal” to him. Long time industrial security field staff or field office chiefs/middle managers with experience were shut out from promotions. Lawhorn’s management selectees have less than 2 years experience with DSS or are from the ranks of the unemployed and are desperate for a job. Once employed or promoted these persons may be called upon to lie about someone targeted for removal. Then another such beholden or “loyal” employee will swear to the lie and is subsequently rewarded with an appointment to a position such as Field Office Chief, Regional Director, or Deputy of this or that created SES position. This orchestrated duplicity is how Lawhorn has ensured the loyalty of his management staff. They are loyal to him for the sake of job retention and not mission driven. This environment is ripe for DCIPS abuse and that has already been demonstrated.
DSS has a daunting task with over 12,000 CDCs in the NISP and 400 field personnel to implement the program. There are another 400+ HQ employees and managers that never set foot in the field. The agency has been understaffed for years and minimal efforts have been made to actively recruit let alone retain qualified candidates. This has become a national security vulnerability.DSS needs to return to its mission of protecting the warfighter by securing the classified and be lead by persons with ethics and integrity; OR it needs to be dissolved and the mission returned to the military departments.

Posted by: TracyVerdi | October 6, 2010 11:15 PM | Report abuse

I agree with much of what dodavatar said. There are a couple of additions and clarifications I wish to add.

The period of time I view as the era of PSI trying to coopt the entire agency, roughly from the early 1990's to the mid 2000's (reference the A-76 Studies). Even before PSI was sent off en masse to OPM, there were problems. In some cases, PSI employees with no understanding of the importance of the Industrial Security Mission were put in place as Office Chief's of combined PSI/ISP offices.

There appeared to be some insider good old boys thing going on with at least some of those office chiefs. From what I have learned, a lot of waste, fraud, abuse and just plain arrogant irresponsible actions were committed during that time by them.

PSI managers made a run for ISP program money, and took it at will at the local/regional office level. ISP employees were left with insufficient funds to meet the requirements of their stated official mission. ISP reps were not given what they needed to do their jobs, and then were beat up by managers for not doing their jobs. There are many compelling and quite horrifying stories that employees from those years can relate.

These ISP reps suffered at the hands of these unqualified office chiefs, who made up what they did not know about the National Industrial Security Program with bullying and empire building.

This went on for some time, and no one in upper agency management did anything to address the problems, seemingly because the good old boy network extended into upper management. Richard Lawhorn was in management at that time, and was fully a part of those shenanigans. Some of the others were forced out or allowed to retire, as the corrupt and destructive management behavior continued. Richard Lawhorn is still there; it appears to me he has built himself an empire which has allowed him to remain pulling the strings and manipulating the workplace for the field offices, while directors have come and gone.

Hiring people who have the prerequisite knowledge, skills, ability and the aptitude and attitude to continue to learn new information, develop new specialized skills and expertise is extremely important in the type work that DSS ISR's must do if they are to fulfil their real mission, as defined by Executive Order 12829 and delegated by OSD. I do not agree that military experience is necessarily the key to being a competent and skillful ISR. DSS has hired former military into ISR and other positions, but that background is not a guarantee of ability to excell in performing challenging ISR responsibilities.

The reinvention effort of the 1990's though not all negative, opened the doors to major problems,of increasing influence of contractors on the inspection and oversight roles of DIS/DSS employees. It appeared to this observer that there was a a lot of revolving door use between DSS and defense contractors as well. Quality training in DSS has ceased to exist.

Posted by: gfs2010 | October 7, 2010 1:57 AM | Report abuse

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