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Thank you, Mr. Chairman and Members of the Committee, for the
opportunity to discuss the security and counterintelligence
improvements we've implemented at the Department of Energy; and why I
believe the amendment offered by Senators Kyl, Domenici, and Murkowski
to the defense authorization bill is exactly the wrong way to go in
the wake of the Chinese espionage situation.

I understand that some modifications have been made to the amendment.
However, let me be clear: if the amendment is included in the
Intelligence authorization bill, I will recommend that the President
veto it.

It is abundantly clear that security and counterintelligence have, in
the past, been given short shrift at our weapons laboratories. In the
past, the Department of Energy's security operations were scattered,
with accountability spread too thin across the entire complex. This
practice was amplified by an ingrained lab culture, which tended, at
that time, to only tolerate security efforts -- not embrace them as
necessary parts of a job well done.

This is no longer the case. I have said this many times since my
appointment as Secretary of Energy, nine months ago: no mission has
been more important to me than improved counterintelligence and
security at the Department's National Laboratories. In these past nine
months, these national security safeguards have been vigorously
fortified and improved.


1.  Counterintelligence

Our efforts to improve have been in motion for some time. In February,
1998, President Clinton ordered that the Department of Energy better
its security dramatically, and implement a new, comprehensive
counterintelligence and cyber-security plan.

I have seen improvement. By November, after I had been aboard three
months, the Department had an extensive program in place that included
mandatory background checks for all visitors from sensitive countries;
more rigorous document controls at the laboratories;
counterintelligence experts at our weapons labs; the use of polygraphs
for Department scientists working in sensitive areas; and increases in
our counterintelligence budget -- which has multiplied by a factor of
15 since 1996.

As you know, the Department now has as Director of its
Counterintelligence Office Ed Curran -- a 37-year veteran of the FBI
and the nation's pre-eminent counterintelligence expert.

In March of this year, I announced seven new initiatives, demanding
further counterintelligence upgrades, security training, and threat
awareness, and directed an additional $8 million dollars to further
secure classified and unclassified computer networks.

And in April, when I was informed of the serious security breach at
Los Alamos, I ordered a complete stand-down of the classified computer
systems at our three major nuclear weapons laboratories -- Los Alamos,
Lawrence Livermore, and Sandia. I allowed the system back up only when
I was confident that our computers were secure and that each lab
employee knew their security responsibilities.

2. Security

And we're raising the bar further. Just under a month ago -- on May
11th -- I announced the most sweeping security reform in the Energy
Department's history.

The central element in our Security Reform Package is a new Office of
Security and Emergency Operations -- which clusters all Departmental
security functions under one roof. The Office will report directly to
me. I'm looking for a Czar for this office -- a top general who will
have the clout, the funds and the tools to ensure security is taken
seriously, and that my reforms are carried out fully.

Now, this reorganization has several components:

-- security affairs, consolidating all Department physical security

-- the Chief Information Officer, who will consolidate all the
Department's classified and unclassified cyber-security;

-- a foreign visits and assignments office, to account for all foreign
nationals within the Energy complex;

-- a plutonium, uranium and special material inventory office, to
monitor all nuclear materials under Department supervision; and

-- an independent office to evaluate security and emergency

I have also enacted a zero-tolerance security violations policy, where
breaches or willful disregard for security procedures result in
automatic suspensions.

We're also clearing our backlog of background investigations: the FBI
will now manage our most sensitive inquiries. We're putting new
cyber-intrusion detection systems in place, and we've created
counterintelligence "red teams," which evaluate espionage threats and
act with fitting dispatch.

I have also asked the President to extend the automatic document
declassification deadline for historical records. I was worried that
things were moving a little too quickly. An extension will further
ensure that declassified documents are searched for inadvertently
commingled nuclear design information. It is a balanced strategy that
strengthens transparency with surety, so that we can offer openness
without jeopardizing our security.

An important part of this reorganization is the consolidated security
budget controlled by the security Czar. Security funds will be
separated from program funds, ensuring that security needs and
priorities are not compromised by competing program missions. I am
working with OMB to identify offsets that will allow me to propose
further increases for cyber and physical security in addition to the
$8 million dollar increase the President requested some weeks ago. I
look to have something to the Congress soon.

Finally, I have restructured our field-to-headquarters reporting
relationship. Based on a number of reports on how to improve
management, we have assigned labs, sites, and field offices to three
assistant secretaries who will now be held responsible for those
entities. This will increase accountability and will remove the maze
of responsibility that plagued previous reform efforts.


Now, let me address the amendment offered by Senators Kyl, Domenici,
and Murkowski, and why I strongly oppose this legislation.

a) Undermines Progress on Counterintelligence

First -- and fundamentally -- this language simply undermines all the
work we've been doing on counterintelligence. Under Ed Curran's
leadership, this program will soon be second to none in the U.S.
government, and has received bipartisan support in the Congress.

Making the Nuclear Security Administration (NSA) a separate entity
within the Department of Energy would effectively remove it from
oversight by the new counterintelligence office -- the wrong signal to
send in the wake of the Cox report. Every effort in the past 15 months
at the Energy Department has been focused on uniting our programs
under a strong, disciplined counterintelligence program. This proposal
would dissolve this unifying campaign, and throw the effort into

b) Weakens Safeguards and Security

Second: I have called handing safeguard and security oversight to the
NSA -- as this amendment proposes -- like having the fox guard the
chicken coop.

For some time, GAO reports have painted a bleak picture of Energy
Department safeguards and security. One problem is programs' skimping
on security to better fund projects they find more attractive. As I
mentioned earlier in my testimony, I am proposing a new security
office, led by a "czar" who will set security budgets for each of the
programs. The amendment, on the other hand, would eliminate the
guarantee that security dollars will be spent where they must, and
hands the budget power and oversight power to the administrator of the
NSA. This is a bad idea.

c) Threatens Safety

Third: the amendment also thwarts needed safety improvements. Instead
of an independent safety office, the amendment provides that the NSA
will handle safety. Given the special materials handled by our defense
programs, a rigorous, independent safety program is essential. I
recently committed the Department of Energy to a strict regime of
integrated safety management. The NSA would be exempt from this effort
and from oversight by the Department's environmental safety and health
office. This is a blueprint for safety breakdowns -- dangerous for our
employees, and dangerous for your communities.

d) Weakens the National Laboratories

Fourth: the amendment's language states that the NSA administrator is
assigned responsibility over the national laboratories. As I just
mentioned, isolating the labs is unwise, as it starves these premier
research institutions of much of the interaction they need to excel.
Our labs' scientific health is also advanced through connections to
other Department mission areas -- fossil energy, science, renewable
energy -- and this will be weakened dramatically over time if the
proposal is adopted.

e) Weakens Stockpile Stewardship

Fifth: stockpile stewardship will be undercut. An entity within the
Department will not be able to take advantage of the seat at the
cabinet table presently occupied by the Secretary of Energy. The
Nuclear Security Administration has been set up as an independent
entity and it will grow more independent as time moves on. It will
also be left without a voice in the highest levels of the

f) Budget Influence Will Wane

Sixth: budgetary influence will be eroded if budget-making powers are
given to the NSA, as suggested in this amendment. As I just mentioned,
the NSA will not be represented as a Cabinet agency at the White
House. Instead, it would have to gain access as an entity within the
Department, and would have to obtain resources without the benefit of
having the Secretary of Energy fighting for them. Considering our need
to bolster our national security, this proposition does not reassure

g) Diminished Accountability

Seventh: Neither I nor any other Secretary of Energy will be able to
hire and fire NSA employees. This returns us to the 'lack of
accountability' issue I previously described -- the same one that
helped bog us down in the quagmire we're digging ourselves out of.
Accountability is the linchpin of good management. Yet Congress will
not be able to hold the Secretary of Energy accountable for any
activities of personnel under the NSA. Such an arrangement can not,
and will not, work.

h) End of Contract Accountability

Eighth: the amendment proposes that the NSA be given power over
contracting. Congress has instituted numerous contract reform
procedures for the Department of Energy. But the procedure outlined in
this legislation would lead to less competition in contracting,
running counter to what we need to do.

i) Loss of Local Control

Ninth: the Defense Programs office at the Department of Energy has
been advocating a so called "mega-contract," which would take power
away from communities (in Tennessee, California and South Carolina).
The amendment, however, would short circuit any debate on the merits
of this proposal. And local control over Department facilities and
contracts would be vastly diminished if this proposal is implemented.

j) First Step Towards Military Control of Nuclear Weapons Development

And tenth: the NSA is the first step toward bringing nuclear weapons
design and development under the control of the Department of Defense
-- as is being contemplated in the House of Representatives. This
concept is as wrong today as it was 15 years ago, when the President's
Blue Ribbon Panel chaired by William P. Clark and Jim Schlesinger --
recommended in 1985 against transferring funding for nuclear weapons
to the Department of Defense. The panel concluded that a transfer
would (quote) "undermine the Energy Department's ability to nurture a
technology base and to provide independent judgements on nuclear
weapons safety, security, and control."

Nuclear weapons design and development have remained within a civilian
organization so that security and safety considerations are evaluated
from a perspective independent of that of the end user of those
weapons. To demonstrate the dangers inherent in changing our system,
we need only look at the Russian nuclear weapons program, where
nuclear weapon design and development is under military control.
Following such failed models is plainly not in our national security
interest. I strongly agree with the 1985 panel that the disadvantages
of such a transfer greatly offset any advantages.

Ultimately, this amendment is exactly the wrong tack to take in the
wake of the Cox Committee Report. One reason the China espionage
problem festered at the Department of Energy -- from the late 1970's
to the 1990's -- is that there was inadequate management structure and
information to assure proper Secretarial oversight on Department
programs and labs. For example, the reforms proposed by Deputy
Secretary Curtis in 1996 were only partially executed by the program
and by the labs.

Some 50 years ago, the First Hoover Commission laid the groundwork for
a widely-accepted government principle: that politically accountable
agency heads have legal authorities over their agency. The
Kyl-Domenici-Murkowski proposal would run counter to this counsel,
instead deepening the gap between senior management and the rest of
the Department, exacerbating the management failures that led to the
current crisis. This is exactly the wrong way to go in light of the
recent Chinese espionage revelations. What is needed is more
accountability, not less. What is needed is better oversight and
better coordination, Department-wide, not worse.

I need your help to do my job -- a job that, for the sake of our
nation's security, must be done right. I want to thank the Committee
for giving me a chance to appear on this issue, and I will now gladly
answer your questions.

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