WRITTEN STATEMENT OF MR. LOYD WRIGHT, CHAIRMAN OF THE COMMISSION ON GOVERNMENT SECURITY, FILED WITH THE POST OFFICE AND CIVIL SERVICE COMMITTEE, U.S. HOUSE OF REPRESENTATIVES, CONCERNING H.R. 8322, H..R. 8323, AND H.R. 8334.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00965R000500030008-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 31
• Document Creation Date: December 9, 2016
• Document Release Date: October 27, 1998
• Sequence Number: 8
• Publication Date: July 16, 1957
• Content Type: PREL

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For Release: 10 A.M., July 16, 1957
WRITTEN. STATEf,NIT OF 1, 111. LOYD WRIGHT,
CHAIRMAN OF THE COUbISSION ON GOVERNI~,'ENT
SECIRITY, FILED 114ITH THIS POST OPTICS AND
CIVIL SERVICE COIrIVIITTEE, U. S. HOUSE OF
REPRESENTATIVES, CONCERNING H.R. 8322,
H.R. 8323, and H.R. 8334.
Mr. Chairman and Members of the Committee on Post office and
Civil Service. In my oral statement, I sununarized for the Committee
the reasoning behind some of the principal recommendations of the
Commission as set forth in its Report transmitted to the Congress and
the President on June 21, and as embodied in the Bills before you.
The purpose of this additional statement is to enlarge upon my oral
statement for the record and to analyze in greater detail the various
chapters and sections of these Bills.
The purpose of each of these Bills is stated to be:
""To establish a Central Security Office to coordinate the
administration of Federal personnel loyalty and security
programs, to prescribe administrative procedure for the
hearing and review of cases arising under such prograns,
and for other purposes."
Each of these Bills is identical with the exception of certain
differences in Section 101, concerning which I will refer later. Also,
with the exception of Section 101., H.R. 8322 and 8323 are identical
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with legislation proposed by the Commission beginning on page 691, of
our report. H.R. 8334 is identical with the legislation we proposed.
Section 2 of each pill defines certain terms. The definitions
are generally clear. I would like to point out particularly, however,
as stated in definition No. (7), that the term "civilian employee-!,
means any officer or employee of any executive agency other than the
Central Intelligence Agency or the National Security Agency. That
wording simply means this: The. Commission has recon'iended a program
for civilian employees based on considerations of loyalty. We further
recommend that the procedure of this program extend to all civilian
employees with the exception of those employed by the CIA and the NSA.
These agencies by their very nature must be given the authority to
depart from normal security practices. Convex Iey, they should, of
course at a minimum observe the basic standards and criteria relating
to removal recommended for all employees.
Chapter 1 and Chapter 2 are concerned with the establishment,
functions and operation of a Central Security Office, As stated in
our report, the creation of a Central Security Office is perhaps the
most important recomanendation made by the Commission. We recognize
that the implementation of this recommendation would be a major step
in the administrative machinery of our government. Because of its
great significance I would like to devote a few moments to discussing
its necessity and proposed operation.
In brief, the purpose of the Central Security Office would be to
provide procedures for the hearing and appeal of security and loyalty
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oases and to assist in the coordination of the civilian employees,
program, the industrial security program, the port security program,
the Commission recommended civil air transport security program,, and
the document. classification program. It would also provide hearing
examiners to hear cases concerning. organizations the Attorney General
proposes to designate on the so-called Attorney General's List. I
want to make it abundantly clear at the outset that the Central
Security Office would in all matters be advisory only to the heads of
the appropriate agencies. It would have no final authority and its
rec anmendationw would not be mandatory. Only the President would
have the authority to order changes in executive operations. The
Commission studied each of these programs individually and as a com-
posite whole. litany deficiencies were discovered in the separate
programs and specific recommendations for correction were made
accordingly. In addition, our study disclosed many weaknesses that
ran across the board and could be found in greater or lesser degree
in all of the programs. Some of these defects were, for example ---
1. Lack of uniformity in the preparation and application
of rules and regulations.
2. Lack of coordination between agencies and between
divisions of the same agency.
3. Duplication of forms and records.
4. Duplication of investigations and clearances.
Wide dispersion of responsibility among personnel,
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6. Lack of training and guidance of personnel.
7. Lack of uniformity in screening procedures.
8. Lack of uniformmity in hearing procedures.
In short, perhaps the outstanding thing about our various security
programs is their dissimilarity with one another.
Thus. for example -- The hearing boards under the civilian employees'
security program are composed of goverment employees having regular,
normal duties and responsibilities in their own agencies. The Civil
Service Commission maintains a roster or panel of more'than 1,800 such.
employees who are available when needed consonant with their regulgr
agency work. Although they are required to be individuals of "integrity,
ability and good judgment." certainly fundamental qualifications I hope
for arty employee, there are no special qualifications for service and
no training is required or given.
The Department of Defense and the Atomic Energy Commission, on
the other hand, operate their own hearing boards under the. industrial.
security program; and the Coast Guard has a separate system under the
port security program. At present there is no air transport security
program and, of course, no provision for any hearings at all.
Now while these programs are different in many respects and must
of necessity retain certain individual differences, they do have essen-
tial similarities. Each program is concerned with the protection of
the nation's security from a common enemy each program deals with
.individuals and their right to employment each program should be
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concerned with ensuring that in its basic elements it provides equal
protection for the nation end equality of treatment for the persons
it affects.
Yet despite the fact that the Federal Government has operated
these programs for years, there is still no central point of coordi-
nation -- no provision for insuring that the programs carry out a
single government policy with some degree of uniformity.
Similar disparities in operation and lack of uniformity can also
be found in the matters of screening, selection of security personnel,
training of security personnel, and even in the basic manuals of rules
and regulations.
Now I would be ingenuous indeed to deny that these programs have
functioned with varying degrees of success. I an confident that
through the efforts of the heads of the various agencies, assisted by
their security personnel. and the menbers?of hearing boards, that many
an individual of hyphenated loyalty has been properly removed from the
public rolls or denied access to classified information or restricted
areas. I realize full well also that there is no advantage in having
"uniformity" for the sake of "uniformity"t itself. Our studies have
shown unquestionably, however, that these programs operating sui juris
have been far from efficient, and, in many instances, have been the
cause of cruel injustices to individuals and their families because
of inept handling of individual cases by inexperienced or untrained
personnel, undue delays, and scineti.mes plain ignorance of the govern-
ment policy involved.
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So much for the negative side of the picture. The fact that our
security programs were the, subject of grievous complaint was publicly
known long before the Cormission on Government Security was created.
In fact, it was because of these complaints that the Commission was
brought into being. Let us consider now the positive advantages to
be obtained by the enactment of the legislation before you.
Under Chapter 1 of the Bills before you, the Central Security
office would be an independent office subject to the direction of the
President. It would be a small office with a Director, and Assistant
Director for Hearings, and an Assistant Director for Administration,
each of whom would, be appointed by the President. There would be a
Central Review Board consisting of three members, also appointed by
the President.
The hearing examiners would be selected Fran a special Civil Ser-
vice.register and would be required to meet such special qualifications
as the Commission prescribes after consultation with the Director.
Further, each examiner would be obliged to complete a special training
course. The ex,sniners would be assigned to hear cases under the ci-
vilian employees' :Loyalty program, the industrial security program,
the port security program, and, if the Commission's recommendation is
followed, under a civil air transport security program to be established.
Are indicated previously, they would also conduct hearings concerning
organizations proposed for designation on the Attorney General's List.
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The Commission felt that the use of specially selected, trained,
full-time hearing examiners in such cases is not only an advantage,
but a, necessity. The hearing of a loyalty or security issue is a
grave and often complex matter. The task of sifting evidence; of
separating truth from falsehood; of evaluating the significance of
past activities and associations; of determining the existence or
nonexistence of reasonable doubt or danger to the common defense and
security should be entrusted only to specially selected, qualified,
full-time examiners. our experience with hearing examiners under
the Administrative Procedures Act, and with special matters in
Federal and State Courts,. particularly where the issues are compli-
cated, is ample evidence of the benefits to be expected through their
use.
The use of hearing examiners in the several programs should pro-
mote uniform equitable treatment for persons called before them,
insure that the Government's interests are adequately and continuously
protected, lessen hearing costs and expedite hearing procedures.
All other employees including the hearing examiners would be
appointed subject to Civil Service laws and the Classification Act
of 1949, and to the satisfactory completion of a full field investiga-
tion by the Civil Service Commission.
Chapter 2 provides for coordination of the Loyalty and Security
Programsby the Centre]. Security Office, Under Section 20 the Director
would provide training programs for officers and employees of the
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Office and instructional conferences for the security officers of
the executive agencies. It is fundamental, of course, that the
personnel of the Central Security Office itself should be afforded
training not only in appropriate technical subjects but in constitu-
tional and related matters affecting Federal service. The instruc-
tion of agency security personnel is similarly important. Today
there is no governmental training program, formal or informal, and
the degree of indoctrination and instruction furnished varies from
agency to agency and program to program. It is not the Commission's
suggestion that formal training for security personnel-be provided
through or conducted by the Central Security Office. It does believe,
however, that conferences for the purpose of briefing on current
problems* and discussion will help immeasurably in increasing the
efficient operation of each program and uniformity throughout.
Under Section 21 the Director would conduct continuing surveys
and inspections of the regulations and the practices and procedures
of executive agencies in the operation of loyalty and security programs --
including among other matters screening practices, training programs,
and the classification of documents.
The surveys would be used to determine for example whether existing
classification procedures result in overclassification of information
and whether they effectively provide for the declassification of informa-
tion when the need for its classification has ended.
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This is a matter of vital significance. The tendency of score
agencies to overclassify or to retain information in a classified
category longer than required must be subject to a continuing check
to insure that declassification procedures have been provided and
are in fact in operation. The maxi.murn information concerning govern-
meet operations must be freely available to the Congress, public and
the press. It is very important that the Congress, as well as the
agencies involved, thoroughly understand that it is not the intention
of the Commission on Government Security that the .central. Security
Office employees will have my authority to examine individual files
or documents in any agency other than those concerned with such pro-
cedures and practices.
Under Section 22 the Director would receive, evaluate and investi-
gate complaints made by Government contractors concerning requirements
iarnposed on them for security reasons. The Director would endeavor to
work out problems with the contractors and the appropriate agencies.
Under Section 23 the Director would compile and maintain statistical
records concerning essential developments in the loyalty and security
programs. The compilation and correlation of statistics is one of the
principal means of judging the operation and effectiveness of any pro-
gram. The Commission felt that statistics should be particularly main-
tained for the use of the :Director and for the information of the Congress
and the President.
Section 214 is of great importance. It gives the Director the recponsi-?
bil.ity to promulgate rules and regulations for the conduct of employees of
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the Central Security Office, for the conduct of hearings and review
proceedings, and finally, in consultation with the Goverrnnent depext-
ments and agencies, to furnish advice and guidance for the purpose of
establishing uniformity in the loyalty and security programs generally.
The necessity of bringing a high degree of uniformity to the various
sets of rules and regulations appeared obvious to the Commission. In
the industrial security program, while there are basic industrial
security manuals, each of the three military services issue their own
interpretative guides and regulations -- the Atomic Energy Commission
has its own set of regulations. In the Civilian ]nployeest Security
Program each of the more than 60 departments and agencies issue their
own regulations. While they are in many ways substantially similar
to sample regulations promulgated by the Department of Justice in
April of 1953, there are wide discrepancies and there is no procedure
for keeping them in line with current overall government policy. While
the problems of particular agencies and programs necessitate certain
differences in regulations to meet differing situations, coordination
through the Central Security office will help promote uniformity where
uniformity is needed, particularly in the application of the loyalty
and security standards and implementing criteria to particular fact
situations.
Under Section 25 the Director would be obliged to submit an annual
report to the Congress and the President on the operation of the Centrv3.
Security Office and of each loyalty and security program. You will also
note that under Section 25 (b):
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"Upon request made by the President, the Congress
or either House thereof, or any duly authorized
coiinittee or subcommittee of either House of the
Con ress, the Director shall make a special report
concerning the operation of any loyalty or security
program." (emphasis supplied)
The Commission felt that adequate and intelligent reporting is
essential. The Central Security Office activities should be open
for inspection, consonant of course with security considerations in-
volved in individual hearing or appeal cases. Adequate statistical
and other reporting will give the Director the opportunity to recom-
mend changes believed needed in the various programs as observed from
his central vantage point. It will, for the first dame, give the
Congress and the President the opportunity to keep continuously advised
of the developments in and progress of those programs in order that
corrective steps may be taken as may be indicated or recommended.
Chapter 3 provides for hearing and review of loyalty and security
questions. Section 30 (a) provides that whenever any civilian employee
or applicant for employment is entitled by for or executive order to a
hearing under the loyalty program, the hearing shall be conducted in
accordance with the provisions of Chapter 6. This would be applicable
to hearings conducted under the proposed civilian employees loyalty
program described in Chapter 1.
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Section 30 (b) provides that whenever an individual who is not
an employee of an executive agency is entitled under any security
program to a hearing, that hearing shall also be conducted in
accordance with the provisions of Chapter 8. This paragraph would
apply to individuals in connection with the industrial personnel
security programs described in Chapter 5, to individuals under the
port security program, and to individuals under the air transport
security program, if the latter is established by legislation as
recommended by the Commission.
Section 30 (c) provides for hearings on request of organizations
which may be designated for inclusion by the Attorney General on the
so-called Attorney General's Ii.st referred to in Section 60 of these
Bills. The Commission's recaamendation for the retention of the
List, with certain modifications, will be discussed later under
Section 60.
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Section 31 provides for review of adverse decisions in any type
hearing by the Central Review Board which would be located in the
Central Security Office. ,The operations of the Central Review Board
will be discussed later under Chapter 9.
Chapter 4 outlines the civilian employees loyalty program and the
procedures to be observed by an executive department or agency in
determining the loyalty of an employee or an applicant for employment.
Sections 40 (a), (b), (c), (d), and (e) describe the investigative
requirements. No person would be permitted to enter the Federal civilian
service until an investigation or national agency check had been completed
except where the head of the agency determines an emergency condition
justifies exception. Tn such a case he would be tendered employment
conditioned upon a favorable determination as to his loyalty and suit-
ability upon completion of the investigation. In brief, a national
agency check would be made with regard to each applicant considered for
appointment to or employment in any non-sensitive position. A full field
investigation would be made with regard to an applicant considered for
appointment to or employment in a sensitive position, or in the case of
an employee considered for transfer from a non-sensitive position to a
sensitive position. Full field investigations would be made, as is the
present practice in most instances, by the Civil Service Commission with
the requirement that if an investigation discloses derogatory subversive
information, the matter shall be referred to the Federal Bureau of
Tnvestigation for a full field investigation by that agency.
This proposed legislation, which is based upon the Commissionts
recommendations, retains without substantial changes the desirable
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features of the investigative requirements of the former loyalty program
and the current security program. The loyalty program proposed by the
Commission and in these Bills can only be as effective as the quality of
the loyalty investigations made and the Commission strongly urges that
appointment or employment, based upon the completion of an adequate
investigation and favorable determination, be continued.
Section 41 provides for the screening and evaluation of information
contained in reports of investigations of civilian employees and appli-
cants for appointment or employment. In brief, this assignment in each
agency would be handled by specially qualified personnel. Whenever a
screening officer determines that .a. report contains derogatory informa-
tion relating to loyalty, the officer shall grant to the individual con-
cerned an opportunity for an interview in which he may offer his explana-
tion of that information. Under present practice there is no requirement
that an employee or applicant be interviewed. The Commission's survey
indicated that many cases would never have reached the hearing stage with
consequent hardship to the individuals involved and needless administrative
effort and cost to the Government, if opportunity had been given for
employees to explain certain information in investigative reports. It
therefore recommended, as these Bills state? that such an interview
be a mandatory part of the loyalty procedures.
If,-following such interview and additional investigation, if needed,.
or in the event an interview is declined, or the screening officer deter-
mines that the issuance of a letter of charges is justified, he shall
prepare and transmit such a letter to the individual which shall be as
specific and detailed as the interests of the national security permit..
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The letter must also advise the individual of his right to a hearing. Before
the letter is issued, however, the screening officer will obtain the opinion
of the appropriate legal officer of the agency on its sufficiency as outlined
in Section 41 (d) of the Bills.
Under Section 14 (e) if an investigative report discloses information
indicating that a civilian employee or applicant may be unsuitable on any
ground other than doubt as to his loyalty, such case will be handled in
accordance with the regular Civil Service suitability procedures. I should
note at this time that one of the basic recommendations of the Commission
is that loyalty cases be completely divorced and handled separately from
cases which involve elements of personal unsuitability for Federal service.
Under the present security program many of the factors to be considered in
determining whether an individual is a risk to the national security are
regular suitability factors and, in fact, the majority of Federal employees
who have been dismissed under the current program as security risks were
processed under the regular Civil Service procedures. The Commission's
recommendation and these Bills thus would prevent the unjust stigmatizing
of persons actually terminated because of general unsuitability for Federal
service.
Section 42 describes the procedures to be followed in loyalty hearings
and determinations. In brief, whenever an individual has received a
letter of charges as described under Section 41, he will have the oppor-
tunity to file a sworn answer thereto and request a hearing upon those
charges. When a hearing has been requested the agency screening officer
shall transmit a copy of the letter of charges and all papers filed by
the individual to the Director of the Central Security Office for filing
and a hearing in accordance with the provisions of Chapter S. When
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following a hearing the agency head.dete~mtnes that there is ..xea nable
doubt as to the loyalty of the individual, the, latter, ma y, nyake, written
application to the agency head for a review cf such determination. The
agency head shall forward that request, together with all documents and
records pertinent thereto, to the Director of the Central Security Office
for review by the Central Review Board. If the individual fails to make
timely application for such a review, the agency head determination shall
become final and conclusive. This finding shall be binding upon the head
of every other executive agency in the absence of a further determination
to the effect that new information warrants a rehearing of the individualts
Section 43 provides for transfer and suspension of civilian employees.
I should note that Public Law 733, 81st Congress, which is the basis o
the current security program, requires suspension without pay where derog-
atory information is developed before an employee can. be given a hearing
or terminated. Under the provisions of Section 43 where a screening of-
ficer receives information which indicates that reasonable doubt may exist
as to loyalty of an employee occupying a sensitive position, an effort
would first be made to'transfer that employee without reduction in salary
to a non-sensitive position within the agency. If there is no vacancy
permiting such transfer, the employee would be suspended with compensation
at his present salary rate. The investigative agency would give priority
to the investigation of employees who have been transferred or suspended.
Tf the determination by the head of the agency following a hearing is
favorable to a transferred or suspended employee, he shall be returned to
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his regular position. Tf the determination is unfavorable to such
employee and there is timely application for review by the Central
Review Board, the employee shall be suspended without compensation
pending final determination by the agency head following such review.
Where an individual has been so suspended without compensation and the
head of the agency determines that reasonable doubt of loyalty does not
exist, he shall be restored and paid a sum equal to the amount of com-
pensation he would have received for the period of his suspension reduced
by the net amount of compensation he actually received for personal
services during the suspension period.
One of the unfortunate requirements of the present program is the
requirement of mandatory suspension without pay. Hundreds of employees
who were summarily suspended under the law have been reinstated with
resulting hardship to the employee and expense to the Government. The
Commission's recommendations as embodied in this section, by providing
for a transfer, if possible, to a non-sensitive position and by suspension
without pay only where there has been initial finding of reasonable doubt
of loyalty, should therefore benefit both our Federal personnel and the
.Government.
Section 44 provides that the case of any civilian employee or applicant
whose loyalty has been adjudicated or readjudicated under the provisions
of T;xecutive Order 10450, upon which the present security program is based,
shall not be readjudicated under the provisions of this proposed legisla-
tion in the basence of new evidence. The purpose of this section in to
eliminate the further harassment of individuals who have already been
processed.
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Chapter 5 establishes the procedures to be observed in the Indus-
trial Personnel Security Programs. Every Executive agency engaged in
the procurement of goods or services from Government contractors shall,
if such procurement involves access by contractor representatives to
classified information material, or to a security facility, establish
and administer a security program to prevent access by untrustworthy
individuals to such information, materiel, or facility.
Provision is made that any such Government contractor shall enter
into a security agreement under, which the contractor will be obliged to
withhold from any individual access to information and security facilities
of any classification unless that individual holds a security clearance.
The contractor must also incorporate in any sub-contracts such security
provisions as may be prescribed in the original security agreement with
the contracting agency.
Section 51 provides for the investigation of contractor representa-
tives< In brief, ;security clearance shall not be granted for access to
any information or security facility classified Secret or Atomic Secret
unless a National Agency check has been made. If such check discloses
derogatory subversive information, the matter shall be referred to the
FDI for a full field investigation. Security clearance for access to
any information or security facility which has been classified as Top
Secret or Atomic Top Secret will not be given unless a full field investi-
gation has been made by the investigative organization of the contracting
agency or the Civil Service Commission. The disclosure of derogatory
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subversive information during such investigation will again necessitate
the.referral of the case for a full field investigation.
Section 52 provides for the evaluation of personnel investigations
under the industrial security program. The procedure is substantially
similar to the procedure previously described in connection with the
evaluation of personnel investigations under the civilian loyalty program.
Provision is made for each case to be screened by specially qualified
officers, for the individual in question to be granted the opportunity
for an interview, and for the transmission of an appropriately detailed
..letter of charges.
Section 53 provides for security hearings and determinations. The
procedures here are also substantially similar to the procedures set forth
in Section 42 regarding civilian employee loyalty hearings and determina-
tions.~ As in the civilian program, provision is made for a review of an
adverse agency head, determination and for final determination by the agency
head. Such final determination shall be binding upon the heads of all
Executive agencies.
Chapter 6 is concerned with the designation of subversive organiza-
tions by the Attorney General. The Commission felt that the use of such
a list is a necessary part of the investigative process in connection
with the various loyalty and security programs. Were such a list not
available, the Attorney General would still be obligated to advise the
various departments and agencies as to the character of organizations to
which employees or applicants for employment belong or have belonged in
the past. The Commission also felt, however, that it should sharply
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delineate the procedures to be observed by the Government before any
organization is designated to the list.
Sections 60 through 66 of the Bills embody the Commissions recom-
mendations. Tn brief, Section 60 provides that the Attorney General shall
maintain a list of the names of organizations determined by him to fall
into certain categories.
Section 60 (a) sets forth the criteria to be used by the Attorney
General in making this determination. As is the present practice, no
organization shall be so determined unless it has been investigated by
the FAT. and, in addition, has been given an opportunity for hearing and
review in conformity with the provisions of this Chapter.
Section 61 provides for. appropriate notice of the proposed designa-
tion to be given to the organization in question.
Section 62 provides for the notice the organization may file with
the Attorney General indicating its desire to contest the proposed
designation.
Section 63 provides that the Attorney General shall transmit to the
organization a statement of the grounds for the proposed designation and
such written interrogatories as he considers necessary to obtain facts
pertinent to those grounds. Failure of the organization to respond to
such interrogatories shall constitute an acquiescence in the proposed
designation. The organization may, however, in connection with its
reply to the interrogatories request a hearing before the Attorney General.
Section 64 provides procedures for a hearing. In brief, the hearing
would be conducted by a hearing examiner under the supervision of the
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Central Security Office and following such hearing the Attorney General
shall make his determination. If no timely application for such a hearing
is made, the Attorney General may proceed and make a final determination.
Section 65 provides procedures for a review of unfavorable determina-
tions by the Attorney General. Upon the filing of timely application for
such a review, the Attorney General shall forward the application and all
documents and records pertaining thereto to the Director, for review by
the Central ReviewDoard. On receipt of the advisory report of that Board,
the Attorney General shall make his final determination. Again, if following
a hearing and an unfavorable determination, timely application for review
is not made, such determination shall become final upon the expiration of
the filing period.
Section 66 provides that any final determination made by the Attorney
General in conformity with the provisions of this Chapter shall be con-
clusive and may not be questioned or reviewed by any officer, Executive
agency or court.
Chapter 7, Section 70 (a) sets forth the basic loyalty standard;
namely, "No individual may be appointed, employed, or retained as a
civilian employee if, upon all information, there is,reasonable doubt
as to his loyalty to the Government of the United States."
Section 70 (b) sets forth the criteria which may be considered by
the appropriate security personnel and agency heads in determining whether
there is reasonable doubt as to the loyalty of any individual. As indi-
cated in section 70 (c), the suggested criteria are not all inclusive.
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They are set forth merely as guide lines for officials in carrying out
their responsibilities.
Much controversy has arisen in the past concerning the significance
to be given to the membership of individuals in or the association of
individuals with certain organizations. The evaluation of such associa-
tions is a. difficult task requiring skill and experience in security
matters. For the assistance.of agency heads and their security personnel,
the-Commission recommended certain additional considerations which should
be taken into account in making. such a judgment, and these considerations
are set forth in section 70 (d).
Section 71 (a) sets forth the basic security standard to be observed
in connection with the various industrial security programs; namely, that
security clearance will not be granted '?if it is determined in accordance
with the provisions of this Act, on the basis of all information, that
his possession of such Olesrance?will endanger the common defense and
security.'!
You will note that the basic standard with regard to industrial
security programs is a security standard whereas the standard for Federal
civilian employees is a loyalty standard. The reason for the distinction
is as follows:
Under the Commissiont's recommendations, the loyalty program
would,be complemented by the regular suitability program which is
the basis of the Federal. personnel system. It was felt, as T
indicated previously, that distinction should be made between
loyalty and other suitability considerations.
The problem of granting a security clearance, however, involves
both loyalty and suitability considerations which the contracting agency
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must consider jointly. There are certain suitability disqualifications
quite apart from the question of loyalty which would render an individual
unfit to be granted access to classified information or security facili-
ties. The Conmission felt that under these conditions the standard as
recommended would be the most workable.
Section 71 (b) sets forth the criteria which may be considered in
determining whether the possession of a security clearance will endanger
the common defense or security. The criteria are similar to those set
forth with regard to the civilian loyalty program except that certain
suitability factors have been included.
Chapter 8 details some of the special procedures to be followed in
loyalty and security hearings, the most important of which are:
1. That the determination whether any applicant shall be entitled
to a hearing or the determination of questions presented by any letter
of charges filed for a hearing shall be governed by the law or executive
order applicable to the particular progrtn.
2. That priority of hearing shall be given to cases which involve
suspension from duty of civilian e.nployees because of the existence of
doubt as to their loyalty.
3. That an examiner shc,l have the power of a district court of
the United States to issue process to compel witnesses to appear and
testify and to compel the production of other evidence. This right of
subpoena is subject to certfa_in qualifications to which I will refer later.
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4. That the individual charged may be represented at his own
expense by counsel.
That, while the rules of evidence applied by courts need not be
applied in hearings, nevertheless the evidence shall not be received unless
it is relevant to one or more of the allegations in the letter of charges.
6. That the individual charged may tr esent evidence and rebuttal
evidence in his own behalf which may include evidence as to his character
and reputation as well as his demonstrated appreciation of the need for
the protection of the national security. This latter point is significant
particularly in security hearings. The Commission felt that an individual's
positive contribution to the national security- should be considered along
with any factors w1lich may indicate that his access to classified informa-
tion materiel or security facilities may endanger the national security.
7. Only the examiner, personally assigned for official duty at a
hearing, the party charged, counsel for the individual and the Government
and witnesses may be present at a hearing. The Commission felt that the
informal atmosphere of hearings thus restricted is more conducive to an
impartial determination. of the facts. Whatever advantages open hearings
might offer in protecting the individual's rights have been adequately
provided for in the many procedural safeguards afforded the individuals
under the proposed loyalty and security programs.
8. A verbatim, stenographic transcript of all proceedings would
be made.
9.. At the conclusion of a hearing the examiner would prepare a
written report which would contain a recitation of the questions involved,
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a summary of the evidence received, findings of fact as to each
allegation and conclusions. The Comnission felt it ahould be mandatory
that the examiner prepare findings of fact. Requiring the hearing
examiner to prepare findings of fact will insure that the examiner has
actually based his decision on the facts.
10. The report would be forwarded to the Director of the Central
Security Office who would transmit it to the bead of the executive agency
concerned.
11. Confrontation would be provided in larger measure than ever
before. In brief, it would be allowed to the maximum extent consistent
with the protection of the national security. Only regularly established
confidential informants furnishing Government intelJ..l gence and security
information would be excepted. Evers where confrontation is not permitted
the substance of the information from such sources and evaluations of the
reliability of the sources by the investigative agencies would be put in
the hearing record. All other persons who have furnished information
would be obliged to appear to personally testify or to give a deposition,
or their information would be excluded. If an identified source of
'information is unavailable because of death,, incompetency., or other reason,
such information may be considered by the examiner but with due regard for
the lack of opportunity for cross-examination.
12. Both the Government and the individual charged vuuld be permitted
to subpoena witnesses if the evidence sought is relevant rind not merely
cumulative except regularly established confidential informants or
identified informants who have furnished information on condition they
not be called. If, as I indicated previously, an identified informant
does not submit to subpoena or to furnishing inforirrition by deposition
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or interrogatories., this in roriiat:ton would be excluded.
Subpoena power hitherto has been unknown in the 'edea ai!'loyalty
and security pror;ra,ria;. To insure its effective uce, provision has also
been made wheretfy the Government would bear the travel and per diem costa
of witnesses subpoenaed by an individual in the event he is finally
cleared of the charges against him.
Chapbar 9 sets forth the procedure as for review and final determin-
ation applicable to all loyalty and security programs, It should be
noted that the review of any case would be limited to an examination of
the report of the examiner in that case and the record of proceedings
in the hearing before the wtaaminer, Any member of the three-man Central
Review Board who does not concur in the recomendation made by the
majority may prepare a separate report. The report of the Board and
4 -he separato report of any dissenting merhbor will be forwarded to the
;hood of the executive agency. The dot'vr~ninaatio a made by the head of
;the agency upon the basis of the report or reports so transmitted to
him shall be final and conclusive. I want to streese again that the
operations of the Central Sevurity Office in all of its phases as in
connection with apix als handled by the Central Review i3oaard are advisory
only to the head of the interested agency? The operations of tho Central
Security Office are complernontary to tics final, authority of the agency
,head and not in derogation of it,,
Chapter 10, section 100 provides for an extremely Important amend-
ment of the National Security Act of .1947.
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This amendment would require the establishment, within the Office
of the Secretary of Defense, of a riew operating office to achieve con-
solidation of the industrial security programs of the three armed service:
into a single, integrated program, controlled, supervised, and operated by
an Office of Security.
Under this proposal, there wazld be a single set of regulations
which would cover all the security aspects of the armed forces indus-
trial security program.
Security personnel, including inspectors would be transferred from
the Arrrq, Navy and Air Force to work under and be subject to the Office
of Security in the Office of the Secretary of Defense for purposes of
implementing; this program?
In order to insure maxirrtum uniformity, the industrial security
provisions of any contract should be subject to approval of the proposed
Office of Security.
A single office dealinf; directly with industry would eliminate
duplications, confusion, delay', waste of time and money. Industry is
overwhelmingly in favor of dealing with a single office within the
armed forces and the Commission believes this can only be accomplished
by the location of such an office as an operating unit in the Office of
the Secretary of Dcfenae.
Section 101 rec on r ends amending the Atomic Energy Act of 19514 to
permit security clearances for contractor representatives under the
industrial security ir ogram of any other agency to be accepted by the
Atomic F,n ergy Corrrni s s ion.
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Section 103 provides for the issuance of Ir ocess by the Inter-
national Organizations Employees Loyalty Board. The Commission studied
the operations of this 9oard and proposed certain recommendations for
changes in its report. As indicated previously, subpoena power hereto-
fore has not been provided in loyalty and security hearinr;s. Section 103
Thould permit the Board to adraini: ter oaths for the taking of evidence,
issue subpoenas to compel witnesses to appear and testify and to compel
the production of evidence., and to appoint any person to take a deposition
upon oral examination or written interrogatories.
Section lOlt refers to the Veterans' Preference Act of 1944.
H,R. 8322 and 8323 propose to amend both the Veterans' Preference Act
of 194I. and the Lloyd La;l+'ollett : Act of August 2! , 1912. H.R. 83,':4
proposes to amend only the Veterans' Preference Act of 1944-
The Commission recommendation is in agreement with House bill 8334
in that it proposes to amend only Sections J1 and 15 of the Veterans'
Preference Act.
Under existing, legislation the present practice in brief is as
follows: When a question of an employee's suitability arises, the
matter, if the eraployee is not a veteran, is handled by the particular
agency in accordance with roquirernents of law and the rep1lations of the
Civil Service Commission. The final decision rests with the head of the
agency. Under Section 14. of the Veterans' Preference Act, however,
adverse decisions of agency heads may be appealed to the Civil Service
Commission by preference eligible veteran:. The decision of the
Commission is mandatory on the head of the agency.
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The Commission on Government Security feels that the provisions
of Section ll~ not only provide a needless adrnini.stra:tive burden but
in eliminating the authority of the agency head violate food personnel
practice and weaken our entire System of rdministra.tion.
It should. be very clearly understood that the Commission recom-
mendation is not taking anything away from veterans that has been granted
them in the way of employment privileLges by the Congress on behalf of a
grateful nation. It merely recommends that the responsible official of
an agency should have the authority to determine whot,her an employee is
or is not unsuitable for retention in the service. At the present time
the Civil Service ComrrrLssion has that authority.
The Comkicjion felt that veterans and nonveterans should. be afforded
equality of treatment where charges of unsuitability have been made, that
tt;is violative of sound personnel managenrerat to vest in an outside, agency
the final decision as to retention of employees charged with be-big un-
suitable. Surely the rr sponsible official of any agency,: in or out of
government should have the :final authority to remove or suspend eniployee,s.
upon whom he has to depend to perform his duties in a satisfactory manner.
The provisions of Section 11t of the Veterans' Preference Act Hulce the
decisions of agency and department heads mere formalities. In this
connection, I. might add that the Hoover Commission reached the same
conclusion with the observation that it leads to working situations
which are intolerable.
The Comnd.ssion felt that this matter should be brought to the
attention of the Congress for a reexamination. It is the responsibility
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of the Congress to detarmbne basic Federal personnel policies in the
interest of sound adnai.nistr7.tion. The Commission deliberated the
alternative to amending Section 114 as it relates to employees of the
Executive Branch of Government and after careful study arrived at the
considered opinion that.. it would be contrary to sound principle and at
best an expedient compromise to extend the procedures of Section 11t. to
al employees. We, therefore, strongly urge the Congress to follow our
recommendation as spelled out in H.R. 8D4-
I would like to point out' that there is no conflict between the
Commission recommendation in this instance and the recommendation for
hearings and appeals to the proposed Central Security Office. It should
be borne in mind that the recommendations of the hearing examiners and
the appeals board are to be advisory only to the head of an agency or
department. Under the present procedure established by Section 14 the
Civil. Service ComAssion has final authority over the head of any agency.
Section 105 would repeal Public Law 733, the Act of August 26, 1950,
which is the legal basis for the present security program for civilian
employees. Public Law, 733, in brief, provides for the summary suspension
and termination of an employee of designated agencies whenever the head of
an agency shall determine such termination necessary or advisable in the
interrst of the national security of the United States. The provisions
of this statute, were extended to all employees by Executive Order. 10450,
dated April 27, 1953. The Supreme Court lii.ted the provisions of the
basic act and the Executive Order, in the case of Cole v. Young by pro-
viding that Public raw 733 is applicable to persons in sensitive positions
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only. If the Congress enacts the legislation set forth in these bills
before you establishing a loyalty program for civilian employees,
Public L..w 733 is no longer necessary and should be repealed.
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