(navigation image)
Home American Libraries | Canadian Libraries | Universal Library | Community Texts | Project Gutenberg | Children's Library | Biodiversity Heritage Library | Additional Collections
Search: Advanced Search
Anonymous User (login or join us)
Upload
See other formats

Full text of "Hearing relating to H.R. 10175 to accompany H.R. 11363 amending the Internal security act of 1950 : hearings before the Committee on Un-American Activities, House of Representatives, Eighty-seventh Congress, second session. March 15, 1962"

t 







liit 




mm 
m 



it 









HEARINGS RELATING TO H.R. 10175, TO ACCOM- 
PANY H.R. 11363, AMENDING THE INTERNAL 
SECURITY ACT OF 1950 



HEARINGS 

BEFORE THE 

COMMITTEE ON UN-AMERICAN ACTIVITIES 
HOUSE OE REPRESENTATIVES 

EIGHTY-SEVENTH CONGRESS 

SECOND SESSION 



MARCH 15, 1962 
INCLUDING INDEX 



Printed for the use of the 
Committee on Un-American Activities 




U S. (iOVERNMENT PRINTING OFFICE 
WASHINGTON : 1962 

NAKVAfM) eOlLRL LIBRAR" 

DEPOSITED BY TBE 
UWTEO STATBb aoVERNMEM^ 

MAV IH ]:i V. f 



COMMITTEE OX UN-AMERICAN ACTIVITIES 
United States Hoxjse of Representatives 

FRANCIS E. WALTER, Pennsylvania, Chairman 
MORGAN M. MOULDER, Missouri GORDON H. SCHERER, Ohio 

CLYDE DOYLE, California AUGUST E. JOHANSEN, Michigan 

EDWIN E. WILLIS, Louisiana DONALD C. BRUCE, Indiana 

WILLIAM M. TUCK, Virginia HENRY C. SCIIADEBERG, Wisconsin 

Frank S. Tavenner, Jr., Director 

Alfred M. Nittle, Counsd 

John C. Walsh, Co-counsel 

QWENN Lewis, Administrative Assistant 

II 



CONTENTS 



Page 

Foreword vm 

March 15, 1962, Statement of : 

Walter T. Skallerup, Jr 458 

Frank A. Bartimo 458 

George MacClain 458 

Herbert Lewis 458 

Afternoon Session : 

Walter T. Skallerup, Jr. (resumed) 488 

Frank A. Bartimo (resumed) 488 

George MacClain (resumed) 488 

Herbert Lewis (resumed) 488 

J. Walter Yeagley 504 

John F. Doherty 504 

Kevin T. Maroney 504 

H.R. 10175 453 

H.R. 11363 IX 

Appendix 519 

Executive Order 10865 519 

Executive Order 10909 523 

Department of Defense Directive No. 5220.6 (Industrial Personnel 

Access Authorization Review Regulation) 525 

Index i 

ui 



Public Law 601, 79th Congress 

The legislation under which the House Committee on Un-American 
Activities operates is Public Law 601, 79th Congress [1946] ; 60 Stat. 
812, which provides: 

Be it enacted hy the Senate and House of Representatives of the United States 
of America in Congress assembled, * * ♦ 

PART 2— RULES OF THE HOUSE OF REPRESENTATIVES 

Rule X 

SEC. 121. STANDING COMMITTEES 
******* 

17. Committee on Un-American Activities, to consist of nine Members. 

RUEE XI 
POWERS AND DUTIES OF COMMITTESIS 



( q ) ( 1 ) Committee on Un-American Activities. 

(A) Un-American activities. 

(2) The Committee on Un-American Activities, as a whole or by subcommit- 
tee, is authorized to make from time to time investigations of (i) the extent, 
character, and objects of un-American propaganda activities in the United States, 
(ii) the diffusion within the United States of subversive and un-American propa- 
ganda that is instigated from foreign countries or of a domestic origin and attacks 
the principle of the form of government as guaranteed by our Constitution, and 
(iii) all other questions in relation thei-eto that would aid Congress in any 
necessary remedial legislation. 

The Committee on Un-American Activities shall report to the House (or to the 
Clerk of the House if the House is not in session) the results of any such investi- 
gation, together with such recommendations as it deems advisable. 

For the purpose of any such investigation, the Committee on Un-American 
Activities, or any subcommittee thereof, is authorized to sit and act at such 
times and places within the United States, whether or not the House is sitting, 
lias recessed, or has adjourned, to hold such hearings, to require the attendance 
of such witnesses and the production of such books, papers, and documents, and 
to take such testimony, as it deems necessary. Subpenas may be issued under 
the signature of the chairman of the committee or any subcommittee, or by any 
member designated by any such chairman, and may be served by any person 
designated by such chairman or member. 



Rule XII 

LEGISLATIVE OVERSIGHT BY STANDING COMMITTEES 

Sec. 136. To assist the Congress in apprai-sing the administration of the laws 
and in developing such amendments or related legislation as it may deem neces- 
sary, each standing committee of the Senate and the House of Representatives 
shall exercise continuous watchfulness of the execution by the administrative 
agencies concerned of any laws, the subject matter of which is within the juris- 
diction of such committee ; and, for that purpose, shall study all pertinent reports 
and data submitted to the Congress by the agencies in the executive branch of 
the Government. 

V 



RULES ADOPTED BY THE 87TH CONGRESS 

House Resolution 8, January 3, 1961 
4t m * * * * • 

Rule X 

STANDING COMMITTEES 

1. There shall be elected by the House, at the commencement of each Congress 

4: * * * * * * 

(r) Committee on Un-American Activities, to consist of nine Members. 
m ***** * 

Rule XI 

POWERS AND DUTIES OF COMMITTEES 
* * * * * * * 

18. Committee on Un-American Activities. 

(a) Un-Amei'ican activities. 

(b) The Committee on Un-American Activities, as a whole or by subcommittee, 
is authorized to make from time to time investigations of (1) the extent, char- 
acter, and objects of un-American propaganda activities in the United States, 
(2) the diffusion within the United States of subversive and un-American proi> 
aganda that is instigated from foreign countries or of a domestic origin and 
attacks the principle of the form of government as guaranteed by our Constitu- 
tion, and (3) all other questions in relation thereto that would aid Congress in 
any necessary remedial legislation. 

The Committee on Un-American Activities shall report to the House (or to the 
Clerk of the House if the House is not in session) the results of any such investi- 
gation, together with such recommendations as it deems advisable. 

For the purpose of any such investigation, the Conmiittee on Un-American 
Activities, or any subcommittee thereof, is authorized to sit and act at such times 
and places within the United States, whether or not the House is sitting, has 
recessed, or has adjourned, to hold such hearing.s, to require the attendance 
of such witnesses and the production of such books, papers, and documents, and 
to take such testimony, as it deems necessary. Subpenas may be issued under 
the signature of the chairman of the committee or any .subcommittee, or by any 
member designated by any such chairman, and may be served by any person 
designated by any such chaii'man or member. 

******* 

27. To assist the House in appraising the administration of the laws and in 
developing such amendments or related legislation as it may deem necessary, 
each standing committet^ of the House shall exercise continuous watchfulness 
of the execution by tlie administrative agencies concerned of any laws, the subject 
matter of which is within the jurisdiction of such committee ; and, for that pur- 
pose, shall study all pertinent reports and data submitted to the House by the 
agencies in the executive branch of the Government. 

VI 



FOREWORD 



At the hearings of March 15, 19G2, on H.R. 10175, which are fully 
recorded herein, the views of the interested Departments of Govern- 
ment were received. The Departments ap]:)eared to be unanimous in 
their approval of the purposes of the bill, but as will be noted in the 
record certain modifications and revisions were sng-gested. 

As a result of the views presented by the Departments of Defense 
and Justice, it was the thought of the committee that a bill be 
introduced which would incorporate those revisions requested by the 
Departments as modi lied or supplemented by our own thinking. Con- 
sequently, I introduced H.R. 11368 on April 17, 1962, and on the 
following dav ^Nlr. Scherer, in snp]iort of this proposal, introduced 
an identical bill, H.R. 11414. 

The hearings on H.R. 10175 are therefore directly related to the 
bills above mentioned, which w^ere subsequently introduced, and 
form the base for consideratiou and miderstanding of them. The 
Departments of Defense and Justice have now been asked to express 
their final views with respect to H.R. 11363 and its companion bill, 
H.R. 11414. Upon receipt of comments by the Departments relating 
to this new version it is exi)ected that sliortly thereafter the com- 
mittee will make its rej^ort to the House. 

A copy of H.R. 11363 follows. 

Francis E. Walter, 
Chairman^ Cotnmittee on Un-American Activities. 

vn 

April 19, 1962. 



87th congress 
2d Session 



H.R. 11363 



IN THE HOUSE OF REPRESENTATIVES 

April 17, 1962 
Mr. Walter introduced the following bill ; which was referred to the Com- 
mittee on Un-American Activities 



A BILL 

To amend the Internal Security Act of 1950 to provide for the 
protection of chxssified information released to or within United 
States industry, and for other purposes. 

Be it enacted hy the Senate and House of Representatives of 
the United States of America in Congress assembled^ That the In- 
ternal Security Act of 1950 is amended by adding at the end thereof 
the following new title : 

"TITLE III— INDUSTKIAL SECURITY PROGRAM 

"regulations 

"Sec. 301. Under such regulations as the President may prescribe, 
the Secretary of Defense may prescribe such uniform regulations, 
standards, restrictions, and other safeguards as he considers necessary 
to protect classified information released to or within any industrial, 
educational, or research organization, institution, enterprise, or other 
legal entity, located in the United States, whether or not operated 
for profit (hereafter in this title referred to as 'United States in- 
dustry'), including procedures for determining eligibility for 
authorizations for access to classified information so released. The 
standard for determining eligibility for authorization for access to 
classified information pursuant to this title shall be that the granting 
or continuing of access authorization is clearly consistent with the 
national interest. 

"personal appearance procedures 

"Sec. 302. Except in cases where the Secretary personally deter- 
mines that such procedures cannot be employed consistently with the 
national security, in which event the Secretary will personally make 
the determination to deny or revoke access authorization, an author- 
ization for access to classified information by an individual (here- 
after in this title referred to as 'applicant'), employed in United 
States industry whose employment involves access to classified in- 
formation may not be finally denied or revoked unless the applicant 
has been given — 

"(1) a written statement of reasons for the denial or revoca- 
tion stated as comprehensively and detailed as the national 
security will permit ; 

IX 



X HEARINGS RELATING TO H.R. 10175 

"(2) an opportunity, after he has replied in writing within 
a reasonable time under oath or affirmation in specific detail 
to the statement of reasons, for a personal appearance proceed- 
ing at which time he may present evidence in his own behalf: 
"(3) a reasonable time to prepare for the proceeding; 
"(4) the opportunity to be represented by counsel; and 
"(5) a written notice advising him of final action which, if 
adverse, shall specify whether the Secretary has found for or 
against him with respect to each allegation in the statement of 
reasons. 
With respect to matters, other than those relating to the characteriza- 
tion in the statement of reasons of any organization or individual 
other than the applicant, which he controverts in his reply, the appli- 
cant shall be given an opportunity to inspect any documentary evi- 
dence or cross-examine either orally or through written interrogatories 
any witness providing adverse information upon whicli the Secretary 
may rely in reaching a final determination to deny or revoke the au- 
thorization for access to classified information. However, documen- 
tary evidence which has been classified, and information supplied by 
informants may be received and considered without an opportunity for 
inspection or cross-examination if the applicant is given a summary 
of such evidence or information which is as comprehensive and de- 
tailed as the national security will permit and, in the case of informa- 
tion supplied by an informant, the informant is one — 

''(1) who is identified but who cannot be brought forward 
because of death, serious illness, or for similar cause ; or 

"(2) who cannot, for reasons determined by the Secretary to 
be good and sufficient, be either identified or cross-examined; or 
"(3) whose identity cannot be revealed, in the judgment of the 
head of the Department supplying such iriformant, without sub- 
stantial harm to the national interest. 
Nothing contained in this title shall be deemed to support a demand 
by an applicant to inspect or have access to the investigati\e reports 
of any agency of the Government. 

"compulsory process 



"<j. 



'Sec. 303. Under such regulations as the Secretary may prescribe, 
the Secretary (or his designee for such purpose) shall ha\e power to 
issue, and in his discretion for good cause shown, shall issue, process 
to compel witnesses to appear and testify or produce evidence in a 
personal appearance proceeding under section 302. Any process so 
issued may run to any ])art of the Ignited States and its' possessions, 
including the District of Columbia and the Commonwealth of Puerto 
Rico. Any person who willfully neglects or refuses to appear, or re- 
fuses to qualify as a witness, or to testify or produce evidence in 
obedience to any process duly issued under this section, shall be fined 
not more than $500, or imprisoned not more than six months, or both. 
Upon certificiition by the Secretary, concerning any such neglect, 
refusal, or failure by any person, to the Ignited States attorney for 
any judicial district in which such person resides or is found, the 
United States attorney shall proceed by information for the prosex^u- 
tion of such person. The Secretary (oi- his designee for such pur- 



HEARINGS RELATING TO H.R. 10175 XI 

pose), upon good cause shown, may (1) authorize any party to a per- 
sonal appearance proceeding under section 302 to obtain the testimony 
of any person by deposition upon oral examination or by written 
interrogations, and (2) appoint any person to obtain such testimany. 
Any person so appointed shall have the power to administer oaths. 



"fees and expenses for taking evtdence 

"Sec. 304. The fees and expenses of witnesses subpenaed or called 
by or on behalf of the applicant shall be borne by the applicant, 
excepting that the Secretary may, in accordance wdth such regula- 
tions as he shall prescribe, provide that such fees and expenses shall, 
under certain equitable circumstances and in the interests of justice, 
be borne in whole or in part by the United States. Witnesses sum- 
moned or called to testify or produce evidence at a personal appear- 
ance proceeding are authorized travel expenses and per diem in such 
amounts as provided by the Standardized Government Travel Regula- 
tions or the Joint Travel Regulations, as appropriate. A witness 
whose deposition is taken, and the person taking his deposition, is 
entitled to the same fees that are paid for like services in the courts 
of the United States. Any appropriation otherwise available to 
the agency concerned for procurement shall be available for such 
expenses. 

"reimbursement for loss of certain earnings 

"Sec. 305. The Secretary may, in accordance with such regula- 
tions as he may prescribe, provide for the reimbursement of all or 
any part of a net loss of earnings resulting directly from the sus- 
pension, denial, or revocation of an authorization for access to 
classified information of an applicant, who, at the time of such 
suspension, denial, or revocation, was employed in United States 
industry if, at a later time, it has been determined by the Secretary 
that (1) the applicant is eligible for an access authorization equiv- 
alent to that which was suspended, denied, or revoked, and (2) 
after considering all of the facts and circumstances under which 
the suspension, denial, or revocation occurred, it is fair and equitable 
that the United States, rather than the applicant, bear the loss for 
which reimbursement is to be made. Reimbursement may not ex- 
ceed the difference between the amount the applicant would have 
earned as an employee of the same employer had he continued in 
the same position as that held at the time of suspension, denial, or 
revocation and his interim earnings during the period commencing 
on the date of suspension, denial, or revocation and ending with 
the date of giving notice to the applicant by regular first-class mail 
addressed to his last known address of his eligibility for access au- 
thorization. The authority conferred by this section may be exer- 
cised whether the suspension, denial, or revocation of access 
authorization directly causing the loss of earnings, or the subsequent 
determination of eligibility, occurred before or after the date of 
enactment of this title. Any appropriation othei-wise available to 
the agency concerned for procurement shall be available for such 
reimbursements. 



Xn HEARINGS RELATING TO H.R. 10175 

"extension of program by agreement 

"Sec. 306. By agreement between the Department of Defense and 
any other department or agency of the United States, reguhitions 
prescribed by the Secretary of Defense under this title may be ex- 
tended to apply to releases to or within United States industry of clas- 
sified information which the other department or agency has the 
responsibility for safeguarding. In such cases, however, any reim- 
bursement authorized by section 305 of this title shall be made by the 
department or agency concerned. 

"nONAPPLICATION of ADMINISTRATrVTE PROCEDURE ACT 

"Sec. 307. The Administrative Procedure Act, as amended (5 
U.S.C. 1001 et seq.) shall not apply to the use or exercise of any author- 
ity granted by this title. 

"DEFINmON OF CLASSIFIED INFORMATION 

"Sec. 308. For the purposes of this title the term 'classified informa- 
tion' means information which, for reasons of national security, is 
siDecifically designated by a United States Government agency for 
limited or restricted dissemination or distribution." 



HEARINGS RELATING TO H.R. 10175, TO ACCOMPANY 
H.R. 11363, AMENDING THE INTERNAL SECURITY 
ACT OF 1950 



THURSDAY, MARCH 15, 1962 

United States House of Representatives, 

Committee on Un-American Activities, 

Washington^ D.G. 
Public Hearings 

The Committee on Un-American Activities met, pursuant to call, 
at 10 :15 a.m., in Room 445 of the House Office Building, Washington, 
D.C., Hon. Francis E. Walter (chairman of the committee) presiding. 

Committee members present : Representatives Francis E. Walter, of 
Pennsylvania; Clyde Doyle, of California; William M. Tuck, of 
Virginia ; Gordon H. Scherer, of Ohio; August E. Johansen, of Michi- 
gan ; and Henry C. Schadeberg, of Wisconsin. 

Staff members present: Frank S. Tavenner, Jr., director; Alfred 
M. Xittle, counsel ; John C. Walsh, co-counsel ; and George H. Lynch, 
consultant. 

The Chairman. I apologize for being late. I was detained this 
morning, trying to get the immigration bill out of committee. 

We meet today for the consideration of H.R. 10175. The purpose 
of this bill is to create a legislative base authorizing the Secretary of 
Defense to establish a security program with respect to defense con- 
tractors and their employees, and to prescribe procedures to be fol- 
lowed in evaluating industrial security cases, so that the preservation 
and integrity of classified information may be assured. 

That a program of this nature is undoubtedly necessary would 
seem to be self-evident. Our defense efforts have long been the target 
of planned espionage and sabotage. In numerous hearings over the 
years, this committee has established that the Communist Party of 
the United States has, for purposes of sabotage and espionage, delib- 
erately infiltrated basic industry which is involved in defense produc- 
tion of highly classified projects of the military establishments. 

For example, Mr. John Lautner, who held high Communist Party 
office on the national level and was an active Communist Party mem- 
ber for more than 20 years prior to his expulsion from the party in 
1950, testified that, as far back as 1932, the Communist Party em- 
barked upon a program called "Face to the Shop," which was designed 
to infiltrate and colonize basic industry with Communists. 

He traced the development of that program and testified that in 
1948 the organizational director of the Communist Party, in a secret 
report, was able to boast that over 3,000 Communist Party branches 
throughout the country and between 400 and 500 industrial branches 

451 



452 HEARINGS RELATING TO H.R. 10175 

had been established. (See: "Investigation of Communist Infiltra- 
tion and Propaganda Activities in Basic Industry, Gary, Ind., Area," 
hearin^rs held February 10 and 11. 1958.) It may be taken as factual 
that the Communists have succeeded in serious degree in accomplish- 
ing their planned infiltration of basic industry. (See also: "Prob- 
lems of Security in Industrial Establishments Holding Defense Con- 
tracts, Greater ^Pittsburgh Area, Part 2," hearings held March 11, 
1959.) 

More recently the investigations of this committee into the IS^ational 
Security Agency, arising out of the defection of William H. Martin 
and Bei-non F. ^litchell to the Soviet Union July 1960, have pointed 
up additional security problems of a general nature and other than 
those related directl;7 to disloyalty, including such considerations as 
perversion, personality and character defects, and habits that render 
individuals untrustworthy and unreliable as repositories of classified 
information or State secrets. 

The general necessity for a security program cannot be disputed. 
Moreover, the legal necessity for specific congressional action to au- 
thorize such a program on a firm basis is suggested. This committee 
has repeatedly and urgently recommended a legislative program of 
this type. Although the Executive Branch of the Government has 
been aware of the serious danger to national security by reason of 
Communist infiltration of industry holding defense contracts, as well 
as other security problems above indicated, the industrial clearance 
or security program which had been for several years established in 
the Defense Department under regulations of the Secretary of the 
Defense, was struck down by the recent decision of the Supreme 
Court in the case of Greene v. McElroy, 360 U.S. 474, decided June 29, 
1'959. The regulations of the Secretary of Defense then in effect, and 
which provided for a personnel security clearance program granting 
fair but limited hearings to persons denied access to classified informa- 
tion, were held invalid by the Supreme Court. 

The Supreme Court declared that such regulations issued under the 
authority of the Secretary of Defense had not sufficient authorization 
and that "it must be made clear that the President or Congress, within 
their respective constitutional powers, specifically has decided that the 
imposed procedures are necessary and warranted and has authorized 
their use." 

The Chief Justice went further and declared, at page 508 : 

Whether those procedures under the circumstances comport with the Constitu- 
tion we do not decide. Nor do we decide whether the President has inherent 
authority to create such a program, whether congressional action is necessary, 
or what the limits on executive or legislative authority may be. We decide only 
that in the absence of explicit authorization from either the President or Congress 
the respondents were not empowered to deprive petitioner of his job in a proceed- 
ing in which he was not afforded the safeguards of confrontation and cross- 
examination. 

Perhaps I should point out that innnediately after this decision in 
the Greene case, I introduced on July 7, 1959, JEI.R. 8121, with a view 
toward establishing congressional authority for the issuance by the 
Secretary of Defense of such regulations. That bill was reported out 
by this committee on September 2, 1959, passed by the House on 
February 2, 1960, and referred to the Senate, which took no final 
action. Further, the President on February 20, 1960, issued Execu- 



HEARINGS RELATING TO H.R. 10175 453 

tive Order No. 10865, g:ivino; authority to certain departments, includ- 
ing the Department of Defense, to issue reguhitions and prescribe 
requirements for the safeguarding of chissified information within 
industry. The necessity for such reguhitions was thus clearly and 
explicitly recognized by the President. 

However, congressional action likewise seems desirable in order to 
clarify any ambiguity as to the necessity for congressional action posed 
in the foregoing language of Chief Justice Warren which I have 
quoted. With these thoughts in mind, we now proceed to a considera- 
tion of the bill, H.ll. 10175, and the views of the Executive depart- 
ments in relation thereto. 

(H.R. 10175 follows:) 

[H.R. 10175, 87th Cong., 2d sess] 

A BILL To amend the Subversive Activities Control Act of 1950 to provide for a security 
program with respect to defense contractors and their employees 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled, That the Subversive Activities Control Act 
of 1950 (64 Stat. 987) is amended by inserting immediately after section 5 the 
following new section : 

"INDUSTEIAL PERSONNEL SECUKITY REVIEW 

"Sec. 5A. (a) The Secretary of Defense (hereafter in this section referred to 
as the 'Secretai-y') is authorized, in connection with the performance of any 
contract with a military department involving classified information, to pre- 
scribe such requirements, restrictions, and safeguards, with respect to access to 
such information, as he may deem necessary in the interest of national security. 

"(b) In any case in which access to classified information by (1) any i^erson 
who has a contract referred to in subsection (a) of this section, (2) any person 
who has a subcontract of any such contract, or (3) any employee of any such 
person, is denied, suspended, or revoked under the regulations referred to in 
such subsection (a), the Secretary shall provide for a personal appearance 
proceeding at which the person aggrieved by the denial, suspension, or revocation 
of his access to classified information shall be permitted to present evidence 
in his behalf and at which the United States shall produce those persons who 
furnished information forming the basis of any such denial, suspension, or revo- 
cation, to the extent that the Secretary, and the head of the investigative agency 
(if any) which supplied the information, shall determine to be permissible in 
the interest of national security. 

"(c) Under such regulations as the Secretary may prescribe, the Secretary 
(or his designee for such purpose) shall have the power to issue process to 
compel witnesses to appear and testify or produce evidence in a personal appear- 
ance proceeding under subsection (b) of this section. Any process so issued may 
run to any part of the United States and its possessions, including the District 
of Columbia and the Commonwealth of Puerto Rico. Any person who willfully 
neglects or refuses to appear, or refuses to qualify as a witness, or to testify or 
produce evidence in obedience to any process duly issued under this subsection, 
shall be fined not more than .$.jOO, or imprisoned not more than six months, or 
both. Upon certification by the Secretary, concerning any such neglect, refusal, 
or failure by any person, to the United States attorney for any judicial district 
in which such person resides or is found, the United States attorney shall 
proceed by information for the prosecution of such person. The Secretary (or 
his designee for such purpose) may (1) authorize any party to a personal 
appearance proceeding under subsection (b) of this section to obtain the testi- 
mony of any person by deposition upon oral examination or by written interroga- 
tions, and (2) appoint any person to obtain such testimony. Any person so 
appointed shall have the power to administer oaths. 

"(d) Witnesses summoned to a personal appearance proceeding under sub- 
section (b) of this section shall be paid the same fees and mileage that are paid 
witnesses in the courts of the United States, and witnesses whose depositions 
are taken, and the person taking their deposition, shall be entitled to the same 
fees as are paid for like services in the courts of the United States. 



454 HEARINGS RELATING TO H.R. 10175 

"(e) I'nder such rejjulations as the Secretary may pi-escribe, any individual 
referred to in clause (3) of subsection (b) of this section may be reimbursed 
for any loss of earnings directly resulting from a denial, suspension, or revoca- 
tion of his access to classified information, if the Secrot.iry. or his designee, 
determines that such denial, suspension, or revocation was unjustified and that 
under all the circumstances reimbursement would be just and equitable. Reim- 
bursement may be made for all or part of the period of such denial, suspension, 
or revocation, in an amount not more than the difference between the amount 
such individual would have earned as an employee of the contractor or subcon- 
tractor concerned at the rate he was receiving on the dav of such denial, sus- 
pension, or revocation, and the amount of his interim earningrs. 

"(f) For the purposes of this section the term 'classified information' means 
information which, for reasons of national security, is specifically designated by 
a United States Government agency for limited or restricted dissemination or 
distribution." 

The Chairman. Mr. Tavenner, will you call your witness? 

Mr. Tavenner. Mr. Chairman, I think possibly first we should in- 
troduce a letter from the Department of Defense, dated March 14, 
1962, which is in reply to your request for the views of the Depart- 
ment, together with the enclosed copy of a proposed substitute bill. _ 

The Chairman. That will be made a part of the record at this 
point. 

(The documents referred to follow :) 

General Counsel of the Department of Defense, 

Washington, D.C., March H, 1962. 
Dear Mr. Chairman : 

You requested the Department of Defense to comment upon H.R. 10175, 87t.h 
Congress, a bill "To amend the Subversive Activities Control Act of 1950 to pro- 
vide for a security program with respect to defense contractors and their em- 
ployees." 

In view of the action of the President in Executive Order 10865, the proposed 
legislation is not considered necessary. However, if the Congress considers that 
this legislation is desirable, the Department of Defense would have no objec- 
tion to its enactment. 

H.R. 10175 would amend the Subversive Activities Control Act of 1950, as 
amended (50 U.S.C. 781 et sen.), by inserting immediately after section 5 thereof 
a new section 5A, entitled "Industrial Personnel Security Review". It would 
provide legislative authority for the Secretary of Defense to prescribe appro- 
priate safeguards for the protection of classified informntion in the hands of 
any contractor, subcontractor, or employee of any contractor or subcontractor, 
in connection with the performance of any contract wifh a military department. 
It would provide a legislative basis whereby an individual whose access authori- 
zation had been suspended, denied or revoked would be entitled to a personal 
appearance proceeding at which, subject to certain limitations, he would be af- 
forfled opportunity for cross-examination of persons who had furnished adverse 
information against him : it would provide the Secretary of Defense with author- 
ity to subpoena and to obtain testimony by oral deposition or written interroga- 
tories; it would provide for the payment of certain fees to witnesses; and it 
iVould provide authority for reimbursement under certain circumstances for 
loss of earnings directly resulting from a denial, suspension, or revocation of an 
authorization for access to classified information. 

We appreciate the effort of the Congress to strengthen our security program 
and we are in accord with the purposes of H.R. 10175 and its principles. It is 
believed, however, that certain modifications should be made in the bill in the 
light of experience gained in the operation of the program and Executive Order 
10865, February 20, 1960 as amended by Executive Order 10909. January 17, 1961. 

Knowing the desire of the Committee tf) enact legislation which will assure 
the continuance of a strong industrial security program, there is submitted for 
consideration a revised draft of legislation which reflects the views of the 
Department of Defense. 

This redraft is designed to extend the scope of the bill to cover Defense De- 
partment relations with industry, erlucational and research organizations and 
other activities; and to provide express legislative authorization by the Congress 



HEARINGS RELATING TO H.R. 10175 455 

concerning the policies and procedures to be followed in evaluating and adjudi- 
cating individual industrial security cases. 

The enclosed proposed substitute bill would make the following major 
modifications to H.R. 1017"): 

a. It would amend the Internal Security Act of 1050 by adding a new Title, 
entitled •'Industrial Security Program", rather than amend the Suhver.sive Ac- 
tivities Ccintrol Act of 10.10. The Committee is aware that it is necessary to 
protect classified information from willful and inadvertent disclosure resulting 
from activities of those persons who are not motivated by sul)version. It is 
necessary also to guard against persons who may be susceptible to persuasion, 
coercion, pressure or blackmail because of character weaknesses or unfavorable 
past associations and activities. Consequently, inasmuch as the industrial 
security pro?j:ram covers more than the area of subversive activities, we believe 
the proposed legislation should reflect this breadth of scope. 

b. Although both H.R. 10175 and the enclosed redraft are directed in major 
portion to the policies and procedures governing adjudication of applicant 
cases, we believe that this draft bill should provide express Congressional au- 
thority for all phases of an industrial security program, including the receipt, 
handling, use, dissemination, storage, transmission, protection and destruction 
of classified information, and not he limited solely to adjudication of applicant 
cases. 

c. The revised draft of the bill would cover not only situations where a con- 
tract involving classified information exists but several other areas where classi- 
fied information is released to non-governmental activities. This proposal is 
designed to cover in broad terms both pre-contract and post-contract activities, 
as well as performance; special situations in the field of research and develop- 
ment; and relations with educational and research organizations and non-profit 
groups and organizations. 

d. The revised draft of the bill w^ould also permit the Department of Defense 
to continue its program of protecting foreign classified information entrusted 
to the United States and released to United States industry in furtherance 
of international defense efforts. This includes the excliange of classified in- 
formation under NATO and various bilateral agreements between the United 
States and other countries. 

e. The draft bill sets forth Congressional approval for policies under which 
opportunities for cross-examination of witnesses are now afforded. Of prin- 
cipal importance are the specific provisions for receipt and consideration of 
information provided by informants who cannot, for stated reasons, be brought 
forward for cross-examination and the exact circumstances under which oppor- 
tunities for cross-examination may be denied. In this report, it is important 
to note the following language of the Supreme Court in the case of Greene v. 
McElroy (360 U.S.C. 474, (1959)) : "Before we are asked to judge whether, in 
the context of security clearance cases, a person may be deprived of the right 
to follow his chosen profession without full hearings where accusers may be 
confronted, it must be made clear that the President or Congress, within their 
constitutional powers specifically have decided that the imposed procedures are 
necessary and warranted and have authorized their use." 

f. The Committee will note that the proposed draft bill does not contain 
a grant of subpoena authority to the Secretary of Defense for use in connection 
with the industrial security program. Experience gained under Executive Order 
10865, as amended, has demonstrated that with the necessary amount of effort, 
expenditure of time, together with the splendid cooperation on the part of 
other Government agencies, we have been able to obtain the necessary witnesses 
and evidence in order to support all but an extremely small minority of cases. 
Accordingly, we do not now seek such subpoena authority but should future 
experience demonstrate that our need for it is greater than we now think, we 
will so advise the Committee. 

g. The changes contained in the revised draft bill concerning reimbursement 
for lost earnings are intended to establish firmly that reimbursement under the 
Industrial Security Program is a matter resting solely in the discretion of the 
Secretary and is not a legal right of the applicant. 

h. By agreement between the Secretary of Defense and the heads of certain 
departments and agencies, arrangements have been made to apply the Depart- 
ment of Defense Industrial Security Program to operations of the National 
Aeronautics and Space Administration, the Federal Aviation Agency, the Gen- 



82627—62- 



456 HEARINGS RELATING TO H.R. 10175 

eral Services Administration, the Department of State and the Department of 
Commerce. A new section has been included in the draft bill to provide Con- 
gressional approval for the continuance of this activity and for extension to 
cover other agencies. 

The Bureau of the Budget advises that, from the standpoint of the Admin- 
istration's program, there is no objection to the presentation of this report for 
the consideration of the Committee. 
Sincerely, 

(Signed) Cyrus R. Vance. 
Inclosure : Draft bill. 

Honorable Francis E. Walter, 

Chairman, Committee on Un-American Activities, 

House of Representatives. 



PROPOSED SUBSTITUTE BILL 

A BILL To amend the Internal Security Act of 1950 to provide for the protection of 
classified information released to or within United States industry and for other 
purposes. 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled. That the Internal Sectirity Act of 19.50 (50 
U.S.C. 781 et seq. ) is amended by adding at tlie end thereof the following new 
title : 

"TITLE III— INDUSTRIAL SECURITY PROGRAM 

"Sec. 301. Under such regulations as the President may prescribe, the Secre- 
tary of Defen.se may prescribe sucli uniform regulations, standards, restric- 
tions, and other safeguards as he considers necessary to protect classified infor- 
mation released to or within any industrial, educational, or research organiza- 
tion, institution, enterprise, or other legal entity, located in the United States, 
whether or not operated for profit (hereinafter referred to as "I'nited States 
industry"), including procedures for determining eligibility for authorizations 
for access to classified information so released. 

' "Sec. 302. Except in cases where the Secretary personally determines that 
such procedures cannot be employed consistently with the national security, 
in which event the Secretary will personally make the determination to deny or 
revoke access authorization, an authorization for access to classified informa- 
tion by an individual (hereinafter referred to as "applicant"), employed in 
United States industry whose employment involves access to classified informa- 
tion may not be finally denied or revoked unless the applicant has been given — 
"(1) a written statement of reasons for the denial or revocation stated as 
comprehensively and detailed as the national security will permit; 

"(2) an opportunity, after he has replied in writing within a reasonable 
time under oath or affirmation in specific detail to the statement of reasons, 
for a personal appearance proceeding at which time he may present evidence 
in his own behalf; 

"(3) a reasonable time to prepare for the proceeding; 
"(4) the opportunity to be represented by counsel; and 
"(5) a written notice by or in behalf of the Secretary advising him of 
final action which, if adverse, shall specify whether the Secretary has found 
for or against him with respect to each allegation in the statement of reasons. 
With respect to matters not relating to the characterization in the statement of 
reasons of any organization or individual other than the applicant, and which 
he controverts in his reply, the applicant shall be given an opportunity to inspect 
any documentary evidence or cross examine either orally or through written 
interrogatories any witness providing adver.se information upon which the 
Secretary niiiy rely in renching a final determination to deny or revoke the au- 
thorization for access to classified informntion. However, documentary evidence 
which lins been classified, and information supplied by informants may be re- 
ceived and considered without an opportunity for inspection or cross examination 
if the applicant is given a summary of such evidence or information which is as 
comprehensive and detailed as the national security will permit and, in the case 
of information supplied by an informant, the informant is one — 



HEARINGS RELATING TO H.R. 10175 457 

"(1) who is identified but who cannot be brought forward because of 
death, serious illness, or for similar cause ; or 

"(2) who cannot, for reasons determined by the Secretary to be good and 
sufficient, be either identified or cross examined ; or 

"(3) whose identity cannot be revealed, in the judgment of the head of 
the investigative agency supplying such informant, without substantial harm 
to the national interest. 
However, the applicant may not inspect or have access to the investigative 
reports of any agency of the Government. The Administrative Procedure Act, 
as amended (5 U.S.C. 1001 et seq.), does not apply to personal appearance pro- 
ceedings conducted under regulations prescribed under this Title. 

"Sec. 303. Whenever a person is called at the request of the Secretary to testify 
or produce evidence at a personal appearance proceeding under this Title, travel 
expenses and per diem are authorized as provided by the Standardized Govern- 
ment Travel Regulations or the Joint Travel Regulations, as appropriate. A 
witness whose deposition is taken, and the person taking his deposition, is entitled 
to the same fees that are paid for like services in the courts of the United States. 
Any appropriation otherwise available to the agency concerned for procurement 
shall be available for such expenses. 

"Sec. 304. The Secretary may, in accordance with such regulations as he may 
prescribe, provide for the reimbursement of all or any part of a net loss of earn- 
ings resulting directly from the suspension, denial, or revocation of an authoriza- 
tion for access to classified information of an applicant, who, at the time of such 
suspension, denial, or revocation, was employed in United States industry if, at a 
later time, it has been determined by the Secretary that (1) the applicant is 
eligible for an access authorization equivalent to that which was suspended, 
denied, or revoked, and (2) after considering all of the facts and circumstances 
under which the suspension, denial, or revocation occurred, it is fair and equitable 
that the United States, rather than the applicant, bear the loss for which reim- 
bursement is to be made. Reimi)ursement may not exceed the difference between 
the amount the applicant would have earned as an employee of the same em- 
ployer had he continued in the same position as that held at the time of suspen- 
sion, denial, or revocation and his interim earnings during the period commenc- 
ing on the date of suspension, denial, or revocation and ending with the date of 
giving notice to the applicant by regular first class mail addressed to his last 
known address of his eligibility for access authorization. The authority con- 
ferred by this section may be exercised whether the suspension, denial, or revoca- 
tion of access authorization directly causing the loss of earnings, or the subse- 
quent determination of eligibility, occurred before or after the date of enact- 
ment of this Title. Any appi'opriation otherwise available to the agency con- 
cerned for procurement shall be available for such reimbursements. 

"Sec. 305. By agreement between the Department of Defen,se and any other 
department or agency of the United States, regulations prescribed by the Sec- 
retary of Defense under this Title may be extended to apply to protect releases 
to or within United States industry of classified information which the other 
department or agency has the responsibility for safeguarding. In such cases, 
however, any reimbursement authorized by section 304 of this Title shall be made 
by the department or agency concerned." 



458 HEARINGS RELATING TO H.R. 10175 

STATEMENT OF WALTER T. SKALLEEUP, JR., DEPUTY ASSISTANT 
SECRETARY OF DEFENSE (SECURITY POLICY), DEFENSE DE- 
PARTMENT, ACCOMPANIED BY FRANK A. BARTIMO, ASSISTANT 
GENERAL COUNSEL (MANPOWER); GEORGE MacCLAIN, LEGAL 
ADVISER AND SPECIAL ASSISTANT TO THE DIRECTOR, OFFICE 
OF INDUSTRIAL PERSONNEL ACCESS AUTHORIZATION REVIEW, 
DEFENSE DEPARTMENT; AND HERBERT LEWIS, DIRECTOR, IN- 
DUSTRIAL PERSONNEL ACCESS AUTHORIZATION REVIEW DIVI- 
SION, DEPARTMENT OF DEFENSE 

Mr. Taveistner. Now, will Mr. Walter T. Skallerup, Jr., who is, 1 
believe, Deputy Assistant Secretary of the Defense Department, comt' 
forward, please ? 

I believe counsel accompanying you is Mr. Frank Bartimo^ 

Mr. Skallerup. Yes, sir. 

Mr. Tavennek. And Mr. MacClain. Will you introduce the other 
members of your group who are present? 

Mr. Skallerup. Yes, Mr, Herbert Lewis, who is director of Indus- 
(rial Personnel Access Authorization Review Division. 

Mr. Tavenxer. Now, Mr. Nittle, will you conduct the examination, 
please ? 

Mr. Nittle. Mr. Skallerup, for the purpose of the record, will you 
kindly state your name in full, your official capacitj^ and the agency 
whose views you are authorized to present here today ? 

Mr. Skallerup. My name is Walter T. Skallerup, Jr. I occupy the 

office of Deputy Assistant Secretary of Defense for Security Policy. 

, I am here today to present the views of the Department of Defense 

with respect to H.R. 10175, and these views reflect the views of tlie 

three services, as well as the Department of Defense. 

Mr. NriTLE. Do you have a statement to communicate in response 
to the conunittee's request for the views of your Department? 

Mr. Skallerup. Yes, I have, Mr. Nittle. 

Mr. Nittle. Woukl you kindly proceed to give that statement? 

Mr. Skallerup. Mr. Chairman and Members of the Committee, 
I appreciate this opportunity to appear before the Plouse Committee 
on Un-American Activities to discuss H.R. 10175 and to review the 
Department of Defense considerations which have led to the submis- 
sion of a redraft of the bill. 

We appreciate the efforts of tlie committee to strengthen our security 
program and are in accord witli the purposes of H.R. 10175 and its 
principles. It is believed, however, that certain modifications should 
be made in the light of experience gained in the operation of the 
industrial security program and Executive Order 108G5,^ Februarj'^ 
20, 1960, as amended by Executive Order 10909,^ January 17, 1961. 

Two important considerations stand out above all others; one is the 
case of Greene v. McElroy^ 360 U.S. 474 (1959), and the other is infor- 
mation based upon actual exjierience in the conduct of the industrial 
security program. 



1 Executive Orders Nos. 10865 and 10909 marked "Exhibits Nos. 1 and 2," respectively. 
See appendix, pp. 519 and 523. 



HEARINGS RELATING TO H.R. 10175 459 

In Greene, the Court said : 

Thus, even in the absence of specific delegation, we have no difl5culty in finding, 
as we do, that the Department of Defense has been authorized to fashion and 
apply an industrial clearance program which affords affected persons the safe- 
guards of confrontation and cross-examination. * * * Before we are asked 
to judge wliether, in the context of security clearance cases, a person may be 
deprived of the right to follow his chosen profession without full liearings where 
accusers may be confronted, it must be made clear that the President or Congress, 
within their respective constitutional powers, specifically has decided that the 
imposed procedures are necessary and warranted and has authorized their use. 

The Chairman. Don't you feel, Mr. Secretary, that that was an 
invitation to this committee, or the appropriate congressional commit- 
tee, to legislate ? 

Mr. Skallerup. I agree, sir. 

As a result of the Greene decision, questions were raised with respect 
to that portion of the industrial security program dependent upon the 
issuance of Statements of Keasons and the conduct of personal ap- 
pearance proceedings. Although in our view the Greene case did not 
decide any constitutional question, it showed that express authoriza- 
tion from the President or the Congress was necessary if the Depart- 
ment of Defense was to be empowered to reach final determinations 
in the absence of full opportunity for cross-examination. 

The Court indicated that it would closely scrutinize any limitation 
that might be expressly authorized. It was in this context and in the 
equally serious and compelling context of establishing a realistic means 
of reaching finality in such cases that Executive Order 10865 was 
drawn. By setting forth conditions that must be fulfilled, this Order 
expressly authorized specific limitation on cross-examination and 
placed the ultimate responsibility for using this authority at the level 
of the heads of departments in the Executive Branch. 

Inasmuch as the industrial security program also is drawn to pro- 
tect classified defense information from willful and inadvertent dis- 
closure by persons not motivated by subversion, and from persons who 
ma}^ be susceptible to persuasion, coercion, pressure, or blackmail be- 
cause of weaknesses in character, associations, or activities, we believe 
the proposed legislation should cover more than the area of subversive 
activities alone and, therefore, recommend this proposed bill as a new 
title to the Internal Security Act of 1950, rather than as an amendment 
to the Subversive Activities Control Act of 1950. 

Over the years the extent of classified operations outside govern- 
mental activities has expanded significantly. They cover not only 
industries, large and small, but also educational and research institu- 
tions and various nonprofit activities. On occasion individuals are 
dealt with as contractors. The term "United States industry" is used 
in the draft bill in the broad sense, covering all nongovernmental 
activities outside the Department of Defense. These activities also 
include, for example, activities carried on outside of the United States 
by the employees or other representatives of corporations owned by 
United States citizens having their principal place of business located 
within the United States. The definition in section 301 is intended to 
provide this coverage. 

Before commenting on the sections of this proposed bill, I would 
like to review the factual background of our industrial security pro- 
gram based upon actual experience and, particularly, that informa- 



460 HEARINGS RELATING TO H.R. 10175 

tion which shows the impact of tlie industrial security program and 
the review program upon the work force employed in United States 
industry. I would hope that this factual discussion would promote a 
public understanding of our program and would help place these 
security matters in a sound perspective. 

The United States work force engaged in the manufacture of dur- 
able and nondurable goods early in 1962 is reported to number 16,400,- 
000 people. 

Mr. Tavenner. Mr. Chairman, excuse me a minute, will you pardon 
my interruption? 

Mr. Skallerup. Go right ahead, Mr. Tavenner. 

Mr. TA^^:NNER. May I call this to your attention? The letter of 
March 14, 1962, which was presented and which has been introduced 
in evidence, has not been read to the members of the committee, so it 
is quite possible that the committee members would not readily under- 
stand just which bill you are referring to. In order to clarify the 
matter, I would like to ask you whether or not your comments relate 
to what you consider an improvement on the present bill, and when 
you are speaking of "proposed bill," you are speaking of the Defense 
Department proposed draft bill that you are presenting here this 
morning. Is that correct ? 

Mr. Skallerup. Mr. Tavenner, and Mr. Chairman and Members 
of the Committee, my remarks are addressed to the proposed draft 
bill, so that when I cite sections like this recent citation of section 
301, it refers to the proposed draft bill. 

The Chairman. That you are offering ? 

Mr. Skallerup. That we are offering, yes, sir. In general, of 
course, these remarks have a direct bearing on H.R. 10175. 
• The Chairman. Yes. 

Mr. Skallerup. This was done for purposes of simplicity. We 
thought it would be simpler to proceed in this manner. 

Mr. Tavenner. Pardon the interruption, if you will begin your 
paragi'aph over again, please. 

Mr. Skallerup. The United States work force engaged in the man- 
ufacture of durable and nondurable goods early in 1962 is estimated to 
number 16,400,000 people. This is roughly one-fourth of the total 
United States work force. Our estimate of the cumulative total nnm- 
ber of access authorizations granted in industry since 1949 is 5.000.000. 
The total cumulative number of cases which have come under the De- 
partment of Defense industrial review program since 1953 is about 
4,600 cases. 

The language of both the Executive Order and the proposed legis- 
lation is in sufficiently broad and general terms to cover the entire 
industrial security program, both in its granting aspects (the 5,000,000) 
and its review aspects (the 4,600). 

In looking over the 4,600 review cases since 1953. of which a little 
over 800 have come under the current program which began August 1, 
1960, after the Greene case, it appears that a high percentage of per- 
sons receiving a Statement of Reasons (SOR) defaulted by not reply- 
ing to the Statement of Reasons. Defaults occur in over 30 percent 
of the cases where a Statement of Reasons has been issued. 

Between April 1955 and March 1962, it appears that the preponder- 
ant majority of grants in the review program have been made by the 



HEARINGS RELATING TO H.R. 10175 461 

Screening Board. Tlie Screening Board accounts for about 85 per- 
cent of all grants. Nevertheless this number accounted for an average 
of only 35 percent of all cases sent to the Screening Board, including 
the still pending cases. 

Only a minority of all cases received into the review program ever 
reach the personal appearance proceeding stage, namely, about 20 
percent. Of those cases which do reach the personal appearance pro- 
ceeding stage, there are more denials and revocations than grants, with 
an average of about 42 percent grants and 58 percent denials and 
revocations. 

Since 1960 under the present program a higher percentage of ap- 
plicants have defaulted by failing to reply to the SOR. Percentages 
have increased from 30 percent to 33.2 percent, and the percentage of 
denials and revocations by the Central Board has increased from 54.7 
percent to 61.2 percent. 

A review of cases under the present 1960 program also discloses 
the remarkable fact that out of a total of about 800 cases which have 
come under the review program, of which 500 have been completed 
and 300 are pending, there are only 11 — and the number eventuall}' 
may be less than 11 — in which there is need for use of a cei'tiiicate to 
limit opportunity for cross-examination. In all other instances suffi- 
cient information has been obtained to go forward with the case and 
provide an opportunity for cross-examination with respect to those 
allegations which were in controversy. 

Therefore, I would conclude that by dint of hard work and the 
splendid cooperation of other agencies and departments in tlie Execu- 
tive Branch of the Government, the Department of Defense industrial 
security review program has been able to operate effectively within 
the traditional legal framework, and that only in a very small number 
of cases is a resort to exceptional procedures apt to be necessary. In 
short, our procedures and practices have recognized the interests of 
individuals and have established safeguards to protect these interests. 

Sections 301, 302 of the draft revised bill would provide express 
legislative authority for the establishment of standardized procedures 
for the industrial security program, including the review program. 
These sections would not impair the authority of the Secretary of De- 
fense under regulations prescribed by the President to dispense with 
such procedures when he decides that the national security so requires 
in the particular case and when, thereupon, lie makes the decision on 
eligibility in the case, 

Mr. ScHERER. Pardon me just at that point. Your draft bill, then, 
doesn't have any sections which would allow the elimination of cross- 
examination? 

Mr. Skallerup. There are sections in it, sir, which would permit 
the elimination of cross-examination. 

Mr, Sciierer. Maybe I didn't follow you, but I understood, from 
what you just said, that it wouid eliminate such language. 

Mr. Skallerup. Well, my purpose in reviewing the experience un- 
der the program was, first, to demonstrate that really it is only in a 
very small minority of cases that people cannot be confronted with 
witnesses and be given the opportunity to cross-examine them. 

The second point is that in the legislation which we are proposing, 
authority would be granted to the Secretary of Defense under regula- 



462 HEARINGS RELATING TO H.R. 10175 

tions prescribed by the President in individual and particular 
cases 

Mr. ScHERER. Not to require cross-examination ? 

jMr. Sk^^llerip. Xot to require cross-examination. 

Mr. SciiERER. That is in this bill that you propose ? 

Mr. Skallerup. Yes, it is, and Mr. Bartimo, assistant general coun- 
sel, would like to comment on this point. 

Mr. Bartimo. May I, in answer to your question, Mr. Scherer, pin 
that point home ? Section 302 of the draft bill reads as follows : 

Except in cases where the Secretary personally determines that such pro- 
cedures cannot be employed consistently with the national security, in which 
event the Secretary will personally make the determination to deny or revoke 
access authorization. 

This language is designed to take care of the point which you are 
making ; that is the exceptional case. Because of national security in- 
terests, the Secretary of Defense may not decide to go ahead with these 
procedures. The cross-examination procedures may not be employed, 
and on his own determination the Secretary of Defense may make the 
decision to deny this particular individual the privilege of access to 
our classified information. 

Mr. Scherer. I understand. 

Mr. Skallerup. I am coming to that point in this following para- 
graph. 

Section 302 contains an express legislative authorization whereby the 
Secretary of Defense, under such regulations as the President may 
prescribe, may limit the opportunity for cross-examination. 

The Chairman. May I interrupt at that point? 
, Mr. Skallerup. Yes, Mr. Chairman. 

The Chairman. "Wouldn't it be preferable to spell out the type of 
cases, rather than to have the President issue regulations? l^Hiy 
wouldn't it be better to take this entirely away from the field of regu- 
lations and write a statute to cover it ? 

Mr. Skallerup. Well, the thought here is that this would provide 
legislative authority to achieve these results. The President through 
his Executive Order, and particularly in section 9 of the Executive 
Order, has granted this authority. 

Mr. Scherer. Well, what the chairman means, is that you would 
pliminate the necessity for regulation, because we would spell it out 
in the statute. 

The Chairman. You see, this provides express legislative author- 
ization for regulations to be issued by the President. Now why isn't 
it better to spell out the regulations fully b}'' statute? 

Mr. Bartimo. Mr. Chairman, I think you are raising a very good 
point and one which we have discussed extensively, both in the De- 
partment of Defense and with our colleagues in the Department of 
Justice, and I think the problem comes about, sir, in trying to spell 
out sjiecific criteria in slatnte which would cover that area. 

It is most difficult to do and, therefore, we would urge and recom- 
mend that the Congress, that this committee, set forth guidelines, and 
leave the flexibility in the Executive Branch to go which way it deems 
best in the national interest. 

Mr. Scherer. Well, you would have to spell it out in your Executive 
Order, wouldn't you? 



HEARINGS RELATING TO H.R. 10175 463 

^fr. IxvKTiMo. It is true, sir. 

Mr. SciiERER. You nier.n you could olmuuv I lie Executive Order, 
from time to time, to meet specific instances? 

i\Ir. Bartimo. Precisely. 

Mr. SciiERER. ?ToAv -would that atl'ect future cases before the Su- 
preme Court? Wouldn't you be in better shape in doing what the 
chairman suggests by spelling it out in the law, rather than leaving it 
to iTgulation? 

The Chatrmax. HaA'ing in mind the decision in the Greene case. 

Mr. Bartisio. I believe, sir, that if this committee sets forth clearly 
both in its legislative history and the broad language of the statute 
that which you have in mind, the Secretary of Defense has tlie author- 
ity to implement your guidelines, with specific language. In such 
a case I am sure that the courts would determine that he is operating 
under authority given to him by the Congress. 

Mr. SciiERER. You think that would meet the requirements in the 
Greene case? I know it isn't part of the decision, but it is obiter 
in the Greene case, isn't it? 

The Chairmax. I think the obiter dictum very definitely indicates 
the danger that we are confronted with in permitting the administra- 
tive finding to prevail. 

Mr. Bartimo. I would agree, sir, v,"ith your statement, that the 
dicta, or the obiter dictum as you put it, does give us an indication 
of the thinking of the Supreme Court. In our judgment, the Su- 
preme Court is in effect, in a statesmanlike manner, pointing out to 
us the deficiencies in our procedures pre-Greene. 

We believe that, with the revised draft of the bill which we are rec- 
ommending to you for consideration, the guidelines and the specific 
criteria set forth will be sufficiently clear to indicate the will of this 
committee and the Congress, should the bill become law. 

"We believe under those circumstances the Supreme Court, looking 
at another case in the future, would reach the conclusion that you 
have in mind. The guidelines are clear, the reasons are clear. The 
will of Congress is clear. 

Mr. ScHERER. Now this bill, as I understand it, is limited solely to 
classified information, is it not ? 

Mr. Bartimo. That is true, sir. 

Mr, SciiERER. Since 1952, I remember the Defense Department has 
been asking for legislation similar to this that deals with nonclassified 
material, has it not? 

Mr. Bartimo. I am not familiar with that, Mr. Scherer. 

Mr. SciiERER. I have listened to testimony from the Defense Depart- 
ment asking for legislation similar to this to deal with individuals 
in defense plants where the individuals do not handle classified 
information. 

Mr. Bartimo. Yes. 

Mr. Scherer. But would be working on normal or regular weapons 
of war. 

Mr. Bartimo. Yes, I think, Mr. Scherer, if we may for the record, 
I believe you had in mind a piece of legislation which — if I may devi- 
ate for a moment and congratulate this committee for its marvelous 
work in not only getting the bill through the committee but past the 
House, whereby the Secretary of Defense, upon his finding that a 



464 HEAKINGS RELATING TO H.K. 10175 

particular plaiil or industry is considered a defense plant industry, 
and such a plant or industry is posted, it puts on notice a member 
of the Communist Party that he would be in violation of a criminal 
statute to continue to be so employed in such a facility. That is point 
number one. 

Mr. ScHERER. Pardon me. That provision is applicable since the 
Supreme Court last fall sustained the Internal Security Act of 1950. 

Mr. Bartimo. That is correct, sir, I agree. 

Mr. SciiERER. You think that eliminates the necessity for the legis- 
lation which the Defense Department lias been requesting since 1052, 
that we have legislation or that we authorize the setting up of pro- 
cedure to deal with individuals in defense plants who are not handling 
classified work ? I know^ I introduced a bill a couple of times to take 
care of that situation, at the request of the Defense Department. 

Mr. Bartimo. Yes, sir, let me say this. I think that, in part, I 
would agree with your statement. Plowever, what you are really 
coming up against on the nonclassified information is a very esoteric 
area of great magnitude. Let us say this — and I am sure this com- 
mittee realizes it far better than we — that an individual may go 
around and pick up pieces of unclassified information; when those 
pieces are put together, it may in effect result in a classified document. 
This has been proven, as you know, from research groups that have 
done it. 

I think there was a group at Yale that did it. They picked up the 
various committee hearings, the appropriation hearings, what ap- 
pears in technical magazines, such as Aviation Week, and they put 
that together and it became a bundle of useful information. 

I do not know that we can ever find the panacea to solve this ill. 
We are a free nation, a free democracy; the fourth estate operates 
with great freedom : T am sure we want it that way. 

I think as a point of departure, however, it is up to the individuals 
who have access freely throughout our country to have a degree of re- 
sponsibility. Security in this Nation is not only the job of this com- 
mittee and the officials in the Department of Defense. Tn our judg- 
ment it is the responsibility of every citizen. 

It seems to me that discretion and judgment are most important; 
that if an individual or a newspaperman or a technical magazine has 
gotten access to information which in their judgment should be known 
to be sensitive, they ought to treat it as such! 

I don't believe, sir, that we can ever legislate that all information 
not classified has to undergo certain rules and regulations. I think 
we would frustrate the very freedoms we are seeking to preserve. 

Ml-. ScnERER. Well, T am not talking necessarily about informa- 
tion ; but I remember your predecessors from the previous Adminis- 
tration, who came from the same agency in the Defense Department 
that you gentlemen do here today, pointed out that they lacked the 
ability, because of the lack of legislation, to take care of a subversive 
person who didn't even work in the defense plant, but worked in a 
utility plant that supplied power to a defense plant; and they were 
asking us for legislation since 1952 to set up procedures whereby we 
might either get rid of that person in that position or in some way 
control him, because they pointed out that that individual was as 
dangerous to our security as a person handling classified information, 



HEARINGS RELATING TO H.R. 10175 465 

or a person actually employed m the defense work on normal defense 
weapons. 

Now that is the point. "We have no legislation to deal with that, 
except perhaps the Internal Security Act, w^hich has now been held 
constitutional and which says that no Communist may work at such 
a position. But what about a person that you cannot prove is a Com- 
munist ? And most of the persons that would be in a position to pull 
the switch may not be members of the Communist Party. 

Mr. Bartimo. I think specifically, Mr. Scherer, on the point, your 
example of the subversive, if we could determine and prove he was 
a subversive, undoubtedly he would also be a Communist. 

Mr. Scherer. That is not necessarily so. 

Mr. Bartimo. Well, in the case where it isn't necessarily so, I would 
have to agree with you, on your example, that we do have a hiatus, 
that it is an area in which we do not have specific statutory authority 
to move. 

Mr. Scherer. You don't have statutory authority to cover even per- 
sons working in defense plants on conventional weapons, do you? 

Mr. Bartimo. That is correct. 

Mr. Scherer. Now has the Defense Department abandoned its re- 
quest for such legislation ? I won't keep on introducing my bill if you 
have. 

Mr. Bartimo. I believe the answer to that is, it is not necessarily 
abandoned. It is I believe a very, very difficult area to legislate iii. 

Mr. Scherer. Are you familiar with the bill that I introduced? 

Mr. Bartimo. I am not, and I apologize. We should reread your 
bill. 

Mr. Scherer. Well, it wasn't my bill, it was recommended by the 
Defense Department. The language in it was recommended. 

The Chairman. Defense and industrial. 

Mr. Bartimo. May we take this point up later and relook at the 
bill, and determine if the position of the Executive Branch is as it 
was, evidently, when it was submitted here ? 

Mr. Scherer. Yes. The only reason I raise that issue now is, if it 
is necessary that we have such legislation, and if you still feel that it 
is necessary — and I certainly feel it is, because I feel that a person 
such as I have mentioned is as dangerous, perhaps, to the security of 
the United States as is some person handling classified material — we 
perhaps could add such provisions to this bill. 

Mr. Bartimo. May we take a look at it, sir, when we go back, to the 
Pentagon? 

Mr. Skallerup. It is certainly an appropriate time to consider it, 
sir. 

The Chairman. May I ask you whether or not you conferred with 
Justice concerning this proposal ? Because they are well acquainted 
with what Mr, Scherer is talking about. 

You see, the thing that disturbs us is — today a particular plant is 
covered, and tomorrow it isn't. Changing conditions, of course, have 
to be met. I believe that the Justice Department has some very strong 
views on this. 

Mr. Bartimo. We will be most happy, Mr, Chairman, to consult 
with our colleagues in the Justice Department on this point. 



466 HEARINGS RELATING TO H.R. 10175 

The Chairman. Have you submitted your proposal to the Bureau 
of the Budget ? 

Mr. Bartimo. Our proposal has been submitted to the Bureau of 
the Budget, and they have determined that our recommended proposed 
legislation conforms to the program of the President. Therefore, it 
is approved by them. 

The Chairman. Therefore, the Justice Department has seen it. 

Mr. Bartimo. The Justice Department has seen it, and you will have 
the opportunity to have the Assistant Attorney General, Mr. Walter 
Yeagley, as a witness, I understand. I am sure he will be most happy 
to address himself to this point. 

The Chairman. All right. 

Mr. ScHERER. In considering the proposition that I raised, you 
iiiight want to take a look at our hearings in the Pittsburgh area, 
designed to support legislation such as I have indicated, in which we 
showed that there were five plants in the Pittsburgh area whose em- 
ployees were represented hj unions that had been expelled from the 
CIO because they were Communist-dominated and controlled, and 
also showed that indi^ndual members of those unions were members 
of the Communist Party, at that time working on defense contracts. 
Not classified, however, but working on defense contracts. And it 
has been indicated, we have no legislation to handle those individuals. 

Mr. Bartimo. "We will be glad to look at that, Mr. Scherer. 

Mr. Scherer. One of those plants could be easily sabotaged if we 
should get into a shooting war with the Soviet Union. 

Go ahead. I am sorry. 

Mr. Skallerup. Section 302 contains an express legislative author- 
ization whereby the Secretary of Defense, under such regulations as 
the President may prescribe, may limit the opportunity for cross- 
examination. In stating this authority, the draft bill does not ex- 
jiressly reiterate each and every requirement and condition set forth in 
ihe Executive Order. However, we believe there is no conflict be- 
tween what the draft bill requires and what Executive Order 10865 
requires. 

The Department of Defense intends to continue to apply all the 
requirements of the Executive Order and in so doing will meet every 
requirement expressed or implied in the proposed legislation. 

At this time I submit for the record, a copv of Department of De- 
fense Directive 5220.6.^ dated July 28, 1960, which carries into effect 
the authority granted by Executive Order 10865. A copy of that 
Executive Order is appended to the directive. I also submit copies 
of Executive Order 10909, which amended Executive Order 10865. 

Section 303 of the revised draft bill would provide legislative 
authority whereby the Department of Defense could pay travel ex- 
])enses and a per diem available from appropriated funds to cover 
the expenses oi witnesses called by the Department of Defense to give 
testimony or produce evidence in personal appearance proceedings. 
By virtue of Executive Order 10909, the Dei^artment of Defense is 
expressly authorized to furnish travel in kind and to pay other actual 
expenses to witnesses not to exceed a per diem of fixed maximum 
amount. Section 303 also would provide legislative authorization 



1 Department of Defense Directive 5220.6 marked "Exhibit No. 3." See appendix, 
p. 525. 



HEARINGS RELATING TO H.R. 10175 467 

for the pajnnent of certain fees in connection with takinjr depositions. 
P'or many years the Department of Defense has antliorizecl the reim- 
bursement of lost earnings directly caused by adverse actions in the re- 
view program. This action has been discretionary with the Depart- 
ment, and has not been intended to create a legal right in an applicant 
to demand reimbursement. Reimbursement is not contemplated for 
applicants who have not been found eligible for access authorization 
prior to the time of filing their claims. Reimbursement is intended 
only when and to the extent required b}^ considerations of fairness and 
equity. 

The draft bill is intended to express the policy that reimbursement 
is absolutely discretionary with the Department ; that it is not a legal 
right of the applicant under this bill ; that it will be made only on 
grounds of fairness and equity which clearly show that the Govern- 
ment, rather than the applicant, should bear the loss; and that the 
maximum reimbursement must be calculated in terms of nonspecula- 
tive sums of money. 

The section would grant such authority and make appropriated 
funds available. 

As indicated in the Department's letter transmitting the revised 
draft bill, the Department of Defense has entered into mutual agree- 
ments with certain other departments and agencies of the Govern- 
ment; namely, the National Aeronautics and Space Administration, 
the Federal Aviation Agency, the General Services Administration, 
and the Departments of State and Commerce. Under these agree- 
ments the industrial security program of the Department of Defense 
is made available to other agencies of the Government for the resolu- 
tion of cases in which such agencies are concerned with safeguarding 
classified information which they are responsible to protect. 

By these agreements, an economy of effort and funds can be accom- 
plished while, at the same time, affording a wider base for the applica- 
tion of the experience of the Department of Defense in administering 
this program. Section 305 of the revised draft bill is designed to ap- 
prove such agreements now in effect and to provide legislative antlior- 
ity to enter into similar agreements with other agencies or depart- 
ments, as desired from time to time. 

In recent years, the Department of Defense has been administering 
a program to provide protection for classified information belonging 
to other countries which is entrusted to the United States and released 
to United States industry in furtherance of international defense ef- 
forts. The term "classified information" in section 301 is understood 
to cover broadly all classified information, regardless of country of 
origin, which the Department of Defense is obligated to protect. 

(At this point Mr. Walter left the hearing room.) 

Mr. Skallerup. As you can see, the draft bill does not include sub- 
pena authority. Experience under Executive Order 10805 has shown 
that most cases can be resolved on the open record through witnesses 
and documents presented by the Department to the Field Board. The 
extreme minority of cases (11 out of 800) in which certified testimony 
and documents may be needed would not be resolved by subpena au- 
thority because certified testimony and docmnents would still be 
needed. The Department would prefer to gather more experience be- 



468 HEARINGS RELATING TO H.R. 10175 

fore supporting a grant of subpena authority at this time. It will 
advise the Congress if and when the authority has been shown to be 
necessary to the continued success of the program. 

(Mr. DoA'le presiding.) 

Mr. Doyle. Proceed with your statement, please. 

IMr. Skali^rup. "We shall be liappy to try to answer any questions 
that the conmiittee may wish to ask and to furnish in greater detail 
any information which thus far has been covered only in general 
terms. 

That concludes my statement. 

Mr. Doyle. Thank you very much. 

Counsel, do you care to ask any questions ? 

Mr. NiTTLE. Yes, sir. Mr. Skallerup, I want to call your atten- 
tion to the letter of March 14, 1962, of the General Counsel of the De- 
partment of Defense, forwarded to the committee in response to its 
request for the views of the Department. This letter has already been 
offered for the record at the commencement of this proceeding. 

There is a statement therein as follows : 

In view of the action of the President in Executive Order 10865, the proposed 
legislation is not considered necessary. 

Now in view of the fact that a committee of the Congress does not 
wish to engage in useless motions, perhaps that should be clarified on 
the record. 

Certainly, we do not mean to suggest by the introduction of H.R. 
10175, which is the bill under consideration, that the Defense Depart- 
ment has not met its responsibilities following the decision in Greene 
v. McElroy^ or prior thereto. As a matter of fact, your Executive 
Order 10865, which was promulgated immediately after the decision, 
was an attempt by the Defense Department and the President to ful- 
fill its responsibilities in maintaining the security of classified infor- 
mation released within industry. 

However, I call your attention to certain language in Greene v. Mc- 
Elroy. The Court struck down the security procedures of the Defense 
Department on the ground that in setting up what may be described 
as a limited hearing procedure, the Department had exceeded its au- 
thority. Chief Justice Warren said, "it must be made clear that the 
President or Congress, within their respective constitutional powers, 
specifically has decided that the imposed procedures are necessary 
and warranted and has authorized their use." 

Perhaps moi-e pointed is the language of the Chief Justice at page 
508: 

Whether those procedures under the circumstances comport with the Constitu- 
tion, we do not decide. Nor do we decide whether the President has inherent 
authority to create such a program, whether congressional action is necessary, 
or what the limits on executive or legislative authority may be. We decide 
only that in the absence of explicit authorization from either the President or 
Congress the respondents were not empowered to deprive petitioner of his job 
in a proceeding in which he was not afforded the safeguards of confrontation 
and cross-examination. 

Now, Mr. Skallerup, in the light of that language of Chief Justice 
Warren, would you not agree that congressional action would place 
the Presidential order upon a finn basis and would remove any doubt 
at all as to the Presidential authority to create the specific program 
which has been set up in Executive Order 10865, as amended ? 



HEARINGS RELATING TO H.R. 10175 4G9 

Mr. Skaij.erup. Inasnmch as I have Mr. Bartiiiio from the General 
Couiisers Ollice and inasmuch as your questioning relates largely to 
questions of legal authoiity, 1 think it would be appropriate for me 
to ask Mr. Bartimo to answer it. 

iNIr. Bartimo. Thank you, Mr. Secretary. 

I tliink. Mr. Xittle, you are raising a very significant and a very mi- 
portant })oint in which we ought to build some clear legislative history. 
I think your quote from Greene v. McElroy is very pertinent. 

The Supreme Court did not cross the bridge of whether or not the 
procedures violated any constitutional provision, as you have indi- 
cated. It simply said that the Department of Defense does not 
have the authority either specifically under an Executive order of the 
President or a statutory provision. In my judgment, the Supreme 
Court in a statesmanlike manner was pointing to us a way to remedy 
the defect. 

I believe j^ou will agree with me that we should not make any legis- 
lative history in this liill which would indicate or cast the least doubt 
that the Executive Branch is impotent to act in an area so important 
as protecting the classified information of our Government. 

I think we ought to be clear that the President of the United States, 
under his constitutional prerogatives, under his constitutional man- 
date, has the authority and has the duty to step in and act. 

(At this point Mr. Tuck left the hearing room.) 

Mr. Bartimo. I think tlie President of the United States did that 
when he promulgated the Executive Order to which you refer. 

^Ir. SciiERER. Now I agree with your reasoning thoroughly, be- 
cause tliat is where I disagreed with the Supreme Court in the Greene 
case. I think the President, as Commander-in-Chief, has the right to 
do what lie wants with classified information of this Government, and 
he should be able to prevent a person from having classified informa- 
tion if he doesn't like the way he parts his hair, because classified 
information is a property right in the Government of the United 
States. 

Mr. Bartimo. I agree with you. 

Mr. SciiERER. I then agree with Mr. Nittle, although I don't agi'ee 
with the decision, that w^e should do everything we can to comply with 
the Court's decision. 

Mr. Bartimo. I agree that we should, Mr. Scherer. 

Mr. Scherer. I think it is wrong. I think the Supreme Court is 
wrong in this case. I think the Pi-esident does have inherent right, as 
I said, as Commander-in-Chief, to control a property right of the 
Government of the United States and to let his agent's or employees 
or any individuals have possession of it so long as he wants them to 
have possession of it. 

He should have the inherent right to deprive them of it, whether 
they are security risks or not. 

Mr. DoTLE. May I suggest at this point, the bells have sounded. 

Mr. Scherer. Is that a quorum call ? 

Mr. DoYEE. That is a quorum call. 

Mr. Tavenxer. Have you finished? 

Mr. Bartimo. No, sir. 

Mr. Ta'\t:nner. May I suggest, the witness has not quite finished, 
and if you could remain long enough 



470 HEARINGS RELATING TO H.R. 10175 

Mr. JoHANSEN. Could we wait, Mr. Chairman, until the second 
bell? 

jNIr. Doyle. Well, we will still have to adjourn for 20 minutes, any- 
way, when we do go. 

Mr. JoiiANSEN. You are comin^ back? 

Mr. Doyle. Oh, yes, we must come back, but may the witness under- 
stand we reo:rot that the bells have sounded, and we must go, but we 
will return at the earliest possible moment. 

Mr. ScHERER. Can he finish his statement that I interrupted? 

Mr. Doyle. Yes, proceed. 

Mr. BARTuro. In addition to the statement I have made, ]\fr. Nittle, 
you are raising a ver}' significant point as I have stated: Is legisla- 
tion necessary? I believe that that question can be answered suc- 
cinctly, that it certainly is a marvelous thing to have the President's 
Executive Order buttressed by the will of the Congress, to set forth 
clearly a congressional intent, 

I would like to add a footnote to Mr. Scherer's remarks, also for 
legislative history. The Supreme Court did not in its decision in 
Greene v. McEJroy upset the entire industrial security program. All 
it said is that we do not have either ExecutiA^e authority or statu- 
tory authority to finally deny an individual without a confrontation 
hearing. The rest of the industrial security program, as the Secretary 
indicated, is a vast one. Only a small percentage of cases are affected 
by hearings which involve the confrontation issue. 

I think he said about 11 cases, and I think it is significant for us to 
pin that point home. 

Mr. D0Y1.E. The committee will stand in recess for about 15 or 20 
minutes while we answer the roll call, and then we will immediately 
return. 

Sorry to cause the witness this inconvenience. 

(Whereupon, at 11:05 a.m., the committee was recessed to be re- 
convened the same day.) 

AFTER RECESS 

Committee members present: Clyde Doyle, of California; Gordon 
H. Scherer, of Ohio ; and August E. Johansen, of Michigan. 

Mr. Doyle. Let the committee reconvene. A quorum is present, 
following the quorum call on the floor. 

Are you ready. Counsel ? 

Mr. Ntttle. Yes, sir. 

Mr. Doyle. Proceed. 

Mr. Nittle. Mr. Skallerup, the Supreme Court in Greene v. 
McElroy seemed particularly concerned that there should be an expres- 
sion by the President or the Congress that the actual procedures estab- 
lished are necessary. 

Now it would seem that the mere fact that these procedures have 
been adopted in Executive Orders and in regulations of the Secretary 
of Defense wonld be a clear expression of their necessity. 

Nevertheless, it seems that to clear the record, there should be a 
positive expression on your part, as to whether or not a limited hearing 
or personal appearance procedure, such as is established in the bill 
under consideration and also under your proposed draft bill, is neces- 
sary in fact. 



HEARINGS RELATING TO H.R. 10175 471 

Mr. Skallerup. In our view, it is not only desirable, but necessary. 

Mr. NiTTLE. Could you elaborate on the point of necessity for 
establishing a personal appearance proceeding which limits, in certain 
reasonable circumstances, the confrontation and cross-examination 
of adverse witnesses ? 

Mr. Skallerup. INIr. MacClain will respond. 

Mr. MacClain. First of all, I should like to say that we strongly 
endorse the principle that we should do everything within our power 
to provide each applicant with every reasonable opportunity to demon- 
strate his eligibility as he sees it, and that we should do everything 
within our power, likewise, to inform him of the things about him 
that have come to our knowledge that raise questions in our mind 
as to his eligibility. But it is plain from experience that there are 
sources of information which are valuable to the United States Gov- 
ernment in its continuing eliort to protect the security of the Nation, 
and that the value of these sources of information is lost when the 
sources are identified. 

It isn't a situation where you are considering an activity of a man 
m the light of whether or not he should be criticized for that activity 
and whether or not, in order to prove his activity, you bring forth or 
don't bring forth a particular informant. In our area, what we are 
doing is protecting entirely the interest of the United States. If an 
informant is vital to that interest, then his identity must necessarily not 
be disclosed if we are to continue to have him available for the purpose 
intended. 

This, from our experience, does happen, and from our experience, 
we know that we do need to have the authority to limit the right of 
cross-examination for this purpose. At the same time, we know that 
in achieving that end, we can also help to serve the interest of the appli- 
cant by summarizing for him as much of the information as we can, 
without disclosing the identity of this confidential and precious source. 

If the committee would like to have me do it at this time, or at any 
time, we would show how tlie proposed revised bill, interlocking with 
the Executive Order, would accomplish these purposes and, at the 
same time, establish for the individual case the degree of reliability 
of the source and the accuracy of the information from the source. 
This is slightly detailed, and I would be very glad to do it, if you 
would like it to be done. 

Mr. DoTLE. Yes. we would like very much for you to do it. 

Mr. MacClain. There are in general two classes of witnesses. "We 
may call one of these classes the confidential witness v/ho is engaged in 
furnishing intelligence information to the United States Government. 
This category of witness is especially the kind whose identity must not 
be disclosed. 

Under the Executive Order and under our program as now operated 
and under the proposed revised bill as we would see it, this category 
of informant is made available to our program through a certificate 
from the head of the investigating agency whose informant it is. For 
example, the Attorney Genera] would furnish a certificate for an in- 
formant in that category, and the certificate would state that the 
informant is a confidential informant, that he has been engaged in 
furnishing intelligence information to the Government, and that the 

82627—62 3 



472 HEARINGS RELATING TO H.R. 10175 

disclosure of his identity would be substantially harmful to the 
national security. 

The other category of informant is just anyone who has information 
with respect to the matter at hand. He could be a friend or a neigh- 
bor or a fellow employee or a doctor or just anyone who has informa- 
tion available. Here the purpose of permitting us to use his inforaia- 
tion is that the circumstances laid out in the Executive Order, and as 
they would be iinplemented under our proposed bill, are such that it is 
literally impossible to produce him for cross-examination. Thus, the 
v\itness could not be produced because of death or serious illness or 
for a similar reason, or for some other reason which the head of the 
department concerned — in our case, the Department of Defense — de- 
termines is a good and sufficient reason. 

If the head of the department is prepared to make a preliminary 
determination as to the reliability of the source and the accuracy of 
the information, based upon information furnished to him by the in- 
vestigative agency, and if the head of the department is further pre- 
pared to state that failure to use this informaion would adversely 
affect the security of the Nation, and if after all of that has been said 
and done, he is ready to state the reason why the informant cannot 
come forward for cross-examination, then, under those circumstances, 
we can use that information. 

Now with respect to both of these categories, there are not only these 
conditions precedent to the use of the information, but there are also 
conditions subsequent. The first condition is that the individual shall 
be informed of the information as fully as the national security will 
permit. Secondly, consideration must be given to the fact that oppor- 
tunity for cross-examination was not made available to him, and 
finally, and maybe most important of all, under the Executive Order 
and under our regulations, and under our intention, an adverse deci- 
sion in that kind of a case can be made only by the head of the depart- 
ment. 

So you can see that with respect to our authority to limit cross- 
examination, the decisions as to the need for it and the final decision, 
if it is adverse, on eligibility, are placed right at the head-of-depart- 
ment level, wliich gives the individual maximum protection within 
the Executive Branch. 

I want to add just a further word. In our experience in administer- 
ing tlie program under the existing Executive Order, we view this 
authority to limit cross-examination as something to be utilized only 
when absolutely necessary. I think that this is demonstrated very 
convincingly by the fact that, after operating since August 1960, we 
have today out of several hundred cases only 11, and maybe less than 
11, in which we think it will be necessary to use this exceptional 
procedure. 

Now this is our attitude, but we absolutely know tliat there are those 
cases where, if we are going to safeguard classified information and 
not disclose precious sources, we have to have tliis tj^pe of exceptional 
authority, which is one of the subjects in this bill. 

There is a little further word on this subject that Mr. Bartimo 
would like to add. 

Mr. Bartimo. I think tliat Mr. MacClain has made a very lucid and 
succinct statement on the exceptional procedure in the overall picture 



HEARINGS RELATING TO H.R. 10175 473 

here, but I think we ought to put on the record the fact that the 
Department of Defense, or the Executive Branch, is not seeking to 
control tlie movements or the employment of individuals in civilian 
life. 

This is not our objective. I think it is important to note here that 
when the Executive Branch has classified information, this informa- 
tion belongs to the country, to the people who are charged with protect- 
ing this information. Therefore, it is our view that access to this 
information is not a right ; it is a privilege. 

Based on that philosophy, we have bent every eilort within the 
American framework, the American spirit of giving everyone who 
wants the privilege of getting access, what we believe is a fair hearing. 

I think this is important to bear in mind throughout the hearing, 
that we are not denying anybody the right to go to work at plant A or 
B or wherever he chooses. 

I think it is important also to note that where an individual who 
comes to us for consideration for access to classified information, and 
is denied that access to classified information, it does not necessarily 
follow that this individual must be dismissed from his employment. 
He might work in an area where there is no classified information. 
He certainly has the right to manufacture percolators or automobile 
wheels, or many of the millions of gidgets and gadgets which our 
economy needs. But he certainly shouldn't have the right after this 
screening process, if there is some doubt as to his reliability or trust- 
worthiness, to have access to our classified information. 

I think that this view is most important, and I would hope that the 
courts, in analyzing a case which might come before them, would give 
due consideration to this basic understanding, this basic philosophy. 

Mr. NiTTLE. Certainly, would you not agree that the Government 
is placed in a very serious dilemma if it cannot control access to classi- 
fied information? 

If the Government cannot control it, then the Government must 
oither divulge this information, release it to persons of doubtful char- 
acter and integrity, or not have necessary work done in industry. 
Isn't that correct? 

Mr. Bartimo. I would say that is correct, Mr. Nittle. 

Mr. ScHERER. Don't you think — and if classified information is a 
property right, it belongs to the Government of the United States — 
don't you think we are leaning over backwards when it becomes neces- 
sary to deprive a person of further access to classified information to 
even make all of these procedures available to him ? 

He has no basic right to that information, does he ? As you point 
out, it is not a right, it is merely a privilege. He acquires no property 
right. 

]Mr. Bartimo. Well, Mr. Scherer, I think you and I agree that under 
our American way of life, we should take every precaution, every 
means at our disposal, to be certain that we do not stigmatize unjustly 
an individual ; and I think you will agree that because we are human 
beings, mistakes are apt to be made. 

We want to stretch every effort to be certain that our procedures are 
such that we don't make a good citizen a citizen who is disgruntled be- 
cause he was unjustly accused. This is fundamental in our criminal 
procedures. We are willing in our criminal procedures to have a 



474 HEARINGS RELATING TO H.R. 10175 

criminal go free rather than to incarcerate the innocent. Within that 
philosophy, and always having in mind that we must protect the na- 
tional security interests, these procedures are geared with the hope that 
they will be accepted by the Congress and the American people and 
also the courts. 

Mr. Doyle. May I inquire if unclassified information is the prop- 
erty of the Government ? What is the property right of an applicant 
to have unclassified information given to him ? Wliat is his right of 
claim to that, if any ? 

Mr. Bartimo. Well, Mr. Doyle, I think that we are agreed that any 
information in the possession of the Executive Branch is inforaiation 
belonging to all of the American people. Some of it must be classi- 
fied, because our potential enemies might make use of it to our detri- 
ment. The unclassified portion of the information which you address 
yourself to is that information which ordinarily is in the public do- 
main, and yet, there is a segment of that unclassified information 
which should not be in the public domain, because it is privileged-type 
information. 

For example, supposing the Executive Branch were debating 
whether or not a certain policy should be promulgated. Many views 
are gotten throughout the Executive family; oftentimes we consult 
informally with the Congress to get their guidance. ITntil the policy 
is promulgated, it is not fair to release that type of information, it 
seems to me, to the detriment of candid views, to the detriment of a 
solid, educated policy that has all the facts ancl figures. I think it is 
important to note that where that type of situation prevails, various 
pressure groups might come in and press their point of view. 

This is the reason, I think, and I am sure we all agree, that we 
should have this type of Executive-privilege philosophy. It is not 
that we are withholding information. It is only because we want, in 
all candor, to examine all possibilities, so that when the final decision 
is made, it is the best judgment of the people who have the responsi- 
bility to make the decision. 

Mr. Doyle. May I further inquire at what level is the screening of 
the information about an applicant made? Before you send the ap- 
plicant any notice to appear, how many people are involved in making 
that decision, so as to screen it for veracity and lack of bias and these 
other things that might well enter into it ? 

Mr. Bartimo. Mr. Lewis is here today to answer questions along 
this line, sir. 

Mr. Lewis. The final screening before a Statement of Reasons would 
be issued to the individual is done by a Screening Board located in the 
Office of the Assistant Secretary of Defense. At the present time 

Mr. Doyle. Would you speak up just a little louder? 

Mr. Lewis. I am sorry. 

At the present time, we have a six-man screening board, sitting in 
two panels, made up of senior military officers and civilians of consid- 
erable experience, both in security and with legal training. And it 
is only after a group of three men has completely evaluated all of the 
investigative material that the letter of charges or the Statement of 
Reasons is issued. 

Mr. Doyle. Does that board, after screening the material, ever re- 
fuse to put an applicant on notice that they have discovered prejudice 



HEARINGS RELATING TO H.R. 10175 475 

or ill will or anything of the sort entering into a complaint or informa- 
tion ? Has that ever occurred ? 

]\lr. Lewis. Well, all of the information is verj' carefully evaluated, 
and as the Secretary pointed out earlier, a vast percentage of the cases 
which reach this level do result in clearances by that board. 

Mr. Doyle. How do they reach that level, those cases ? This board ? 
And what levels do they reach before they get to the board ? 

Mr. Lewis. The cases originate within the military departments, 
and they originate at the field level. Each of the military depart- 
ments has a slightly different organizational setup. 

Let me describe the Army setup for you. The security office at the 
headquarters of each Army in the United States — each Continental 
Army, plus the Military District of Washington, has a security office 
vvhicii is responsible for initially processing the requests of industry 
for an access authorization. They conduct the necessaiy record 
checks and held investigations and. then evaluate the results. If in 
their opinion the officials at the Army level are satisfied with the re- 
sults of the record checks and investigation, they are authorized — 
they have delegated to them the authority from the Department of 
Defense — to grant the access authorization. If they do not, or if 
they are not satisfied with tlie results, then the case is forwarded from 
the Army level to the Department of Army Headquarters, the Assist- 
ant Chief of Staff for Intelligence. 

There another review is made. Further investigation may be made ; 
and after the additional work is done, if in the opinion of the Assist- 
ant Chief of Staif for Intelligence for the Department of the Army 
the man should be granted access autliorizatiou, the case ends there. 

If he does not feel that he wants to grant the access, the case then 
comes to the review office in the Oflice of the Assistant Secretary of 
Defense, and then the Screening Board may do more work. We may 
iuterview the man. We may ask for still more investigation, and 
in a large percentage of the cases, the Screening Board disposes of the 
case favorably to the man. 

Mr. DoTLE. Thank you very much. 

Mr. JoHAXSEN. Mr. Chairman, may I make the observation that if 
there were — and this is not said critically — but if there were a requisi- 
tion for an employee or for a contractor on a hurry-up job, I suspect 
there would be some time consumed in the process you have detailed. 

Mr. Lewis. Yes, there is. The initial inquiries, at least through 
the secret level, are primarily record checks, and they are accomplished 
in a relatively short period of time. If the record checks develop 
(]uestion_able information and the case has to be converted to field in- 
vestigation, then a considerably longer period of time may result. 

All of these people are already Avorking for the company at the 
time the requests are initiated, so it isn't as if they were seeking em- 
ployment at the time 

Mr. JoHANSEX. But they are seeking assignment. 

Mr. Lewis. Within the company, yes. 

Mr. JoHANSEN. Now my question is a serious one in this respect, 
that to what extent are you estopped from pushing this one person, 
or this one contractor, aside due to delays inherent in resolving the 
question, and substituting, if there is a factor of urgency ? 



476 HEARINGS RELATING TO H.R. 10175 

In other words, are we actually, in the process of our extreme cau- 
tion to protect the rights and interests of the individual involved, 
throwing a delaying factor into what may be an urgent timewise pro- 
cedure or operation ? 

Mr. Lewis. Well, if you are addressing your question, sir, to the 
facility itself, I would say the answer is no. I have had no experience 
that would demonstrate that any vital defense industry, or part of in- 
dustry, was affected in its efforts to produce on a contract because of 
the time factor in processing requests for individuals who would be 
working for the company on a contract. 

It is true that certain engineering personnel, as well as blue-collar 
workers who might require access, individually would be delayed 
in getting access if in the course of investigation we discovered suf- 
ficiently derogatory information to warrant bringing the case all the 
way up to the Office of the Assistant Secretary of Defense and proc- 
essing it through the review program, yes sir. 

Mr. ScHERER. And we are doing this in an instance where we are 
dealing with a privilege rather than a basic right ? 

Mr. Sk^vllerup. That is true. 

Mr. Scherer. Legally, we would not be required to do it? 

Mr. Skallerup. I would be reluctant to come to that conclusion 
legally, Mr. Scherer. We are bending over backwards to be fair, 
and they do get a fair hearing. 

Mr. Scherer. Yes, I understand that. But when you do provide 
them with cross-examination and confrontation, that is required, of 
course, under the law when you are attempting to deprive a person of 
a basic right, namely, when he is charged with a criminal offense and 
he may be deprived of his liberty or fined. Then is when the law re- 
quires confrontation and cross-examination; but certainly, if we come 
to the conclusion that classified information, as counsel did, is not a 
basic right — a person has no property right to it, it is only a pri^^lege 
that the Govennnent extends to an individual to have that — then cer- 
tainly he is not entitled to a confrontation or cross-examination. He 
is not really entitled, except that you want to be fair in all of these 
procedures set up, which Mr. Johansen pointed out may, in the long 
run, affect the security of the United States. 

Mr. Doyle. May I ask, Mr. MacClain? I think you used the term, 
Mr. MacClain, describing the area in which a certificate could be made 
properly by the Secretary, for reasons of death or serious illness? 

Mr. MacClain. Yes, sir. 

Mr. Doyle. And then you used the phrase "or some other reason." 
Now are you in a position to tell me what other reasons would be con- 
sidered comparable to death or serious illness to justify the circum- 
stances? 

Mr. MacClain. Mr. Doyle, those particular words are in the Execu- 
tive Order and in our proposed revised bill. 

Mr. Doyle. I notice they are, but they don't specify. 

Mr. MacClain. The experience to date has not brought up a single 
instance in which we would have to make a determination of the 
meaning of those words "good and sufficient cause" as used in Section 
4(a) (2) (B) of E.O. 10865, as applied to a particular case. We do 
know that in this area there are some situations of a very high degree 
of sensitivity from the standpoint of the information involved. And 



HEARINGS RELATING TO H.R. 10175 477 

we know that if we have that kind of case, and we have an informant 
who would otherwise be available to us, but for a reason whicli at 
this moment I really cannot describe, but to the head of the department 
would seem good and sufficient reason as compared to this verj- high 
degree of sensitivity, in that situation, sir, an attempt would be made 
to resolve the meaning of those particular words. 

Certainly, there is no intention to make use of those words as any — 
in a manner of speaking — as any easy way out. It is going to be the 
hardest possible way out, before we use them, sir. 

Mr. Doyle. Counsel, do you want to proceed ? 

Mr. NiTTLE. Yes, sir. 

Now with respect to the procedures for personal appearance by ag- 
grieved applicants set forth in H.R. 10175 and your draft bill, certainly 
you do not regard these procedures as an admission in derogation of 
the absolute right and power of the Executive to control access to 
classified infomiation? 

Mr. Bartimo. Mr. Nittle, I agree with the point you are making. 
But we must keep in mind what Mr. Scherer has brought out, what 
we from the Department of Defense have indicated as the necessity 
and the philosophy and the reasons behind the procedures. But, cate- 
gorically speaking, you are absolutel}' right. 

Mr. Nittle. I believe that is the interpretation wdiich is to be placed 
upon the statement in section 9 of your Executive Order 10865, which 
reads as follows: 

Nothing contained in this order shall be deemed to limit or affect the responsi- 
bility and powers of the head of a department to deny or revoke access to a spe- 
cific classification category if the security of the nation so requires. 

Now, as a matter of fact, there are other powers involved here, are 
there not? And I ask this question with respect to present procedure. 
In Greene v. McElroij, by procedures then in effect, the Defense De- 
partment entered into a specific contract with an industrial establish- 
ment relating to personnel security matters. This was a contract 
between two parties only, the employer and the Defense Depart- 
ment, which provided, in fact, that the contractor shall exclude from 
any part of its plants, factories, or sites at which work for any mili- 
tary department is being performed, any person or persons whom the 
Secretary of the military department concerned or his duly author- 
ized representative, in the interest of security, may designate in writ- 
ing. Greene was not a party to this contract, and acquired no legal 
rights under it, 

Mr. Bartimo. Mr. Nittle, I think that the point you are bringing 
out is a very important one. I think this is a good point on the 
record, for us to indicate that the Greene case, Greene v. MeEli'oy, 
was based on a peculiar set of circumstances wdiich the Supreme Court 
found to be present in that particular case. I would like to duote 
here from a brief of the Government in Stephen L. Kreznar case, where 
the Government on p. 12 stated : 

The Greene case involved the revocation of a security clearance granted to 
Greene, an aeronautical engineer employed by a company devoted primarily to 
developing and manufacturing mechanical and electronic devices for the Armed 
Services. He had been with the firm for over fifteen years, and had become 
a chief executive oflBcer of the company. His work was of a specialized 
nature, and could not be performed without access to classified Information. 



478 HEARINGS RELATING TO H.R. 10175 

When his clearance for access to such information was withdrawn, there 
was no work for him to do and he was dischai'ged. He could not thereafter 
obtain employment in the aeronautical field because of his lacli of security 
clearance, and he was forced, to accept much lower paying work. 

On that peculiar set of facts and circiimRtances, the Court evidently 
concluded that this particular individual was being denied some 
rights — the Court didn't specifically state what those rights were — the 
Court was concerned by not having what it called a fair hearing 
to determine whether or not the decision of the Department of Defense 
was correct. 

It is interesting to note that the Court in the Brawner ^ case adhered 
to the philosophy which you have expounded, and that is, that the 
commanding officer of a Xaval installation had the authority to deny 
access, ingress, egress, from that installation, without a hearing. So, 
therefore, the courts, I think, are becoming cognizant of the point 
you are making. I think, we ought to pin home the point that Greene 
was a particular fact circumstance, and the Court, as I have indi- 
cated earlier, in my judgment, was being statesmanlike in indicating 
to us how we could improve our procedures under the American way, 
giving a man a fair hearing, 

Mr. SciiERER. But the Court did that, I think, on the false assump- 
tion that Greene has a basic right to classified information. 

Mr. Barttmo. Mr. Scherer, you may be right. I would diffei" 

Mr. Scherer. I think it was a false assumption the Court acted 
under. 

Mr. Bartimo. You may be right 

Mr. Scherer. And that is the only way it could arrive at the 
decision it did arrive at, assuming that he had a basic right rather 
than, as you said a few minutes ago, a privilege. 

Mr. Bartimo. You may be right in your interpretation. We have 
had many interpretations of what the Greene v. McElroy case means. 
I prefer, in charity and as a lawyer interested in the area, to construe 
the case as the Supreme Coui't setting forth its judgment that our 
procedures should be improved. 

For example, the Court said that we had not the right in the absence 
of an express authorization under an Executive Order or a statute to 
run the industrial security program in the precise manner that we did 
in that case. But the Court added, had it found that we gave a con- 
frontation and cross-examination type of hearing, it would have deter- 
mined that we had that right by implication. This to me was the 
handwriting on the wall, the statesmanlike opinion of telling us to 
improA'e our p]"ocedures, as T bf4ieve we have. 

Mr. Scherer. The Court indicated, as you say and as I remember, 
in the Greene case, that it might hold — even though the proper pro- 
cedu'Ts wei'e set up or even though tlie Defense Department had 
ihe delegation of autliorit}', either from the Congress or the President, 
to set up these procedures — at a later time that this individual is en- 
titled to confrontation. Didn't the Court hold that in that case? 

Mr. Bartimo. I ])el ieve the majority o]:)inion did 

Mr. Scherer. Entitled to cross-examination. 

Mr. Bartimo. I believe the majority opinion did not go so far as to 
make that judgment. 

Mr. Scherer. But it said that some place in the opinion, didn't 
it? One of the Justices said that? 



1 Cafeteria and Restaurant Workers Union, Local 473, AFL-CIO v. McElroy, 367 U.S. 
886 (1961). 



HEARINGS RELATING TO H.R. 10175 479 

]\Ir. Baktimo. You may be correct, but I think in order to be com- 
pletely responsive to your hypothesis on what Greene means, and 1 
think that as i a^'ree with you tliat access to classihed information is 
a privilege and not a right, you begin to get to what I call a gray 
area. Under the fact situation of Greene, which was peculiar, 
you begin to get into an area where the courts have said in other 
cases you might unjustly stigmatize a good American because you 
haven't given him a fair hearing. Where does that tine dividing line 
come then ? I agree with you that access to classified mf ormation is 
not a right, it is a privilege. But in adhering to certain procedures, 
where do you stop ^ From the clear demarcation of a right and a priv- 
ilege? And what of those elusive gray areas? Where do your pro- 
cedures unjustly stigmatize? 

I think this is what the Court was worried about. I believe that 
the Executive Branch, the President's Executive Order, and the regu- 
lations we prescribed would be wholeheartedly adhered to b}^ the 
Supreme Court, should we get another case. I woukl hope so. 

Mr. JoHANSEX. May I interject at that point, is it your belief that 
under the Executive Order issued subsequent to Greene that in an 
identical case — or tlie Greene case, had that existed prior to the 
action in his case — the courts would hold that his denial of access 
was a valid denial ? 

Mr. Bartimo. I would say, Mr. Johansen — and I am sure you will 
find better informed lawyers than I in this field who might disagree 
with what I am about to say — it is my judgment that should the 
Greene case, or a case similar to the Greene case, go before the 
Supreme Court, having gone through the procedures we are now 
operating with, the Supreme Court would hold that we have given him 
a fair hearing. I believe the Supreme Court — and I would hope it 
would — would commejid us for picking up what it considered a chal- 
lenge for an improvement. I believe the Court would say : "You 
have improved your procedures." 

Mr. Johansen. May I now press the question one step further? 
Assuming the hypothetical situation in which you have a Greene 
case, completely identical with these existing procedures, and assum- 
ing that in that case there was a determination, in consequence and 
responsive to the rules and procedures and by the proper authority, 
that there should not be confrontation and cross-examination, would 
your belief as to the similar action standing up apply to that situation 
as well ? 

Mr. Bartimo. Mr. Johansen, again, with the same caveat that other 
lawyers might disagree with me 

Mr. Johansen. Well, I think the committee is not going to accept 
that. 

Mr. Bartimo. It is my judgment, if we had a case where the Secre- 
tary of Defense personally made the determination tliat this particular 
individual is not entitled to access to our classified information and, 
because of the sensitivity of the case, that he would make a fiat and 
without procedures he would want to deny this individual access, that 
the Supreme Court of the United States would uphold that. 

I believe that this is a very rare type case. We haven't had one. 
I would hope it would be a very de minimis type situation. But in 
my judgment, in these perilous times in which we live, we must give 



480 HEARINGS RELATING TO H.R. 10175 

that authority to a key individual iii our Government, who has the 
responsibility for running his agencj^. He must have that authority. 
I believe the President has it. I believe it is legal for the President 
to delegate it to his top official, in the Department of Defense, the 
Secretary of Defense, and I would hope that the Supreme Court 
would adhere to the views which we are expounding here this morn- 
ing and find that legal. 

Mr. JoHANSEN. Well, I am very happy and commend the gentleman 
for the reference to these perilous times which include some internal 
perils, as well as external, and I concur completely. 

Mr. DoYLE. May I ask one further question ? 

I have before me the Executive Order 10865, which is referred to on 
page 6 of the statement this morning by the Secretary, and I call your 
attention to section ?>, subdivision (1) of that. I am especially inter- 
ested in subdivision (1). This apparently, as I read the order — it is 
the first time I have had the pleasure of reading it — this is in the pre- 
liminary stages of an inquiry, but unless I am in error in reading it — 
and let me read it out loud — the Avritten statement of reasons why his 
access authorization may be denied or revoked, I call your attention 
to this clause, "which shall be as comprehensive and detailed as the 
national security permits." 

Now, am I in error that the person that gives that notice of that 
decision is not the Secretary ? 

Mr. Skallerup. In this instance, the case has come up through the 
field organization, as Mr. Lewis described. It has come to the Screen- 
ing Board, and the Screening Board has made its determination that 
it cannot grant access. Therefore, the Screening Board prepares a 
Statement of Reasons, setting forth the basis for coming to the conclu- 
sion that the man should be denied access. The (juestion comes up : 
How broad, how extensive should this Statement of Reasons be? 
How far does the Screening Board have to go?" 

The Executive Order states that it should be as comprehensive and 
detailed as the national security permits, so that when the individual 
who has been seeking access is notified for the first time that he is 
not going to be given access, he is likewise notified in comprehensive 
and detailed language — just as comprehensive and detailed as the 
national security permits — precisely why he is not being granted ac- 
cess. This happens at the Screening-Board level. This board is in 
the Office of the Assistant Secretary of Defense. 

After the individual receives this Statement of Reasons, he is per- 
mitted to reply within a reasonable period of time to the statement, 
under oath or affirmation ; and at that point, if he desires, a hearing 
will be held in a field office — there are three of them in the United 
States — and he will be permitted to bring in counsel, to bring in evi- 
dence, to bring in witnesses, and with respect to those matters that are 
controverted in his reply to the Statement of Reasons, he may cross- 
examine the witnesses. 

Mr. Doyle. This, in fact, becomes a preliuiinary foundation for 
later action by the Secretary? 

Mr. Skaleerup. Yes, sir; it is the first time that the picture is clari- 
fied to the individual seeking access. He is given his Statement of 
Reasons. 



a 



HEARINGS RELATING TO H.R. 10175 481 

Mr. ScuERER. To which I don't think he is entitled, if what counsel 
hero and I ai!:ree on is so, that this is only a privilege. In the sense of 
American fair play, yes. 

Mr. Doyle. I am not the Supreme Court, but I rather think, until 
a person is proven to be a risk within the definitions before us, that 
the person has some rights. I think a person has a right to be in- 
formed. I don't regard that as a privilege, Mr. Scherer, I think 
that what 3^011 are doing here, in subdivision (1) of section 3, is some 
sort of a right of an American citizen. 

Mr. JoHANSEN. Well, Mr. Chairman, I am sure, you will agree 
that it is a relative right, at least to the extent that the Executive 
Order and this proposed legislation vests an absolute right in the 
head of the department to deny access in certain circumstances. 

!Mr. Doyle. I don't question that for a minute, but up until the time 
that there is a finding that the man is a risk and shouldn't have access, 
I think in lay language he is an American citizen that is entitled to 
know^ what the charges are against him. He has the right of counsel 
at all times, under this directive, as I see it. Is that a privilege, or is 
that a right ? The right of counsel under this Order. 

Mr. Skallerup. If I might answer, part of the difficulty here, when 
cases of this sort get into Court, as I see it, is in characterizing the 
problem. 

Now in the Greene case, the Court was concerned with a right, but 
it was not speaking of the right which Mr. Scherer and Mr. JBartimo 
were speaking about. The Court said that under the specific facts 
before it in that case, this man has been, to use its own language, "de- 
prived of the right to follow his chosen profession," and as a matter 
of fact that was the consequence of denying him the security clearance 
under those circumstances. So the Court said : 

Before we are asked to judge whether, in the context of security clearance 
cases, a person may be deprived of the right to follow his chosen profession with- 
out full hearings where accusers nuay be confronted, it must be made clear that 
the President or the Congress within their respective constitutional powers, spe- 
cifically has decided that the imposed procedures are necessary and warranted 
and has authorized their use. 

"Well, when a case comes down the track to us, we are not sure just 
how it will be characterized when it gets into Court, so considering 
the interests of the individual and the Government, w^e are providing 
these procedures, so that in the event the upshot is that the man, as in 
Greene, is denied the right to follow his chosen })rofession, we wall at 
least be doing it in a way which we believe is consistent with the way 
set forth by the Supreme Court in the Greene case. 

Mr. Doyle. Well, you are doing it to play safe, as you say — antici- 
pating any possible future Supreme Court decision. 

Mr. Scherer. Let us assume that I am an employer and have 
owned, maybe under patents, a certain secret formula. I have 
to have employees apply that formula in the manufacture of what- 
ever conmiodity I am manufacturing. Suppose I have just reason 
to believe that an employee is passing on this formula, or his con- 
duct is such that he may pass on that formula to a competitor, 
a secret fomiula which I own. Do I then, as a private employer, if 
the reasoning of the Supreme Court is correct, have to set up some 



482 HEARINGS RELATING TO H.R. 10175 

kind of board, give liim a trial in a hearing, to deteraiine whether 
I can fire him or not ? 

I think the secrets of the United States whicli protect the security 
of this Nation are more important, more vital, than this formula I 
might have. How far are we going to carry this? How do you 
explain that? 

Mr. Bartimo. May I make a comment ? And I would beg the in- 
dulgence of the committee, and I say this in all humility, that seman- 
tics is sometimes said to be a science, and I believe from what I have 
heard, I think valuable discussion for legislative history^ that Mr. 
Doyle is not apart from Mr. Scherer, and Mr, Scherer is not apart 
from the Department of Defense. 

Let us briefl}^ recapitulate. We start with the premise that access 
to classified information is not a right of any individual. If it were, 
we would reach ridiculous results. "We could have a person from 
Russia who would become a citizen for the purpose of gaining access 
and getting information and carting it home to Eussia. I think we 
all agree that is a ridiculous result. 

I think, as I have tried to indicate, that you have two principles 
at stake here. One is the principle that Mr. Scherer propounds, in 
which I agree, that having access to classified information is a priv- 
ilege. It is up to the Executive Branch, that has the authority, that 
is charged by the American people with protecting this sensitive in- 
formation, all for the purpose of preserving our way of life, to deter- 
mine that a person must be reliable, trustworthy, and adheres to our 
fundamental concepts in our way of life. 

Our procedures are geared to screen out those individuals which do 
not meet this criterion, which I am sure we all agree to. Xow, how 
do' we get what appears to be a cleavage, from what I understand 
Mr. Doyle is saying, and from what I understand 

Mr. Doyle. Now for the purposes of the record, I will stipulate to 
that point. You and I and Mr. Scherer agree. 

Now how about the other areas ? 

Mr. Bartimo. Fine. The area where I think that there might be 
a possible difference, and I would hope that it is a semantic difference, 
is that where in the peculiar fact situation which we described, and 
which was present in the Greene case, that you have a peculiar devia- 
tion from what I think is the sense of the entire group that is here 
this morning. I believe it comes from, under a particuhir fact situa- 
tion, procedures which were then invoked by the Department of De- 
fense, and an individual found himself in a most peculiar set of cir- 
cumstances. I doubt if Ave will even get another case like it. That his 
training, his background, equipped him so he could only earn a live- 
lihood by working on defense contracts, which meant that he had to 
have a clearance. The Supreme Court was concerned, I think, not 
so much on the Greene case itself, but on the principle that you might 
have made a mistake, that you might have denied a good citizen the 
means of livelihood. The Court was probably going on to the theory 
that the Executive Branch might possibly be stigmatizing a good 
citizen. It was concerned about that. 

As I have said, the Court indicated, I believe, in its opinion, a 
statesmanlike approach, you should improve those procedures in 



HEARINGS RELATING TO H.R. 10175 483 

accordance with the American tradition. What is that tradition? 
Fair pUiy. 

We have picked up the Court's challenge, and when I say "we," we 
have had the aid of erudite attorneys like Mr. Walter Yeagley from 
Justice, White Plouse attorneys, many attorneys throughout the Ex- 
ecutive Branch, who have put their brains to work. 

It took about 9 months of hard work to come up with the Executive 
Oixler and the regulations, all to the end of meeting the challenge 
of the Supreme Court, and always having in mind that we must use 
procedures which protect the national security— that is the para- 
mount issue. In my judgment, that paramount issue is set forth 
specificallj'' in section 9 of the Order, which says that in a particular 
set of circumiStances, where the Secretary of Defense personally de- 
termines, because of the sensitivity of the situation, or the classified 
information, he cannot go to a full-scale hearing, it is his judgment, 
weio-hincr the value of the individual and national interests that this 

^ ^ • • • 

individual on his own say-so shall not have access. I think this is 
in accord with our xVmerican tradition. 

iNIr. SciiERER. Now I think we should show for the record, then, 
what the evidence in the Greene case showed about Greene's back- 
ground. I think it is important. 

(Mr. Scherer, reading:) 

During 1942 SUBJECT [Greene] was a member of the Washington Book Shop 
Association, an organization that has been officially cited by the Attorney Gen- 
eral of the United States as Communist and subversive. 

SUBJECT'S first wife, Jean Hinton Greene, to whom he was married from 
approximately December 1942 to approximately December 1947, was an ardent 
Communist during the greater part of the period of the marriage. 

During the period of SUBJECT'S first marriage he and his wife had many 
Communist publications in their home, including the "Daily Worker" ; "Soviet 
Russia Today" ; "In Fact" ; and Karl Marx's "Das Kapital." 

Many apparently reliable witnesses have testified that during the period of 
SUBJECT'S first marriage his personal political sympathies were in general ac- 
cord with those of his wife, in that he was sympathetic towards Russia ; followed 
the Communist Party "line" ; presented "fellow-traveller" arguments ; was appar- 
ently influenced by "Jean's wild theories" ; etc. * * * 

In about 1946 SUBJECT invested approximately $1,000 in tlie Metropolitan 
Broadcasting Corporation and later became a director of its Radio Station 
WQQW. It has been reliably reported that many of the stockholders of the 
Corporation were Communists or pro-Communists and that the news coverage 
and radio programs of Station WQQVv^ frequently paralleled the Communist 
Party "line." * * * 

On 7 April 1947 SUBJECT and his wife Jean attended the Third Annual Dinner 
of the Southern Conference for Human Welfare, an organization that has been 
officially cited as a Communist front. * * * 

Beginning about 1942 and continuing for several years thereafter SUBJECT 
maintained sympathetic associations with various officials of the Soviet Embassy, 
including Major Constantine I. Ovchinnikov^ — 

I can't pronounce his name — and a number of other top Communists. 
I won't read on, but there are tendered specifications that get worse 
as you go on. 
]Mr. JoiiAxsEN. And is Mr. Greene now entitled 



Mr. Scherer. Oh, he is entitled to classified information. 
Mr. JoHANSEx. — entitled to access to classified information? 
Mr. Bartimo. May I clarify the record on that? Greene does not 
have access to classified information. The Supreme Court did not 



484 HEARINGS RELATING TO H.R. 10175 

order us to give him a clearance. The Supreme Court was very limited 
in its decision, and this is one reason why I have constantly character- 
ized this decision as a statesmanlike decision. Greene does not have 
access. 

Mr. JoHANSEN. How was the denial of that access accomplished in 
the face of the Court decision ? 

Mr. Bartimo. The fact is tliat I don't believe the Supreme Court 
wants the Greene decision to be construed as having one ami of our 
three arms of Government telling another arm what it should manda- 
torily do. It has set out some criteria, some guidelines, some prin- 
ciples, which it believes should be followed. The Executive Branch 
has followed that. The Supreme Court never has indicated that the 
Executive Branch should give this individual access. The Supreme 
Court never made that determination. 

As Mr. Scherer pointed out, there is probably a lot of information 
that would cause doubt in the Supreme Court's mind on this individ- 
ual's ability to have access. All it was pointing out was that you 
should give this man, in accordance with our American tradition, a 
fair hearing. And this is what we seek to do. 

If Greene came in today — if I may add this — and asked for access, 
we would give him these procedures. 

Mr. Scherer. But didn't the Supreme Court in the Greene case, by 
its decision, hold that he was illegally deprived of access? 

Mr. Bartimo. I believe that the Court held 

Mr. Scherer. That was the basis of the decision. That was the 
decision. 

Mr. Bartimo. But having arrived at that, it does not necessarily 
follow that we should give him access. I don't believe that follows. 

Mr. Scherer. Well, what actually happened in the Greene case, 
then? 

Mr. Bartimo. What happened in the Greene case ? 

Mr. Scherer. Yes. 

Mr. Bartimo. The order that was written — and I don't have it. 
Do we have it with us ? 

Mr. MacClain participated in writing the order that implemented 
the Greene decision, and I believe he can straighten out your point, 
Mr, Scherer. 

Mr. DoTLE. Now, in view of the fact that I referred to section 3, 
subdivision (1), and I asked a question, what sort of a right an 
applicant has — I stipulated, and I believe that certainly we are all 
agreed, that the Government has an absolute right to withhold 
any information wherein the national security is involved — but 
referring here again to subdivision (1), section 3, what right, if any — 
I think that was my wording — what right, if any, does a man have, in 
the first part of that section, or does he have a right? Is it a privilege, 
or is it a right, to be notified of what the complaint is? Is that a 
privilege that a man has ? Is that all he has, or doesn't he have a right 
to be notified of anything that doesn't involve the national security? 
Or am I in error ? 

Mr. Bartimo. Mr. Doyle, I think that what you are saying, as far 
as you are going, and what I believe you have in mind, you could 
characterize that as a right. However, we cannot take that and sep- 



HEARINGS RELATING TO H.R. 10175 485 

arate it from the whole ball of wax. As I have tried to indicate, and 
I believe that both Mr. Scherer 

Mr, Doyle. I can see that, but you yourself said there was a line 
of cleavage some place. 

]Mr, Bartimo. Yes. 

Mr. DoTLE. Xow where is that line of cleavage? Is it the line that 
you draw here in subdivision (1), section 3? Because there is a line 
of cleavage drawn there. 

Mr. Bartimo. No, I don't believe that is where I suggested that 
we might draw a line of cleavage. I think that if we just reiterate 
one or two points, and hope to clarify your point, which I think is a 
valuable point, we have agreed, and I believe you said so, Mr. Chair- 
man, that section 9, which gives the Secretary of Defense the right, 
without regard to any hearings, to deny an individual, is a legal 
procedure. 

Did I understand you clearly ? 

Mr. DoYi^E. That is right. 

]Mr. Bartiimo. Now if that is correct, then it seems to me we are 
agreed with Mr. Scherer and Mr. Johansen, that so far, we are in 
agreement. Is that correct ? 

Now, then, where does the cleavage come? This word "cleavage'"? 
I believe it comes where in the peculiar fact situation of Greene, this 
individual, peculiarly trained and equipped to work and make a liveli- 
hood in an industry which is monopolized by the defense contracts, 
which were classified — this was in effect what the Court, said — where 
you had that peculiar situation, and you did not have what the Court 
termed a confrontation or a cross-examination type procedure, the 
Court found — and this is wdiat it fomid — that the Department of De- 
fense did not have authority to rmi this type of a procedure, either by 
the President or by the Congress, and this is all it found. 

Now in trying to answer your question, on Mr. Scherer's point. 
The Supreme Court decision has been implemented to the effect that 
the record, so far as the final determination in Greene, is expunged. 
Therefore, you do not have on the record that Greene has been denied 
access. This doesn't necessarily, ij^so focto^ give him access. 

For example — and I believe this point is very significant, and Mr. 
Doyle touched upon it — let's take a hypothetical case of a person 
who has been cleared in our program, and we suddenly come across 
information that this man is a saboteur planted in that particu- 
lar industry by the Communists. We had not screened this, nor had 
we learned it in our investigative procedures. We have the right to 
immediately suspend tliis man from access to classified information so 
that he cannot do harm, without regard to procedures. 

We would then give him a Statement of Reasons, setting forth our 
jud^nent of why we believe he is a saboteur, on the basis of the infor- 
mation available to us. Then he may take advantage of our pro- 
cedures. 

I believe, having that in mind, sir, I would welcome your judgment, 
that we have clarified the air about what we consider a priialege on 
the one hand, and a right on the other. I believe it reduces itself to 
semantics, but I believe men of good will, discussing these points, will 
arrive at what seems to me a logical solution, one which is necessary 
for us to protect our way of life. 



486 HEARINGS RELATING TO H.R. 10175 

Mr. JoHANSEN. Mr. Chairman, I still want to pursue one question. 
It may have been my lack of comprehension. Is Greene today de- 
prived of his livelihood because he has not access to classified infonna- 
tion? And if so, by what means— was it under this Executive Order, 
or by what means — did tlie Defense Department, subsequent to the 
Court's decision, deprive him of that access, or fail to grant him that 
access ? 

Mr. Tavenner. May I interrupt a moment ? 

Mr. DoTLE. T>/et us suspend for a few minutes. 

Mr. JoHANSEN. I do want to have the record show the answer 
to that question before we go. 

Mr. ScHERER. Let me ask this. Didn't the Greene case finally deter- 
mine that this man was improperly deprived of access to classified 
information? 

Mr. Bartimo. It did not. The Supreme Court opinion in my judg- 
ment did not reach that issue. 

Mr. JoHANSEN. Well, what was the practical effect of it vis-a-vis 
Greene ? 

Mr. Barttmo. The practical effect of the Greene decision was for 
us to pragmatically institute procedures which were in keepinsr with 
the Supreme Court opinion — I beg your indulgence on this if I am 
being repetitious — and the Court did not say that we have to give 
Greene access. 

Now as to your question about what has happened to Greene since. 
I haven't followed Greene's career. I don't know what occupation 
he is engaged in, if any; but, nevertheless, I think the record ought to 
be clear that if Greene feels a necessity to have access to classified 
information, and wants to submit himself to our procedures, they are 
available. 

Mr. ScHERER. He had it at the time. He had access to information, 
and the Greene case was to deprive him of it. He wasn't asking for 
it. He had it. 

Mr. MacClain. Ma v I make a statement to clarify this ? 

Mr. Bartimo. Mr. MacClain, I believe, might add here, Mr. Chair- 
man. 

Mr. MacClain. Prior to the time when the Greene case reached the 
Supreme Court, there had been a series of actions in his case taken by 
the Department of Defense at one level or another. He had been 
deprived of the right of further access, long before his case ever 
reached the Supreme Court. 

Mr. ScHERER. That is right. 

Mr. MacClain. As a result of the Supreme Court decision in that 
case, which didn't pass in any respect upon his eligibility for access in 
my judgment, the Court said that "the procedure that you used in the 
final analysis to pass upon this man's eligibility lacked authorization. 
The final result vou I'eached, based upon this particular procedure, 
lacks validity. "Wipe that out.'' We did. He is restored, then, to the 
position he occupied before that. 

Mr. ScTiERER. Entitled to access? 

Mr. MacClain. No, sir, not entitled. The action of the Secretary of 
the Navy, in notifying his employers to remove him from a position 
of access Avas, as we see it under the circumstances of his case, a sus- 



HEARINGS RELATING TO H.R. 10175 487 

pension type of action, and it has been and is onr view tliat the Greene 
case does not reaeli a suspension type of exercise of authority by the 
Department of Defense. It is just as ^Ir. Doyle brought out and as 
the Secretary and Mr. Bartinio have brought out. Preliminary to 
this final action which was inider the review of the Supreme Court, 
there had been preliminary actions, a suspension, an issuance of a 
Statement of Reasons, and an opportunity to go forward to a final 
type of personal appearance proceeding. This is what happened in 
his case, and as a result of the personal appearance proceeding which 
we gave to him, the Supreme Court found us in error, but they didn't 
go back, in our view, and undercut the preliminary actions that had 
been taken, and which were still in effect. 

Mr. ScHERER. You sa}' that Greene, then, didn't retain his right to 
classified information ? 

Mr. MacClaiint. Oh, no, sir. The present situation is that, as far as 
he is concerned, on the books of the Department of Defense, the pre- 
liminary suspension as against him is still in effect. It has never been 
disturbed. The Court order that was entered pursuant to the Greene 
decision said that the final action taken in his case, and any proceed- 
ings based on that final action, are to be expunged as invalid. It 
did not reach any preliminary action whatsoever, and it was these 
preliminary actions which separated him from actual access, and 
that is where he is today. 

Mr. JoHANSEN. Then he won, in terms of gaining or regaining access 
to classified information, a completely meaningless victory? 

Mr. Skallerup. That is right. 

Mr. Bartimo. A Pyrrhic victory, if you will. 

Mr. JoHANSEivr. So that he does not as of now and has not since 
the decision had access ? 

Mr. MacClain. That is right, sir. 

Mr. Doyle. Well, we will have to go to the Floor. We will be back 
again in about 15 minutes. 

The committee will stand in recess. 

Mr. Tavenner. I suggest, sir, that we take more time now for lunch 
and come back at a quarter of two. 

(AVliereupon, at 12:50 p.m., Thursday, March 15, 1962, the commit- 
tee was recessed to be reconvened at 1 :45 p.m. of the same day.) 



82627—^62- 



488 HEARINGS RELATING TO H.R. 10175 

AFTERNOON SESSION— THURSDAY, MARCH 15, 1962 

(The hearings were reconvened at 2 p.m., Mr. Doyle presiding.) 

(Present also were Representatives Scherer, Johansen, Bruce, and 
Schadeberg.) 

Mr. Doyle. Let the meeting come to order, and we will proceed, 
counsel. 

Mr. JoiiANSEN. Mr. Chairman, I wonder if at tliis point I might 
direct a question to committee counsel. 

Mr. Doyle. Certainly. 

Mr. JoiiANSEN. I wonder, because there were some questions that 
were raised near the close of the morning session, whether you would 
very briefly highlight the issues, or more specifically the relief which 
Greene sought in his case, and also the decrees of the court, the Su- 
preme Court to the low^er courts, that emanated from the Supreme 
Court decision. 

Mr. NiTTLE. I have before me the Supreme Court report of the case 
of Greene v. McElroy. In the o])inion. Chief Justice Warren recites 
the facts and the relief sought by Greene in that case. 

Mr. Scherer. What was the relief he sought ? 

Mr. NiTTLE. He said this: After the Security Board decision in 
1954, the petitioner — that is Greene — "filed a complaint in the United 
States District Court for the District of Columbia asking for a decla- 
ration that the revocation," that is, revocation of security clearance, 
"was imlawful and void and for an order restraining respondents from 
acting pursuant to it. He also asked for an order requiring respond- 
ents to advise" the employer "that the clearance revocation was void." 

The Government filed a bill for dismissal of the complaint and for 
summary judgment, alleging presumably that there was no cause of 
action, and tlie district court granted the Government's motion for 
summary judgment. 

On appeal to the United States Supreme Court, the fuial order is 
recited as follows: "Accordingly, the judgment is reversed and the 
case is remanded to the district court for proceedings not inconsistent 
herew^ith." 

That is all that appears from the decision, but the assumption would 
seem to be that the district court was now obliged to enter a judgment 
to the effect that the revocation of security clearance was unlawful 
and void, to advise the employer of that fact, and restraining the 
respondents from acting pursuant to it. 

Mr. ScTiERER. That is the way T read the decision. 

Mr. NiTTLE. As a matter of fact, after the findings of the Security 
Board, it appears from the recital of the facts in the case that Greene 
was forced to resign from the offices lie lield in the corporation. I 
think he was vice president. 

Mr. Walsti. And he was also discliai-ged from his employment by 
the employer. That was the ])osture of the case. 

Mr. JoiiANSEN, You mean this was prior to the appeal ? 

Mr. NiTTLE. Yes. He had resigned his offices and was discharged. 

Mr. Johansen. And this was in consequence of the Government's 
refusal to grant him clearance? 

Mr. NiTTLE. Yes, sir, 



HEARINGS RELATING TO H.R. 10175 489 

Now, I think this may be relevant to a clear understanding of the 
case : The Government seems to have acted entirely reasonably in its 
handling" of the Greene case. 

It forwarded to liim a letter of charges and specifically set forth 
those matters of which it complained, and gave him an opportunity to 
respond. The Government also offered Greene an opportunity to pre- 
sent his witnesses; but the Government did not give him an opportu- 
nity fully to cross-examine or be confronted with all the witnesses 
agamst hnn, and indicated that it acted to a degree upon certain con- 
fidential information. 

Mr. ScHERER. May I interrupt? The District Court held with 
the Government. The Circuit Court of Appeals affirmed. And the 
Supreme Court, when we get into this social consideration 

Mr. JoHANSEx. I take it the gentleman does not think the Supreme 
Court acted in a statesmanlike fashion. 

Mr. ScHERER. Oh, I think it did not follow the basic law, as I was 
taught it in law school. 

Mr. NiTTLE. Certainly, the case presents one of the complex prob- 
lems in the science of jurisprudence. It is something that has been 
troubling theorists for a long time. 

Apparently the Supreme Court treated this matter as a case involv- 
ing competing and perhaps conflicting interests and principles. The 
logic of the law pointed up but did not resolve the conflict. The Court 
then engaged in a balancing act — and suggested a sort of compromise. 

Mr. JoHANSEN. May I come directly to the point? Since the Su- 
preme Court's decree involved the issuance, as I understand it, by the 
lower court of an order restraining the Government from acting pur- 
suant to its previous finding or ruling, what was the result of the 
matter; since the issue at stake seemed to be the restoration of em- 
ployment, what was the result of tlie matter ? 

Mr. NiTTLE. That does not appear from the case. The report of 
the case indicates only that the case was remanded to the District 
Court with orders to issue a decree in accordance with the decision. 

Mr. JoiiAXSEN. I wonder if counsel can tell us whether such an 
order was issued, and what the consequences of it were, in terms of 
the status of Mr. Greene subsequent to his victory in the Supreme 
Court. 

Mr. Skallerup. Mr. MacClain can answer. 

Mr. MacClain. The order was issued by the consent of both sides. 
The order directed itself against that portion of the proceedings in 
Vv-hich Mr. Greene had been involved, which related to his having a 
personal appearance proceeding on the basis of which the final deci- 
sion was entered revoking his access authorization, aud the order 
declared that by virtue of the decision in the Supreme Court, the 
final action of revocation, which had been based on this particular 
personal appearance proceeding, was unauthorized, and therefore 
illegal and void, and was ordered and directed to be expunged. 

Here is a copy of the order. 

Mr. Doyle. The order may be made a part of the record. 



490 HEARINGS RELATING TO H.R. 10175 

( The order follows : ) 

2i THE USITSP aS'AS'^S i;..SIi^^C7r CAS? 
7m THE DISSRiCf €F CQIijmZk. 

FILED 

■y« : • Clril Acrtiaa File !io, 5;---.- 

H D S H 

i^<m tbe decision af tbe Ujiit«d Stetes Supfresje sJossrt in 
this case C Oreega v. H cglro g;^ 3oC U.S. ^72;-) aad tla copy of 
ibe Ju3®ssi!« a?sd, opiaiosi of tlse Suaress Qaart l^eretofos^ filed 
•wltli thft clerk of this Court; aad 

It «j^)e«riog tiist couasei fear tie respective parties hsre 
coaiseste<i bereto, it is berefey 

OSEiSESS that tte actioa of tlK Secretsry of Defease aisd 
Ms ^oSxsrdiEates ia fljsaily rercskiog plaintiff 'e security 
clearacsce w»s aad tJse eaae is berel>y declared to fee oot v^lidi^ 
swfcaorized; aai it is ftsrther 

CiaaSS© tbat aoy or all rullE^, orders, or detsngissticsss 
vtereln or ybfcTQljy plaintiff 'e secoritj dearacce vas revo&sA are 
hesxttby azmalled aad ex^siioged frae all records of the GcveruEjeat 
of the Uiaited States. 

D&ted: • ' ^' , 1959 

i' L- t- ■ 



Itoited States District Judge 



CoGseacted to: 



Attoruey for r>2fe2daats 



<^.<X(^ , 



^attdoaafln&i^Y^ 



Attarasy for Plaintiff 









'eputj^: OldPk. 



HEARINGS RELATING TO H.R. 10175 491 

Mr. JoHANSEN. Well, now, with the simplicity of a nonlegal mind, 
does tliat mean : Did he ^ct his job back ? Or didn't he ? 

Mr. MacClain. I would answer your question in at least two steps. 

Mr. JoHANSEN. Can you not answer that Yes or No ? 

Mr. MacClain. We were not concerned with whether he got his 
job back in the sense that we could put him back in it, because we 
could not. We had not directed his discharge, and we could not put 
him back in his job, either one or the other. 

As a matter of fact, according to information that I think is in the 
record before the Supreme Court, he never did return to the job that 
he had held prior to the time of this action. 

Mr. ScHERER. May I interrupt there? Under the Supreme Court 
decision, he would have the right, as I understand it, to return to his 
job. 

Mr. MacClain. Sir, the language of the Supreme Court did talk 
about a job, a profession, employment, and that kind of thing. But 
the total effort of the Department of Defense was never directed 
toward his having or not having a job or employment or following 
his profession. It was directed to the single problem of whether he 
could have access or not. 

Mr. ScHERER. I understand that. The result was the deprivation 
of a job. 

Mr. MacClain. The practical result was that his job was 
terminated. 

Mr. JoHANSEN. Did not the Court go even further, and did it not 
say that the effect of the finding of tlie Government and the action of 
the Defense Department — that the actual effect of it — was to deprive 
him of his means of livelihood, not just this job, but the livelihood 
based on the career for which he had been professionally trained? 

_Mr. MacClain. Well, sir, I do not disagree with what you have 
said, and I think words to that effect can be found in the Supreme 
Court decision. From the point of view of the Department, we were 
concerned with whether this man would or would not have access 
to classified information in one job or any other job, in one profession 
or any other profession. And the practical result of what happened 
to him may be looked at as the practical result. The objective that 
we had in mind M'as something else. 

Mr. ScHERER. The question is, then, that you go back one step and 
say: Was not the result of the Supreme Court decision that the man 
was entitled to have classified information? 

Mr. :MacClain. In our judgment, the answer to that question, sir. 
is Xo. 

Mr. Bartimo. JNIay I read for the record the pertinent part of the 
decision? I read toward the end of the decision. I quote. And 
this is the majority view : 

In the instant case, petitioner's work opportunities have been severely 
limited on the basis of a fact determination rendered after a hearing which 
failed to comport with our traditional ideas of fair procedure. The type 
of hearing was the product of administrative decision not explicitly author- 
ized by either Congress or the President. Whether those procedures under 
the circumstances comport with the Constitution we do not decide. Nor do 
we decide whether the President has inherent authority to create such a 
program, whether congressional action is necessary, or what the limits on 
executive or legislative authority may be. We decide only that in the ab- 



492 HEARINGS RELATING TO H.R. 10175 

sence of explicit authorization from either the President or Congress the 
respondents were not empowered to deprive petitioner of his job, in a pro- 
ceeding in which he was not afforded the safeguards of confrontation and 
cross-examinatii >n. 

Accordingly, the judgment is reversed and the case is remanded to the 
District Court for proceedings not inconsistent herewith. 

And we have attempted to explain that the court order in the Dis- 
trict Court, which was agreed to by counsel for Greene and the Gov- 
ernment, was not inconsistent with the views I have just read you. 

Mr. JoHANSEx. Has Greene— subsequent to this decision, in any 
way sought, by reason of any employment that he subsequently ac- 
quired, whether it was a result or not a result of this decision — has 
Greene at any time since this decision sought clearance for access to 
classified information ? 

Mr. ScHERER. He did not have to seek clearance. He had it. And 
this decision prevented the Government from taking it away from him. 

Mr. JoHANSEisr. All right. Has he had any employment under 
which he exercised the right alleged and ruled by the Supreme Court ? 

Mr. Bartimo. I think I can help, here. Xumber one: To our 
knowledge, Greene has not sought employment within the United 
States which would necessitate access to classified information. 

Mr. Scherer. May I interrupt you there, counsel ? 

Mr. Bartimo. Yes, sir. 

Mr. Scherer. If he did seek that, you could not deprive him of it, 
could you ? 

Mr. Bartimo. My answer to that is : Yes, w^e could deprive him of 
it. We would offer him 

Mr. Scherer. Under this decision ? 
• Mr. Bartimo. Under this decision. The Supreme Court has not — 
and if I may emphasize not — required the Executive Branch, the Gov- 
ernment, to give him access to classified information. That is not 
what the opinion stands for, in our judgment. It is also the judgment, 
evidently, of his counsel, because he has not pressed us on that issue. 
I think it is further fortified from the order issued by the District 
Court. 

Mr. Scherer. I cannot follow. 

Mr. Johansen. I would like to hear counsel proceed. I think he 
was going to make a couple of other points. 

Mr. Bartimo. Yes. 

On your point, Mr. Johansen, I think it is a little complex, and 
if you will bear with me for just a minute, I will try and explain it. 

Under our procedures, as I illustrated by my hypothetical point 
this morning, where a man is cleared in industry through our pro- 
cedures, and we finally discover he is a saboteur in the employ of a 
Communist oligarchy, we do not have to give him procedures. We 
can suspend him forthwith from access to classified information. We 
can pick up the telephone and do it immediately, to get him out of 
our classified area. 

Now, let us assume that we have made a mistake. At this juncture, 
what has happened to this hypothetical individual ? He has been sus- 
pended. That is in accordance with our procedures, and it is perfectly 
legal. The Supreme Court has not challenged us on this. 

I would think the Supreme Court would agree that in carrying 
out our responsibilities to protect classified information we must have 



HEARINGS RELATING TO H.R. 10175 493 

the authority to suspend ;i known saboteur when sucli information 
comes to us without waiting months to decide. I do not tliink the 
Supreme Court ^^■ould ever deny tliat right. 

Having that point in mind, then you go to tlie next issue. This man 
has been denied access. He lias been suspended. 

Mr. ScHERER. Pardon me. Is that what you did in the Greene 
case ? 

Mr. Bartimo. Yes, sir, w^e did that in the Greene case. The Sec- 
retary of the Navy, under tlie old procedures, suspended him. And 
just to pin home that point, Mr. Scherer, the Court decision did not 
affect our right to suspend. This issue was brought to a head during 
the District Court order in the Greene case. 

Then the nest step from the suspension is the so-called final deter- 
mination. The final determination comes about after the procedure 
has been instituted. Before Greene when, as you know the procedures 
were a little different than they are now, as has been explained, where 
he got a full Statement of Reasons, wdiere we considered the utmost 
that we could give him without affecting the national security. 

True, as counsel has read, there were classified matters which Ave 
could not give him. But the Supreme Court issue went, I think, on a 
very narrow issue. It was a peculiar fact situation, as we explained 
this morning. It was a narrow holding. 

And yet, in all due respect to Mr. Johansen, I think the Supreme 
Court was trying to be helpful. It was trymg to point the way 
out to us, without meeting the constitutional issue, a method by which 
we could give a fair hearing and be within constitutional, legal 
gi'ounds. 

This I think we have done. This bill which you have before you 
would buttress what the Executive Branch has done by Executive 
Order and regulations, and, in my judgment, if another case similar 
to Greene's ever got before the Court, the Court woidd, I hope, give us 
an accolade that we have picked up its suggestions and now have 
proceedings which are fair and in the American tradition. 

Mr. Scherer. Why, then, did not Greene attack the suspension? 

Mr. Bartimo. I cannot answer you why Greene has not attacked 
the suspension. 

Mr. Scherer. Did not the decision entitle him, then, to another 
hearing on the suspension ? 

Mr. Bartimo. Yes, And as Mr. George MacClain has just indi- 
cated by a note handed to me, we did actually offer Greene a proceed- 
ing, and he has not accepted it. 

Mr. Johansen. Now, what would that proceeding constitute or 
involve? 

Mr. Bartimo. The proceeding would constitute something like this, 
Mr. Johansen. If Greene came in to us and asked for a hearing, an 
appraisal of him as an individual as to whether he should have access 
to classified information would be made. We would bring his case 
up to date by investigation, at which time our experts, some of whom 
are here this morning, would set forth a Statement of Reasons as to 
why Greene should be denied access. He would have an opportunity, 
through counsel, with the aid of counsel, to answer our allegations, our 
Sta^^ement of Reasons, as to why we believe he should not have access. 

Once these answers are in, they are reviewed for compliance with 
requirements as to form and sufficiency. If these requirements are 



494 HEARINGS RELATING TO H.R. 10175 

met, he has a right to a full scale personal appearance proceeding 
under the procedures described this morning. Thereafter, a final de- 
termination would be made. 

Mr. JoHANSEN. And that procedure, then, would involve the right 
of confrontation and cross-examination? 

Mr. Bartimo. Under these procedures. And as 3^ou know, as Mr. 
MacClain and the Secretary explained this morning, we have certain 
caveats in our procedures ; one dealing with the so-called confidential 
informant. 

If it is a judgment of Mr. Hoover of the FBI and the Department 
of Justice, then this must be made by the Attorney General himself. 
If to reveal this confidential informer would be detrimental to our 
national security, the Attorney General issues a certificate to this 
effect. 

By means of this procedure, the Government is entitled to use this 
evidence in appraising this particular individual. In such a case, as 
was pointed out this morning, the determination, the final judgment, 
must be made by the head of the Department concerned, in this case 
the Secretary of Defense. 

Mr. JoHANSEN. May I ask one final question? 

Possibly this is irrelevant, but under the situation you have de- 
scribed, and as I understand it, he is not now in Government service 
or in employment for a contractor involving Government contracts 
and involving classified information. 

Precisely what was won for Greene in this decision ? And I suppose 
there were some fairly ample legal fees. 

Mr. Bartimo. I think he won two thinixs, if you can say he won. 
The record was expunged, so far as the Government was concerned, 
with respect to the final determination made before the new pro- 
cedures. 

Number two : He has earned a right or a privilege, whichever you 
will, to <TO before the Court of Claims, and ask for money damao-es. 

Mr. MacClain. I want to explain that Mr. Greene has not filed an 
action in the Court of Claims. Mr. Greene has been informed by the 
Department of Defense that at any time that he wishes, we will give 
him a proceeding under our present directive, under the Executive 
Order; and pfter that has been completed, we will give full considera- 
tion to any claim he may wish to file administratively. 

If it should happen, as the result of these further proceedings, that 
he again is finallv denied access authorization, we would not entertain 
his claim: but if he should win, and be determined currently eligible, 
we would then, if he filed a claim, address ourselves directly to the 
question of his entitlement to money. 

Mr. JoHANSEN. HoAv recently was that notification given to him? 
Would vou recall ? 

Mr. MacClain. Mr. Greene was notified almost directly after the 
issuance of our new regulation, last July, that this procedure was 
available to him, but even before that time, he was informed that as 
soon as we had a regulation, we would c'ive him this opportunity. 

Mr. JoHANSEN. Is there any terminal date to that offer? 

]\fr. MacClain. No, sir. 

Mr. JoHANSEN. They are necessarily open-ended? 

Mr. MacClain. That is riffht. Right now it is in his hands com- 
pletely, and there is no cut-off date that I know of at all. 



HEARINGS RELATING TO H.R. 10175 495 

Mr. NiTTLE. Slioiild you not provide in the regulations for some 
cut-otT date? After all, if too many years pass hy, you may be handi- 
capped ill the presentation of your case, oi' evidence. Your witnesses 
may die, or they may go overseas, or sometliing may occur. The 
memory may become dull. AVould it not be wise to make some pro- 
vision in the regulations for a cut-off date ? 

Mr. Skallerui'. The regulations should contain some kind of pro- 
vision relating to cutoff dates. Whether it would be put in terms of 
particular date, or particular time after the final judgment has been 
made, or whether it would be i^ut in terms of "show cause why you have 
not filed sooner," or put on the merits, we just cannot say now, but 
certainly it would be a veiy important part of any regulation dealing 
with this. 

Mr. JoHANSEN. Does the Defense Department's offer preclude his 
initiating action in the Court of Claims, if he elects to take that 
course ? 

Mr. Skallerup. That is a difficult legal issue. 

Mr. JoHANSEN. I will withdraw it. 

Mr. MacCl.\in. I would like to explain that it is always a matter 
of choice with Mr. Greene where he should go for his relief. And 
1 am sure he would make a decision whether to go to the Court of 
Claims or not. But there are others who have gone to the Court of 
Claims, and their cases are pending there now. Not one of them has 
yet been decided. But in the two or three cases in which District 
Court orders were entered after Greene, none of the pei-sons who had 
gone to the Court of Claims has obtained from the Department of 
Defense a determination of present eligibility. 

And it is our position that until they at least have done that, they 
have no standing in the Court of Claims. Mr. Greene is up against 
that same proposition. We would assert it, I am sure, if he filed now. 

Mr. JoHANSEN. 1 want to expi-ess my ap})i'eciation to the three gen- 
tlemen for your patience in getting me finally to understand the pic- 
ture; and I appreciate my colleagues' patience. 

Mr, Bartimo. I think, Mr. Johansen, this has been a valuable dis- 
cussion from the point of view of legislative history. 

Mr. JoHANSEx. I think it contributes directly. 

Mr. Doyle. Counsel, are you ready to interrogate? 

Mr. NiTTLE. Yes, sir. 

You have, Mr. Skallerup, given a very fine summary of your ex- 
perience under this personnel security program, and j^ou have dis- 
cussed the question of the number of people who have been affected 
by personnel security procedures over some years past. 

Since the adoption of Executive Order 10S65, could you tell us 
specifically how many persons have in fact been deprived of employ- 
ment in a particular defense industry who would otherwise have re- 
mained so employed except for the operation of these proceedings? 

Mr. Skallerup. We have no information at all which would provide 
a basis for an answer to that quCvStion. 

Mr. NiTTLE. Do you have an estimate ? 

Mr. Skallerup. It would be most difficult to estimate, and perhaps 
I could explain why. 

It is conceivable that in some instances, where individuals who have 
been denied access as a result of a complete hearing, have lost their em- 



496 HEARINGS RELATING TO H.K. 10175 

ployment. It is conceivable tluit in instances where individuals have 
been suspended from access and have chosen not to go forward with 
the proceeding, they may have left their employment. It is also pos- 
sible that in some instances, in cases where these proceedings arise in 
the course of the man's probation period, he might be considered by 
his employer not the kind of person he would want to continue in 
permanent employment, and for that reason that person might lose 
employment. 

Mr. NiTTLE. Your statement discloses that under the present 1960 
program you have had 800 cases which have come under the review 
program. Would that not indicate that there are at most less than 
800 persons in the past two years who could have been deprived of em- 
ployment as a result of the operation of these procedures? 

Mr. Skallerup. Mr. Lewis reminds me that the 800 figure is the 
figure of total cases which have come into the industrial review pro- 
gram, and that of the 800 — in answering your question, it would be a 
figure quite a bit short of 800, if all of those who had been denied 
were denied employment. 

But I would like to point out that this denial of access is not ipso 
facto a denial of employment. It is a denial of access to information 
that is classified, and in some firms, where a small proportion of the 
employees are engaged in classified work, if the employer wants to 
continue using the services of that individual, he could use him in 
another part of the plant, where unclassified work is performed. 

Mr. NiTTLE. Yes. I think it important that you point out on the 
record, as you have done, that a denial of access to classified informa- 
tion does not necessarily result in a denial of other employment within 
the same industry. 

Mr. JoHANSEN. It is not an automatic result, in other words. 

Mr. Skallerup. That is correct. 

Mr. NiTTLE. Then at least we do have for the record a statement 
that there could not have been more than an average of 400 per year 
who would have been deprived of employment as a result of the 
operation of these procedures. 

Mr. Skallerup. Mr. Lewis has come prepared with some figures, 
and I hope that his figures will result in a total which would reduce 
that 400 appreciably. 

Mr. NiTTLE. Yes. I was, of course, taking an upper limit. If there 
are only 800 security cases since 1960, and assuming that all of these 
persons were actually deprived of employment, the average figure at 
most would be 400 per year. And in the context of the operation of 
such a vast and important program, it seems that the number of indi- 
viduals affected is very, very small in contrast with the importance 
of the program and the extent of its operation. 

Mr. Lewis. The Secretary this morning said that there were a total 
of approximately 800 cases since the activation of the new program 
on July 28th, 1960. 

To begin with, 800 of those cases are still unresolved. Of the re- 
maining 500, there were final denials of only 118. So the raw figure 
of possible losses of employment based on a final denial is 118; and 
since the Department of Defense policy, the public policy, is that the 
loss or denial of authorization does not require the contractor to termi- 
nate the employment of the individual, we have no reason to believe 



HEARINGS RELATING TO H.R. 10175 497 

that all of these 118 lost their jobs as a result of the denial. Some 
figure under 118. 

Mr. NiTTLE. So may the committee conclude, under those circum- 
stances, that great care is obviously exercised by the Secretary of De- 
fense to see that the employment of the individual is reasonably main- 
tained, consistently with the national interest ? 

Mr. Skallerup. That is true, sir. 

Mr. NiTTLE. Perhaps we should state for the record that H.R. 10175 
is intended to authorize the Secretary of Defense to provide regula- 
tions covering the entire range of security problems involved in the 
handling of classified information, and is not to be considered limited 
solely to subversive activities. It is also clear from the statements sub- 
mitted by the Defense Department today that that has likewise been 
the objective of your draft bill. 

Now, would you briefly summarize the area of security factors which 
are now specifically covered in existing regulations? That is, the 
basic principles upon which you grant or deny clearance. 

Mr. Skalleeup. The criteria ? 

]Mr. NiTTLE. Yes. 

Mr. Skallerup. They are set forth in our regulation, and they 
appear in Department of Defense Directive No. 5220.6, dated July 
28th, 1960, under Paragraph III, a copy of which was entered into the 
record. It appears at page 10 of the directive. And it sets forth the 
standard for issuing an access authorization, and then in detail de- 
scribes the criteria for application of the standard in cases involving 
individuals. 

There are 21 criteria set forth under Paragraph III of the direc- 
tive which has been entered into the record. 

Mr. NiTTLE. Since the entire document has been entered in the rec- 
ord, your specific reference to that paragraph will be sufficient. 

Mr. Doyle. Is there any item or criteria that you wish you had in 
there ? 

Mr. Bruce. Under 5, one of the criteria is "Intentional, unauthor- 
ized disclosure to any person of classified information, * * *" 

What if a man made it unintentionally ? Suppose, I mean, he was 
n.aive about it? 

Mr. Skallerup. You mean careless or reckless in handling classified 
information? 

Mr. Bruce. Yes. 

Mr. Skallerut. I believe that appears under Criterion 17, "Acts of 
a reckless, irresponsible or wanton nature which indicate such poor 
judgment and instability as to suggest that the individual might dis- 
close classified information to unauthorized persons."* 

Mr. Walsh. What page is that ? 

Mr. Skallerup. This is page 12. 

And 13, 1 would point out — "Willful violation or disregard of secu- 
rity regulations." And 14, "Any behavior, activities, or associations 
which tend to show that the individual is not reliable or trustworthy." 

Mr. ScHERER. Mr. Chairman, I would like to be excused. Another 
coimnittee needs one more member to make a quorum, so that they can 
vote on a resolution. 

Mr. Tavenner. Will you be back shortly ? We are putting you on 
another subcommittee. 



498 HEARINGS RELATING TO H.R. 10175 

Mr. ScHERER. About what time? 

Mr. Ta\'enner. I am hopeful that we could reach it about 3 :30. 

(Mr. Scherer left the hearing room.) 

Mr. Doyle. May I renew my question to the Secretary: Based 
upon your experience as to these 21 criteria, have you by experience 
found that you omitted something that you wished to put in there? 
If so, what? 

Mr. Skallerup. There is one consideration which we are consider- 
ing adding to this list of criteria. It relates to the willful failure to 
reply to official questions. It takes on the nature of an unwillingness 
to really cooperate with us in having a reasonable and timely resolu- 
tion of matters pending. This is being considered as a possible addi- 
tion to this list of criteria. 

Mr. Doyle. Does it involve his constitutional rights to plead the 
fifth amendment? 

Mr. Skallerup. Pardon, sir? 

Mr. Doyle. Does it involve the area of his constitutional rights to 
plead his constitutional privilege and refuse to answer? 

Mr. Skallerup. Well, this constitutional privilege would exist with 
respect to any one of the statements appearing in the Statement of 
Reasons. 

Mr. Doyle. Well, my question was directed to whether or not, by 
experience, you found you had left out something that you wished you 
had put in. That was the purport of my question. If so. what is it? 

Mr. Skallerup. My answer was tliat what we are considering put- 
ting in would be another criterion, which would state that the willful 
refusal to answer questions set forth would be considered, along with 
aW the other relevant factors in the case, in determining access. 

Mr. JoirANSE>r. Mr. Chairman, in that connection, under Item 21 
of the criteria : "Refusal by the individual, without satisfactory sub- 
sequent explanation, to answer questions before a congressional or 
legislative committee," and so on— now, does the phrase "without 
satisfactory subsequent explanation" intend to convey that the ex- 
planation that I invoke the fifth amendment in my refusal to answer 
questions before this or any other member of the Congress — would 
that be regarded as a satisfactory subsequent explanation? 

Mr. Skallerup. Would refusal on grounds of the fifth amendment 
be considered a satisfactory explanation for not replying? 

Mr. JopiANSEX. That is right. In other words, would the invoca- 
tion of the fifth amendment in response to a question as to wliether the 
person had been or was a member of the Communist Party — would 
the invocation of the fifth amendment get him off the hook, so far as 
this 21st item is concerned ? 

Mr. Skallerup. No. the intention is quite the reverse. This would 
be considered as grounds upon which to deny access. 

Mr. JoHANSEN. I am happy to hear that. 

Mr. NiTTLE. You will note that H.R. 10175, as well as your draft 
bill, adopts the procedure of authorizing reimbursement for loss of 
earnings to aggrieved applicants under certain equitable circumstances. 
Would such appropriation or application of funds toward reimburse- 
ment require congressional sanction ? 

Mr. Skallerup. We believe it does. The committee may be inter- 
ested in some information with respect to the number of claims and 



HEARINGS RELATING TO H.R. 10175 499 

the size of claims, so that you have an idea of the size of the problem, 
■sve are grapj^liiig witli. 

During the period since 1955, there have been on the average 
about 25 claims paid a year, and the average claim which has been 
paid runs just a little over $2,500. 

Mr. JoHANSEN. These are claims based on what grounds? 

Mr. Skallerup. These are claims which are based on grounds that 
the Government acted improperly in denying access or suspending 
an access authorization. 

Mr. JoiiANSEN. And he has lost pay as a consequence ? 

Mr. Skallerup. And he has lost pay as a consequence, and at the 
end of the line he was ultimately cleared. 

And in the light of the whole record, is it not fair for the Govern- 
ment to reimburse him something for that loss of wages? It is that 
set of circumstances. But I would like to draw again the emphasis 
we place on the fact that before we will entertain a claim, the man 
must be cleared at the end of the line, must be granted access. 

Mr. Tavenner. Mr. Chairman, may I go back to an earlier question ? 

Mr. Doyle. Go ahead. 

Mr. Tavenner. Reference was made to the use of the fifth amend- 
ment in refusing to answer a question. Is it not a fact that under the 
draft bill, in section 302, it is only in those cases in which the appli- 
cant controverts a matter contained in the reasons submitted, that the 
opportunity for examination and cross-examination and confrontation 
is applicable ? 

Mr. Skallerup. That is correct, Mr. Tavenner. 

Mr. Ta\tenner. I would think that that should clarify the question 
of the use of the fifth amendment. 

Mr. Skallerup. A good point. 

Mr. Nittle. I call your attention to section 302 of your draft bill, 
particularly the opening clause, which establishes the power of the 
Secretary to except certain cases from the operation of the personal 
appearance procedures. 

Is this power, which is vested in the Secretary to make exceptions 
to an appearance procedure, conclusive and final ? 

Mr. Skallerup. Are you speaking, sir, of the power which would be 
granted should this be enacted? Or are you speaking of powers of 
the Secretary as they are today ? 

Mr. NrrTLE. As they are incorporated in the draft bill. I will read 
that opening clause. 

Section 302 begins this way : "Except in cases where the Secretaiy 
personally determines that such procedures cannot be employed con- 
sistently with the national security * * *." 

Then, with that exception, you establish the personal appearance 
proceeding to which an applicant will be entitled, with limited rights 
of confrontation and cross-examination. 

In the draft bill you give the Secretary the power to make excep- 
tions to that procedure when he personally determines that such pro- 
cedures cannot be employed consistently with the national security. 

Now, is that determination of the Secretary reviewable in any way? 

Mr. Skallerup. It is not reviewable in any way under our indus- 
trial security review progranu Whether such action of the Secretaiy 
might be reviewable in court is a matter that remains to be seen. 



500 HEARINGS RELATING TO H.R. 10175 

Mr. NiTTLE. Do you envisage any requirement, to be implied or in- 
ferred in that language, that the Secretary, in making the determina- 
tion of exception, shall give any Statement of Reasons underlying his 
determination that the appearance procedures cannot be employed 
consistently with the national security in a particular case? 

Mr. Skai.lerup. No such requirements are intended. 

Mr. NiTTLE. Would you care to exemplify the type of cases where 
it is likely the Secretary may make such a determination ? 

Mr. MacClain. I would like to give you a hypothetical situation 
which would illustrate that problem, sir. Please bear in mind this is 
hypothetical. 

Let us suppose that back in 1950 to 1954, the applicant engaged in 
Communist Party activity. Available information shows that he was 
a member, that he was active, that he was a party man. 

Then let ns suppose that there is a period of time elapsing from 1954 
until 1960, during which he is for all we know completely divorced 
from any party activity of any kind. 

Let us suppose that back in 1950 to 1954, the applicant engaged in 
party activity, in and subsequent to 1960. 

But let us suppose further that it is most important that he not know 
that this activity of his is known. 

Now, in a situation of that kind, you could not possibly resolve the 
case by simply explaining the fact that back some years ago he was a 
member of the party. He would say, "Yes, of course, I was," perhaps. 

But in the Statement of Reasons that we would want to give him, we 
could not, consistently with national security, tell him that this recent 
activity is now also in the picture. And since we could not tell him 
that, we could not really give him a Statement of Reasons which would 
really tell him what the case was about. 

If this is a sensitive situation, iuA^olving classified information, we 
liave only one way to go, and that is to the Secretary, to make an 
exception on these procedures. 

Mr. NiTTLE. Mr. Chairman, the staff has no further questions of 
the Department of Defense. 

Mr. DoYLE. Are there any further questions? 

The committee has no further questions. 

I thank you, Mr. Skallerup, and your associates. 

Mr. Skallerltp. Thank you, sir. 

Mr. NiTTLE. Mr. Chairman, the committee invited the Department 
of Labor to submit its views upon H.R. 10175. They have not sent 
a personal representative here today, but have submitted a letter to 
the committee, dated March 12, 1962. under tlie hand of the Honorable 
Arthur J. Goldberg, Secretaiy of Labor, in which he supplies the 
views of the Department of Labor on H.R. 10175. 

I ask that this be made a part of the record at this point. 

Mr. Doyle. Without objection, it will be so ordered. 

(The letter follows:) 



HEARINGS RELATING TO H.R. 10175 501 

U. S.'DEP/>fRTMENT OF LABOR 



OFFICE OF THE SECRETARY , jX (^ ) 



WASHINGTON 



MAR ^ 2 ^gg2 



The Honorable Francis E. Walter 
Chairman, (^ramittee on Un-American 

Activities 
House of Representatives 
Washington 25, D. C. 

Dear Congressman Walter: 

This is in further response to your request for 
a report on H.R, 10175, a bill "To amend the Subversive 
Activities Control Act of 1950 to provide for a security 
program with respect to defense contractors and their em- 
ployees." 

Although the Department of Labor does not ad- 
minister any industrial security program, we of course 
have a great concern in this area under the Department's 
statutory responsibility with respect to the welfare of 
Americsm wage earners. It is of the utmost importance 
that any industrial security program effectively protect 
the rights and interests of workers as well as of the 
Government, and it is clear that one of the most basic 
and important rights of an individual is that of being 
allowed to earn his livelihood. 

As you know, the general area of H.R. 10175 is 
presently covered by Executive Order 10865, "Safeguarding 
Classified Information within Industry*', issued February 20, 
i960, and amended by Executive Order 10909 on January 17, 
1961. This Executive Order was designed to counteract the 
decision of the Supreme Court in Greene v. McElroy , 36O U.S. 
U7U> that the Defense Department's former industrial secu- 
rity program was authorized by neither statute nor Presi- 
dential directive insofar as it provided for the denial or 
revocation of security clearances of individuals in private 
industry. 

The Execvftive Order spells out the rights of 
affected 'workers in substantial detail. It goes far to 
protect the essential rights of these persons, including 
their right to confront and cross-examine witnesses. In- 
dividuals whose eligibility for access to classified in- 
formation is questioned must be given a written statement^ 



502 HEARINGS RELATING TO H.R. 10175 

The Honorable Francis E. Walter Page 2 



as con^srehensive and detailed as national secixrity permits, 
why their eligibility may be denied or revoked. They must 
be afforded an opportunity to reply in writing, to appear 
personally before the agency head, to prepare for that ap- 
pearance, and to be represented by counsel. They are spe- 
cifically given the right to cross-examine persons who have 
made statements respecting a controverted issue, subject to 
certain spelled-out limitations necessary to protect the 
national interest and the identity of bona fide confidential 
infcjrraants. When such a person may properly be denied the 
right to confront and cross-examiiae a particular witness 
under one of these limitations, he must be given a summary 
of the information which shall be as comprehensive and de- 
tailed as the national security permits. Comparable pro- 
visions apply to documentary material which cannot be in- 
spected by the individual because it is classified. 

In passing upon an applicant's request for access 
to classified information, the fact that he did not have an 
opportunity to cross-examine a particular witness must be 
taken into consideration and a final adverse determination 
may be made only by the agency head based on his personal 
review of the case. In addition, as much provision as pos- 
sible, in the absence of the subpena power, is made to secure 
the appearance of witnesses at the proceeding and to make 
persons who have made adverse statements available for cross- 
examination by the applicant. Moreover, the Order specifically 
states that any adverse decision shall be a determination in 
terras of the national interest and shall in no sense be a de- 
termination as to the loyalty of the applicant, 

H,R, 10175 provides for a personal appearance pro- 
ceeding at which the person aggrieved shall be permitted to 
present evidence in his behalf, and at which the United States 
shall produce those persons who furnished adverse information 
to the extent that the Secretary of Defense and the head of 
the investigative agency that supplied the information shall 
determine to be permissible in the interest of national se- 
curity. The subpena power would also be conferred upon the 
Secretary, These provisions, of course, recognize the exist- 
ence of the rights of cross-examination and confrontation of 
witnesses. However, they leave entirely to the Secretary's 
discretion the determination of whether the national secxirity 



HEARINGS RELATING TO H.R. 10175 503 

The HonoraSle Francis E. Walter Page 3 



permits the production of witnesses, with no limitations 
along the lines of the Executive Order. In addition, the 
other rights conferred by the Executive Order (although 
they are doubtless conteii^>lated) would have to be Inferred 
because they are not mentioned In the measure. 

It would appear preferable for Industrial security 
programs to remain subject to Executive Order rather than 
statute, in order to retain flexibility to meet changing 
situations. If It should be determined that the national 
Interest would best be served by providing a legislative 
foundation for such a program, we believe that the rights 
of workers subject thereto should be protected to the extent 
now provided by E. 0. 10865. We think It vital that exist- 
ing protections be maintained In full and not reduced or 
weakened In any fashion, particularly since the existing 
program appears to have operated successfully. Denial of 
security clearance may cost a worker his ability to support 
himself and his dependents, a consequence so fraught with 
Irreparable harm that It should be permitted only under the 
strictest safeguards. 

The Bureau of the Budget advises that there is no 
objection to the presentation of this report from the stand- 
point of the Administration's program. 



Tours sincerely. 




Secretary Off Labor 




82627—62- 



504 HEARINGS RELATING TO H.R. 10175 

STATEMENT OF J. WALTER YEAGLEY, ASSISTANT ATTORNEY 
GENERAL, IN CHARGE OF THE INTERNAL SECURITY DIVISION; 
ACCOMPANIED BY JOHN F. DOHERTY, FIRST ASSISTANT, AND 
KEVIN T. MARONEY, CHIEF, APPELLATE SECTION, DEPARTMENT 
OF JUSTICE 

Mr. NiTTLE. Mr. Yeagley, will you and. your associates please come 
forward. 

Mr. Doyle. You are always welcome before the committee, gentle- 
men. We appreciate your coming. 

Mr. NiTTLE. Mr. Yeagley, would you kindly state your full name 
for the record, your official capacity, and the agency whose views you 
are authorized to present, together with the identification of your 
associates, and their official capacity ? 

Mr. Yeagley. Yes, sir. My name is J. Walter Yeagley, Y-e-a-g-1-e-y. 
I am Assistant Attorney General of the Department of Justice, in 
charge of the Internal Security Division, and my associates are ^Nlr. 
John F. Doherty, my First Assistant, and Mr. Kevin Maroney, who 
is the Chief of the Appellate Section. 

Mr. Nittle. Do you have a statement for the committee in response 
to its request for the views of the Department of Justice? 

Mr. Yeagley. Yes, I do have a statement. 

(Mr. Yeagley reading:) 

Mr. Chairman and members of the committee. I am pleased to ap- 
pear at this hearing on behalf of the Department of Justice in response 
to your request for our views on H.R. 10175. 

A sound industrial security program directed at the safeguarding 
of classified defense information in the hands of industry is a subject 
worthy of congressional interest and action. 

It is, of course, necessary for the Government to entrust vital defense 
secrets to industry if we are to build and maintain a suitable defense 
posture. 

In view of the constant effort of representatives of the Soviet bloc 
to ferret out such information, it is important that adequate provision 
be made for the protection of this data. An important part of this 
protective effort is to know the background of the people who are to 
have access to the information and to provide appropriate procedures 
for processing cases concerning the few who may be untrustworthy. 

As you know, the Supreme Court, in the case of Greene v. McElroy, 
which has been discussed here today, and which came down on June 
29, 1959, decided that the Department of Defense was not empowered 
to deprive Greene of his job in a proceeding in which he was not af- 
forded the opportunity of confrontation and cross-examination in the 
absence of explicit authorization for such a hearing from either the 
President or Congress. 

As a result of the Greene decision, Executive Order 10865, entitled 
"Safeguarding Classified Information Within Industry," was issued 
on February 20, 1960. Pursuant to this Executive Order, the De- 
])artment of Defense on July 28, 1960, issued "Industrial Personnel 
Access Authorization Review Regulation," 25 Federal Register 7523 



HEARINGS RELATING TO H.R. 10175 505 

(1960), which sets forth procedures for implementing the industrial 
security program. 

The principal problems arising from screening procedures that are 
directed at denying one access to classified information essential to his 
job are posed by the fifth and sixth amendments to the Constitution, 
particularly where the person is denied the right to cross-examine 
witnesses supplying the information against him. 

In recent 3^ears, the courts have given considerable attention to the 
nature of the hearing and the right of cross-examination in govern- 
mental administrative actions that may stigmatize persons or deprive 
them of certain rights. If adverse information is to be considered 
without advising the applicant of its source or of its precise nature, 
while depriving him of the right to cross-examine the witness regard- 
ing its accuracy and his motivation, it becomes apparent that any 
safeguards in lieu of cross-examination that can be prescribed by the 
Government regarding the nature and reliability of the source and 
the probable accuracy of the information, w^ould be most helpful in 
any litigation involving the constitutionality of the program. 

^Ye think that the procedures established by E. O. 10865 adequately 
protect the national security and at the same time in cases W'here cross- 
examination of a witness is not possible provide the maximum safe- 
guards possible toward assuring the reliability of the source and the 
accuracy of the information. 

Executive Order 10865 provides that an applicant shall have the 
opportmiity to cross-examine persons who have furnished adverse in- 
formation concerning him, except : 

(1) Where the head of the department supplying the statement 
certifies that the person who furnished the information is a confidential 
infonnant who has been engaged in obtaining intelligence information 
for the Government and that disclosure of his identity would be sub- 
stantially harmful to the national interest; in the case where an FBI 
informant is involved, this means a certificate signed personally by 
the Attorney General ; or 

(2) The head of the department concerned or his special designee 
for that particular purpose has preliminarily determined, after con- 
sidering information furnished by the investigative agency involved 
as to the reliability of the person and the accuracy of the statement 
concerned, that the statement concerned appears to be reliable and 
material, and the head of the department or such special designee has 
determined that failure to receive and consider such statement would, 
in view of the level of access sought, be substantially harmful to the 
national security and that the person who furnished the information 
cannot appear to testify (A) due to death, severe illness, or similar 
cause, in which case the identity of the person and the information to 
be considered shall be made available to the applicant, or (B) due to 
some other cause determined by the head of the department to be 
good and sufficient. 

If I may note here, No. 1 relates to information from informants, 
confidential informants, and No. 2 relates to information from other 
sources. 

Mr. JoHANSEN. May I interrupt at that point ? 

Mr. Yeaglet. Yes, sir. 



506 HEARINGS RELATING TO H.R. 10175 

Mr. JoiiAXSEx. I think this was discussed with the previous wit- 
nesses, but could you give us your understandino: of tlie meaning of 
2(B) "Due to some other cause determined by the head of the de- 
partment to be good and sufficient"? How broad and inchisive and 
sweeping is that ? 

Mr. Yeagley. First of all, I do not believe that it was intended to 
be broad and sweeping, for the reason that the authority is placed at 
the level of the head of the department. He is a busy man, and they 
are not going to be able to take many matters of this kind up with 
him. It would therefore have to be in the exceptional and rare case. 

It was a sort of exception, I believe, that was placed in this Order 
for a very rare and unusual situation that the Secretary might feel 
warranted no other action but this one particular exception. 

And I cannot oft'-hand give you an example — I believe we could at 
a later time — of the type of a rare case that might fall properly into 
such a classification. 

When the Government is compelled to rely on one of these excep- 
tions, the applicant should be given a summary of the Statement of 
Reasons which must be as comprehensive and detailed as the national 
security pennits. Appropriate consideration shall be accorded to the 
fact that the applicant did not have an opportunity to cross-examine 
such a person or persons, and a final determination adverse to the 
applicant shall be made only by the head of the department, based 
upon his personal review of the case. 

The Executive Order also contains provisions for the reception in 
evidence and consideration, subject to rebuttal, of physical evidence — 
other than investigative reports, both classified and unclassified — with- 
•out authenticating witnesses. 

We think this Executive Order provides a sound and workable pro- 
gram, and that it should be given a chance to perfonn the function 
for which it was intended. 

I understand that a rather sizable number of personal appearance 
proceedings, with full opportunity of cross-examination, have been 
Iield. 

In any legal test regarding the nature of the hearing, it would, of 
course, be desirable for the program to be supported by both Execu- 
tive Order and congressional authorization in view of the language 
in the Greene decision. However, we doubt the advisability of mak- 
ing changes of substance or procedure at this time. 

H.R. 10175 does not mention E.O. 10865. That bill would provide 
legislative authority for the Secretary of Defense to prescribe security 
safeguards for the protection of classified information in connection 
with tlie performance of contracts of the United States which involve 
classified information, without full cross-examination. It aifords the 
right of cross-examination in access hearings "to the extent that the 
Secretary, and the head of the investigative agency, if any, which 
supplied the information, shall determine to be permissible in the 
interest of national security." 

Upon closer examination from the standpoint of a possible test in 
court, we note that the bill does not require that the applicant be in- 
formed prior to the hearing of the nature of the information he is 
expected to refute. It seems to permit the Government to take into 
consideration the entire investigative file, which might include infor- 



HEARINGS RELATING TO H.R. 10175 507 

mation from sources of unknown reliability, anonymous letters and 
opinions of otliei-s, with no re(iuirement that the applicant be advised 
of tlie nature of the information that may form the basis for an adverse 
determination. 

For the foregoing reasons, the Department of Justice does not en- 
dorse H.R. 10175. It does support the view that it would be desirable 
to have congressional autliorization for the present program under 
E.0. 10865 and provisions relating to the payment of witnesses similar 
to Section 5A(d) of H.R. 10175. 

That concludes my statement. 

Mv. Doyle. Thank you, Mr. Yeagley. 

Any questions, counsel ? 

Mr. NiTTLE. Mr. Yeagley, I presume you have examined the draft 
bill of the Defense Department which was presented here this 
morning. 

Mr. Yeagley. Yes, I have. It has not been processed elsewhere in 
our Department, nor have we commented to the Bureau of the Budget. 

Mr. NiTTLE. Does the draft bill in your opinion meet the require- 
ments you have pointed out in your statement, and does it provide a 
sound basis for legislation ? 

Mr. Yeagley. We think that it is a good bill, well drafted. It 
covers practically all of them. But there are a few points, I think, 
that should be noted, that is, points of difference, that to my mind, 
raise a question as to the standing of Executive Order 10865, in the 
event such a bill is passed without reference to the Executive Order. 

I am not prepared to say now that it would revoke the Executive 
Order, but it is different in some respects, and it does not endorse or 
ratify or affirm the Executive Order, and that would raise a question, 
I believe. 

Fii-st of all, I don't find in the bill a criterion to be used by the 
Secretary in denying access. In other words, it is not clear whether 
it is in the national interest, which is in the case of the Executive 
Order, or if it is a security standard such as in the interest of national 
security. 

I do not think there is a criterion in the bill to form the basis for a 
decision, although I imderstand from the people in the Department 
of Defense that they would under this bill reissue their present 
regulations. 

Mr. JoHANSEN. Now, so the record will be completely clear, at this 
juncture, and speaking of this bill, you are speaking of the revised 
draft bill proposed by the Defense Department ? 

Mr. Yeagley. That is correct. 

The standard in Executive Order 10865, if I recall, was a standard 
general in nature, but nonetheless a standard in the national interest, I 
believe, or in the interest of the United States, without the word "se- 
curity"' being involved. 

It is a broad standard, and it was purposely drawn that way, 
partly because of the desire to avoid stigmatizing the person who is 
denied access, that the Defense Department people mentioned earlier. 
If a man is denied access because he is not a good security risk, this 
could be considered perhaps stigma, in the language of the Court in 
some of its cases. The standard in the Executive Order now is clearly 
consistent with the national interest. 



508 HEARINGS RELATING TO H.R. 10175 

I think the only other point I should note is that the Order pro- 
A'ides for the head of the investigative agency to issue the certifica- 
tion regarding an informant who is not available to testify'. 

We have not talked with the FBI about this recently. They were 
present at discussions, of course, involving a draft of the Executive 
Order; and at that time it was their definite feeling that they did not 
want to be in a position of furnishing the information and then also 
making the determination as to whether or not they would permit 
cross-examination of the informant, or whether they would withhold 
it as secret information. They felt that the head of the Department 
should make this determination, and not the agency that gathers the 
information. Consequently, under the Executive Order, the head of 
the Department supplying the information makes that determination 
now, and I believe that the FBI would probably favor the same po- 
sition today, although we have not talked to them about this draft of 
the proposed bill. 

Now, this has been prepared within the last few days, and we have 
had revised copies as they w^ere changed. For this reason, it has not 
been processed elsewhere in the Department, not even in my own 
office. I have read it. I have made those few observations. We would 
want, if it is introduced, to have the usual opportunity for depart- 
mental comments on the bill. 

Mr. NiTTLE. Would you comment briefly on what may be your views 
as to the necessity of maintaining a security program, of the type 
set up in the Executive Orders and the regulations of the Defense 
Department? 

Mr. Yeagley. Well, there is no doubt in my mind that there nuist 
be adequate procedures and regulations with the proper authority be- 
hind them, set up to protect these secrets that must be passed out to 
industry if industry is to manufacture weapons or missiles or space 
craft or other items relating to our national defense. Some of them 
involve developments of the greatest secrecy; yet they must become 
the knowledge of from hundreds to thousands of Americans who are 
employees in defense industry. 

We know, from the material we get, largely from the FBI, of course, 
of tile constant activity aimed at obtaining American secrets, par- 
ticularly of a technical nature, of industrial know-how, new inventions, 
new processes in defense weapons. These efforts come from many 
quarters. And we cannot assume that the millions of Americans in- 
volved are all adequately prepared and capable of protecting the in- 
formation that may come to them, so some check must be made. 

I do not faiow that any serious question can be raised of the need to 
have some protection for this information that goes out in great vol- 
ume to a feW' million people. 

^[r. Xtttle. The bill luider consideration nnd the draft bill of the 
Defense Department are, of course, not confined solely to subversive 
activities. However, based upon your experience and your present 
office, Avould you agree with the statement the chainnan made this 
morning: "It may be taken as factual that the Communists have suc- 
ceeded in serious degree in accomplishing their planned infiltration 
of basic iridustry" ? 

Mr. Yeagley. If that implies that they have succeeded in doing 
what they wanted to do, I would have to take some exception to that, 



HEARINGS RELATING TO H.R. 10175 509 

because their goals are considerably higher than what they have 
attained. 

I certainly agree with the point that the chainnan makes, that one 
of the major points of infiltration by the Communist Party in this 
country since its origin over 40 yeai*s ago has been basic industry, 
and they have constantly made that one of tlieir important targets. 

The only small exception I take is that I believe their goals are con- 
siderably higher than their attainment. 

Mr. NiTTLE. That may well be. But there is no question in your 
muid, based upon your experience and your sources of information, 
that the Communists have infiltrated basic industry ? 

Mr. Yeaglet. Yes. 

Mr. JoHANSEN. May I interject at that point? 

And is there any question in your mind as to the persistent deter- 
mination and desire to accomplish that result? 

Mr. Yeagley. No, I have no question as to that. 

Mr. JoHANSEN". Constituting an always present and serious actual 
and/or potential internal danger to the United States ? 

Mr. Yeagley. Absolutely. They had that as a goal before they 
developed such a concern about acquiring technical secrets. That 
goal was a part of the class struggle, infiltration of industry. 

Mr. JoHANSEN. And therefore that is part of a domestic threat, as 
opposed to an external threat ? 

Mr. Yeagley. Not if I understand you. The threat comes from the 
fact that the information wall end up in an external 

Mr. JoHANSEN. I recognize that the destination is external ; but the 
existing threat in this area is an internal threat within the United 
States ? 

Mr. Yeagley. Yes, espionage and matters related to that have been 
one of the most important security problems that the Government has 
faced over recent years in relation to the Soviet bloc. 

Mr. NiTTLE. Based upon your knowledge and experience, do you 
find that members of the Communist Party of the United States are 
disposed, and indeed required by the principles of their association, 
to commit sabotage and espionage under appropriate circumstances? 

Mr. Yeagley. Yes, sir. 

Mr. NiTTLE. The chairman quoted from the testunony of Mr, John 
Lautner, who indicated that a high Communist Party official rendered 
a secret report to the party when Lautner was likewise a high official 
in the party, and boasted that by 1948, over 3,000 Communist Party 
branches throughout the country, and between 400 and 500 industrial 
branches, had been established. 

Would you care to comment upon that testimony of Mr. Lautner ? 

Mr. Yeagley. No. I do not think that I could add much to that. 
I know John Lautner, of course. He has been a witness who has been 
used by our lawyers in some of our cases. If he testified to that as of 
1948, I would assume that he had reasonably accurate figures upon 
which to base his statement. I do not know of anything to contra- 
dict it, as of that date. 

Mr. NiTTLE. As of that period. 

Now, as of the present time, without asking you to disclose any mat- 
ters of confidence, would you be able to say that in general thei'e are 
at least a few hundred industrial branches of the Communist Party 
established in American industry ? 



510 HEARINGS RELATING TO H.R. 10175 

Mr. Yeagley. This, of coui-se, is an invest ijrfitive problem. We do 
not have investigators of our own. We get our information from the 
FBI. I would not want my answer to be taken necessarily as factual. 
It would have to be my opinion for what it is worth. 

And I would concur in your statement, from the best judgment I 
can make. 

Mr. NiTTLE. Would you care to express your views as to the consti- 
tutionality of the personal appearance proceedings set up in the De- 
fense Department draft bill, which provide for a limited confronta- 
tion and cross-examination proceeding? 

Mr. Yeagley. If I may do that by basing my comment on the Ex- 
ecutive Order, which I have had a great deal more to do with, ha^dng 
previously noted the few differences between the bill you speak of, the 
draft bill, and the Executive Order, I would rather do it from that 
basis, because I feel like I have a better familiarity with the Executive 
Order. 

Mr. NiTTLE. Yes. 

Mr. Yeagley. I believe, and we believe, that in an appropriate test 
case in the Federal courts, the constitutionality of such a proceeding 
could be sustained in the Supreme Court. 

This is a guess. I hope it is an educated guess. 

We participated with Defense and the Wliite House in preparing 
the Executive Order, and tremendous man-hours of study and research 
went into this, to determine what was required legally, constitution- 
ally, and what was required from the standpoint of the interests of 
national security, and a great number of men, lawyers, investi- 
gators, and administrators, did their best to prepare a workable and 
fair order. After hearing the testimony of the people from the De- 
fense Department today on the success they have had under the Order, 
I believe we could sustain it, although it would not be without some 
difficulty. 

Mr. NiTTLE. We would also like your opinion as to the necessity 
for a limited type of proceeding, such as is established in that Execu- 
tive Order. 

Would it be inconsistent with the interests of national security to 
require a full hearing in all security cases, with absolute rights guar- 
anteed to confrontation and cross-examination — in all cases? 

Mr. Yeagley. I did not get the first part of the question, sir. Would 
it be required ? Would it be inconsistent ? 

Mr. NiTFLE. Would it be inconsistent with the interests of national 
security to require a full hearing, with full confrontation and cross- 
examination ? 

Mr. Yeagley. Yes, I believe it would be inconsistent with the best 
interests of security particularly if it required the production or un- 
covering of informants regardless of their potential. There is lan- 
guage in court opinions, in recent years, that the employee may suffer 
some detriment from an adverse determination, or perhaps some 
stigma or loss of job, in which case he could have a right to have 
some opportunity to find out if there is error in the charges or in the 
allegations against him, or find out if the source is one that holds 
malice toward him. He may have a right under our constitutional 
system to some fair proceeding in order to protect himself. And this 
would have to, of course, be weighed in the light of what was the 
Government's objective or the Government's needs. If the Govern- 



HEARINGS RELATING TO H.R. 10175 511 

ment has a vital area that it has to protect, and if there is a threat to 
our Government, as there is today, then the Government also has an 
important interest. 

The court does what is called a balancino; of the interests. If there 
is a constitutional right, or some sort of a right of the individual 
employee that may be infringed, the question then might be whether 
the interest of the Government is an overriding interest, and was 
maximum protection afforded to the employee under the circum- 
stances ? 

If he is deemed to be entitled to a regular, full hearing with com- 
plete right to confrontation and cross-examination, this would mean 
that the Government would have a choice, one of two choices, to make, 
in such a case. 

It would have the choice of letting a potential agent retain his job 
if the Government chooses to withhold a confidential informant that 
it cannot reveal or uncover on the witness stand. The Government 
may not be able to afford to release an informant in every instance. 
He may be a vital part of Government coverage in a certain area. 

The choice would be to micover the informant and lose the cov- 
erage in future months or years in that area in order to produce him 
as a witness to be cross-examined, or to keep quiet about the informant 
and about the information it has on Mr. X, and let Mr, X proceed 
in his employ. 

Therefore I should add, I suppose, that if it is a full confrontation 
hearing, the country's best security interests cannot be provided for. 

I would like to observe, however, that I was greatly impressed, as 
I imagine many of you were, with the statistics that the Defense De- 
partment people have presented today, to show the large number of 
cases in which full confrontation was possible and was provided ; and 
that only in a very, very few cases, an extremely small percentage, a 
fraction of a percentage, has it been necessary to consider the use of 
an Attorney General's certificate in lieu of a live witness. 

Mr. DoTLE. Is there any question from the committee members ? 

Mr. Bruce. I have none. 

Mr. Doyle. Mr. Johansen, do you have a question for our distin- 
guished witness ? 

Mr. Johansen. Mr. Attorney General, I was particularly interested 
in and impressed by your comments indicating that you do regard this 
situation as a present and continuing potential source of danger. I 
would just like to make a comment, and then, if you care to, you can 
comment on it. 

There was published in the NeiD York Times on February 22nd of 
this year one of the periodic paid ads urging that the Congress abolish 
this committee. That is only incidental to the point I want to make 
and the comment I want to make. 

And one of the reasons alleged in this ad was that it caused us 
to neglect settlement of problems in our foreign relations field — that 
was the implication — or abroad, and attempted to concentrate at- 
tention on the minuscule Communist movement in this country. 

It is very interesting to note that one of the signers of this ad was 
Mr. Russell Nixon, who has been in previous hearings identified before 
this committee under oath as a Communist, and a man who I under- 
stand until recently was with a union that was referred to in the hear- 



512 HEARINGS RELATING TO H.R. 10175 

ings this morning, and was the subject of hearings in the Pittsburgh 
area several years ago. 

It seems to me not irrelevant that in view of the concern that you 
have expressed in this area of national security, and in view of your 
vei-y clear testimony with respect to the existing and always potential 
internal danger that we are addressing ourselves to, it is sufficient 
just to call attention to this calculated and deliberate effort, the effort 
to abolish the committee, for my purposes, being incidental, but this 
deliberate and calculated effort, subscribed to by one man, who is 
obviously a party in interest, to totally minimize any threat on the part 
of the Communist Party in the United States. 

I just wondered if you would like to comment on that. 

Mr. Yeaglet. I did not see the advertisement you speak of. I do not 
recall it now. I imagine that you gentlemen here have more detailed 
knowledge than I do of your critics. Particularly if you are doing 
something, you have critics. 

I am not sure that I get the exact point of your question. 

I woidd like to observe, however, that the lawyers in my office are 
the lawyers that represent the House Committee on Un-American 
Activities and the Senate Internal Security Subcommittee in the 
courts when you desire to pursue contempt of Congress charges against 
witnesses, and I have had the job, and I must say the pleasure, to par- 
ticipate in some of those cases myself. 

So we have a great familiarity with the committee, what it does, 
what it has done, how it works, and also to some extent with the crit- 
ics. We have been meeting, I think, with increasing success, and I 
hope it continues. 

Mr. JoiiAxsEN. Well, my point goes not to criticism of the commit- 
tee ; my point goes to the fact that here, as a part of this campaign, we 
have the evidence of the continuing campaign to minimize the exis- 
tence of any internal threat so far as the Communists are concerned, 
and one of the advocates of that doctrine is a man who, on the basis of 
sworn testimony before this committee, has a considerable and obvious 
interest in minimizing it. That is the point I wanted to make. 

Mr. Yeagley. As far as I know, all Communists would join with 
him, if they had the courage and the opportunity, to criticize this com- 
mittee, as well as the other one. 

Mr. JoiiANSEN. That is all I have. 

Mr. Doyle. Mr. Yeagley, I noticed you made a brief observation 
in answer to Mr. Johansen's question as to the possible degree or 
extent to which the Communist conspiracy or Communist Party 
activities were internal, that is, within our own domestic confines. I 
was interested particularly in your answer, wliich was very brief, 
wherein you mentioned that the information went to external sources. 
Could you elaborate on that some, please? Because I am aware of 
frequent communications these days, from constituents and others, 
whicli claim that our Government is not paying any attention, or 
enough attention, to the Commmiist conspiracy within our own domes- 
tic confines, and too much to it in other parts of the world. 

Now, if you have any opinion on the extent to which the Com- 
munist movement still operates within our domestic territory, as com- 
pared with the outside, I would appreciate it. 

Mr. Yeagley. I do not know if I can make clear my own feelings 
on this, but it is an important area, I think. We, too, get a great deal 



HEARINGS RELATING TO H.R. 10175 513 

of correspondence from the public. I am not sure that we are able to 
express ourselves or explain it adequately. And of course our position 
may be wrong. 

It seems to me, at least, that the great problem today, the great 
danger, not only to us, to this countiy, but to hmnanity itself, comes 
from this tremendous international Communist movement, as prin- 
cipally represented by the Soviet bloc. That is to me the danger. It 
could cause a tremendously destructive nuclear war that might wipe 
out humanity, or most of it, certainly civilization as we know it today. 
That threat is one that is almost beyond human comprehension. And 
to me this is the real big danger, the real big problem. It is right 
there. 

The Communist Party in this country, the same as the Communist 
Party in any country, is not only an agent of that group, but is part 
and parcel of the Soviet bloc and the international Communist move- 
ment. They are all members of the same crowd, with the same 
objectives. 

They may claim and be able to establish American citizenship, but 
as far as I am concerned, for the most part that is a paper documenta- 
tion, and what they have in their hearts and their minds is what 
concerns us. I can only consider them to be as much a part of 
this international threat as a member of the Communist Party in the 
Soviet Union would be, and that if they had the opportunity here, they 
would do as much for the Soviet movement. 

After all, the members of the Communist Party are not newly be- 
come Commmiists. Wliat we liave in this comitiy today are the hard- 
core, old-time Communists that are left after the party has fallen in 
membership by many, many thousands over the years, and those that 
are left tx)day are really hard-core, devoted Soviet-bloc Communists, 
international Communists, as I see it. 

]Mr. Bruce. Mr. Chairman, may I interject there, and ask a question 
on that ? 

Is it not a tactic of an internal Communist Party to narrow down 
and get rid of the soft flesh, as it were, at times of real crisis, so that 
the numbers can be a misleading evaluation of the strength of the 
Communist movement ? Would that be correct ? 

Mr. Yeaglet. Yes, that could be correct. They as you know have 
had their purges, and they have times when they have membership 
drives, and other times when they do not. 

The answer to your question is yes, sir. It could be correct. 

Pardon me. I might add one point. It is a part of this same area. 

I do not want to leave the impression that when one of us in the 
Department may speak in terms of approximately how many Com- 
munists there are in this country, that that means necessarily that we 
are certain that those who left the party have left permanently. We 
do know this : that many of them who have left are not talking about 
it. They are not talking about what they used to do. They are not 
cooperating with the Government. There may be others, so-called 
bandwagon Communists, that might be glad to jump back on if condi- 
tions become more appropriate for that. 

So figures, as you say, are interesting and useful, but their signifi- 
cance sometimes is a bit elusive. 

Mr. Bruce. There is, as you know, a great deal of controversy, and 
this is what we have been dealing with for the last few minutes, about 



514 HEARINGS RELATING TO H.R. 10175 

this diversionary aro^iiment, of whether the strength or the danger of 
the Communist Party is internal or external. And if I am interpret- 
inc; Avliat you have said correctly, you are sayinjj that it is one and the 
same, that you cannot se])arate internal and external, that it is the 
Communist worldwide conspiracy, which is a faith in a military oper- 
ation and an economic operation, and that the Communist Party in 
any g^ven country, tlie Ignited States, Mexico, or anywhere else, is a 
danger in direct j^roportion to the world Communist movement, being 
under the discipline thereof. 

So actually it is a nice diversion for us to set ourselves one against 
the other on whether the danger is internal or external. It is a total 
danger that comprises both, because they are one and the same. The 
danger is the world Communist movement. And their agent in any 
given country is the Communist apparatus. 

Is that correct ? 

Mr. Yeagley. Yes. I would like to add that some who have com- 
mented on this have perhaps a different idea in mind in discussing 
that relationship, and being primarily interested in the political capa- 
bility of the group in any given country. 

Mr. Bruce. But it is true that they have built a good deal of their 
military strength as a result of their disciplined apparatus within 
the United States. They short-circuited their atomic research neces- 
sities with their espionage system and many other advances, where 
they could leapfrog over some of the painful experimentation as a 
result of the success of their apparatus within our society. 

That would be correct, would it not? 

Mr. Yeagley. Oh, yes. They have made, I suppose, considerable 
use out of their espionage network, as we know from the Klaus Fuchs 
case and the Rosenberg case. There is no doubt about that. 

Mr. Xittle. Mr. Chairman, may I ask the witness a few additional 
questions? 

Mr. Doyle. Yes, indeed. 

Mr. NiTTLE. I believe the Attorney General was quoted in the news- 
papers some weeks ago, Mr. Yeagley, as indicating that the Commu- 
nist Party membership was now about 10,000. 

Am I correct in that statement? 

Mr. Yeagley. I did not see that. You could be correct. I did not 
see that. 

Mr. NiTTLE. Have you made any public pronouncements as to the 
present membership of the Communist Party? 

Mr. Yeagley. I have made some statement about my opinion as to 
the membership. 

Mr. NiTFLE. Would you indicate that for the record, please? 

Mr. Yeagley. I am not quite sure what I said, but I believe it was 
approximately 8,000. 

Mr. NiTn.E. Now, when you give the figure of membership of 8,000, 
are you referring simply to what might be called formal member- 
ship? A moment ago you indicated that several thousand Commu- 
nists have left the party; but there was some doubt as to whether 
they were continuing their sympathetic association with it and fol- 
lowing its line. Now, when you referred to a membership of 8,000, 
are you referring to what might be called the formal membership? 



HEARINGS RELATING TO H.R. 10175 515 

Mr. Yeagley. Not quite. I do not believe the Comniunist Party 
knows what its formal membership is. It is not that precise, 1 do 
not believe. And so I am not claiming that my ligure has any par- 
ticular accuracy, except that it is indeed the best judgment 1 can 
make on the material I have seen currently, as compared to what I 
used to see when I was in the FBI a good many years ago. And it is 
frankly not based on formal membership, but on what I think is an 
accurate figure of people who today would consider themselves to 
be Communists. 

Mr. Bruce. On that, sir, has not Mr. Hoover somewhat qualified the 
use of a figure on this with the rest of a statement which so often is 
forgotten, that for every one of these, there are ten others ready, 
willing, and able to carry out the bidding of the Communist Party? 
So according to his statement, you would almost have to multiply 
the official figure that is given by ten ? 

Mr. Yeagley. Yes, he has said that, I think, on more than one occa- 
sion. 

Mr. NiTTi.E. Communist Party publications have a circulation and 
a paid circulation far in excess of the membership figure which you 
have given ? 

Mr. Yeagley. That is correct. 

Mr. Nittle. It may be true that some of these Communist publica- 
tions are circulated to certain Government agencies and other non- 
Communists for intelligence or research purposes, but certainly not to 
the extent of the several thousand indicated by the paid circulation of 
these newspapers in excess of the membership figures you have given. 
The Worker has a circulation, a paid circulation, I believe, of 15 or 20 
thousand on the East Coast. The Peoph\s World has a circulation of 
over 6,000 on the West Coast. There are other Communist publica- 
tions circulated to the extent of several thousand more. There is an 
indicated paid circulation of possibly 30,000 and more. 

W\\o are these people that are reading these publications? 

Are these people loyal Americans, or are they Communists in 
sympathy with, and following the propaganda line of, the Communist 
Party and its policies and therefore engaging in the sabotage of Amer- 
ican policy in that way? 

I mean to ask: Do we not minimize the extent of Communist action 
in this country when we say the membership is just 8,000? 

Mr. Yeagley. I think the figures you have given on subscriptions 
may well be correct. I do not know. This is an area which we, as 
law enforcement people, do not get into so much, because this is 
obviously in the area of freedom of the press, and until recently, we 
had no legitimate concern with the publications as violating any of 
our laws. 

Mr. Nitt^le. There is a violation of the law if Communist publica- 
tions are not labeled under the Internal Security xVct. 

Mr. Yeagley, Since this order became final, of the Subversive Ac- 
tivities Control Board, as a result of the Supreme Court action, we 
do now have an interest in any publication that is disseminated by 
the Communist Party, being appropriately labeled. They are not in 
violation of law so long as they label it. That is all that is required. 
They do not have to go out of business. But if they fail to label, and 
if we can establish a case in court, then they would be subject to 
criminal prosecution. 



516 HEARINGS RELATING TO H.R. 10175 

You may have noted from the press recently that we have beo;un a 
grand jury investigation here in the District of Cohimbia to deter- 
mine whether The Worker, for example, should be labeled, and who 
could be prosecuted for failure to label. 

The contempt action this week against James E. Jackson, who is 
the editor of The Worker, was not mereh' a case of some Government 
lawyers snooping into the freedom of the press, at all. It was a case 
of the law stating that a publication must be labeled, disseminated by 
blank, a Communist organization, if in fact it is so disseminated. And 
The Worker^ we believe, fell into that category, at least so as to require 
a grand jury investigation. The Acting Attorney General authorized 
a grand jury investigation into this area as a part of our responsibility 
to enforce the law. 

Mr. NiTTLE. Of course, I want to remain clear on the record that we 
by no means suggest that freedom of the press should be interfered 
with. My questions were not put to you with that thought in mind, 
but I noted the circulation of Communist ]:)ublications as somewhat 
of a gauge to determine the number of Communists within the country 
who follow the party line, but who may not be formal members or 
organizationally active. 

Now, certainly in the mid-1940's, I think Mr. Hoover announced 
that there were in excess of 50,000 Communist Party members at that 
time. Then followed, of course, a series of prosecutions under the 
Smith Act by the Justice Department, and membership in the partv 
fell off. 

Now, does one suppose that these people ceased being Communists, 
or did they simply sever formal membership for the purpose of avoid- 
ing prosecution ? 

Mr. Yeagley. Yes, that was the point I was raising a bit earlier. 

Mr. TA^T.NXER. Mr. Chairman, since the questioning has gotten into 
this area, it might be pertinent to make this comment : That a seri- 
ously considered estimation of the number of persons in the United 
States today who have been members of the Communist Party reaches 
the astounding figure of 700,000. No one knows how many of those 
persons left the Communist Party through conscience or conviction. 
and no one knows how many of that great number are out onlj^ organ- 
izationally speaking. 

Mr. SciTERKR. May I ask one question ? 

Do you feel, Mr. Yeagley, that there is adequate legislation on the 
books to enable the Government to deal effectively with potential 
espionage agents or saboteurs in defense plants ? 

Mr. Yeagley. Well, we are recommending today that legislation 
supporting the present industrial security program would be useful. 
If we had both an Executive Order and legislation, it would fortify 
us in the courts. 

Tlie question you raise also involves what I believe we used to call 
the defense facilities protection bill. And I think this one you re- 
ferred to today has been received in the Department of Justice, if I 
am not mistaken, and T believe it is under consideration. I have not 
seen the present draft. I know we have not commented on it. 

There has been a little water over the dam, judicially speaking, 
since the position we took 5 years ago. I regret that I do not know 
our answer to your question as of this moment. 



HEARINGS RELATING TO H.R. 10175 517 

Mr. SciiERER. You are not able to say whether tlie Justice Depart- 
ment feels the need of such legislation, as you did 4 or 5 years ago ? 

Mr. Yeagley. There may be a need. I do not know, in view of the 
legal problems involved, what our comments will be. I really have, 
not read the bill, and I have not thought in terms of the rest of in- 
dustry as compared with this particular area we are discussing today. 

Mr. ScHERER. I was not thinking in reference to the specific terms 
of a specific bill. 

Mr. Yeagley. I can only put it this way : that we know that there 
are a great many people here who are Communists. We know where 
their loyalties are, and not only that, but their interests and their hopes 
and their desires. If they are in an area that is sensitive, where they 
have access to information, I would have to assume they are going to 
pass it on. 

Mr. Scherer. I was not exactly talking about information. I be- 
lieve you were in the room this morning when I used the illustration 
of a security risk or a potential saboteur working in a utility plant 
which is in support of a defense plant. Do you have any legislation 
to deal with this fellow ? Suppose you find out that he had actually 
studied, taken courses in sabotage, and he is in a position to pull 
a switch in a utility plant or power plant supplying electricity to one 
of our defense plants. There is nothing you can do about it, is 
there 

Mr. Yeagley. This gets into an area, just off-hand, of what this 
man may intend to do or possibly do in the future from the stand- 
point of sabotage. Of course, there are many plants that have had 
security surveys over the years, for the veiy purpose of protecting 
their facilities : so that a very, very limited number of people can get 
into the type of an area you are speaking about. 

But I am sure this must not be the case in eveiy situation. 

Mr. Scherer. You do not have any legislation whereby you could 
remove such an individual from that sensitive position today, whether 
he is in a support plant or whether he is actually in a defense plant? 

And I am not talking about classified information. I am talking 
about protection of, say, weapons, missiles. 

Mr. Yeagley. I do not know that we have anything at all. Neither 
do I know that this question has been posed to us as an actuality; 
so that we have probably never studied this precise question. We 
have had no cases of this kind. 

Mr. Scherer. The Defense Department has testified on a number 
of occasions since I have been a member of this committee, and con- 
sistently since 1950 has asked for legislation to meet this particular 
problem which I posed. 

Mr. Yeagley. Yes, I believe the Department of Justice testified in 
1957 on a bill of that type, or at least on a problem very closely related 
to that. 

Mr. Scherer. I think you approved a bill that was submitted to 
the Defense Department, if my recollection is correct. 

Mr. Yeagley. I believe we testified either for the objective of the 
bill or for the bill itself. I am not quite clear on it, but we did testify 
here at that time. 

Mr. Scherer. I think such a bill is just as important as this legisla- 
tion to protect classified information. As far as I have been, I have 



518 HEARINGS RELATING TO H.R, 10175 

not been able to find anything whereby we might deal effectively with 
a situation such as that which I have outlined. 

The Defense Department said they were going to give considera- 
tion to it. I would certainly appreciate it if the Justice Department 
would review its position on this. 

Mr. Yeagley. Fine. Yes, we intend to. 

Mr. Doyle. Any other questions, Counsel ? 

Mr. NiTTLE. No, sir. 

Mr. Doyle. Any other questions by members of the committee ? 

We thank you, Mr. Yeagley, and your associates. We appreciate 
your being in the hearing room all day with us. 

Mr. Yeagley. Yes, Mr. Chairman. Thank you. 

Mr. Doyle. We are sorry we had to make you wait so long. 

Mr. Yeagley. That is all right. 

Mr. Doyle. Is there any other matter to come before the committee ? 

Mr. NiTTLE. There are no further witnesses to be presented on this 
bill, Mr. Chairman. 

Mr. DoYLE. Then the committee will stand adjourned on this par- 
ticular bill. 

(Whereupon, at 4 :00 p.m., Thursday, March 15, 1962, the committee 
adjourned subject to the call of the Chair.) 



APPENDIX 



Exhibit No. 1 

Executive Order 10865 

safeguarding classified information within industry 

T^^EREAS it is mandatory that the United States protect itself 
against hostile or destructive activities by preventing unauthorized 
disclosures of classified information relating to the national defense ; 
and 

WHEREAS it is a fundamental principle of our Government to 
protect the interests of individuals against unreasonable or unwar- 
ranted encroachment; and 

WHEREAS I find that the provisions and procedures prescribed 
by this order are necessary to assure the presentation of the integrity 
of classified defense information and to protect the national interest ; 
and 

T^^^EREAS I find that those provisions and procedures recognize 
the interest of individuals affected thereby and provide maximum 
possible safeguards to protect such interests: 

NOW, THEREFORE, under and by virtue of the authority vested 
in me by the Constitution and statutes of the United States, and as 
President of the United States and as Commander in Chief of the 
armed forces of the United States, it is hereby ordered as follows: 

Section 1. (a) The Secretary of State, the Secretary of Defense, 
the Commissioners of the Atomic Energy Commission, the Adminis- 
trator of the National Aeronautics and Space Administration, and 
the Administrator of the Federal Aviation Agency, respectively, shall, 
by regulation, prescribe such specific requirements, restrictions, and 
other safeguards as they consider necessary to protect (1) releases 
of classified information to or within United States industiy that 
relate to bidding on, or the negotiation, award, performance, or termi- 
nation of, contracts with their respective agencies, and (2) other 
releases of classified information to or within industry that such 
agencies have responsibility for safeguarding. So far as possible, 
regulations prescribed by them under this order shall be uniform and 
provide for full cooperation among the agencies concerned. 

(b) Under agreement between the Department of Defense and any 
other department or agency of the United States, including, but not 
limited to, those referred to in subsection (c) of this section, regula- 
tions prescribed by the Secretary of Defense under subsection (a) of 
this section may be extended to apply to protect releases (1) of classi- 
fied information to or within United States industry that relate to 
bidding on, or the negotiation, award, performance, or termination of, 

519 

82627 0—^2 6 



520 HEARINGS RELATING TO H.R. 10175 

contracts with such other department or agency, and (2) other releases 
of classified information to or within industry which such other de- 
partment or agency has responsibility for safeguarding. 

(c) When used in this order, the term "head of a department" 
means the Secretary of State, the Secretary of Defense, the Commis- 
sioners of the Atomic Energy Commission, the Administrator of the 
National Aeronautics and Space Administration, the Administrator 
of the Federal Aviation Agency, and, in sections 4 and 8, includes the 
Attorney General. The term "department" means the Department 
of State, the Department of Defense, and the Atomic Energy Com- 
mission, the National Aeronautics and Space Administration, the Fed- 
eral Aviation Agency, and, in sections 4 and 8, includes the Depart- 
ment of Justice. 

Sec. 2. An authorization for access to classified information may be 
granted by the head of a department or his designee, including but 
not limited to, those officials named in section 8 of this order, to an 
individual, hereinafter termed an "applicant", for a specific classifica- 
tion category only upon a finding that it is clearly consistent with the 
national interest to do so. 

Sec. 3. Except as provided in section 9 of this order, an authoriza- 
tion for access to a specific classification category may not be finally 
denied or revoked by the head of a department or his designeej includ- 
ing, but not limited to, those officials named in section 8 of this order, 
unless the applicant has been given the following : 

(1) A written statement of the reasons why his access authoriza- 
tion may be denied or revoked, which shall be as comprehensive and 
detailed as the national security permits. 

(2) A reasonable opportunity to reply in writing under oath or 
affirmation to the statement of reasons. 

(3) After he has filed under oath or affirmation a written reply to 
the statement of reasons, the form and sufficiency of which may be 
prescribed by regulations issued by the head of the department con- 
cerned, an opportunity to appear pereonally before the head of the 
department concerned or his designee, including, but not limited to, 
those officials named in section 8 of this order, for the purpose of sup- 
porting his eligibility for access authorization and to present evidence 
on his behalf. 

(4) A reasonable time to prepare for that appearance. 

( 5 ) An opportunity to be represented by counsel. 

(6) An opportunity to cross-examine persons either orally or 
through written interrogatories in accordance with section 4 on 
matters not relating to the characterization in the statement of reasons 
of any organization or individual other tlian the applicant. 

(7) A written notice of tlie final decision in his case which, if ad- 
verse, shall specify whether the head of the department or his designee, 
including, but not limited to, those officials named in section 8 of this 
order, found for or against him with respect to each allegation in the 
statement of reasons. 

Sec. 4. (a) An applicant shall be afforded an opportunity to cross- 
examine persons who liave made oral or written statements adverse to 
the applicant relating to a controverted issue except that any such 
statement may be i*eceived and considered witliout affording such 
opportunity in the circumstances described in either of the following 
paragraphs : 



HEARINGS RELATING TO H.R. 10175 521 

(1) The head of tlie department supplying the statement certifies 
that the person who furnished the information is a confidential in- 
formant wlio has been engaged in obtaining intelligence information 
for the Government and that disclosure of his identity would be sub- 
stantially harmful to the national interest. 

(2) The liead of the department concerned or his special designee 
for that particular purpose has preliminarily determined, after con- 
sidering information furnished by the investigative agency involved 
as to the reliability of the person and the accuracy of the statement 
concerned, that tlie statement concerned appears to be reliable and 
material, and the head of the department or such special designee has 
determined that failure to receive and consider such statement would, 
in view of the level of access sought, be substantially harmful to the 
national security and that the person who furnished the information 
cannot appear to testify (A) due to death, severe illness, or similar 
cause, in which case the identity of the person and the information to 
be considered shall be made available to the applicant, or (B) due to 
some other cause determined by the head of the department to be good 
and sufficient. 

(b) "VAHienever procedures under paragraphs (1) or (2) of sub- 
section (a) of this section are used (1) the applicant shall be given a 
summary of the information which shall be as comprehensi-«"e and 
detailed as the national security permits, (2) appropriate considera- 
tion shall be accorded to the fact tliat the applicant did not have an 
opportunity to cross-examine such person or persons, and (3) a final 
determination adverse to the applicant shall be made only by the head 
of the department based upon his personal review of the case. 

Sec. 5. (a) Records compiled in the regular course of business, or 
other physical evidence other than investigative reports, may be re- 
ceived and considered subject to rebuttal without authenticating wit- 
nesses, provided that such information has been furnished to the de- 
partment concerned by an investigative agency pursuant to its respon- 
sibilities in connection with assisting the head of the department 
concerned to safeguard classified information within industry pursu- 
ant to this order. 

(b) Records compiled in the regular couree of business, or other 
physical evidence other than investigative reports, relating to a con- 
troverted issue which, because they are classified, may not be inspected 
by the applicant, may be received and considered provided that: (1) 
the head of the department concerned or his special designee for that 
purpose has made a preliminary determination that such physical 
evidence appears to be material, (2) the head of the department con- 
cerned or such designee has made a determination that failure to re- 
ceive and consider such physical evidence would, in view of the level 
of access sought, be substantially harmful to the national security, and 
(3) to the extent that the national security permits, a summary or 
description of such physical evidence is made available to the appli- 
cant. In every such case, information as to the authenticity and ac- 
curacy of such physical evidence furnished by the investigative agency 
involved shall be considered. In such instances a final determination 
adverse to the applicant shall be made only by the head of the depart- 
ment based upon his personal review of the case. 

Sec. 6. Because existing law does not authorize the Department of 
State, the Department of Defense, or the National Aeronautics and 



522 HEARINGS RELATING TO H.R. 10175 

Space Administration to siibpena witnesses, the Secretary of State, 
the Secretary of Defense, or the Administrator of tlie National Aero- 
nautics and Space Administration, or his representative, may issue, in 
appropriate cases, invitations and requests to appear and testify in 
order tliat the applicant may have the opportunity to cross-examine 
as provided by this order. So far as the national security permits, the 
head of the investigative agency involved shall cooperate with tlie Sec- 
retary or the Administrator, as the case may be, in identifyintj pereons 
who have made statements adverse to the applicant and in assisting 
him in making them available for cross-examination. If a person so 
invited is an officer or employee of the executive branch of the Govern- 
ment or a member of the armed forces of the United States, the head 
of the department or agency concerned shall cooperate in making that 
person available for cross-examination. 

Sec. 7. Any determination under this order adverse to nn applicant 
shall be a determination in terms of the national inte;^"' and shall 
in no sense be a determination as to the loyalty of tlie . n iicant con- 
cerned. 

Sec. 8. Except as otherwise specified in the preceding provisions 
of this order, any authority vested in the head of a department by this 
order may be delegated to tlie 

(1) Under Secretary of State or a Deputy Under Secretary of State, 
in the case of authority vested in the Secretary of State; 

(2) Deputy Secretary of Defense or an Assistant Secretary of De- 
fense, in the case of authority vested in the Secretary of Defense ; 

(3) General Manager of tlie Atomic Energy Commission, in the case 
of authority vested in the Commissioners of the Atomic Energy Com- 
ruission; 

(4) Deputy Administrator of the National Aeronautics and Space 
Administration, in the case of authority vested in the Administrator 
of the National Aeronautics and Space Administration ; 

(5) Deputy Administrator of the Federal Aviation Agency, in the 
case of authority vested in the Administrator of the Federal Aviation 
Agency; or 

(6) Deputy Attorney General or an Assistant Attorney General, in 
the case of authority vested in the Attomey General. 

Sec. 9. Nothing contained in this order shall be deemed to limit or 
affect the i^sponsibility and ])owers of the head of a department to 
deny or revoke access to a specific classification category if the security 
of the nation so requires. Such authority may not be delegated and 
may be exercised only when the head of a department determines 
that the procedures prescribed in sections 3, 4, and 5 cannot be invoked 
consistently with the national security and such determination shall 
be conclusive. 

DwiOHT D. ElSENirOWER 

The White House, Fehmary W^ 1960. 

[F.R. Doc. 60-1735 ; Filed, Feb. 23, 1960; 11 :51 a.m.] 



Exhibit No. 2 

Executive Order 10909 

amendment of executive order no. 108 6 5/ safeguarding classified 

information within industry 

Bv virtue of the authority vested in me by the Constitution and stat- 
utes'of the United States, and as President of the United States, and 
as Commander in Chief of the armed forces of the TTnited States, 
Executive Order No. 10865 of Febniary 20, 1960 (25 F.E. 1583), is 
hereby amended as follows : 

Section 1. Section 1(c) is amended to read as follows : 

" (c) When used in this order, the term 'head of a department' means 
the Secretary of Stat^, the Secretary of Defense, the Commissioners 
of the Atomic Energy Commission, the Administrator of the National 
Aeronautics and Space Administration, the Administrator of the Fed- 
eral Aviation Agency, the head of any other department or agency of 
the United States with which the Department of Defense makes an 
agreement under subsection (b) of this section, and, in sections 4 and 
8, includes the Attorney General. The term 'department" means the 
Department of State, the Department of Defense, the Atomic Energy 
Commission, the National Aeronautics and Space Administration, the 
Federal Aviation Agency, any other department or agency of the 
United States Avith which tlie Department of Defense makes an agree- 
ment under subsection (b) of this section, and, in sections 4 and 8, 
includes the Department of Justice." 

Sec. 2. Section 6 is amended to read as follows : 

"Sec. 6. The Secretary of State, the Secretary of Defense, the Ad- 
ministrator of the National Aeronautics and Space Administration, 
the Administrator of the Federal Aviation Agency, or his representa- 
tive, or the head of any other department or agency of the United 
States with which the Department of Defense makes an agreement 
under section 1(b), or his representative, may issue, in appropriate 
cases, invitations and requests to appear and testify in order that the 
applicant may have the opportunity to cross-examine as provided by 
this order. AVhenever a witness is so invited or requested to appear 
and testify at a proceeding and the witness is an officer or employee of 
the executi\e branch of the Government or a member of the armed 
forces of the United States, and the proceeding involves the activity 
in connection with which the witness is employed, travel expenses and 
per diem are authorized as provided by the Standardized Government 
Travel Eegulations or the Joint Travel Regulations, as appropriate. 
In all other cases (including non-Government employees as well as 
officers or employees of the executive branch of the Government or 
members of the armed forces of the United States not covered by the 

1 25 F.R. 1583. 

523 



524 HEARINGS RELATING TO H.R. 10175 

foregoing sentence), transportation in kind and reimbursement for 
actual expenses are authorized in an amount not to exceed the amount 
payable under Standardized Government Travel Regulations. An 
officer or employee of the executive branch of the Government or a 
member of the armed forces of the United States who is invited or 
requested to appear pursuant to this paragraph shall be deemed to be 
in the performance of his official duties. So far as the national security 
permits, the head of the investigative agency involved shall cooperate 
with the Secretary, the Administrator, or the head of the other depart- 
ment or agency, as the case may be, in identifying persons who have 
made statements adverse to the applicant and in assisting him in mak- 
ing them available for cross-examination. If a person so invited is an 
officer or employee of the executive branch of the Government or a 
member of the armed forces of the United States, the head of the de- 
partment or agency concerned shall cooperate in making that person 
available for cross-examination." 

Sec. 3. Section 8 is amended by striking out the word "or" at the end 
of clause (5), by striking out the period at the end of clause (6) and 
inserting "; or" in place thereof, and by adding the following new 
clause at the end thereof: 

" ( Y) the deputy of that department, or the principal assistant to the 
head of that department, as the case may be, in the case of authority 
vested in the head of a department or agency of the United States 
with which the Department of Defense makes an agreement under 
section 1(b)." 

DwiGiiT D. EISE^^Ho^\^:R. 

The White House, January 17, 1961. 

[F.R. Doc. 61-567 ; Filed, Jan. 18, 1961 ; 2: 08 p.m.] 



HEARINGS RELATING TO H.R. 10175 525 



Exhibit No. 3 




July 28, i960 
NUMBER 5220. 6 



asd(mp&r) 

Department of Defense Directive 

SUBJECT Industrial Personnel Access Authorization Review Regulation 

Reference: (a) DOD Directive 5220.6, entitled "Industrial Personnel 
Security Review Regulation, " dated February 2, 1955, 
as amended (cancelled) 

I. GENERAX 

A. Authority 

This Regulation Is issued pursuant to the authority vested 
by law, Including Executive Order IO865 (reproduced as 
Appendix A), In the Secretary of Defense. 

By an exchange of letters between the Secretary of Defense 
and the Administrators of the Federal Aviation Agency and 
the National Aeronautics and Space Administration, and as 
provided for in Section 1 (b). Executive Order IO865, the 
Deparijnent of Defense has been authorized to act for and 
in behalf of the Federal Aviation Agency and the National 
Aeronautics and Space Administration in the performance 
of the administrative and personnel services set forth in 
this Regulation. Reference (a) is hereby cancelled. 

B. Purpose 

1. The Secretary of Defense and the Administrators of the 
Federal Aviation Agency, and the National Aeronautics 
and Spa^e Administration have prescribed specific 
requirements, restrictions, and other safeguards which 
they consider necessary to protiect (a) releases of 
classified Infonnation to or within United States 
Industry that relate to bids, negotiations, awards, or 
the performance or termination of contracts with their 
department or agency, and (b) other releases of classified 
Information to or within industry which their department 
or agency has responsibility for safeguarding. In this 
connection, this Regulation prescribes uniform standards. 



526 HEARINGS RELATING TO H.R. 10175 



criteria, and procedures for processing to final determina- 
tion all cases which ccane within the scope of the Industrial 
Personnel Access Authorization Review Program. 

2. Pursuant to the agreement made between the Department of 
Defense, and thtf Federal Aviation Agency, and the National 
Aeronautics and Space Administration, (provided for in 
Section 1 (b). Executive Order IO865), this Regulation has 
been extended to apply to protect the releases of classified 
information specified in subparagraph 1., above. The Boards 
eind instrumentalities provided for in this Regulation are 
hereby authorized to assxame jurisdiction over, and as herein- 
after provided, to process eind make determinations in cases 
arising out of such releases of classified information. 

3. This Regulation is Issued to conform the Industrial Personnel 
Access Authorization Review Program to the requirements of 
Executive Order IO865. 

C. Definitions 

1. Whenever the words "Department of Defense", or "Department 
of Defense agency or activity", or "military department" 
are used herein, they shall be deemed to include where 
applicable the Federal Aviation Agency, or the Nationeil 
Aeronautics and Space Administration. 

2. Access Authorization : An authorization to have access to 
one or more categories of information classified in 
accordance with Executive Order IO50I. (NOTE: Actual 
access, when authorized, requires both an access authoriza- 
tion and a "need to know".) In the case of a contractor, 
an "access authorization" is an authorization for the 
contractor involved to have access to specific categories 

of classified information provided such access is (a) required 
in connection with the bidding, negotiation, award, performance, 
or termination of contracts with a Department of Defense agency 
or activity or (b) required in connection with other releases 
of classified information to or within industry. In the case 
of a contractor employee, em "access authorization" is an 
authorization for the employee to have access to specific 
categories of classified information provided such access is 
(1) required for the performance of his work with a particular 
contractor on contracts with a Department of Defense agency 
or activity or (2) required in connection with the release 
of classified information to or within industry. 

3. Administrator : The Administrator of the Federal Aviation 
Agency, or the National Aeronstutics and Space Administration. 



HEARINGS RELATING TO H.R. 10175 527 



k. Agency case : A case arising out of the release of cleisslfled 
information to or within industry directly by the FedereJ. 
Aviation Agency or the National Aeronautics and Space 
Administration in connection with the bidding, negotiation, 
award, or performauice or tennination of a contract by one 
of those eigencies. 

5. Applicant ; Any person who is eligible to have the matter of 
granting, revoking, or denying him an access authorization 
determined or reconsidered \inder the Industrial Personnel 
Access Authorization Review Program a^ provided for in 
patragraphs I.F. and V.B. 

6. Contractor : An industrial, educational, ccmmercial, or 
other entity which has executed a contract or a Department 

of Defease Security Agreement (UD Form khl) with a Department 
of Defense agency or activity. 

7. Personal appearance proceeding : A proceeding before the New 
York, Washington, or Los Angeles Industrial Personnel Access 
Authorization Field Board convened and conducted in accordance 
with this Regulation. The use of the terms "personal 
appearance proceeding" or "proceeding" in this Regulation 
does not imply, and shall not be construed to raeem, that such 
procedures are subject to the provisions of the Administrative 
Procedure Act, or that the rules of evidence custcmary in the 
courts of the United States shall be applied. 



D. Policy 



1. The responsibilities of the Department of Defense, including 
those imposed by the President in Executive Order IO865, 
necessitate application of policies designed to minimize 
the possibility of ccrapromise incident to placing classified 
Information in the hands of industry. Adequate measui'es 
will be taken to insure that no person is granted, or is 
allowed to retain, an authorization for access to classified 
information unless the avedlable information justifies a 
finding that such access authorization, at the specific 
classification category granted, is clearly consistent with 
the national Interest. 

2. A determination that granting or retaining authorization for 
access to information of a specific cleisslfi cation category 
is not clearly consistent with the national Interest shall 
result in denying or revoking authorization for such access. 
Any determination under this Regulation adverse to an 
applicEint shell be a determination in terms of the national 
interest and shall in no sense be a determination as to the 

82627 O -62 -7 



528 HEARINGS RELATING TO H.R. 10175 



loyalty of the applicant concerned. A determination 
under this Regulation favorable to an applicant is not, 
in and of itself, an access authorization; nor is it in 
any sense a determination that the applicant concerned 
actually requires access to classified information. Since 
an access authorization relates only to access to classified 
information, denying or revoking such an authorization does 
not preclude participation in unclassified work. 

3. In the absence of the power to suhpoena witnesses, the 
Secretary of Defense, through the Director, Office of 
Industrial Personnel Access Authortzation Review, may issue 
in appropriate cases invitations and requests to appear and 
testify, and may defray reeisoaable emd necessary expenses 
incurred by such witnesses, in order that the applicant may 
have the opportunity for cross-examination provided by this 
Regulation. So far as the national security permits, 
investigative agencies under the control of the Department 
of Defense shall cooperate by identifying to the Office of 
Industrial Personnel Access Authorization Review, persons 
who have made statements adverse to the applicant and by 
assisting in making such persons available for cross- 
examination. 

k. All personnel involved in the processing of cases under the 
IndustrisLL Personnel Access Authorization Review Program 
shall comply with the applicable directives pertaining to 
the safeguarding of classified information and the handling 
of investigative reports. No classified Information, nor 
any information which might canpromise investigative sources 
or methods or the identity of confidential informsmts, shall 
be disclosed to emy appliceuit, or to his counsel or repre- 
sentatives, or to any other person not authorized to have 
access to such Information. In cases involving individual 
applicants, the employer concerned may be Eidvlsed only of 
the final determination in the case and of any interim 
decision to suspend em access authorization previously 
granted. Except at the written request of the applicant, 
the Department of Defense shall not release copies of the 
Statement of Reasons or findings relative thereto outside 
of the Executive Branch of the Govenment. 

E. Program 

The Industrial Personnel Access Authorization Review Program 
is hereby revised, modified, and continued in accordance with 
this Regulation. The Program shall be administered by the 
Director, Office of Industrial Personnel Access Authorization 
Review, who shall have a staff for that purpose. The Office 



HEARINGS RELATING TO H.R. 10175 529 



of Industrial Personnel Access Authorization Review shall 
consist of the following elements: 

1. The Office of the Director. 

2. The IndustriaJ. Personnel Access Authorization Screening Boeird 
(hereinafter called the Screening Board). 

3. The IndustriaJ. Personnel Access Authorization Field Boards 
(hereinafter called the Field Boards). 

k. The Central Industria]. Personnel Access Authorization Board 
(hereinafter called the Central Board). 

F. Scope of Program 

1. Except as provided in subparagraph d. of this peursigraph 
the procedures estahlished in this Regulation shall be 
applicable to caaes in which the applicant is eligible 
under the Armed Forces Industrial Security Regulation for 
consideration as to the granting or continuing of an access 
authorization and in addition thereto: 

a. A Department of Defense agency or activity has reccm- 
mended that an access authorization of a contractor or 
contractor omployee be denied or revoked; 

b. A Department of Defense agency or activity has suspended 
an access authorization of a contractor or contractor 
employee; 

c. A Department of Defense agency or activity has denied 
or withdrawn a temporary access authorization fran an 
individual, other than a foreign national, who falls 
within such categories £is may be established under this 
subparsigraph; or 

d. Action is requested by the Secretary of Defense, or the 
Secreteury of any milit8u:y department or the Administrator 
concerned. 

2. Once access authorization has been suspended, or a Statement 
of Reasons has been issued, or a temporary authorization 
for access has been withdrawn or denied in the case of 
applicemts included in categories established under sub- 
paragraph 1., above, these procedures may be invoked by 

an applicsuit even though his employment hsis been tenninated. 



530 HEARINGS RELATING TO H.R. 10175 



II. ORGANIZATION 



A. Office of Industrial Personnel Access Authorization Revlev 
1. Organization 

a. The Office of Industrial Personnel Access Authorization 
Review shall be established in the Office of the Secretary 
of Defense and will function under the administrative 
jurisdiction of the Assisteuit Secretary of Defense (MF&R). 
The Office shall be headed by a civilian Director appointed 
by the Secretary of Defense after consultation with the 
Assistant Secretaj:^ of Defense (MP&R) and the Secretaries 
of the Army, Navy and Mr Force. Policy guidance for the 
operation of the program Including manpower and personnel 
requirements shall be provided by the Assistant Secretary 
of Defense (MP&R). The Director shall be responsible for 
administering the Industrial Personnel Access Authorization 
Review Program, including its constituent boards; he shall 
advise and consult with the Secretaries of the Army, Navy 
and Air Force in carrying out this responsibility. He shall 
be responsible for ensuring that the Screening, Field and 
Central Boards are provided with such advice, assistance 
and personnel. Including legal ajid security advice, as he 
considers necessary to enable these elements properly to 
carry out their functions under this Program. He shall 
have such professional, technical, and clerical staff as 

he may require to carry out his responsibilities, as set 
out herein, and such other related responsibilities as may 
be prescribed. The Director is authorized to obtain Infor- 
mation, assistance, and advice directly from any agency or 
activity of the Department of Defense, and. In accordance 
with established policies, from other agencies of the 
Government. He shall prepeire monthly reports showing 
caseloads and the status of pending cases. The Director 
may issue such supplemental instructions, not Inconsistent 
with this Regulation, as may be desirable for the 
administration and efficient operation of this Program, 
including rules for the processing of cases, the conduct 
of screenings, personal appearance proceedings, determina- 
tions and reviews, and for guidance In the application 
of the standard and criteria set forth In peiragraph III. 
In any partlculai" case, the Director may request addi- 
tional investigation to be made subject to the provisions 
of any agreements with investigative agencies outside the 
Department of Defense. 

b. The Office of IndustrieLL Personnel Access Authorization 
Review shall be located in the Pentagon asid shall be 



HEARINGS RELATING TO H.R. 10175 531 



supported administratively by the Office of the 
Secretary of Defense. The military departments shall 
make appropriate allocations of funds, military and 
civilian personnel, and personnel spaces. 

c. Connnuni cations shall be addressed to the Director, 
Office of Industrial Personnel Access Authorization 
Review, The Penteigon, V/ashington 25, D. C. 

2. Department Counsel 

The Office of Industrial Personnel Access Authorization 
Review shall include within its staff a sufficient number 
of qualified attorneys, who may be stationed in Washington, 
D. C. or at such other locations as the Director may select, 
to act as counsel for the Department of Defense in each case 
in which a personal appearance proceeding is held under 
this Regulation. When designated by the Director to serve 
in this capacity, department counsel sheill perform the 
functions normally and custcmarily associated with said 
position. Department counsel sheill also advise and assist 
the Screening Board eis required, and shall represent the 
Department of Defense before the Central Board when 
appropriate. 

3. Files 

The complete files of all review cases pertaining to 
industrial personnel shall be maintedned by the Deparianent 
of the Army. 

B . Industrial Personnel Access Authorization Scr e ening Boa rd 

1. The Screening Board shall be located in the Office of 
Industrial Personnel Access Authorization Review and shall 

be responsible for the performance of the duties and functions 
hereinafter prescribed. 

2. The Secretary of each military department shall appoint one 
or more monbers, military or civilian, to the Screening 
Board as the caseload requires. Appropriate officials 
designated by each Secretary will submit nominations through 
the Director, who will review the qualifications of each 
nominee and make 6in appropriate recommendation to the 
Secretary concerned. Except as provided in paragraph II. F., 
any three members so appointed, one from each military depart- 
ment, shall constitute a quorum-panel so that more than one 
panel may be convened at the same time. The Director shall 
designate one member to serve as Chedrman of the Screening 
Board. 

3. The Screening Board shall have Jxxrisdiction over sill cases 
which are referred to it in accordance with this Regulation. 



532 HEARINGS RELATING TO H.R. 10175 



C. Industrteil Personnel Access Authorization Field Boards 

1. There shall he three field hoards, which shall he known 
as the New York, the Washington and the Los Angeles 
Industrial Personnel Access Authorization Field Boards 
and which shall he located In said cities. Additional 
field hoards may he established hy the Director with the 
approval of the Secretaries of the Army, Navy and Air 
Force. Panels of existing Field Boards may he convened 
at other locations to provide praapt and convenient 
personal, appeetrance proceedings. Each Field Board shall 
he responsihle for the performance of the duties and 
functions hereinafter prescribed. 

2. The Secretary of each military departanent shall appoint 
one or more members, military or civilian, to each Field 
Board as the caseload requires. Appropriate officials 
designated by each Secretary will submit nominations 
through the Director, who will review the qualifications 
of each nominee and make an ajjpropriate recommendation to 
the Secretary concerned. The Director shall designate 
either one member of the Board or a staff member to serve 
as eu3ministrative director of each Boaird who will be 
responsible for the iamediate operations of the Board. 

A quorum-panel may consist of any one civilian member who 
is a qualified attorney, or of any three members, one from 
each military department, of whom at least one shall be a 
civilian and at least one shall be a qualified attorney. 
When a panel of three members is convened, the administrative 
director shcLll designate one member to act as Chairman. A 
quoirum-pemel may exercise all of the authority conferred 
on the Board or Chairman by this Regulation. 

3. Each Field Board will have jurisdiction over all cases 
referred to it in accordance with this Regulation. 

D. Responsibilities of Military Lepartments for Administrative 
Support 

1. Except as provided in paragraph 2., the Field Boards shall 
be supported eidmlni strati vely by the following military 
depeurtments, which shall appoint such other personnel as 
may be required by the Director to assist each Field Board: 

New York Industrial Personnel Access Authorization Field Board 
Depariment of the Army 

Weishington Industrial Personnel Access Authorization Field Board 
Depeirtment of the Air Force 

Los Angeles Industrial Personnel Access Authorization FieldBcard 
Department of the Navy 



HEARINGS RELATING TO H.R. 10175 533 



2. Whenever, pursuant to direction of the Director, a panel 

of a Field Board established under paragraph II.C.l., above, 
is convened at any of the follovriLng named locations, the 
canmanders named, respectively, shaJLl arrange or provide 
for the administrative support needed by such board panel 
in order to discharge its official business at such locations: 

Alaska: 

Ccramander, Alaskan Air Ccmmand 

Virgin Islands, Canal Zksne, and Puerto Rico: 
Commanding General, USA, Carribean 

Guam, American Samoa, V/ake, Midway, Guano Island & Hawaii: 
Comnandant, lUth Naval District 

3- V^iere a panel of a Field Poard is convened at a location 

other than its principal office or at a location outside the 
jurisdiction of the commanders named in paragraph 2., above, 
the military department requested by the Director shall 
provide office space, facilities and clerical personnel for 
each personal appearance proceeding and for the prompt 
making of a verbatim transcript thereof. 

h. As a verbatim transcript will be required of each personal 
appearance proceeding before a Field Board, it is the 
responsibility of each of the above mentioned commanders 
to provide the necessary personnel and facilities for the 
prompt making of such transcripts. 

E. Centred. Industrial Personnel Access Authorization Board 

1. There is hereby established a Central Board, which shall be 
located in the Office of Industrieil Personnel Access 
Authorization Review, and shall be responsible for the 
performance of the duties and functions hereinafter 
prescribed. 

2. The Secretary of each military department shaill appoint one 
or more members, military or civilian, to the Central Board 
as the caseload requires. Appropriate officials designated 
by each Secretary will submit ncminations through the 
Director, who will review the q^sdlfi cations of each nominee 
and make an appropriate recommendation to the Secretary 
concerned. The Director shsLll designate one member to serve 
as Chairman of the Central Board. Except as provided in 
paragraph II. F., any three members so appointed, one from 
each military department, shstll constitute a quorum-panel 

so that more than one panel may be convened at the same time. 
One of the members of each quorum-panel must be a qualified 
lawyer and each quorum-panel shall include at least one 
civillam. 



534 HEARINGS RELATING TO H.R. 10175 



3. The Central Board shall have Jurisdiction over all cases 
referred to it in accordance with this Regulation. 

F. Canposition of Boards in Agency Cases 

1. Whenever an agency case is referred for consideration and 
determination under the Program the Administrators concerned 
shall be entitled to api>oint one menber to the Sci*eening 
Board and two members to the Central Board. Such appoint- 
ments shall conform to the requirements of paragraph II. G. 
of this Regulation. 

2. Whenever an agency case is referred to the Screening or 
Central Boards, the Director shall notify the Administrator 
concerned thereof. The Administrator, or his designee, 
shall, in their absolute discretion, exercise or waive the 
right of his agency to be represented on the Board Involved 
and shall notify the Director thereof In writing, which 
notification shSLLL be made a permament part of the record 
in the case. If the right is exercised, the Screening Board 
pemel to which the case is referred shall consist of foiir 
members and the Central Board panel of five members, insteeid 
of the usual three members; if it is waived the Board shall 

be constituted as provided in paragraphs II. B. or II. E., above. 

G. Access Authorization of Nominees 

No person shall, be appointed Director, board member, or staff 
member under this Program until such person has been granted 
an authorization for access to Top Secret information, or its 
equivsLLent, based on a background investigation. 

III. STANIARD AKD CRITERIA 

A. Standard for Issuing an Access Authorization 

Authorization for access to classified Information of a specific 
classification category shall be granted or continued only if it 
Is determined that such access by the applicant is clearly con- 
sistent with the national Interest. 

B. Criteria for Application of Standard in Cases Involving Individuals 

1. Ccranission of any act of sabotage, espionage, treason, or 
sedition or attempts thereat or preparation therefor, or 
conspiring with, or aiding or abetting, another to ccmmit or 
attempt to ccramit any act of sabotage, espionage, treason or 
sedition. 



HEARINGS RELATING TO H.R. 10175 535 



2. Establishing or continuing a sympathetic association with 

a saboteur, spy, traitor, sedltionlst, anarchist, revolutionist, 
or with em espionage agent or other secret representative of 
a foreign nation whose interests may be inlmlcaJ. to the 
interests of the United States, or with any person who advocates 
the use of force or violence to overthrow the Government of the 
United States or the alteration of the form of Government of 
the United States by unconstitutional means. 

3. Advocacy of use of force or violence to overthrow the Govern- 
ment of the United States, or of the alteration of the form 
of Goverrment of the United States by unconstitutioneLl means. 

k. Membership in, or affiliation or sympathetic association 
with, or participation in the activities of any foreign 
or dcmestlc organization, association, movement, group, or 
ccmbinatlon of persons which is totalitarian, fascist, 
canmunlst, or subversive, or which has adopted or shows, a 
jxjlicy of advocating or approving the ccnmilsslon of acts of 
force or violence to deny other persons their rights under 
the Constitution of the United States, or which seeks to 
alter the form of Government of the United States by un- 
constitutional means. 

5. Intentional, unauthorized disclosure to any person of 
classified information, or of other information, disclosure 
of \rtilch is prohibited by law. 

6. Performing or attempting to perform his duties, or other- 
wise acting, so as to serve the interests of another govern- 
ment in preference to the interests of the United States. 

7. Participation in the activities of an organization established 
as a front for an organization referred to in subparagraph k., 
above, under circumstances indicating that his personal views 
were sympathetic to the subversive purposes of such 
organization. 

8. Participation in the activities of an organization with 
knowledge that it had been infiltrated by members of sub- 
versive groups under circumstances indicating that the 
individual was a part of, or sympathetic to, the infiltrating 
element or sympathetic to its p\irposes. 

9. Sympathetic interest in totalitarian, fascist, ccmmunlst, or 
similar subversive movements. 

10. Sympathetic association with a member, or members, of an 
organization referred to in subparagraph k., above. 



536 HEARINGS RELATING TO H.R. 10175 



(Ordlnar^.ly, this vlll not include chance or occasional 
meetings, nor contacts limited to normal business or 
official relations.) 

11. Currently medntedning a close continuing association with 
a person who has engaged in activities or eissociations of 
the type referred to in subparagraphs 1. through 9-, above. 
A close continuing association may be deemed to exist if 
the individual lives at the same premises eis, frequently 
visits, or frequently conmunicates with such person. 

12. Close continuing association of the type described in sub- 
paragraph 11., above, even though later separated by 
distance, if the circumstances indicate that renewal of 
the association is probable. 

13. Willful violation or disregard of security regulations. 

ik. Any behavior, activities, or associations which tend to 
show that the indlvidueLI is not reliable or trustworthy. 

15. Any deliberate misrepresentations, falsifications or 
omission of material facts from a Personnel Security 
Questionnaire, Personal History Statement, or similar 
document . 

16. Any criminal, infamous, dishonest, immoral, or notoriously 
disgraceful conduct, habitual use of intoxicants to excess, 
drug eiddiction, or sexual, perversion. 

17. Acts of a reckless, irresponsible or wanton nature which 
indicate such poor judgnent euad instability as to suggest 
that the individual might disclose classified information 
to unauthorized persons, or othei-wise assist such persons, 
whether deliberately or inadvertently, in activities 
inimical to the national interest. 

18. Any illness, including any mental condition, of a nature 
which, in the opinion of competent medical authority, may 
cause significant defect in the Judgment or reliability of 
the employee, with dae regard to the transient or continuing 
effect of the illness and the medical findings in such c6lsc. 

19. Any facts which furnish reason to believe that the individual 
may be subjected to coercion, influence, or pressure which 

may be likely to cause action contretry to the national interest. 

20. The presence of a spouse, parent, brother, sister, or offspring 
in a nation whose interests may be inimical to the interests 

of the United States, or in satellites or occupied areas of 



HEARINGS RELATING TO H.R. 10175 537 



such a nation, under circumstances permitting coercion 
or pressure to be brought on the individual through such 
relatives which may be likely to cause action contrajry 
to the national interest. 

21. Refusal by the individual, without satisfactory subsequent 
explanation, to answer questions before a Congressional or 
legislative committee, or Federal or State court or other 
tribunal, regarding charges of his all eged disloyalty or 
other misconduct. 

C. Guidance for the Application of the Standard and Criteria 

1. The activities and associations listed in paragraph III.B., 
above, describe conduct which may, in the light of all the 
surrounding circimistances, be the basis for denying or 
revoking an access authorization. The conduct varies in 
implication, degree of seriousness and signlficeince depending 
upon all the factors in a particular case. Therefore, the 
ultimate deteimination of whether an authorization should 

be granted or continued must be an over-all common- sense 
one on the ba^is of all the information which may properly 
be considered under this Regulation including but not 
restricted to such factors, when appropriate, as the 
following: the seriousness of the conduct, its implications, 
its recency, the motivations for it, the extent to which it 
was voluntary and undertaken with knowledge of the cir- 
cumstances involved and, to the extent that it can be 
estimated and is appropriate in a particular ca^e, the 
probability that it will continue in the future. 

2. Legitimate labor activities shall not be considered in 
determining whether access authorization should be granted 
or continued. 

3. It Is essential, to the efficient, econccilcal, and equitable 
operation not only of the Industrial Personnel Access 
Authorization Review Program, but of the total procedures 
whereby the Department of Defense authorizes access to 
classified information, that applicants provide full, frank 
and truthful answers when they complete official questionnaires 
or other similar documents, or respond to official inquiries. 
Accordingly, the deliberate giving of false or misleading 
testimony or information on relevant matters, may be 
sufficient standing alone to justify denying or revoking 
access authorization and shsJLl be weighed carefully before a 
detennination is reached under this Program. 

h. The granting or continuing of an authorization for access to 
a contractor is not clearly consistent with the national 
interest if the access authorization of an owner, officer. 



538 HEARINGS RELATING TO H.R. 10175 



director, or any executive of the contractor who is required 

to have such an access authorization, has not been, or would 

not be, granted under the stajadard and criteria set forth in 
paragraphs III. A. and III.B., above. 

IV. PROCESSING OF CASES 

A. Bnergency Action 

Department of Defense activities or agencies may not make a finad. 
determination denying or revoking an authorization for access. 
In exceptionsLL cases officials authorized by the military depart- 
ment concerned may suspend an authorization previously granted 
to £in individual (but not to a facility) when, in the opinion of 
the authorized official, the individual's continued access to 
classified information, pending action by the Screening Board, 
would constitute an immediate threat to the national interest. 
Any such suspension action shall be reviewed by the Screening 
Board to determine its propriety. 

B. Forwarding Cases 

DepEtrtoent of Defense activities or agencies shall forward to 
the Director all cases prescribed in paragraph I.F.I together 
with the complete file, including the recanraendation in the 
case, the reasons therefor, and all other available information 
and material relevant to a determination. After ens\iring that 
the file has been properly prepared and transmitted, the 
Director shall forward it to the Screening Board for appropriate 
action. 

C. Initial Adjudication Procedures (Screening Board Action) 

1. The Screening Board shall review each case referred to it 
by the Director and sheLLl determine in accordance with the 
standard euid criteria set forth in paragraph III idiether 
the rejxjrted information warrants (a) authorizing or 
continuing to authorize access at the specific classification 
category requested or (b) further processing as set forth 
below. 

2. With respect to any case pending before it, the Screening 
Board may request the Director to: 

a. Request further investigation, specifying the particular 
points on which the Botird feels its information is not 
adequate . 

b. Issue to the applicaxit such written interrogatories eus 
the Board may deem desirable. 

c. Arrange for an interview with the applicant. 



HEARINGS RELATING TO H.R. 10175 539 



d. Arrange for an interviev with any witness who has 

given information relevant to a decision in the case. 

3. The Screening Board may, with respect to any case oeaiiing 
before it, determine at any time that an existing authoriza- 
tion shall be suspeuled. Upou any s>ich detei'-ai nation, the 
Director shall notify the applicant, the contractor, the 
office of the cognizant military department and the agency 
or activity which fonrarded the case to him. 

k. If the Screening Board determines that access at the specific 
classification category requested should be granted or 
continued in effect, it shall prepare its detor-il nation in 
accordance with the instructions set out in subparagraph 9., 
below. The Director shall notify the aigency or activity 
which forwarded the case to lilm of the determination and 
instruct it to effect the authorization where appropriate. 
The Screening Board shall reconsider its determination at 
the request of the Secretary of Defense, the Secretary of a 
militarj'- deijoi'tment, or the Administrator concerned. 

5. If the Screening Board concludes on the bfisis of the infor- 
mation available to it and In acooriiance with the staadard 
and criteria set forth in paragraph III that the case does 
not warrant a determination favorable to the applicant, it 
shall prepare a Statement of Reasons informing the applicant 
of the grounds upon which his acitass authorization may be 
denied or revoked. This Statement of Reasons shall be as 
comprehensive and detailed as the national security permits. 
At the time a Statement of Reasons is issued, any access 
authorization previously granted for Secret or Top Secret 
shall be suspended or limited to Confidential unless such 
access authorization was granted pursuant to board action 
under any industrial personnel review program in which case 
the Screening Board shall detennine whether the access 
authorization should be suspended or limited. The Screening 
Board shall also determine whether any access authorization 
previously granted for Confidential should be suspended or 
limited. 

6. The Director shall forward the Statement of Reasons and a 
copy of this Regulation to the applicant and shall inform 
him of the status of his access authorization pending a 
final determination. An applicant who has been served with 
a Statement of Reasons and who has filed under oath or 
affirmation a written reply thereto which complies with the 
requirements of paragraph IV. C. 7 shall be afforded: 

a. An opportunity to appear personally before a Field Board 
for the purpose of supporting his eligibility for access 
authorization and of presenting evidence on his own behalf. 



540 HEARINGS RELATING TO H.R. 10175 



b. A reasonable time to prepare for that appearance. 

c. An opportunity to be represented by counsel without 
cost to the Government. 

d. The opportunity to cross-examine adverse vltnesses 
prescribed in paragraph IV. E. 2. 

7. Before an applicaxit is afforded an opportunity to make a 
personal appearance before a Field Board he must submit a 
detailed written answer under oath or affirmation specifi- 
cally admitting, denying or disclaiming knowledge of each 
allegation and each supporting fact alleged in the State- 
ment of Reasons. The applicant's answer must either admit 
or deny each auLlegation or supporting fact, giving such 
explanation as may be available to him, or disclaim knowledge 
thereof. A general denial or other similar answer is not 
sufficient. The applicant must set out his position with 
sufficient particularity to disclose the basis thereof, in 
order that the Department of Defense may determine in ad- 
vance of the personal appearemce proceeding whether the 
allegations and supporting facts are wholly denied, denied 

in part, or wholly admitted and make arrangements to pro- 
duce such information in support as may be required. The 
Director may decline to accept answers which do not meet 
the above requirements and, upon notice to the applicant, 
may refuse to continue to process his application. In 
that event, the Director shall suspend any access authori- 
zation then in effect and give appropriate notice. In the 
alternative, the Director may forward the case to a Field 
Board which may treat allegations or supporting facts with 
respect to -vrtiich the Director finds the answer is insuffi- 
cient as established for the purpose of making a determina- 
tion under this Program. 

8. Where the applicant: 

a. Files an answer which complies with subparagraph J. 

and requests a personal appearance proceeding, or •vrtiere, 
although the answer is insufficient, the Director elects 
to proceed as provided for in said subparagraph, the 
Director shall assign the case to a Field Board for a 
proceeding. 

b. Files an answer which complies with subparagraph 'J., but 
elects not to request a personal appearance proceeding, 
the Director shall assign the case to the Central Board 
for determination on the basis of all available infor- 
mation including the answer euid all documents in support 
thereof . 



HEARINGS RELATING TO H.R. 10175 541 



c. Does not answer, the Director shall instruct the 

departanent which forwarded the case to deny or revoke 
access authorization, as appropriate, and shsdJ. advise 
the applicant. 

9. All determinations by the Screening Board shall be made in 
executive session. A determination to grant or continue 
access authorization shall be by unanimous vote. No person 
other than members of the Board shall be present when the 
Board deliberates and reaches its determination. 

10. Decisions adverse to the applicant announced by the Director 
in accordance with paragraph IV.C.S.c. may be reconsidered 
by the Screening Board at the request of the Director, or 
at the request of the applicant addressed through the 
Director, after a finding by the Screening Board that there 
is newly discovered evidence or that other good cause has 
been shown. 

D. Personal Appearance 

1. Pronptly after being ijotified by the Director that a case 
has been referred for a personal appearemce proceeding, the 
Chairman of the Field Board shall set a time and place for 
the proceeding and inform the applicant thereof. Personal 
appearance proceedings shall be held as soon as practicable, 
allowing the applicant and the Depariment of Defense a 
reasonable time to prepare. Postponements may be granted by 
the Chairman in his sound discretion upon application by 
either party with notice to the other. 

2. Normally, a personal appearance proceeding shall be held at 
the heme office of the Field Board concerned. When the 
applicant so requests and when in the discretion of the 
Chainnan equity to him requires that the proceeding be held 
in a different place, or when the interests of the Government 
would be served thereby, Field Boards, subject to the over-all 
authority of the Director, may arrange to convene at such 
times and places as will best meet the above objectives. 

3. It is to the advantage of both the applicant and the Department 
to shorten and simplify the proceedings before the Field Board 
by stating the issues and arriving at an agreed-upon version 

of the facts in the case when it is possible to do so. Depart- 
ment counsel is authorized to consult directly with the 
applicant, or if he has counsel or representative, with them, 
for purposes of reaching mutual agreement upon arrangements 
for an expeditious proceeding in the ceise. Such arrangements 
may include clarification of issues, and stipulations with 
respect to testimony and the contents of documents and other 



542 HEARINGS RELATING TO H.R. 10175 



physical evidence. Such stipulations when entered into 
shall be binding upon the applicant and the Department of 
Defense for the purpose of these proceedings. 

k. The applicant is responsible for producing witnesses in his 
own behalf or presenting other evidence before the Field 
Board to support his reply to the Statement of Reasons. When 
specific assistance is requested, however, the department 
counsel and the Chairman of the Field Board may provide such 
assistance, upon a showing that it is practicable and necessaiy. 
In the Chairman's sound discretion, invitations to attend the 
proceeding as witnesses in the applicant's behalf, or requests 
for specific documents or other physical evidence, may be 
tendered upon application, provided a showing of the necessity 
for such assistance has been made. 

5. Department counsel is responsible for producing at the 
proceeding witnesses and information relied upon by the 
Department to establish those facts aJ-leged in the Statement 
of Reasons which have been controverted. Every reasonable 
and practicable effort shall be made to obtain witnesses and 
to facilitate their appearance in accordance with the policy 
set out in paragraph I.D.3. When requested all Department 
of Defense agencies and activities shall cooperate in 
carrying out this policy. 

6. ^There an applicant who has requested an opportunity to appear 
falls without sufficient reason therefore to appear at the 
time and place set for the proceeding, or at any postponement 
thereof, and has not requested that his case be determined on 
the basis of all available information including any written 
material he may have submitted, the Field Board shall return 
the case to the Director without further action. The Director 
shall then take action under paragraph IV.C.8.C. 

E. Procedures for Personal Appearance Proceedings 

1. General Provisions 

a. Personal appearance proceedings are designed to ascertain 
all the relevant facts in a case to aid in reaching fair 
and impartial determinations. Such proceedings are not 
to be conducted with the formality of a court proceeding 
or of an administrative hearing conducted under the 
Administrative Procedure Act, but rather as administrative 
inquiries held for the purpose of affording the person 
concerned ein opportunity to appeetr for the purpose of 
supporting his eligibility for an access authorization 
and to permit the Department of Defense to inquire fully 
into the matters related to the parti culau: ca^e. As 



r 



HEARINGS RELATING TO H.R. 10175 543 



provided in paragraph IV.E.2.a., the customary rules 
of evidence shall not be controlling. 

Personal appearance proceedings conducted under this 
Regulation are not adversary in nature. Nevertheless, 
a careful and searching inqiiiry into the facts is 
necessary if the objectives of this Regulation are to 
be effectuated. Field Boards shall be alert to the 
necessity for identifying and resolving disputed issues 
of fact whenever possible and sha3J. make their rulings 
with these considerations in mind. 

Personal appearance proceedings shall be conducted in 
an orderly manner and in an atmosphere of dignity and 
decorum. They may be attended only by the members of 
the Field Board, the applicant and his counsel or 
representatives, authorized personnel of the Department 
of Defense and necessary clerical personnel. Unless 
the Chairman of the Field Board rules otherwise, a 
witness may be present only when he is testifying. 

The Director shall designate a qualified attorney to 
represent the Department of Defense and to act as 
department counsel in each case. He shall represent 
the Department, and shall be responsible for making a 
conrolete record and for placing before the Field Board 
all material which may properly be incorporated therein. 
He shall question Department of Defense witnesses and 
cross-examine witnesses produced by the applicant, 
although the Field Board may also question any witness. 

After the proceeding has been convened, and the Statement 
of Reasons and the applicant's answer thereto have been 
entered into the record, normally the applicant shall 
have the right to make a general opening statement 
either in person or by counsel, and to present his case. 
He may call witnesses, testify in his own behalf if he 
so desires and present documents, or other information, 
in support of his application for access authorization, 
and cross-examine witnesses produced by the Department 
of Defense. 

Witnesses before the Field Board shall testify subject 
to the provisions of Sec. 1001, Title l8, U.S. Code. 
Before testifying they shall be informed that said 
section makes it a criminal offense punishable by a 
maximum of five years imprisonment, $10,000 fine, or 
both, knowingly and willfully to make a false statement 



544 HEARINGS RELATING TO H.R. 10175 



or representation to axiy depcLrtanent or agency of the 
United States eis to any matter within the jurisdiction 
of any depsLrtment or agency of the United States. 
Written interrogatories must be sworn to before a notary 
public or other official authorized to administer oaths. 

g. When appropriate the Field Boeurd shall amend the Statement 
of Reasons to confonn it with the information available 
and enter the amendment into the record. When such 
amendments eire made, the Chairman of the Field Board shall 
grant the applicant such additional time as, in his sound 
discretion, he deems appropriate to answer such amendments 
and to secure and present evidence pertaining thereto. 

h. The Field Board may recess the proceeding at any time 
at the request of the applicant or his counsel, depart- 
ment counsel, or upon its own motion. 

i. Before the Chsdrman of the Field Board adjourns the 

proceeding, he shall ask the applicant whether he desires 
additional time to secure and present additional evidence 
or to submit a brief. If the applicemt desires to present 
such additional material, the Field Board shall determine 
the time within which it must be presented and the form 
in which it will be received. The Chairman shall eQ.so 
advise the applicant that einnouncement of the determination 
in his case will be made by the Director, Office of 
Industrial Personnel Access Authorization Review. 

J. A verbatim transcript (in triplicate) sheill be made of 
the proceedings and such transcript shall beccme a 
permement part of the record. The transcript shall not 
include information introduced in accordance with the 
provisions of paragraph IV.E.2.e. and f., below. The 
applicant or his designated representative shall be 
furnished without cost one copy of the transcript, less 
the exhibits, upon his request. The transcript shall be 
reviewed by the Board prior to release to ensure that it 
contains no classified information, nor any information 
which might ccmprcmise investigative sovu:ces or methods 
or the identity of confidential informants. 

k. If the applicant or his counsel desires to submit 
corrections in the treinscript to the Field Board, he 
sheLll note the corrections on a separate statement 
designating the page and line. The statement of 
corrections must be filed within the time set by the 
Field Board which shall determine what corrections aj^ 
allowable, shall enter on the transcript by margineLL 
notation the corrections which are allowed, and shall 



HEARINGS RELATING TO H.R. 10175 545 



enter on the statement filed by the applicant the 
corrections which are rejected. This statement shall 
be made a permanent part of the record. The Chairman 
of the Field Board in his discretion may call upon the 
applicant or his counsel for a discussion of the 
corrections. Corrections shall be allowed solely for 
the purpose of conforming the transcript to the actual 
testimony. 

1. Whenever the Field Board concludes with respect to an 
issue of fact that the investigation is inadequate or 
that all of the information has not been fully developed 
or explored, it may request that further investigation 
be conducted and in appropriate cases may recess the 
proceeding pending such investigation. Such requests 
shall be addressed to the Director through the department 
counsel. Information developed through supplemented, 
investigation shall be mside available to the Board in 
the same manner as information developed in the original 
investigation. 

2. Introduction of Information 

a. The record shall consist exclusively of all information 
presented by the Deparianent of Defense in accordance 
with this Regulation, together with all information sub- 
mitted by the applicant. The record sheill not be limited 
to evidence admissible in the courts of the United States. 
Any oral or documentary evidence may be received if 
otherwise admissible under this Regulation and accorded 
the weight deemed appropriate, but irrelevant, immaterial 
or unduly repetitious material may be excluded, in the 
sound discretion of the Chairman of the Field Board. 
Efforts shall be made to obtain the best evidence available. 

b. Unless permitted by paragraphs e. and f., below, the 
record may contain no information adverse to the 
applicant on amy controverted issue unless (l) the 
information or its substance has been made available 
to the applicant and he offers no objection to its 
presentation; or (2) the information or its substance 
is made available to him and the applicant is afforded 
an opportunity to cross-examine the person providing the 
infoiroation either orally or by written interrogatories. 
The foregoing shall not apply to information bearing upon 
the characterization in the Statement of Reasons of any 
orgamzation or individual other than the applicEint. 
Information the admission of which is not prohibited by 
this paragraph, or by any other provision of this 
Regulation, may be received and made part of the record 
and may be considered by any board or official charged 
with making determinations under this Regulation. 



546 HEARINGS RELATING TO H.R. 10175 



c. Prior to the referral of a case to a Field Board 
for a personal appearance proceeding, the Director, 
Office of Industrial Personnel Access Authorization 
Review, upon application by either the applicant or 
the department counsel, shall nile whether, in the 
light of all the circumstances, testimony shall be 
taken personally, by deposition, or through cross - 
interrogatories. In making this ruling, the Director 
shall exercise his sound discretion and shall state 
his reasons therefor. He may direct the applicant 

or his counsel, and department counsel to frame written 
interrogatories and upon application by either party 
shsill rule upon the i^levancy and materiality of any 
question to be incorporated therein. Once the csise 
has been referred to the Field Board, the Chairman of 
the Field Board shall perfonn this function. Any action 
taken by the Director under this peuragraph shall be 
reflected in the record where appropriate. 

d. Notwithstanding any other provision of this Regulation, 
records compiled in the regular course of business, or 
other physiceQ. evidence other than investigative reports 
as such, may be received and considered subject to 
rebuttal without authenticating witnesses, provided 
such information has been furnished by an investigative 
agency pvirsuant to its responsibilities in connection 
with eissisting the Secretary of Defense or the 
Administrator of the Federal Aviation Agency or the 
NationsQ. Aeronautics and Space Administration to safe- 
guard classified information within industry pursuant 

to Executive Order IO865. Such documents shall be 
exhibited to the applicant and when received by the 
Field Board shall be made a part of the record in the 
case. 

e. Records ccmplled in the regular course of business, or 
other physical evidence other than investigative reports 
as such, relating to a controverted issue, which, because 
they are classified, may not be inspected by the 
applicant, may be received and considered provided that 
(1) the Secretary of Defense or when appropriate, the 
Administrator of the Federal Aviation Agency or the 
National Aeronautics and Space Administration, or the 
Director, Office of Industrial Personnel Access 
Authorization Review, who has been designated as their 
special designee for that purpose pursuant to Section 5^(^)^ 
Executive Order IO865, has made a preliminary determination 
that said physical evidence appears to be material, eind 
that failure to receive and consider it would, in view of 
the level of access sought, be substantieilly harmful to 



HEARINGS RELATING TO H.R. 10175 547 



the national secnirity, and (2) to the extent that the 
national security permits, a Guramary or description of 
said physical evidence shall be made avedlable to the 
applicant. In every such case, information as to the 
authenticity and accuracy of such physical evidence 
furnished by the investigative agency involved shall be 
considered. 

A vrriTJten or oral statement by a person adverse to the 
applicant on a controverted issue, and not relating to 
the characterization in the Statement of Reasons of 
any organization or individual other than the applicant, 
may be received and considered without affording an 
opportunity to cross-examine the person making the 
statement only in circumstances described in either of 
the follovilng subparagraphs, provided however, that a 
svunmary of the statement as comprehensive and detailed 
as the national security permits shaJJL be made available 
to the appllcsuit: 

(1) The head of the departoent supplying the statement 
certifies that the person who furnished the infor- 
mation is a confidential informant who has been 
engaged in obtaining intelligence information for 
the Government and that disclosure of his identity 
would be substantieLLly harmful to the national 
interest . 

(2) The Secretaj^y of Defense or when appropriate, the 
Administrator of the Federal Aviation Agency or 
the National Aeronautics and Space Administration, 
or the Director, Office of Industrial Personnel 
Access Authorization Review, who has been designated 
as their special designee for that particular 
jnirpose pursuant to Section h (a), (2), of Executive 
Order IO865, has preliminarily determined, after 
considering information furnished by the investigative 
agency involved as to the reliability of the person 
and the accuracy of the statement concerned, that 

the statement concerned appears to be reliable and 
material, emd has detennined that failure to receive 
and consider such statement would, in view of the 
• level of access sought, be substantially harmful 
to the national security and that the person who 
furnished the information cannot appeeir to testify 
(a) due to death, severe illness, or similar cause, 
in which case the identity of the person and the 
information to be considered shall be made available 
to the applicant, or (b) due to some other cause 



548 HEARINGS RELATING TO H.R. 10175 



determined by the Secretary or the Deputy 
Secretary of Defense, or when appropriate, by 
the Administrator or Deputy Administrator of the 
Federal Aviation Agency or the llationaJ. Aeronautics 
and Space Administration to be good and sufficient. 

g. A written or oral statement of a person relating to the 
characterization in the Statement of Reasons of any 
organization or individual other than the applicant may 
be received and considered without affording the applicant 
an opportunity to cross-examine the person making the 
statement, irrespective of whether the statement is 
adverse to the applicant or relates to a controverted 
issue, provided the applicant is given notice that it 
has been received euid may be considered by the Board, 
and is informed of its contents to the extent permitted 
by paragraph I.D.U., above. 

h. Whenever information is made a part of the record under 
the exceptions authorized by subpeiragraphs e. or f . (l) 
or (2), the record shall contain certificates evidencing 
that the determinations required therein have been meuie. 
Such certificates shsLLl include the reasons therefor and 
shall be made available to the applicant unless their 
disclosure is prohibited by paragraph I.D.i*-., above. 

i. In any case where information is received by the Field 
Board pursuant to subparagraphs e. or f. (l) or (2), a 
final determination eidverse to the applicant in a 
Department of Defense case shall be made only by the 
Secretary of Defense, and in an agency case by the 
Administrator of the Federeil Aviation Agency or of the 
National Aeronautics and Space Administration, as 
appropriate, based upon their personal review of the case. 

F. F ield Board's Report 

1. As promptly as possible after the proceeding and after full 
consideration of the record and of any arguments made or 
briefs submitted, the Field Board shall prepare a report 
which shall include a recoramended decision in the ca^e, 
prepetred in accordance with the standard and. criteria set 
forth in paragraph III. The Field Board's report shall 
contain a recitation, of the questions presented, a summary 
of the evidence received, findings of fact with respect to 
each allegation made, and its conclusion on each question 
presented for consideration. The Field Board's report shall 
be forwarded through the Director to the Central Industrial 
Personnel Access Authorization Boetrd. The report sheuLL not 
be made available to the applicant. — 



HEARINGS RELATING TO H.R. 10175 549 



2. Whenever an applicant has made a personal appearance before 
a Field Board, a decision adverse to him may be made only 
on grounds stated in the Statement of Reasons emd any 
amendments thereto and must be based upon a record that is 
in conformity with Executive Order IO865 and this Regulation. 
A Field Board or the Central Hoard may not receive or 
consider any information with respect to any fact in issue, 
unless such information is made available to such Board in 
accordance with this Regulation. 

3. In every case where applicable, the Field Board shall give 
appropriate consideration to the fact that the applicant 
did not have the opportunity to inspect classified infor- 
mation or to identify or cross-examine persons constituting 
sources of information. It shall also give appropriate 
consideration to whether infonnation was given under oath 
or affirmation, and whether or not the person concerned has 
had an opportunity to rebut it. In every case where 
classified physical evidence is involved, information as to 
the authenticity and accuracy of said physiceil evidence 
furnished by the investigative agency shall be considered. 

Action by the Central Industrial Personnel Access Authorization 
Board 

1. Whenever a case is referred to the Central Board, it shall 
make a final determination subject to the provisions of 
pareigraph IV. 1. 3. in cases which do not fall within the 
provisions of paragraphs IV.E.2.e. or IV.E.2.f. (l) or (2), 
specifying the specific category of classified information 
to which access shall be granted or continued where 
appropriate. 

2. In cases where the provisions of pareigraphs rV.E.2.e. or 
IV.E.2.f. (1) or (2) apply, the Central Board shall (a) 
prepare a final determination where the decision is to grant 
or continue access at the specific classification category 
requested, or (b) where it concludes that access at that 
specific classification category is not warranted, it shall 
so notify the Director. 

3. Before the Central Board meikes a final decision, it shall 
take the following action, as applicable: 

a. If the Board reaches a tentative decision adverse to 
the applicant, it shall, through the Director, give 



550 HEARINGS RELATING TO H.R. 10175 



notice thereof to the applicant tocether vd.th notice 
of its proposed findings for or against him with 
respect to each allegation in the Statement of Reasons, 
and shall provide him vrLth an opportunity to make an 
appearajice before it, in person or by counsel, or to 
file a written brief. Within ten (lO) calendar days 
after his receipt of such notice, the applicant may 
file with the Board a written notice of intention to 
appear or to file a written brief. If the applicant 
files such written notice of intention, the Board shall 
fix as early a date as practicable for filing a written 
brief or making a personal appearance before it, and, 
through the Director, shall give notice theireof to both 
the applicant and department counsel and at the same time 
shall furnish depsirtment counsel with copies of the 
tentative decision and proposed findings as previously 
furnished to the applicant. 

b. If the Board reaches a tentative decision favorable to 
the applicant it shall, through the Director, give notice 
thereof to the department counsel together with notice of 
its proposed findings for or against the applicant with 
respect to each allegation in the Statement of Reasons, 
and shall provide department counsel with an opportunity 
to maJie an appearance before it, or to file a written 
brief.. Within ten (lO) calendar days after receipt of 
this notice, department counsel may file with the Board 

a written notice of intention to appear or to file a 
■y/ritten brief. If depsirtraent counsel files such written 
notice of Intention, the Board shall fix as early a date 
as practicable for filing written brief or making personal 
appearance before it, and, through the Director, shall 
give notice thereof to both department counsel ajnd the 
applicant and at the same time shall furnish the 
applicant with copies of the tentative decision and 
proposed findings as previously furnished to department 
counsel. 

c. Personal appearances before the Central Board and written 
briefs filed vrLth the Central Board are intended to permit 
the applicant and department counsel to present their 
positions based exclusively upon the record made before 
the Field BoEird, and shall not be used as a substitute 
for proceedings before such a Board. Argument may be 
made, but witnesses sheill not be heard eind testimony 
shall not be taken. 

d. Under a. and b., above, when the applicant or departaient 
counsel, as the case may be, has filed a written notice 



HEARINGS RELATING TO H.R. 10175 551 



of intention, the other shall be entitled at the 
designated time to appear personally or file a written 
brief as he may prefer. Failure by blm to utilize this 
opportunity shall be deemed a waiver thereof. 

e. After the applicant and department counsel have sub- 
mitted written briefs or appeared before the Centrsil 
Board, as provided in subparagraphs a. and b., above, 
the Board shall reach a final determination in all 
cases in which it is authorized to do so, and shall 
refer all other cases to the Director for action by 
him in accordance with peiragraph H., below. If the 
applicant under subparagraph a., above, or department 
counsel under subparagraph b., above, fails to file 
written notice of intention, or fails, after filing 
such notice, to appear or file a written brief in a 
timely manner, the tentative decision of the Board 
shall automati cal 1 y become final in all cases in which 
the Board is authorized to make a final deteimi nation 
emd notice thereof shall be given in accordance with 
paragraph I., below; in all other cases the tentative 
decision shall be referred to the Director for action 
by him in accordance with paragraph H., below. 

h. In reaching a determination or conclusion as hereinabove 
provided, the Central Board may adopt, modify or reverse 
the findings, conclusion, or recommendation of the Field 
Board, or may request further Investigation or may return 
the case through the Director to the Field Board with 
Instructions to take further testimony or conduct other 
proceedings. In each case it shall consider the matters 
set out in paragraph IV. F. 3., above. 
I 

5. In cases in which it is authorized to reach a final 

determination, the Central Board shall prepeire an opinion 
which shall include an aneilysls of the evidence, findings 
of fact and the reasoning on which the determination is 
based. The determination shall be reached by majority 
vote, shall be signed by the members, and made a permajient 
part of the record in the case. If a determination is not 
unanimous, a minority opinion shall be filed, 

H. Action by the Secretary of Defense or the Administrators 

Whenever a case falls within the provisions of paragraphs 
IV.E.2.e. or IV.E.2.f . (l) or (2), and the Central Board con- 
cludes that access at the specific classification category 
requested is not warranted, the Director shall forward the 
case to the Secretary of Defense or the Administrator of the 



82627 O -62 -8 - 



552 HEARINGS RELATING TO H.R. 10175 



Federal Aviation Agency, or the national Aeronautics and 
Space Administration as appropriate for detemi nation. The 
determination shall include a review of any determinations 
made pursuant to paragraph IV.E.2.f. (2) (b) by any official 
other than the Secretary or the Administrator. 

I. Procedure after final determinations 

1. Final determinations reached by the Central Board shall be 
announced by the Director who shall notify the applicant of 
the determination in his case. Where the determination is 
favorable to the applicant he shall be notified only of 
the final conclusion reached, \7here the determination is 
adverse to the applicant, he shall be notified of (l) the 
final conclusion reached, and (2) whether a finding was for 
or against him with respect to each allegation in the State- 
ment of Reasons. The Director shall also give appropriate 
notice to the other parties concerned. 

2. Final determinations reached by the Secretary of Defense or 
the Administrator concerned shall be announced by the Director. 
Where the detenni nation is favorable to the applicant he shall 
be notified only of the final conclusion reached. V.Tiere the 
determination is adverse to the applicant, he shall be 
notified only of (l) the final conclusion reached and (2) 
whether a finding was for or against him with respect to 

each allegation in the Statement of Reasons. The Director 
shall also give appropriate notice to the other parties 
concerned. 

3. Determinations of the Central Board shall be final subject 
only to: 

a. Reconsideration on its own motion, or at the request of 
the applicajit, addressed through the Director, after it 
has made a finding that there is newly discovered 
evidence or that other good cause has been shown; 

b. Reconsideration by the Central Board at the request of 
the Secretary of Defense, the Secretary of any military 
departjTient, the Director, or when appropriate, the 
Administrator concerned. 

c. Reversal by the Secretary of Defense or in agency cases 
reversal by the Administrator concerned after consultation 
with the Secretary of Defense. 

J. Authority of the Secretary of Defense, and the Administrators, 
Federal Aviation Agency £: National Aeronautics and Space 
Administration 

Nothing conteiined in this Regulation shall be deemed to limit 



HEARINGS RELATING TO H.R. 10175 553 



or affect the responsibility and powers of the Secretary of 
Defense or of any Administrator personally, and without respect 
to this Regulation, to deny or revoke an access authorization 
in a case affecting his department or agency when he personally 
detennines that the provisions of this Regulation caiinot be 
invoked consistent with the national security and that the 
security of the nation requires such denial or revocation of 
access authorization. Such determination shall be conclusive. 

V. MISCELLANEOUS 

A. Pending Cases 

All cases presently pending in the Office of Industrial Personnel 
Access Authorization Review or before any board constituted under 
any IndustriaJL personnel review program shall be processed under 
this Regulation unless a Statement of Reasons has been issued in 
the case and the applicant has been afforded a personal appearance 
proceeding substantially in accordance with the provisions of 
this Regulation. 

B. Reconsideration of Prior Decisions 

1. Decisions rendered under any industrial personnel review 
program prior to the effective date of this Regulation 
which denied or revoked an access authorization may be 
reconsidered by such boards as the Director deems appropriate 
at the request of the applicant, addressed through the 
Director, after a finding by the appropriate board that there 
is newly discovered evidence or that other good cause has 
been shown. Whenever a final determination of denlEil or 
revocation based upon a personal appearance proceeding is 
found to have been unauthorized at the time it was made, 
authority is hereby delegated to the Director, Office of 
Industrial Personnel Access Authorization Review, to vacate 
such final determination and all subsequent administrative 
action predicated thereon and to take such other steps as 
may be deemed necessary to complete reconsideration of the 
case. 

2. In cases where an access authorization has been previously 
granted and a Department of Defense agency or activity 
receives additional derogatory information which was not 
considered by a boaird at the time it decided the case, such 
agency or activity, wlien it is of the opinion, after reviewing 
the complete file including the record of any prior proceedings, 
that revocation of said authorization is wanranted, shall 
forward the case to the Director through appropriate channels 
for referral to the Screening Board in accordance with 
parEigraph rV.B. 



554 HEARINGS RELATING TO H.R. 10175 



C. Monetary Restitution 

If an applicant sviffers a loss of earnings resulting directly 
fron a suspension, revocation, or denial of his access authoriza- 
tion, and at a later time a final administrative determination is 
made that the granting to him of an access authorization at least 
equivalent to that which was suspended, revoked or denied, would 
be clearly consistent with the national interest and it is 
determined by the board making a final favorable determination 
that the administrative determination which resulted in the loss 
of earnings was unjustified, reimbursement of such loss of earnings 
may be allowed in an amount which shall not exceed the difference 
between the amo^Ant the applicant would have earned at the rate he 
was receiving on the date of s\ispension, revocation, or denial of 
his access authorization and the amount of his interim net 
earnings. The filing and processing of any such claim shall be 
in accordance with such regulations as the Secretary of Defense 
may prescribe after consultation with the Administrators. Payment 
shall be limited to claims administratively determined to be just 
and equitable. No applicant shall be compensated for any increase 
in his loss of earnings caused by his voluntary action in xmduly 
delaying the processing of his case under any industrial personnel 
review program. Payments under this provision shall be in full 
satisfaction of any and all claims, of whatever nature they may 
be, which the applicant has or may assert against the United 
States, or the Department of Defense or any of its agencies or 
activities, or the Federal rvviation Agency, or the National 
Aeronautics and Space Administration, or any of them, by reason 
of or arising out of the svispension, revocation or denial of 
access authorization. 

D. Effective Date 



This Directive is effective immediately. 



f 
Secretary of Defense 



Enclosure - 1 

Executive Order IO865 ( See App. pp. 519) 



INDEX 



Individuals 

Page 

Baldwin, Barbara B 490 

Bartimo, Frank A 1 450-500 (statement) 

Brawner, (Rachel) 478 

Doherty, John F 504-518 (statement) 

Eisenhower, Dwight D 522,524 

Fuchs, Klaus 514 

Gates, Thomas S., Jr 554 

Goldberg, Arthur J 500-503 

Greene, Jean Hiuton (formerly Mrs. William L. Greene). (See Hinton, 
Jean.) 

Greene, William Lewis 452, 

455, 458-460, 463, 468-^70, 477-479, 481-495, 501, 504, 506 

Gressman, Eugene 490 

Hinton, Jean (formerly Mrs. William L. Greene) 483 

Hoover. J. Edgar 494, 516 

Hull, Harry M 490 

Jackson, James E 516 

Keech, Raymond B 490 

Kreznar, Stephen L 477 

Lautner. John 45I, 509 

Lewis, Herbert 4.58-500 (statement) 

MacClain. George 458-.500 (statement) 

MacGuineas, Donald B 490 

Maroney. Kevin T .504-518 (statement) 

Martin, William H 452 

McElroy, Neil H 452. 

455, 458, 468-470, 477, 478, 488, 490, 501, .504 

Mitchell, Bernon F 452 

Nixon, Russell Arthur (Russ) 511 

Ovchinnikov, Constantine I 483 

Rosenberg (Ethel) 514 

Rosenberg (Julius) 514 

Skallerup, Walter T., Jr 458-500 (statement) 

Vance, Cyrus R 456 

Warren, Earl 452, 453, 468, 488 

Yeagley, J. Walter 466, 483, 504-518 (statement) 

Organizations 

Cafeteria and Restaurant Workers Union, AFL-CIO, Local 473 478 

Communist Party of the United States of America 4.51,509,513-516 

Congress of Industrial Organizations (CIO) 466 

Metropolitan Broadcasting Corp 483 

Southern Conference for Human Welfare 483 

U.S. Government : 

Bureau of the Budget 466 

Defense, Department of 454^.500. 52.5-.554 

District Court, District of Columbia 490 

Justice, Department of 494, .504-518 

Labor, Department of 500-.503 

Subversive Activities Control Board ,515 

Supreme Court 452, 455, 459, 481, 488, 491 



BOSTON PUBLIC LIBRARY 



3 9999 05706 3115 



This book should be returned to 
the Library on or before the last date 
stamped below. 

A fine is incurred by retaining it 
beyond the specified time. 

Please return promptly. 





I 
I 


i 
1. 

\ 




i