I close as I began, Mr. Chairman, by commending the Committee for commissioning this inquiry and the Members of the Jacobs Panel for their conscientious and valuable efforts. I would like to emphasize the Administration's willingness to work with the Committee and the Jacobs Panel to achieve, improved counterintelligence measures. I should also note that some of the proposals may require additional resources to implement effectively, and we will work cooperatively with Congress to accomplish this.

Thank you.

Chairman BOREN. Thank you very much, Ms. Lawton. We appreciate your comments and willingness of the Administration to work with us in developing and refining these proposals. We certainly will take you up on your offer to do so.

I want to raise just a few questions. You indicate that while you are not quarreling with the move toward uniform minimum standards for TOP SECRET clearances, you think it is more appropriate to leave that to the Executive branch for action. And you make the point the Administration is actively addressing the issue of minimum standards.

I wonder if you can tell us how long the Administration has been actively addressing this issue? I believe that it may have begun in 1983 at the direction of President Reagan if my memory serves me correctly. So we've been actively addressing for about 7 years at the minimum. Why has this been so difficult? Am I right in my memory that we are now into the seventh year of actively addressing this and why shouldn't we decide to push ahead if it has taken this long?

Ms. LAWTON. Seventh year of the Executive branch looking at it, Mr. Chairman, but certainly not of this Administration.

Chairman BOREN. If we could begin this over again every 4 years, we can maybe be up to a 100 years before it's certain of actively addressing.

Ms. LAWTON. No, actually after the inauguration, President Bush decided to take a fresh look, using his appointees and the perspective of the new Administration, at the efforts that had gone before. The Committee working on that, as I understand it, has completed its process in a lot less time than it took the first time around, and has sent forward a recommendation to the National Security Council, is my understanding.

Chairman BOREN. Well, should we then expect a new Executive Order on security clearances fairly soon from the Executive branch?

Ms. LAWTON. I can't answer you with certainty, Mr. Chairman. I'm not involved in the process right now. And so I don't honestly know. I do know that the Committee working on it has finished and sent forward a proposal.

Chairman BOREN. Do you know if it would include access to financial records, travel records, and consumer credit records along the lines of the Jacobs Panel recommendations or not?

Ms. LAWTON. Those things, Mr. Chairman, an Executive Order could not do, because there are statutes barring that access and only with the statutes changed could that access be provided.

Chairman BOREN. So we would have to actually have legislation to amend the Right to Financial Privacy Act so the Government could go in and request—

Ms. LAWTON. Oh yes.

Chairman BOREN. That would require legislation?

Ms. LAWTON. That, and consumer credit and so forth, yes. It needs legislation and we support the proposals.

Chairman BOREN. What about the Legislative and Judicial branches? I would assume an Executive Order could not cover the other two branches of Government. Do you think there is some wisdom in trying to have an action taken that would cover the other two branches of Government as well?

Ms. LAWTON. Well, it becomes awkward always of course, for example, for the Congress to try to cover the Judicial branch, which historically, of course, has been the least troublesome branch in this area. We've never even had an allegation of a leak from them that I know of.

This body, of course, has already taken action which we think is just wonderful to set up a security system. We'd like to see the other body do as well. But certainly Congress could legislate acrossthe-board for itself. In theory, it could in connection with court employees. But as I've said, that's a bit problematic. And that is not an area that has been proved difficult.

Chairman BOREN. On the polygraph provision, I gather you take the same position, that it would be better to leave it up to the Executive branch and Executive Order which would allow for greater flexibility. But isn't it the point of the Jacobs Panel that if we do leave it up to the Executive branch, there are simply going to be many agencies, perhaps some of those where the need is greatest, that will simply decide not to take any action in this area?

Ms. LAWTON. Well, without some specific directive from the Executive, agencies are under no obligation to adopt their own policies. If the Executive were to issue such a directive they would comply with it.

It is a difficult problem in part because, as you know, for a while, Mr. Chairman, the Department of Defense was under statutory limitations. No matter what the President said, they could only do so many polygraphs because Congress had said they could only do so many.

Like the problem on reporting foreign contacts, which we dealt with and which I was involved with, it is very hard to issue a uniform rule for all agencies. Some agencies have foreign contacts as their mission. And a reporting requirement too strenuous for them might be all right for an agency that does that rarely.

So with the difference in mission of the various agencies, we really think that it, in practical terms, has to be that way, however strongly we might wish to increase the base standards for certain clearances.

Chairman BOREN. Well, in our discussion of the polygraph, we've talked only about communicators, very strictly constrained, only security type questions and not lifestyle questions. That's a bare minimum really. We're not talking about covering all the people in a department with TOP SECRET clearance or even those in most sensitive jobs, but strictly limited to security type questions for

those that are communicators. Do you still see the problem of those that deal with codes and ability to communicate in code? Do you still see a problem, since we are dealing in such a constrained area, with some uniform procedures for those particular people even though they are in different agencies?

Ms. LAWTON. There may well be sufficient differences. Most of the time when we think of cryptographers, we think of certain aspects of the military services and the National Security Agency. But there is indeed an increasing use of encrypted communications in other areas. Law enforcement, for example, is looking toward encryption of certain types of devices. And the standards might well be different depending in the type of encryption and the purpose of the encryption.

Chairman BOREN. Let me ask about the three new criminal provisions in the bill. Possession of espionage devices, the sale of TOP SECRET documents so designated and retention of TOP SECRET documents. I gather you feel, as the agency responsible for prosecuting these cases, there is a need for additional legislative action in this field?

Ms. LAWTON. Well, we are a little torn there, Mr. Chairman, and I'll defer to John. After all, we think we've got a pretty good record in the last 10 years with the existing laws, with the old laws.

On the other hand, there could be instances where some of these would come in handy. The unique sort of fact situations. We know that the Jacobs Panel, in working on these, was looking at specific cases as they looked for ways that the law could be enhanced that it might help. And you never know what the next twist or turn might be. But I—

Mr. MARTIN. Mr. Chairman, if I may? We discussed this at some length with representatives of the Jacobs Panel and had an opportunity to talk to your staff about it.

With regard to the criminal provisions, there is-while these provisions would be helpful, the unique nature of the crime of espionage makes it very, very difficult, not only to define but also to enforce. It is a crime that leaves no footprints. It is not like the ordinary, street crime, the ordinary theft or homicide. And while these provisions are helpful, they do not solve, and they are not intended to solve, the very difficult and complex evidentiary problems that we have when we face trial. But as Mary said in her testimony, and as we've told the staff, we want to study this more closely and see if we can come up with something that will definitely benefit our efforts, our prosecutive efforts.

Chairman BOREN. I'd like to turn to those FBI recommendations concerning information on unlisted telephone numbers, contact with agents of foreign powers and the access to consumer credit reports. As I understand it, the FBI proposal would allow the FBI to identify people with unlisted numbers whose phones are used in communication with foreign powers. And I suppose this would apply to everyone that called a foreign embassy. A number of these calls might well be legitimate calls for purely legitimate reasons. ACLU proposes changing the language of the amendment to allow the FBI to identify people with unlisted numbers only if the Bureau has probable cause to believe that the foreign agent, so called or was called from an unlisted number, is involved in clan

destine activities. Would the probable cause standard create a problem for the FBI if we were to add that to the legislation?

Ms. LAWTON. It certainly would, Mr. Chairman. Access now under the ECPA statute doesn't require probable cause. It requires specific and articulable facts, a lesser standard, and that to get the toll records of an individual, to track all their calls.

A probable cause standard for unlisted numbers would be even higher than what we would need to get toll records, a far more intrusive inquiry.

Yes, it would be impossible to live with.

Mr. MARTIN. And it might frustrate some very significant investigations. You may recall, Mr. Chairman, that defendants such as Ronald Pelton, John Walker, Christopher Michael Cook had open contacts with foreign embassies.

Chairman BOREN. On the consumer credit reports, there has been concern voiced that financial information from these credit reports could be misused. Could you accept a restriction against the use of the substantive financial information from the consumer credit reports beyond the names of the financial institutions where the FBI already will be able to go to get the underlying information? Would that be a problem?

Ms. LAWTON. Well in certain circumstances, it might, Mr. Chairman. I'm thinking for example of the Cavanaugh case. Cavanaugh did what he did in offering to sell information primarily because of a debt load he was carrying and he was trying to recover. The price he asked for what he was selling was exactly what he needed to clear off the debt load on his consumer credit records.

Chairman BOREN. Although if you got the names of the institutions with which he was dealing, couldn't you then go to one of those institutions and get the underlying information as opposed to the summary of that information in a consumer credit file?

Ms. LAWTON. You could get the identity of his bank. But his debt problems may not have been limited to the bank. He could have been running a float on credit cards. The debts where probably scattered around.

Chairman BOREN. You can't get that information now, for example, from credit card balances or consumer debt from let's say a merchandise institution as opposed to a bank?

Ms. LAWTON. Well, the prime source though to identify all of that is your consumer records. The example that the FBI always cites to me--and it's a bit of an irony, it doesn't quite answer your question-but it's that as a businessman in Norfolk, John Walker could have gotten credit records by paying a fee, of anybody he inquired about. The FBI could not get his.

Chairman BOREN. I see your point.

Let me just ask one last question. The ACLU also, of course, strongly opposes secret searches with or without a court order. We get into the whole question of what the inherent authority is or is not without a court order. Is the Administration opposed to any kind of notice, even after the fact, of a search having been made, so that perhaps the person against whom a search was made could test at some point in time the legality of the search?

Ms. LAWTON. Yes, Mr. Chairman. I believe the Committee has some knowledge of the sort of targets that are involved. And focus on it for a while and I think you will see why we it gets

Chairman BOREN. I assume that at the time of prosecution there would be access to the fact that these searches had taken place. Ms. LAWTON. If there is prosecution-

Chairman BOREN. If there is prosecution.

Ms. LAWTON. There was in the TRONG case-and that was a case where, which John's far more familiar than I-in which the defendant had the full opportunity to challenge the search and did. Chairman BOREN. So you might have a closed case, for example, where a search, perhaps an electronic search with a court order or a physical search without a court order, was made. Then a decision was made not to prosecute possibly because there were insufficient grounds. The person, even though the case had been closed, would not necessarily have ever been aware of a search.

Ms. LAWTON. That's right. That's the way it operates now under the Foreign Intelligence Surveillance Act.

Chairman BOREN. Senator Specter has joined us. Senator Specter, are there any comments or any questions that you would like to ask at this point?

Senator SPECTER. Thank you very much, Mr. Chairman.

First, I do have an opening statement which I will just insert in the record.

[The prepared statement of Senator Specter follows:]

PREPARED Statement of SENATOR ARLEN SPECTER

I want to thank the Chairman and Vice Chairman for their initiative in constituting a special panel-the Jacobs panel-to assess the need for and remedies to our security and espionage laws.

In the past five years especially, there has been a near hemorrage of espionage in the United States which according to Defense Department estimates has cost tax payers billions in terms of lost defense capabilities and in terms of necessary countermeasures. The Jacobs panel has served a useful purpose in pointing out where our current espionage statutes are in need of strengthening.

While the world is on the verge of a new order based on principals of democracy, no nation or responsible leader can ever abrogate responsibility for national security. Every American and indeed, every sane individual should welcome the efforts to reduce or eliminate arms but not simply for the sake of disarmament, for the greater goal of peace and harmony can realistically be achieved only through cooperation and vigilance. For the latter this equates to deterrence and defense in consonance with the threat.

The history of mankind has shown that no matter the level of cooperation and defense, nations will always want access to other nations' defensive posture. Unfortunately, while this country has not been immune to the scourge of treason, the more recent past has demonstrated a shift in motivation from ideology to profit and personal gain. The results are equally devastating.

I applaud the efforts of Eli Jacobs and his panel. Their efforts have been expansive, thorough and thoughtful.

However, I am sure that the members of the panel and this Committee will agree that in our quest to preserve national security, we do not erode basic human and civil rights guaranteed by the Constitution and Bill of Rights.

In our hearing today, I shall be mindful of the need to strike a balance between security and these basic rights. In reviewing the Panel's proposals, I find myself in full agreement in principal. I therefore look forward to clarifications and opposing views on several provisions which will allow me to support them or recommend modifications.

Chairman BOREN. Let me say that Senator Specter has been a very active Member of the Committee in this area.