Russian Intelligence Activities at the State Department: Senate Hearing Feb 2000

Senate Hearing on Security at State Department:

"Russian Intelligence Activities Directed at the State Department"

February 10, 2000

02/11/00

Unofficial Transcript: Senate Hearing on Security at State Department

(Head of diplomatic security David Carpenter testifies Feb. 10)

Several factors -- including cuts in budget and personnel, a lowered sense of security threats following the end of the Cold War, and the absence of a policy to escort visitors in the building -- combined to make the Department of State headquarters building in Washington more vulnerable to the kind of intelligence-gathering activity carried out by Russian national Stanislav Gusev, according to David Carpenter, assistant secretary of state for diplomatic security.

Gusev was arrested December 8, 1999, for monitoring a listening a device that had been planted in a conference room in the main State Department building -- a device that Carpenter described in February 10 testimony before the Senate Foreign Relations Committee as "very cleverly installed and concealed." Following his arrest, Gusev was asked to leave the United States.

Carpenter told Senator Sam Brownback (R-Kansas), who chaired the hearing, that to his knowledge no classified information was intercepted by the Russians by means of the listening device. "Is it fair to say that we barely dodged a bullet," Brownback asked. "I think that's a fair assessment," Carpenter replied.

The Gusev case "puts to rest in the department the notion that since the Cold War is over, we can let down our guard against espionage. While most acknowledge that so-called economic espionage flourishes, this case is proof-positive that the more traditional targets are still ripe and of interest to foreign intelligence services," Carpenter said.

He told the Committee that the State Department would have been less vulnerable if its counterintelligence program had had more personnel and resources. Following the Embassy bombings in Africa in August 1998, Carpenter, who was newly approved as head of the Bureau of Diplomatic Security (DS), naturally focused on "efforts to prevent further similar tragedies." Resources were siphoned away from counterintelligence in favor of embassy security, and even the protection of visiting dignitaries in the United States, he said.

Once the bureau's operations were restored to normal, he said, "I saw first-hand just how much the State Department's budget had been cut, and, to my regret, how hard those budget and personnel cuts had hit Diplomatic Security."

However, so many factors go into a strong counterintelligence program, including the physical design of the building and the agency's security procedures, "that a much stronger counterintelligence unit, in and of itself, would not have been sufficient," Carpenter said. "In the absence of an escort policy, even the strongest of counterintelligence would have had difficulty."

He explained what new security measures have been implemented and noted that a study is being done in cooperation with the Federal Bureau of Investigation (FBI) and other agencies, with preliminary results due in 90 days.

One major change has been a new escort policy for the approximately 300 persons without diplomatic security clearance who visit the main State Department building every day and have access to classified areas or material, Carpenter said.

Carpenter acknowledged that the escort policy initially resulted in "some grumbling" by departmental personnel when it went into effect in August 1999, but added that the change has gone "very, very smoothly with very few problems" since then and has received "the collective support of the entire department."

Another current policy that Carpenter said is being studied is the process by which foreign journalists are credentialed, what the escort policy should be, "and if we need to do more."

On the Gusev case, Carpenter showed charts and diagrams of the Oceans and International Environmental Scientific Affairs (OES) conference room where the listening device was found, and the location of the room within the State Department complex. He said he wanted to dispel rumors "that this conference room was adjacent to or in the close proximity to the secretary's suite." In fact, it is "a city block away" from Secretary Madeleine Albright's suite.

Carpenter noted that when it comes to its overseas missions, the State Department is "very aggressive toward security, very responsive," and he said the same attitude began forming in Washington after Gusev was arrested.

Prior to the Gusev incident, he said, the espionage threat in Washington had been rated low, perhaps lower than it should have been. "I would suggest low doesn't mean no. Low means low, and you have to take appropriate measures. I think our baseline may have been a little low," Carpenter said.

Summing up the overall response to his efforts to reassess security at the State Department, Carpenter said, "I've had tremendous support from the foreign service community in getting this done. We have had some setbacks...But collectively, I think the State Department is much better than it was when I came a year and a half ago, and a year and a half from now will be much better than it is today."

Asked what changes should be made to enhance the ability of DS to engage in security and counterintelligence activities, Carpenter said he needs more people and funding.

"I would only say this. In my experience, 28 years in this field, personal security and physical security and the intelligence field, I have never seen a department where people are so tired, where they are burning the candle literally at both ends to try to meet the challenges.

"I would be less than responsive to their needs if I didn't say that we do need more personnel. I do believe that the secretary's budget that's up here addresses that. We're starting to see a response that we need."

Following is an unofficial transcript of the hearing, from Federal News Service:
(begin transcript)

HEARING OF THE SENATE FOREIGN RELATIONS COMMITTEE

SUBJECT: RUSSIAN INTELLIGENCE ACTIVITIES DIRECTED AT THE STATE DEPARTMENT

WITNESS: DAVID CARPENTER, ASSISTANT SECRETARY OF STATE FOR DIPLOMATIC SECURITY

CHAIRED BY: SEN. SAM BROWNBACK (REPUBLICAN OF KANSAS)

February 10, 2000

SEN. BROWNBACK: I'd like to bring this hearing to order...

I think we can all agree that, given that we have a security system that has been porous, to the extent that the Russians can rip out a piece of molding in the State Department on the very floor that contains the Secretary of State's offices and to replace it with a similar one that contained a bug, I think we've got a major problem.

...I'm concerned the State Department has become a soft target for foreign intelligence services because of a lack of security consciousness in the State Department culture.

For example, controlling access at the State Department is a contentious issue. Diplomatic Security's first attempt to restrict access to the State Department's corridors in 1998 met with failure. A mandate for all visitors to be escorted at all times was rescinded six days after it was issued due to complaints from senior department officials at the State Department.

In addition to creating the opportunities for espionage, the lack of access control makes it difficult to determine when the Russian listening device was installed and by whom. There is speculation that the Russians planted the bug in the conference room before the access control policy was reinstated nine months later. I hope we can clear up some of that speculation as well today.

Another issue in question is the question of access to sensitive systems by individuals who do not have appropriate clearance. Now, according to a report by the GAO, dozens of foreign citizens, including British, Chinese, Pakistanis and Ethiopians were given access to sensitive computer systems at the Federal Aviation Administration without undergoing security checks. Comparable concerns have arisen regarding DOE's [Department of Energy] stockpile stewardship program. I'm concerned that similar security lapses could have occurred at the State Department.

And I'm particularly disturbed that Secretary Albright, in response to my questions on Tuesday, indicated that she believed all foreign citizens who work at the State Department, including all contractors, have to go through background checks. Now, you and I know that that is not the case. Commercial contractors are given unsupervised access during regular business hours and do not all have security clearances. In fact, clearances are not required for contractors to perform sensitive computer hardware or software work in the building. And I'm sure you share my concerns that DS [Diplomatic Security] is not necessarily informed of the type and location of work that is being done by these contractors.

Now, in addition to the top-to-bottom security review that you are doing right now for the secretary, I want to make sure that she is being adequately briefed in this area... I want to thank you very much, Mr. Carpenter, for coming and your willingness to testify today.

MR. CARPENTER: I do, Mr. Chairman. And I'd like to thank you for the opportunity to appear before this committee today...

The department's operational counterintelligence responsibilities are vested within the Bureau of Diplomatic Security. Responsibilities for protecting Department of State facilities in the United States and the facilities and personnel of nearly all U.S. government agencies assigned abroad also is assigned to our bureau....

On August 11, 1998, four days after the bombings of our embassies in Africa, my recess appointment was confirmed by the U.S. Senate. Necessarily, my immediate focus and nearly all of my attention was on the bombings and our efforts to prevent further similar tragedies....

As the weeks and months progressed ...I saw first-hand just how much the State Department's budget had been cut, and, to my regret, how hard those budget and personnel cuts had hit Diplomatic Security and its ability to provide the type of protection I believe to be required for the department's facilities and employees.

I found that DS had people in all areas of its responsibilities who, in my experience, were second to none in other similar agencies but who had precious little support in terms of tools to do their jobs... Employees pointed out to me that, following the fall of the Soviet Union, DS was authorized to hire only a handful of agents, engineers, and civil service security personnel. The budget cuts were so severe that DS imposed a 5 percent reduction in the worldwide guard program.

I was told that a number of positions had been abolished, and rules and regulations concerning security were loosened to the point that holding employees accountable for serious security issues became difficult at best. I was told that during those years, budget and personnel cuts had essentially permitted the bureau to conduct properly only the most essential services. We had reached the point that if there were a major peace conference in the U.S. requiring DS to conduct large-scale protection, numerous operations, including counterintelligence, would be virtually shut down to support it. In some respects, this type of scenario still continues to this day.

Among the offices affected during the periods of cuts was our Office of Counterintelligence. The number of positions was reduced from 41 to 26. The funding for the program was cut from $225,000 to $65,000. Our technical countermeasures program suffered a similar fate, and limited funding forced the bureau to decide to fund other programs rather than to invest in upgrading its countermeasures equipment within main State...

Since 1997, the bureau's hiring has picked up considerably. And while it appeared that we were making strides in restaffing DS...the bombings occurred in 1998. Nearly all the new positions acquired since that time have been directed at overseas staffing and with anti-terrorism in mind.

Other programs, such as counterintelligence, dignitary protection and domestic facilities security, continue to be largely understaffed. But I want to make it clear that the president and the secretary's budget submission for you is moving to correct this inadequacy.

I'll take a few minutes to discuss the reason for being here today: The Russian bugging of the seventh floor conference room....

I've told you of how, as a newcomer to the department, I quickly learned that our security programs had been weakened in the early post-Cold War years. It takes very little imagination for one to surmise that the Russian intelligence service took advantage of our posture...

In 1982, the department established a required escort policy for 31 countries. As the Cold War was won, that number was whittled down so that, in 1992, 10 years later, the remaining three countries were taken off the list...

On November 17, 1998, we issued a new policy requiring for the first time in the history of the Department of State that all visitors, with the exception of U.S. government agency personnel with photo identification, be escorted at all times when in the Department of State. Literally, within minutes of the policy announcement, my office received word that there was concern that the policy had not been vetted or cleared properly throughout the department. We rescinded the policy in order to do the necessary spade work.

[Meanwhile] our counter-intelligence division was engaged in a sensitive and classified effort which gave us an additional concern regarding access to the department by uncleared persons -- uncleared and unescorted persons. We decided to renew our efforts to implement the escort policy....On August 6th of 1999, the escort policy was implemented....

As you know, for several months the FBI detected Russian intelligence officer Stanislav Gusev on the street near the State Department. His behavior appeared unusual and a plan was implemented to surveil him. It was noted that the Russian visited the immediate vicinity of the State Department twice or more per week, walked the streets and fussed about in his car. Sensitive technical countermeasures later revealed the presence of a listening device located in the Oceans and International Environmental Scientific Affairs, OES, conference room.

Further investigation revealed that this was indeed a Russian intelligence operation directed against the department. Confirmation in hand, agents of DS and the FBI arrested Gusev on December 8, 1999. He was subsequently asked to leave the country....

The FBI, assisted by DS, is leading the investigation into how the device was placed in the OES conference room, which we believe was picked as a target of opportunity. Additionally, we are in the process of jointly conducting a damage assessment....It was a very cleverly installed and concealed device....

The escort policy is now in place, and though not perfect, it has improved our access procedures....

We also need to beef up our counter-intelligence division. That division is responsible for protecting the department and tenant agencies' most sensitive information and communications at over 260 facilities in the United States and abroad. Unfortunately, it is still under-funded. This year's operational budget is $113,000 -- barely half of what it was at its peak. Further, the division remains woefully understaffed and far too often I have to task them with other duties, usually dignitary protection, totally unrelated to their counter-intelligence mission...

This case, coming on the heels of other widely publicized espionage cases, puts to rest in the department the notion that since the Cold War is over, we can let down our guard against espionage. While most acknowledge that so-called economic espionage flourishes, this case is proof-positive that the more traditional targets are still ripe and of interest to foreign intelligence services...

The major challenge for us is two-fold. First, we must make the case for, obtain and manage additional resources to improve our counter-intelligence program across the board. The president and the secretary have taken a positive step in this direction with the budget that is currently before you. Secondly, once we obtain the necessary resources and put them in place, we have to guard vigilantly against reallocating them to other areas...

Mr. Chairman, thank you for your interest, and I'd be happy to answer any question that you or the committee may have.

SEN. BROWNBACK: Mr. Carpenter, thank you very much for your testimony...

Given that we know the Russians' modus operandi, should we have been more vigilant about the potential for this particular kind of attempted espionage?

MR. CARPENTER: The answer to that question is clearly yes.

SEN. BROWNBACK: Well, that's a good answer. You did mention the State Department budget had been cut. Where was it cut and by whom? Was it a Congressional cut? Was it inside the department, the reallocation of funds to deal with this type of security measures?

MR. CARPENTER: ...my information is that those cuts were sort of a combination of all the things that you mentioned. The department as a whole was forced to reduce its numbers of personnel and its program. DS, being one of the bureaus within the department, had to take a corresponding cut. Some of the reductions that DS took, I have to be very up front with you, are self-induced. In other words, DS had to impose priorities within its own bureau, place importance where it felt importance needed to be placed. And I have to say that counter-intelligence was one of those areas following the Cold War that the consensus was to risk manage in those areas and reductions were made.

SEN. BROWNBACK: ...November 17, 1998, a department notice stated that "All visitors with the exception of active U.S. government agency personnel who display proper photo identification shall be escorted at all times." Now, this mandate was rescinded just six days later... you mentioned in your statement that it was revoked because it didn't go through the process in the bureaucracy.

First, was it revoked because of some complaints by agency personnel? And then the question, why did it take so long to get it reinstated?

MR. CARPENTER: ... I asked my staff to make sure that the proper vetting had been done.

The State Department has never had an escort policy in its history. This was a radical change to the way it operated domestically...

The day that the escort policy was issued and being distributed, I was called to answer why had this not been fully vetted in the department and that the geographic bureaus, who are quite frankly a majority of the personnel in the State Department, were not aware of this. And they would be the ones that, quite frankly, predominantly would have to bear the brunt of this escort. I was a little bit shocked.... So we rescinded it. And we went back to the drawing board to get a better program together....

That process, unfortunately, took about nine months before we had a program... [and] the department signed on to it...when it went into effect in August, it has gone very, very smoothly with very few problems. And it has received the collective support of the entire department....

SEN. BROWNBACK: Now has the State Department's failure to put in place an escort policy before the August 1999 date made it more difficult to determine who planted the bug for Russian intelligence and how long it had been there?

MR. CARPENTER: Clearly the field of suspects is much wider when you don't have an escort policy...

SEN. BROWNBACK: ... Can you explain for us exactly what the policy is regarding security clearances for these workers [commercial contractors]?

MR. CARPENTER: All personnel having permanent passes to the Department of State, working on classified systems, have full background investigations up to the top-secret level.

Employees in the category of certain contractors, temporary fill-ins for the day do not have what I would consider to be a background investigation. If the duration of their duties at the State Department allow us to run name-checks and those type of simpler police checks, we do that. But if you are not working on classified projects and you do not need access to classified areas of the department, there are not background checks done routinely.

SEN. BROWNBACK: Is that going to change?

MR. CARPENTER: ...A contractor working on a classified project would be required to have a security clearance.

A contractor working on a non-classified system or software would not, as of now require a security clearance. We are looking at the wisdom of that procedure.

SEN. BROWNBACK: Is it possible under the current practice for Russian nationals to have been given access to computers at the State Department?

MR. CARPENTER: Yes, it is -- in an unclassified atmosphere, where they would not be allowed access to classified areas... without being escorted.

SEN. BROWNBACK: Should the DS be informed of all the work which is being done and the location of the contractor personnel which is doing that work?

MR. CARPENTER: It certainly makes sense as far as process that DS be included in that chain.

SEN. BROWNBACK: Are you right now or you aren't?

MR. CARPENTER: ... A majority of the time we are, but there is clearly times when we have not been in that chain.

SEN. BROWNBACK: ...I understand the security problems created by allowing the press corps access to all public areas in the State Department building as well.

And I don't know if we can include foreign press in this as well. But we do know that the agents of foreign governments use press credentials as cover for their activities. Are you considering any changes at all in the regulations that repress access?

MR. CARPENTER: With the introduction of the escort policy, press do not walk around unescorted within the building into any areas other than those areas designated for them to be. And that is their own specific press areas, the cafeterias, barber shop and other public areas of the department. Any other time, they have to be escorted.

We are looking at the wisdom of the process by which we credential foreign press, and if we need to do more.

SEN. BROWNBACK: There are concerns that a foreign agent could gain access to the State Department with a State Department badge. The current system -- there's no biometric such as a thumb print or photo recognition. In this area, is there any progress in updating the ID system that the State Department is using?

MR. CARPENTER: There are clearly plans to update it. We clearly need a redundant system, a redundant security system to the current system that exists -- whether that be biometrics, PIN number, or some other technological improvement. And we are trying to seek -- which is a part of the study that I'm asking the other agencies to participate in -- to give us their best assessment of what type of equipment we do need.

We hope to have that recommendation to us within 90 days.

[And] Implementation as quickly as funds to procure that equipment can be obtained.

SEN. BROWNBACK: I was going to say, I imagine it depends on budgeting.

MR. CARPENTER: Yes, sir.

SEN. BROWNBACK: The possessions of State Department employees -- like briefcases, suitcases and purses -- do not have to be X-rayed when they enter the building right now?

MR. CARPENTER: Employees do not, that's true.

SEN. BROWNBACK: And are you looking to change that policy as well?

MR. CARPENTER: The atmosphere or the environment of that building makes it very difficult -- the physical set-up of that building -- makes that a very difficult undertaking.

Part of any sort of enhancement, security enhancement, is going to require selling that type of a procedure, because it could be, in some instances, very, very confining, to say the least, and cause huge back-ups at a very busy facility. But we are undertaking that, and will have, as a part of this study, again in 90 days, a decision on that.

SEN. BROWNBACK: What are the number of visitors a day to the building?

MR. CARPENTER: Well, there are 8500 personnel, and about 1,000 visitors a day that run the gamut. In addition to that, workers on construction. I think the number easily would exceed 10,000 people that pass through the doors of the State Department daily.

SEN. BROWNBACK: So when you're talking about the number of people that needed to be escorted, would you say that's maybe around 1,000?

MR. CARPENTER: The number actually comes down to about 300 a day.

SEN. BROWNBACK: Moving on to the damage assessment itself and the Bureau of Oceans and International Environmental and Scientific Affairs -- OES... What is the policy regarding keeping log-in books for the conference rooms? And does the OES bureau have a log of all the meetings that have taken place in that room that are of concern to the dates that you have?

MR. CARPENTER: ... the conference room in question, the OES conference room, is not what we'd consider a secure conference room. It is simply one of the many conference rooms in the Department of State that various and sundry people need.

The log that was kept that we are looking at goes back to January of 1999. It was incomplete, in that it did not capture every person that has gone into that room, after-hours enterings of the room. It is only an attempt at a scheduling of specific meetings in that room. It's a scheduling device versus an accountability device.

Now, this has to be compared to other conference rooms in the building, designated for discussions of classified information, top-secret and FCI information in which very complete logs are kept.

SEN. BROWNBACK: So you said this was an unclassified area.

MR. CARPENTER: It's a non-secure area.

SEN. BROWNBACK: ..was there, to your knowledge, any classified information discussed?

MR. CARPENTER: There was classified information and sensitive information, but nothing above the top-secret or FCI top -- the highest level of secure information.

SEN. BROWNBACK: Now there were a lot of jokes about the poor Russians who had to listen to the boring meetings of the OES. But wasn't it also used by other bureaus, such as intelligence and research?

MR. CARPENTER: Yes. Our records show that I and R [Intelligence and Research] had used the conference room one time for a briefing at which information above the top-secret and FCI was not discussed.

SEN. BROWNBACK: This conference room was very easy to access. The logbooks were incomplete. I understand that it was even used by the seventh-floor cleaning crew on break. Doesn't all this make it more difficult to assess the damage --

MR. CARPENTER: It complicates it.

SEN. BROWNBACK: From 1993 to 1995, Diplomatic Security asked the State Department for funds, was refused those funds necessary for an active technical countermeasures program.

Do you believe that the Russian activities would have been detected earlier had the State Department been able to fund the request of the DS at that time?

MR. CARPENTER: That's a very hard question to answer, Mr. Chairman. I would suggest that the more complete the counterintelligence division of DS was -- the more personnel they had to devote to their duties -- the less vulnerable we would have been.

But there are so many factors that go into a strong counterintelligence program. And part of it is not just the counterintelligence, it's the physical design and security policies and procedures of the department and the building -- that a much stronger counterintelligence unit, in and of itself, would not have been sufficient....

In the absence of an escort policy, even the strongest of counterintelligence would have had difficulty.

SEN. BROWNBACK: I see you brought some charts...

MR. CARPENTER: I would be glad to, sir. Now the first chart is an aerial overview of the State Department... The park -- the two areas outlined, one in yellow, is State Annex Three. That's Virginia Avenue, running along that direction. Below it in blue, outlined in blue, is the park in which Mr. Gusev had been sitting on a bench and observing.

And let me go to the conference room on the seventh floor. The OES conference room is right in that area. The Virginia Avenue side is where he was parking his car to monitor the device in the room. This all had to be in line of sight of the seventh-floor conference room.

SEN. BROWNBACK: That's the way the signal was being transmitted. In other words, it had to be in line of sight in order to receive the signal?

MR. CARPENTER: Yes, it did.

...To try to dispel rumors that this [OES] conference room was adjacent to or in the close proximity to the secretary's suite, we've outlined in blue the secretary's suite. This is a city block away from where this took place.

The next picture...is actually walking into the OES conference room... I draw your attention to the plant, the curtain and that window.. the plant and the drapes were concealing the chair molding....That was the area in which it was found by our countermeasures sweep.

SEN. BROWNBACK: So there had to be more than one visit to that room, in order to map out the strategy and how the device was going to be planted, measurements, and then access to be able to install it and remove it. So that had to be, you know, access without anybody else present.

MR. CARPENTER: That is our assumption, that this was done, this operation was done on multiple visits to the OES conference room.

...looking out at the park -- at the red light. That's where Gusev did a lot of his relaxing, and his vehicle was parked in and around this area. And the lower diagram is Virginia Avenue, and that's State Annex Three that we had outlined on the first diagram. And he also chose to park his vehicle in space available along there. And once we realized what he was doing, space was always available.

SEN. BROWNBACK: In order to oversee his activities.

MR. CARPENTER: Oversee his activities.

SEN. BROWNBACK: If the OES conference room is not secured, looking back then, should any classified information have been discussed, whether it was confidential or secret? Should that room have been used for that?

MR. CARPENTER: Clearly there needs to be a greater awareness of discussing any type of secure information outside designated secure areas.... I think the escort policy goes a long way to ensure that we're not victimized. However, we do clearly have to take a better look at what areas are available, should be made available for the discussion of classified information.

SEN. BROWNBACK: Mr. Carpenter, while you're still conducting a damage assessment -- I'm assuming it's still ongoing?

MR. CARPENTER: Yes, it is.

SEN. BROWNBACK: The preliminary word seems to be that no highly classified information was lost. Is that correct, we can assume that?

MR. CARPENTER: Yes, we can.

...I must add, Mr. Chairman, I think that it has been a universally held opinion by a lot of people at State, that our vulnerabilities in the United States are not what they are in the overseas arena. So there has been a much more relaxed attitude about this. Clearly this serves notice that that needs to be rethought.

....I'll mention a couple of benefits. Clearly the level of awareness about the potentials brought about by this bugging have had a positive impact on the Foreign Service in general and the employees at the State Department. Not at just this building, but throughout the world.

SEN. BROWNBACK: Now if I overstate this, you can correct me on this. But the access control policy at the State Department seems to have been a matter of confrontation between the foreign policy establishment at State and the DS for a number of years, even before your arrival.

Do you believe that the culture at the State Department inhibits your ability to provide a secure environment?

MR. CARPENTER: I think that's an excellent question. I think that's at the crux of what quite frankly has brought us here. There has always been a divide, not just at State but throughout society -- between those persons who want a work environment to be open and friendly and inviting, and the security element who want the security.

Overseas, that gap is almost non-existent. There the policies and procedures are well understood. The threat is well-understood. And I think we have excellent programs overseas, programs and policies. Those programs and policies have not translated well domestically, where, absent incidents of this nature, we clearly have reduced our awareness....

Prior to having an incident like this, it has been a difficult sell because this has not been occurring regularly. The threat of this was rated to be low. I would suggest low doesn't mean no. Low means low, and you have to take appropriate measures. I think our baseline may have been a little low.

I would have to say, in my personal experience -- and I've been there since bombings and that type of activity at State -- that there has been a very solid response of the Department of State towards these issues...I've had tremendous support from the foreign service community in getting this done. We have had some setbacks. We've had to go back and do our homework a little bit better. But collectively, I think the State Department is much better than it was when I came a year and a half ago, and a year and a half from now will be much better than it is today.

SEN. BROWNBACK: You said the counterintelligence portion of DS is about a third of the size that it was at the end of the Cold War. Is that correct?

MR. CARPENTER: That's correct.

SEN. BROWNBACK: And in that context, do you think that the counterintelligence agency has been undervalued by the State Department over these years?

MR. CARPENTER: Undervalued may not be the right word. But I think, on a risk-management continuum, when you look at the risk was rated at low, it received a proportionate amount of support, which was low. And that caused us to be behind where we would like to be, where we once were.

SEN. BROWNBACK: To go back again and talk about maybe this division or this line that might be between State and DS, Booz Allen & Hamilton, as you know, a consulting firm, recently conducted an audit on the State Department's ability to respond to both terrorist and counterintelligence threats. It has been reported that one of the recommendations made in the report was to elevate the role of the Bureau of Diplomatic Security. Do you believe that the role of DS should be elevated and that DS should report directly to the secretary of State?

MR. CARPENTER: I was and am supportive of the recommendations made by the Booz Allen Hamilton study. Currently I have an informal reporting relationship to the secretary in that I brief her every morning relative to security problems, hot spots around the world, issues that are important to me that it's important that she knows these. But again, that's informal. I believe that that should be formalized. And it's currently under study for a decision by the secretary as to whether to formalize that and what form that formalizing would take.

SEN. BROWNBACK: What changes need to be made to enhance the ability of DS to engage in security and counterintelligence activities? What would be probably a couple of top priorities you would have?

MR. CARPENTER: Mr. Chairman, I would suggest that everyone that comes before you, the solution to their problem is, "I need more people. I need more finances." I'm no different than the rest.

I would only say this. In my experience, 28 years in this field, personal security and physical security and the intelligence field, I have never seen a department where people are so tired, where they are burning the candle literally at both ends to try to meet the challenges.

I would be less than responsive to their needs if I didn't say that we do need more personnel. I do believe that the secretary's budget that's up here addresses that. We're starting to see a response that we need. And, quite frankly, I applaud that. I think this is a tremendous step in the right direction.

We have within Diplomatic Security, we have the expertise. We do. We don't need to turn to other agencies for this. We simply do not have the personnel to distribute out or allocate out appropriately. We have additional needs for finances for some technical enhancements of the most sensitive nature that are available out there, but we simply at this time do not have the finances to go procure those, install them, and be, quite frankly, cost-effective.

One of our goals in the stand-up, both after the bombings in East Africa and certainly trying to address the issues of the bugging, is to do it in a way that the taxpayer is getting the best bang for the buck here. And it takes a while to sort through all of your options to do that. And we would hope to continue to work with you and this committee to satisfy that and make available any and all information that you might need to support us in that effort.

SEN. BROWNBACK: Okay. I just wanted to, you know, make a comment here that, you know, I think a lot of your efforts and activities, or all security [efforts], might be under-appreciated....

So I know we appreciate that, you know, as employees here. You try to make that security as least painful as possible in order to facilitate, you know, the flow of people in and out of the building. So we appreciate the work you do.

Thank you very much, Mr. Carpenter, for being here. I appreciate your testimony.

MR. CARPENTER: Thank you, Mr. Chairman.

SEN. BROWNBACK: This hearing is complete.

(end transcript)