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Dear Mr. Chairman:

On behalf of the Archivist of the United States and the Director of the Office of Management and Budget, I am pleased to enclose a brief report that provides "an update of agency compliance with the declassification requirements of Section 3.4 of E. O.12958, 'Classified National Security Information,'" and a brief report on "agency compliance with sections 1.2, 1.3, 1.6, 1.8, and 1.9 of Executive Order 12958." These reports are directed by House Report 105-240, which accompanied the Treasury, Postal Service, and General Government Appropriations Act for 1998.

The enclosed data and information disclose unprecedented effort and achievement on the part of executive branch agencies to meet the declassification requirements of E.O. 12958 during Fiscal Years 1996 and 1997. At the same time, we remain mindful that an even greater effort will be necessary as agencies seek to review the remaining records that will otherwise be subject to automatic declassification under the terms of the Order. We are also aware that the level of achievement among the agencies remains uneven, with several agencies slow to get started in their declassification efforts. The report on classification activity reveals general compliance throughout the executive branch with the cited provisions of E.O. 12958.

The Information Security Oversight Office (ISOO) will have more information available and analyzed when it issues its Report to the President for Fiscal Year 1997. Copies of the Report to the President will be provided to the Subcommittee and other interested Committees of Congress as soon as it has been cleared by the White House. We hope to have that Report to the President by the end of May. In the meantime, l am available at your request to meet with the membership or staff of the Subcommittee to provide as much information and data as we have available. Also, we will provide the Subcommittee with a report on security classification costs by May 1, 1998, as directed in House Report 105-240.

Inasmuch as the data contained in the enclosure are preliminary, and have not as yet been included in any public report or disclosure, we respectfully request that the Subcommittee limit access to these reports to its needs or the needs of the Committee on Appropriations until ISOO issues its Report to the President for Fiscal Year 1997.

Sincerely,

Steven Garfinkel
Director

Enclosure

cc: The Honorable John W. Carlin
Archivist of the United States

The Honorable Frank Raines
Director, Office of Management and Budget

Preliminary data gathered by the Information Security Oversight Office (ISOO) as of the date of this report reveal that in Fiscal Year 1997, the agencies of the executive branch continued to declassify historically valuable documents in numbers unprecedented before the issuance of Executive Order 12958, "Classified National Security Information." E.O.12958 went into effect early in Fiscal Year 1996. In FY 1997, executive branch agencies declassified approximately 205 million pages of historically valuable records. This represents more than a four percent increase from the 196 million pages that the agencies declassified in Fiscal Year 1996.

In other words, during the first two years that E.O.12958 has been in effect, executive branch agencies have declassified more than 400 million pages of historically valuable documents. Added to the approximately 69 million pages declassified in FY 1995¹, in just the past three years, the executive branch has declassified more than 70% of the pages of historically valuable documents declassified since 1980.

Of the 401 million pages declassified in FY 1996 and FY 1997, the National Archives and Records Administration (NARA) accounts for fully 57% (227 million) of the total from the holdings within the National Archives of the United States. Of course, these records originated in agencies other than NARA, predominantly from the components of the Department of Defense (DOD) and from the Department of State (State). Other agencies that have declassified large numbers of historically valuable records over the past two years include DOD, 126 million pages; State, 25 million; United States Information Agency, 8.5 million; the Department of Energy, 3.8 million; the Department of Commerce, 2.6 million; the Agency for International Development, 1.6 million; the National Aeronautics and Space Administration, 1.0 million; the Department of the Treasury, 0.6 million; and the National Security Council, 0.16 million.

INTERIM TARGETS

To meet the President's declassification targets detailed in Executive Order 12958, executive branch agencies were to declassify during FY 1996 at least 15% of their total records subject to the Order's automatic declassification provisions, "and similar commitments for subsequent years until the effective date for automatic declassification," i.e., April 17, 2000. Existing records subject to automatic declassification have been appraised as historically valuable and will be at least 25 years old in April 2000.

The data provided to date continue to indicate uneven accomplishment among the agencies of the requirement to declassify significant portions of the subject records each year. Some of the larger classifying agencies are only now beginning to declassify records in significant numbers. However, the National Archives and Records Administration has done an extraordinary job in declassifying various agencies' records within the National Archives of the United States. As a result, from the data currently available, lSOO believes that the 401 million pages declassified by the executive branch in FY 1996 and 1997 combined exceed 30% of the total universe of classified pages subject to automatic declassification by April 2000.

E.O. 12958 authorized the heads of agencies that originate classified information to designate particular file series of classified information to be exempt from the Order's 25-year-old automatic declassification provision. These series were to be limited to records replete with information that "almost invariably" fell within one of the categorical exemptions to automatic declassification. These exempt file series are subject to presidential approval. Agency heads direct them to the President through the Assistant to the President for National Security Affairs (National Security Adviser).

In June 1997, the National Security Adviser requested that ISOO review the agencies' proposed exempt file series, and advise him of ISOO's recommendations regarding their acceptance by the President. Assisted by staff members from the National Archives and Records Administration and the National Security Council, the ISOO team has nearly completed its review and is preparing to send its recommendations to the National Security Adviser as this report is being prepared.

As a result of the ISOO review, six agencies withdrew entirely their requests for file series exemptions. The remaining 10 agencies that requested such exemptions have significantly narrowed the scope of their requests. Perhaps most important, for each one of the remaining file series proposed for exemption, the agencies have established fixed dates to review them for declassification.

The President created the ISCAP under E.O. 12958 to perform critical functions in implementing several of the Order's provisions. These include: (a) deciding on appeals by parties whose requests for declassification of information under the mandatory review provisions of the Order have been denied; (b) approving, denying or amending agency exemptions from automatic declassification; and (c) deciding appeals brought by individuals who have filed classification challenges. The work of the ISCAP is crucial to the implementation of E.O. 12958, because its decisions will ultimately establish the cutting edge between what information is declassified and what information remains classified.

The ISCAP, made up of senior level representatives appointed by the Secretaries of State and Defense, the Attorney General, the Director of Central Intelligence, the Archivist of the United States and the Assistant to the President for National Security Affairs, began meeting in May 1996. The President appointed Roslyn A. Mazer, Associate Deputy Attorney General, to serve as the ISCAP's chair. The Director of ISOO serves as its Executive Secretary, and ISOO provides its staff support.

As of the date of this report, the ISCAP has decided appeals seeking the declassification of 61 documents that remained fully or partially classified upon the completion of agency processing. Of these, the ISCAP voted to declassify 49 (80%) of them in full, to declassify significant portions of eight others (13%), and to affirm the agency's action fully for only four documents (7%).

To keep interested persons aware of its activities and decisions, the ISCAP membership voted to issue periodic communiques. It issued its first communique in June 1997, and is preparing to issue its second shortly. In addition, ISOO provides copies of the ISCAP's decision database upon request. Because the ISCAP's product is presidential records rather than Federal records, the White House Counsel's Office concurred in the ISCAP's decision to make these items publicly available.

• An unprecedented effort to declassify older historically valuable information is in place.
• Agencies that have had only minimal declassification programs in the past are now engaged in significant declassification efforts.
• Communication and coordination between agencies' security and records management staffs have improved tremendously from what was generally a very poor situation.
• A declassification infrastructure has been established in every agency that originates classified information.
• Communication among the agencies has increased significantly as they attempt to coordinate their declassification efforts.

• In practice, automatic declassification at 25 years (rather than at a later date) means that more information requires review, more information is proposed for exemption, less bulk declassification occurs, and the cost of compliance increases.
• Start-up and compliance among the major classifying agencies has been uneven. Several agencies were very slow in getting started, and they find themselves in a difficult catch-up situation. In addition, many agencies spent a year or more attempting to gain sufficient knowledge about the scope of their classified holdings.
• The rate of declassification at several agencies is lagging because of an apparent unwillingness to alter an extremely cautious approach to declassification. Several agencies will not declassify any information that has not undergone a line by line review by several reviewers, notwithstanding the age of the documents or their subject matter. This method of review is obviously the most time consuming and costly. As a result, a few agencies that to date have spent the most on their declassification programs have yet to declassify significant numbers of records, although substantial increases are anticipated.
• Resource limitations are having a clear impact on agency compliance and oversight.
• Agencies, on the whole, have been slow in providing NARA with the timely and complete declassification guidance that would permit NARA to declassify more information. Resource and records management limitations increase this tardiness.
• In many cases, documents contain the classified information of several agencies (agencies with equities in the document). Dealing with multiple equities greatly complicates and delays the declassification review process.
• In some instances, declassification activity has been so prolific that it exceeds the ability of agency systems and resources to process the records for public access, or even the ability to advise other agencies and the public about what information has been declassified.

BACKGROUND

Executive Order 12958, "Classified National Security Information," issued by the President on April 17, 1995, and effective on October 14, 1995, increases the personal accountability of original classifiers to make reasonable and justifiable classification decisions. The House Report specifically references several sections of the Order that are intended to limit classification activity to the minimum truly necessary to protect the national security: Section 1.2, Classification Standards; Section 1.3, Classification Levels; Section 1.6, Duration of Classification; Section 1.8, Classification Prohibitions and Limitations; and Section 1.9, Classification Challenges.

Sections 1.2, 1.3 and 1.6 address classified information at its creation. Section 1.2 sets out the standards that must be met before information may be classified in the first instance, and directs that doubtful situations be resolved in favor of no classification. Section 1.3 establishes the standards for the three permissible levels of security classification, Top Secret, Secret and Confidential. Section 1.6 establishes the time frames that limit the duration of classification. Classifiers must first seek a specific date or event for declassification. When such specific dates or events elude the classifier, he or she is now required to set a 10-year time frame. Only if an applicable exemption category pertains may the classifier extend the duration of classification beyond 10 years, but not longer than 25 years.

Sections 1.8 and 1.9 serve as control mechanisms to help ensure that classifiers act prudently. Section 1.8 expresses when classification is forbidden, e.g., to conceal violations of law or to prevent embarrassment to an individual. Section 1.9 mandates a retribution-free process through which holders of information may challenge and appeal questionable classification actions.

Taken together, these five sections of E.O. 12958 provide a strong foundation for sound classification decision making. Current evidence available to ISOO suggests that they are working as intended.

ISOO OVERSIGHT

Under E.O. 12958 and Executive Order 12829, "National Industrial Security Program," the Information Security Oversight Office (ISOO) oversees the implementation of the security classification system within the executive branch and industry, respectively. "Industry" refers to those contractors, licensees, grantees and certificate holders that do work for the Federal Government which requires access to classified information.

Historically and practically because of its very small size, ISOO operates as a policy oversight entity. That is, ISOO's oversight concentrates on program reviews designed to reveal whether the subject agency is implementing the security classification system as intended by the President. To this end, ISOO works closely with each agency's officials responsible for implementing its security classification system. These officials exercise internal agency oversight as part of their responsibility.

Over the years, ISOO has developed means to leverage the effectiveness of its oversight despite its small size. With respect to such classification activities that House Report 105-240 specifically addresses, ISOO has relied primarily on classified document reviews. In these reviews, ISOO analysts examine a random sampling of an agency's recently classified product. ISOO knows that a review of even a small portion of an agency's product reveals a great deal about the overall effectiveness of an agency's internal monitorship and security education program, and also pinpoints specific problem areas in classification and marking.

Since the issuance of E.O. 12958, ISOO has not conducted extensive document reviews of agencies' classified product. A primary factor has been the Order's radical changes in the declassification program, which have dominated not only ISOO's time and resources, but also those of the agencies. Also, ISOO has focused more of its oversight to agency implementation of the National Industrial Security Program (NISP), which was designed to reduce significantly the costs of the security classification system within industry. The NISP is at a critical stage of its development, and ISOO believes its active involvement at this time is extremely important to the program's ultimate success or failure.

Until ISOO is able to resume fully its document review program, it must rely on other aspects of its oversight program to monitor classification activity within the agencies. These include its collection and analysis of statistical data; its receipt and review of complaints and suggestions about the security classification program; and its role as the Executive Secretary and staff for the Interagency Security Classification Appeals Panel (ISCAP).

Beginning in the late 1980s, classification activity within the executive branch began a downward trend that has generally continued until the present. Based upon the most recent classification statistics for FY 1996, agencies have made progress in keeping original classification activity to a minimum, reporting the lowest number of original classification actions since ISOO began reporting this information. Original classification precedes all other aspects of the security classification system. Consequently, this statistic is an important indicator of classification activity, in terms of quantity and quality.

The FY 1996 data also showed a significant change in the assignment of declassification dates, commonly called the duration of classification. Classifiers chose 10 years or less as the declassification date for over 50 percent of their decisions. This statistic is a very positive indicator of progress in implementing the Section 1.6 of E.O. 12958 Before E.O.12958 classifiers limited the duration of classification for less than 5% of their classification decisions.

ISOO is now receiving and analyzing statistical data on agencies' security classification programs for FY 1997. Preliminary review of the data received so far appears to support the benchmarks established in FY 1996, the first year of E.O. 12958's implementation. A full analysis and reporting of these data will appear in ISOO's Report to the President for FY 1997, which ISOO is planning to issue in May 1998. ISOO will provide copies of this Report to the interested Committees of the Congress, including the Appropriations Committees, immediately upon its availability.

Section 5.3 of E.O.12958 directs ISOO to respond to "complaints and suggestions from persons within or outside the government with respect to the administration of the program." Responding to complaints and suggestions about the security classification program is a regular item on ISOO's work agenda.

For example, lSOO recently responded to a complaint concerning an agency's alleged use of the outdated duration of classification marking "OADR" (Originating Agency's Determination Required) on newly generated classified material. To resolve this complaint, lSOO contacted the responsible officials of this agency. It appears that this problem arose from the failure of the agency to revise its internal classification regulation to comply with E.O. 12958 upon its effective date. The problem of unpublished revised internal agency regulations is widespread because of the added demands of the declassification program.

However, most agencies have issued interim instructions that have prevented similar violations of E.O.12958. ISOO directed the "offending" agency to take whatever steps were necessary to prevent its classifiers from using outdated duration of classification instructions, and it is acting responsibly to resolve this problem quickly. ISOO may follow up this complaint with a program review.

Perhaps surprisingly, complaints alleging such systemic violation of E.O. 12958's classification provisions have been relatively few. However, lSOO is anxious to resume its document review program when time and resources permit.

Another control bearing on the implementation of the Order's classification provisions is the work of the Interagency Security Classification Appeals Panel (ISCAP). Among its other functions, the ISCAP decides on appeals by persons who have filed classification challenges under Section 1.9 of E.O. 12958. The ISCAP has been meeting since May 1996, and has not yet received an appeal from a classification challenge. This suggests either that agencies are resolving classification challenges informally or successfully through their challenge programs, or that individuals are not challenging classification actions. If, as ISOO suspects, the latter is true, classifiers are either doing an exceptional job or holders are still reluctant to challenge the actions of classifiers, who routinely occupy high level positions. When time and resources permit, lSOO will conduct a review of agency challenge programs to evaluate their effectiveness.

As agencies "round the corner" in meeting the declassification requirements of E.0.12958, ISOO expects that both the agencies and ISOO will be able to place more emphasis on the classification aspects of the new Order. In the interim, however, lSOO is aware of no indicators to suggest any significant abuse of the program. To the contrary, the security classification system appears to be well under control. Nevertheless, lSOO's comfort level with this assumption will increase when it is able to resume a full schedule of agency program reviews, including a sampling of each agency's classified product.

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