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On 6 February 1997, at 0930, a meeting of the Financial Disclosure Working Group was convened at the offices of the Security Policy Board Staff. In attendance were:


1. The meeting was opened by Mr. Thompson who thanked everyone for attending and gave brief synopsis of the events of the last year that pertain to the financial disclosure issue.

2. After the initial financial disclosure form was referred to the Security Policy Board the question whether or not the form should contain values was not reconciled. The Deputy Attorney General, Jamie Gorelick, rendered an opinion that amounts should be included on a financial disclosure form. The Security Policy Board was of the opinion that ranges should be included in lieu of actual amounts. The Security Policy Board Staff then convened a meeting at the Financial Fraud Institute in Glynco Ga. to craft a form using ranges. Upon completion of that effort, the form was referred to the Security Policy Forum and three options were presented; 1) recommend to the SPB that the new form be adopted as is, 2) simplify the form and recommend approval or 3) explore the utility of an expanded financial investigation as either an adjunct or an alternative to the form. The Forum elected option 3 and referred the matter to the PSC for action. The PSC then directed the FD Working Group to reconvene and address this matter. The current purpose before the FD Working Group is to construct the financial investigative element of a background investigation that would satisfy the requirement for a form. This effort may include some attention to the adjudicative aspects associated with the BI. Mr. Thompson then surrendered the floor to the chair, Mr. Peter Nelson.


1. Mr. Nelson. began by asking Mr. Kelly of CIA to describe the status of the agency financial investigation endeavor Mr. Kelly indicated the FD form has been forwarded to the entire agency population, contractors and detailees. Within the agency it has been sent, and may be completed, electronically. As might be expected, some resistance has been noted but ADCI Tenet has reaffirmed his commitment to the effort. The collection effort is in the very early stages with 30 April as the deadline for filing. Subsequent analysis will include the use of an algorithm for screening.

2. Mr. Nelson then indicated the target population for an expanded financial investigation should probably be the T.S. and above candidates. Those carrying only a SECRET or CONFIDENTIAL clearance number in the millions and clearly do not warrant such additional attention The group concurred.

3. Mr. Nelson then asked the group to consider the efficacy of screening the target population via the Fincen Large Cash Transactions database. DIS currently screens a portion of their investigative subjects through Fincen databases and arrived at a 2% hit rate. It was brought to the group's attention that there also exists a Fincen "8300". This database deals with transactions over $10,000 performed at institutions other than banks, i.e. automobile dealerships, jewelers etc. It was noted that it takes 12 hours of computer time to screen 50,000 subjects and, consequently, resources will be an issue. The group agreed that such a screening effort holds promise and will be discussed further.

4. The use of the credit report was then discussed. All seemed to agree that the field investigator ought to have a copy of the credit report or at least a summary. Customs currently does this. It was stated that several consecutive credit reports need to be examined to search for significant and unexplained changes in financial status. The practical problems associated with getting the credit report to the investigator are an unknown at this point.

5. Another area to be addressed is the methodology used by the investigator himself/herself i.e. what questions should be asked of the subject during the subject interview and what questions should be asked of a source. Two documents were submitted which enumerated different questioning modes. Mr. Thompson will combine the two into a strawman which will be discussed at the next meeting.

6. It was volunteered that Customs has a travel database, Text II, which might be used in conjunction with, or as a component of, the financial investigation. Existing commercial databases may also provide some assistance but they are spotty and often do not contain universal indicators. The group agreed that some retraining of investigators and adjudicators will undoubtedly be necessary. The nature, extent and scope of that training will be dictated largely by the particulars of the investigative vehicle developed.

7. The group will make every effort to achieve a revenue neutral solution. It nevertheless must be recognized that an expansion of an investigation performed on over a million subjects may unavoidably entail additional time and/or revenues.

8. The next meeting will be held on 4 March 1997 at 0930 at the SPBS conference room.

Terry Thompson




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