Order Code RL34595
Intelligence Reform at the Department of Energy:
Policy Issues and Organizational Alternatives
July 28, 2008
Alfred Cumming
Specialist in Intelligence and National Security
Foreign Affairs, Defense, and Trade Division

Intelligence Reform at the Department of Energy: Policy
Issues and Organizational Alternatives
Summary
After the repeated urging of the Department of Energy (DOE), Congress in 2006
agreed to temporarily consolidate separate counterintelligence (CI) offices at the
Department of Energy and the National Security Administration (NNSA) into a
single CI office under DOE control. DOE had complained that the dual office
structure was ineffective. In permitting DOE to consolidate the two offices,
Congress reversed its 1999 authorization to establish a separate NNSA CI office —
a decision that at the time was prompted by congressional concerns over repeated
departmental security and counterintelligence lapses.
At the same time, in 2006, DOE combined its separate Offices of Intelligence,
and Counterintelligence into a new DOE office called the Office of Intelligence and
Counterintelligence. The Department reasoned that combining the disciplines of
counterintelligence and foreign intelligence under one integrated office would foster
synergistic cooperation that would lead to a more strategic and ultimately more
effective counterintelligence program.
This report analyzes both consolidations — the first authorized by Congress at
DOE’s request; the second initiated by DOE — and examines the impact of each on
the effectiveness of the Department’s CI program. A major oversight issue for
Congress is whether either, or both, organizational changes will strengthen the
Department’s CI program as intended. Some observers are concerned that the two
consolidations may have undercut CI capabilities.
Congress could maintain the status quo or choose from several alternative
organizational approaches, some of which continue to be discussed despite the most
recent organizational changes to the Department’s CI program. Such alternatives
range from maintaining the consolidated DOE/NNSA CI office but reversing DOE’s
decision to combine its formerly independent offices of foreign intelligence and
counterintelligence, to eliminating both consolidations.
Congress also could exercise several oversight options, ranging from conducting
classified CI briefings to commissioning a formal assessment of DOE’s current CI
reorganization.
This report will be updated as warranted.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
DOE Counterintelligence Critiques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Critics Blame Weak Counterintelligence (CI) on Several Factors . . . . . . . . 2
Fears That China Stole Nuclear Secrets Sparks CI Changes 1998 . . . . . . . . 3
The Turning Point . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Congress Adopts PFIAB Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Is a “Bifurcated” CI Structure Effective? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Debate Over Twin Office Effectiveness Continued . . . . . . . . . . . . . . . . . . . . 8
Congress Changes Course; Eliminates DOE/NNSA Bifurcation and
Authorizes Program Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Proponents of DOE/NNSA Consolidation Say It Strengthens CI . . . . . . . . 10
Critics Cite Negative Impacts of DOE/NNSA CI Consolidation . . . . . . . . 11
DOE Implements Internal Consolidation, Combining Offices of Intelligence
and Counterintelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Proponents of FI/CI Consolidation Say it Has Strengthened CI . . . . . . . . . 14
Critics of FI/CI Consolidation Argue It Has Undercut CI Capabilities
and Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Possible Organizational Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Alternative One: Eliminate the 2010 Sunset; Retain DOE’s FI/CI
Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Alternative Two: Maintain the 2010 Sunset But Establish an
Independent NNSA CI Office; Retain DOE’s FI/CI Consolidation . . 19
Alternative Three: Eliminate Both the 2010 Sunset and DOE’s
FI/CI Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Alternative Four: Maintain the 2010 Sunset Provision But Consolidate
All CI Within NNSA; Retain DOE’s Consolidated FI/CI Program . . 20
Alternative Five: Maintain 2010 Sunset; Eliminate DOE’s Consolidated
FI/CI Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Alternative Six: Place FBI in Charge of DOE CI . . . . . . . . . . . . . . . . . . . . 20
Maintain the Legislative Status Quo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Possible Oversight Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Alternative One: Classified Congressional CI Briefings . . . . . . . . . . . . . . . 21
Alternative Two: Commission a Formal Assessment of FI/CI
Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Alternative Three: Review DOE Compliance With the Law . . . . . . . . . . . . 22
Alternative Four: Codify Relevant Parts of PDD-61 . . . . . . . . . . . . . . . . . . 22
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Table 1: Statutory Role of the FBI in the DOE CI Program . . . . . . . . . . . . . . . . 24

Intelligence Reform at the Department of
Energy: Policy Issues and Organizational
Alternatives
Introduction
DOE Counterintelligence Critiques
Since its establishment in 1977, DOE has been repeatedly criticized for its
security and counterintelligence efforts — viewed as being so seriously deficient that
some observers believe DOE, through its actions, has “invited attack by foreign
intelligence services.”1 The General Accounting Office,2 the President’s Foreign
Intelligence Advisory Board, and the Intelligence Community, as well as DOE’s own
inspector general and security experts, collectively have issued numerous classified
and public reports — according to some estimates, more than 100 — in the last 30
years that have highlighted a litany of DOE security and counterintelligence
vulnerabilities. Because of these vulnerabilities, many believe that sensitive nuclear
weapons information has “certainly” been lost to espionage. In countless other
instances such information has been left vulnerable to theft and duplication.3
Although the damage to national security resulting from such lapses has been
difficult to calculate, DOE has been warned on many occasions that its “lackadaisical
oversight” could lead to an increase in the nuclear threat to the United States.4
According to some analysts, given DOE’s unwieldy bureaucratic structure,
security lapses should not be viewed with surprise. DOE was established in 1977 by
combining 40 diverse government organizations. The intention was to harness the
Nation’s research laboratories as part of a coordinated government effort to confront
an energy crisis brought on in part by creation of OPEC.5 Each agency, however,
came with its own bureaucratic structure and culture, and many had different if not
conflicting missions.
1 See President’s Foreign Intelligence Advisory Board, Science At Its Best/Security At Its
Worst, June, 1999, pp. 2-3. The report, one of the most comprehensive of its kind, is often
referred to as “The Rudman Report,” in recognition of former U.S. Senator Warren B.
Rudman, who served as Chairman of the President’s Foreign Intelligence Advisory Board
at the time the report was issued.
2 The U.S. General Accounting Office is now known as the U.S. Government Accountability
Office.
3 See President’s Foreign Intelligence Advisory Board, Science At Its Best/Security At Its
Worst, June, 1999, p. 13.
4 Ibid, p. II.
5 The Organization of Petroleum Exporting Countries.

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The agencies also differed in the importance they attached to security and CI.
Some, such as the Energy Research and Development Administration, home to the
Nation’s highly sensitive nuclear weapons program, viewed such matters as being
relatively more important. Others, such as the as the Interior Department’s Power
Marketing Administrations, attached a low priority to such matters. These
sometimes starkly diverging views, although having moderated over time, arguably
contribute to the cross-currents and conflicting pressures that have bedeviled DOE’s
security program and contributed to its lapses from the outset.
These varying views in turn may stem from certain built-in and enduring
tensions which to a large degree are inherent in DOE’s four principal missions.
Three of those missions — fundamental science, energy resources, and
environmental quality — thrive, indeed depend on open scientific inquiry. It is
DOE’s fourth mission, national security, that demands that security be the backdrop
for scientific inquiry.6 The result is an ever-present potential for conflict and an
enduring challenge to strike the right balance between open collaboration and
partnership, and security. So serious have been the ramifications of this challenge,
that one study has concluded DOE has never fully recovered from some of the
internal contradictions growing out of its own complicated creation.7
Critics Blame Weak Counterintelligence (CI) on Several
Factors

Although many critics blame DOE’s security problems generally on the tension
within DOE between open scientific inquiry and security, they tend to focus on what
they characterize as, inter alia, three specific issues: a high turn-over of
inexperienced top leadership, bloated and dysfunctional management, and an agency
culture that views the discipline of counterintelligence with disdain.
High leadership turn-over has been an enduring problem, according to
Department critics. They point to the eleven secretaries who have led the department
over an almost 30-year period. Although some secretaries have pushed aggressive
security reforms, they often have left office before having fully implemented their
proposals. Following their departures, the proposed reforms may be discarded or
forgotten. Another cited problem has been a lack of experience in national security
among some of those who have served as Secretary. Although DOE spends almost
a third of its budget — roughly 30 percent — on nuclear related functions, many of
its top leadership have lacked prior experience in such matters. As a result, security
and CI problems may often have been seen as lesser priorities, and decisions on such
matters left to lower-ranking officials who often have lacked either the incentive or
authority to take quick, decisive action.8
6 DOE’s national security program also depends on open scientific inquiry and international
collaboration, but in a secure and classified environment.
7 President’s Foreign Intelligence Advisory Board, Science At Its Best/Security At Its
Worst, June, 1999, p. 8.
8 Ibid, p. 5.

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A second factor cited, related to DOE’s security record is the Department’s
management structure which has been characterized by critics as bloated and
dysfunctional. Multiple bureaucratic layers reportedly have so diffused authority and
left accountability so erratic that “it [accountability] is now almost impossible to
find.”9 Consequently, security and CI shortcomings appear to have gone unaddressed.
Finally, critics blame DOE’s culture for contributing to an environment in which
legitimate CI concerns are viewed with ambivalence, at best, and open hostility, at
worse. The environment, it is suggested, is in large measure a natural and somewhat
ironic outgrowth of brilliance from DOE scientists, some of whom “bridle under the
restraints and regulations imposed by administrators and bureaucrats who do not
entirely comprehend the precise nature of the operation being managed.”10 Thus, to
some extent the very brilliance of its employees is cited as a significant contributing
factor to a bureaucratic culture which they say is thoroughly saturated with cynicism
and disregard for authority, and cavalier in its attitude toward security.11
Fears That China Stole Nuclear Secrets Sparks CI Changes
1998

DOE’s CI program received a particular serious jolt in 1998, when intelligence
evidence surfaced that indicated the People’s Republic of China (PRC) had
successfully stolen nuclear weapons secrets from the Department’s weapons
complex. This information led the Clinton Administration to conclude that the
Department’s CI program was in serious trouble and that a program overhaul could
not be put off.
In February 1998, President Clinton issued a decision directive (PDD-61)
instructing DOE to implement 13 reforms, the balance of which was geared to
strengthening the Department’s CI program. Among the most significant of the
reforms was one that required DOE to establish its first-ever independent
counterintelligence office — known formally as the Office of Counterintelligence
(OCI). The mission of the new office was to develop and implement a coherent and
comprehensive CI policy. A senior Federal Bureau of Investigation (FBI) executive,
with access to the Energy Secretary, was put in charge.
The President’s directive contained several additional initiatives. One
authorized the OCI director to oversee and fund all DOE’s CI functions, including
all direct CI operations and all of DOE’s laboratory-based CI field offices.12 A
9 Ibid, p. 4.
10 Ibid, p. 11.
11 Ibid, p. 6.
12 According to DOE, the Department currently operates 19 CI field offices, which are
located at its laboratories, science centers, plants, and site offices throughout the complex.
CI Field Offices are headed by Senior Counterintelligence Officers, seven of whom are
senior federal officers, with the balance being laboratory contract workers with extensive
CI experience. The mission of a CI Field Office is to develop and implement a CI program.
(continued...)

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second initiative required that DOE laboratories be contractually obligated to meet
certain CI goals, objectives, and performance standards. And lastly, senior laboratory
CI personnel were given direct access to laboratory directors.
Under a 1999 follow-on implementation plan, the OCI director’s authority was
expanded to include control over all CI programming, funding, and personnel matters
at DOE field offices.
PDD-61 represented an effort to address long-standing weaknesses in DOE’s
CI program. DOE’s CI program historically had never had a bureaucratic home of
its own. Instead, the program, invariably characterized as a “junior partner,” was a
component of a larger office – in the 1980s, the Office of Security, which was tasked
with physically protecting DOE facilities, and in the 1990s, the Office of Intelligence,
whose principal mission was to assess foreign weapons of mass destruction
programs. In each instance, the offices’ principal respective missions did not include
the development of an aggressive, unified, and comprehensive CI program aimed at
preventing espionage. And the development of such a program is generally
considered not to have begun until President Clinton issued PDD-61.
PDD-61 addressed other perceived weaknesses as well. Among them:
insufficient CI funding; inadequate Headquarters control and authority over its CI
field offices; uneven and irregular access by the Department’s CI officials to senior-
level DOE management; inadequately trained DOE CI employees; and a strained
relationship with the FBI, the agency DOE relied on for much of its
counterintelligence investigative expertise and resources.13
The Turning Point
Concerns about DOE’s CI program came to a boil in 1999, a year in which
Congress became more fully aware of DOE’s espionage vulnerabilities.14 In March
12 (...continued)
DOE also operates a cyber operational analysis center (OAC), which is managed by a senior
federal CI officer.
13 For a more detailed examination of the FBI’s counterintelligence role at DOE, see
Appendix 1.
14 Media reports of a recent allegation of espionage with a DOE connection involved PRC
spy Katrina M. Leung, who the FBI reportedly said was a 20-year Bureau informant they
now suspect was a “double agent” who provided classified material to the PRC. Leung
allegedly had affairs with two former FBI agents, William Cleveland Jr., who, until he
resigned his post on April 10, 2003, was Director of Security, at DOE’s Lawrence
Livermore National Laboratory, and James Smith. Leung received probation after pleading
guilty to a tax charge and lying. Smith pleaded guilty to a felony false statement charge in
2004 and was sentenced to probation and three months home confinement. Cleveland was
never charged with a crime. See Josh Gerstein, “Court Hears Arguments Over FBI Agent
Accused of Exposing Probe,” New York Sun, March 8, 2006. FBI officials reportedly said
at the time that every PRC counterintelligence case investigated by the Bureau since 1991
(continued...)

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of that year, allegations surfaced that a scientist employed by the Los Alamos
National Security Laboratory had failed to notify DOE officials of his contacts
officials of the People’s Republic of China (PRC). It also was alleged that the
scientist, a Taiwanese-born American named Wen Ho Lee, had failed to properly
safeguard classified material and had refused to cooperate with authorities with
regard to certain security matters. Lee was fired from his research position at Los
Alamos National Laboratory after allegedly failing a polygraph examination. He
later pleaded guilty to one felony count of unlawful retention of national defense
information.15
In May 1999, a bipartisan House Select Commission16 charged that the PRC had
stolen design information on the United States’ most advanced thermonuclear
weapons and was using the information to speed the building of its next generation
of thermonuclear weapons. The Commission concluded that the PRC had been
penetrating U.S. national weapons laboratories for years, and continued to do so.17
In June 1999, the President’s Foreign Intelligence Advisory Board (PFIAB)
issued an extraordinarily harsh assessment of DOE’s security practices. The Board
criticized DOE for the “worst” security record on secrecy that members said they had
ever encountered.18 It also reported that its examination had revealed a department
in denial over its security and counterintelligence vulnerabilities and failures, and
blamed DOE’s decades-long record of security failures on poor organization and a
failure of accountability. The Board concluded that with regard to security matters,
DOE was dysfunctional and incapable of reform.19
Despite its harsh criticism, the PFIAB dismissed assertions that DOE had
suffered wholesale losses of nuclear weapons technology as a result of espionage.
The Board, concurred, however, with an earlier U.S. Intelligence Community
assessment that had concluded the PRC had stolen classified U.S. nuclear weapons
14 (...continued)
may have been compromised by Leung, including that involving Wen Ho Lee. See Susan
Schmidt and Dan Eggen “FBI Assesses Potential Damage From Spy Scandal,” Washington
Post
, April 13, 2003, p. A04.
15 See James Sterngold, “Nuclear Scientist Set Free After Plea in Secrets Case; Judge
Attacks U.S. Conduct,” New York Times, September 14, 2000, p. A-1.
16 The Commission was known formally as the Select Commission on U.S. National
Security and Military/Commercial Concerns With the People’s Republic of China and was
chaired by then Rep. Christopher Cox.
17 See the Select Commission on U.S. National Security Military/Commercial Concerns
With the People’s Republic of China, Cox Commission, H.Rept. 105-851, May 25, 1999,
Overview, p. ii.
18 See President’s Foreign Intelligence Advisory Board, Science At Its Best/Security At Its
Worst, June, 1999, p. 1.
19 Ibid. pp. II-III.

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information that probably enabled it to accelerate its development of nuclear
weapons.20
To fix DOE’s security problems, the PFIAB recommended that policymakers
consider two options. The first option called for the creation of a semi-autonomous
agency within DOE that would be strictly segregated from the rest of the department,
be more mission focused and bureaucratically streamlined, and that would be devoted
principally to nuclear weapons and national security matters. The Board cited the
National Security Agency and Defense Advanced Research Projects Agency, both
elements of the Defense Department, as models of this approach.
A second option called for the creation of a new agency that would be entirely
independent of DOE and would be headed by an administrator who would report
directly to the President. The National Aeronautics and Space Administration and
the National Science Foundation were cited as models of this approach.
Congress Adopts PFIAB Recommendation
Over the opposition of the executive branch, which argued that PDD-61 offered
the best approach to resolving DOE’s security problems by mandating the
establishment of a single, unified Office of Counterintelligence — Congress
approved the PFIAB’s first option and created a semi-autonomous agency within
DOE. Designated the National Nuclear Security Administration (NNSA),21 NNSA
was placed in charge of all DOE national security-related nuclear programs.22
In establishing the new agency, Congress also created two separate
counterintelligence offices — placing the first one at NNSA and the second at DOE,
thus essentially codifying the Office of Counterintelligence initially established under
PDD-61. DOE’s office was made responsible for developing overall CI policy for
both DOE and NNSA, but implementing that policy only at non-weapons facilities.
NNSA’s CI office, designated the Office of Defense Nuclear Counterintelligence
(ODNCI), was given responsibility for implementing OCI-developed policy at
NNSA’s facilities, principally at the DOE weapons laboratories. The NNSA CI
office was to focus on protecting classified nuclear and related defense technology
at NNSA facilities, while DOE’s CI office was to concentrate on safeguarding all
other technology and DOE sites. The two offices were to share analytic and
20 Ibid. p.4.
21 NNSA facilities include the national laboratories (Los Alamos National Laboratory, Los
Alamos, NM; Lawrence Livermore National Laboratory, Livermore, CA; and Sandia
National Laboratories, Albuquerque, NM and Livermore, CA); NNSA’s CI programs are
located principally at these national laboratories, which also are referred to as DOE’s
“weapons laboratories.” NNSA facilities also include the nuclear weapons production
facilities (the Plantex Plant, Amarillo, TX; Kansas City Plant, Kansas City, MO; the Y-12
Plant, Oak Ridge, TN; the tritium operations facilities at the Savannah River Site, Aiken,
SC; and the Nevada Test Site, NV); and a service center at Albuquerque, NM. The U.S.
Navy reactor facilities also fall under NNSA.
22 See S. 1059; conference report, H.Rept. 106-301; and P.L. 106-65, signed into law on
October 5, 1999.

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investigative resources, leading some observers to characterize the arrangement as
a “partially bifurcated” CI program.
Is a “Bifurcated” CI Structure Effective?
Critics of the new structure questioned its effectiveness and in 2002, the
Commission on Science and Security,23 issued a report criticizing the bifurcated
program. The Commission’s report recommended that DOE reestablish a single,
unified program under the Department’s control that would be responsible for
counterintelligence across the DOE complex, including NNSA. The Commission’s
report stated:
Counterintelligence must be an enterprise-wide function, responsible for
counterintelligence issues anywhere within the DOE complex. Furthermore,
counterintelligence investigations, analysis, and all other counterintelligence
information must be developed within a unified organization and provided to the
Secretary and other senior officials without bureaucratic delays. This vital
function necessitates one organization with one chief of counterintelligence
reporting to the office of the Secretary.24
In urging the adoption of a unified CI program, the Commission said foreign
adversaries do not limit their espionage efforts to NNSA but search out attractive
targets across the DOE/NNSA complex. Moreover, they stated that visiting foreign
scientists, many from countries thought to be interested in conducting espionage at
DOE facilities, often travel to both DOE and NNSA sites.
A second study, issued in 2003 by the Office of the National Counterintelligence
Executive (NCIX),25 similarly concluded that the bifurcated structure “not only
served to further complicate the formidable challenge of managing CI at DOE, but
also endangered the goals and implementation of an effective CI program.”26
23 The Commission on Science and Security was established in October 2000 at the request
of then-Energy Secretary Bill Richardson to “...assess the new challenges facing the
Department of Energy in operating premier scientific institutions in the twenty-first century
in a manner that fosters scientific excellence and promotes the missions of the Department,
while protecting and enhancing national security.” See Commission on Science and
Security, Science and Security in the 21st Century, A Report to the Secretary of Energy on
the Department of Energy Laboratories, April 2002, p. 82. By the time the Commission
completed its report in 2002, former U.S. Sen. Secretary Spencer Abraham had replaced Bill
Richardson as DOE Secretary.
24 Commission on Science and Security, Science and Security in the 21st Century, A report
to the Secretary of Energy on the Department of Energy Laboratories, April 2002, p. 26.
25 The Office of the National Counterintelligence Executive is part of the Office of Director
of National Intelligence. One of its principal missions is to develop, coordinate, and
produce an annual national CI strategy for the U.S. Government.
26 See National Counterintelligence Executive, An Assessment of the Effectiveness of the
Division of the CI Programs at the Department of Energy and the National Nuclear Security
Administration
, 2003. p. 1.

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The NCIX report also stated that, “In light of the history of CI investigations that
foundered because of mis-communications within well-established agencies, the two-
office arrangement has raised the odds of missteps and problems.”27
NCIX blamed the dual-office structure for numerous day-to-day problems,
including duplicative and, at times, contradictory messages to field sites; mis-routed
sensitive CI information related to investigations; uncoordinated communications to
the FBI and the Intelligence Community; and dual, sometimes, inconsistent, program
tasking.28
According to one law enforcement officer interviewed by NCIX during the
preparation of its report, the two-office configuration “might some day lead the
department to miss a serious CI breach or prevent the conduct of an effective
investigation.”29 NCIX recommended that the two CI offices be consolidated within
DOE under one senior counterintelligence officer who would be responsible for a
Department-wide CI program and report directly to the Energy Secretary.30
The Directors of Central Intelligence and the FBI endorsed the NCIX findings
in separate letters to the Chairman and Vice Chairman of the Senate Select
Committee on Intelligence.31
In 2003, DOE Secretary Spencer Abraham publicly joined the debate, arguing
that partially bifurcated structure was “not optimal.” DOE had continued to complain
that the structure impeded the smoother functioning of the Department’s security
operations. The Secretary recommended that the two offices be combined and placed
under the control and authority of DOE.32
Debate Over Twin Office Effectiveness Continued
Despite the criticism, proponents of the new CI structure touted its
effectiveness, arguing that the NNSA office was focusing the kind of sustained
attention on CI at the laboratories that Congress had been demanding. They argued
that NNSA’s separate, dedicated CI office was vital if CI at NNSA’s weapons
laboratories was to receive the sustained attention Congress expected. They also said
27 Ibid. p. 2
28 Ibid. p. 10.
29 Ibid. p. 13.
30 Ibid. p. 3
31 See letters from Director of Central Intelligence George Tenet, June 9, 2003, and from
FBI Director Robert Mueller, July 11, 2003. Both letters were introduced into the record
during a July 13, 2004 hearing on DOE counterintelligence consolidation conducted by the
House Energy and Commerce Subcommittee on Energy and Air Quality.
32 For a more complete discussion of DOE’s position on the issue of CI bifurcation, see
testimony presented by Linton Brooks, Administrator, National Nuclear Security
Administration, before the House Energy and Commerce Committee, Energy and Air
Quality Subcommittee, July 13, 2004.

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that the bifurcated structure had proven successful in other DOE programs that
shared jurisdiction. They instead blamed any significant problems on ineffective and
non-cooperating program managers, rather than on the structure itself.
As each of the offices began to take on their own identities, Members of
Congress also appeared to develop diverse views of the effectiveness of the two
office structure. Rather than recombine the two offices under DOE control, as
Secretary Abraham had recommended, the Senate Armed Services Committee
approved the establishment of a single CI office, but placed it under NNSA control.
The House Armed Services Committee objected, and the Senate’s proposal died in
conference. But, the Conferees did agree to urge the two offices to improve
cooperation, noting in their report:
....that the NNSA was originally set up as a semi-autonomous agency, in large
part, to ensure that there would be adequate focus and priority placed on
counterintelligence activities. The conferees urge the counterintelligence offices
at DOE and NNSA to work together to ensure security of both DOE and NNSA
programs and facilities.”33
Congress Changes Course; Eliminates DOE/NNSA
Bifurcation and Authorizes Program Consolidation

In 2007, Congress reversed course, albeit reluctantly, and consolidated the two
CI offices into a single office within DOE.34 In agreeing to DOE’s recommendation,
however, Congress said it remained un-persuaded the Department had “fully and
faithfully” implemented the counterintelligence structure authorized in 1999, and it
stated that any of the perceived problems thought to stem from having two CI offices
could have been resolved by applying “greater management resourcefulness.”35
Congress said it remained skeptical that DOE could implement a strong security
program. Alluding to the Wen Ho Lee case, the Conference warned that re-
consolidation, together with DOE’s internal decision to combine its own Offices of
Intelligence and Counterintelligence under a new Office of Intelligence and
Counterintelligence, would leave DOE’s counterintelligence functions “organized as
33 The 108th Congress voted to retain the bifurcated CI structure. See Conf. Rept. 108-767,
p. 897, accompanying H.R. 4200, the FY2005 defense authorization bill.
34 P.L. 109-364, Sec. 3117. The legislation approved by Congress calls for the
disestablishment of NNSA and the transfer of its Office of Defense Nuclear
Counterintelligence to DOE’s Office of Counterintelligence, but under a sunset provision,
would reestablish NNSA’s CI office in 2010. As result of DOE’s internal consolidation of
its intelligence and counterintelligence offices in March 2006, the Office of
Counterintelligence no longer exists, per se. Counterintelligence is now over seen by the
Directorate of Counterintelligence, which is a component of DOE’s recently established
Office of Intelligence and Counterintelligence.
35 Conference Rept. 109-702 (2nd Sess.), p. 769, accompanying H.R. 5122, the FY2007 John
Warner Defense Authorization Act, which became P.L. 109-364.

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they were when the Department experienced significant counterintelligence
problems.”36
Congress adopted legislation that included some “safeguards.” First, the
legislation contained a “sunset” provision that effectively would reestablish NNSA’s
CI office in 2010. Second, the legislation established an Intelligence Executive
Committee within DOE to develop and promulgate CI policies. The NNSA
Administrator was designated a committee member. Third, the legislation
established a new position — the Intelligence and Counterintelligence Liaison —
within the staff of the NNSA Administrator to act as a liaison between NNSA and
DOE’s Office of Intelligence and Counterintelligence. Lastly, the legislation required
that DOE detail in its annual congressional budget submission the level of funding
requested for counterintelligence activities overall and the amount of such
counterintelligence funding requested by NNSA.37
Proponents of DOE/NNSA Consolidation Say It Strengthens
CI

Proponents of consolidating all counterintelligence programming within DOE
argue that such a unified structure has provided a number of benefits.
One such benefit, according to proponents, is increased accountability. Rather
than relying on two CI program managers with divided accountability, the Energy
Secretary and the NNSA Administrator now can hold a single individual ultimately
accountable for a single, unified Department-wide CI program.
Another benefit proponents cite — one that the Commission on Science and
Security underscored in its reported in 2002 report — is that consolidation has
provided DOE a unified bureaucratic structure through which the Department can
more effectively centralize control over CI programming across the DOE complex.
Under the previous partially bifurcated structure, responsibility for CI was shared
between the two offices. DOE’s Office of Counterintelligence developed CI policy,
which NNSA’s CI office then implemented at NNSA facilities. The arrangement
was said to lead to disagreements between the two offices, and DOE’s CI officials
questioned whether its NNSA counterparts were exceeding their mission and
developing their own CI policies. On this point, NNSA officials countered that DOE
failed to develop comprehensive and effective policies, and they therefore were left
with no choice but to develop their policies when necessary. Proponents and critics
appear to agree that the bifurcated structure contributed to the development of
divergent management philosophies, priorities, and interpretations and
36 Ibid.
37 P.L. 109-364, Sec. 323 states, “...In the budget justification materials submitted to
Congress...the amounts requested for the Department for intelligence and the amounts
requested for the Department for counterintelligence functions shall each be specified in
appropriately classified individual, dedicated program elements. Within the amounts
requested for counterintelligence functions, the amounts requested for the National Nuclear
Security Administration shall be specified separately from the amounts requested for other
elements of the Department.”

CRS-11
implementation of DOE CI guidance, and resulted in inconsistent CI practices across
the DOE/NNSA complex.38
A third benefit, one highlighted by NCIX in its 2003 report, is that consolidation
has eliminated, or certainly reduced, the occurrence of certain day-to-day problems
that stemmed from a two-office structure in which responsibilities sometimes
overlap. These problems reportedly included duplicative and at times contradictory
messages issued to field sites, mis-routed sensitive investigative CI information, and
uncoordinated communications to the FBI and the Intelligence Community.
Finally, consolidation, it is argued, has provided the official in charge of DOE’s
CI program — the Secretary of Energy’s Senior Intelligence Officer (SIO) —
exclusive authority to develop and implement a more strategically-oriented DOE-
wide CI policy. This is particularly important, it is suggested, given that NNSA’s
program was perceived as largely tactical, reactive, and ultimately geared to
uncovering espionage after the fact. According to proponents, consolidation has
resulted in the development of a more strategic, and therefore stronger CI program
— one that focuses predominantly on using foreign intelligence to determine what
DOE information and computer networks are most at risk of espionage. Equipped
with this knowledge, CI officials, the argument goes, increasingly have been able to
construct an aggressive CI program focused on preventing espionage before it occurs.
“We want to harness foreign intelligence to support counterintelligence,” said one CI
official. “If we can understand the offense (the plans and intentions of foreign
intelligence services), we can harness it.”39 Proponents point to the development of
the “Common Operational Picture” tool as an example of the kind integrative
initiatives that have been launched as a result of consolidation. This particular tool
provides CI officials a method by which to represent the CI threat geo-spatially,
permitting that CI analysis can be captured collaboratively and comprehensively
across the DOE/NNSA complex.
In pointing to the benefits of the NNSA/DOE consolidation, however,
proponents caution that a recent decision to transfer a substantial number of CI
headquarters staff to another location within the Washington metropolitan area could
have the effect of undercutting some of those benefits. The transfer, they argue, the
result of limited classified space at Headquarters, could undermine efforts to improve
program integration and ironically create another type of bifurcation.
Critics Cite Negative Impacts of DOE/NNSA CI Consolidation
Consolidation critics do not dispute that a unified office and single chain of
command improves accountability, but they cite several reasons why DOE/NNSA
consolidation has undercut the CI capabilities.
First, NNSA’s CI office focused exclusively on counterintelligence. In contrast,
DOE treats CI as a component of a larger integrated office — the Office of
38 Interviews with DOE officials, September-October, 2007.
39 Interview with senior DOE official, July 11, 2007.

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Intelligence and Counterintelligence — that also includes a Foreign Intelligence
Directorate (FI), which, among other tasks, assesses intelligence in order to identify
those DOE technologies most likely to be the target of espionage.40 As result of
placing CI within a larger structure, according to critics, DOE is unable to match
NNSA’ s more focused treatment. On this point, consolidation proponents argue that
DOE has always used all appropriate information and resources from the intelligence,
security and law enforcement communities to address CI concerns.
Compounding what they view as a structural bias is DOE’s decision to devote
comparatively more time, attention, and resources to developing its foreign
intelligence capabilities. This, critics suggest, has come at the expense of CI
capabilities.
Critics describe an emerging programmatic imbalance between foreign
intelligence (FI) and CI. They point to DOE’s history, which is one in which CI often
has been relegated to a secondary or supporting role, first to the DOE’s physical
security program in the 1980s and 90s, and now possibly to its FI program. These
critics argue that it is this historic trend that prompted Congress to establish NNSA’s
CI office in the first place. It was not lost on Congress, according to one senior CI
official, that DOE headquarters was “detached from the field reality” when it came
to dealing with CI issues. DOE Headquarters officials concede they have decided to
increase the focus on FI but that they are doing so as part of an overarching strategic
effort, the goal of which is to more effectively harness FI to support of CI. They
dispute that such support has come at the expense of counterintelligence.
Second, NNSA CI managers, some suggest, simply were more effective than
their DOE counterparts have been under the consolidated arrangement. It is
suggested that NNSA managers developed and implemented a number of laudable
practices. Among them: frequent communication between NNSA headquarters and
field personnel; regular laboratory visits by NNSA Headquarter CI officials;
consensus building on CI tactics and strategy; effective follow-up; and relatively
quick decision-making. Even in the one area some critics credit DOE’s consolidated
program for emphasizing — strategic CI — they fault DOE for what they argue has
been its failure to take and resolve some of strategic issues that are integral to any
successful strategic plan.
Third, NNSA’s CI methods and techniques were generally more effective than
those now being employed by DOE. Critics say the difference is one of emphasis.
NNSA placed greater reliance on non-confrontational briefings and debriefings of
laboratory employees, an approach that consolidation critics contend is more
effective in ferreting out espionage. DOE, it is suggested, is taking a harder-edged,
investigative approach. One critic, for example, compares DOE’s approach to
“dragnet tactics that assume folks are guilty until proven innocent.”41 NNSA,
according to this critic, pursued investigations when necessary, but generally relied
40 The Intelligence Directorate operates Field Intelligence Elements, which are located at
some DOE laboratories and assess intelligence related to science and technology trends and
foreign nuclear weapons systems.
41 Interview with senior DOE official, December 13, 2007.

CRS-13
on less aggressive techniques, in the belief that such an approach would generate
more useful information about possible espionage. “[NNSA’s philosophy] relied on
the workforce to help you,” this observer suggested. On this point, consolidation
proponents contend that DOE’s CI program has always employed a multi-disciplined
approach incorporating various CI tools such as investigations, analysis, cyber
activities, and CI training and awareness. They also argue that both programs were
mandated to follow the same CI procedures.
Despite these disagreements, critics and proponents appear to agree that a
unified CI program under a single chain of command is preferable. Consolidation
critics, however, suggest that the ultimate success of any CI program depends more
on effective leadership than its does on any particular bureaucratic structure. In this
regard, they state that DOE in the past has overseen a consolidated program and
argue that program effectiveness was undermined by ineffective leadership. One
consolidation critic conceded that the establishment of NNSA’s CI office may have
represented little more than an effort to “work around” what some viewed as DOE’s
historically weak CI management.42
Consolidation proponents counter that the DOE/NNSA consolidation has been
in place only since the beginning of 2007, and that it is taking root in the aftermath
of a prolonged period of organizational turmoil characterized in part by high
management turnover.43 As a result, they argue, efforts to build consensus, improve
communication, and foster collaboration are still in their infancy. They also question
the quality of some of the CI evaluation assessments conducted by NNSA CI office
and say that such assessments are now being undertaken in accordance with DOE and
IC CI standards.
DOE Implements Internal Consolidation, Combining Offices
of Intelligence and Counterintelligence

In 2006, the same year Congress agreed to consolidate the DOE and NNSA
counterintelligence offices, DOE decided to combine its Offices of Intelligence and
Counterintelligence under a new Office of Intelligence and Counterintelligence. The
mission of the new office is to provide the Secretary, his staff, and other DOE
policymakers with timely, technical intelligence analyses on all aspects of foreign
nuclear weapons, nuclear materials, and energy issues worldwide.44 The office is led
by the Department’s Senior Intelligence Officer, who reports directly to the Secretary
of Energy.
The Office of Intelligence and Counterintelligence is comprised of four
directorates: intelligence, counterintelligence, management, and energy and
42 Interview with senior DOE official, December 12, 2007.
43 Consolidation proponents say that four directors have led DOE’s CI program since 1998,
one of whom served only one year.
44 See [http://www.energy.gov/organization/staffoffices.htm]. Although this particular
Internet site contains no apparent mention of the Office’s CI mission, the Office does
contain a CI Directorate.

CRS-14
environmental security. The Directorate of Intelligence is tasked with assessing the
capabilities, intentions, and activities of foreign powers, organizations, and persons
who may be targeting DOE for espionage purposes. The Counterintelligence
Directorate is charged with protecting DOE’s classified information from espionage.
The Management Directorate houses support activities for the other two directorates,
including human resource services, contract support, and facility planning. And the
Energy and Environmental Security Directorate is charged with examining the impact
of certain energy and environmental issues on U.S. national security.
Proponents of FI/CI Consolidation Say it Has Strengthened CI
Proponents of this consolidation say that by establishing intelligence and
counterintelligences directorates in a single office, DOE has strengthened its CI
program.
Specifically, proponents contend a more integrated FI/CI structure will make it
easier for the Department’s Senior Intelligence Officer to foster cooperation between
the two disciplines and to develop and implement a CI program that is both more
synergistic and strategic in approach. Previously, the two programs worked together,
but on a more independent basis that consolidation proponents argued was
detrimental to both. Under the new arrangement, they say, communication,
cooperation, and collaboration between two disciplines already have improved. As
result, officials have been able to more effectively harness foreign intelligence
analysis and use it to fashion more strategically focused CI plans that concentrate on
what DOE information and computer networks are most at risk of espionage.
Specifically, proponents point to increases in CI and FI collection, the number of
investigative cases opened, and in the pace of offensive operations against national
security targets. Further, DOE officials say the consolidation program conforms with
the intent of the FY2004 Intelligence Reform and Terrorism Prevention Act, a major
goal of which was to encourage the Intelligence Community to adopt a more
integrated corporate approach.
Proponents also say that FI/CI consolidation has helped to correct a prevailing
mis-perception within the Intelligence Community that DOE had two Senior
Intelligence Officers — one for intelligence and one for counterintelligence.
Although the Department always has had a single SIO, the organizational confusion
reportedly contributed to weakening the SIO’s overall program authority which in
turn undercut accountability and the operational cohesion between FI and CI. “...Can
we do the mission if CI and FI are separate?” one official asked. “I’m convinced you
cannot.”45
Proponents further suggest that consolidation has enabled DOE to begin the
process of establishing an “intelligence brand,” thus simplifying the challenge of
distinguishing DOE’s intelligence products from those of other Intelligence
Community agencies. Doing so, according to these proponents, will help to reverse
a commonly held Intelligence Community view that DOE’s FI program is a mere
extension of the CIA, and that its CI program an extension of the FBI, since detailees
45 Interview with senior DOE official, July 17, 2007.

CRS-15
from the CIA and FBI respectively historically headed the two DOE programs. The
argument is that establishing a “branding” will enable DOE to more effectively
highlight DOE’s unique contributions to policymakers.
Lastly, proponents suggest, consolidation has enabled DOE, through its SIO,
to begin formulating and implementing a training program that eventually will lead
to the development of DOE cadres of senior intelligence and counterintelligence
professionals, thus ending its historic reliance on CIA and FBI detailees.46
Critics of FI/CI Consolidation Argue It Has Undercut CI
Capabilities and Authorities

Critics point to what they contend are at least three indicators that CI/FI
consolidation has undercut counterintelligence capabilities and authorities.
First, critics insist that CI resources at some laboratories have been cut, and they
blame the reductions in part on increased FI spending. They point to at least two FI
initiatives — the Energy Attache Program47 and the Collection Management
Initiative48 — and suggest that funding for both has been provided at the expense of
the CI program.
They also point to CI budget constraints, citing several other factors. Among
them: a continuing resolution that kept CI spending flat, despite DOE requests for
increase49; the transition of some DOE laboratories from non-profit to a for-profit
status, which has resulted in higher payroll and other costs; and a reported DOE
Headquarters CI contingency fund, which has resulted in 10 percent of the overall CI
budget being held in reserve to cover unexpected costs.50
DOE Headquarters officials deny that CI funding has been diverted to support
FI. Rather, they say they have increased spending for CI, but that those increases have
gone unrealized because DOE has operated under short-term continuing resolutions
since 2006. But they appear to generally agree with consolidation critics who
attribute at least some of the blame for budget constraints on the non-profit to for-
profit transition that is underway at some laboratories and the CI contingency fund.
They contend, however, that no laboratory CI office is doing with less but that “each
46 Interview with senior DOE official, July 17, 2007.
47 This initiative is designed to place overt DOE Intelligence Attaches in U.S. embassies
where they will focus on energy security issues.
48 The Collection Management Initiative involves the production and dissemination of
increased quantities of Intelligence Information Reports, raw intelligence reports derived
from DOE intelligence collected passively from DOE personnel by DOE CI personnel.
49 Critics assert that any lingering impact of the Continuing Resolution is long over and, yet,
no field CI office has received any budget relief. They further contend that DOE’s overall
level of CI effort is decreasing, including at the NNSA laboratories.
50 DOE CI and FI budget data are classified, preventing a more detailed unclassified
examination.

CRS-16
office has gotten little more than the year before.”51 Critics counter that CI offices
at each of the six largest laboratories — Los Alamos, Lawrence Livermore, Argonne,
Pacific Northwest, Oak Ridge, and Sandia — have absorbed 10 percent funding cuts
over the last year, despite increases in the DOE Headquarters CI budget and despite
the fact that the Department is no longer operating under a continuing resolution.52
Second, critics say the authorities of CI Deputy Director have been eroded since
the previously existing independent CI office was eliminated and absorbed by the
Office of Intelligence and Counterintelligence. Whereas the director of that
independent office controlled CI spending and staff, the CI Deputy Director in the
new Office of Intelligence and Counterintelligence does not and that control resides
with the Deputy Director of Administration. And while the Deputy Director, like his
independent office predecessor, continues to have access to the Energy Secretary —
generally viewed as one of PDD-61’s more significant provisions — his access to the
Secretary appears to be at the pleasure of the Director of Intelligence and
Counterintelligence, to whom the Deputy Director now reports.
Third, critics say they are concerned by suggestions made to senior DOE
officials that PDD-61 is dated and should therefore be placed on “an inactive status.”
Critics contend that some of the directive’s most important provisions have been
ignored, allowing the document to be characterized as “dated.” They cite as an
example the elimination of independent Office of Counterintelligence, a principal
provision originally contained in the directive. Critics believe certain provisions,
however, remain in effect and should be preserved. One such provision requires that
DOE’s laboratory contracts contain certain CI program goals, objectives, and
performance measures. Another requires senior CI officials at the laboratories to
have direct access to laboratory directors.
Those advocating that PDD-61 should be placed on an “inactive status” say they
embrace the CI vision embodied in the directive but insist that some of its key
provisions have been superseded by changes in law.53 One change is that the role of
the FBI director in selecting a DOE CI chief has been eliminated. [See Appendix for
a general discussion of the FBI’s role in DOE CI.] Under current law, the Secretary
of Energy has that authority. Another change is that there is no longer a requirement
that the CI chief be a senior FBI executive, which PDD-61 required. Finally, in
another change, the Secretary is expected to “coordinate” his selection with the
Director of National Intelligence, a relatively new position which was created under
the FY2004 Intelligence Reform and Terrorism Prevention Act, and which did not
exist at the time PDD-61 was issued in 1998. Under PDD-61, the FBI Director
recommended a selection to the Attorney General.
Despite these concerns, critics say they agree that communication between FI
and CI officials could be improved. But, they question whether this goal could have
51 Interview with senior DOE official, December 19, 2007.
52 E-mail exchange with senior DOE official, February 25, 2008.
53 Interview with senior DOE official, July 17, 2007.

CRS-17
been achieved through means other than a wholesale reorganization which they
characterize as highly disruptive.
Concerns of some CI officials that FI/CI consolidation has weakened CI
capabilities and authorities appear to run deep.54 One senior CI official has
reportedly resigned because of cuts to his laboratory’s CI program. According to
another CI official, budgets for CI programs at DOE’s six largest laboratories were
cut at the beginning of FY2008, despite a double-digit increase in the Department’s
overall CI budget.55 These funds, according to this official, are being used to fund
projects at DOE Headquarters. As a result of the cuts, this official said, CI analytic
capability has been degraded.
Some CI officials argue that CI program managers increasingly are being asked
to carry out FI assignments, the result of which, in some cases, is to reduce the time
and resources devoted to CI. “We watched this (de-emphasis of CI) go into peaks
and valleys...it is a huge mistake to demote CI to FI.”56 One laboratory CI official,
concerned by what he perceived to be a diminution of CI, but also by the general
level of disruption resulting from consolidation, complained that, “Until the (CI/FI)
reorganization, I spent 10 percent of my time on Headquarters stuff. Now it’s
reversed.” He said the CI/FI consolidation itself was “unraveling.” “(DOE)
Headquarters doesn’t appreciate how deep the field concerns are,” another said,
referring the views of CI officials at DOE’s weapons laboratories.57
These officials contend that communication between Headquarters and the
laboratories — never very good — has been made worse by the consolidation.
Finally some officials complain that although one of the principal objectives of
consolidation was to foster a more strategic approach to CI, that certain strategic
goals are not being met. They cite as examples DOE’s inability to adequately
address issues of personnel security clearances, and the CI implications of DOE
interactions with foreign scientists, whether such interactions occur with visiting
scientists in the Department’s laboratories, or when DOE laboratory employees travel
overseas.
Consolidation proponents acknowledge such criticisms, but suggest they
underscore continuing communication problems between DOE Headquarters and CI
field offices rather than an actual diminishment in CI operational capabilities.58 They
also suggest that there are “misperceptions about how DOE Headquarters is
managing overall CI spending, but insist that the each of DOE’s six largest
54 This impression was derived from a series of interviews conducted with senior DOE
officials in October of 2007.
55 According this official, since the beginning of the fiscal year funding in the case of some
laboratories has been restored, at least in part.
56 Interview with senior DOE official, November 2, 2007.
57 Interview with senior DOE official, October 17, 2007.
58 E-mail from senior CI official, April 28, 2008.

CRS-18
laboratories has received “budget/spending” authority increases in FY2008.59
Finally, they concede that some observers could conclude that some CI funding is
being used to support FI efforts — critics have cited CI spending in support of the
new collection management initiative — but argue that such spending ultimately has
served CI interests.60
Finally they characterize the consolidated business model DOE Headquareters
has adopted as sound and emphasize that consolidation is a work in progress beset
by normal organizational growing pains.61
Possible Organizational Alternatives
Congress may deem the current approach to be the appropriate one, which
would have the effect of reestablishing NNSA’s CI office in 2010 and retaining
DOE’s FI/CI program consolidation. If organizational changes are sought,
policymakers might consider several questions. First, should the 2010 sunset
provision currently in law be retained and NNSA’s CI office be reestablished in
2010? Second, should DOE’s FI/CI consolidated program be retained, or should
Congress direct DOE to reestablish independent FI and CI offices within DOE?
Within the context of these two overarching questions, the range of possible options
include (1) eliminate the 2010 sunset provision contained in P.L. 109-364 and not
reestablish NNSA’s CI office in 2010; retain DOE’s FI/CI consolidated program; (2)
maintain the 2010 sunset provision and reestablish NNSA’s CI office, but as an
office independent of DOE, dropping the previously existing bifurcated CI structure;
retain DOE’s FI/CI consolidated program; (3) eliminate both the 2010 sunset
provision and DOE’s FI/CI consolidated program, reestablishing independent FI and
CI offices within DOE; (4) maintain the 2010 sunset provision and reestablish
NNSA’s CI office, but consolidate within that office DOE’s CI directorate; retain
DOE’s FI/CI consolidated program; (5) maintain the 2010 sunset provision and
reestablish NNSA’s CI on a bifurcated basis under which NNSA and DOE would
share certain CI resources; eliminate DOE’s FI/CI consolidated program and
reestablish independent FI and CI offices within DOE; and (6) place the FBI in
charge of DOE CI.
Alternative One: Eliminate the 2010 Sunset; Retain DOE’s
FI/CI Consolidation

This approach would eliminate the sunset provision contained in P.L. 109-364
and not reestablish NNSA’s CI office in 2010 while retaining DOE’s FI/CI
consolidated program. Proponents could argue that in doing so, the gains resulting
from the DOE/NNSA consolidation — improved accountability and enhanced CI
capabilities — could be preserved and expanded. With regard to DOE’s consolidated
59 Ibid.
60 Ibid.
61 Ibid.

CRS-19
FI/CI program, they could argue that gains made as a result of consolidation could
be preserved and expanded by retaining the current structure.
Opponents could argue that retaining the sunset provision and reestablishing
NNSA’s CI program would bring needed attention and focus to CI in DOE’s
weapons laboratories. With regard to DOE’s consolidated FI/CI program, they could
argue that gains made as a result of consolidation could be preserved and expanded
by retaining the current structure.
Alternative Two: Maintain the 2010 Sunset But Establish an
Independent NNSA CI Office; Retain DOE’s FI/CI
Consolidation

A second alternative would be to maintain the sunset provision and to
reestablish NNSA’s CI program in 2010, but as an independent entity unencumbered
by the previously existing bifurcated structure; DOE’s FI/CI consolidated program
would be retained. Under the previously existing structure, NNSA’s CI office was
restricted to implementing DOE CI policy, and it shared certain analytic and
investigative resources with its DOE counterpart.
Proponents could argue that an independent NNSA CI office could be more
effective than its predecessor, since, under this alternative, the office would have the
responsibility for both developing and implementing CI policy at all NNSA facilities.
They could assert that this approach could eliminate the tensions and bureaucratic
inefficiencies that resulted from the previous twin office structure. With regard to
DOE’s consolidated FI/CI program, they could argue that gains made as a result of
consolidation could be preserved and expanded by retaining the current structure.
Opponents could argue that re-establishing NNSA’s CI office could disrupt the
continuity and progress that have resulted under the current consolidated
arrangement. They also could assert that establishing an independent CI office at
NNSA could require additional funding, since the office would no longer be sharing
certain resources with its DOE counterpart. With regard to DOE’s consolidated
FI/CI program, they could argue that gains made as a result of consolidation could
be preserved and expanded by retaining the current structure.
Alternative Three: Eliminate Both the 2010 Sunset and DOE’s
FI/CI Consolidation

A third alternative would be to eliminate the sunset provision contained in P.L.
109-364 and to not reestablish NNSA’s CI office in 2010. DOE’s FI/CI consolidated
program also would be eliminated under this alternative and an independent CI office
with budget control reestablished. Proponents could argue that eliminating the sunset
provision would eliminate redundancies and additional costs that result from a dual
or bifurcated CI program management structure. Eliminating DOE’s consolidated
FI/CI program, it could be argued, would address the concerns expressed by some
that CI interests have been subordinated to FI priorities.

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Alternative Four: Maintain the 2010 Sunset Provision But
Consolidate All CI Within NNSA; Retain DOE’s Consolidated
FI/CI Program

A fourth alternative would be to maintain the sunset provision and reestablish
NNSA’s CI office in 2010, but shift control over all CI program functions, including
DOE’s, to the new NNSA office; DOE’s FI/CI consolidated program would be
retained.
Proponents could argue that the reestablishment of an NNSA office under which
all CI, including DOE’s, would improve program effectiveness because of NNSA’s
record focusing more attention on CI. With regard to DOE’s consolidated FI/CI
program, they could argue that gains made as a result of consolidation could be
preserved and expanded by retaining the current structure.
Opponents could contend that such an approach could disrupt DOE’s continuing
efforts to construct a strategic CI program within the Department and jeopardize the
gains that have been achieved. They also could argue that NNSA’s previously
existing CI office was overly tactical in its approach to CI and failed to place
sufficient emphasis on strategic issues. With regard to DOE’s consolidated FI/CI
program, they could argue that gains made as a result of consolidation could be
preserved and expanded by retaining the current structure.
Alternative Five: Maintain 2010 Sunset; Eliminate DOE’s
Consolidated FI/CI Program

This approach would eliminate both organizational consolidations — the
NNSA/DOE CI consolidation as well as DOE’s FI/CI consolidation. Proponents
could argue that such an approach would strengthen CI authorities and capabilities
by restoring NNSA’s CI office and an independent CI office within DOE.
Opponents could argue that reversing the two consolidations could undermine
the benefits derived from having a more CI integrated program interacts more closely
with the FI discipline.
Alternative Six: Place FBI in Charge of DOE CI
Under this approach, Congress could eliminate DOE’s CI program altogether
and place it under the FBI’s authority. Although the FBI currently has special agents
co-located at certain laboratories, under this alternative, these agents would take on
more assertive leadership roles.
An advantage of such an alternative is that the FBI is the government’s premiere
CI organization, and therefore is arguably uniquely suited by training and experience
to undertake this task.
A disadvantage could be that an FBI-controlled CI program could have a
chilling effect on the possible cooperation of DOE employees, particularly scientists

CRS-21
and engineers, who historically have chaffed at FBI’s involvement in DOE’s CI
program.
Maintain the Legislative Status Quo
Under this approach, the NNSA/DOE CI consolidation would be reversed in
2010 and NNSA’s CI office reestablished; DOE’s FI/CI consolidated program would
be retained.
Proponents of the status quo could contend that the NNSA/DOE consolidation
has failed to improve accountability and overall CI program effectiveness. With
regard to DOE’s consolidated FI/CI program, they could argue that gains made as a
result of consolidation could be preserved and expanded by retaining the current
structure.
Opponents could argue that NNSA’s CI program was effective and should be
reestablished. With regard to DOE’s combined FI/CI program, they could argue that
consolidation has undermined CI authorities and capabilities and had the effect of
relegating CI to a “second-class” status within the Department.
Possible Oversight Alternatives
The Congress also could consider adopting one or more of several oversight
alternatives. The range of alternatives includes (1) instituting classified CI briefings;
(2) commissioning a formal assessment of the benefits derived from DOE’s FI/CI
consolidation; (3) ensuring DOE compliance with current law; and (4) codifying
portions of PDD-61.
Alternative One: Classified Congressional CI Briefings
Congress could require that DOE brief the appropriate congressional committee
or committees on the types of CI methods being used, especially on the Department’s
most significant pending CI cases.
An advantage of such an approach would be that it could provide Congress with
significant new insight into DOE’s overall CI efforts. Such briefings could also lead
to a better understanding of the strategic interests of certain foreign powers and could
provide insights into how effectively DOE is interacting and cooperating with the
Intelligence Community at large.
A disadvantage of this alternative would be that such briefings could be
considerably time-consuming; the number of such cases can be numerous, detailed,
and complicated. Such cases also are invariably quite sensitive. DOE might try to
restrict such briefings to committee leadership. As a result, committee leadership
could find themselves assuming a significant oversight responsibility.

CRS-22
Alternative Two: Commission a Formal Assessment of FI/CI
Consolidation

A second approach would be for Congress to commission an assessment of any
benefits that have been derived from the DOE FI/CI consolidation. Such an
assessment could enable Congress to better evaluate whether the consolidation has
indeed improved communication between the two disciplines, as DOE has suggested.
As part of such an assessment, the Department’s Senior Intelligence Officer could be
requested to demonstrate with concrete examples how the Department’s FI/CI
consolidated program has led to certain program synergies which could not have
otherwise been achieved through greater management resourcefulness.
Other than the cost that may be associated with conducting such an assessment,
there is no apparent disadvantage to such approach.
Alternative Three: Review DOE Compliance With the Law
Another approach Congress could pursue is to ensure that DOE complied with
the law when it consolidated the Office of Intelligence and Counterintelligence under
the new Office of Intelligence and Counterintelligence. Some have questioned
whether the consolidation is consistent with current law, suggesting that
consolidation amounted to a “transfer of function” from the Office of
Counterintelligence or the Office of Intelligence to a new layer of bureaucracy within
the Office of Intelligence and Counterintelligence. 62
Alternative Four: Codify Relevant Parts of PDD-61
Under this approach, Congress could codify certain PDD-61 provisions. Two
such provisions could be viewed as being particularly relevant. The first requires
that DOE’s laboratory contracts contain specific CI goals, objectives, and
performance standards. The second provision stipulates that senior laboratory CI
personnel be granted direct access to laboratory directors. Codifying these provisions
would ensure that they are legally binding and not subject to termination by
administration fiat.
A possible disadvantage of such a approach is that it could limit certain
executive branch flexibility.
62 For a more detailed treatment of this issue, see S.Rept. 109-259, which accompanied S.
3237, the FY2007 Intelligence Authorization Act, pp. 44-45. The Senate Select Committee
asserted that DOE’s “consolidation effort is arguably inconsistent with current law.” The
Committee said that such an inconsistency would exist if the consolidation amounted to a
“transfer of function” from the Office of Counterintelligence or the Office of Intelligence
to a new layer of bureaucracy within the Office of Intelligence and Counterintelligence.

CRS-23
Appendix
The Historical Role of the FBI63 in the Development of the DOE CI
Program. The 1998 PDD-61 formalized what until then had been a more informal
FBI role in supporting DOE’s CI Program. The directive established an independent
Office of Counterintelligence and directed that the FBI director select and place in
charge of the office a senior FBI representative.
A more recent example of the FBI’s formal role is the joint FBI-DOE “Agents-
in-the Labs” (AIL) Program. The AIL Program is designed to support the FBI
Counterintelligence Division’s strategic priorities, which include:
1. Preventing or neutralizing the foreign acquisition of weapons of mass
destruction (WMD) technology or equipment;
2. Preventing the penetration of the Intelligence Community, U.S. Government,
or contractors;
3. Preventing the compromise of U.S. critical national assets; and
4. Conducting aggressive CI operations against most significant threat nations.64
Under this program, the FBI has 16 Special Agents at 12 DOE locations working
with DOE CI professionals to execute the CI mission.65
Despite its expanded role, the FBI has more recently lost some of its authority
over the program. Congress eliminated the FBI director’s authority to select a
director for DOE’s CI program, and the individual serving in that role is no longer
required to be a senior FBI executive. Under current law, the Secretary of Energy
now exercises the selection authority. (See Table 1 below).
Whether the congressional action eliminating the FBI’s role in the selection
process will result in the diminishment of the FBI’s role in DOE’s CI program
continues to be the debated. Whether FBI assumes a diminished role turns in part on
whether DOE develops the capability to recruit, train, and retain its own CI
63 The FBI has played and continues to play an important role in the CI Program because it
is lead agency for counterintelligence within the United States, where all DOE labs are
located. It should be noted, however, that even within the discipline of counterintelligence
there are differing approaches. Arguably, the FBI’s approach relies heavily, although not
exclusively, on CI investigations and operations to prevent espionage. While foreign
intelligence agencies recognize the importance of investigations, generally, their CI focus
is on understanding how the adversary operates to collect intelligence and proactively
engaging in tactics to prevent the adversary’s techniques from being successful. Military
CI organizations, generally, tend to view CI through the prism of force protection and use
a variety of CI tools to reach that end. CRS is unaware of any empirical studies which have
assessed how these approaches have performed relative to one another.
64 Interview with FBI officials, November 6, 2007.
65 Ibid.

CRS-24
professionals and thus reduce its historical reliance on the FBI. If it is unable to do
so, FBI’s potentially diminishing role could be viewed in a less positive light.
Table 1. Statutory Role of the FBI in the DOE CI Program
Authority
Role of the FBI
Personnel Authority
PDD-61 (Feb. 1998)
A new Office of CI (OCI)
Attorney General
was created. The Director
nominated, at the
of the new OCI will be
recommendation of the
[emphasis added] a senior
Director, an FBI SES-level
executive from the FBI.
Special Agent to assume
The Director of the FBI,
OCI leadership. Three
along with other officials,
OCI leaders from the FBI
including the Director of
served under this
Central Intelligence, as
authority.
involved principles, will
provide support to the
Secretary of Energy in the
implementation (of PDD-
61) and continuation of an
effective CI Program.
Section 3232, National
Provided statutory basis
Diluted the requirement
Defense Authorization Act
for separate Office of
that the Director, OCI be
of 2000 (P.L. 106-65).
Intelligence and OCI, both
an official of the FBI. FBI
Codified at 50 U.S.C,
reporting directly to
has consultative role in
Section 2422.
Secretary. Stated that the
appointment of leader of
Director of the FBI may
new NNSA - ODNCI.
detail [emphasis added],
any employee of the FBI
to the Department for
service as Director, OCI.
Bifurcated CI Program by
establishing a separate
Office of Defense Nuclear
CI (ODNCI) within the
NNSA. Secretary to
appoint Dir., ODNCI, in
consultation with
Dir. of
the FBI.

CRS-25
Authority
Role of the FBI
Personnel Authority
Section 3117, National
Consolidated CI across
Amended NNSA Act to
Defense Authorization Act
NNSA and DOE
reflect that the Secretary
of 2007 (P.L. 109-364).
(reversing NDAA of
of Energy may choose the
Codified at 42 U.S.C.,
FY2000). Dissolved
Director OCI and Director
Section 7144(b) note.
ODNCI within NNSA, and
OI from SES, SIS, SNIS,
transferred personnel and
or “any other Service that
functions to DOE CI.
the Secretary, in
Established Intel
coordination with the
Executive Committee. CI
Director of National
budgets to be tracked
Intelligence, considers
separately, according to
appropriate.”
that which is requested for
CI for NNSA facilities and
Outside of being part of
other DOE facilities.
the Intelligence
Community and, therefore,
possibly having indirect
influence with the DNI,
the FBI no longer has any
formal statutory role in the
recommendation of
candidates for the
Director, OCI position.