Shifts in Defense Security Policy Tied to Pressure

Last year, in the middle of the undercover investigation into massive fraud and bribery in the nation’s weapons contract system, defense security officials moved to limit access to the Pentagon for more than 1.4 million retired military personnel but were rebuffed when high-ranking retirees objected to the proposal, The Times has learned.

In a draft 1987 directive, the security officers cited fears about “an increase in terrorism,” but a Pentagon official said in an interview that the more immediate concern was the potential vulnerability to the nation’s defense security apparatus and its secrets.

Second Attempt Fails

A year earlier, in another attempt to tighten security, officials moved to cut by as much as 50% the rolls of those who had access to classified material, including more than 1 million defense contractors and their consultants. The effort reduced the number of people holding security clearances by 40%, but many other initiatives were never fully implemented because they were opposed by defense contractors and consultants.

There is no indication that these actions were related to any of the specific allegations that have been disclosed about the current investigation. However, both instances illustrate the enormous influence of the defense industry, showing that the Pentagon was swayed from taking significant measures to safeguard the nation’s secrets by pressure from former military officers and industrialists who use their special access to benefit their business.

The reduction of the number of those with security clearances was recommended in a November, 1985, report entitled “Keeping the Nation’s Secrets,” prepared under the direction of retired Army Gen. Richard G. Stilwell. In the report, a 14-member panel of security experts also recommended that defense consultants be subject to periodic briefcase searches as they exit the Pentagon.

A year later, the department still had not begun this search policy because it “require(d) further staffing (consultation) with the defense industry,” according to an internal Pentagon report prepared in April, 1987.

A similar “staffing” process, however, torpedoed the proposal to keep military retirees, who retain their Defense Department identification cards, from entering the Pentagon and other military facilities at any hour of the day or night.

Criticism Mounted

When then-Defense Secretary Caspar W. Weinberger announced the new policy in June, 1987, it quickly drew criticism from veterans organizations, and former generals and admirals--including some of the most valued consultants and contractors in the defense industry--descended on the Pentagon and pounded on desks. Before it had even taken effect, the policy was withdrawn, though the cards now can be used to enter the Pentagon only during normal working hours.

In their effort to limit access to the Pentagon, the security planners also considered cutting the number of passes issued to defense contractors, Pentagon spokesman Glenn E. Flood said Friday. That proposal came up in “brainstorming sessions,” he said, but it never reached the stage of official policy.

While access to the Pentagon building is a crucial tool for defense consultants, access to classified information is far more important to the trade and efforts to limit the circulation of such secret documents have been less successful than hoped by officials.

Weinberger, citing “the grave harm that a single individual, with or without traitorous intent, can cause by compromise of classified information,” ordered an inspection of the entire Defense Department and cut the number of people given access to classified material further.

Nowhere was concern higher than in the Navy, defense officials say. In the wake of a pair of highly damaging spy scandals involving the service, the Navy moved most aggressively to stem the flow of classified documents.

Navy Promised Cuts

In June, 1985, then-Navy Secretary John F. Lehman Jr. had promised that the Navy would halve the number of people who held security clearances to work on Navy projects, then estimated to stand at about 2 million.

At that time, then-Assistant Navy Secretary Melvyn R. Paisley, a central figure in the expanding fraud investigation, had access to the nation’s most coveted and closely held military secrets. Government sources have alleged that Paisley arranged an elaborate scheme under which high-level Pentagon officials smuggled classified documents out of the Pentagon and allowed him to copy them with the aid of his wife.

As the Navy’s research and development chief, Paisley presided over work on such ultra-sensitive technologies as submarine listening and quieting devices, stealth aircraft and missiles, satellite reconnaissance projects and electronic jammers.

Although Lehman’s order had stripped many Navy consultants of their security clearances, Paisley maintained his status when he left the Defense Department in March, 1987. Paisley had planned to consult under contract to the chief of naval research, Rear Adm. J. B. Mooney, a position that would have ensured him continued access to highly classified documents.

Webb Cancels Arrangement

James H. Webb Jr., who succeeded Lehman as Navy secretary, abruptly canceled this arrangement on April 13, 1987, Navy spokesman Lt. Kenneth Ross said. It could not be determined whether Paisley retained official access to classified documents as a subcontractor to a defense contractor or under a consulting arrangement with a different military service.

Regardless of his clearance status, investigators have said that Paisley continued to see documents that were designated as secret because they dealt with defense contractors’ bids.

James E. Gaines, Paisley’s close deputy in the Navy Department and one of six Pentagon officials stripped of their access to secret documents Tuesday, is suspected of being a major supplier of this classified and proprietary material to Paisley, according to a document in the investigation.