A reader sent this in recently.  I have already been trying to find out about Kathleen Watson and Richard Lawhorn, of Defense Security Service, and someone who works for Boeing named Timothy J. McQuiggan.  I haven’t had a lot of luck using normal online search tools, but found out today, I’ve been misspelling Mr. McQuiggan’s name. (See comments on earlier posts from the last couple of weeks.)  

This article is disturbing. I will continue to work on this.   I will check with my contacts I have on the east coast and in the Washington DC area to see if I can find out anything specific, particularly about the truth of what has been happening in DSS, (that this reader is intimating at), but did not leave contact information so I can follow up with him or her.  I understand how intimidated and afraid people in the government and working in industry are now, due to the extreme retribution they face if they try to do something about the unethical or criminal behavior they are observing.  If anyone can enlighten us, please comment or email.  -GFS 

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G. Florence-

If the officials,  (that can actually do something), only knew the truth about Watson and the DSS.

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U.S. Defense Tech Security Called ‘Swiss

Cheese’

By WILLIAM MATTHEWS

Published: 16 Apr 16:51 EDT (12:51 GMT)

     As the value of the U.S. dollar declines, investing in U.S. defense firms

becomes more attractive to foreign companies. That worries Rep. Duncan

Hunter, R-Calif., who fears more foreign ownership will mean more pilfered

defense technology secrets.

     “This is not irrational fear or veiled protectionism, this is a real national

security concern,” Hunter assured his colleagues on the House Armed

Services Committee April 16. “We are in a period where industrial espionage

is on the rise.”

     But globalization of the defense industry seems

inevitable.

     “We’ve got people with lots of cash” in the rest of the

world, and American companies “that are desperate for cash.” The increase

of foreign entities buying U.S. defense companies “is going to be a problem

for years to come,” Hunter said.

     So, how able is the United States to protect its defense secrets from prying

foreign investors, the Armed Services Committee wanted to know.

Not very, said witnesses from the Pentagon and the Government

Accountability Office (GAO).

     A “safety net” of agencies and policies designed to protect classified

industrial information “right now is Swiss cheese,” said Ann Calvaresi-Barr,

the GAO’s director of acquisition and sourcing management.

It’s not as bad as it was two years ago, said Kathy Watson, director of the

Defense Security Service. But improvements are coming slowly.

     The DSS is a little-known agency within the Defense Department that

determines which defense companies qualify for access to classified

information. It awards clearances to company officials and evaluates “foreign

ownership, control or influence” over U.S. defense companies.

When she took over as director in 2006, Watson said the DSS was

underfunded and understaffed. Today, the agency receives an adequate

budget and has been allotted an additional 145 personnel – but so far, only

about one-third of the new jobs have been filled, she said.

     The agency still relies on paper files scattered among 71 field offices, Watson

said. And while it has a computer system and is entering data, “it’s not the

system of the future,” Watson told committee members.

Calvaresi-Barr said a GAO evaluation in 2005 showed that the Defense

Security Service did not systematically collect and analyze information to

assess the effectiveness of its operations. As a result, the agency does not

know whether certain violations are increasing nor can it identify patterns of

security violations and then plan how to keep classified information from

being compromised, she said.

     DSS agents also lacked basic understanding of complex transactions, such

as the security implications of foreign hedge funds buying interests in U.S.

defense firms. That is increasingly common, and “it’s difficult to know where

the money is coming from and who the players are,” Calvaresi-Barr said.

Watson said DSS employees are receiving more training is those sort of

transactions.

     The GAO has not re-evaluated the DSS since Watson has begun making

reforms, Calvaresi-Barr said. “We are very pleased” to hear that DSS is

working to strengthen defense industrial security, she said.

     DSS is hardly the only weak link. There are numerous agencies, laws,

regulations, policies and processes intended to protect critical defense

technology, and among them “there are alarming gaps,” Calvaresi-Barr said.

http://www.owlcti.com/pdfs/Swiss_Cheese_and_DSS.pdf

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