CNS settles with DOE, NNSA over improper shipment, storage of classified records

 

Consolidated Nuclear Security LLC has reached a settlement agreement with federal officials over the improper shipment and storage of classified archived records at the Y-12 National Security Complex in Oak Ridge.

The settlement agreement with the U.S. Department of Energy and National Nuclear Security Administration requires CNS, which manages and operates Y-12, to implement corrective actions and pay a $73,000 monetary remedy.

The settlement agreement was entered into on July 23 between CNS, NNSA, and DOE’s Office of Enterprise Assessments’ Office of Enforcement.

In a July 13 letter, NNSA Administrator Lisa E. Gordon-Hagerty and Kevin L. Dressman, acting director of the Office of Enforcement, said CNS made a decision in 2016 to vacate an off-site records storage facility on Pine Ridge that had met DOE requirements.

To vacate that building, CNS sent boxes of inactive archived records, dating back to 1943, to one of three U.S. National Archives and Records Administration facilities: unclassified records went to two different federal records centers based on whether the records were textual or non-textual (e.g., films), and classified records, regardless of the medium, were transferred to a federal records center that is authorized to store classified information.

The transfer of textual records that were believed to be unclassified began in December 2016 and continued until the transfer was suspended in March 2017, when it was discovered that CNS had transferred classified information to a federal records center that was not authorized to store it.

“CNS’s classification review of the information involved in this security event identified textual data containing classified information up to and including Secret/Restricted Data,” Gordon-Hagerty and Dressman said in their July letter.

The federal records center that received the information has access controls and security measures in place, as required by the National Archives and Records Administration, but those protection measures do not meet DOE’s requirements for the protection and control of classified information, Gordon-Hagerty and Dressman said.

“DOE considers this a preventable event and the result of a lack of attention and carelessness toward classified information security requirements,” the two federal officials said. “CNS did not identify or properly protect and control classified information from unauthorized disclosure. Furthermore, CNS’s job scoping did not identify special circumstances or conditions possibly present given the historical nature of some archived records and potential risks due to the change in protection for the assets associated with this security event.”

Uncleared individuals accessed the classified inactive archived records during the “security event,” according to the settlement agreement.

CNS discovered the “security event” on March 16, 2017, and reported it through a safeguards and security system.

DOE’s Office of Enterprise Assessments’ Office of Enforcement started investigating the incident in September. The results of the investigation, “Improper Shipment, Storage, and Unauthorized Access to Classified Information,” were provided to CNS early this year, in a report dated January 17.

When they decided to enter into the settlement agreement, the NNSA and Office of Enforcement considered CNS’s immediate actions during the initial stages of developing and executing its recovery plans, Gordon-Hagerty and Dressman said.

“The Office of Enforcement and NNSA also placed considerable weight on CNS’s re-evaluation of its initial corrective action plan for this event,” the federal officials said. “CNS’s revised corrective action plan has matured significantly and includes actions recognizing the importance of work planning and engagement with security personnel.”

In response to a reporter’s inquiry Tuesday, CNS issued this statement: “When classified records were discovered among inactive archived records initially stored off-site, we self-reported the discovery and then cooperated with DOE’s Office of Enforcement investigation into the event. CNS is committed to ensuring the security of all records, and we have implemented corrective actions to improve our processes and practices.”

The Office of Enforcement and NNSA said they will continue to closely monitor CNS’s implementation of DOE classified information security requirements until the issues associated with the settlement agreement are resolved.

In the settlement agreement, CNS is required to develop and “expeditiously execute” a plan to retrieve archived record boxes that pose a potential risk of containing classified information. CNS must also ensure that corrective actions focus on more effective project execution related to the handling of classified information. The agreement has been signed by Gordon-Hagerty, Dressman, and CNS President and Chief Executive Officer Morgan Smith.

What happened

The settlement agreement said onsite records storage at Y-12 reached capacity in early 2000, and archived records were stored in several different buildings throughout the site.

But the buildings were not compliant with NARA requirements for protecting stored records from fires and natural disasters, even though they were compliant with the requirements for storing classified information.

In 2004, to ensure compliance with NARA requirements, the Y-12 contractor leased the off-site records storage facility on Pine Ridge, a short drive away on a ridge top overlooking the east end of the plant. The off-site facility was approved for classified storage in 2005, and all records—both classified and unclassified—were transferred there.

But CNS decided in 2016 to leave that leased space and implemented the decision by sending the boxes of inactive archived records to the three NARA facilities (two unclassified and one classified).

“CNS records management personnel determined that the relocation of over 30,000 boxes of unclassified and classified archived records to FRCs (federal records centers) did not meet CNS’s criteria for a ‘formal project’ and therefore did not develop a formal project plan for this activity,” the settlement agreement said. “These personnel coordinated the transfer process with personnel at the three FRCs designated to receive Y-12 archived records with minimal advance coordination with CNS security personnel. They also decided that a special security plan was not required and that their existing security processes and procedures were sufficient to proceed. The job scoping did not identify special circumstances or conditions possibly present given the historical nature of some archived records and potential risks due to the change in protection for the assets associated with this security event.”

The Office of Enforcement investigation report in January said CNS did not properly validate the contents of historical archived records boxes, which had traditionally been stored in areas approved for classified storage, before shipping them to a federal records center that was not approved to receive and store classified information.

“In the absence of all required protection and control measures, classified information remained improperly secured at the FRC (federal records center) for seven months, and classified information was accessed under the control of uncleared FRC personnel,” the settlement agreement said.

Among the corrective actions taken by CNS since then:

1. temporarily suspending shipments of archived records to the federal records center,
2. traveling to the records center to retrieve the classified documents that were discovered,
3. conducting an onsite inspection at the federal records center of 84 boxes of archived records that were in the same CNS shipment of boxes that had contained classified documents, and
4. conducting two 100 percent inspections of all the boxes remaining at the off-site records storage facility on Pine Ridge.

Requesting a settlement, CNS in November cited its demonstrated track record for transparent reporting, timely reporting, a thorough investigation, and corrective actions, according to the agreement.

Responding to the investigation report in February, CNS said it had established corrective action plan objectives meant to strengthen its planning processes to ensure that risks associated with offsite material movements are addressed, prevent new defects from being introduced into archived records, relocate records when the risk has not been demonstrated to be low, and evaluate whether alternatives to records destruction by the federal records center would be viable and reduce risk, the agreement said.

You can see a notice of the settlement agreement here.

You can see the settlement agreement here.

More information will be added as it becomes available.

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