April 30, 2013 / 6:21 PM / 5 years ago

UPDATE 1-Canada admits defense ministry vulnerable to security threats

* Canada shaken last year by spying scandal
    * Watchdog reports problems with contractor screening

 (Releads with comments from defense minister)
    By David Ljunggren
    OTTAWA, April 30 (Reuters) - Canadian Defence Minister Peter
MacKay admitted on Tuesday his department has failed for years
to combat the risk of security leaks from contract workers who
are not being screened properly.
    The admission could lead to further embarrassment for the
military after it emerged last year that a Canadian navy officer
had passed secrets to Russia for years before he was caught.
    MacKay made his comments after Parliament's official
watchdog, the auditor general, rapped the Defence Department for
failing to ensure that all private contractors receive security
clearance for sensitive jobs. The auditor general first flagged
the problem in 2007.
    "I agree with the auditor general that the Department of
National Defence is not acting expeditiously to address key
security concerns. They must do better," MacKay said at a news
conference held to address the report's findings.
    MacKay said a special security team was looking into his
ministry's practices. He said he wanted to see an interim report
by this autumn.
    The defense ministry, national police and two intelligence
agencies use private contractors to carry out many sensitive
tasks, and must seek security clearance for these workers.
    But Auditor General Michael Ferguson said that did not
always happen and complained the government had not done enough
to address problems outlined in the 2007 auditor general's
report. Guidelines on who needs clearance are inconsistent and
not always applied properly, he said.
    "Although the government has made a number of improvements
... in our opinion significant weaknesses remain," he wrote.
"Contracts are sometimes awarded to those who lack the
appropriate security clearance."
    The government amended policies after the 2007 report, but
Ferguson said the changes did not clarify whether firms with
access to protected and classified information were required to
hold a security clearance.
    "This is an important gap that could result in inconsistent
application of the policy and thus introduce additional security
risk," he said.
    In the 2011-12 fiscal year, about 27,000 security clearance
requests were filed, of which 1,400 had been in the system for
almost eight months, well beyond the supposed maximum 75 days.
    A further 1,100 requests remained from previous years.
    Ferguson said defense ministry and police employees,
frustrated by the amount of time needed to gain security
permits, would sometimes allow a person with no clearance to
work in a classified area as long as they had an escort.
    In other cases, all classified material in a particular area
would be removed before the contractor started work.
    "This practice fails to address identified security
requirements and may result in inadequate security for
projects," he said.
    Canada's security standards came under scrutiny last year
after the arrest of navy Sub-Lieutenant Jeffrey Delisle on
charges of spying for Russia. He was jailed for 20 years in
February this year.
    Officials told a sentencing hearing that allies had
threatened to withhold intelligence from Canada unless it
tightened security procedures. Along with the United States,
Britain, Australia and New Zealand, Canada belongs to the
so-called "Five Eyes" group of nations that share intelligence.
    MacKay said the Delisle case "puts further focus on the need
for screening".
    The defense ministry said it agreed with all of Ferguson's
comments and would take action.
    Ferguson also found that some contract employees at the
top-secret Communications Security Establishment Canada, which
gathers electronic intelligence, had been allowed to start work
before gaining security clearance.
    He reported no serious problems at the Canadian Security
Intelligence Service agency.

 (Reporting by David Ljunggren; Editing by Janet Guttsman,
Sofina Mirza-Reid and Peter Galloway)

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