Classified Information Security Event EFCOG Fall Workshop October

Classified Information Security Event EFCOG Fall Workshop October 21, 2015 UNCLASSIFIED Operated by Los Alamos National Security, LLC for the U. S. Department of Energy's NNSA

Agenda § Event Overview § Timeline § Investigation Results & Potential Violations § Enforcement Outcome (Mitigation of Penalties) § Lessons Learned UNCLASSIFIED Operated by Los Alamos National Security, LLC for the U. S. Department of Energy's NNSA Slide 2

The event involved potential unauthorized disclosure, consisting of “loss of control of classified matter” § December 2012 – LANS discovered that it could not document the disposition of two classified legacy parts – Parts manufactured in the 1960’s for the underground test program – Parts not required to be accounted for pursuant to then existing security requirements (parts contained accountable amount of depleted uranium) § April 2013 – LANS internal investigation concluded – Likelihood of compromise of classified information was low – Destruction documentation was not required in 2005 -06, when the parts in question likely were appropriately destroyed UNCLASSIFIED Operated by Los Alamos National Security, LLC for the U. S. Department of Energy's NNSA Slide 3

The timeline related to this event stretched over multiple years Dec 2012 LANS discovered MC&A inconsistencies April 2013 Internal LANS investigation completed Jan 2013 LANS identified non-compliances and reported in SSIMS 2012 11/14/13 LANS received OE Notice of Intent to Investigate 4/24/13 Report closed in SSIMS Week of 12/9/13 OE onsite investigation 2013 8/12/14 OE enforcement conference; LANS factual accuracy provided 5/20/14 OE investigation report issued 2014 UNCLASSIFIED Operated by Los Alamos National Security, LLC for the U. S. Department of Energy's NNSA 6/29/15 LANS submitted response to PNOV 5/27/15 LANS received PNOV 7/28/15 LANS received FNOV 2015 4

The investigation report cited four potential violations of classified information security requirements # LANS Position at Enforcement Conference – clarifying information was provided as support Description of Potential Violation 1 Failure to provide timely notification Notification was timely and conservative of an incident of security concern Note: not cited in FNOV 2 Failure to adequately define potential risk (disposition pathways, physical security) LANS incident evaluation was thorough, conservative and compliant 3 Failure to control classified information No evidence that LANS failed to control classified matter 4 Failure to implement a comprehensive self-assessment program NNSA approved self-assessment program UNCLASSIFIED Operated by Los Alamos National Security, LLC for the U. S. Department of Energy's NNSA Slide 5

Civil penalties were mitigated based on corrective actions and clarifying information provided § PNOV assessed a $247, 500 financial civil penalty – Cited three violations – one Severity Level I and two Severity – – – Level II violations; continuing violation Penalty was initially calculated by OE to be $385, 000; mitigated for corrective actions associated After enforcement conference, LANS provided factual accuracy document and affidavits LANS submitted letter to OE requesting reconsideration challenging severity of violations and argued that civil penalties proposed were excessive LANS’ continued focus during the investigation was factual accuracy and providing clarifying information, resulting in a positive outcome. UNCLASSIFIED Operated by Los Alamos National Security, LLC for the U. S. Department of Energy's NNSA Slide 6

Civil penalties were further reduced based on additional clarifying information provided § FNOV assessed a $192, 500 financial civil penalty – Penalty reduced based on LANS letter and additional supporting – information provided • Eliminated per day penalty that PNOV had identified as continuing violation • Further consideration of LANS corrective actions No change to severity of violations LANS’ continued focus during the investigation was factual accuracy and providing clarifying information, resulting in a positive outcome. UNCLASSIFIED Operated by Los Alamos National Security, LLC for the U. S. Department of Energy's NNSA Slide 7

Lessons Learned – this investigation § Factual accuracy – continued follow up § Corrective actions – proactive discussions § Mitigation of penalties § Understanding of rules associated with investigation – 30 day response deadline – Citations associated with violations UNCLASSIFIED Operated by Los Alamos National Security, LLC for the U. S. Department of Energy's NNSA Slide 8

Lessons Learned – general § PAAA role § Teaming with legal counsel § PAAA engagement in investigation – Interviews – Planning § Strategy § Document request § Formality – OE interaction UNCLASSIFIED Operated by Los Alamos National Security, LLC for the U. S. Department of Energy's NNSA Slide 9