“Ladies and Gentlemen, welcome to today’s hearing on the National Industrial Security Program:  Addressing the Implications of Globalization and Foreign Ownership for the Defense Industrial Base.  I’m pleased that we are able to focus on this important topic. 

 “All too often, the pace of events and the demands of war can so consume us that we have a hard time stepping back and looking at the defense industrial base and how it is changing.  Today’s hearing does just that by exploring how the Department of Defense works to protect the classified information in the hands of the private sector companies who develop, build, and maintain defense systems.  These companies are home to the vast majority of our classified information, and the National Industrial Security Program is the primary means for ensuring that this information is protected.

 “It has long been this nation’s official policy to be open to the rest of the world.  We open our markets to goods from all countries, and we are open to foreign investment. Closer to home for this committee, we have sought to be interoperable with NATO allies, sharing standards, technology and information on our tactics and procedures.    We have provided exceptions to various domestic source restrictions for companies located in NATO allies. 

 “The story for our defense industry is no different.  We have allowed for foreign investment in our defense industry, and developed mechanisms like government security committees on corporate boards to ensure that national security is protected.    All of these policy choices are predicated on two fundamental assumptions:  that in working more closely together, we are all made stronger, and that reasonable measures can be taken to protect that which must be protected while remaining open in most things.

 “Today, we will examine in greater depth what reasonable measures need to be taken to protect U.S. national security.  Industry is changing as the economy globalizes.  How rapidly are issues of foreign ownership, control, and influence impacting the defense industry as a result? Will new investment vehicles like hedge funds and sovereign wealth funds require us to change how we determine what constitutes foreign ownership?    Can the National Industrial Security Program keep up with the scope and pace of these changes?  Is the Defense Security Service staffed, trained, and equipped to implement the policy?

 “Here today to help us answer these questions are Mr. Toby Sullivan, Deputy Under Secretary of Defense for Counterintelligence and Security, Ms. Kathleen Watson, Director of the Defense Security Service, Dr. Bill Schneider, Chairman of the Defense Science Board, and Ms. Ann Calvaresi-Barr, Director of Acquisition and Sourcing Management at GAO.  Also at the table is Mr. Greg Torres of the Department of Defense who is here to answer questions.  Welcome all. 

 “Before we ask for your testimony, I turn to my friend and colleague from California, Duncan Hunter for any comments he would like to make.”