A secret government report on security procedures surrounding the release of market moving monthly jobs numbers found “unexamined flaws in the process” that potentially put the data at risk of disclosure, according to a new letter obtained by CNBC.
The letter was sent Tuesday by GOP Representative Darrell Issa, chairman of the House Oversight and Government Reform committee to Secretary of Labor Hilda Solis.
In it, Issa refers to an analysis of security procedures surrounding the Department of Labor’s release of the monthly employment data that was conducted by Sandia National Laboratories, the same agency charged with protecting the government’s nuclear arsenal.
The security review — which has never been made public — was requested by the Department of Labor and has been used by the Department to justify new efforts at preventing early leaks of the jobs data to financial markets.
The changes have focused on the so-called “lock ups” ahead of the monthly data release in which select financial reporters are allowed access to the numbers in a sealed room a half hour before they are released to the public. This allows journalists time to digest the information, add context, and write their stories ahead of the 8:30 a.m. release time.
But several news organizations objected to the changes, which would require them to use government computers, notebooks and pens, among other high security procedures.
In a Capitol Hill hearing last week, Issa requested that the Department of Labor show him the security report that justified the new restrictions on the media. But he apparently didn’t like what he saw when he reviewed it on June 8.
In his letter to Solis, Issa wrote that “Sandia found unexamined flaws in the process that potentially put the sensitive economic information handled by the Department at significantly more risk than the lockup procedures.”
And he alleged that the Department of Labor “ignored Sandia’s warning that other Department procedures put the sensitive economic information handled and disseminated by the Department at potentially much greater risk.”
Sandia, Issa wrote, “was prevented from examining the full scope of the department’s handling of economically significant data...Sandia did not examine all potential vulnerabilities in the data dissemination process.”
Jennifer Kaplan, a spokesperson for the Department of Labor, told CNBC that Sandia was hired specifically to look at lock up security, but the report noted that there were other aspects to the data collection and release process that it did not review. “Being a thorough team, the review team noted that the facility it was looking at was but one part of a larger process,” she said. “The other parts of the process were not part of Sandia’s review.”
Separately, CNBC has obtained an email from Department of Labor spokesman Carl Fillichio to several news organizations in which he suggests that the full range of new security procedures will not be rolled out all at once for the upcoming July 6 data release, but may instead be put in place gradually for those news organizations that have been issued new credentials for access to the lock up.
"We’ve been working all along with the Labor Department to find a mutually acceptable plan to address any concerns about the release of economic data, and we welcome the chance to give that process more time," said Ashley Huston, Vice President of Corporate Communications for Dow Jones & Co.
Greg Babyak, Head of Government Affairs for Bloomberg LP, saidL: "We are delighted that the Department of Labor—consistent with their commitment made to Chairman Issa and the House Oversight and Government Reform Committee—will produce a new timetable for the completion of a new policy. This will provide the time needed to modify the current lockup conditions and not undermine the First Amendment or risk market chaos."