OTTAWA (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