From the U.S. Government Accountability Office, www.gao.gov Transcript for: Security of Federal Facilities Leased from Foreign Owners Description: Audio interview by GAO staff with Keith Cunningham, Assistant Director, Physical Infrastructure Related GAO Work: GAO-17-195: Federal Real Property: GSA Should Inform Tenant Agencies When Leasing High-Security Space from Foreign Owners Released: January 2017 [ Background Music ] [ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. It's January 2017. The federal government leases facilities for many federal agencies, including high-security facilities for agencies like the FBI and the Drug Enforcement Administration, which conduct classified operations and process or store sensitive data in those spaces. If the spaces are in buildings with foreign owners, how is the government addressing potential threats to sensitive information and the employees who work there? A GAO team recently examined government leasing in foreign-owned buildings. Jacques Arsenault sat down with Keith Cunningham, an assistant director in GAO's Physical Infrastructure team, to talk about what they found. [ Jacques Arsenault: ] Your team looked at high-security federal facilities that are leased from foreign owners. About how many facilities are we talking about here, and what types of agencies are using them? [ Keith Cunningham: ] We found 25 leases of space from foreign companies. The agencies which operate in this conduct a broad range of operations, including law enforcement and holding personally identifiable information. Most of the agencies are listed in our report, but four of them decided that their information was too sensitive to release to the public. As for the countries of origin where these buildings are owned, they include also a number of different countries, including China, Canada, Israel, and South Korea. [ Jacques Arsenault: ] So then, what kinds of risks might these situations present? [ Keith Cunningham: ] First of all, foreign investment in America is a good thing. It increases competition and can lower lease rates. But it does introduce a number of risks. There are cyber and physical security risks due to the owner's access or potential access to the building, but there's also a risk of money laundering. The State Department found that the U.S. is a likely spot for money launderers. [ Jacques Arsenault: ] So we have 25 leases, and it sounds like there are some risks that are involved, but I assume there are also some steps that can be taken to address these risks? [ Keith Cunningham: ] Sure. When an agency knows who the owners are, they can assess the risks, and they can restrict things like access to the building or even helping decide who operates the building. Without knowing that, they can't take those precautions. The problem starts with not knowing who the owners of the buildings are. The agencies who are in the buildings, they don't lease directly from the companies. They go through the government's landlord, or GSA. And GSA doesn't have any policies or practices for identifying the country of origin of the building's owner. [ Jacques Arsenault: ] So it may be that GSA themselves don't necessarily know who owns the building. Or if they do know, they're not necessarily notifying the agencies that they're using? [ Keith Cunningham: ] Yeah. The first thing we did in this job was ask GSA for a list of the buildings that were owned by foreign governments, foreign companies, but the list they provided was not reliable. So we had to build our own list, and when we built the list of the 25 different leases and we found that most of the agencies in those did not know that their building was owned by a foreign company. [ Jacques Arsenault: ] Can you talk about the recommendations that GAO is making to GSA in this report? [ Keith Cunningham: ] Sure. The issues in this report are fairly complicated, but our recommendations were straightforward. First, GSA needs to figure out who the owners of these buildings are-the actual owners. Second of all, when the owner is a foreign company, they need to inform the tenants. Tenants can only prepare for risks they know about. [ Jacques Arsenault: ] And finally, what would you say is the bottom line of this report? [ Keith Cunningham: ] The bottom line is foreign investing in the United States can be a good thing, but it does come with risks, and, when you're talking about law enforcement investigations and personal information like Social Security numbers, the risks are real. But they can be controlled if the tenants know who the building owner is. [ Background Music ] [ Narrator: ] To learn more, visit GAO.gov and be sure to tune in to the next episode of GAO's Watchdog Report for more from the congressional watchdog, the U.S. Government Accountability Office.