Security questions lead State to dump custom app

Security questions lead State to dump custom app

Excel replaces budgeting software created by team of programmers from the former Soviet Union

By Tony Lee Orr

GCN Staff

Concerned about security risks, the State Department has replaced a custom budgeting database program installed at 170 embassies around the globe with Microsoft Excel 97.

The FBI is investigating the database management software and its maker, Synergy International Systems Inc., many of whose programmers are from Armenia, a former Soviet-bloc country, State and company officials said.

Before the department decided to replace the Vienna, Va., company's software with Excel, embassy offices had been using the software to create their mission performance plans.

The department paid about $1 million to develop and implement the software, said Wayne Rychak, deputy assistant secretary for countermeasures and information security in State's Diplomatic Security Bureau.

But after the Dec. 8 arrest of Russian diplomat Stanislav Borisovich Grusev, who was suspected of spying on State headquarters, the department reviewed all its programs for possible spy incursions by Russian agents. During that review, diplomatic security chief David Carpenter learned of the Synergy contract and that the company's employees, many of them former Soviet citizens, regularly visited department offices as part of the software deployment.

Ashot Hovanesian, Synergy International Systems' founder and president, said his company has done nothing wrong and that his employees were fulfilling the company's contract to develop and install the unclassified software.

Official denial

State officials deny that the contract employees' ethnicity prompted the investigation, but they have said that their nationality gave investigators cause for alarm.

'Certainly, foreign contractors doing work in this was brought to our attention at that time, and that was an issue that we thought merited further examination,' James P. Rubin, former assistant secretary for public affairs, said in February in response to a question during a department daily press briefing.

Development of the program began at the U.S. Embassy in Moscow in the mid-1990s to correct a database problem discovered by the Agency for International Development. Hovanesian and a team of programmers, who later formed Synergy International Systems, developed the database as subcontractors, AID officials said. Pleased with the application, State's Moscow embassy officials recommended using it throughout the department to compile embassy mission performance plans.

But because the project originated at the embassy, it did not receive the review process that is common to projects developed within State's Office of the Chief Information Officer, Rychak and other State officials said.

Typically, the CIO staff has a team of State systems chiefs and program managers review projects to approve both the strategy and budget.

The Synergy program wasn't reviewed or vetted by this team, adding to concerns that a problem could exist in its code. After the controversy erupted over the software, the Diplomatic Security Bureau began using the review process as well, Rychak said.

Earlier this year, the department removed the software from its systems around the world and opened the probe.

The FBI and the National Security Agency are scrutinizing the software's 1 million lines of code to see if it contains anything malicious.

Hovanesian said he has asked State and the FBI to disclose their findings so he can clear his company's name, but so far letters to investigators have gone unanswered.

'I have no idea what's going on,' he said. 'It's been going on for six months, but no one at the State Department or the FBI will tell me anything.'

Synergy International Systems has been 'harshly affected' by being unfairly accused because its employees hail from former Soviet countries, he said. Contract negotiations with other agencies have been put on hold or halted due to the probe, Hovanesian said.

Buying review

The department awarded the contract as a sole-source deal, said State officials who added that the department's inspector general is reviewing the procurement.

State officials refused to speculate whether embassies would be allowed to use the application if the department and FBI clear it.

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