By Mark Hosenball and Andrea Shalal-Esa
June 18 (Reuters) - Industry executives and some corners of the U.S. intelligence community are pushing back against possible legislative moves to curb contractors' access to classified information.
Following leaks by former National Security Agency contractor Edward Snowden, Senate Intelligence Chairman Dianne Feinstein is working on legislation intended to restrict spy agencies from assigning contractors like Snowden to sensitive jobs.
Snowden, who worked as a systems administrator at an NSA facility in Hawaii through a contract with Booz Allen Hamilton , exposed documents detailing the government's vast surveillance of Americans' phone and Internet data.
Since Feinstein pledged last week to curtail contractors' access to "highly classified technical data", both industry executives and security agencies have cautioned against such a move and any other perceived overreaction.
"In any system the weakest link is the insider," William Swanson, chief executive of Raytheon Co, told Reuters at the Paris Airshow, when asked about Feinstein's proposal.
"I don't care whether you're in government or you're in industry. The question is what are the processes that you have in place. What kind of system do you have to protect information?"
A spokesman for Booz Allen Hamilton, which fired Snowden last week, said the company is not commenting further on matters linked to the Snowden leaks.
U.S. Representative Rick Larsen, a Democrat from Washington state, said industry executives were urging him to block legislation that would introduce severe restrictions on contractors.
He also said that without contractors, the government would have to hire more workers, which would be expensive, especially as Congress continues to negotiate on a deficit reduction plan.
"At least the contractors you can get rid of them if they're doing a poor job," he told Reuters at the Paris Airshow.
U.S. intelligence agencies are also quietly expressing resistance. A source familiar with the views of intelligence agencies said that some agencies are concerned because contractors are used so widely in systems administrator positions.
The source said that in addition to the difficulty of phasing out contractors who now perform essential network duties, some officials believe that it is unfair to penalize all contractors because a single individual decided to violate his secrecy oath.
The issue of spy agencies' use of contractors as systems administrators surfaced on Tuesday at a public hearing on NSA monitoring programs held by the House of Representatives Intelligence Committee.
NSA Director Keith Alexander said there are about 1,000 systems administrators working at NSA complexes and that the majority are contractors.
He said the agency has "significant concerns" about how Snowden was able to leak the information, and added that agencies would be moving to implement a regimen of two-person control for systems administrators.
But he also described how budget cuts more than a decade ago are what started the move to contractors.
"As we tried to downsize our government work force, we pushed more of our information technology workforce or system administrators to the contract arena," Alexander said. "That's consistent across the intelligence community."