Classify foreign government information, other than NATO information, that is “Restricted,” “Designated,” or “unclassified
provided in confidence” as U.S. Confidential to protect it from unauthorized disclosure. When adequate to achieve the agreed-upon protection requirements of the providing government, this type of FGI may be handled under standards that are less restrictive than the safeguarding standards that ordinarily apply to U.S. Confidential information, provided that it is marked "Confidential/Modified Handling" or "C/MOD."
[My emphasis]
32 CFR 2001.54 sheds more light on this:
Restricted and other foreign government information provided in confidence.
In order to assure the protection of other foreign government information provided in confidence (e.g., foreign government “Restricted,” “Designated,” or unclassified provided in confidence), such information must be classified under the Order. The receiving agency, or a receiving U.S. contractor, licensee, grantee, or certificate holder acting in accordance with instructions received from the U.S. Government, shall provide a degree of protection to the foreign government information at least equivalent to that required by the government or international organization that provided the information.
When adequate to achieve equivalency, these standards may be less restrictive than the safeguarding standards that ordinarily apply to U.S. Confidential information. If the foreign protection requirement is lower than the protection required for U.S. Confidential information, the following requirements shall be met:
(1) Documents may retain their original foreign markings if the responsible agency determines that these markings are adequate to meet the purposes served by U.S. classification markings. Otherwise, documents shall be marked, “This document contains (insert name of country) (insert classification level) information to be treated as U.S. (insert classification level).” The notation, “Modified Handling Authorized,” may be added to either the foreign or U.S. markings authorized for foreign government information. If remarking foreign originated documents or matter is impractical, an approved cover sheet is an authorized option;
(2) Documents shall be provided only to persons in accordance with sections 4.1(a) and (h) of the Order;
(3) Individuals being given access shall be notified of applicable handling instructions. This may be accomplished by a briefing, written instructions, or by applying specific handling requirements to an approved cover sheet;
(4) Documents shall be stored in such a manner so as to prevent unauthorized access;
(5) Documents shall be transmitted in a method approved for classified information, unless this method is waived by the originating government.
[My emphasis.]
What these regulations appear to be trying to achieve is honoring the requests of the foreign government providing the information, absent an independent basis for the US Government to impose classification.
In essence, I think the Reuters story is wrong. And if it is not, then it seems to me the State Department can not function outside of secure systems, as its main order of business is exchanging communications with foreign governments.
If Reuters' argument is considered accurate, I have no doubt, none whatsoever, that there are thousands of violations in State, including John Kerry, every day.
The key purpose of this provision is to respect foreign government's wishes, not to protect what the US Govt deems classified.
And indeed, Reuters' own story seems to confirm this:
A spokeswoman for one of the foreign governments whose information appears in Clinton's emails said, on condition of anonymity to protect diplomatic relations, that the information was shared confidentially in 2009 with Clinton and her senior staff.
If so, it appears this information should have been classified at the time and not handled on a private unsecured email network, according to government regulations.
The foreign government expects all private exchanges with U.S. officials to be treated that way, the spokeswoman for the foreign government said.
[My emphasis]
Treated what way? Confidentially? Or routed through classified systems? I think it is the former, not the latter. I do not believe foreign governments generally have the expectation that their communications with the State Department will be routed through classified secure systems. They do expect it will be kept confidential, not classified "CONFIDENTIAL," just every day normal confidential.
I think classification of "foreign government information" as "CONFIDENTIAL" comes when the foreign government asks for it. And I think that's what the regs require.
I think the Reuters argument is wrong.
And I think the State Department has operated as if the Reuters argument is wrong forever, and still does.
To wit, if Hillary Clinton violated these regulations, the State Department itself, from top to bottom, has violated these regulations forever.