89 010
107 th Congress
Report
SENATE
1st Session
107 63
AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 2002 FOR INTELLIGENCE
AND INTELLIGENCE-RELATED ACTIVITIES OF THE UNITED STATES GOVERNMENT, THE
COMMUNITY MANAGEMENT ACCOUNT OF THE DIRECTOR OF CENTRAL INTELLIGENCE,
AND THE CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM,
AND FOR OTHER PURPOSES
September 14, 2001.--Ordered to be printed
Mr. Graham , from the Select Committee on Intelligence, submitted the
following
REPORT
[To accompany S. 1428]
The Select Committee on Intelligence (SSCI or Committee), having
considered an original bill (S. 1428), to authorize appropriations for
fiscal year 2002 for intelligence and intelligence-related activities of
the United States Government, the Community Management Account of the
Director of Central Intelligence, and the Central Intelligence Agency
Retirement and Disability System, and for other purposes, reports
favorably thereon and recommends that the bill do pass.
CONTENTS
Purpose of the Bill 2
Classified Supplement to the Committee Report 3
Scope of Committee Review 3
Committee Action on the Fiscal Year 2002 Intelligence Budget 4
Congress and the Intelligence Community 5
Presidential Determinations to Limit Access to Reporting of Covert Action 5
Effective Provision of Intelligence to, and Use by, Congress 6
Intelligence Community Personnel:
Intelligence Community Education Program
7
CIA Inspector General Report on CIA Promotion Policy
8
Intelligence Collection, Analysis and Dissemination:
Review of Legal Authorities to Conduct Computer
Attack and Computer Intrusion Investigations
8
Counterterrorism
9
Counterdrug
11
Standardization of Foreign Names and Places in
Intelligence Community Databases
12
Counterintelligence:
Assessing the Possible Co-location of the National
Infrastructure Protection Center and Office of the National
Counterintelligence Executive
12
Department of Energy Compliance with
Counterintelligence and Security Initiatives
13
Storage of Sensitive Compartmented Information
13
Director of Central Intelligence Guidelines for
Initiation of Counterintelligence Damage Assessments
14
Assessment of Alternative Technologies to the Polygraph
14
Status of Implementation of Recommendations
Contained in the ``Final Report of the Attorney General's
Review Team on the Handling of the Los Alamos National
Laboratory Investigation''
15
Intelligence Community Financial Management, Planning, and Performance:
Adopotion of Baseline Accounting and Financial
Statement Standards
15
Strategic Planning and Performance Goals and
Measures for the Intelligence Community
16
Section-by-Section Analysis and Discussion
17
Committee Action
20
Estimate of Costs
20
Evaluation of Regulatory Impact
21
Changes in Existing Law
21
PURPOSE OF THE BILL
This bill will:
(1) Authorize appropriations for fiscal year 2002 for (a) U.S.
intelligence activities and programs; (b) the Community Management
Account of the Director of Central Intelligence; and (c) the Central
Intelligence Agency Retirement and Disability System;
(2) Authorize the personnel ceilings as of September 30, 2002, for
intelligence activities of the U.S. Government and for the Community
Management Account of the Director of Central Intelligence;
(3) Authorize the Director of Central Intelligence, with Office of
Management and Budget approval, to exceed the personnel ceilings by up
to two percent;
(4) Permit judicial review under the Foreign Narcotics Kingpin
Designation Act;
(5) Modify the positions requiring consultation with the Director of
Central Intelligence in appointments;
(6) Modify reporting requirements for significant anticipated
intelligence activities and significant intelligence failures;
(7) Modify authorities for protection of Intelligence Community
employees who report urgent concerns to Congress;
(8) Require the Attorney General to review the protections against
unauthorized disclosure of classified information and to submit a report
to Congress;
(9) Modify authorities relating to official immunity in interdiction
of aircraft engaged in illicit drug trafficking;
(10) Suspend the reorganization of the Diplomatic Telecommunications
Program Office;
(11) Require Presidential approval and submission to Congress of the
National Counterintelligence Strategy and National Threat Identification
and Prioritization Assessments;
(12) Extend, for one year, the Central Intelligence Agency Voluntary
Separation Act;
(13) Provide permanent authority for the central services program.
CLASSIFIED SUPPLEMENT TO THE COMMITTEE REPORT
The classified nature of the United States intelligence activities
prevents the Committee from disclosing the details of its budgetary
recommendations in this Report. The Committee has prepared a classified
supplement to this Report, which contains (a) the Classified Annex to
this Report and (b) the classified Schedule of Authorizations which is
incorporated reference in the Act and has the same legal status as
public law. The Classified Annex to this report explains the full scope
and intent of the Committee's action as set forth in the classified
Schedule of Authorizations. The Classified Annex has the status as any
Senate Report and the Committee fully expects the Intelligence Community
to comply with the limitations, guidelines, directions, and
recommendations contained therein.
The classified supplement to the Committee Report is available for
review by any Member of the Senate, subject to the provisions of Senate
Resolution 400 of the 94th Congress.
The classified supplement is made available to the Committees on
Appropriations of the Senate and the House of Representatives and to the
President. The President shall provide for appropriate distribution
within the Executive Branch.
SCOPE OF COMMITTEE REVIEW
The Senate Select Committee on Intelligence (SSCI for Committee)
conducted a detailed review of the fiscal year 2002 budget requests for
the National Foreign Intelligence Program (NFIP) of the Director of
Central Intelligence; for Joint Military Intelligence Program (JMIP) of
the Deputy Secretary of Defense; and the Tactical Intelligence and
Related Activities (TIARA) of the military services. The Committee's
review entailed a series of briefings and hearing with senior government
officials, numerous staff briefings, review of budget justification
materials, and numerous written responses provided by the Intelligence
Community to specific questions posed by the Committee. The Committee
also monitored compliance with reporting requirements contained in
statute. Each report was scrutinized by the Committee and appropriate
action was taken, if necessary.
In accordance with a Memorandum of Agreement with the Senate Armed
Services Committee (SASC), the SSCI is including its recommendations on
both JMIP and TIARA in the Classified Annex. The SSCI has agreed that
JMIP and TIARA issues will continue to be authorized in the defense
authorization bill. The SASC has also agreed to involve the SSCI staff
in staff-level defense authorization conference meetings and to provide
the Chairman and Vice Chairman of the SSCI the opportunity to consult
with the SASC Chairman and Ranking member before a JMIP or TIARA issue
is finally closed out in conference in a manner with which they
disagree, The Committee looks forward to continuing a productive
relationship with the SASC on all issues of mutual concern.
In addition to its annual review of the Administration's budget
request, the Committee performs continuing oversight of various
intelligence activities and programs. The Committee's Audit Staff
conducts in-depth audits and reviews of specific programs and activities
identified by the Committee as needing close scrutiny. The Audit Staff
also supports the Committee's continuing oversight of a number of
administrative and operational issues. During the last year the Audit
Staff evaluated the Central Intelligence Agency's efforts to increase
its cadre of clandestine collectors of human source intelligence;
examined the Intelligence Community's foreign materiel acquisition and
exploitation programs; coordinated the Committee's ongoing review of the
espionage activities and investigation of former Federal Bureau of
Investigation employee Robert Hanssen; initiated an investigation of the
Intelligence Community's actions in the case of Navy Lt. Commander
Michael Speicher; and monitored the products and activities of the
Intelligence Community's statutory and administrative Inspectors
General. These kinds of inquiries frequently lead to Committee action
with respect to the authorities, applicable laws, and budget of the
activity or program concerned.
COMMITTEE ACTION ON THE FISCAL YEAR 2002 INTELLIGENCE BUDGET
Committee priorities--a five year plan
The budget request submitted by the President includes a substantial
increase for programs funded in the National Foreign Intelligence
Program. The Committee believes this funding increase should represent
the first installment of a five year effort to correct serious
deficiencies that have developed over the past decade in the
Intelligence Community. As the Soviet Union dissolved and the threat
from communism faded into history, our defense and intelligence budgets
went into a period of steady decline through the mid-1990s. While the
end of the Cold War warranted a reordering of national priorities, the
continued decline in funding has left us with a diminished ability to
address the emerging threats and technological challenges of the 21st
Century.
We are at a point where continuing global instability and uncertainty
forces us to refocus our attention on the importance of our intelligence
apparatus. Transnational threats such as international terrorism, global
crime syndicates, international drug trafficking, and the proliferation
of weapons of mass destruction and their delivery systems pose
significant risk to this nation's interests. Yet these threats cannot be
defeated solely with traditional military force. Our Intelligence
Community is our first line of defense.
In this budget, the Committee seeks to highlight four priority areas
that must receive significant attention in the near term if intelligence
is to fulfill its role in our national security strategy. Those are: (1)
revitalizing the National Security Agency; (2) correcting deficiencies
in human intelligence; (3) addressing the imbalance between intelligence
collection and analysis; and (4) rebuilding a robust research and
development program. This budget lays out a five year plan for
addressing each of these areas.
The Committee's top priority last year was the revitalization of the
National Security Agency (NSA). This continues to be the Committee's
number one concern. Five years from now the NSA must have the ability to
collect and exploit electronic signals in a vastly different
communications environment. Along with significant investment in
technology, this means closer collaboration with clandestine human
collectors. The computer and telecommunications systems that NSA
employees use to accomplish their work must be state-of-the-art
technology. Analysts must have sophisticated software tools to allow
them to exploit fully the amount of data available in the future. The
Committee is encouraged that the Administration also has made this a
priority and requested significantly more resources for the NSA in the
fiscal year 2002 budget.
The five-year plan for correcting deficiencies in human intelligence
should enable this critical component of the Intelligence Community to
meet the increasingly complex and growing set of collection
requirements. The Central Intelligence Agency (CIA) will need to hire
case officers capable of dealing with the explosion of technology, both
as collection tools and as potential threats. These individuals must be
able to operate effectively in the many places around the world where
U.S. interests are threatened. To do that, the CIA must place even
greater emphasis on the diversity of the new recruits. Finally, the
human intelligence system must be integrated more closely with our other
collection agencies.
As we do a better job of collecting intelligence, we also must
enhance our ability to understand this information. The percentage of
the intelligence budget devoted to analysis and processing has been
declining steadily since 1990. While collection systems are becoming
more and more capable, our investment in analysis continued to decline.
The disparity threatens to overwhelm our ability to analyze and use the
information collected. To address this problem, the Committee has added
funds to finance promising all-source analysis initiatives across the
Community. The amount authorized is a down payment on a five-year
spending profile to rebuild the Community's all-source analytical
capability.
The Committee's final priority, a strong research and development
program, supports all of the other initiatives. Over the past decade,
agencies have allowed research and development accounts to be the ``bill
payer'' for funding shortfalls, and have sacrificed modernization and
innovation in the process. The Committee has outlined a plan to reverse
the Intelligence Community's declining investment in advanced research
and development. The Classified Annex also includes a requirement for a
review of several emerging technologies to determine what will provide
the best long-term return on investment. The Committee continues to
support and encourage a symbiotic relationship between the Intelligence
Community and the private sector using innovative approaches such as the
Central Intelligence Agency's In-Q-Tel.
CONGRESS AND THE INTELLIGENCE COMMUNITY
Presidential determinations to limit access to reporting of
covert actions
The Committee is concerned with Executive Branch compliance in some
cases with the requirement in the National Security Act of 1947 (50
U.S.C. 401 et seq.) to provide the intelligence committees with written
notice of Presidential covert action findings.
Section 503 of the National Security Act (50 U.S.C. 413b) describes
the process by which the President authorizes the conduct of covert
actions by departments, agencies or entities of the United States
Government. Under this provision, the President may authorize a covert
action if ``the President determines such an action is necessary to
support identifiable foreign policy objectives of the United States and
is important to the national security of the United States, which
determination shall be set forth in a finding * * * [and] [e]ach finding
shall be in writing. * * *'' Section 503 (a)(1) and (c)(1) set forth
special circumstances in which the President is given the authority
either to delay the written notification for 48 hours in an emergency
situation, or to limit the access to the written finding in
extraordinary circumstances to only eight members of Congress--the
leadership of the House and Senate and the leadership of the
intelligence committees. In neither of those special circumstances,
however, is the President relieved of his statutory responsibility to
provide a copy of the finding in writing. Section 503(c)(3) and (4)
state clearly that whenever prior notice of a covert action is not given
to Congress, or access is limited, the written finding shall state the
reasons justifying those special circumstances.
The Committee believes that the provision of written copies of the
President's findings is essential to effective congressional oversight
of covert action programs. In cases in which access has been limited to
the leadership of the Senate and House of Representatives and the
leadership of the intelligence committees--and denied, because of the
extreme sensitivity of the program, to the other members of the
intelligence committees who are charged with oversight of the activities
of the Intelligence Community--section 503(c)(4) requires that the
President provide to the Chairmen of the intelligence committees a copy
of the finding, including the reasons for the limited access. Copies of
these limited access findings, kept in accordance with accepted security
practices in the Sensitive Compartmented Information facilities of the
intelligence committees, will thus be available for further study and
discussion among the few members who have been granted authorized
access. This will allow proper oversight, as contemplated by the
statute, of these important programs that the President has determined
``affect the vital interests of the United States.''
The common practice of the Executive Branch, however, has been only
to provide oral briefings on these sensitive programs, many of which
present complicated factual and policy issues. The Committee expects
this practice to be rectified to conform with the National Security Act
requirement for the provision of a written finding to the Chairmen of
the intelligence committees, including the specific reasons for the
limitations on access.
The Committee is confident that the security directors of the
intelligence committees, in cooperation with security officials of the
Executive Branch, will be able to develop procedures that will satisfy
Executive Branch concerns about the security of, and limited access to,
these sensitive covert action documents.
Effective provision of intelligence to, and use by, Congress
Congress, primarily through the Senate Select Committee on
Intelligence and the House Permanent Select Committee on Intelligence,
conducts oversight of the Intelligence Community and authorizes funds
for intelligence activities by the agencies within the community. In
furtherance of these two goals, the members and staffs of the
intelligence committees are given access to a wide array of intelligence
products, including finished intelligence. However, less attention as
been paid to another important role of Congress--its role as a consumer
of intelligence to inform its decisionmaking on policy. This role is
recognized both in the National Security Act of 1947 and in presidential
executive order. Despite this
recongnition, there has been little effort to develop
mechanisms to ensure that members of Congress receive intelligence, in a
form tailored to their unique needs, to enable them to perform their
policymaking responsibilities efficiently and effectively.
Accordingly, the Committee directs the Director of Central
Intelligence to prepare a comprehensive report which, at a minimum, sets
forth: (1) a description of existing mechanisms established pursuant to
Section 103(a)(1)(D) of the National Security Act of 1947 (50 U.S.C. 403
3(a)(1)(D)) and Section 1.5(s) of Executive Order 12333 to ensure that
Congress is appropriately served in its policymaking role as an
intelligence consumer; and (2) a recommendation for changes in such
mechanisms, if needed. In preparing such report, the Director of Central
Intelligence should consider the appropriateness of adopting some or all
of the mechanisms, procedures and methodology currently used to ensure
effective intelligence support to the Executive Branch.
Intelligence community personnel
Intelligence Community Education Program
In order to develop and maintain robust intelligence capabilities,
the Intelligence Community must hire and retain employees with advanced
scientific and technical skills. The Committee notes that one of the
challenges facing the Intelligence Community is the competition from the
private sector for individuals with advanced science and technology
degrees. While the Intelligence Community is often unable to match the
financial incentives provided by the private sector, the challenge and
excitement of intelligence work often enables agencies to retain
technical experts once they have worked in the Community and have
contributed to solving Intelligence Community technology problems. The
period of time required to obtain security clearances, however, can
sometimes cause a debilitating delay during which applicants accept
private sector positions.
While this challenge affects many elements of the Intelligence
Community, the Committee is most concerned with agencies such as the
National Security Agency (NSA) that are heavily dependent upon
individuals with technical training. The Committee has included funds
for a pilot program at the NSA to provide educational opportunities to
recent graduates who are waiting for the security clearance process to
be completed. Details of this program are included in the Classified
Annex accompanying this bill.
The Deputy Director of Central Intelligence for Community Management
is directed to monitor the implementation of this program by the NSA and
to determine the efficacy of the program and the advisability of
expanding the program to other agencies. The Director of Central
Intelligence shall make a recommendation to the Committee on the
possible expansion of this program as part of the fiscal year 2004
budget request.
CIA Inspector General Report on CIA Promotion Policy
The Central Intelligence Agency (CIA) must recruit and train a new
generation of intelligence officers to complement, and ultimately
replace, the intelligence officers nearing the end of their careers. The
Committee places a high priority on the recruitment and retention of
highly qualified personnel to staff the CIA and other components of the
Intelligence Community. While the Committee is persuaded that the CIA is
recruiting an impressive group of new officers, the Committee is less
certain about the Agency's retention of experienced, senior intelligence
officers. The Committee believes that an important factor contributing
to attrition among the senior ranks is dissatisfaction with the
promotion policies within various Agency directorates. Accordingly, the
Committee directs the CIA Inspector General to conduct an inspection of
the CIA's promotion policy of all Agency employees to, and within, the
Senior Intelligence Service from 1995 to the present, and to provide a
written report to the intelligence oversight committees by March 1,
2002.
The inspection should cover promotions within all Agency directorates
and should include, but not be limited to, an examination of factors
such as: professional accomplishments, length of service, time spent in
the field versus time spent at Headquarters, use of accelerated
promotions, counterintelligence experience, out-of-directorate
experience, interagency experience, level of education and training,
management experience, age, sex, race, composition and effectiveness of
peer review panels, and the extent to which promotion candidates have
recourse to a clearly-defined appeal process. The Inspector General also
shall make specific recommendations on how CIA management can improve
the Agency's promotion policy to ensure that it is fair, equitable, and
consistently-applied--both within each directorate and from one
directorate to another--and that the policy rewards CIA employees with
demonstrated record of achievement and expertise.
INTELLIGENCE COLLECTION, ANALYSIS AND DISSEMINATION
Review of legal authorities to conduct computer attack and
computer intrusion investigations
Over the past few years, a number of computer attack and intrusion
cases have tested the capabilities of U.S. government agencies and
private sector entities to investigate these incidents, identify those
responsible, and prevent similar efforts in the future.
The Federal Bureau of Investigation (FBI), Central Intelligence
Agency (CIA), and other government agencies all play some role in
computer attack and intrusion investigations. Because identifying those
responsible for computer attacks and intrusions is difficult, and
hackers can easily transcend traditional national boundaries, the
government entities involved in these investigations have encountered
numerous problems in determining their own and one another's legal
authorities and responsibilities in computer investigations. In the
past, these problems have been resolved through ad hoc interpretations
of statute and regulation, cumbersome coordination, and over-cautious
division of labor among the agencies. The time and effort spent
resolving these issues detracts from the overall goal of investigating
the computer attack and intrusion itself.
The Committee believes that these issues should be resolved.
Accordingly, the Committee directs the Attorney General, the Director of
the FBI, the Director of Central Intelligence, and the Secretary of
Defense to complete a review by March 1, 2002 of the legal authorities
and responsibilities of the government entities customarily involved in
investigations of computer attacks and intrusions which threaten
national security interests. Additionally, the review should indicate
whether legislative changes are necessary to improve the U.S.
Government's capability to investigate computer hacking, while
respecting the rights of United States persons. The review should also
provide an assessment of the budget implications, if any, of the
recommendations. Finally, this review should include a detailed plan on
how to inform and train employees of each relevant government entity on
the legal authorities and restrictions relevant to each agency's
involvement in such investigations.
Counterterrorism
The Committee notes that recent assessments of U.S. terrorism and
structures for countering terrorism point to the need for increased
attention to the Intelligence Community response to the problem of
terrorism. The National Commission on Terrorism (``Bremer Commission'')
focused specifically on terrorism, while the U.S. Commission on National
Security/21st Century set terrorism within a larger context of
redefining concepts of national security. The Advisory Panel to Assess
Domestic Response Capabilities for Terrorism Involving Weapons of Mass
Destruction focused on domestic, catastrophic attacks, and acknowledged
the blurred lines between domestic and international terrorism.
All three reports recognize the fundamental importance of
intelligence in any strategy to combat and respond to terrorism. But all
three reports also make clear that any effort to improve the
government-wide approach to the terrorism problem must take into account
every facet of the issue--detection, prevention, consequence management,
crisis management, and law enforcement, diplomatic and military
responses. A counterterrorism intelligence program must be designed
within this larger context. Further, in addition to enhancement of the
central coordinating authority for terrorism policy, we also must have a
centralized authority for managing the intelligence component of that
policy. The Director of Central Intelligence needs to perform that role
for the United States Government.
Oversight of the intelligence component of the U.S. response to
terrorism is the responsibility of this Committee and is among its
highest priorities. The Committee believes a number of issues are of
particular importance, and they are noted below.
The Relationship Between Intelligence and Law Enforcement: The
relationship between law enforcement and intelligence that has
developed, largely on an ad hoc basis over the last decade, is better
than it ever has been. However, the Committee believes that a statutory
framework may be necessary to institutionalize and rationalize the
relationships among the agencies. Many observers have noted that while
law enforcement is, theoretically, only one of a set of ``tools'' to
respond to terrorism, it has often taken a preeminent, and sometimes
exclusive, role. The Bremer Commission recognized this, highlighting the
``pros and cons of the law enforcement approach'' in its treatment of
the Pan Am 103 prosecution efforts. One of the other tools is
intelligence, and it is important to create a framework within which
these issues can be addressed.
Sharing of Information Among Government Agencies: Effective sharing
of information between and among the various components of the
government-wide effort to combat terrorism is also essential, and is
presently hindered by cultural, bureaucratic, resource, training and, in
some cases, legal obstacles. The Bremer
Commission noted that ``[t]he law enforcement community is
neither fully exploiting the growing amount of information it collects
during the course of terrorism investigations nor distributing that
information effectively to analysis and policymakers.''
The Committee commends the Intelligence Community for aggressive,
effective and creative intelligence efforts against the terrorism
target. But there is room for improvement. The Committee remains
concerned that, in the commendable rush to engage against the imminent
threat associated with international terrorism, the Intelligence
Community has adopted a crisis mentality. Ad hoc approaches to
coordination and interaction among the agencies created during crisis
situations become the norm after the crisis is over. International
terrorism is not, however, in the view of the Committee, a ``crisis,''
with its connotation of a short-lived phenomenon. International
terrorism is a ``condition'' with which we will have to deal on a
long-term basis. The Committee strongly encourages the Intelligence
Community to orient itself accordingly by implementing policies--under
the control of the Director of Central Intelligence--for regulating the
various roles of the elements of the Intelligence Community that
participate in the fight against terrorism.
Financial Intelligence Related to International Terrorism: The
Committee believes that intelligence related to the finances of foreign
terrorist organizations can play a valuable role in efforts to combat
international terrorism. Such intelligence can allow for a better
understanding of the form, structure and capabilities of individual
terrorist groups, and the relationships within and among such
organizations. Such intelligence can also contribute to active efforts
to disrupt terrorist organizations, including, but not limited to, law
enforcement and regulatory mechanisms.
The Committee endorses, in principle efforts to develop elements
within the Intelligence Community designed to exploit effectively
financial intelligence. One effort within the Department of Treasury's
Office of Foreign Assets Control, is the ``Foreign Terrorist Asset
Tracking Center'' (FTATC), which shows promise as a vehicle to address
this need. However, the Committee is concerned that FTATC, to extent it
will function as an element of the Intelligence Community, has not been
coordinated adequately with the Director of Central Intelligence nor
reviewed by this Committee.
Accordingly, the Committee directs the Director of Central
Intelligence and the Secretary of Treasury to prepare jointly a report
assessing the feasibility and advisability of establishing an element of
the federal government to provide for effective and efficient analysis
and dissemination of foreign intelligence related to the financial
capabilities and resources of international terrorist organizations. The
report should include an assessment of the FTATC as a vehicle for
addressing such a need and, if appropriate, a plan for its continued
development.
National Virtual Translation Center: The Committee is concerned that
intelligence in general, and intelligence related to terrorism in
particular, is increasingly reliant on the ability of the Intelligence
Community to quickly, accurately and efficiently translate information
in a large number of languages. Many of the languages for which
translation capabilities are limited within the United States Government
are the languages that are of critical importance in our
counterterrorism efforts. The Committee believes that this problem can
be alleviated by applying cutting-edge, internet-like technology to
create a ``National Virtual Translation Center''. Such a center would
link secure locations maintained by the Intelligence Community
throughout the country and would apply digital technology to network,
store, retrieve, and catalogue the audio and textual information.
Foreign intelligence could be collected technically in one location,
translated in a second location, and provided to an Intelligence
Community analyst in a third location.
The Committee notes that the CIA, FBI NSA and other intelligence
agencies have applied new technology to this problem. The Committee
believes that these efforts should be coordinated so that the solution
can be applied on a Community-wide basis. Accordingly, the Committee
directs the Director of Central Intelligence, in consultation with the
Director of the FBI, and other heads of departments and agencies within
the Intelligence Community, to prepare and submit to the intelligence
committees by June 1, 2002, a report concerning the feasibility and
structure of a National Virtual Translation Center, including
recommendations regarding the establishment of such a center and the
funding necessary to do so.
Counterdrug
On April 20, 2001, a Peruvian air force fighter plane mistakenly shot
down an American missionary plane. Two American citizens, Veronica
Bowers and her infant daughter Charity, were killed and the American
pilot of the missionary plane, Kevin Donaldson, was seriously injured.
The Peruvian military plane involved in this incident was operating in
conjunction with a CIA surveillance plane as part of a wider U.S.-Peru
``air bridge denial'' program designed to prevent drug traffickers from
utilizing air transport routes to move cocaine from Peru to Colombia.
The U.S. Government began assisting the Government of Peru in air
interdiction efforts in the early 1990s. Legislation enacted in October
1994 required the President to make a determination that safeguards were
in place in Peru to prevent the shoot-down of planes not involved in
narcotics trafficking. President Clinton made that determination in
December 1994. The legislation requiring presidential approval did not
provide for additional periodic reviews of the safeguards.
In the aftermath of this tragic event, the Committee conducted a
review of U.S. Government involvement in the air bridge denial program.
Committee staff conducted interviews with executives and personnel from
the CIA, the Department of State, the Department of Defense, the Customs
Service, the Drug Enforcement Administration, the Office of National
Drug Control Policy, the Peruvian Air Force, Peru's aeronautical agency,
and the Association of Baptists for World Evangelism missionary
organization. The Committee intends to issue a report containing the
findings and conclusions of the review. Among its findings, the
Committee found that annual reviews of safeguards and procedures should
be conducted if the U.S. Government is involved in an air interdiction
program that includes the use of lethal force against suspected drug
trafficking aircraft. Accordingly, the Committee included in the Senate
Intelligence Authorization Bill for fiscal year 2002 a provision
requiring annual presidential certification and report to Congress
concerning such programs.
Standardization of foreign names and places in Intelligence
Community databases
Section 309 of the Intelligence Authorization Act for fiscal year
1998 (Public Law 105 107; 111 Stat. 2248; 50 U.S.C. 403 3 note) directed
the Director of Central Intelligence to ``carry out a survey of current
standards for the spelling of foreign names and places, and the use of
geographic coordinates for such places, among the elements of the
intelligence community.'' Section 309 also required a report of the
findings of the survey be provided to Congress, and the issuance of
guidelines to the Intelligence Community to ``ensure the use of uniform
spelling of foreign names and places and the uniform use of geographic
coordinates for such places.'' The report accompanying that statute
noted the Committee finding that ``[i]ntelligence databases maintained
by various entities within the intelligence community are a critical
national resource * * * [t]he Intelligence Community must standardize
the names and places in each database to allow for effective and
consistent support for war fighters and national security policy
makers.''
The Committee reaffirms its belief that intelligence databases are
vital to the efforts of the Intelligence Community, and thus is
concerned that the directives contained in the 1998 law have not been
fulfilled. No formal report has been issued and it appears that little
work has been done on this effort in the nearly four years since the
Congress enacted the provision requiring such action.
Accordingly, the Director of Central Intelligence is directed to
comply, on an immediate basis, with the directives contained in Section
309 of the Intelligence Authorization Act for Fiscal Year 1998.
COUNTERINTELLIGENCE
Assessing the possible co-location of the National
Infrastructure Protection Center and Office of the National
Counterintelligence Executive
The FBI's National Infrastructure Protection Center (NIPC) is charged
with detecting, preventing and responding to cyber and physical attacks
on U.S. critical infrastructures and with overseeing computer crime
investigations conducted by FBI field offices. The Committee believes
that there is sufficient similarity in the mission and interagency focus
of both the NIPC and the Office of the National Counterintelligence
Executive to warrant consideration of co-locating the two offices at one
site. Accordingly, the Committee directs that no later than March 1,
2002, the National Counterintelligence Executive, the Director of
Central Intelligence, and the Director of the FBI jointly provide to the
intelligence oversight committees a written assessment of the
desirability and feasibility (including a budgetary assessment) of
co-locating the NIPC and the Office of the National Counterintelligence
Executive at one site, separate and apart from CIA, FBI and Department
of Defense facilities.
Department of Energy compliance with counterintelligence and
security initiatives
A General Accounting Office assessment of the status of the
Department of Energy's compliance with counterintelligence and security
initiatives announced by the President or Secretary of Energy indicates
that a number of these eighty-eight initiatives have not been completed.
The Committee directs the Secretary of Energy to provide a written
report to the intelligence oversight committees, and other appropriate
committees, by February 1, 2002, regarding the status of implementation
of all outstanding counterintelligence and security initiatives at the
Department of
Energy (as well as the National Laboratories), including the
time frame for implementation, the reason(s) for lack of implementation
to date, and a detailed accounting of the additional resources, if any,
needed to complete implementation of the initiatives.
Storage of Sensitive Compartmented Information
Last year, Congress directed the Director of Central Intelligence to
certify whether each element of the State Department that handles,
retains or stores information that is classified as Sensitive
Compartmented Information complies with all applicable Director of
Central Intelligence Directives (DCIDs) and all applicable Executive
Orders relating to the handling, retention, or storage of such
information. This action was taken in response to a series of serious
lapses and counterintelligence failures at the Department of State.
During the past year, the Director of Central Intelligence has worked
closely with the State Department's Bureau of Intelligence and Research
(INR) and Bureau of Diplomatic Security (DS) to reduce the number of
facilities used to discuss and store Sensitive Compartmented Information
and to ensure that the remaining facilities meet applicable regulations.
Although this process continues, the Committee believes the actions
taken by the Director of Central Intelligence, INR and DS have improved
the security posture at the State Department. Nevertheless, further
periodic review of security practices and procedures at the State
Department and other Intelligence Community agencies is necessary to
ensure intelligence sources and methods are adequately protected.
In June 2001, the Director of Central Intelligence directed that the
Senior Officials of the Intelligence Community conduct a self-inspection
of the policies and procedures in place for their organizations to
protect Sensitive Compartmented Information facilities and information,
and to report the results of the inspections to the Director of Central
Intelligence by September 2001. The Director of Central Intelligence
directed that these self-inspection reports shall address the following
areas: physical security, technical security, personnel security,
information systems security, visitor access controls, document control,
document handling/storage and security awareness training. The Director
of Central Intelligence is directed to provide a written report to the
intelligence oversight committees by February 1, 2002, summarizing the
results of these inspections, how the Director of Central Intelligence
plans to address any non-compliance with applicable DCIDs and Executive
Orders, and how this will be addressed in the context of the fiscal year
2003 budget submission.
Director of Central Intelligence guidelines for initiation of
counterintelligence damage assessments.
The Committee is concerned about the timeliness with which
counterintelligence incidents (including espionage cases) have been
referred by the Director of Central Intelligence to the Office of the
National Counterintelligence Executive, and its predecessor, to conduct
a damage assessment. Accordingly, the Director of Central Intelligence
is directed to provide to the intelligence oversight committees, by
February 1, 2002, has written guidelines for determining what
counterintelligence incidents warrant a damage assessment and time frame
for referring such matters to the Office of the National
Counterintelligence Executive.
One element of this issue is related to concerns that a formal damage
assessment conducted during the pendency of a criminal investigation or
prosecution could complicate or harm the investigation or prosecution.
If would, of course, be the Committee's preference that
counterintelligence damage assessments, including and especially in
espionage cases, be commenced and completed as soon as possible. At the
same time, the Committee does not want to require any action that could
unduly complicate or harm ongoing criminal investigations or
prosecutions. Accordingly, the Committee requests that the Attorney
General submit a report, by February 1, 2002, setting forth the
following: (1) an assessment of current law concerning the potential
effect of conducting counterintelligence damage assessments during the
pendency of a criminal investigation or prosecution; and (2) if such
assessment reveals that current law prohibits, discourages, or delays
conducting counterintelligence damage assessments during the pendency of
a criminal investigation or prosecution, the recommendations of the
Attorney General on specific legislation which could eliminate or
ameliorate these impediments.
Assessment of alternative technologies to the polygraph
The FBI, the CIA and the Department of Defense are directed to
conduct jointly an assessment of the accuracy, reliability and
desirability of the TruthScan technology (developed by Dr. Michael
Tansey), particularly for counterintelligence purposes, as an
investigative tool to supplement the use of the polygraph. The report
should be provided to the appropriate oversight committees of the
Congress no later than March 1, 2002. The report should include an
assessment of other
alternative technologies to the polygraph which have been
examined by the FBI, the CIA or the Department of Defense and the
prospects for their use as investigative tools.
Status of implementation of recommendations contained in the
``Final Report of the Attorney General's Review Team on the Handling of
the Los Alamos National Laboratory Investigation''
The Committee directs the Attorney General, with the cooperation of
the Director of the FBI, to provide a written report to the appropriate
committees of Congress, by February 1, 2002, regarding the status of
implementation of the recommendations contained in the ``Final Report of
the Attorney General's Review Team on the Handling of the Los Alamos
National Laboratory Investigation,'' including the time frame for
implementation, the reason(s) for lack of implementation, if any, to
date, and a detailed accounting of the additional resources, if any,
needed to complete implementation of the recommendations.
INTELLIGENCE COMMUNITY FINANCIAL MANAGEMENT, PLANNING AND PERFORMANCE
Adoption of baseline accounting and financial statement standards
In January 1997, a report was provided by the President on Executive
Branch Oversight of the Intelligence Community Budget. The report states
that Department of Defense elements carrying out programs and activities
of the National Foreign Intelligence Program are subject to the
requirements imposed by law on other elements and components of the DoD.
Additionally, the National Security Agency (NSA), the Defense
Intelligence Agency (DIA), and the National Reconnaissance Office (NRO)
were directed to prepare classified financial statements beginning with
the reporting of fiscal year 1997 financial information required by law.
Since 1997, the financial statements and management practices of the
NRO have received more scrutiny than those of any other DoD entity. The
Inspectors General of the DoD, CIA, and NRO have independently or
jointly conducted audits of various aspects of the NRO's financial
management systems since the mid-1990s. Additionally, an independent
public accounting firm completed an audit of the NRO's fiscal year 2000
financial statements in February 2001. To date, however, only fiscal
year 1998 financial data of the NSA and DIA have been audited by the DoD
Inspector General, and only on a limited basis.
The recent independent audit of the NRO's fiscal year 2000 financial
statements revealed significant shortcomings in its financial management
practices. Despite the problems noted, the audit does afford an
opportunity for the NRO's senior management to rectify identified
deficiencies. The Committee is concerned that similar shortcomings may
exist within other National Foreign Intelligence Program agencies which
have not received the same level of financial management oversight. This
includes the National Imagery and Mapping Agency (NIMA), and CIA, two
agencies not discussed in the January 1997 report.
The Committee directs the Director of Central Intelligence, in
consultation with the Secretary of Defense, to direct the appropriate
statutory Inspector General to perform an audit of the form and content
of the fiscal year 2001 financial statements of the DIA, NSA, NIMA, and
CIA, and report the findings of the audits to the intelligence
committees by April 1, 2002. The principal purpose of these audits will
be to determine if agencies are preparing their financial statements in
a manner consistent with Federal financial accounting standards and
appropriate Office of Management and Budget (OMB) guidance. The audits
also will specify any improvements that each agency must make to their
financial management systems to enable future comprehensive audits of
their financial statements. Thereafter, as necessary, each of these
agencies is directed to submit an annual report to the intelligence
committees no later than April 1 each year specifying improvements
underway to ensure that the financial statements created with fiscal
year 2004 data can be audited consistent with current law and OMB
requirements.
The Committee further directs the Director of Central Intelligence,
in consultation with the Secretary of Defense, to ensure that all
agencies in the DoD NFIP aggregation, including the CIA, receive an
audit of their financial statements by March 1, 2005. In addition to
other items, the audits will assess the adequacy of internal controls
over resource information management systems and facilities. The result
of the audits must be reported to the intelligence committees no later
than April 1 of the appropriate year. The audits are to be performed by
a statutory Inspector General or a qualified Independent Public
Accountant, at the discretion and under the direction of the appropriate
Inspector General.
Finally, to ensure that sufficient resources are available for these
audits, the Committee directs the Community Management Staff, in
coordination with the appropriate Inspectors General, to provide a
report by May 1, 2002, to the intelligence committees specifying the
level of resources that will be required and how each agency will
incorporate them into its long-range budget to allow for
completion of a full financial statement audit by the spring
of 2005. The report also will include a proposed schedule for completion
of the audits, informed by the results of the form and content audits of
the agencies' current financial statements as previously described.
Strategic planning and performance goals and measures for the
Intelligence Community
The Committee believes that the Intelligence Community is handicapped
by the lack of comprehensive strategic and performance plans that can be
used to articulate program goals, measure program performance, improve
program efficiency and aid in resource planning. In the absence of such
plans, the Committee feels that it is challenging for both the Executive
and Legislative Branches to assess the effectiveness of individual
intelligence agencies and programs, and the Intelligence Community as a
whole, against Administration-stated goals and objectives. It is
particularly important to ensure that resources are used as efficiently
and effectively as possible during periods of limited budgets and rapid
technological change. The Committee commends the Director of Central
Intelligence for issuing his Strategic Intent in March 1999, but the
inherent limits of the document, especially in terms of defining and
measuring the Intelligence Community's performance, requires the
production of updated plans and new metrics.
The Committee directs the Director of Central Intelligence to produce
a comprehensive Intelligence Community strategic plan and performance
plan, as well as complementary strategic and performance plans for the
intelligence agencies within the National Foreign Intelligence Program
aggregation. The Committee anticipates that the results of the current
strategic Intelligence Community review will inform the final strategic
and performance plans. The Committee anticipates that final plans will
be classified, consistent with appropriate executive orders, to protect
intelligence information.
The Committee directs that, within 60 days after the enactment of
this Act, the intelligence committees be briefed regarding the DCI's
progress in completing the strategic and performance plans. The briefing
also will afford the Intelligence Community with the opportunity to
solicit and consider the views and suggestions of Congress. The
Committee further directs that the strategic and performance plans for
fiscal year 2003 be completed and delivered to the intelligence
authorization committees by March 1, 2002. Thereafter, an updated and
revised strategic plan should be submitted at least once every four
years, and performance plans should be updated and submitted annually to
the intelligence committees by March 1 of each year.
In addition, the Committee directs the Director of Central
Intelligence to submit a report to the intelligence committees detailing
the fiscal year 2003 program performance of the overall Intelligence
Community and individual National Foreign Intelligence Programs by March
1, 2004. Thereafter, annual reports on program performance for the
previous fiscal year should be submitted to the intelligence committees
by March 1 of each year.
Section-by-section analysis and Discussion
TITLE I--INTELLIGENCE ACTIVITIES
Section 101. Authorization of appropriations
Section 101 lists departments, agencies, and other elements of the
United States Government for whose intelligence and intelligence-related
activities the Act authorizes appropriations for fiscal year 2002.
Section 102. Classified schedule of authorizations
Section 102 states that the details of the amounts authorized to be
appropriated for intelligence and intelligence-related activities and
personnel ceilings for the entities listed in section 101 for fiscal
year 2002 are contained in a classified Schedule of Authorizations. The
Schedule of Authorizations is incorporated into the Act by this section.
Section 103. Personnel ceiling adjustments
Section 103 authorizes the Director of Central Intelligence, with the
approval of the Director of the Office of Management and Budget, in
fiscal year 2002 to exceed the personnel ceilings applicable to the
components of the Intelligence Community under Section 102 by an amount
not to exceed two percent of the total of the ceilings applicable under
Section 102. The Director may exercise this authority only when
necessary to the performance of important intelligence functions or to
the maintenance of a stable personnel force, and any exercise of this
authority must be reported to the intelligence oversight committees of
the Congress.
Section 104. Community Management Account
Section 104 provides details concerning the amount and composition of
the Community Management Account (CMA) of the Director of Central
Intelligence.
Subsection (a) authorizes appropriations for fiscal year 2002 for the
staffing and administration of various components under the CMA.
Subsection (a) also authorizes funds identified for the advanced
research and development committee to remain available for two years.
Subsection (b) authorizes full-time personnel for elements within the
CMA for fiscal year 2002 and provides that such personnel may be
permanent employees of the CMA element or detailed from other elements
of the United States Government.
Subsection (c) expressly authorizes the classified portion of the CMA.
Subsection (d) requires that personnel be detailed on a reimbursable
basis, with certain exceptions.
Subsection (e) authorizes appropriations in the amount authorized for
the CMA under subsection (a) to be made available for the National Drug
Intelligence Center (NDIC). Subsection (e) requires the Director of
Central Intelligence to transfer the appropriations to the Department of
Justice to be used for NDIC activities under the authority of the
Attorney General, and subject to Section 103(d)(1) of the National
Security Act of 1947 (50 U.S.C. 403 3(d)(1)).
TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM
Section 201. Authorization of appropriations
Section 201 authorizes appropriations for fiscal year 2002 for the
Central Intelligence Agency Retirement and Disability Fund.
TITLE III--GENERAL PROVISIONS
Section 301. Increase in employee compensation and benefits
authorized by law
Section 301 provides that appropriations authorized by the Act for
salary, pay, retirement, and other benefits for federal employees may be
increased by such additional or supplemental amounts as may be necessary
for increases in such compensation or benefits authorized by law.
Section 302. Restriction on conduct of intelligence activities
Section 302 provides that the authorization of appropriations by the
Act shall not be deemed to constitute authority for the conduct of any
intelligence activity which is not otherwise authorized by the
Constitution or laws of the United States.
Section 303. Judicial review under the Foreign Narcotics
Kingpin Designation Act
Section 303 amends the Foreign Narcotics Kingpin Designation Act
(title VIII of Public Law 106 120; 113 Stat. 1629; 21 U.S.C. 1904). This
provision eliminates the restriction on judicial review of
determinations made under that Act, and is in accord with
recommendations made by the Judicial Review Commission on Foreign Asset
Control.
Section 304. Modification of positions requiring consultation
with Director of Central Intelligence in appointments
Section 304 removes the position of Director of the Office of
Nonproliferation and National Security of the Department of Energy from
those positions for which the Secretary of Energy is required to consult
with the Director of Central Intelligence, and adds to the list of
positions the Director of the Office of Intelligence of the Department
of Energy and the Director of the Office of Counterintelligence of the
Department of Energy. This provision brings the law into accord with the
positions that exist currently at the Department of Energy.
Section 305. Modification of reporting requirements for
significant anticipated intelligence activities and significant
intelligence failures
Section 305 amends the National Security Act of 1947 to require that
notifications to Congress of intelligence activities and intelligence
failures be made in writing and contain a concise statement of facts
pertinent to the report and an explanation of the significance of the
intelligence activity or failure covered by the report. This section
also requires the Director of Central Intelligence to establish
standards and procedures applicable to such reports. This section is
designed to bring clarity and uniformity to an essential element of
congressional oversight of the Intelligence Community. While not
intended to increase or change reporting requirements, it is designed to
ensure that reports made pursuant to the National Security Act are
properly memorialized and consistent in form and content. The Committee
notes that this provision is not intended to discourage prompt oral
notifications, but requires that they be followed immediately by a
written report fulfilling the requirements of this section.
Section 306. Modification of authorities for protection of
Intelligence Community employees who report urgent concerns to Congress
Section 306 alters the process applied to the handling of complaints
or information brought to the attention of the Central Intelligence
Agency Inspector General and other Inspectors General of the
Intelligence Community, by requiring that in all such cases the
complaint or information be forwarded to the Director of the Central
Intelligence, or other agency head, and then to the intelligence
committees. Prior to this amendment, only complaints that the Inspectors
General found ``credible'' were forwarded to the agency head and onward
to the intelligence committees. Section 306 requires the agency heads
and the intelligence committees also to receive copies of those
complaints that an Inspector General ``does not find credible.''
Section 307. Review of protections against the unauthorized
disclosure of classified information
Section 307 requires the Attorney General, in conjunction with the
Director of Central Intelligence and the heads of other appropriate
agencies, to conduct a comprehensive review of current laws, regulations
and protections against unauthorized disclosure of classified
information and to submit a report to Congress in unclassified form.
Section 308. Modification of authorities relating to official
immunity in interdiction of aircraft engaged in illicit drug trafficking
Section 308 amends current law (22 U.S.C. 2291 4) relating to
official immunity for employees and agents of the United States and
foreign countries engaged in the interdiction of aircraft used in
illicit drug trafficking. Under Section 308, the President must make an
annual certification to Congress concerning both the existence of a drug
threat in the country at issue and the existence in that country of
appropriate procedures to protect against innocent loss of life. An
annual report to Congress by the President concerning United States
Government assistance to such interdiction programs is also required by
Section 308.
Section 309. Suspension of reorganization of Diplomatic
Telecommunications Service Program Office
Section 309 suspends until October 1, 2002 the effective date of the
provisions in the Intelligence Authorization Act for fiscal year 2001
that require reorganization of the Diplomatic Telecommunications Service
Program Office.
Section 310. Presidential approval and submission to Congress
of National Counterintelligence Strategy and National Threat
Identification and Prioritization Assessments
In December 2000, President Clinton signed Presidential Decision
Directive 75 outlining specific steps that will enable the U.S.
Counterintelligence Community to fulfill better its mission of
identifying, understanding, prioritizing and counteracting the
intelligence threats faced by the United States. Section 310 requires
that the President approve and submit to Congress the National
Counterintelligence Strategy and each National Threat Identification and
Prioritization Assessment, or any modifications thereof, produced
pursuant to Presidential Decision Directive 75.
TITLE IV--CENTRAL INTELLIGENCE AGENCY
Section 401. One-year extension of Central Intelligence
Agency Voluntary Separation Pay Act.
Section 401 extends the Central Intelligence Agency Voluntary
Separation Pay Act for one year, to September 30, 2003.
Section 402. Modification of Central Services Program
Section 402 eliminates the termination date for the Central
Intelligence Agency Central Services Program.
COMMITTEE ACTION
On September 6, 2001, the Select Committee on Intelligence approved
the bill and ordered that it be favorably reported.
ESTIMATE OF COSTS
Pursuant to paragraph 11(a) of rule XXVI of the Standing Rules of the
Senate, the estimated costs incurred in carrying out the provisions of
this bill for fiscal year 2002 are set forth in the Classified Annex to
this bill. Estimates of the costs incurred in carrying out this bill in
the five fiscal years thereafter are not available from the Executive
Branch, and therefore the Committee deems it impractical, pursuant to
paragraph 11(a)(3) of rule XXVI of the Standing Rules of the Senate, to
include such estimates in this report. On September 11, 2001, the
Committee transmitted this bill to the Congressional Budget Office and
requested that it conduct an estimate of the costs incurred in carrying
out the provisions of this bill.
EVALUATION OF REGULATORY IMPACT
In accordance with paragraph 11(b) of rule XXVI of the Standing Rules
of the Senate, the Committee finds that no regulatory impact will be
incurred by implementing the provisions of this legislation.
CHANGES IN EXISTING LAW
In the opinion of the Committee it is necessary to dispense with the
requirements of paragraph 12 of rule XXVI of the Standing Rules of the
Senate in order to expedite the business of the Senate.
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