[Senate Report 107-51]
[From the U.S. Government Printing Office]
107th Congress Report
1st Session SENATE 107-51
_______________________________________________________________________
COMMITTEE ACTIVITIES
__________
SPECIAL REPORT
of the
SELECT COMMITTEE ON INTELLIGENCE
UNITED STATES SENATE
JANUARY 6, 1999 TO DECEMBER 15, 2000
August 3, 2001.--Ordered to be printed
C O N T E N T S
Page
I. Introduction......................................................1
II. Legislation.......................................................3
A. Intelligence Budget..................................... 3
B. S. 1009 Intelligence Authorization Act for FY 2000...... 3
C. S. 2507 Intelligence Authorization Act for FY 2001...... 5
D. S. 2089, The Counterintelligence Reform Act for FY 2000. 6
E. S. 1902 Japanese Imperial Government Disclosure Act of
2000................................................... 7
III.Oversight Activities..............................................8
A. Hearings................................................ 8
1. Counterintelligence................................ 8
2. Counterterrorism................................... 8
3. Counterproliferation............................... 9
4. Counternarcotics................................... 10
5. Denial and Deception............................... 11
6. Ballistic Missile Analysis......................... 11
7. State Department Security Breaches................. 11
8. National Security Threats to the U.S............... 13
9. Covert Action Quarterly Reviews.................... 14
10. Kosovo............................................. 14
11. Russia............................................. 15
12. The People's Republic of China (PRC)............... 16
13. Colombia........................................... 16
14. Iraq............................................... 16
15. India/Pakistan..................................... 17
16. Cyber Security..................................... 17
17. Y2K................................................ 18
18. Lt. Commander Michael Speicher..................... 18
19. Nazi War Crimes.................................... 20
20. Encryption......................................... 20
21. CTBT............................................... 21
22. FISA and the Technology Challenge.................. 21
23. Pan Am 103......................................... 22
24. Intelligence Needs of Unified Commanders........... 22
25. NIMA/TPED.......................................... 23
26. Unauthorized Disclosure of Classified Information.. 24
B. Investigations and Inquiries............................ 25
1. China Investigations................................ 25
2. PRC Nuclear Espionage, Department of Energy Security
and Counterintelligence Matters, and the Wen Ho Lee
Case............................................... 30
3. Deutch Mishandling of Classified Material........... 31
4. USS Cole............................................ 32
C. Community Issues........................................ 33
1. Activities of the CIA in Chile..................... 33
2. Oversight of Intelligence Community Inspectors
General............................................ 33
3. Classified Information Procedures Act (CIPA)........ 34
4. POW/MIA Analytic Capability in the Intelligence
Community.......................................... 35
5. Counterdrug Intelligence Plan....................... 36
6. Judicial Review Commission on Foreign Asset Control. 36
7. National Commission for the Review of the National
Reconnaissance Office.............................. 37
D. Audits.................................................. 37
1. NIMA................................................ 38
2. Covert Action....................................... 38
3. Other............................................... 38
E. Technical Advisory Group (TAG) Reports.................. 38
1. Signals Intelligence--Rebuilding the NSA............ 39
2. Human Intelligence--Bringing Technology in from the
Cold............................................... 40
3. MASINT--Funding and Organizing to Realize Potential. 41
4. IMINT--Keeping the Customers Satisfied.............. 41
IV. Confirmations....................................................42
A. James M. Simon, Jr., Assistant Director of Central
Intelligence for Administration........................ 42
B. John McLaughlin, Deputy Director of Central Intelligence 42
V. Support to the Senate............................................42
VI. Appendix.........................................................43
A. Summary of Committee Activities......................... 43
1. Number of Meetings.................................. 43
2. Bills and Resolutions Originated by the Committee... 43
3. Bills Referred to the Committee..................... 43
4. Publications........................................ 43
107th Congress Report
SENATE
1st Session 107-51
======================================================================
COMMITTEE ACTIVITIES--SPECIAL REPORT OF THE SELECT COMMITTEE ON
INTELLIGENCE, UNITED STATES SENATE, JANUARY 6, 1999 TO DECEMBER 15,
2000
_______
August 3, 2001.--Ordered to be printed
_______
Mr. Graham, from the Select Committee on Intelligence,
submitted the following
SPECIAL REPORT
I. Introduction
The Senate Select Committee on Intelligence (SSCI) was
established in 1976 by Senate Resolution 400 to strengthen
Congressional oversight of the programs and activities of U.S.
intelligence agencies. Throughout its history, the Committee
has sought to carry out its oversight responsibilities in a
nonpartisan manner. During the 106th Congress, the Committee
continued this tradition in crafting important intelligence
legislation, conducting investigations and audits into
Intelligence Community and other national security issues, and
authorizing and as necessary, increasing or reallocating--
funding for a wide array of U.S. intelligence activities.
As part of its oversight responsibilities, the Committee
performs an annual review of the intelligence budget submitted
by the President and prepares legislation authorizing
appropriations for the various civilian and military agencies
and departments comprising the Intelligence Community. These
entities include the Central Intelligence Agency, Defense
Intelligence Agency, National Security Agency, National Imagery
and Mapping Agency, National Reconnaissance Office, as well as
the intelligence-related components of Department of State,
Federal Bureau of Investigation, Department of the Treasury,
and Department of Energy. The Committee makes recommendations
to the Senate Armed Services Committee on authorizations for
the intelligence-related components of the U.S. Army, U.S.
Navy, U.S. Air Force, and U.S. Marine Corps. The Committee also
conducts periodic investigations, audits, and inspections of
intelligence activities and programs.
The Committee's charge is to ensure that the Intelligence
Committee provides the accurate and timely intelligence
necessary to identify and monitor threats to the national
security to support the executive and legislative branches in
their decisions on national security matters, ensure that U.S.
military commanders have the intelligence support to allow them
to prevail swiftly and decisively on the battlefield, and to
ensure that all intelligence activities and programs conform
with the Constitution and laws of the United States of America.
Following the dissolution of the Warsaw Pact and the Soviet
Union, the U.S. Intelligence Community has reviewed,
redirected, and expanded its efforts to monitor both
traditional and emerging national security threats, including
so-called ``asymmetric threats,'' confronting the United
States. The emergence and growth of transnational threats such
as the proliferation of weapons of mass destruction,
international terrorism, information warfare, narcotics
trafficking, and international criminal organizations presents
the nation and the Intelligence Community with challenges
requiring different policies, programs, technologies, and
structures. These challenges are compounded by dramatic
advances in telecommunications technology, including the spread
of strong encryption, and the growth of foreign denial and
deception activities designed to conceal, or mislead as to,
activities of concern to U.S. intelligence collectors,
analysts, and policymakers. As new challenges and threats
confront the country, the Committee plays an ever more
important role in ensuring that the Intelligence Community
adapts to and meets these evolving threats and intelligence
challenges.
The need to modernize the Intelligence Community's
infrastructure--both ``hardware'' (e.g., collection,
communications, dissemination, and support systems) and ``human
software'' (e.g. leadership, motivation, innovation, language
skills, and analysis) with which the Community approaches the
future--was a central theme of the Committee's work in the
106th Congress. As in the 105th Congress, the Committee built
upon the work of the SSCI Technical Advisory Group (TAG) in
identifying problems, solutions, and opportunities for
Committee action.
Reflecting the recommendations of the TAG as well as other
problems and shortfalls identified by the Committee, the
Committee in the 106th Congress has continued to fight, with
some success, to increase the overall level of intelligence
spending above the President's budget request, while reducing
or reallocating funds from programs and activities that were
poorly justified, redundant or lower in priority. The Committee
sought to focus on the most imminent and critical challenges
facing the Intelligence Community, including an aging U.S.
signals intelligence (SIGINT) collection system, and serious
shortfalls in the Tasking, Processing, Exploitation, and
Dissemination (TPED) of intelligence from satellites and other
collection platforms. In addition, the Committee continued to
concentrate additional resources and attention on the five
areas of counternarcotics, counterterrorism
counterproliferation, counterintelligence, and effective covert
action.
The Committee focused special oversight and legislative
attention on counterintelligence and security matters,
including The People's Republic of China (PRC) nuclear
espionage and a series of security problems at theDepartment of
State. In addition to its investigation into PRC espionage and security
problems at the Department of Energy, the Committee conducted extensive
investigations into satellite and missile technology transfers to the
PRC, the PRC efforts to influence U.S. policy, and the mishandling of
highly classified information by former Director of Central
Intelligence John Deutch. The Committee also adopted a provision--later
vetoed by President Clinton--to deter leaks of classified information.
During the 106th Congress, the Committee conducted 99
hearings and on-the-record meetings. Of these, 57 were
oversight hearings, 12 were budget hearings (including
conference meetings with the House committee), 20 were
legislative hearings, eight were business meetings, and two
were nomination hearings. The Committee also held 17 on-the-
record briefings and more than 250 off-the-record briefings.
II. Legislation
A. Intelligence Budget
The Committee conducted annual reviews of the fiscal year
2000 and fiscal year 2001 budget requests for the Director of
Central Intelligence's National Foreign Intelligence Program
(NFIP), and the Department of Defense's Joint Military
Intelligence Program (JMIP) and Tactical Intelligence and
Related Activities (TIARA). As part of its review, the
Committee received testimony from senior Intelligence Community
officials and evaluated the detailed budget justification
documents submitted by the executive branch.
The Committee is concerned that for a number of years, the
funding allocated for intelligence activities has been
inadequate. While some reallocation of national resources was
inevitable after the end of the Cold War, the Committee
believes the time has come to increase funding for intelligence
activities to ensure timely and adequate warning of threats to
our national security in a complex and challenging security
environment. The Committee identified substantial shortfalls in
modernization programs for some agencies that can only be
addressed by additional resources, or a realignment of
priorities for intelligence expenditures.
The Committee also has recommended a five year realignment
of resources for fiscal years 2001-2005, should the executive
branch choose not to increase the allocation of resources for
intelligence.
During the 106th Congress, the Committee maintained its
commitment to advanced research and development efforts
community-wide and strengthening U.S. capabilities in the areas
of counterproliferation, counterterrorism, counternarcotics,
counterintelligence and covert action.
B. S. 1009, FY 2000 Intelligence Authorization Act
On May 11, 1999, the Committee reported S. 1009, the
Intelligence Authorization Bill for Fiscal Year 2000. The bill
provided the annual authorization for appropriations for
intelligence activities and included several legislative
provisions. Some of these provisions:
Authorized the intelligence activities and programs
for the Central Intelligence Agency (CIA), the
Department of Defense (DOD), the Defense Intelligence
Agency (DIA), the National Security Agency (NSA), the
Department of the Army, the Department of the Navy, the
Department of the Air Force, the Department of State,
the Department of the Treasury, the Department of
Energy (DOE), the Federal Bureau of Investigation
(FBI), the National Reconnaissance Office (NRO), and
the National Imagery and Mapping Agency (NIMA).
Authorized investigative components, such as the
Federal Bureau of Investigation (FBI) and internal
Intelligence Community investigative or security
elements, to access computers of individuals handling
classified data, with the consent of the individual.
Expanded the definition of ``agent of a foreign
power'' under the Foreign Intelligence Surveillance Act
(FISA) to include the classic illegal spy who comes to
the United States under a false identity and remains
hidden for many years before being tasked to conduct
espionage.
Expanded the discretion available to government
officials under the Immigration and Nationality Act to
permit naturalization of persons who have made an
extraordinary contribution to the national intelligence
mission and who were otherwise disqualified because of
past membership in the Communist Party or other
totalitarian organization.
On the floor, the Senate took up the intelligence
authorization bill passed by the House and struck all of the
House bill after the enacting clause and inserted a substitute
text, consisting of the text of S. 1009 and amendments. In
conference, members of the House Permanent Select Committee on
Intelligence (HPSCI) and the SSCI met to seek agreement on the
authorization of appropriations for fiscalyear 2000 and to
resolve differences in the legislative provisions in the House and
Senate bills. The HPSCI receded from its disagreement to the amendment
of the Senate with an amendment that was a substitute for the House
bill and the Senate amendment. The conference report passed both houses
and was signed by the President on December 31, 1999, as P.L. 106-120.
The provisions of S. 1009 described above remained in the final
conference report. In addition, the conference report:
Established procedures for blocking assets of foreign
narcotics traffickers who pose an unusual and
extraordinary threat to national security (the
``Foreign Narcotics Kingpin Designation Act'') and
created a Judicial Review Commission to evaluate and
report on remedies available to U.S. persons affected
by the blocking of assets of foreign persons.
Required a declassification review and critical
analysis of an intelligence estimate on Vietnam-era
personnel who are listed as prisoners-of-war or
missing-in-action personnel (POW/MIA).
Established the Commission for the Review of the
National Reconnaissance Office (NRO) tasked with
reviewing the roles and missions of the NRO to ensure
that the Intelligence Community acquires the most
efficient technologically capable, and economical
satellite collection systems.
The Foreign Narcotics Kingpin Designation Act was added to
the Senate bill as an amendment during floor consideration. The
conferees debated at length the issue of the judicial review
available to U.S. persons whose assets may be affected by the
blocking of assets of foreign drug kingpins. The conferees
agreed to appoint a Judicial Review Commission to study whether
adequate judicial review was available and report back to the
Committees.
The POW/MIA provision in the conference report was a floor
amendment to the Senate bill and was accepted by the managers.
The NRO Commission provision was added at conference. The
managers agreed that the functions and missions carried out by
the NRO are essential to the provision of timely intelligence
to policymakers and military leaders and that a review of the
NRO was necessary to ensure that it was performing its tasks in
a high-quality and cost-effective manner.
C. S. 2507, FY 2001 Intelligence Authorization Act
On April 27, 2000, the Committee reported S. 2507, the
Intelligence Authorization Bill for Fiscal Year 2001. The
Senate passed the bill on October 2, 2000, with several
amendments. The bill, as passed by the Senate:
Authorized the intelligence activities and programs
for the Central Intelligence Agency (CIA), the
Department of Defense (DOD), the Defense Intelligence
Agency (DIA), the National Security Agency (NSA), the
Department of the Army, the Department of the Navy, the
Department of the Air Force, the Department of State,
the Department of the Treasury, the Department of
Energy (DOE), the Federal Bureau of Investigation
(FBI), the National Reconnaissance Office (NRO), and
the National Imagery and Mapping Agency (NIMA).
Criminalized the knowing and willful disclosure of
classified information by persons with authorized
access to such information to persons not authorized to
receive the information. This provision was intended to
close a gap in current law, which criminalizes only
leaks of ``defense information'' or other specified
categories of intelligence information. The Departments
of Justice and State, the CIA, and the Executive Office
of the President all supported the provision as adopted
by the Senate.
Required the Director of Central Intelligence, in
consultation with the Secretary of Defense, to create
an analytic capability for intelligence relating to
prisoners of war and missing persons. The analytic
capability would extend to activities with respect to
prisoners of war and missing persons after December 31,
1990.
Required the Director of Central Intelligence, in the
wake of high profile security breaches at the State
Department, to certify State Department compliance with
applicable standards regarding the handling, retention,
or storage of Sensitive Compartmented Information (SCI)
material.
Strengthened the CIA Inspector General's (IG)
Congressional reporting requirements in cases of
possible wrongdoing by senior CIA officials, in
response to the CIA's failure to report in a timely
fashion, security violations by the former Director of
Central Intelligence, John Deutch.
Amended the Drug Kingpin Act of 1999 to provide U.S.
citizens with civil due process rights in the event
their assets are seized or affected pursuant to the
Act.
Amended the Intelligence Authorization Act for Fiscal
Year 1995 and the Foreign Intelligence Surveillance Act
to require additional coordination within, and among,
the U.S. federal agencies investigating and prosecuting
espionage and other cases affecting national security.
It clarified, in statute, certain obligations of the
affected agencies, ensured accountability in
decisionmaking by agency heads, and codified current
law and practice with respect to determinations of
``probable cause'' under the FISA statute.
Created a Public Declassification Board, on a pilot
program basis, that would be charged with advising the
President on government-wide declassification efforts,
while ensuring the protection of national security
interests.
Created a process for the declassification of
documents related to the Japanese Imperial Government
similar to the process established for the Nazi War
Crimes Disclosure Act.
S. 2507, as passed by the Senate, was supported by the
Administration in a Statement of Administration Policy (SAP)
issued on October 2, 2000. The Senate then requested a
conference with the House and amended H.R. 4392 with the text
of S. 2507, as amended.
In conference, all of the Senate provisions were included
in the conference report except for the provision relating to
the Drug Kingpin Act. House conferees argued that the Congress
should not act with regard to this issue until the Judicial
Review Commission on Foreign Asset Control issued its report as
required by law. (The Commission issued a report on December 4,
2000 and the Committee expects to revisit the issue in the
Fiscal Year 2002 authorization bill.)
The conferees also discussed section 304, relating to
unauthorized disclosure of classified information, and section
501, relating to contracting authority for the National
Reconnaissance Office. Amendments relating to both of these
provisions were rejected by the conferees.
The conference report was approved, unanimously, by the
Senate and the House on October 12, 2000. Unfortunately,
despite the support of the heads of the affected agencies for
section 304 and the previous written statements by the White
House in support of the legislation, President Clinton vetoed
the bill on November 4, 2000, citing his opposition to that
provision.
Following the veto, on November 13, 2000, the House
reintroduced and passed the conference report in the House as a
new bill, H.R. 5630. H.R. 5630 did not include the provision
regarding ``leaks'' of classified information that led to the
President's veto. The Senate considered and passed H.R. 5630 on
December 6, 2000, with an amendment by Senator Allard to strike
section 501, relating to contracting authority by the National
Reconnaissance Office. The House considered and passed the bill
on December 11, 2000, without amendment. The President signed
the bill on December 27, 2000 as P.L. 106-567.
D. S. 2089, The Counterintelligence Reform Act of 2000
In response to some of the issues identified in the
investigation of espionage at the Department of Energy labs, on
February 24, 2000, Senators Specter, Torricelli, Thurmond,
Biden, Grassley, Feingold, Helms, Schumer, Sessions, and Leahy
introduced the ``Counterintelligence Reform Act of 2000'' (S.
2089). In early April 2000, the Select Committee on
Intelligence held a closed hearing to receive testimony on S.
2089 and other issues involving the Foreign Intelligence
Surveillance Act (FISA). The bill was considered by the Senate
judiciary Committee on May 18, 2000, and ordered favorably
reported with an amendment in the nature of a substitute. On
May 23, 2000, S. 2089 was reported to the Senate and
immediately referred to the Select Committee on Intelligence
pursuant to Senate Resolution 400, 94th Congress, on the same
day. The Committee, by a vote of 15-0, ordered the bill
favorably reported with amendments on July 18, 2000. The bill
was considered by the Senate as an amendment by Senator Specter
to the Intelligence Authorization Act for Fiscal Year 2001, and
was enacted as part of that legislation (P.L. 106-567).
The bill delineates coordination responsibilities within
and among the U.S. Government agencies investigating and
prosecuting espionage cases and other cases affecting national
security. The legislation clarifies, in statute, the
obligations of each of the affected agencies in an espionage
investigation, ensures accountability in decisionmaking by
relevant agency heads, and codifies current law and practice
with respect to a determination of ``probable cause'' under the
FISA. The Committee's amendments to the bill are detailed in
Senate Report 106-352, which accompanied S. 2089.
e. s. 1902, japanese imperial government disclosure act of 2000
S. 1902, the Japanese Imperial Army Disclosure Act, was
introduced by Senators Feinstein, Wellstone, Grams, Boxer,
Levin, and Hatch on November 10, 1999. The bill was approved by
the Judiciary Committee on May 18, 2000, without amendment, and
referred to the Select Committee on Intelligence, pursuant to
Senate Resolution 400, 94th Congress, on June 7, 2000. The
Committee considered the legislation on July 18, 2000, and
approved it with amendments.
The Act established a Japanese Imperial Army Records
Interagency Working Group to review, for declassification,
records pertaining to the Japanese Imperial Army and
governments allied with, or cooperating with, the Imperial Army
of Japan. The bill set out standards for the interagency
working group to use, when reviewing the documents. In
addition, it allowed for expedited processing of the Freedom of
Information Act (FOIA) requests relating to Japanese Imperial
Army records. The Committee amended the legislation to ensure
the protection of intelligence sources and methods, by deleting
a provision that would have eliminated the Director of Central
Intelligence's obligation under the National Security Act of
1947 to protect operational files.
This legislation was considered by the Senate as an
amendment by Senator Feinstein to S. 2507, the Fiscal Year 2001
Intelligence Authorization bill. That amendment was approved by
the Senate, and the Japanese Imperial Army Records Disclosure
Act was considered in conference as a Title of H.R. 4392. In
conference, the provision was amended to apply to the Japanese
Imperial Government rather than the Japanese Imperial Army and
additional changes were made to ensure protection of sources
and methods. The legislation was enacted as part of the
authorization legislation (P.L. 106-567).
III. Oversight Activities
a. hearings
1. Counterintelligence
In recent years, the Committee has become increasingly
concerned about the ability of existing U.S.
counterintelligence structures, programs, and policies to
address both emerging threats and traditional adversaries using
cutting edge technologies and trade craft in the 21st Century.
The Committee made its views known to the nation's senior
intelligence and counterintelligence officials. Many of them
shared these concerns.
On March 8, 2000, during a closed hearing before the SSCI,
DCI George Tenet, FBI Director Louis Freeh, and Deputy
Secretary of Defense John Hamre unveiled a draft proposal
entitled ``Counterintelligence for the 21st Century.'' This
plan, generally referred to as ``CI 21,'' resulted from an
extensive review assessing existing counterintelligence
structures and capabilities to address emerging, as well as
traditional, counterintelligence threats. The drafters of the
CI 21 plan found current U.S. counterintelligence capabilities
to be ``piecemeal and parochial,'' and recommended adoption of
a new counterintelligence philosophy--described as more policy-
driven, prioritized, and flexible, with a strategic, national-
level focus--as well as a restructured national
counterintelligence system. CI 21 proposes significant changes
in the way the United States Government approaches, and
organizes itself, to meet the threat of foreign espionage and
intelligence gathering.
After additional interagency review, the revised outlines
of the CI 21 plan were presented to the Committee on July 26,
2000. The Committee will hold hearings on a Presidential
Decision Directive (PDD) signed on December 28, 2000
establishing the CI 21 structures, authorities, and
responsibilities.
2. Counterterrorism
Terrorism threatens American lives and interests around the
world. The continuing and evolving terrorist threat was
demonstrated by the October 12, 2000 terrorist attack on the
USS Cole as it refueled in Aden, Yemen.\1\ Ensuring that the
Intelligence Community is well positioned to support the United
States Government's efforts to counter terrorism remains among
the Committee's highest priorities. In addition to extensive
classified briefings at the staff level, the Committee held
several hearings on the counterterrorism topic, as well as
exploring counterterrorism issues in other hearings on the
intelligence budget and other matters.
---------------------------------------------------------------------------
\1\ The Committee's staff inquiry into the question of whether our
intelligence capabilities were fully utilized prior to the attack on
the USS Cole is addressed in this report's section on ``Investigations
and Inquiries.''
---------------------------------------------------------------------------
On February 9, 2000, the Committee held a hearing to
receive the Intelligence Community's comprehensive assessment
of the terrorist threat against the United States, the status
of U.S. counterterrorism efforts, including the recent efforts
to defeat the so-called ``Millennium'' threat, the resources
devoted to countering the threat and any projected resource
shortfalls.
The Committee subsequently received an off-the-record
briefing by the Special Assistant to the President for National
Security Affairs and National Coordinator for Counterterrorism,
as well as the Director of the DCI's Counterterrorism Center,
the FBI's Assistant Director for Counterterrorism and the
Department of State's Coordinator for Counterterrorism.
On June 8, 2000, the Committee held an open hearing to
receive the report of the National Commission on Terrorism,
known as the ``Bremer Commission,'' prepared pursuant to P.L.
277. Testifying before the Committee were Ambassador L. Paul
Bremer III, Commission Chairman, as well as Commission Vice
Chairman Maurice Sonnenberg, and Commissioners R. James
Woolsey, Jane Harman, and Juliette N. Kayyem.
The purpose of the hearing was to inform the Committee of
the intelligence-related findings and recommendations contained
in the Commission's unclassified report entitled ``Countering
the Changing Threat of International Terrorism.'' The Committee
noted that the Commission echoed the Committee's concern
regarding the evolving threat posed by international terrorism.
These concerns were noted in the Committee's May 4th report
accompanying the Committee's Intelligence Authorization Bill
for Fiscal Year 2001. In that Report, the Committee stated
that: ``The Committee continues to be extremely concerned by
the threat posed by international terrorism to our nation's
security, and to the lives of Americans here and around the
world.'' The Commission highlighted the Members' concern that
``in addition to traditional weapons such as hijacking and car
bombs, terrorists' attacks are ever more likely to include
chemical, biological, radiological, and nuclear weapons.'' The
Committee also noted, in that report, that the terrorist
threats faced during the millennium celebrations were deferred
rather than defeated.
In his opening statement, the Chairman applauded the
Commission for highlighting the terrorist threat, the critical
importance of intelligence in countering terrorism, and the
need to fund and strengthen these capabilities, in particular
human intelligence, on an urgent basis. The Commission also
highlighted an urgent need to rebuild the National Security
Agency. The Commission's report states that: ``The National
Security Agency is America's most important asset for technical
collection of terrorism information, yet it is losing its
capability to target and exploit the modern communications
systems used by terrorists, seriously weakening the NSA's
ability to warn of possible attacks.'' In this regard, the
Commission Report cited the Senate Select Committee on
Intelligence's Technical Advisory Group, whose reports on the
NSA identify significant and expanding technology gaps.
Rebuilding the NSA was the Committee's highest priority in its
budgetary actions for Fiscal Years 2000 and 2001.
The Bremer Commission further raised concerns regarding
policy restrictions that have impeded collection of
intelligence by elements of the Intelligence Community legally
authorized to undertake such collection. The Committee is
continuing to review this issue as part of its on-going
oversight.
3. Counterproliferation
There is no more disturbing trend than the proliferation of
nuclear, biological, and chemical (NBC) weapons and the
missiles to deliver them. As Director Tenet testified before
the Committee, ``Over the next 15 years, . . . our cities will
face ballistic missile threats from a wider variety of actors--
North Korea, probably Iran, and possibly Iraq. * * * As
alarming as the long range missile threat is, it should not
overshadow the immediacy and seriousness of the threat that
U.S. forces, interests, and allies already face overseas from
short and medium-range missiles.'' At a minimum, American
leaders seeking to defend U.S. interests overseas, against
states or groups armed with such weapons, will have to reckon
with an expanded threat of attack against U.S. forces, allies,
or the U.S. homeland, dramatically changing their risk-benefit
calculus in a given contingency.
On June 10, 1999, the Committee held a closed hearing to
provide Members with an up-to-date understanding of the current
proliferation threat and to assess the relative value of
responses to counter or mitigate that threat. The Committee
heard testimony from senior members of the Intelligence
Community with responsibility for intelligence activities and
analysis regarding proliferation, as well as from outside
experts on proliferation issues.
The Committee also has received numerous briefings on
proliferation-related topics, including a briefing on the
export of military technology by thePeople's Republic of China
(PRC). At the time, the Senate was about to consider two pieces of
legislation relating to the PRC. The first was legislation proposed by
Senator Thompson (S. 2645) that would require annual reviews of PRC
proliferation activities and possible sanction of Chinese proliferators
or other PRC activities. The second was legislation to grant the PRC
permanent normal trade relations (PNTR) status (S. 2277)--a condition
for final agreement between the United States and China to open the way
for PRC membership in the World Trade Organization. Among the issues
discussed in the Senate debate on these two bills were: Chinese
proliferation; Chinese military and especially missile modernization,
human rights abuses, the Chinese economy, and the impact of increased
trade with the United States on democratization of the PRC. The purpose
of the briefings was to provide Members with the current intelligence
information regarding these issues in anticipation of Senate debate on
the two bills.
4. Counternarcotics
The Committee held a closed hearing on July 29, 1999, to
receive a general overview of the national security threat
posed by international drug trafficking, as well as a
description of the U.S. Government's efforts directed against
this threat. The situation in Colombia was addressed in detail,
with particular emphasis placed on those Colombian insurgent
groups which actively participate in, and derive their funding
from drug trafficking.
While the primary focus of the hearing was on Colombia, the
witnesses also presented information on those foreign
governments, or defacto governments, that actively participate
in, or provide support for drug trafficking. This discussion
included information regarding the Revolutionary Armed Forces
of Colombia (FARC), the insurgent group which controls nearly
two-thirds of Colombian territory, and the Taliban regime in
Afghanistan. Additionally, the witnesses discussed the merits
of establishing a component within the Drug Enforcement
Administration to facilitate the sharing of intelligence
valuable for national security while protecting law enforcement
and prosecutorial equities.
5. Denial and deception
The Committee has been deeply concerned about the increase
in foreign denial and deception efforts directed against U.S.
intelligence collection. Denial and deception refers to efforts
to conceal, or mislead with respect to, activities of interest
and concern to U.S. policymakers such as military deployments,
development of weapons of mass destruction, and political
intentions. Denial and deception threatens the national
security by depriving U.S. policymakers and military leaders of
timely and accurate intelligence of threats to U.S. interests.
The Committee held one briefing for Members and a number of
staff briefings on denial and deception issues. The Committee
increased funding for activities to counter denial and
deception, and has directed actions designed to focus
Intelligence Community resources and management attention on
this critical intelligence challenge.
6. Ballistic missile analysis
As discussed elsewhere in this report, a critical threat
facing the United States today is the threat of attack by
ballistic missiles bearing nuclear, biological or chemical
weapons. The Intelligence Community has no more serious
challenge than to monitor this threat and no more serious
responsibility than to get this analysis right. On September
30, 1999, the Committee held a closed hearing to receive
testimony from the National Intelligence Officer for Strategic
and Nuclear Programs on the analysis and findings of a National
Intelligence Estimate (NIE) titled ``Foreign Missile
Developments and the Ballistic Missile Threat to the United
States Through 2015.'' The NIE concluded that during the next
15 years the United States most likely will face
Intercontinental Ballistic Missile (ICBM) threats from Russia,
China, and North Korea, probably from Iran, and possibly from
Iraq, although the threats will consist of dramatically fewer
weapons than today due to significant reductions expected in
Russian strategic forces.
The Committee found that the NIE incorporated a number of
improvements in the rigor and quality of the analysis,
including many based on the recommendations of the Commission
to Assess the Ballistic Missile Threat to the United States
(also known as the Rumsfeld Commission) in its July 1998
Report.
7. State Department security breaches
During the 106th Congress, the Committee held hearings and
staff briefings to review significant security breaches that
occurred at the Department of State. The Committee believes
this series of incidents reveals serious deficiencies in
security awareness, practice, and culture at the State
Department.
In February 1998, an unidentified man, wearing a tweed
jacket entered the Secretary of State's seventh floor office
suite and removed classified documents, including documents
classified as Sensitive Compartmented Information (SCI). The
man, in this ``tweed jacket incident'' has never been
identified and the documents have never been recovered.
Additionally, poor procedures for handling classified
information resulted in the Department's inability to
reconstruct which documents were taken. Without such
information, a full and complete damage assessment was not
possible.
On December 8, 1999, the FBI detained a Russian
intelligence officer, Stanislav Gusev, as he was recording
transmissions from a bug implanted in a piece of chair rail, in
a conference room within the Department of State headquarters
building. Gusev's detention capped a six-month investigation
that began when the FBI spotted the Russian intelligence
officer loitering near the State Department. Following
surveillance and observation of Gusev, technical
countermeasures discovered the remotely-activated device in the
conference room. Gusev was declared persona non grata and was
required to leave the United States.
The FBI and State Department continue to investigate who
was responsible for planting the bug and what sensitive
materials discussed in the conference room may have been
compromised. Recreating the extent to which Russian
intelligence or other personnel, may have had access to the
room in question has been complicated by the fact that from
1992 until August 1999, there were no escort requirements for
Russian (or other foreign) visitors to the State Department.
In January 2000, a laptop computer containing highly
sensitive classified intelligence materials, including SCI
material relating to weapons proliferation, was discovered to
be missing from the State Department Bureau of Intelligence and
Research (INR) and is presumed stolen. Despite an obligation
under the National Security Act of 1947 to keep the
intelligence committees ``fully and currently informed of all
intelligence activities'' including ``significant intelligence
failures,'' the Committee was not informed of the loss of this
laptop computer until after the Washington Post reported the
story in April 2000.
Following the ``tweed jacket'' affair, the SSCI, in the
Annex to the Intelligence Authorization Act for Fiscal Year
1999, directed the State Department Inspector General (IG) to
review and report on State Department policy and procedures for
handling classified information within the State Department
Headquarters facility. The September 1999 IG report, entitled
``Protecting Classified Documents at State Department
Headquarters,'' found that ``[t]he Department [of State] is
substantially not in compliance with the DCIDs [Director of
Central Intelligence Directives] that govern the handling of
SCI.'' (emphasis in original) In response to the IG Report in
the Annex to the Intelligence Authorization Act for Fiscal Year
2000, the Congressional intelligence committees required (1) a
report from the DCI evaluating the State Department's
compliance with all DCIDs related to the protection of
Sensitive Compartmented Information, (2) a State Department
report on specific plans for enhancing the security of
classified information within the State Department and (3) full
implementation, as appropriate, of the recommendations found
within the Inspector General's report.
The February 2000 DCI report noted that an independent
review by the CIA and the Community Management Staff confirmed
that the State Department was not in compliance with applicable
DCID requirements, and concluded that certain additional steps
were required to ``improve security practices in Department
offices where SCI is handled and discussed, as well as to
strengthen SCI document control and accountability.'' In its
report the State Department identified a number of actions or
proposed actions it intended to take in response to the IG
Report.
In the wake of the missing laptop computer incident,
Secretary of State Albright declared her intention to transfer
positions and responsibility for ensuring the proper security
and handling of SCI material from the State Department's Bureau
of Intelligence and Research to the Bureau of Diplomatic
Security (DS). At that time, the Committee expressed its
concerns regarding this transfer, including the need to ensure
continued DCI oversight over SCI material at the State
Department and the requirement that this function should be
funded through the National Foreign Intelligence Program (NFIP)
budget. Such oversight and budgetary authority is critical to
ensure effective implementation of measures to protect
intelligence information at the State Department. In the fall
of 2000, the DCI's Community Management Staff and the
Department of State agreed to measures designed to ensure
continued DCI oversight of the protection of SCI material and
continued funding for this function within the NFIP.
In the Intelligence Authorization Act for Fiscal Year 2001,
the Committee required the Director of Central Intelligence, in
the wake of high profile security breaches at the State
Department, to certify State Department compliance with
applicable standards regarding the handling, retention, or
storage of SensitiveCompartmented Information material.
Elements of the State Department that the DCI does not certify as in
compliance, or that do not receive a DCI waiver, may not retain or
store SCI information until they are certified as compliant.
Additionally, the Committee, in the report accompanying the
Intelligence Authorization Act for Fiscal Year 2001, directed
the State Department Inspector General to conduct annual
reviews of State Department policies and procedures for
protecting classified information at the State Department for
the next five years to determine progress in this area.
The Committee has taken numerous steps to improve the
security situation at the State Department and will continue
this focused oversight in the future.
8. National security threats to the United States
The Committee continued its practice of opening each new
session of the Congress with open and closed hearings reviewing
the Intelligence Community's assessment of current and
projected threats to the national security of the United
States. These annual hearings form the backdrop for the
Committee's budget authorization process, as well as provide a
rare public forum for discussion of national security threats
by the nation's top intelligence officials.
In his February 2, 2000 appearance before the Committee,
Director of Central Intelligence George Tenet emphasized the
interplay between traditional and emerging threats and modern
military technologies, in particular, ballistic missiles,
chemical, nuclear and biological weapons, and information
technologies.
``Over the next 15 years * * * our cities will face
ballistic missile threats from a wider variety of actors [in
addition to Russia and the PRC]--North Korea, probably Iran,
and possibly Iraq,'' the DCI testified. The DCI noted that,
``in a very real sense, we live at a moment when the past and
the future are colliding. In other words, today we must still
deal with terrorists, insurgents, and others who have hundreds
of years of history fueling their cases--but the chances are
they will be using laptop computers, sophisticated encryption,
and weaponry their predecessors could not even have imagined.''
The DCI expanded upon these themes, noting that traditional
ethnic hatreds and conflicts once frozen within the global
competition between two Cold War superpowers are now thawing in
Africa, the Caucasus, and the Balkans. At the same time, a
growing perception of so-called American ``hegemony'' has
become a lightening rod for the disaffected. Such an
environment of rapid change makes the United States even more
vulnerable to sudden surprise.
Throughout the 106th Congress, the Committee focused on
these and other threats and challenges to the security of the
United States. It concentrated much of its attention on
unconventional and asymmetric threats, including threats posed
by the proliferation of weapons of mass destruction and high-
technology, and state-sponsored and non-state terrorism. In
particular, the Committee recognizes that this dynamic change
and uncertainty continues, driven by significant transitions in
key states and regions throughout the world, the activities of
``rogue'' states and terrorist groups, rapid technological
development and proliferation, continuing international
criminal activity, and resentment of U.S. political, economic,
military, and social dominance.
The transcript of the Committee's February 2, 2000 hearing,
``Current and Projected National Security Threats to the United
States'' (S. Hrg. 106-580) was printed and made available to
the public.
9. Covert action quarterly review
Throughout the 106th Congress, the Committee continued to
conduct rigorous oversight of covert action programs. The
Committee reviews these programs to ensure their methods and
objectives are consistent with U.S. foreign policy goals, and
are conducted in accordance with all applicable U.S. laws. The
Committee pursues its oversight responsibilities with the
understanding that covert action programs can be a significant
factor in accomplishing vital foreign policy objectives. At the
same time, to be successful, such programs must be consistent
with the ideals and principles of our nation. During the 106th
Congress, the Committee established, with the Central
Intelligence Agency and the National Security Council, a
process to conduct regular quarterly written assessments of the
covert action programs. The Committee believes this reporting
requirement will improve both the implementation and oversight
of covert action programs in the future.
10. Kosovo
In the 106th Congress, the Committee closely monitored
developmentsin Serbia and Kosovo and the corresponding
intelligence issues that emerged in the course of NATO's first-ever
offensive combat operations. The Committee has continued to follow
events in the former Yugoslavia, including intelligence issues relating
to the NATO implementation force in Kosovo, and analysis of recent
political developments in Serbia.
The Committee examined the intelligence track record with
regard to the crisis in Kosovo and the Balkans--what we knew,
when did we know it, what were the analysts telling the
policymakers?
On April 14, 1999, the Committee held a closed briefing on
the military and intelligence implications of the crisis in
Kosovo, with testimony by General John Gordon, Deputy Director
of Central Intelligence; General Patrick Hughes, Director of
the Defense Intelligence Agency; and Phyllis Oakley, Assistant
Secretary of State for Intelligence and Research.
The Committee also was interested in how the worldwide U.S.
collection posture was affected by the Balkan crisis, with
special emphasis on hard target coverage. Finally, the
Committee undertook an examination of collection requirements
and opportunities facing the United States and the NATO
Alliance in Kosovo.
In 2000, the Committee focused on the ``intelligence
lessons learned'' from the Kosovo military campaign,
culminating in a May 10, 2000 briefing from the outgoing
Supreme Allied Commander Europe, General Wesley Clark. That
briefing touched on the problems associated with NATO Alliance
intelligence sharing during the air campaign and the
implications for timely intelligence of the ``war-making-by-
committee'' approach that characterized the early stages of the
Kosovo operation.
11. Russia
Over the past two years, the Committee has sought to stay
abreast of fast-paced developments in Russia by holding closed
briefings on the full range of national security and
intelligence issues associated with these changes. The
Committee has concentrated its attention on issues associated
with Russia's proliferation of nuclear and missile technology,
especially to Iran, Russia's evolving security relationship
with the PRC, as well as monitoring Russian nuclear issues.
Russia's interests coincide with those of the United States
and our allies from time to time. They often do not. Regional
instability in the former Soviet Union, in particular in the
Caucasus or Central Asia, could threaten U.S. interests,
especially if such instability were to spiral out of control or
tempt external intervention.
The long term impact of the Duma elections in December
1999, Yeltsin's surprise resignation, and the advent of
Vladimir Putin as Yeltsin's successor remain unclear. The
Committee focused its attention on how these recent leadership
changes will affect Russian's foreign and security policies.
Although Russia's need for integration into international
economic institutions and access to financing and key markets
may make a wholesale return to the confrontation of the Cold
War unlikely, Russia, especially under Putin, is likely to
persist in efforts to counter what it perceives as U.S.
dominance by using all the tools remaining at its disposal.
Russian domestic developments will have a great inpact on
stability in Eurasia and on Russia's capacity to act abroad.
The Committee recognizes that the United States has a major
interest in Russia's domestic transformation, although our
ability to affect the outcome is severely limited.
12. The People's Republic of China (PRC)
The People's Republic of China is perhaps the preeminent
national security, foreign policy, and intelligence challenge
facing the United States in the post-Cold War world. In the
106th Congress, the Committee held a total of 26 hearings on a
wide range of intelligence, counterintelligence, and policy
issues relating to the PRC. Many of these activities are
described in greater detail in sections of this report covering
the Committee's investigations into missile and satellite
technology transfers to the PRC and PRC efforts to influence
U.S. policy, and PRC nuclear espionage, Department of Energy
counterintelligence and security matters, and the Wen Ho Lee
investigation and prosecution.
Given the PRC's emergence as a strategic competitor of the
United States, it is critical that U.S. policymakers have a
complete, objective, and accurate understanding of the goals,
intentions, motivations, capabilities, and prospects for change
of the world's most populous nation. To that end, the Committee
directedactions to ensure that the CIA Directorate of
Intelligence applies rigorous external contrarian scrutiny to its
analysis of the PRC.
13. Colombia
On January 25, 2000, President Clinton announced a Colombia
Assistance Package to help ``strengthen the Colombian economy
and democracy, and fight narcotics trafficking.'' The
assistance package totals approximately $1.3 billion spread
over fiscal years 2000 and 2001. The assistance provided by the
United States is part of a $7.5 billion plan set forth by
Colombian President Andres Pastrana to battle Colombia's
narcotics, military, and economic problems. Colombia plans to
provide $4 billion towards this effort with the remainder
coming from other international assistance. ``Plan Colombia''
has five major components: helping the Colombian Government
push into the coca-growing regions of southern Colombia, which
are now controlled by insurgent guerrillas; upgrading Colombian
capability to aggressively interdict cocaine and cocaine
traffickers; increasing coca crop eradication; promoting
alternative crops and jobs; and increasing protection of human
rights, expanding the rule of law, and promoting the peace
process.
On February 3, 2000, the Committee held a closed hearing on
the situation in Colombia, with specific focus on the proposed
assistance package and additional funding for intelligence
activities included in the President's supplemental
appropriations request The witnesses were asked to provide
analysis on the political and military situations in Colombia;
to describe current narcotics trafficking activity within that
nation; to explain the rationale for the $1.3 billion
supplemental request for Colombia; and to describe how
additional intelligence funding would be used. The hearing also
explored the involvement of armed guerrilla groups and
paramilitaries in the drug trafficking business. The Committee
will continue to monitor closely developments in Colombia and
the contribution of U.S. intelligence agencies to U.S. policy.
14. Iraq
During the 106th Congress, the Committee continued its
extensive oversight of intelligence collection and analysis in
support of U.S. policy towards Iraq. Since the end of the Gulf
War, Iraq's intransigent rejection of United Nations
resolutions regarding Iraq's programs to develop weapons of
mass destruction, unwillingness to accept international
inspectors, and continued belligerence towards its neighbors
have been a serious concern for the United States and its
allies. Throughout this period, American military personnel
have been in a constant state of alert and are often engaged in
combat operations in the course of enforcing the northern and
southern no-fly zones established in Iraq in the wake of the
Gulf War.
In 1999 and 2000, the Committee held a number of closed
hearings and briefings to review intelligence collection and
analysis on Iraq, intelligence support to U.S. military forces
in the area, and support to the efforts initiated under the
Iraqi Liberation Act (ILA) of 1998. In addition, Committee
members and staff received numerous classified briefings
throughout the 106th Congress on intelligence regarding Iraq's
missile, chemical, biological, and nuclear programs, and the
status and intentions of Saddam Hussein's regime.
15. India/Pakistan
In the summer of 1999, after five decades of tension and
three wars, Pakistan and India engaged in military clashes over
Kashmir. Fighting between India and Pakistan and India and
Kashmiri separatists resulted in more than a thousand
casualties. Tensions remained high in 2000. The acquisition of
nuclear weapons capability by both countries, demonstrated by
nuclear tests in 1998, heightens concern that tensions between
India and Pakistan could erupt with little warning into full-
scale war, possibly escalating rapidly to nuclear war.
Providing warning in such a situation is a critical challenge
for the U.S. Intelligence Community.
In addition to staff briefings, on May 24, 2000, the
Committee received a classified briefing by senior intelligence
officers on India and Pakistan. The purpose of this briefing
was to provide Members with an update on the ongoing tensions
between India and Pakistan and the current status of their
military capabilities.
16. Cyber security
The United States increasingly has become reliant on
certain critical infrastructures, i.e., the physical and
computer-based systems essential to the operation of the
economy, government, and public health and safety. These
include telecommunications, energy, banking and finance,
transportation, water systems, and both governmental and
private emergency services. On July 22,1999, the Committee held
a closed hearing to review the Intelligence Community's role in
securing our nation's critical information infrastructure.
As the information technology revolution links and
automates critical components of our infrastructure, our
reliance on computers and advanced telecommunications creates a
new potential vulnerability to computer attack, in addition to
the more traditional threats from physical attack, equipment
failure, human error, and weather.
During the 106th Congress, Committee Members and staff had
numerous classified briefings regarding the role of the
Intelligence Community in identifying information warfare
threats and warnings, and in providing technical expertise to
both defend against computer attacks and investigate actual
computer intrusions. The Committee will continue its oversight
of this growing threat to our national security.
17. Y2K
On September 15, 1999, the Committee held a closed hearing
on the Year 2000 (Y2K) computer issue and its potential impact
on the U.S. and other nations.
The Y2K problem originated from the lack of information
storage capacity in the first few generations of computers.
Because storage capacity was at a premium, programmers decided
to designate a year by its last two digits (i.e., 88 instead of
1988) in order to save computer memory space. This practice was
common until the mid-1990s. As a result many computer experts
feared that older computer hardware devices and software would
incorrectly recognize the two digits representing the year 2000
(00) as the year 1900, and that this problem would cause
computer hardware and software to freeze up or shut down. Also,
because computers connected in a network are interdependent,
newer systems connected to hardware and software susceptible to
the Y2K problems also would suffer difficulties even if the
newer systems were Y2K compliant. Many believed that the Y2K
problem had the potential to cascade through computer networks
or systems dependent on computers susceptible to the Y2K
problem.
While the U.S. Government and American companies applied
significant time and resources to addressing the Y2K issue
prior to December 1999, information technology experts
expressed concern that most foreign governments and companies
had not adequately prepared for this problem. As a result many
computer experts feared that Y2K failures might cause
catastrophic failures in these nations' industrial sectors and
facilities.
The Intelligence Community prepared analyses on the
possible effects of the Y2K problem in various nations, and how
these consequences could have affected U.S. policy and
interests abroad. Despite alarmist predictions by both the
Intelligence Community and private sector analysts, the vast
majority of computer systems worldwide were prepared for the
Y2K issue and the failures that did occur were adequately
contained and remedied without significant damage.
18. Lt. Commander Michael Speicher
U.S. Navy Lt. Commander ``Scott'' Speicher was shot down
over Iraq on January 17, 1991, the first night of the Gulf War.
He was subsequently declared ``Killed in Action'' (KIA). For
several years, the Committee has been concerned that LCDR
Speicher has never been adequately accounted for.
The issue surfaced in the 105th Congress when the New York
Times ran a front page article that reported that Admiral
Stanley Arthur, then Vice Chief of Naval Operations and
formerly Commander of Allied Naval forces in the Persian Gulf
during the Gulf War, believed ``that Commander Speicher had
ejected successfully and survived.'' The Committee's interest
centered on the role and impact of intelligence on the
Government's accounting of LCDR Speicher, and what the
Committee increasingly came to view as the discrepancy between
the available intelligence information and the Navy's
determination that LCDR Speicher had been killed on the night
of January 17, 1991.
In July 1999, Senator Pat Roberts asked the SSCI to conduct
an inquiry into the Intelligence Community's input to the U.S.
Government's decision to list LCDR Speicher's status as KIA.
The Committee held a closed briefing on September 15, 1999,
and a closed hearing on October 28, 1999, to examine the case.
The Committee received testimony from Vice Admiral Thomas
Wilson, Director of the DIA, Brigadier General Roderick Isler,
Associate DCI for Military Support and Admiral Mike Ratliff,
Director of Naval Intelligence. The purpose of the hearing was
to: (1) review the Intelligence Community's analytical input
concerning Speicher's status as a Prisoner of War, Missing, or
Killed in Action, (2) determine how the Intelligence Community
is organized to carry out the DCI's statutoryresponsibility for
analytical support on POW/MIA matters and, (3) consider recommendations
for handling analysis of POW matters in the future. The Committee
concluded that information existed suggesting that LCDR Speicher may
have survived his aircraft being shot down. If so, he may at one time
have been--and conceivably could still be--a prisoner of war.
The Committee's interest prompted the establishment of a
Secretary of Defense ``Tiger Team,'' which included members of
the DIA and the Office of the Secretary of Defense (OSD), to
reassess the Speicher case. Although scheduled to produce a
joint report on March 13, 2000, DIA and OSD were unable to
agree on findings, and no report was published. The Committee
held an additional closed hearing on April 4, 2000. The
Committee received testimony from Vice Admiral Wilson; Jerry M.
Hultin, Under Secretary of the Navy; and Mr. Paul Lowell,
Director of Naval Intelligence. The purpose of the hearing was
to (1) review the Intelligence Community's all-source
analytical input to the Secretary of the Navy and the DoD Tiger
Team concerning Speicher's status, (2) review the Intelligence
Community's responsiveness to the Secretary of the Navy's
intelligence needs regarding the Speicher case, and (3)
determine how the Intelligence Community might be better
organized to carry out the DCI's statutory responsibility for
analytical support on POW/MIA matters.
At this hearing, Members learned that no comprehensive
analytic review of all-source intelligence had been produced on
the fate of LCDR Speicher since his plane was shot down in
1991. As a result, the Committee directed a comprehensive
analytical assessment of the intelligence related to the fate
of LCDR Speicher. The Committee held another closed briefing on
July 25, 2000, to update Members on efforts to obtain the
fullest possible accounting of LCDR Speicher's fate. The
Committee, by that point was deeply concerned that the Navy's
conclusion that LCDR Speicher was killed in action during the
Gulf War did not reflect the information provided by the
Intelligence Community. In addition, the Committee directed
that the Inspectors General of the Department of Defense and
the Central Intelligence Agency jointly examine the
intelligence support to the Speicher case and address (1) the
Intelligence Community's organization and assignment of
responsibility, (2) dissemination of reporting, and (3)
objectivity, accuracy, and completeness in handling POW/MIA
issues.
Largely as the result of the collection and analytic
efforts directed by the Committee, the Navy on January 10, 2001
changed LCDR Speicher's status from ``Killed in Action'' to
``Missing in Action.'' On the same day, the State Department
delivered a demarche and diplomatic note to the Iraqi Interests
Section in Washington demanding an accounting of any
information regarding Commander Speicher's fate.
19. Nazi War Crimes
The Committee met on September 16, 1999 to review the
status of declassification efforts by the Intelligence
Community to comply with the Nazi War Crimes Disclosure Act of
1998. The purpose of the law is to ensure that information
contained in classified World War II documents will be made
available to the public through declassification. Senators
Shelby, DeWine, Hatch, and Kyl co-sponsored this Act.
The Committee heard from members of the Intelligence
Community, the Chairman of the Nazi War Criminal Records
Interagency Working Group, and officials from the Office of the
Secretary of Defense.
The testimony indicated that declassification efforts are
proceeding well; records are being stored in the National
Archives; and there are no fiscal or organizational impediments
to sustaining this effort. The Working Group was given a two
year extension as part of the Japanese Imperial Government War
Crimes Act.
20. Encryption
The Committee is concerned by the impact of widespread
encryption on the NSA's ability to collect signals intelligence
on threats to U.S. interests, and on the ability of the FBI and
other law enforcement agencies to conduct their
counterterrorist, counterintelligence, and law enforcement
missions. Encryption is the process of disguising a message in
such a way as to hide its content. Historically, encryption has
been used primarily by governments and militaries to protect
their diplomatic communities, military plans, and other
secrets. However, in the last two decades the growing use of
computers, computer networks, the Internet cellular telephones
and other telecommunications technologies has increased the
demand for encryption products to protect privacy and
confidentiality.
Modern encryption products use complex mathematical
algorithms to encode messages. The strength of an encryption
product normally is judged according to the number of ``bits''
in the key--the higher the number of bits, thestronger the
encryption. Until recently, the export of encryption products had been
tightly regulated due to concerns over how the availability and use of
strong encryption products overseas would affect the NSA's capability
to collect signals intelligence (SIGINT).
During the 106th Congress, the Committee reviewed numerous
bills and proposals regarding encryption policy, and received
classified briefings regarding how the Intelligence Community
seeks to adjust to the use of modern encryption products.
On September 22, 1999, the Committee held a closed hearing
to hear the recommendations contained in the Committee's TAG
review of U.S. encryption policy. The TAG members were asked to
address (1) the seriousness of the technical challenge to
foreign intelligence collection posed by commercial encryption
products, (2) alternative technical responses to the
proliferation of encryption products, (3) the viability of the
foreign encryption products market, (4) federal policy or
statutory prescriptions that will protect national security
interests, and (5) technical or policy alternatives that will
assist law enforcement to gain access to encrypted information
in accordance with legal and constitutional safeguards.
The Committee will maintain its oversight of U.S.
encryption policy and will continue to support the Intelligence
Community's plans to address encryption technology.
21. Comprehensive Test Ban Treaty (CTBT)
In October 1999, the Committee held a closed hearing with
senior representatives of the Intelligence Community in support
of the Senate's deliberations on whether to give its consent to
ratification of the Comprehensive Test Ban Treaty. The hearing
focused on the ability of the United States to monitor foreign
nuclear testing in the context of the treaty and the relative
contributions of national and international monitoring and
inspection capabilities. Later in the month, the Senate voted
against U.S. ratification of the Comprehensive Nuclear Test Ban
Treaty.
The Committee also held staff briefings on possible Russian
nuclear test activities and the other aspects of foreign
nuclear weapons programs affecting U.S. national security.
22. The Foreign Intelligence Surveillance Act (FISA) and the technology
challenge
In 1998, the Committee audit staff conducted a six-month,
comprehensive review of the implementation and administration
of the Foreign Intelligence Surveillance Act of 1978. While the
audit staff found that the FISA legal review and approval
procedures receive senior management attention and are
appropriately rigorous, effective, and consistent with the law,
the staff also found that certain agencies were not prepared to
counter emerging technologies which challenge traditional
techniques of intelligence gathering under the FISA.
The challenges the Intelligence Community faces in
conducting electronic surveillance in today's communications
environment remain a particular concern to the Committee. As
the FISA has been the means by which some of our nation's most
important intelligence has been obtained for more than two
decades, it is imperative for the intelligence oversight
committees to understand the impact the dramatic changes in
communication and information technology have had on FISA
collection efforts. Equally important is the need to ensure
that the FISA statute itself keeps pace with rapidly changing
technology, so that counterintelligence and terrorist targets
cannot evade detection and prosecution by simply changing the
way they communicate, and at the same time, to ensure that the
privacy rights of American citizens are not placed at risk.
In March 2000, the Committee conducted a hearing to review
the role and viability of the FISA in today's collection
environment and the impact of modern technology. Senior
Intelligence Community officials have told the Committee that
the Act of 1978 presently provides the flexibility to permit
collection against emerging technologies.
The Committee also is encouraged by recent Intelligence
Community efforts both to confront technological changes and
exploit opportunities presented by rapidly changing
communications technologies. However, the Committee recognizes
that any degradation in the Intelligence Community's capability
to exploit emerging communications technologies will adversely
affect our nation's ability to collect critical intelligence
information. Monitoring of the Intelligence Community's
research and development efforts to ensure that collection
capabilities keep pace with communications technologies will
continue to be a high priority for the Committee's oversight of
the FISA.
23. Pan Am 103
On December 21, 1988, Pan Am Flight 103 exploded in the air
over Lockerbie, Scotland. The explosion and crash killed 270
people, including 189 Americans, and was quickly determined to
have been the work of terrorists. On May 3, 2000, more than 11
years after the bombing, the trial under Scottish law of two
Libyan nationals, Abdel Basset Ali al-Megrahi and Lamen Khalifa
Fhima, began in Camp Zeist, The Netherlands. [The Scottish
Court convicted Fhima and acquitted al-Megrahi for the bombing
in February 2001.]
This Committee monitored the proceedings in The Netherlands
as part of its oversight responsibilities. The United States
Government and, in particular, the Director of Central
Intelligence pledged full support to the Scottish prosecutors
in their efforts to obtain a conviction of the two Libyan
nationals. The Committee supports that commitment. The families
of the American citizens who died in that explosion have a
right to expect that the United States Government will go to
extraordinary lengths to bring the perpetrators to justice.
Those who may plan to engage in terrorist acts against United
States citizens or interests in the future must know that the
United States will pursue justice no matter how long it takes.
In a briefing to the Committee on March 3, 2000 Members
were briefed on the CIA's role in providing information in its
possession to support the prosecution, which is unprecedented
in a case heard before a foreign tribunal. In addition to the
briefing for Members, the Committee staff received periodic
briefings on the progress of the case, particularly with
respect to the potential risks to intelligence sources and
methods caused by the introduction of CIA documents as evidence
and the testimony of CIA officers as witnesses.
24. Intelligence needs of Unified Commands
For the first time since the formation of the Senate Select
Committee on Intelligence, the Committee conducted a briefing
for Members with the senior intelligence officers of the
Unified Combatant Commands and the Specified Commands. The
Committee held the briefing to assess the levels of support
provided by the Intelligence Community to the commands.
The conclusion of the Cold War and the spread of
technologies related to weapons of mass destruction have
complicated the plans and intelligence requirements within the
commands. Preventing strategic surprise remains an important
mission, but terrorism, counternarcotics, peacekeeping and
humanitarian support require increased emphasis to meet the
diverse mission requirements of the commands.
By consensus, the commands have been satisfied with the
level of support provided by the Intelligence Community. There
is agreement, however, that the imbalance between collection
and processing, exploitation and dissemination continues to
grow. While strongly supporting new collection platforms, the
commands would like to see greater emphasis placed on
processing, exploitation, and dissemination capabilities.
25. National Imagery and Mapping Agency (NIMA) and tasking, processing,
exploitation, and dissemination (TPED) modernization
The Committee long has been concerned that intelligence
collection continues to outstrip analysis, and is troubled that
funding for the latter remains woefully inadequate. This
funding shortfall challenges the Intelligence Community's
ability to manage the tasking, processing, exploitation, and
dissemination of intelligence collected by satellites,
airplanes, unmanned aerial vehicles, and other platforms and
sensors. The issue of Tasking, Processing, Exploitation, and
Dissemination Modernization is at the heart of how the
Intelligence Community collects raw intelligence data, and then
in a timely manner, turns it into a product that is
understandable and usable to a wide variety of consumers, from
the President of the United States to the military commander in
the field.
In June 1999, the NIMA issued a congressionally-mandated
report describing the challenges and projected shortfalls in
the areas of TPED related to intelligence to be collected by
the Future Imagery Architecture (FIA) satellite program and
other intelligence collection systems. The funding shortfall
figures in the NIMA report were updated in the summer of 1999.
The Committee concluded that Phase One of the
Administration's three phase TPED modernization plan was
woefully underfunded in the proposed fiscal year 2001 budget
and over the Future Years Defense Plan (FYDP), i.e., fiscal
years 2001-2005. The Committee was troubled by the
Administration's unwillingness to recognize the significant
disparity between its proposed funding plan and the TPED
modernization funding plan, which is based on a rigorous
technical evaluation that has yet to be challenged as being
either flawed orinflated. The Committee was concerned that the
dramatic underfunding of Phase One TPED modernization in fiscal year
2001 was setting up a budgetary crunch wherein a disproportionate
amount of funds would be required in subsequent years of the FYDP.
The Committee held a closed hearing on March 2, 2000, to
hear testimony on the objectives and plans of the NIMA to meet
the needs of the national and military intelligence customers
today and in the future. One area of particular concern to the
Committee was the modernization effort underway concerning
imagery and geospatial TPED. Arthur Money, Assistant Secretary
of Defense (Command, Control, Communications, and Intelligence)
and Lieutenant General James King, Director of the NIMA,
testified before the Committee on the Administration's plan to
address the TPED shortfalls in Fiscal Year 2001 and over the
balance of the FYDP time frame. Dr. Anita Jones testified on
the findings contained in a just-completed report of the
Defense Science Board Task Force, which she co-chaired,
reviewing the NIMA's roles and missions and TPED modernization
strategy.
The Committee recommended a number of funding changes
within the NIMA budget both in the National Foreign
Intelligence Program and the Joint Military Intelligence
Program to bolster Phase One TPED modernization efforts in
fiscal year 2001.
26. Unauthorized disclosure of classified information
On June 14, 2000, the Committee held a hearing to review
recent significant instances of the public release of
classified information, to determine how the release of
classified information has affected intelligence collection, to
discuss how these cases are investigated and prosecuted, and to
consider ways to halt such ``leaks'' of classified information.
The witnesses at this hearing included Attorney General Janet
Reno, DCI George Tenet and FBI Director Louis Freeh.
Over the past five years, information regarding a number of
sensitive intelligence collection programs and assets has
appeared in the press. These leaks include information that
endangers human intelligence sources, information about our
nation's satellite collection systems, and various signals
intelligence information on terrorist, proliferation, and other
targets.
The public release of such material can result in the loss
of access to intelligence, the enhancement of denial and
deception techniques, an increased reluctance of current and
potential assets to work for the United States, and the arrest,
imprisonment, and execution of foreign human assets.
The Bremmer Commission Report, titled ``Countering the
Changing Threat of International Terrorism'' stated that
``[l]eaks of intelligence and law enforcement information
reduce its value, endanger sources, alienate friendly nations
and inhibit their cooperation, and jeopardize the U.S.
Government's ability to obtain further information.''
In most leaks cases, the identity of the person who
released the classified information is unknown. In many
instances, the classified information was widely distributed,
with literally hundreds of people having access to the
intelligence report. This limits the ability of law enforcement
officials to identify a possible source.
Currently, there is no general criminal penalty for the
unauthorized disclosure of classified information. There are
statutes prohibiting the unauthorized disclosure of certain
types of information, such as diplomatic codes, nuclear
information, communications intelligence, or ``national
defense'' information. Many leaks of classified information do
not easily fit within existing statutory definitions, for
example, certain intelligence information from human sources
and some information relating to covert action. Some legal
scholars have argued that existing statutes only apply to
classic espionage situations and are not meant to be applied to
``leaks.''
The Committee sought to address this issue in the fiscal
year 2001 intelligence authorization bill. Section 304 of the
Intelligence Authorization Act for Fiscal Year 2001 would
prohibit any current or former officer, employee, or contractor
with access to ``classified information'' from knowingly and
willfully disclosing it to unauthorized personnel. ``Classified
information'' was defined within this section as:
``* * * information or material designated and clearly
marked or represented, or that the person knows or has
reason to believe has been determined by appropriate
authorities, pursuant to the provisions of a statute or
Executive Order, as requiring protection against
unauthorized disclosure for reasons of national
security.''
After the Committee had received approval from and support
for this provision from the Administration, President Clinton
vetoed the Intelligence Authorization Act for Fiscal Year 2001
based upon the inclusion of this provision.
Following the veto, on November 13, 2000, the House
reintroduced and passed the conference report in the House as a
new bill, H.R. 5630. H.R. 5630 did not include the provision
regarding ``leaks'' of classified information that led to the
President's veto. The Senate considered and passed H.R. 5630 on
December 6, 2000, with an amendment by Senator Allard to strike
section 501, relating to contracting authority by the National
Reconnaissance Office. The House considered and passed the bill
on December 11, 2000 without amendment. The President signed
the bill on December 27, 2000 as P.L. 106-567.
The Committee will continue its oversight of efforts to
prevent and investigate unauthorized disclosures of classified
information, and may seek to reintroduce legislation in the
107th Congress to address the insufficient statutory
prohibitions against leaks of classified information.
B. INVESTIGATION AND INQUIRIES
1. The People's Republic of China investigations
In the 105th Congress, the Committee unanimously approved
Terms of Reference for investigations into ``Impacts to U.S.
National Security of Advanced Satellite Technology Exports to
the People's Republic of China (PRC)'' and ``The PRC's Efforts
to Influence U.S. Policy.''
These investigations were prompted by (1) press reports of
possible export control law violations by Loral Space and
Communications Ltd. and Hughes Electronics Corporation, in the
course of launching U.S. satellites on Chinese rockets that may
have harmed U.S. national security by providing expertise to
the PRC's military ballistic missile programs, and (2) a report
that Johnny Chung, a Democratic Party fund-raiser, being
investigated for improprieties during the 1996 presidential
campaign, told Department of Justice investigators that an
executive with a PRC aerospace company gave him $300,000 to
donate to President Clinton's 1996 re-election campaign. The
latter report came against a backdrop of earlier reporting and
prior congressional investigations of a PRC Government plan to
influence the American political process.
Subsequent investigations and press reporting identified
additional problems in the course of U.S. satellite launches in
the PRC, which were first authorized under a policy dating to
the Reagan Administration, designed to address the shortage of
space launch capabilities following the Challenger disaster.
These problems included Hughes' transfer to the PRC of a
failure analysis of the 1995 launch of the Hughes Apstar 2
satellite, and the absence of U.S. Government monitors at
Chinese launches of three Hughes satellites in 1995-1996. Other
press reports raised concerns that the PRC may have developed
technology applicable to Multiple Independently Retargetable
Vehicles (MIRVs) through its development, to U.S.
specifications, of a multiple-satellite ``Smart Dispenser'' to
place Motorola ``Iridium'' communication satellites in orbit.
In the course of its investigations, which concluded in May
1999, the Committee conducted ten hearings and dozens of staff
briefings and interviews. Witnesses included the Director of
Central Intelligence George Tenet, Attorney General Janet Reno,
FBI Director Louis Freeh, and expert witnesses from the CIA,
the Defense Department's Defense Technology Security
Administration (DTSA), the Department of State, the National
Air Intelligence Center (NAIC), the NSA, the DIA, and the
General Accounting Office (GAO). Committee staff also reviewed
tens of thousands of documents provided by Executive
departments and agencies and U.S. satellite manufacturers, and
produced analyses for the Committee's use based on those
documents.
In a Committee Report approved on May 5, 1999, by a vote of
16 to one, the Committee found, with respect to satellite and
missile technology transfers, that:
The technical information transferred during satellite
launch campaigns enables the PRC to improve its present and
future space launch vehicles and ICBMS. Because such analyses
and methodologies are also applicable to the development of
other missile systems, the Committee believes that, where
practicable, the PRC will use the transferred information to
improve its short range ballistic missiles (SRBMs),
intermediate range ballistic missiles (IRBMs), and related
technology. These missiles could threaten U.S. forces stationed
in Japan and Korea, as well as allies in the region.
* * * * * * *
The Committee's conclusions with respect to technology
transfer are based on the evidence of technology transfers to
the PRC's space launch industry * * * the substantial
similarities between space launch vehicles and ballistic
missile technology (the CIA has described space launch vehicles
as ballistic missiles in disguise), the integration of the
PRC's space launch and ballistic missile industries, the PRC's
intention to modernize and upgrade its ballistic missile force,
evidence that U.S. know-how was incorporated into the PRC space
launch program, and the Committee's assumption that any
improvements in the PRC's space launch vehicles would be
incorporated wherever practicable in the PRC's military
ballistic missile program.
* * * * * * *
In the past, the PRC has proliferated SRBMs, IPBMs, and
their related technology to potential U.S. adversaries such as
Iran and to countries such as Pakistan where the presence of
advanced weapons increases regional instability. U.S. national
security interests already may have been harmed if the PRC used
the transferred information to improve these proliferated
missile systems. Or U.S. national security may be harmed in the
future if the PRC proliferates missile systems or components
that have been improved as a result of the technology transfer.
The Committee further finds that improvements to the PRC's
space launch capability increases the PRC's ability to use
space for military reconnaissance, communications, and
meteorology. The PRC's enhanced ability to use space in turn
may pose challenges to U.S. national security interests and
capabilities.
The perfection of a flight-worthy PRC Smart Dispenser is an
example of the pulling effect leading to improved space launch
services inherent in U.S. use of such services. The PRC had
indigenous capability to develop a Smart Dispenser prior to
Motorola's request for proposals for the Iridium project.
Undertaking this project resulted in a flight-worthy dispenser.
Analysts differ as to the military significance of this
development.
The Committee found that decisions in 1992 and 1996
transferring licensing jurisdiction over commercial satellites
from the State Department to the Commerce Department emphasized
commercial interests over national security and other concerns.
The 1992 decision shifted jurisdiction over the export of
commercial satellites without militarily significant
characteristics from the State Department to the Commerce
Department. This action reduced the ability of the State and
Defense Departments to block such exports on national security
grounds. * * * In 1996, jurisdiction over the export of all
remaining commercial satellites was transferred to Commerce.
The 1996 decision had the additional consequence of
completing the process of removing commercial satellites from
categories of goods that would not be exported when the U.S.
government imposed Missile Technology Control Regime (MTCR)
Category II sanctions. This step, at least in part, reflected
industry pressure since 1992 to bring about such a policy
change.
* * * * * * *
The transfer of the export of commercial satellites to
Commerce Department jurisdiction affected U.S. national
security. Some believe the national security was enhanced by
having the PRC use U.S. satellites and by maintaining strong
international demand for our satellites. On the other hand,
some believe this step diminished the impact of U.S. sanctions
against the PRC for its proliferation practices, thus weakening
the non-proliferation regime generally.
The Committee identified a failure by successive
Administrations to provide adequate funds, staff, and training
to DTSA officials responsible for monitoring U.S.-PRC satellite
cooperation. As a result of confusion engendered by the 1992
decision, Defense Department monitors were not present during
three satellite launch campaigns in 1993-96. Existing documents
show that no monitors were present in 1997 at the fourth
technical interchange meeting of the Chinastar 1 campaign.
Records suggest, but do not confirm, the absence of monitors at
other meetings. The Committee believes these unmonitored
meetings provided the PRC opportunities to collect technical
information. The Committee would be surprised if the PRC did
not take advantage of such opportunities to obtain technology.
The Committee recommends substantial changes in the launch
monitor program.
From 1988 through today, the Intelligence Community has
generated and disseminated to U.S. policymakers extensive
intelligence reporting on issues relevant to export policy
decisions. Such reporting covers the PRC's interest in
obtaining advanced U.S. technologies, the integration of the
PRC's civilian and military launch vehicle programs, PRC
military modernization, and PRC missile proliferation.
The Committee found that intelligence reporting
dating from at least the 1980s indicated that the PRC
Government has had a strategic, coordinated effort to
collect technological products and information from the
U.S. Government and private companies. According to
intelligence reporting, the PRC Government had devoted
significant resources and effort at collecting all
types of technology from American sources, whether of
military or commercial value or both. Although
intelligence reports detailing widespread and organized
PRC efforts to collect technical knowledge were
available to officials involved with the satellite
export program, weaknesses in procedures and
insufficient resources to support the monitoring effort
detracted from the overall program.
The Committee concludes that U.S. Government
officials failed to take seriously enough the
counterintelligence threat during satellite launch
campaigns. As a result, monitors were inadequately
trained and rewarded and of insufficient number. An
inadequate effort was made to ensure that employees of
U.S. satellite manufacturers were trained and prepared
to deal with PRC efforts to obtain U.S. know-how.
With respect to PRC efforts to influence U.S. policy, the
Committee focused on the following question: ``Is there
intelligence information \2\ that substantiates the allegation
that the PRC government undertook a covert program to influence
the political process in the United States through political
donations, and other means, during the 1996 election cycle?''
---------------------------------------------------------------------------
\2\ For purposes of the Committee report, ``Intelligence
information'' includes foreign intelligence (FI) and foreign
counterintelligence (FCI) as defined in Section 3 of the National
Security Act and in Executive Order 12333. It does not include
information obtained by law enforcement investigations (unless it was
also provided as FI or FCI to law enforcement agencies by intelligence
agencies). However, it does include information obtained in a law
enforcement investigation which was in turn provided by law enforcement
agencies to intelligence agencies as FI or FCI. It does not include
information collected by intelligence agencies pursuant to the
authority of Section 105A of the National Security Act, unless such
information also is FI or FCI. It does not include information
collected by other congressional committees investigating PRC political
influence as such, but it could include this information if it were
also FI or FCI. Finally, it does not, insofar as is known, include
information protected by Rule 6e, Federal Rules of Criminal Procedure
(FRCP).
---------------------------------------------------------------------------
The answer to that question, the Committee concluded, was:
Yes. * * * [Whereas] [h]istorically, the PRC
government has focused entirely on influencing the U.S.
President and other Executive branch officials * * *
after the Taiwanese President, Lee Tung-hui, was
granted a visa to the United States in 1995, PRC
officials decided that it was necessary to reassess
their relationship with Congress. In response to
President Lee's visit, the PRC conceived of a plan \3\
to influence the U.S. political process favorably
toward that country. The plan was an official PRC plan,
and funds were made available for its implementation.
The existence of this plan is substantiated by the body
of evidence reviewed by the Committee, including
intelligence reports.
---------------------------------------------------------------------------
\3\ The term ``China Plan'' was used in discussions between
Congress and the executive branch to refer to the collective body of
information describing these efforts by the PRC.
---------------------------------------------------------------------------
While the primary focus of the PRC plan was the U.S.
Congress, the Committee discovered no direct evidence
or information of an actual attempt to influence a
particular member of Congress. However, the PRC plan to
influence the U.S. political process applied to various
political office holders or candidates at the local,
state, and federal level.
There is intelligence information indicating PRC
officials provided funds to U.S. political campaigns.
However, the intelligence information is inconclusive
as to whether the contributions were part of the
overall China Plan.
During a criminal investigation into violations of
the Federal Election Campaign Act (FECA), Johnny Chung,
a U.S. citizen and a subject of that investigation,
stated that in August 1996 he had been given $300,000
by a senior PRC official to assist in the election of
President Clinton. While this statement is contrary to
his previous statements, the FBI can trace only about
$20,000 of the $300,000 to the Democratic National
Committee, via a contribution by Chung. Most of the
remaining funds went for his personal use, including
mortgage payments. There is also reporting regarding
contributions from other sources made to a Republican
candidate for state office and a Republican state
office holder. There is no intelligence information
indicating that contributions had any influence on U.S.
policy or the U.S. political process or that any
recipients knew the contributions were from a foreign
source.
The intermediary between Johnny Chung and the senior
PRC official was Ms. Liu Chao-ying, daughter of General
Liu Hua-qing, formerly the highest ranking military
officer in the PRC * * *
2. PRC Nuclear Espionage, Department of Energy Security and
Counterintelligence Matters, and the Wen Ho Lee Case
The Committee has jurisdiction over counterintelligence
matters government-wide, including the Department of Energy
(DOE) Office of Counterintelligence. From March 1999 through
September 2000, the SSCI held 16 hearings on the Kindred Spirit
investigation into the loss of W-88 nuclear warhead information
to the PRC, the Intelligence Community damage assessment of PRC
nuclear espionage, security and counterintelligence problems at
the Department of Energy, DOE reorganization, the conduct of
the investigation and prosecution of Wen Ho Lee for downloading
and retaining classified nuclear weapons information, the
resulting plea agreement between Lee and the U.S. Government,
and other related matters. Witnesses included Attorney General
Janet Reno, Energy Secretary Bill Richardson, FBI Director
Louis Freeh, DCI George Tenet, former Energy Secretaries James
Watkins, John Herrington, and Federico Pena, and the directors
of the Los Alamos, Lawrence Livermore, and Sandia national
laboratories. Committee members also met with National Security
Advisor Sandy Berger to discuss the Administration's response
to PRC nuclear espionage.
Committee Members and staff traveled to Los Alamos National
Laboratory, meeting with dozens of lab officials ranging from
the lab director and senior staff to scientists and computer
personnel. Staff also conducted extensive interviews with the
Albuquerque FBI field office and the Assistant U.S. Attorney
for New Mexico, and traveled to Lawrence Livermore and Sandia
national labs to interview lab and local FBI field office
personnel.
Committee staff interviewed five former Secretaries of
Energy and two former Deputy Secretaries of Energy, and held
dozens of interviews, briefings, and meetings with current and
retired senior CIA, FBI, DOE, and NSC officials, including the
National Intelligence Officer for Strategic Programs, the CIA's
Deputy Director for Operations, the FBI Assistant Director/
National Security Division, the Director of Energy
Intelligence, the former CIA Deputy Director for Intelligence,
and the former National Intelligence Officer for Special
Activities.
Committee staff compiled a detailed, all-source chronology
of DOE counterintelligence and security problems, PRC espionage
against the national laboratories, and the related DOE and FBI
investigations.
Although the Committee has jurisdiction only over the
counterintelligence and intelligence functions of the
Department of Energy, the Senate-passed version of the
Intelligence Authorization Act for Fiscal Year 2000 contained
provisions (Title IX) providing for a wide-ranging
reorganization of the Department to address numerous security,
counterintelligence, and management shortcomings identified by
the SSCI, the House Select Committee on U.S. National Security
and Military/Commercial Concerns with the Peoples' Republic of
China (the ``Cox Committee''), and the President's Foreign
Intelligence Advisory Board (the ``Rudman Report''). Title IX
was dropped by the Conference Committee after a similar
reorganization plan was enacted as part of the National Defense
Authorization Act for Fiscal Year 2000. As described elsewhere
in this report the Committee also adopted legislation amending
the Foreign Intelligence Surveillance Act and other
counterintelligence statutes to address issues that arose in
the course of the Kindred Spirit and other investigations.
Meanwhile, the Committee has continued its oversight over
the Department of Energy's Counterintelligence and Intelligence
programs. The Committee continues to monitor closely the
Department's implementation of Presidential Decision Directive-
61 (PDD) enhancing counterintelligence capabilities at DOE, the
DOE counterintelligence implementation plan, and the provisions
of the National Defense Authorization Act for Fiscal Year 2000
to ensure that the Department follows through on these and
other long-overdue reforms.
3. Deutch Mishandling of Classified Material
On December 17, 1996, officials of the Central Intelligence
Agency (CIA) discovered classified information on the
unclassified home computer of former Director of Central
Intelligence (DCI) John M. Deutch. The resulting CIA security
investigation, which began in January 1997, revealed that Mr.
Deutch routinely had placed highly classified information on
unclassified computers with Internet access.
Key steps in the 1997 security investigation of Mr.
Deutch's actions were not taken, and the CIA Inspector General
(IG) did not begin its own investigation until February 1998
after becoming aware that the security investigation was
incomplete. On July 13, 1999, the CIA IG issued its report of
investigation, which was later released in unclassified form at
the Committee's request.
The SSCI initiated its own inquiry into the Deutch matter
in February 2000 after becoming aware that the CIA had not
actively pursued the recommendations contained in the CIA IG's
report of investigation. Using the CIA IG report asfoundation,
the Committee sought to resolve remaining unanswered questions through
more than 60 interviews with current and former Intelligence Community
and law enforcement officials and a review of thousands of pages of
documents. The Committee held five hearings on this topic and invited
the following witnesses: CIA IG Britt Snider, Mr. Deutch, former CIA
General Counsel Michael O'Neil, former CIA Executive Director Nora
Slatkin, Executive Director David Carey, and DCI George Tenet. O'Neil
exercised his Fifth Amendment right not to testify before the
Committee. In addition, former Senator Warren Rudman, Chairman of the
President's Foreign Intelligence Advisory Board, briefed the SSCI on
the findings of the Board's report on the Deutch matter.
The Committee confirmed that Mr. Deutch's unclassified
computers contained summaries of sensitive U.S. policy
discussions, references to numerous classified intelligence
relationships with foreign entities, highly classified
memoranda to the President and documents imported from
classified systems. As the DCI, Mr. Deutch was entrusted with
protecting our nation's most sensitive secrets pursuant to the
National Security Act of 1947, which charges the DCI to protect
the sources and methods by which the Intelligence Community
conducts its mission. It is this Committee's view that he
failed in this responsibility. Mr. Deutch, whose conduct should
have served as the highest example, instead displayed a
reckless disregard for the most basic security practices
required of thousands of government employees throughout the
CIA and other agencies of the Intelligence Community.
The Committee believes further that in their response to
Mr. Deutch's actions, Director Tenet, Executive Director
Slatkin, General Counsel O'Neil, and other senior CIA officials
failed to notify the Committee in a timely manner regarding the
Deutch matter, as they are required by law to do. The
committees were not notified of the security breach by Mr.
Deutch until more than 18 months after its discovery.
The Committee determined that there were gaps in existing
law that required legislative action. Current law required the
Inspector General to notify the Committees ``immediately'' if
the Director or Acting Director, but not the former Director,
is the subject of an Inspector General inquiry. In the
Intelligence Authorization Act for Fiscal Year 2001, the
Committee initiated a change in the Central Intelligence Agency
Act of 1949 to broaden the notification requirement. The new
notification requirements include former DCls, all current and
former officials appointed by the President and confirmed by
the Senate, the Executive Director, and the Deputy Directors
for Operations, Intelligence, Administration, and Science and
Technology. In addition, the Inspector General must notify the
committees whenever one of the designated officials is the
subject of a criminal referral to the Department of Justice.
The CIA IG's July 1999 report contained three
recommendations: review Mr. Deutch's continued access to
classified information; establish a panel to determine the
accountability of current and former CIA officials with regard
to the Deutch matter; and advise appropriate CIA and
Intelligence Community components of the sensitive information
Mr. Deutch stored in his unclassified computers. DCI Tenet
responded to the IG report by indefinitely suspending Mr.
Deutch's security clearances and instructing Executive Director
Carey to form an accountability board and to notify
Intelligence Community components regarding their equities.
The Executive Director established an Agency Accountability
Board in September 1999, but its first meetings were in
November 1999 and subsequent sessions were not held until
January 2000. Ultimately, the Deputy Director of Central
Intelligence decided that the final product of the
accountability board was inadequate. At his request, the
President's Foreign Intelligence Advisory Board conducted an
independent inquiry and its conclusions were provided to the
President and the Deputy Director.
During a Committee hearing in February 2000, DCI Tenet
admitted that the CIA had not initiated a damage assessment on
the possible compromise of the Deutch material. Executive
Director Carey advised Committee staff that the failure to
pursue a damage assessment in August 1999 resulted from a
miscommunication. This mistake was discovered in late 1999, but
was not corrected until after the Committee wrote the DCI in
February 2000 requesting a damage assessment be initiated. A
formal Intelligence Community-wide damage assessment is still
ongoing at this time.
4. USS Cole
The USS Cole was attacked in Aden, Yemen on October 12,
2000. Seventeen sailors were killed and 39 were wounded. The
Committee immediately began efforts to determine whether
intelligence information, analysis, and warning had been
available that might have prevented that attack. The SSCI staff
is conducting a comprehensive review of all available
intelligence informationleading up to the attack on the Cole.
An initial review indicates that the collection and dissemination of
terrorism-related information was timely and effective. A review is
ongoing to determine if enhancements to the analysis and warning
processes could make the intelligence information more effective in
supporting commanders in the field.
c. community issues
1. Activities of the CIA in Chile
Section 311 of P. L. 106-120, the Intelligence
Authorization Act for Fiscal Year 2000, directed the DCI to
submit a report to the Congress describing the activities of
the Intelligence Community in Chile around the time of the 1973
assassination of President Salvador Allende and the subsequent
accession to power of General Augusto Pinochet. The report also
was to focus on human rights violations committed by the
Pinochet regime. The DCI submitted a classified version of the
report to the Committee on September 7, 2000, and an
unclassified version on September 18, 2000. The report provides
insight into the implementation of the U.S. policy of seeking
to block Allende from coming to power. It is an important
historical record not only of the role of the Intelligence
Community in this effort, but also of the policy making
mechanisms used to approve that role. In the report the CIA
acknowledges earlier Presidentially-authorized covert actions
designed to block Allende from coming to power, including
support for coup plotters in 1970, but makes it clear that
there was no comparable involvement in the 1973 coup.
2. Oversight of Intelligence Community Inspectors General
During the 106th Congress, the Committee continued to
monitor the activities of the Inspectors General (IGs) of the
Intelligence Community. This oversight included: review of over
150 IG products, to include audit reports, inspection reports,
reports of investigation, and semi-annual reports of IG
activities; numerous visits to IG offices for updates on plans
and procedures; and attendance at several IG conferences. In
addition to a number of Committee hearings on issues reviewed
by the Intelligence Community IGs, staff conducted a number of
briefings with Community program and IG personnel in order to
follow up on the status of IG recommendations. Examples include
employee grievances, management of operational activities,
contracting procedures, employee recruitment and security
processing, CIA's Working Capital Fund, and effective use of
resources on new technology.
The Committee also adopted report language regarding the
administrative Inspectors General at the NRO, the NSA, the
NIMA, and the DIA. The Committee directed the Directors of
these agencies to take the appropriate steps to create a
separate budget line item and personnel authorization for their
respective administrative IG offices, and to ensure that the IG
has all the authorities required to hire and retain staff that
collectively possess the variety and depth of knowledge,
skills, and experience needed to accomplish, efficiently and
effectively, the Office of Inspector General's mission. The
Committee requested that the Directors provide a written
response on the status of these initiatives.
The Committee also took steps to improve its oversight of
the Inspectors General from the NRO, NIMA, NSA, and DIA by
requesting an annual report that details their request for
fiscal and personnel resources, and the plan for their use.
This report will include the programs and activities scheduled
for review during the fiscal year, comments on the office's
ability to hire and retain qualified personnel, any concerns
relating to the independence and effectiveness of the IG's
office, and an overall assessment of the Agency's response to
the IG's recommendations during the previous year.
3. Classified Information Procedures Act (CIPA)
The 1980 Classified Information Procedures Act (18 U.S.C.
App.) has proven to be a very successful mechanism for enabling
prosecutions that involve national security information to
proceed in a manner that is both fair to the defendant and
protective of the sensitive national security intelligence
information. Before CIPA, the United States Government
occasionally had to make the difficult decision of either
dismissing a criminal case or proceeding in the face of the
risk that classified information might be made public. Neither
alternative was in the best interests of the intelligence or
law enforcement agencies--nor, more importantly, in the
interests of the American people. The CIPA provides pre-trial
procedures for the court to resolve in camera and ex parte
these issues in a manner that protects both the national
security and the defendant's right to a fair trial. The
government has the option of an immediate appeal of any adverse
rulings and, if the issues cannot be resolved in a manner that
protects national security, may then make informed decisions on
whether to proceed or to dismiss some or all of the charges.
In a criminal case in which classified information is at
issue--for example, espionage and terrorism prosecutions--there
are specific agencies in which the information originated and
whose equities are most directly implicated by the decisions
made by the U.S. Government in the case. The head of that
agency is responsible for protecting the information and,
accordingly, will have a strong interest in the key decisions
made by the prosecutors as the case develops. Although all
litigation decisions must rest ultimately with the Department
of Justice, it is the head of the affected agency, in most
cases the Director of Central Intelligence, who will be able to
provide the perspective in the decision-making process on the
risks associated with public release of classified information
at trial. The DCI's expertise will assist the prosecutors in
their goal of not doing more harm to the national security
during the case than was caused by the defendant's alleged
criminal conduct.
Accordingly, Section 607 of the Intelligence Authorization
Act for Fiscal Year 2001 (Public Law 106-567) amends CIPA to
codify existing practice followed by many Department of Justice
prosecutors. Section 607 requires the Assistant Attorney
General for the Criminal Division and the United States
Attorney, or their designees, to provide regular briefings to
the head of the agency that originated the classified
information at issue in the case. These briefings will begin as
soon as practicable and appropriate, consistent with rules
governing grand jury secrecy, and will continue thereafter, as
needed, to keep the agency head fully and currently informed.
The purpose of the briefings is to make sure that the agency
head understands the parameters and benefits of the CIPA
procedures. In addition, the agency head will have an
opportunity at various stages of the case to make his or her
views known to the prosecutors concerning whether the case is
proceeding in such a way that sources and methods are receiving
adequate protection.
4. POW/MIA analytic capability in the Intelligence Community
The Committee has expressed serious concern about the
Administration's accounting for Navy Lieutenant Commander
``Scott'' Speicher, who was shot down over Iraq on the first
night of the Gulf War. A subset of these concerns relates to
the lack of an adequate analytical capability within the
Intelligence Community for Prisoners of War/Missing in Action
(POW/MIA) issues.
The January 1993 Report of the Senate Select Committee on
POW/MIA Affairs concluded that the Defense Intelligence
Agency's POW/MIA Office had historically over-classified,
poorly coordinated, and failed to adequately follow-up on
reports. The report found a ``mindset to debunk [POW] live-
sighting reports.''
As described elsewhere in this report, the Senate Select
Committee on Intelligence conducted an inquiry into the
Intelligence Community's input to support the U.S. Government's
decision to list LCDR Speicher's status as killed in action.
During the later part of the 105th Congress, at the request of
the SSCI, the Director of Central Intelligence produced a
chronology of the Speicher case. This chronology of events
enabled informed judgements about questions of policy, process,
and facts. Furthermore, the chronology highlighted to the
Committee that a POW/MIA analytic shortfall existed within the
Intelligence Community. The Committee judged that the shortfall
stemmed, at least in part, from the Secretary of Defense's 1993
decision effectively to eliminate the Intelligence Community's
only POW/MIA analytic capability.
The impact of this organizational change was first
addressed by the Committee in a 1997 staff inquiry into the
Intelligence Community's input that formed the basis for the
1996 Presidential determination regarding Vietnam's accounting
for American POW/MlAs. As a result, the 1998 Defense
Authorization Act directed the Director of Central Intelligence
to take responsibility for all POW/MIA intelligence-related
analytic matters. The shortfall in POW/MIA analytic capability
surfaced again in February 2000, when the Committee received a
joint CIA and Department of Defense Inspectors General review
of the 1998 National Intelligence Estimate on POW/MIA matters.
This report highlighted significant deficiencies in POW/MIA
analysis specifically related to intelligence.
As a result, the Committee, in Section 307 of the
Intelligence Authorization Act for Fiscal Year 2001 (P.L. 106-
567), directed that the Director of Central Intelligence
establish and maintain an analytic capability within the
Intelligence Community with responsibility for supporting
activities related to prisoners of war and missing persons.
5. Counterdrug Intelligence Plan
On February 12, 2000, the President issued the General
Counterdrug Intelligence Plan and established the Counterdrug
Intelligence Executive Secretariat. The Plan fulfilled
requirements contained in the Treasury and GeneralGovernment
Appropriations Act of 1998 (P.L. 105-61) and the Conference Report
accompanying the Intelligence Authorization Act for Fiscal Year 1998
(P.L. 105-107). These two provisions required the Director of the
Office of National Drug Control Policy to submit ``a plan to improve
coordination and eliminate unnecessary duplication among the
counterdrug intelligence centers and counterdrug activities of the
Federal Government,'' and specifically to report on efforts to
structure the National Drug Intelligence Center in order to
``effectively coordinate and consolidate strategic drug intelligence.''
The Senate version of the Intelligence Authorization Act
Fiscal Year 2001 included a provision (Section 308) to waive
two existing prohibitions and authorize executive branch
agencies to contribute appropriated funds for the purpose of
supporting the Counterdrug Intelligence Executive Secretariat.
This provision was dropped by the conference committee after
similar language was signed into law as part of a supplemental
appropriations act. The Committee's report language, however,
requires the executive branch to report annually on the
activities of the Counterdrug Intelligence Executive
Secretariat.
The Committee has placed, and continues to place, high
priority on counterdrug intelligence programs. These programs
provide essential support to the nation's efforts to attack the
supply of illicit drugs and thereby reduce drug abuse in the
U.S. and its devastating societal consequences. Intelligence is
critical to effective source country programs, interdiction
actions, and law enforcement investigations.
6. Judicial Review Commission on Foreign Asset Control
Title VIII of the Intelligence Authorization Act for Fiscal
Year 2000 comprised the Foreign Narcotics Kingpin Designation
Act. Using the authorities of the International Emergency
Economic Powers Act as previously applied to Colombian drug
traffickers as a model, this legislation established a regime
for identifying, designating, and sanctioning international
drug trafficking organizations and their leadership. The Act
requires the President to designate individuals as significant
foreign narcotics traffickers. These individuals are then
subject to sanctions, including the blocking of assets in the
United States. The Act also provides for the blocking of assets
of foreign persons who materially assist or support the
traffickers, or who are determined to be acting on behalf of
the traffickers.
Section 810 of Title VIII created a commission to review
judicial, regulatory, and administrative authorities used to
block assets of foreign persons and to provide the Congress
with an evaluation of remedies available to any U.S. person
affected by the blocking of assets of foreign persons. The
fundamental question that the Commission was asked to address
was whether provisions in the Act provide constitutionally
adequate remedies to U.S. persons to challenge agency
designations and blocking actions. The Judicial Review
Commission submitted its final report to Congress on January
23, 2001. The report set forth detailed legal analysis and
fact-finding activities of the Commission in support of the
findings and recommendations that had been submitted to the
Committee on an interim basis on December 4, 2000. Among the
recommendations contained in the report was an endorsement of
the position of the Committee, and the Senate, that judicial
review should be permitted for decisions under the Kingpin Act.
In addition, the report made a number of recommendations
regarding the administration and enforcement of sanctions
programs by the Office of Foreign Asset Control.
7. National Commission for the Review of the National Reconnaissance
Office
During the conference on the Intelligence Authorization Act
for Fiscal Year 2000, the Senate and House Committees agreed to
initiate an independent review of the National Reconnaissance
Office. The review would consider how the NRO can provide the
most capable and cost efficient satellite collection systems
possible to ensure that national policy makers and military
leaders continue to receive timely intelligence information. In
particular, Intelligence Committee Members wanted to evaluate
the impact on satellite collection capabilities of dramatic
changes in technology, coupled with significant shifts in the
global threat environment over the past decade. These factors
could seriously affect the ability of NRO satellites to
continue to provide timely intelligence information.
The Commission was comprised of eleven members: two from
the Senate, two from the House of Representatives, six from the
private sector, and the Deputy Director of Central Intelligence
for Community Management. The Director of the NRO was an ex-
officio member.
The Committees tasked the Commission to review the NRO's
roles and missions, organizational structure, and contractor
relationships; the technical skills of the NRO employees; the
use of commercial imagery; launch and supporting services; and
acquisition authorities. The Commission also was asked to
review the NRO's relationship with other agencies and
Government departments. TheCommission's final report, with
recommendations, was delivered to the Intelligence and Armed Services
Committees of the Senate and House of Representatives. The Committee is
reviewing these recommendations. The Committees also tasked the
Director of Central Intelligence and Secretary of Defense to provide an
assessment of the report to the Intelligence Committees.
D. AUDITS
The Committee's audit staff was created in 1988 to provide
``a credible independent arm for Committee review of covert
action programs and other specific Intelligence Community
functions and issues.'' During the 106th Congress, the staff of
three full-time auditors led, or provided significant support
to, the Committee's review of a number of administrative and
operational issues relating to the agencies of the Intelligence
Community. In addition, the audit staff completed three in-
depth reviews of specific intelligence programs or issues.
These reviews included the following:
1. Review of the National Imagery and Mapping Agency (NIMA)
The audit examined NIMA's charter and legal authorities,
financial management system, personnel and facilities,
procedures for acquisition and property management, Office of
Inspector General, and information security practices. The
audit staff was encouraged by NIMA's progress in each of these
areas. The Agency has used its status as a new organization to
create innovative programs, particularly in the areas of
contracting and personnel management. The resulting audit
report contained recommendations aimed at streamlining the
NIMA's administrative processes, strengthening its position
within the Intelligence Community, and resolving open issues
remaining from the creation of the NIMA in 1996.
2. Covert action
The staff examined a covert action program, including the
program's operations, financial obligations and expenses, and
future plans. The audit found a well-managed program, and the
resulting report made a recommendation to the Committee
regarding the appropriate funding level for the program.
To enhance the Committee's understanding of this
intelligence target, the audit also included a review of the
Intelligence Community's collection and analytic capabilities
against a particular country. The staff found weaknesses
similar to those identified for other targets and, as such,
made a recommendation for systemic review by the Assistant
Director of Central Intelligence for Analysis and Production.
3. Other
The audit staff has recently begun a review of the
strategic plan of the Central Intelligence Agency's Directorate
of Operations.
The audit staff conducted over 30 interviews and reviewed
voluminous documentation related to the Committee's inquiry
into former Director of Central Intelligence John Deutch's
mishandling of classified information, and drafted and
coordinated the Deutch report for the Committee's approval. The
Deutch report was provided to the DCI and Department of
Justice.
In addition to these major projects, the audit staff
completed portions of the Committee staff's investigations of
satellite and missile technology transfers to the People's
Republic of China, and counterintelligence and security issues
at the Department of Energy's National Laboratories. The team
also worked to ensure the Intelligence Community's Inspectors
General have the necessary independence, funding, management
structure, and professional staff to adequately monitor the
activities of their respective agencies.
E. TECHNICAL ADVISORY GROUP REPORTS
In 1997, the Committee established a Technical Advisory
Group (TAG) to inform and advise Members of the threats and
opportunities presented by the extraordinary technological
advances of recent years. The TAG members have extensive
expertise in computer hardware and software,
telecommunications, aviation, satellites, imagery, physics,
chemical engineering, and other technical fields, as well as,
in many cases, extensive Intelligence Community experience.
They are drawn from both government and industry, and volunteer
their time and effort to identify problems, solutions, and
opportunities posed by advances in technology.
In the 106th Congress, the Committee continued to draw upon
the TAG's world-class expertise, and to incorporate the TAG's
findings as appropriate intothe Committee's budgetary and
legislative recommendations. The Committee is grateful to the TAG
members for their contribution to our nation's security.
1. Signals intelligence--Rebuilding the NSA
The NSA has responsibility for collecting signals
intelligence (SIGINT) from electronic signals worldwide. As the
central repository of the government's SIGINT expertise, the
NSA is a critical national asset. The NSA historically has led
the way in development and use of cutting edge technology that
has kept the United States a step ahead of those whose
interests are hostile to our own. Unfortunately, in recent
years, we have failed to invest in the infrastructure and
organizational changes required to keep pace with revolutionary
developments in the global telecommunications system.
In 1998, the TAG completed a study of the NSA based on a
thorough review of current and planned operations as well as
research and development programs.
The conclusions of the TAG's 1998 report were extremely
disturbing. While the current information revolution presents
both opportunities for and threats to its mission, the NSA's
ability to adapt to this changing environment was found to be
in serious doubt due to the sustained budget decline of the
past decade. As resources have been reduced, the NSA
systematically has sacrificed infrastructure modernization in
order to meet day-to-day intelligence requirements.
Consequently, the organization begins the 21st Century lacking
the technological infrastructure and human resources needed
even to maintain the status quo, much less meet emerging
challenges. To address these problems, the TAG recommended new
business practices coupled with additional resources to finance
this recovery.
A follow-up TAG review completed in Spring 2000 sounded a
note of optimism, noting that the NSA Director, in November
1999, had initiated an aggressive and ambitious modernization
effort designed to transform the NSA and sustain it as a
national asset. This transformation--which gained additional
impetus from the NSA computer outage in January 2000--includes
organizational and business strategies that promise to
transform the way the NSA conducts its missions. The Committee
was encouraged by these actions, and expects that the Director
of Central Intelligence and the Secretary of Defense will
support the Director of the NSA in making the difficult
decisions necessary for the NSA to restore its predominance.
The Committee determined that to return the NSA to
organizational and technological excellence, NSA managers, as
well as Intelligence Community leaders and the Congressional
oversight committees, must be prepared to accept a level of
risk as some resources are shifted from short-term collection
to long-term infrastructure modernization. Failure to do so
will irreversibly undermine the NSA and its ability to perform
in a transformed global information technology arena.
Rebuilding the NSA is the Committee's top priority. To
provide the additional resources necessary, the Committee has
had to make tough choices. Inadequate NFIP spending has left
little flexibility to meet the challenges faced by the NSA, but
the Committee concluded that the crisis demanded immediate
attention and warranted shifting resources in order to stave
off a steady and inevitable degradation of the NSA's unique and
invaluable capabilities. In its budget recommendations for
Fiscal Years 2000 and 2001, the Committee has made a down
payment on this investment.
At the same time, the Committee knows that money alone will
not solve the NSA's problems. Organizational change also is
essential. The Director of the NSA has authority over
approximately thirty percent of the total SIGINT budget within
the NFIP. Other agencies and organizations within the NFIP and
the Department of Defense expend funds for cryptologic
activities outside the authorities of the Director of the NSA.
If the Director of the NSA is to have functional responsibility
for rebuilding the nation's cryptologic program, the Director
must have greater authority in the planning, programming,
budgeting, and execution of the entire SIGINT budget. To build
a comprehensive, efficient U.S. Cryptologic System, the NSA
Director must have the requisite authorities to manage his
program. The Committee is determined to work with the Director
to improve his ability to provide centralized direction across
the SIGINT infrastructure as he implements his modernization
strategy.
2. Human intelligence--Bringing technology in from the cold
In 1998, the Committee asked the TAG to review the status
of the Intelligence Community's human intelligence (HUMINT)
capabilities. The TAG concluded that while human intelligence
collection will play an increasingly important role in
defending U.S. national security interests, the CIA Directorate
of Operations (DO) lagged in integrating the technical
knowledge and trainingneeded to become a more technologically
oriented, technology-savvy, and technology-responsive organization. The
HUMINT TAG recommended that:
The Intelligence Community develop a comprehensive
plan that recognizes and adapts to the rapidly changing
and technically sophisticated world that now confronts
the HUMINT collector;
The DO continue development of a strategic vision and
implementation plan that focuses on missions rather
than functions and emphasizes elements that integrate
science and technology into its mission solutions; and
Additional funding be provided to move toward a set
of highly advanced capabilities and techniques that
will enable the DO to practice high-technology,
clandestine, intelligence collection in the first half
of this decade.
In response to the TAG's 1998 recommendations and related
Committee guidance, the CIA made key changes in an effort to
take advantage of opportunities provided by technological
innovation. In 2000, the Committee asked the TAG to assess the
progress that the Intelligence Community had made in
undertaking the substantial changes recommended in 1998, and
incorporated the TAG's findings in its budgetary and other
actions on the Fiscal Year 2001 Intelligence Authorization Act.
The Committee will closely monitor the DO's efforts to make
better use of technological innovations.
3. Measurement and signature intelligence (MASINT)--Funding and
organizing to realize potential
In 1999, the TAG reviewed the Intelligence Community's
capabilities to collect MASINT, in particular whether MASINT
was meeting its potential in the areas of management, funding,
technology development, operations, and integration with other
intelligence disciplines.
The TAG found that MASINT can significantly strengthen
collection against many emerging threats, and potentially
become the Intelligence Community's most valuable source of
technical intelligence in the 21st Century. The need for an
improved MASINT capability is driven by global advances in
technology and in our adversaries' ability to conduct denial
and deception against traditional intelligence collection
methods. The MASINT panel concluded that MASINT technologies
can--if aggressively developed and integrated with other
intelligence disciplines--add to and complement the value of
current collection capabilities, but that realizing this
potential requires changes in the current approach to MASINT
technology development.
The Committee has allocated a significant amount of
additional funds over the last two years to bolster MASINT
capability. The Committee also directed the Director of Central
Intelligence, in coordination with the Secretary of Defense, to
conduct a study of the utility and feasibility of various
options for improving the management and organization of
MASINT, including (1) the option of establishing a centralized
tasking, processing, exploitation, and dissemination facility
for measurement and signature intelligence, (2) options for
recapitalizing and reconfiguring the current systems for
measurement and signature intelligence, and (3) the operation
and maintenance costs of the various options.
4. Imagery intelligence (IMINT)--Keeping the customers satisfied
In 1999, the Committee asked the Technical Advisory Group
to review three key areas in Intelligence Community management
of IMINT. The Committee asked the TAG to focus on the Future
Imagery Architecture program, the imagery requirements process,
and the broad functions of tasking, processing, exploitation,
and dissemination of imagery intelligence products.
In April 1999, the TAG briefed Committee members on its
findings and recommendations. The report highlighted the
tensions between varying imagery requirements from the
tactical, theater, strategic, and national level intelligence
customers, and the difficulty in satisfying these often
conflicting taskmasters. One option to address these
proliferating demands is to develop dedicated imagery systems
designed to meet the limited requirements of a particular
customer, which may be more cost-effective than designing
large-scale systems to meet unlimited requirements. The TAG
found that the Intelligence Community has not analyzed these
issues with adequate rigor.
The TAG report to the Committee also emphasized the
significant gap between imagery collection requirements and the
ability of the Intelligence Community to process, exploit, and
disseminate imagery products. Although some actions had been
taken by the Intelligence Community to close the gap, there are
still many serious problems. This issue is addressed at length
in the section ofthis report dealing with tasking, processing,
exploitation, and dissemination of intelligence.
IV. Confirmations
A. James M. Simon, Jr., Assistant Director of Central Intelligence for
Administration
On February 4, 1999, the Committee held public hearings on
the nomination of James M. Simon, Jr. to be the Assistant
Director of Central Intelligence for Administration. Mr. Simon,
a career CIA officer was nominated by the President to the
position on January 6, 1999. (The Senate-confirmable position
of Assistant Director for Administration was one of several
positions created by the Intelligence Authorization Act for
Fiscal Year 1997 in response to the 1996 Brown Commission,
which made recommendations regarding the effectiveness and
efficiency of the Intelligence Community.) In addition to his
administrative responsibilities at the CIA, the Assistant
Director for Administration serves as the deputy to the Deputy
Director of Central Intelligence for Community Management.
Mr. Simon's nomination was considered favorably by the
Committee on February 26, 1999. The Senate considered and
approved his nomination on March 2, 1999 by voice vote. A full
transcript of the nomination hearing was published in S. Hrg.
106-394, a Government Printing Office publication.
B. John E. McLaughlin, Deputy Director of Central Intelligence
On July 27, 2000, the Committee held a closed hearing on
the nomination of John E. McLaughlin to be the Deputy Director
of Central Intelligence (DDCI). McLaughlin, an expert in
European, Russian, and Eurasian affairs, was nominated by the
President on July 13, 2000. The Deputy Director of Central
Intelligence is required by the National Security Act of 1947
to assist the Director in carrying out his functions and to
serve in his place in his absence.
Mr. McLaughlin's nomination was considered favorably by the
Committee on July 27, 2000, by a vote of 15-0. The Senate
approved his nomination on October 18, 2000 by voice vote.
V. Support to the Senate
The Committee undertook a number of activities to support
the Senate's deliberations. In addition to its unclassified
reports, the Committee has sought to support Senate
deliberations by inviting the participation of Members outside
the Committee in briefings and hearings on issues of shared
jurisdiction or interest. The Committee has prepared, and made
available for the Senate, compendia of intelligence information
regarding topics relevant to current legislation. Members
outside the Committee have frequently sought and received
intelligence briefings by members of the Committee staff.
Members have also requested and received assistance in
resolving issues with the actions of an element of the
Intelligence Community. Finally, the Committee routinely
invites staff from other Committees to staff-level briefings on
intelligence issues of common concern.
VI. Appendix
A. Summary of Committee Activities
1. Number of meetings
During the 106th Congress, the Committee held a total of 99
on-the-record meetings and hearings. There were fifty-seven
(57) oversight hearings and eight (8) business meetings. Twelve
(12) hearings were held on the budget, including the Conference
sessions with the House. Two (2) nomination hearings were held.
Additionally, the Committee held seventeen (17) on-the-
record briefings and over two hundred fifty (250) off-the-
record briefings.
2. Bills and resolutions originated by the Committee
S. Res. 139--An original resolution authorizing
expenditures by the Select Committee on Intelligence.
S. 1009--Intelligence Authorization Act for Fiscal Year
2000.
S. 2507--Intelligence Authorization Act for Fiscal Year
2001.
3. Bills referred to the Committee
S. 1902--Japanese Imperial Army Disclosure Act.
S. 2089--Counterintelligence Reform Act of 2000.
4. Publications
Senate Report 106-3--Committee Activities, Special Report
of the Select Committee on Intelligence, January 7, 1997-
October 21, 1998 (February 3, 1999).
Senate Report 106-48--Report to accompany S. 1009, FY 00
Intelligence Authorization Bill (May 11, 1999).
Senate Print 1067-25--Report on Impacts to U.S. National
Security of Advanced Satellite Technology Exports to the
People's Republic of China (PRC), and Report on the PRC's
Efforts to Influence U.S. Policy (May 1999).
Senate Hearing 105-1056--Nomination of Joan A. Dempsey to
be Deputy Director of Central Intelligence for Community
Management (May 21, 22, 1998).
Senate Hearing 106-394--Nomination of James M. Simon, Jr.,
to be Assistant Director of Central Intelligence for
Administration (February 4 and 26, 1999).
Senate Hearing 105-1054--Nomination of L. Britt Snider to
be Inspector General, Central Intelligence Agency (July 8 and
14, 1998).
Senate Hearing 105-1057--Investigation of Impacts to U.S.
National Security From Advanced Satellite Technology Exports to
China and Chinese Efforts to Influence U.S. Policy (June 10 and
July 15, 1998).
Senate Report 106-279--Report to Accompany S. 2507, FY 01
Intelligence Authorization Bill (May 4, 2000).
Senate Hearing 106-452--Joint Hearing Before the Committee
on Energy and Natural Resources, the Committee on Armed
Services, the Committee on Governmental Affairs, and the Select
Committee on Intelligence on The President's Foreign
Intelligence Advisory Board Report on DOE (June 22, 1999).
Senate Hearing 106-580--Current and Projected National
Security Threats to the United States (February 2, 2000).
Senate Hearing 106-592--Department of Energy
Counterintelligence, Intelligence and Nuclear Security
Reorganization (June 9, 1999).
Senate Report 106-352--Report to Accompany S. 2089, The
Counterintelligence Reform Act of 2000 (July 20, 2000).
Report 106-969--Conference Report to Accompany H.R. 4392,
FY 01 Intelligence Authorization Bill (October 11, 2000).
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