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