    [Senate Hearing 107-596]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 107-596

       NOMINATION OF JOHN L. HELGERSON TO BE INSPECTOR GENERAL, CENTRAL
                              INTELLIGENCE AGENCY

    =======================================================================

                                    HEARINGS

                                   before the

                        SELECT COMMITTEE ON INTELLIGENCE

                                     of the

                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

       NOMINATION OF JOHN L. HELGERSON TO BE INSPECTOR GENERAL, CENTRAL
                              INTELLIGENCE AGENCY

                                   __________

                             APRIL 17 AND 25, 2002

                      U.S. GOVERNMENT PRINTING OFFICE
      81-063                  WASHINGTON : 2002
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                         BOB GRAHAM, Florida, Chairman
                   RICHARD C. SHELBY, Alabama, Vice Chairman
    CARL LEVIN, Michigan                 JON KYL, Arizona
    JOHN D. ROCKEFELLER IV, West         JAMES M. INHOFE, Oklahoma
        Virginia                         ORRIN G. HATCH, Utah
    DIANNE FEINSTEIN, California         PAT ROBERTS, Kansas
    RON WYDEN, Oregon                    MIKE DeWINE, Ohio
    RICHARD J. DURBIN, Illinois          FRED THOMPSON, Tennessee
    EVAN BAYH, Indiana                   RICHARD G. LUGAR, Indiana
    JOHN EDWARDS, North Carolina
    BARBARA A. MIKULSKI, Maryland
                  Thomas A. Daschle, South Dakota, Ex Officio
                      Trent Lott, Mississippi, Ex Officio
                                     ------
                         Alfred Cumming, Staff Director
                      Bill Duhnke, Minority Staff Director
                        Kathleen P. McGhee, Chief Clerk

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearings held in Washington, D.C., April 17, 2002 and April 25,
      2002........................................................... 1, 19
    Statement of:
        Graham, Hon. Bob, a U.S. Senator from the State of Florida...     1
        Helgerson, John L., Nominee to be Inspector General of the
          Central Intelligence Agency................................     3
        Shelby, Hon. Richard C., a U.S. Senator from the State of
          Alabama....................................................     2
    Supplemental Materials:
        Senate Select Committee on Intelligence Questionnaire for
          Completion by Presidential Nominees........................    21
        Comstock, Amy L., Director, Office of Government Ethics
          Letter to the Honorable Bob Graham, Chairman, Select
          Committee on Intelligence dated March 4, 2002..............    36
        Financial Disclosure Report of John L. Helgerson.............    37
        Rizzo, John A., Acting General Counsel, Designated Agency
          Ethics Official CIA, letter dated March 26, 2002...........    51

    HEARING ON THE NOMINATION OF JOHN L. HELGERSON TO BE INSPECTOR GENERAL
                       OF THE CENTRAL INTELLIGENCE AGENCY

                                  ----------

                           WEDNESDAY, APRIL 17, 2002

                                           U.S. Senate,
                              Select Committee on Intelligence,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 2:32 p.m., in
    room SH-216, Hart Senate Office Building, the Honorable Bob
    Graham (chairman of the Committee) presiding.
        Committee Members Present: Senators Graham, Rockefeller,
    and Shelby.
        Chairman Graham. The hearing will come to order.
        Today the Committee is meeting in open session to receive
    testimony from the President's nominee for the position of
    inspector general of the Central Intelligence Agency, Mr. John
    L. Helgerson, and we thank you and welcome you, Mr. Helgerson,
    to our Committee meeting. We are delighted that you are also
    accompanied by your wife, Martha, and I understand that you've
    also brought an assistant, Lanetta Watkins. If there are any
    other guests that you would like to introduce, Mr. Helgerson,
    we'd be pleased to be introduced to them.
        Mr. Helgerson. No others, Mr. Chairman, but thank you for
    the welcome.
        Chairman Graham. Mr. Helgerson is nominated to be the only
    third Inspector General in the Central Intelligence Agency
    since this position was created by the Congress in 1989.
    Members of this Committee know well the previous two occupants
    of the Inspector General post, Mr. Fred Hitz and Mr. Britt
    Snider. The House and Senate Intelligence Committees, in fact,
    the entire Congress, as well as the American people, rely on
    the Inspector General to be a strong and tireless overseer of
    the conduct of the CIA. As chairman of this Committee, I feel a
    special responsibility to the American people to be their eyes
    and ears when it comes to oversight of the intelligence
    community, and I know that Senator Shelby and our other
    colleagues share that feeling.
        The activities of most federal agencies are scrutinized by
    many, including, in most cases, more than one congressional
    committee, as well as the media and various other entities
    which are interested in the activities of that federal agency.
    However, when it comes to the CIA, there is, by design, little
    that is available for public view. We as members of this
    Committee are entrusted with overseeing this crucial government
    agency, which is at the front lines of our nation's war on
    global terrorism, and like the Committee the Inspector General
    is charged with assuring that the CIA's employees are
    performing to the highest standards.
        As a statutory Inspector General, the CIA Inspector General
    has the added responsibility of reporting to the Congress any
    and all problems discovered within the agency. To fulfill this
    Committee's oversight responsibility, we must rely on the
    wisdom, the integrity, the diligence and the independence of
    the person who holds the job of CIA Inspector General. Mr.
    Helgerson, I look forward to hearing from you and how you would
    meet these expectations should you be confirmed.
        By way of introduction, I will tell the audience that Mr.
    Helgerson has a long and diverse career within the intelligence
    community. A native of South Dakota, he holds a bachelor's
    degree from St. Olaf College in Minnesota and a master's and
    Ph.D. from Duke University, where I understand he met his wife,
    Martha.
        He began his career as a CIA analyst. He has at varying
    points headed units responsible for coverage of Russia, Europe,
    Africa and Latin America. His senior management positions
    include Deputy Director for Intelligence at the CIA, Deputy
    Inspector General of the CIA and Deputy Director of the
    National Imagery and Mapping Agency. In August of 2001, he was
    appointed Chairman of the National Intelligence Council. Mr.
    Helgerson has received a number of awards and commendations,
    including the CIA's Distinguished Intelligence Medal and NIMA's
    Distinguished Civilian Service Award.
        I would now like to call on my friend and colleague, Vice
    Chairman Senator Shelby for his opening remarks and then we
    look forward to hearing from Mr. Helgerson.
        Vice Chairman Shelby. Thank you, Mr. Chairman.
        Mr. Helgerson, congratulations on your nomination and I
    want to thank you for your willingness to appear before the
    Committee today. I know from our discussion yesterday that
    you're aware of the importance of the position for which you've
    been nominated. The CIA Inspector General is a Presidentially-
    appointed, Senate-confirmed position, a very important job. The
    IG serves at the will of the President, giving him a measure of
    independence from the Director of Central Intelligence, as it
    should be.
        The CIA Inspector General supervises approximately 160
    staff positions and has broad duties and responsibilities. The
    office independently conducts the inspections, investigations
    and audits of the CIA's programs and operations to ensure that
    they're conducted in accordance with applicable laws and
    regulations.
        It is the Inspector General's duty to keep the DCI, the
    Director of Central Intelligence, and the intelligence
    committees informed of any violations of law or deficiencies in
    the CIA programs and to monitor the implementation of
    corrective actions. The CIA Inspector General is obligated to
    report to the oversight committees if he's unableto resolve any
    differences with the Director affecting the execution of his duties on
    any audits or investigations focused on the Director or acting
    Director, or if he's unable to obtain significant documentary
    information in the course of an investigation.
        Mr. Helgerson, I believe you have the qualifications
    necessary to fulfill these duties. Your background at the CIA,
    the National Imagery and Mapping Agency and the National
    Intelligence Council, gives you a broad perspective on the
    issues which are encountered by the intelligence community.
    This experience will serve you well.
        In your statement, you described your approach to
    investigating wrongdoings. You asserted, and I'll quote:
    ``Initiative, integrity and independence should be the
    cornerstones of any investigation.'' I could not agree more. I
    would especially emphasize independence. In the closed society
    of the intelligence community and of the CIA, in particular,
    one must, while having an insider's knowledge of the agency as
    you do, investigate wrongdoings with professional detachment
    and independence. After you're confirmed, I believe you will
    exhibit such independence during your tenure.
        Again, thank you for being here today and I look forward to
    your testimony and also to support your nomination. Thank you,
    Mr. Chairman.
        Chairman Graham. Good. Thank you, Senator.
        Mr. Helgerson.

     STATEMENT OF JOHN L. HELGERSON, INSPECTOR GENERAL-DESIGNATE,
                      CENTRAL INTELLIGENCE AGENCY

        Mr. Helgerson. Thank you, Mr. Chairman, and thank you,
    Senator Shelby. Mr. Chairman, do you wish to swear me in, or
    shall I just begin?
        Chairman Graham. We have such overwhelming confidence in
    your integrity that that will not be necessary.
        Mr. Helgerson. Well, Mr. Chairman, I appreciate that and I
    appreciate the opportunity to make an introductory statement. I
    am honored, as you would know, to have been nominated by the
    President for the position of Inspector General of the Central
    Intelligence Agency. I've looked forward to this exchange with
    the Committee for some time, and I will be happy to answer any
    questions you may have about my experience, qualifications and
    views.
        Should I be confirmed for this position, as you have
    mentioned, I will be the third statutory Inspector General at
    CIA. I have known well the two previous incumbents, Fred Hitz
    and Britt Snider, and have learned a great deal from them
    personally and from their fine example in the performance of
    their duties. As you are aware, I served from 1998 to 2000 as
    Britt's deputy, working with him to build on the foundation
    that Fred had laid as we strengthened still further the
    capabilities of the office.
        Looking back on my time as Deputy IG, I'm proud of the
    progress we made in several specific areas. We brought the
    office up to its full personnel strength, including hiring a
    number of new auditors from outside the agency who had first-
    class information technology and systems auditing skills. We
    launched a program of field station audits, implemented a
    proactive fraud detection effort, expanded staff training,
    established a formal work plan and undertook a number of joint
    inspections with other IGs, some at congressional request.
        And finally, we crafted and secured DCI approval of an
    agency regulation that for the first time comprehensively
    spelled out for all employees the authorities and
    responsibilities of the statutory IG. During this period, as
    the Committee is aware, the office also accomplished a large
    body of substantive work in the form of audits, investigations
    and inspections. As Deputy IG, I reviewed and approved most of
    those. In the case of one key investigation that we conducted,
    I personally led the team that carried out the investigation
    and drafted the report. This was the investigation into the
    bombing in May 1999 of the Chinese embassy in Belgrade. The
    report on the bombing, I believe, provides the Committee a
    concrete and revealing look at the approach I bring to
    investigating wrongdoing--initiative, integrity and
    independence. The results of this investigation were made
    available promptly to the DCI, the President and to the
    Congress. The findings led to important follow-up actions
    within CIA, in the agency's interaction with the U.S. military
    and in U.S. diplomatic efforts.
        I look forward also, if you would like, to discussing with
    the Committee my experience in the field of foreign
    intelligence that's not directly related to the office of the
    Inspector General. Currently, I am serving in an intelligence
    community post as Chairman of the National Intelligence
    Council. As you have mentioned, I've also held senior positions
    as Deputy Director of the National Imagery and Mapping Agency
    and as Deputy Director for Intelligence at CIA. My experience
    in different agencies, both in Washington and overseas, has
    given me broad exposure to the range of programs that the IG
    audits, investigates and inspects.
        Now, a number of the positions that I've held have honed
    the skills and perspectives required to do the work of the
    statutory IG. In my service as CIA's Director of Congressional
    Affairs, it gave me the high awareness of the agency's
    reporting requirements to the Congress. My many years as an
    analyst and supervisor of analysts imbued in me the absolute
    need to make analytic judgments with integrity, to call them
    like we see them. During my tenure at NIMA, I worked to
    strengthen the IG function there. That assignment afforded me
    also the opportunity of learning how the IGs of the defense
    intelligence agencies function autonomously and yet under the
    larger DOD IG umbrella. Finally, Mr. Chairman, my joint service
    with Britt Snider provided me with valuable on-the-job
    training.
        I am familiar with this Committee's views about the
    importance of having a statutory IG at CIA and your very high
    expectations about the experience, integrity and independence
    of the individual who holds that position. I am aware, in
    particular, of the IG's reporting responsibilities to the
    Director of Central Intelligence and to the Congress. Let me
    assure you, Mr. Chairman, that I am fully committed to meeting
    the letter and the spirit of these responsibilities in
    theunambiguous way that they are now embodied in the CIA statute.
        I thank you for your attention. I look forward to your
    questions and, if confirmed, to working with you in the future
    as Inspector General.
        Chairman Graham. Thank you very much, Mr. Helgerson. I
    would like to ask a few questions, and then I'm certain that
    Senator Shelby will also have some inquiries.
        One of the recurring questions for someone who has spent a
    substantial amount of your adult life within the intelligence
    community and now are taking another post which requires you to
    do evaluation of that same community is the issue of
    independence. Can you bring the perspective of objectivity
    along with the depth of your personal experience within the
    community? Could you comment as to how you think you will be
    able to do that and maybe use your previous position as deputy
    Inspector General as illustrative of some of those challenges
    of both knowledge of, but also distance from the intelligence
    community to maintain objectivity?
        Mr. Helgerson. I'd be happy to Mr. Chairman. In fact, as
    you mentioned, I have had unusual, wonderful opportunities to
    hold posts in a number of agencies and directorates of CIA, and
    so on, and this breadth of experience I think does give me a
    valuable perspective. But another way of looking at it is this
    is a career spent wholly within the U.S. intelligence
    community. I would like to say that my experience as deputy
    Inspector General was the single thing that prepared me best to
    do this job, including with the independence and the vigor that
    you and Senator Shelby seek and that I do as well, and that job
    was very important, and I'll come back to it.
        But, frankly, the single most important thing by far was
    the training and experience I had as an analyst and a
    supervisor of analysts. We take great pride in drumming into
    ourselves from the moment we begin that career the integrity of
    the analytic work we do, the need to dig to get the facts and
    to accept nothing at face value, and to offer independent
    conclusions. If anything, frankly, in the analytic cadre, the
    problem is not that we bend with the winds, but the analysts
    instinctively want to poke the policymaker in the eye to prove
    that they know better than they do. So we value independence,
    independent thinking very highly, and I think that background
    more than anything gives me the instinct to do this job.
        But referring specifically to the deputy IG job, it did, of
    course, bring home to me in real terms what's involved with
    audits, investigations, inspections, and, as I've suggested to
    the Committee, I think the opportunity that arose when I was
    given the job of inspecting or investigating how did the U.S.
    government happen to bomb the Chinese embassy in Belgrade is
    kind of a useful case study. When that incident occurred, the
    Director of Central Intelligence and the Inspector General said
    we want somebody to oversee this investigation who knows how
    it's all supposed to work and yet has the courage to lay it all
    on the table as to what actually happened.
        This Committee, HPSCI and others, saw the results of that
    work. It did have a very substantial impact, and I don't think
    you could find anyone inside or outside the intelligence
    community who said anything other than the unvarnished truth
    was laid out there with very significant accountability
    consequences. So I have learned from being an analyst. I've
    learned from our recent experience in the IG business, and I
    think the two combine very well.
        Mr. Chairman, if I may, it's probably unnecessary, but let
    me say that I am, of course, aware of the strengths provided to
    the statutory Inspector General in the statutes, and we may
    want to come back to that. But if there was ever any doubt
    about the ability of the Inspector General to be independent
    and vigorous, those doubts were removed with the tools that
    Congress provided in the statutory IG Act.
        Chairman Graham. There is a special relationship within
    that Act that you just referred to between the Inspector
    General and the oversight committees of Congress. The statute,
    for instance, specifically requires that the DCI forward to the
    oversight committees semi-annual reports to the Inspector
    General. The Inspector General is required to summarize his
    activities and identify to the Committee any significant
    problems that he or she has uncovered. Could you describe for
    us what you will define as being a significant problem that
    warrants being summarized and then specifically referred to the
    oversight committees of Congress?
        Mr. Helgerson. Mr. Chairman, I can commit that I will
    continue the practice that Fred Hitz and Britt Snider used, and
    that was to err in the side of including it all. If there's any
    problem with our semi-annual reports, frankly, it is that they
    include too much rather than too little. We list there every
    investigation, inspection and audit undertaken, and the ones
    that are of any real importance we provide additional material.
    Staff of the Committee have not been shy about questioning us
    if they want additional material. So you are aware literally of
    everything we do, significant or otherwise.
        I might say parenthetically I am aware also, of course, of
    the provision of law that says that if the Inspector General
    shall happen upon particularly serious or flagrant problems
    that we need to inform the DCI immediately and he the Congress
    within seven days. There one does run into more definitional
    problems about what's particularly significant or flagrant,
    but, as a routine matter, you know everything we do.
        Chairman Graham. Senator Shelby.
        Vice Chairman Shelby. Thank you, Mr. Chairman.
        Mr. Helgerson, last year Britt Snider, the outgoing CIA
    Inspector General that we've been talking about, described the
    CIA's financial and management situation as being very poor.
    According to him, it was, and I'll quote his words, ``often
    impossible to know where money is and how it is actually being
    spent.'' He went on to say that ``the CIA could not produce
    uniform and reliable financial data and that they had a
    personnel evaluation process that defies any effort to weed out
    poor performers.'' Furthermore, and I'm quoting the Inspector
    General, Britt Snider, ``There was too little concern about the
    quality of goods and services which the agency was purchasing
    with taxpayer money.''
        In his farewell statement, Mr. Snyder asked a number of
    fundamental questions about the CIA's ability to plan for the
    future and concluded, and I'll quote again. ``Frankly,'' he
    said, ``based upon my timehere''--and that was a long time--``I
    don't think the existing corporate structure provides an adequate
    mechanism for addressing them.'' All in all, he described the CIA as
    lacking, quote again, ``effective, top down corporate management.''
        That assessment was made a little over a year ago, January,
    2001. Since then, the CIA has lacked both a confirmed Inspector
    General and a permanent deputy Inspector General. This year,
    the Agency is about to receive a huge new infusion of funds to
    help fight the war on terrorism, which we all support. Do you
    think the problems that your predecessor, Mr. Snider, as an
    Inspector General identified at the CIA remain problems today,
    or do you know at this point?
        Mr. Helgerson. Well, Senator Shelby, you've asked a number
    of questions in one, but let me pick off pieces of it. I am
    familiar with Britt Snyder's statement that he prepared when he
    left the job of Inspector General----
        Vice Chairman Shelby. Absolutely.
        Mr. Helgerson. Certain pieces of it I think he's absolutely
    right, and they are important. Should I be confirmed and take
    up the job as Inspector General, for example, one thing I
    intend to concentrate on is the CIA procurement acquisition
    process for information technology and information systems.
    This is an area that frankly in any government agency is ripe
    for waste, fraud and abuse. That's how IGs originally started
    their work.
        Vice Chairman Shelby. Absolutely.
        Mr. Helgerson. A lot of money is spent in the acquisition,
    in the operation and the use, or misuse, or security purposes,
    and so on. So a big challenge I know in the office of the
    Inspector General when I was there was hiring, training,
    retaining auditors and investigators who really understood the
    information technology business. I intend to make this one of a
    couple priority areas to ensure that we have the capability and
    the audit and investigations staff to do that.
        A second kind of generic capability that I intend to
    emphasize refers to another part of your question. That is, I
    am mindful that CIA has received and will be receiving
    significant additional funds for the programs you mentioned. A
    great deal of these monies are spent with overseas operations.
    Mr. Snider and I put in place a field audit capability that I
    intend to strengthen still further, because in the IG business,
    frankly, one wants to follow the money. Now, I apologize these
    are such cryptic answers, but let me leap to the most general
    question, and that refers to the kind of overall organization,
    because Mr. Snider was referring not only to the CIA, frankly,
    but to the intelligence community.
        Vice Chairman Shelby. Absolutely.
        Mr. Helgerson. I won't venture an opinion here about what
    ought to be the scope of the DCI authorities. You and the DCI
    and the President will have opinions on that. But as regards
    the IG business, let me take the occasion to say if you were to
    ask me should there be a community-wide IG to help deal with
    these larger problems you've pointed to, my firm answer would
    be if we reach the day when the DCI's responsibilities and
    authorities are expanded significantly in some of the ways
    we're talking about, then it might be appropriate to expand the
    authorities of the Inspector General to match those of the DCI.
        I think if we expanded the authorities of a community IG
    without having expanded authorities on behalf of the Director,
    we'd get the cart before the horse and you'd find a weakened IG
    who couldn't follow up in the way he must, including with our
    semi-annual reports. So I've just touched on a couple parts of
    your question. They're important ones. We can come back to them
    if you like.
        Vice Chairman Shelby. Let me go back to this part of it,
    and I'll quote Mr. Snider again. He says, ``Frankly''--and this
    about the CIA he's referring to. ``Frankly, based upon my time
    here as the CIA's Inspector General, I don't think the existing
    corporate structure provides an adequate mechanism for
    addressing them.'' All in all, he described the CIA as lacking,
    quote, ``effective top down corporate management.'' Are you in
    a position to comment on that yet or do you want to do this
    after you get into your job as Inspector General?
        Mr. Helgerson. Well, prudence would suggest I comment at a
    later stage but that doesn't keep me from having an opinion
    even now, and that is to point out that a number of others,
    including the DCI, have recognized that at least some of what
    Mr. Snider pointed to is the case and the wholly new system
    that is----
        Vice Chairman Shelby. But you're not saying what Mr.
    Schneider said is incorrect?
        Mr. Helgerson. Not at all.
        Vice Chairman Shelby. Okay.
        Mr. Helgerson. I'm saying that parts of it he has a real
    good point, particularly in compensation and personnel
    management, and the new system that you and staff have heard is
    being prepared will address some of those issues. Another
    multi-year program that the IG oversees to help the agency get
    in a position to prepare truly auditable financial statements
    is important in addressing another part of this. We have a
    chief information officer, a chief financial officer, both
    created relatively recently, particularly on the financial
    side. It's a multi-year process to get the auditable financial
    statements but we're making real headway in that progress.
        My challenge, and I'll try and be brief here, should I
    become IG, the challenge there is to hold the Agency's feet to
    the fire, moving toward the auditable financial statements
    without getting ourselves in an Enron/Andersen-like situation.
    That is, in our observations twice a year as to what's wrong
    and what ought to be done to get it fixed, we inevitably
    continue then to work with the affected relevant components to
    see that the follow up is done. I want to be sure that we stick
    with the auditing and the what ought to be done and the
    monitoring the follow up and don't, out of goodwill or
    foolishness, get caught up in the actual implementation and
    management.
        The Enron/Andersen example is something that all IGs and
    perspective IGs have taken seriously. The Comptroller General
    has issued updated guidance to the IG community on how to keep
    yourself out of that problem and I intend to be sure that the
    IG group at CIA have read that report carefully.
        Vice Chairman Shelby. And also to keep other people out of
    the problems.
        Mr. Helgerson. Exactly.
        Vice Chairman Shelby. Thank you, Mr. Chairman.
        Chairman Graham. Thank you, Senator.
        Senator Rockefeller.
        Senator Rockefeller. Thank you, Mr. Chairman.
        I'm sort of a little bit going to go with the same line of
    questions but in a slightly different way because I think
    Senator Shelby was trying to nail something really important
    here. The need for collaboration and cooperation has obviously
    got to grow and you just can't go back to the days of the
    U.S.S. Liberty and Pueblo, right? I mean, people have got to be
    able to talk to each other and there's got to be cooperation in
    the intelligence community.
        Now, more and more programs are going to cut across
    different intelligence agencies in different places and
    oversight will continue to increase. It will need to, hopefully
    constructively and usefully. There are a variety of ways to
    achieve this goal.
        One, the Inspector General at the various intelligence
    agencies could conduct more joint audits and investigations.
    Two, the Congress could create an intelligence community
    Inspector General to handle cross-cutting programs, which is
    the way the Defense Department operates. Or, three, the CIA
    Inspector General, as part of the DCI's staff, could take the
    lead in conducting or coordinating reviews of joint programs.
        I'd like to get your thoughts on each of these, part of
    which will be repetitious but I think it's very important, and
    would the establishment, in your judgment, of an intelligence
    community Inspector General improve the DCI's ability to manage
    the community? I've questioned him on this. I'm not talking
    Scowcroft recommendations. That hasn't come out and this isn't
    about that; this is about commonsense reaction. If you were
    able to do that would that improve his ability to work the
    community and hold the community responsible or would it just
    create chaos? And I have a follow up question.
        Mr. Helgerson. I understand, Senator Rockefeller, thank
    you.
        Let me repeat myself a little bit in saying that I think IG
    oversight of everybody by somebody is appropriate. I have
    worried in the past a little bit about whether the intelligence
    Community Management Staff was exempt from any IG oversight. I
    know our office of Inspector General traditionally has wondered
    whether they are within our purview. It's probably a healthy
    thing that they think decidedly they are. They think not that
    they're exempt from oversight but they have double oversight
    because the DOD IG looks at them and we look at them. And the
    trick of course is whether we look at them together in a
    coordinated way that covers all the bases, keeps things from
    falling through the cracks.
        Let me double back just a minute. That was just an example.
    My fundamental point is for an IG to be effective they have to
    have the backing of the executive who runs whatever the
    institution is. So, again, I think it very important that one
    have a strong, independent IG whose turf corresponds to that of
    the Director. If the Director's turf is expanded with real
    authorities, then so should an IG, whether it's CIA or
    otherwise.
        But let me take just a minute to say in the meantime we
    have a system that probably is better than most people realize
    in the IG forum of which you're doubtless aware. Some four or
    five years ago, that group was reconstituted, and while I don't
    want to exaggerate its effectiveness for those who may be not
    in the middle of this, it's a group made up of the inspectors
    general of a dozen agencies who have national security
    responsibilities. All of the IGs go to the President's Council
    on Integrity and Efficiency which covers the whole of
    government, but a number have said to me, frankly, the IG forum
    in the intelligence community is more useful in dealing with
    the issues that really pertain to us.
        Now, interestingly, in terms of formal audits and
    investigations and inspections, that group has undertaken only
    a few and they're a little dated now, but when I was deputy IG
    we had just finished the work on NRO's financial management,
    we'd done work on foreign intelligence relationships, because
    all agencies had sharing relationships with other services. We
    had done a multi-agency look at export control capabilities
    because we were all involved in it in one way or another.
        But what we've found is that certain other projects, like
    the one we did on POW MIAs at the request of Senator Smith that
    came through then-Chairman Shelby as I recall, we found there
    wasn't much use for the Departments of Transportation or Energy
    or whatever. It was a smaller subset. In any case, what I'm
    saying here is that there have not been a great many large-
    scale formal efforts, and my feeling is that where they are
    truly appropriate one should do them but it isn't easy with 12
    cooks in the broth or however many, so you don't want to force
    things into the community approach unless they really belong
    there. What does belong there and what goes on more
    continuously is a system where that forum meets every quarter,
    chaired alternately by the IGs of Department of Defense and of
    the CIA, and it has very active working groups which, for
    example, meet to discuss information assurance issues of the
    kind I was mentioning earlier. Or now they're working on the
    issue of are we sharing information on terrorism optimally.
        Each year they have an auditors conference. Two or three
    hundred community auditors get together. So this is the kind of
    thing, year in and year out, that some of it sounds kind of
    pedestrian but it is useful in the absence of a larger
    community IG of the kind you're referring to which, at some
    point down the road, might be appropriate, but I personally
    right now think would be premature.
        Senator Rockefeller. Okay. Mr. Chairman, can I just follow
    up very briefly but intelligently. [Laughter.]
        Chairman Graham. You'll be judged on that.
        Senator Rockefeller. I'll be judged on that. I may never be
    able to ask another question again.
        You've said two things and you strike me as having been
    very,very careful in the way you answered that question, but I
    think that there was a feeling coming out of you when you used the
    words ``down the line could make sense.'' Two factors: one is we're
    dealing with the way the world used to be and the way the world now is.
    So to say that something is working much better than people ordinarily
    think it is, is not necessarily a very impressive statement to me
    unless it meets the requirements of what's going to be needed in the
    world that we're going to be facing--and that the IG or the IGs will be
    facing.
        Second, you said at one point that, as I said, people don't
    realize how well these IGs getting together I guess on a
    quarterly basis actually works, and then you came back and said
    in the latter part of your statement in fact that sort of--I
    forget how you phrased it but you didn't put in a very good
    light. You can't have it both ways. And if something is a good
    idea down the road but is premature, that means that it's a
    good idea which somebody doesn't want to come out for because
    it's not of the moment, so to speak.
        And then I look at Secretary Rumsfeld and what he's done
    and he had all these people who evidently didn't want to
    fight--and I don't know this but this has been reported--really
    didn't want to fight wars the way they're going to have to be
    fought, and he said to hell with that, we're going to get young
    people here who know how to take on what has to be done, and
    I'm going to do it. And he did it, and I assume there's a whole
    lot of grumbling and I don't think he cares and the country is
    better served.
        So I'm not even going to make you answer that, but I want
    to put in your mind that I thought that you were being a little
    careful there and I suspect I think I know where you want this
    to come out in the end. And I think I may agree with you. But
    if you simply say that the IG's territory ends at the end of
    the box where his turf expands to and can go no further, then
    quarterly meetings of IGs may be better than people think. I
    just wonder whether it's good enough.
        Mr. Helgerson. Senator Rockefeller, you've kindly offered
    to make this a rhetorical question, but let me nevertheless, if
    I may, make a couple of points. One of them is, I don't mean to
    be too careful here at all. My decided view is that yes, an
    assertive, capable IG is terribly important but I do believe it
    needs to correspond again to the scope of the authorities of
    the director, if it is to work. So my personal position is
    right now, the CIA IG authorities ought to match those of the
    DCI. If the DCI's authorities expand, then my personal opinion
    is some IG ought to have authorities matching his.
        On the other side of this though, let me say I wanted to
    give you as precise an understanding as I could of the
    usefulness of this quarterly IG forum. I don't mean to
    overstate it. If your question were to go a little further and
    say what do I think could be usefully done to make the
    collective intelligence community of IGs more effective, I
    believe without a doubt the answer is to continue what the
    Committee has already done in recent years, which is to give
    added staff and resources to the autonomous IGs of the other
    intelligence agencies.
        I have recently come off a couple of years as deputy
    director of NIMA. While there I oversaw the expansion of that
    IG operation from eight to 24 people and we tripled the budget
    and we tried to bring in people who had meaningful
    investigative audit capability, particularly on information
    systems and information assurance, these kind of issues we've
    been talking about. I think there's dramatic payoff to that. I
    thank the Committee for myself and on behalf of NIMA. It's made
    all the difference in the world.
        So the point is, I don't mean to shade any of this and I'd
    be happy on another occasion to offer still more concrete ideas
    of what we can do to strengthen the IG business across the
    community. I do, however, as you correctly understood, have
    some cautionary views about the conditions under which we ought
    to go the community IG route.
        Senator Rockefeller. Thank you, sir and thank you, Mr.
    Chairman, for your hearty indulgence.
        Chairman Graham. Thank you, Senator. Senator Shelby has a
    pressing next appointment so I'm going to defer to the Vice
    Chairman.
        Vice Chairman Shelby. Thank you, Mr. Chairman. Mr.
    Helgerson, one of the duties of the Office of Inspector General
    is to report violations of the law, right?
        Mr. Helgerson. Right.
        Vice Chairman Shelby. I am sure we'd all agree that where
    an obligation set forth in a statute is accompanied by a
    penalty for non-compliance, a violation of this provision would
    merit an IG report. Do you want me to say that again?
        Mr. Helgerson. Yes, the latter part. It would probably be
    safe if you did, yes.
        Vice Chairman Shelby. Well, let me just say I hope you
    would agree that where an obligation is set forth in statute
    and it's accompanied by a penalty for noncompliance, and a
    violation of this provision would merit an IG report.
        Mr. Helgerson. In general, yes, of course.
        Vice Chairman Shelby. The Congress sometimes writes laws to
    require things without providing a penalty for noncompliance.
    In your view, would the violation of such a provision be a
    violation that an Inspector General would have to report? In
    other words, if it was a violation of a statute.
        Mr. Helgerson. I understand. If I may?
        Vice Chairman Shelby. Yes, go ahead.
        Mr. Helgerson. It is a complicated question, not in the
    spirit, which is that everybody ought to obey the law and the
    IG ought to see that they do.
        Vice Chairman Shelby. Absolutely.
        Mr. Helgerson. The implications though, are a little more
    complicated because normally criminal law, for example, is the
    violation of those statutes to which a jail term might be
    attached.
        Vice Chairman Shelby. Or a fine.
        Mr. Helgerson. Or a fine. The statutes that govern what the
    IG does say that we shall report crimes to the Attorney General
    and we do it through our Director normally, but pursuant to
    guidance that theAttorney General has issued. As a practical
    matter, there is a threshold that involves violation of the law, civil
    or criminal, and in both cases there are fairly substantial numbers of
    violations that, after looking at the Attorney General guidelines, we
    do not in fact formally report to the Attorney General.
        We consult with the Eastern District of Virginia or with
    the Department of Justice, or in some cases we're authorized--I
    say we, but the CIA's IG--not to consult with anybody if they
    don't reach a certain threshold. Even though it's a violation
    of law, the understanding is that they would not be reported
    formally and that administrative action would be taken within
    the Agency to deal with whatever----
        Vice Chairman Shelby. It's based on the Department of
    Justice recommendations too?
        Mr. Helgerson. Yes, it is. Yes.
        Vice Chairman Shelby. Okay. Congress has provided in
    statute, as you well know, that the Assistant DCI for
    collection and the Assistant DCI for analysis and production,
    shall be positions subject to nomination and to Senate
    confirmation. You're familiar with that?
        Mr. Helgerson. I am familiar.
        Vice Chairman Shelby. These positions continue to be filled
    by nonconfirmed appointed officials, despite the law that says
    they shall be positions subject to nomination by the President
    and Senate confirmation. Would you consider that a violation of
    the law that an Inspector General would have to report? Or do
    we already know that?
        Mr. Helgerson. Well, Senator----
        Vice Chairman Shelby. You see where we are coming from?
        Mr. Helgerson. I certainly do. And as you usually do,
    you've anticipated the answer with that last remark. If I may
    put this in a few words, the role of the IG normally,
    classically, is not to serve as prosecutor, judge or jury.
        Vice Chairman Shelby. We know that.
        Mr. Helgerson. Our job is to assemble the facts, as you
    know. We have here an ironic situation where I approach this
    and think to myself, my job is to, on any given issue, find the
    facts and report them where appropriate to the DCI, to the
    intelligence committees, and, where appropriate, to the
    Department of Justice and in principle, even the White House,
    because I work for the President.
        Vice Chairman Shelby. That's right.
        Mr. Helgerson. Now here you've raised a subject--again,
    here's the irony--where the DCI, the Congress, the Department
    of Justice and the White House all know the facts to the point
    where they wish they didn't know the facts. I mean, for four or
    five years we've been going around this track.
        Vice Chairman Shelby. Absolutely.
        Mr. Helgerson. Now my own view is that I would approach
    this if Inspector General, with an eye to protecting the
    integrity, the power, the credibility of the Office of the
    Inspector General. And frankly, just as the federal courts or
    state courts are reluctant to venture into political sands
    between the other two branches of government, frankly I see
    this, in very large part--despite the legal issue you rightly
    point to--in very large part a political issue and I can't help
    thinking, what could the IG really contribute to this and I am
    frankly having no fear of the DCI but I'm a little reluctant to
    get myself crosswise with the White House and with the Congress
    and so on, when I have little to add.
        The other angle to this, from a kind of technical point of
    view and this is not meant to excuse anybody, is that what the
    law really provides is that the President shall appoint, for
    Senate deliberation. I worry that, if I did get into this as
    Inspector General, what my attorneys would tell me is that the
    writ of the OIG at CIA does not extend to the President's
    appointment powers. And I would not really want to get in a
    situation where I had to sign a report that looked like I was
    excusing a situation that we all know, frankly, could have been
    handled better, probably from all sides.
        Now on the political side of this, while I'm not in the
    middle of it, I am aware that the DCI and the Deputy DCI,
    because there is a vacancy in one of those jobs, will be, I
    believe, again talking with the Committee about their
    obligations and next steps. The supreme irony in all this is
    that the Committee wanted these positions created. They have
    been filled by people--Charles Allen and John Gannon, who have
    done a whale of a job over a few years. But this does not
    leave--this leaves unaddressed this question that you raised.
    It's an important one. I have to tell you in all honesty I
    don't know what the Office of Inspector General can bring to it
    in the way of resolving it, but you can be sure that we
    understand the issue.
        Vice Chairman Shelby. Thank you, Mr. Helgerson. You've had
    a lot of experience in the intelligence community. Are there
    any particular areas of inefficiency at the CIA, that you would
    seek to improve, or is this premature at this point? Do you
    want to get into the job more?
        Mr. Helgerson. Well, a considered answer would demand some
    time in the job. But I mentioned in response to an earlier
    question, that the general IS/IT area is one that I know I need
    to work on and the heightened operational funding is clearly an
    area where we'll have to follow up. But I don't know of
    particular areas of problem now, other than those general areas
    that are challenging. Would be in any department of government,
    particularly the IS/IT.
        Vice Chairman Shelby. Chairman, thank you for your
    courtesy.
        Chairman Graham. Thank you very much, Senator. I just have
    one area of further questioning and then I'll call on Senator
    Rockefeller.
        Approximately a year ago we heard a report from one of the
    national accounting firms relative to the state of the
    financial records of the CIA. The basic position was that they
    were not auditable, subject to audit, because they did not
    reach the threshold which an auditor could then proceed to
    review and then give an opinion as to the status of the
    records. Subsequent to that time I have met with the head of
    the General Accounting Office, who has indicated that the
    situation at the CIA was not unique to the CIA and that he
    considers this to be a serious matter, thatthere needs to be a
    commitment to move towards having financial records that are subject to
    generally-acceptable governmental accounting procedures and analysis.
        What role do you see the Inspector General's Office playing
    in facilitating the movement of the CIA towards generally
    acceptable accounting standard financial records?
        Mr. Helgerson. Mr. Chairman, this is an important area and
    I am familiar with it because the multiyear effort to which I
    earlier referred, was begun at the time when Britt Snider and I
    were both in the IG. We have a substantial crew of very capable
    auditors, CPAs, certified fraud examiners and others in the IG
    operation. They were working with the Office of Finance and its
    successors on the CIA management side to help them get to a
    stage where CIA's books did have an auditable financial
    statement.
        Now let me underscore the point you made. CIA is not alone
    in this. I think all our agencies were in this boat and it did
    not mean in fact that we did not have financial controls in
    place. Auditable financial statements is a term of art in the
    auditing profession and I risk getting beyond my level of
    competence here, but the reason we didn't have auditable
    financial statements in CIA and the other agencies was in large
    part that we had never aspired to have. The Government
    Accounting Office, the Congress and others had not required it
    of us, and it seemed for many years inappropriate or
    unnecessary. In recent years, however, including with
    congressional direction, there is a resolve and I think in the
    report language, even a command that we shall, over the next
    two or three years, get to that stage.
        So the Office of Inspector General, with its expertise,
    already has--and nothing to do with me; I've been away a couple
    of years--been working with the chief financial officer and her
    staff to bring this about. But it requires the training of
    their staff. It requires an expertise and a rebuilding of the
    systems in a way that, if done sensibly, perhaps regrettably,
    does take still, as I understand it, another two or three
    years. But we do--I believe you've put in the law that we shall
    do it, each year do an audit of the progress that has been made
    in this direction. I shall see that that continues.
        Chairman Graham. Thank you. Senator Rockefeller.
        Senator Rockefeller. Just a quickie, or two quickies. The
    National Security Act 1947 explicitly says that the DCI, in his
    role as head of the Central Intelligence Agency, can provide
    services that are ``of common concern to the elements of the
    intelligence community.'' And, one, I'm interested in how you
    interpret that.
        Secondly, do you think that this gives the DCI the
    authority to use the CIA Inspector General to conduct
    community-wide investigations? And thirdly, if this were the
    case, could this be a useful way to proceed? But let's start
    with what is in the '47 Act.
        Mr. Helgerson. Senator Rockefeller, I should say I don't
    have an informed view of the true legal aspects of the
    authorities provided by that Act. Obviously, I'd be happy to
    look into this. But I----
        Senator Rockefeller. It's pretty clear.
        Mr. Helgerson [continuing]. Could nevertheless answer the
    question, which is that Act does give the DCI considerable
    authorities and we have already, in the past, used those
    authorities to do Inspector General audits, one agency of
    another, in specific cases, including the one I referred to a
    moment ago where two or three agencies looked over the NRO's
    books. And we've done other such things including under the
    provisions for peer review and so on in the IG community.
        I think that if we wanted to do it--that is the Congress,
    the DCI, Office of Inspector General--considerably more could
    be done in furtherance of the kind of thing you're getting at.
        My concern with this--a little different angle to this--is
    I believe the most powerful thing that came out of the
    statutory IG at CIA--terribly important to us--is that we have
    a system whereby, semi-annually, we report on what our findings
    were, what our recommendations were, progress made to date by
    management in addressing those--and we have an executive
    director and a DCI to back us up. So again I sound like a
    broken record, but the forthright answer is that we can,
    without a doubt, pursuant to the authorities you mention, do
    considerably more in the IG side if it's decided we should, in
    looking into cross-boundary issues.
        My concern, as a long-time manager and a kind of realist in
    this business, is that I want to be sure in the interests of
    good government that there is some clout behind those findings,
    so that on a semi-annual basis, a year and a half down the
    road, I or whoever it is as Inspector General, can go to the
    other party which in this case might be in another agency, and
    say have you done what those recommendations laid out you
    should do and know that behind me stands somebody.
        I don't want to sound at all closed-minded about this.
    There's a lot we can do. I'm just saying that it's not as--the
    real payoff is in getting people to do what the IG and/or
    others believe they should. If we build in somehow the follow
    up, then I think you've got a very good idea and we're right
    there with you.
        Senator Rockefeller. Thank you, sir.
        And my second question is very short but not easy. I always
    ask when a Cabinet Secretary is up for confirmation, if your
    budget comes up blatantly short as per your value system with
    respect to your responsibilities, will you take the President
    on face to face? Will you go do face time with the President,
    argue your case directly, or will you cave in to OMB, as so
    often happens?
        My question to you is just a little bit different. If there
    was an investigation that was requested by this Committee or
    which was in your judgment clearly needed, and the DCI did not
    want that to happen, you would have to exercise judgment. Would
    you be willing to contemplate carrying on with it, in spite of
    the DCI's objection?
        Mr. Helgerson. Unfortunately, this takes reference to two
    provisions of law. The statute that set up the statutory IG at
    the CIA anticipated that there would be differences between an
    IG and the DCI. And one provision of the Act provides that if
    there are differences between the two concerning the IG's
    exercise of his authorities and responsibilities that cannot be
    resolved, then these differences shall be reported immediately
    to the intelligence committees.
        A different section of the same Act, says specifically--the
    first one pertained to anything the IG might be doing. The
    other provision of law says, that if the IG--or put it this
    way, it says the DCI can, on national security grounds, direct
    that the IG not initiate, carry out or publish, whatever the
    word was, an inspection, audit or investigation. In that case,
    the DCI must report to the Congress within seven days that he
    has done this and why he has done it and the IG can append his
    thoughts as well.
        Now, if you want to take the really unlikely scenario, if
    an IG said--so to answer your question, lest you think I've
    forgotten it, if the Director said you may not do this report
    for national security reasons, I would say, yes, sir I will
    desist, but you and I have got to report this to the oversight
    committee. In an extraordinarily unlikely scenario that a DCI
    said, no, I'm not going to report it, then I of course, would
    report it myself under the other provision that said we'd found
    an issue we can't resolve.
        So the DCI--important to know in principle--does have the
    authority, under certain conditions, to order a stand down. As
    a practical matter though, for the record, and the Committee
    should know, that I know very well--Britt Snider and Fred Hitz
    and we in the IG community of course, talk about this--while
    this is a terribly important provision of law, as a practical
    matter these two provisions have never been triggered in the 12
    years we've had a statutory IG at the CIA.
        I hope they are not triggered but these are among the
    provisions that give the statutory IG the strength that he or
    she has to do the job. It means a lot to me to have that in the
    back pocket even though I have no expectation that I'd use it,
    just as it has not been used through ten years and five DCIs
    and two IGs. But it's a key issue.
        Senator Rockefeller. Thank you, sir. Thank you, Mr.
    Chairman.
        Chairman Graham. Mr. Helgerson, thank you very much for
    your presence. We appreciate you being accompanied by family
    and friends and your very informative responses to our
    questions. We will take this matter under advisement and I hope
    soon, be in a position to have a vote to recommend your
    confirmation to our colleagues in the Senate.
        Mr. Helgerson. Mr. Chairman, Senator Rockefeller, thank you
    very much. I appreciate the opportunity.
        Chairman Graham. Thank you very much and thank you for your
    past service and what I'm certain will be distinguished future
    service.
        Mr. Helgerson. Thank you, sir.
        Chairman Graham. Thank you. This concludes the open
    hearing. We will reconvene in five minutes in SH-219 for the
    second part of our hearing this afternoon. Thank you.
        [Whereupon, at 3:33 p.m., the hearing was adjourned.]

        COMMITTEE BUSINESS MEETING TO VOTE ON THE NOMINATION OF JOHN L.
      HELGERSON TO BE INSPECTOR GENERAL OF THE CENTRAL INTELLIGENCE AGENCY

                                  ----------                              -
    --

                            THURSDAY, APRIL 25, 2002

                                           U.S. Senate,
                              Select Committee on Intelligence,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 3:45 p.m., in
    room S-216, The Capitol, the Honorable Bob Graham (chairman of
    the Committee) presiding.
        Committee Members Present: Senators Graham, Rockefeller,
    Feinstein, Wyden, Bayh, Mikulski, Shelby, Kyl, Inhofe, Roberts,
    Thompson.
        Committee Staff Members Present: Vicki Divoll, General
    Counsel; Kathleen McGhee, Chief Clerk; Paula DeSutter, Melvin
    Dubee, Bob Filippone, Chris Ford, Jim Hensler, Matt Pollard,
    Michal Schafer, Linda Taylor, and Jim Wolfe.
        Chairman Graham. I call the meeting to order.
        The Committee will now consider the nomination of John L.
    Helgerson for the position of Inspector General of the Central
    Intelligence Agency. Pursuant to Rule 5 of the Committee rules,
    I move that the Committee vote to report favorably to the
    Senate the President's nomination of Mr. John Helgerson to be
    CIA Inspector General.
        Is there a second?
        Senator Inhofe. Second.
        Chairman Graham. The Clerk will call the roll.
        Mrs. McGhee. Mr. Levin?
        [No response.]
        Mrs. McGhee. Mr. Rockefeller?
        Senator Rockefeller. Aye.
        Mrs. McGhee. Mrs. Feinstein?
        Senator Feinstein. Aye.
        Mrs. McGhee. Mr. Wyden?
        Senator Wyden. Aye.
        Mrs. McGhee. Mr. Durbin?
        Chairman Graham. Aye by proxy.
        Mrs. McGhee. Mr. Bayh?
        Senator Bayh. Aye.
        Mrs. McGhee. Mr. Edwards?
        Chairman Graham. Aye by proxy.
        Mrs. McGhee. Ms. Mikulski?
        Senator Mikulski. Aye.
        Mrs. McGhee. Mr. Kyl?
        Senator Kyl. Aye.
        Mrs. McGhee. Mr. Inhofe?
        Senator Inhofe. Aye.
        Mrs. McGhee. Mr. Hatch?
        Senator Kyl. I have his proxy. I presume it's an aye.
        Mrs. McGhee. Mr. Roberts?
        Senator Roberts. Aye.
        Mrs. McGhee. Mr. DeWine?
        Senator Kyl. I have his proxy, presumably an aye.
        Mrs. McGhee. Mr. Thompson?
        Senator Thompson. Aye.
        Mrs. McGhee. Mr. Lugar?
        Senator Kyl. I have his proxy, presumably an aye.
        Mrs. McGhee. Mr. Shelby?
        Vice Chairman Shelby. Aye.
        Mrs. McGhee. Mr. Graham?
        Chairman Graham. Aye.
        Mrs. McGhee. Sixteen ayes.
        Chairman Graham. Thank you all.
        [Whereupon, at 3.47 p.m., the Committee adjourned.]