[Congressional Record Volume 142, Number 140 (Wednesday, October 2, 1996)]
[Senate]
[Pages S12201-S12216]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     ECONOMIC ESPIONAGE ACT OF 1996

  Mr. NICKLES. Mr. President, I ask the Chair to lay before the Senate 
a message from the House of Representatives on (H.R. 3723) the bill to 
amend title 18, United States Code, to protect proprietary economic 
information, and for other purposes.
  The PRESIDING OFFICER laid before the Senate the following message 
from the House of Representatives:

       Resolved, That the House agree to the amendment of the 
     Senate to the bill (H.R. 3723) entitled ``An Act to amend 
     title 18, United States Code, to protect proprietary economic 
     information, and for other purposes'', with the following 
     House amendment to senate amendment:
       In lieu of the matter proposed to be inserted by the Senate 
     amendment to the text of the bill, insert:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Economic Espionage Act of 
     1996''.
                  TITLE I--PROTECTION OF TRADE SECRETS

     SEC. 101. PROTECTION OF TRADE SECRETS.

       (a) In General.--Title 18, United States Code, is amended 
     by inserting after chapter 89 the following:

               ``CHAPTER 90--PROTECTION OF TRADE SECRETS

``Sec.
``1831. Economic espionage.
``1832. Theft of trade secrets.
``1833. Exceptions to prohibitions.
``1834. Criminal forfeiture.
``1835. Orders to preserve confidentiality.
``1836. Civil proceedings to enjoin violations.
``1837. Conduct outside the United States.
``1838. Construction with other laws.
``1839. Definitions.

     ``Sec. 1831. Economic espionage

       ``(a) In General.--Whoever, intending or knowing that the 
     offense will benefit any foreign government, foreign 
     instrumentality, or foreign agent, knowingly--
       ``(1) steals, or without authorization appropriates, takes, 
     carries away, or conceals, or by fraud, artifice, or 
     deception obtains a trade secret;
       ``(2) without authorization copies, duplicates, sketches, 
     draws, photographs, downloads, uploads, alters, destroys, 
     photocopies, replicates, transmits, delivers, sends, mails, 
     communicates, or conveys a trade secret;
       ``(3) receives, buys, or possesses a trade secret, knowing 
     the same to have been stolen or appropriated, obtained, or 
     converted without authorization;
       ``(4) attempts to commit any offense described in any of 
     paragraphs (1) through (3); or
       ``(5) conspires with one or more other persons to commit 
     any offense described in any of paragraphs (1) through (4), 
     and one or more of such persons do any act to effect the 
     object of the conspiracy,

     shall, except as provided in subsection (b), be fined not 
     more than $500,000 or imprisoned not more than 15 years, or 
     both.
       ``(b) Organizations.--Any organization that commits any 
     offense described in subsection (a) shall be fined not more 
     than $10,000,000.

     ``Sec. 1832. Theft of trade secrets

       ``(a) Whoever, with intent to convert a trade secret, that 
     is related to or included in a product that is produced for 
     or placed in interstate or foreign commerce, to the economic 
     benefit of anyone other than the owner thereof, and intending 
     or knowing that the offense will, injure any owner of that 
     trade secret, knowingly--
       ``(1) steals, or without authorization appropriates, takes, 
     carries away, or conceals, or by fraud, artifice, or 
     deception obtains such information;
       ``(2) without authorization copies, duplicates, sketches, 
     draws, photographs, downloads, uploads, alters, destroys, 
     photocopies, replicates, transmits, delivers, sends, mails, 
     communicates, or conveys such information;
       ``(3) receives, buys, or possesses such information, 
     knowing the same to have been stolen or appropriated, 
     obtained, or converted without authorization;
       ``(4) attempts to commit any offense described in 
     paragraphs (1) through (3); or
       ``(5) conspires with one or more other persons to commit 
     any offense described in paragraphs (1) through (3), and one 
     or more of such persons do any act to effect the object of 
     the conspiracy,

     shall, except as provided in subsection (b), be fined under 
     this title or imprisoned not more than 10 years, or both.
       ``(b) Any organization that commits any offense described 
     in subsection (a) shall be fined not more than $5,000,000.

     ``Sec. 1833. Exceptions to prohibitions

       ``This chapter does not prohibit--
       ``(1) any otherwise lawful activity conducted by a 
     governmental entity of the United States, a State, or a 
     political subdivision of a State; or
       ``(2) the reporting of a suspected violation of law to any 
     governmental entity of the United States, a State, or a 
     political subdivision of a State, if such entity has lawful 
     authority with respect to that violation.

     ``Sec. 1834. Criminal forfeiture

       ``(a) The court, in imposing sentence on a person for a 
     violation of this chapter, shall order, in addition to any 
     other sentence imposed, that the person forfeit to the United 
     States--
       ``(1) any property constituting, or derived from, any 
     proceeds the person obtained, directly or indirectly, as the 
     result of such violation; and
       ``(2) any of the person's property used, or intended to be 
     used, in any manner or part, to commit or facilitate the 
     commission of such violation, if the court in its discretion 
     so determines, taking into consideration the nature, scope, 
     and proportionality of the use of the property in the 
     offense.
       ``(b) Property subject to forfeiture under this section, 
     any seizure and disposition thereof, and any administrative 
     or judicial proceeding in relation thereto, shall be governed 
     by section 413 of the Comprehensive Drug Abuse Prevention and 
     Control Act of 1970 (21 U.S.C. 853), except for subsections 
     (d) and (j) of such section, which shall not apply to 
     forfeitures under this section.

     ``Sec. 1835. Orders to preserve confidentiality

       ``In any prosecution or other proceeding under this 
     chapter, the court shall enter such orders and take such 
     other action as may be necessary and appropriate to preserve 
     the confidentiality of trade secrets, consistent with the 
     requirements of the Federal Rules of Criminal and Civil 
     Procedure, the Federal Rules of Evidence, and all other 
     applicable laws. An interlocutory appeal by the United States 
     shall lie from a decision or order of a district court 
     authorizing or directing the disclosure of any trade secret.

     ``Sec. 1836. Civil proceedings to enjoin violations

       ``(a) The Attorney General may, in a civil action, obtain 
     appropriate injunctive relief against any violation of this 
     section.
       ``(b) The district courts of the United States shall have 
     exclusive original jurisdiction of civil actions under this 
     subsection.

     ``Sec. 1837. Applicability to conduct outside the United 
       States

       ``This chapter also applies to conduct occurring outside 
     the United States if--
       ``(1) the offender is a natural person who is a citizen or 
     permanent resident alien of the United States, or an 
     organization organized under the laws of the United States or 
     a State or political subdivision thereof; or

[[Page S12202]]

       ``(2) an act in furtherance of the offense was committed in 
     the United States.

     ``Sec. 1838. Construction with other laws

       ``This chapter shall not be construed to preempt or 
     displace any other remedies, whether civil or criminal, 
     provided by United States Federal, State, commonwealth, 
     possession, or territory law for the misappropriation of a 
     trade secret, or to affect the otherwise lawful disclosure of 
     information by any Government employee under section 552 of 
     title 5 (commonly known as the Freedom of Information Act).

     ``Sec. 1839. Definitions

       ``As used in this chapter--
       ``(1) the term `foreign instrumentality' means any agency, 
     bureau, ministry, component, institution, association, or any 
     legal, commercial, or business organization, corporation, 
     firm, or entity that is substantially owned, controlled, 
     sponsored, commanded, managed, or dominated by a foreign 
     government;
       ``(2) the term `foreign agent' means any officer, employee, 
     proxy, servant, delegate, or representative of a foreign 
     government;
       ``(3) the term `trade secret' means all forms and types of 
     financial, business, scientific, technical, economic, or 
     engineering information, including patterns, plans, 
     compilations, program devices, formulas, designs, prototypes, 
     methods, techniques, processes, procedures, programs, or 
     codes, whether tangible or intangible, and whether or how 
     stored, compiled, or memorialized physically, electronically, 
     graphically, photographically, or in writing if--
       ``(A) the owner thereof has taken reasonable measures to 
     keep such information secret; and
       ``(B) the information derives independent economic value, 
     actual or potential, from not being generally known to, and 
     not being readily ascertainable through proper means by, the 
     public; and
       ``(4) the term `owner', with respect to a trade secret, 
     means the person or entity in whom or in which rightful legal 
     or equitable title to, or license in, the trade secret is 
     reposed.''.
       (b) Clerical Amendment.--The table of chapters at the 
     beginning part I of title 18, United States Code, is amended 
     by inserting after the item relating to chapter 89 the 
     following:
       (c) Reports.--Not later than 2 years and 4 years after the 
     date of the enactment of this Act, the Attorney General shall 
     report to Congress on the amounts received and distributed 
     from fines for offenses under this chapter deposited in the 
     Crime Victims Fund established by section 1402 of the Victims 
     of Crime Act of 1984 (42 U.S.C. 10601).

``90. Protection of trade secrets..............................1831....

     SEC. 102. WIRE AND ELECTRONIC COMMUNICATIONS INTERCEPTION AND 
                   INTERCEPTION OF ORAL COMMUNICATIONS.

     Section 2516(1)(c) of title 18, United States Code, is 
     amended by inserting ``chapter 90 (relating to protection of 
     trade secrets),'' after ``chapter 37 (relating to 
     espionage),''.
 TITLE II--NATIONAL INFORMATION INFRASTRUCTURE PROTECTION ACT OF 1996.

     SEC. 201. COMPUTER CRIME.

       Section 1030 of title 18, United States Code, is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) by striking ``knowingly accesses'' and inserting 
     ``having knowingly accessed'';
       (ii) by striking ``exceeds'' and inserting ``exceeding'';
       (iii) by striking ``obtains information'' and inserting 
     ``having obtained information'';
       (iv) by striking ``the intent or'';
       (v) by striking ``is to be used'' and inserting ``could be 
     used''; and
       (vi) by inserting before the semicolon at the end the 
     following: ``willfully communicates, delivers, transmits, or 
     causes to be communicated, delivered, or transmitted, or 
     attempts to communicate, deliver, transmit or cause to be 
     communicated, delivered, or transmitted the same to any 
     person not entitled to receive it, or willfully retains the 
     same and fails to deliver it to the officer or employee of 
     the United States entitled to receive it'';
       (B) in paragraph (2)--
       (i) by striking ``obtains information'' and inserting 
     ``obtains--
       ``(A) information''; and
       (ii) by adding at the end the following new subparagraphs:
       ``(B) information from any department or agency of the 
     United States; or
       ``(C) information from any protected computer if the 
     conduct involved an interstate or foreign communication;'';
       (C) in paragraph (3)--
       (i) by inserting ``nonpublic'' before ``computer of a 
     department or agency'';
       (ii) by striking ``adversely''; and
       (iii) by striking ``the use of the Government's operation 
     of such computer'' and inserting ``that use by or for the 
     Government of the United States'';
       (D) in paragraph (4)--
       (i) by striking ``Federal interest'' and inserting 
     ``protected''; and
       (ii) by inserting before the semicolon the following: ``and 
     the value of such use is not more than $5,000 in any 1-year 
     period'';
       (E) by striking paragraph (5) and inserting the following:
       ``(5)(A) knowingly causes the transmission of a program, 
     information, code, or command, and as a result of such 
     conduct, intentionally causes damage without authorization, 
     to a protected computer;
       ``(B) intentionally accesses a protected computer without 
     authorization, and as a result of such conduct, recklessly 
     causes damage; or
       ``(C) intentionally accesses a protected computer without 
     authorization, and as a result of such conduct, causes 
     damage;''; and
       (F) by inserting after paragraph (6) the following new 
     paragraph:
       ``(7) with intent to extort from any person, firm, 
     association, educational institution, financial institution, 
     government entity, or other legal entity, any money or other 
     thing of value, transmits in interstate or foreign commerce 
     any communication containing any threat to cause damage to a 
     protected computer;'';
       (2) in subsection (c)--
       (A) in paragraph (1), by striking ``such subsection'' each 
     place that term appears and inserting ``this section'';
       (B) in paragraph (2)--
       (i) in subparagraph (A)--

       (I) by inserting ``, (a)(5)(C),'' after ``(a)(3)''; and
       (II) by striking ``such subsection'' and inserting ``this 
     section'';

       (ii) by redesignating subparagraph (B) as subparagraph (C);
       (iii) by inserting immediately after subparagraph (A) the 
     following:
       ``(B) a fine under this title or imprisonment for not more 
     than 5 years, or both, in the case of an offense under 
     subsection (a)(2), if--
       ``(i) the offense was committed for purposes of commercial 
     advantage or private financial gain;
       ``(ii) the offense was committed in furtherance of any 
     criminal or tortious act in violation of the Constitution or 
     laws of the United States or of any State; or
       ``(iii) the value of the information obtained exceeds 
     $5,000;''; and
       (iv) in subparagraph (C) (as redesignated)--

       (I) by striking ``such subsection'' and inserting ``this 
     section''; and
       (II) by adding ``and'' at the end;

       (C) in paragraph (3)--
       (i) in subparagraph (A)--

       (I) by striking ``(a)(4) or (a)(5)(A)'' and inserting 
     ``(a)(4), (a)(5)(A), (a)(5)(B), or (a)(7)''; and
       (II) by striking ``such subsection'' and inserting ``this 
     section''; and

       (ii) in subparagraph (B)--

       (I) by striking ``(a)(4) or (a)(5)'' and inserting 
     ``(a)(4), (a)(5)(A), (a)(5)(B), (a)(5)(C), or (a)(7)''; and
       (II) by striking ``such subsection'' and inserting ``this 
     section''; and

       (D) by striking paragraph (4);
       (3) in subsection (d), by inserting ``subsections 
     (a)(2)(A), (a)(2)(B), (a)(3), (a)(4), (a)(5), and (a)(6) of'' 
     before ``this section.'';
       (4) in subsection (e)--
       (A) in paragraph (2)--
       (i) by striking ``Federal interest'' and inserting 
     ``protected'';
       (ii) in subparagraph (A), by striking ``the use of the 
     financial institution's operation or the Government's 
     operation of such computer'' and inserting ``that use by or 
     for the financial institution or the Government''; and
       (iii) by striking subparagraph (B) and inserting the 
     following:
       ``(B) which is used in interstate or foreign commerce or 
     communication;'';
       (B) in paragraph (6), by striking ``and'' at the end;
       (C) in paragraph (7), by striking the period at the end and 
     inserting ``; and''; and
       (D) by adding at the end the following new paragraphs:
       ``(8) the term `damage' means any impairment to the 
     integrity or availability of data, a program, a system, or 
     information, that--
       ``(A) causes loss aggregating at least $5,000 in value 
     during any 1-year period to one or more individuals;
       ``(B) modifies or impairs, or potentially modifies or 
     impairs, the medical examination, diagnosis, treatment, or 
     care of one or more individuals;
       ``(C) causes physical injury to any person; or
       ``(D) threatens public health or safety; and
       ``(9) the term `government entity' includes the Government 
     of the United States, any State or political subdivision of 
     the United States, any foreign country, and any state, 
     province, municipality, or other political subdivision of a 
     foreign country.''; and
       (5) in subsection (g)--
       (A) by striking ``, other than a violation of subsection 
     (a)(5)(B),''; and
       (B) by striking ``of any subsection other than subsection 
     (a)(5)(A)(ii)(II)(bb) or (a)(5)(B)(ii)(II)(bb)'' and 
     inserting ``involving damage as defined in subsection 
     (e)(8)(A)''.
 TITLE III--TRANSFER OF PERSONS FOUND NOT GUILTY BY REASON OF INSANITY

     SEC. 301. TRANSFER OF PERSONS FOUND NOT GUILTY BY REASON OF 
                   INSANITY.

       (a) Amendment of Section 4243 of Title 18.--Section 4243 of 
     title 18, United States Code, is amended by adding at the end 
     the following new subsection:
       ``(i) Certain Persons Found Not Guilty by Reason of 
     Insanity in the District of Columbia.--
       ``(1) Transfer to custody of the attorney general.--
     Notwithstanding section 301(h) of title 24 of the District of 
     Columbia Code, and notwithstanding subsection 4247(j) of this 
     title, all persons who have been committed to a hospital for 
     the mentally ill pursuant to section 301(d)(1) of title 24 of 
     the District of Columbia Code, and for whom the United States 
     has continuing financial responsibility, may be transferred 
     to the custody of the Attorney General, who shall hospitalize 
     the person for treatment in a suitable facility.
       ``(2) Application.--
       ``(A) In general.--The Attorney General may establish 
     custody over such persons by filing an application in the 
     United States District Court for the District of Columbia, 
     demonstrating that the person to be transferred is a person 
     described in this subsection.
       ``(B) Notice.--The Attorney General shall, by any means 
     reasonably designed to do so, provide written notice of the 
     proposed transfer of custody to such person or such person's 
     guardian,

[[Page S12203]]

     legal representative, or other lawful agent. The person to be 
     transferred shall be afforded an opportunity, not to exceed 
     15 days, to respond to the proposed transfer of custody, and 
     may, at the court's discretion, be afforded a hearing on the 
     proposed transfer of custody. Such hearing, if granted, shall 
     be limited to a determination of whether the constitutional 
     rights of such person would be violated by the proposed 
     transfer of custody.
       ``(C) Order.--Upon application of the Attorney General, the 
     court shall order the person transferred to the custody of 
     the Attorney General, unless, pursuant to a hearing under 
     this paragraph, the court finds that the proposed transfer 
     would violate a right of such person under the United States 
     Constitution.
       ``(D) Effect.--Nothing in this paragraph shall be construed 
     to--
       ``(i) create in any person a liberty interest in being 
     granted a hearing or notice on any matter;
       ``(ii) create in favor of any person a cause of action 
     against the United States or any officer or employee of the 
     United States; or
       ``(iii) limit in any manner or degree the ability of the 
     Attorney General to move, transfer, or otherwise manage any 
     person committed to the custody of the Attorney General.
       ``(3) Construction with other sections.--Subsections (f) 
     and (g) and section 4247 shall apply to any person 
     transferred to the custody of the Attorney General pursuant 
     to this subsection.''.
       (b) Transfer of Records.--Notwithstanding any provision of 
     the District of Columbia Code or any other provision of law, 
     the District of Columbia and St. Elizabeth's Hospital--
       (1) not later than 30 days after the date of enactment of 
     this Act, shall provide to the Attorney General copies of all 
     records in the custody or control of the District or the 
     Hospital on such date of enactment pertaining to persons 
     described in section 4243(i) of title 18, United States Code 
     (as added by subsection (a));
       (2) not later than 30 days after the creation of any 
     records by employees, agents, or contractors of the District 
     of Columbia or of St. Elizabeth's Hospital pertaining to 
     persons described in section 4243(i) of title 18, United 
     States Code, provide to the Attorney General copies of all 
     such records created after the date of enactment of this Act;
       (3) shall not prevent or impede any employee, agent, or 
     contractor of the District of Columbia or of St. Elizabeth's 
     Hospital who has obtained knowledge of the persons described 
     in section 4243(i) of title 18, United States Code, in the 
     employee's professional capacity from providing that 
     knowledge to the Attorney General, nor shall civil or 
     criminal liability attach to such employees, agents, or 
     contractors who provide such knowledge; and
       (4) shall not prevent or impede interviews of persons 
     described in section 4243(i) of title 18, United States Code, 
     by representatives of the Attorney General, if such persons 
     voluntarily consent to such interviews.
       (c) Clarification of Effect on Certain Testimonial 
     Privileges.--The amendments made by this section shall not be 
     construed to affect in any manner any doctor-patient or 
     psychotherapist-patient testimonial privilege that may be 
     otherwise applicable to persons found not guilty by reason of 
     insanity and affected by this section.
       (d) Severability.--If any provision of this section, an 
     amendment made by this section, or the application of such 
     provision or amendment to any person or circumstance is held 
     to be unconstitutional, the remainder of this section and the 
     amendments made by this section shall not be affected 
     thereby.
            TITLE IV--ESTABLISHMENT OF BOYS AND GIRLS CLUBS.

     SEC. 401. ESTABLISHING BOYS AND GIRLS CLUBS.

       (a) Findings and Purpose.--
       (1) Findings.--The Congress finds that--
       (A) the Boys and Girls Clubs of America, chartered by an 
     Act of Congress on December 10, 1991, during its 90-year 
     history as a national organization, has proven itself as a 
     positive force in the communities it serves;
       (B) there are 1,810 Boys and Girls Clubs facilities 
     throughout the United States, Puerto Rico, and the United 
     States Virgin Islands, serving 2,420,000 youths nationwide;
       (C) 71 percent of the young people who benefit from Boys 
     and Girls Clubs programs live in our inner cities and urban 
     areas;
       (D) Boys and Girls Clubs are locally run and have been 
     exceptionally successful in balancing public funds with 
     private sector donations and maximizing community 
     involvement;
       (E) Boys and Girls Clubs are located in 289 public housing 
     sites across the Nation;
       (F) public housing projects in which there is an active 
     Boys and Girls Club have experienced a 25 percent reduction 
     in the presence of crack cocaine, a 22 percent reduction in 
     overall drug activity, and a 13 percent reduction in juvenile 
     crime;
       (G) these results have been achieved in the face of 
     national trends in which overall drug use by youth has 
     increased 105 percent since 1992 and 10.9 percent of the 
     Nation's young people use drugs on a monthly basis; and
       (H) many public housing projects and other distressed areas 
     are still underserved by Boys and Girls Clubs.
       (2) Purpose.--It is the purpose of this section to provide 
     adequate resources in the form of seed money for the Boys and 
     Girls Clubs of America to establish 1,000 additional local 
     Boys and Girls Clubs in public housing projects and other 
     distressed areas by 2001.
       (b) Definitions.--For purposes of this section--
       (1) the terms ``public housing'' and ``project'' have the 
     same meanings as in section 3(b) of the United States Housing 
     Act of 1937; and
       (2) the term ``distressed area'' means an urban, suburban, 
     or rural area with a high percentage of high risk youth as 
     defined in section 509A of the Public Health Service Act (42 
     U.S.C. 290aa-8(f)).
       (c) Establishment.--
       (1) In general.--For each of the fiscal years 1997, 1998, 
     1999, 2000, and 2001, the Director of the Bureau of Justice 
     Assistance of the Department of Justice shall provide a grant 
     to the Boys and Girls Clubs of America for the purpose of 
     establishing Boys and Girls Clubs in public housing projects 
     and other distressed areas.
       (2) Contracting authority.--Where appropriate, the 
     Secretary of Housing and Urban Development, in consultation 
     with the Attorney General, shall enter into contracts with 
     the Boys and Girls Clubs of America to establish clubs 
     pursuant to the grants under paragraph (1).
       (d) Report.--Not later than May 1 of each fiscal year for 
     which amounts are made available to carry out this Act, the 
     Attorney General shall submit to the Committees on the 
     Judiciary of the Senate and the House of Representatives a 
     report that details the progress made under this Act in 
     establishing Boys and Girls Clubs in public housing projects 
     and other distressed areas, and the effectiveness of the 
     programs in reducing drug abuse and juvenile crime.
       (e) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     carry out this section--
       (A) $20,000,000 for fiscal year 1997;
       (B) $20,000,000 for fiscal year 1998;
       (C) $20,000,000 for fiscal year 1999;
       (D) $20,000,000 for fiscal year 2000; and
       (E) $20,000,000 for fiscal year 2001.
       (2) Violent crime reduction trust fund.--The sums 
     authorized to be appropriated by this subsection may be made 
     from the Violent Crime Reduction Trust Fund.
   TITLE V--USE OF CERTAIN TECHNOLOGY TO FACILITATE CRIMINAL CONDUCT

     SEC. 501. USE OF CERTAIN TECHNOLOGY TO FACILITATE CRIMINAL 
                   CONDUCT.

       (a) Information.--The Administrative Office of the United 
     States courts shall establish policies and procedures for the 
     inclusion in all presentence reports of information that 
     specifically identifies and describes any use of encryption 
     or scrambling technology that would be relevant to an 
     enhancement under section 3C1.1 (dealing with Obstructing or 
     Impeding the Administration of Justice) of the Sentencing 
     Guidelines or to offense conduct under the Sentencing 
     Guidelines.
       (b) Compiling and Report.--The United States Sentencing 
     Commission shall--
       (1) compile and analyze any information contained in 
     documentation described in subsection (a) relating to the use 
     of encryption or scrambling technology to facilitate or 
     conceal criminal conduct; and
       (2) based on the information compiled and analyzed under 
     paragraph (1), annually report to the Congress on the nature 
     and extent of the use of encryption or scrambling technology 
     to facilitate or conceal criminal conduct.
                TITLE VI--TECHNICAL AND MINOR AMENDMENTS

     SEC. 601. GENERAL TECHNICAL AMENDMENTS.

       (a) Further Corrections to Misleading Fine Amounts and 
     Related Typographical Errors.--
       (1) Sections 152, 153, 154, and 610 of title 18, United 
     States Code, are each amended by striking ``fined not more 
     than $5,000'' and inserting ``fined under this title''.
       (2) Section 970(b) of title 18, United States Code, is 
     amended by striking ``fined not more than $500'' and 
     inserting ``fined under this title''.
       (3) Sections 661, 1028(b), 1361, and 2701(b) of title 18, 
     United States Code, are each amended by striking ``fine of 
     under'' each place it appears and inserting ``fine under''.
       (4) Section 3146(b)(1)(A)(iv) of title 18, United States 
     Code, is amended by striking ``a fined under this title'' and 
     inserting ``a fine under this title''.
       (5) The section 1118 of title 18, United States Code, that 
     was enacted by Public Law 103-333--
       (A) is redesignated as section 1122; and
       (B) is amended in subsection (c) by--
       (i) inserting ``under this title'' after ``fine''; and
       (ii) striking ``nor more than $20,000''.
       (6) The table of sections at the beginning of chapter 51 of 
     title 18, United States Code, is amended by adding at the end 
     the following new item:

``1122. Protection against the human immunodeficiency virus.''.

       (7) Sections 1761(a) and 1762(b) of title 18, United States 
     Code, are each amended by striking ``fined not more than 
     $50,000'' and inserting ``fined under this title''.
       (8) Sections 1821, 1851, 1852, 1853, 1854, 1905, 1916, 
     1918, 1991, 2115, 2116, 2191, 2192, 2194, 2199, 2234, 2235, 
     and 2236 of title 18, United States Code, are each amended by 
     striking ``fined not more than $1,000'' each place it appears 
     and inserting ``fined under this title''.
       (9) Section 1917 of title 18, United States Code, is 
     amended by striking ``fined not less than $100 nor more than 
     $1,000'' and inserting ``fined under this title not less than 
     $100''.
       (10) Section 1920 of title 18, United States Code, is 
     amended--
       (A) by striking ``of not more than $250,000'' and inserting 
     ``under this title''; and
       (B) by striking ``of not more than $100,000'' and inserting 
     ``under this title''.
       (11) Section 2076 of title 18, United States Code, is 
     amended by striking ``fined not more than $1,000 or 
     imprisoned not more than one year'' and inserting ``fined 
     under this title or imprisoned not more than one year, or 
     both''.

[[Page S12204]]

       (12) Section 597 of title 18, United States Code, is 
     amended by striking ``fined not more than $10,000'' and 
     inserting ``fined under this title''.
       (b) Cross Reference Corrections and Corrections of 
     Typographical Errors.--
       (1) Section 3286 of title 18, United States Code, is 
     amended--
       (A) by striking ``2331'' and inserting ``2332'';
       (B) by striking ``2339'' and inserting ``2332a''; and
       (C) by striking ``36'' and inserting ``37''.
       (2) Section 2339A(b) of title 18, United States Code, is 
     amended--
       (A) by striking ``2331'' and inserting ``2332'';
       (B) by striking ``2339'' and inserting ``2332a'';
       (C) by striking ``36'' and inserting ``37''; and
       (D) by striking ``of an escape'' and inserting ``or an 
     escape''.
       (3) Section 1961(1)(D) of title 18, United States Code, is 
     amended by striking ``that title'' and inserting ``this 
     title''.
       (4) Section 2423(b) of title 18, United States Code, is 
     amended by striking ``2245'' and inserting ``2246''.
       (5) Section 3553(f) of title 18, United States Code, is 
     amended by striking ``section 1010 or 1013 of the Controlled 
     Substances Import and Export Act (21 U.S.C. 961, 963)'' and 
     inserting ``section 1010 or 1013 of the Controlled Substances 
     Import and Export Act (21 U.S.C. 960, 963)''.
       (6) Section 3553(f)(4) of title 18, United States Code, is 
     amended by striking ``21 U.S.C. 848'' and inserting ``section 
     408 of the Controlled Substances Act''.
       (7) Section 3592(c)(1) of title 18, United States Code, is 
     amended by striking ``2339'' and inserting ``2332a''.
       (c) Simplification and Clarification of Wording.--
       (1) The third undesignated paragraph of section 5032 of 
     title 18, United States Code, is amended by inserting ``or as 
     authorized under section 3401(g) of this title'' after 
     ``shall proceed by information''.
       (2) Section 1120 of title 18, United States Code, is 
     amended by striking ``Federal prison'' each place it appears 
     and inserting ``Federal correctional institution''.
       (3) Section 247(d) of title 18, United States Code, is 
     amended by striking ``notification'' and inserting 
     ``certification''.
       (d) Correction of Paragraph Connectors.--Section 2516(1) of 
     title 18, United States Code, is amended--
       (1) in paragraph (l), by striking ``or'' after the 
     semicolon; and
       (2) in paragraph (n), by striking ``and'' where it appears 
     after the semicolon and inserting ``or''.
       (e) Correction Capitalization of Items in List.--Section 
     504 of title 18, United States Code, is amended--
       (1) in paragraph (1), by striking ``the'' the first place 
     it appears and inserting ``The''; and
       (2) in paragraph (3), by striking ``the'' the first place 
     it appears and inserting ``The''.
       (f) Corrections of Punctuation and Other Erroneous Form.--
       (1) Section 656 of title 18, United States Code, is amended 
     in the first paragraph by striking ``Act,,'' and inserting 
     ``Act,''.
       (2) Section 1114 of title 18, United States Code, is 
     amended by striking ``1112.'' and inserting ``1112,''.
       (3) Section 504(3) of title 18, United States Code, is 
     amended by striking ``importation, of'' and inserting 
     ``importation of''.
       (4) Section 3059A(a)(1) of title 18, United States Code, is 
     amended by striking ``section 215 225,,'' and inserting 
     ``section 215, 225,''.
       (5) Section 3125(a) of title 18, United States Code, is 
     amended by striking the close quotation mark at the end.
       (6) Section 1956(c)(7)(B)(iii) of title 18, United States 
     Code, is amended by striking ``1978)'' and inserting 
     ``1978''.
       (7) The item relating to section 656 in the table of 
     sections at the beginning of chapter 31 of title 18, United 
     States Code, is amended by inserting a comma after 
     ``embezzlement''.
       (8) The item relating to section 1024 in the table of 
     sections at the beginning of chapter 47 of title 18, United 
     States Code, is amended by striking ``veterans''' and 
     inserting ``veteran's''.
       (9) Section 3182 (including the heading of such section) 
     and the item relating to such section in the table of 
     sections at the beginning of chapter 209, of title 18, United 
     States Code, are each amended by inserting a comma after 
     ``District'' each place it appears.
       (10) The item relating to section 3183 in the table of 
     sections at the beginning of chapter 209 of title 18, United 
     States Code, is amended by inserting a comma after 
     ``Territory''.
       (11) The items relating to section 2155 and 2156 in the 
     table of sections at the beginning of chapter 105 of title 
     18, United States Code, are each amended by striking ``or'' 
     and inserting ``, or''.
       (12) The headings for sections 2155 and 2156 of title 18, 
     United States Code, are each amended by striking ``or'' and 
     inserting ``, or''.
       (13) Section 1508 of title 18, United States Code, is 
     amended by realigning the matter beginning ``shall be fined'' 
     and ending ``one year, or both.'' so that it is flush to the 
     left margin.
       (14) The item relating to section 4082 in the table of 
     sections at the beginning of chapter 305 of title 18, United 
     States Code, is amended by striking ``centers,'' and 
     inserting ``centers;''.
       (15) Section 2101(a) of title 18, United States Code, is 
     amended by striking ``(1)'' and by redesignating 
     subparagraphs (A) through (D) as paragraphs (1) through (4), 
     respectively.
       (16) Section 5038 of title 18, United States Code, is 
     amended by striking ``section 841, 952(a), 955, or 959 of 
     title 21'' each place it appears and inserting ``section 401 
     of the Controlled Substances Act or section 1001(a), 1005, or 
     1009 of the Controlled Substances Import and Export Act''.
       (g) Corrections of Problems Arising From Uncoordinated 
     Amendments.--
       (1) Section 5032.--The first undesignated paragraph of 
     section 5032 of title 18, United States Code, is amended--
       (A) by inserting ``section 922(x)'' before ``or section 
     924(b)''; and
       (B) by striking ``or (x)''.
       (2) Striking material unsuccessfully attempted to be 
     stricken from section 1116 by public law 103-322.--Subsection 
     (a) of section 1116 of title 18, United States Code, is 
     amended by striking ``, except'' and all that follows through 
     the end of such subsection and inserting a period.
       (3) Elimination of duplicate amendment in section 1958.--
     Section 1958(a) of title 18, United States Code, is amended 
     by striking ``or who conspires to do so'' where it appears 
     following ``or who conspires to do so'' and inserting a 
     comma.
       (h) Insertion of Missing End Quote.--Section 80001(a) of 
     the Violent Crime Control and Law Enforcement Act of 1994 is 
     amended by inserting a close quotation mark followed by a 
     period at the end.
       (i) Redesignation of Duplicate Section Numbers and 
     Conforming Clerical Amendments.--
       (1) Redesignation.--That section 2258 added to title 18, 
     United States Code, by section 160001(a) of the Violent Crime 
     Control and Law Enforcement Act of 1994 is redesignated as 
     section 2260.
       (2) Conforming clerical amendment.--The item in the table 
     of sections at the beginning of chapter 110 of title 18, 
     United States Code, relating to the section redesignated by 
     paragraph (1) is amended by striking ``2258'' and inserting 
     ``2260''.
       (3) Conforming amendment to cross-reference.--Section 
     1961(1)(B) of title 18, United States Code, is amended by 
     striking ``2258'' and inserting ``2260''.
       (j) Redesignation of Duplicate Chapter Number and 
     Conforming Clerical Amendment.--
       (1) Redesignation.--The chapter 113B added to title 18, 
     United States Code, by Public Law 103-236 is redesignated 
     chapter 113C.
       (2) Conforming clerical amendment.--The table of chapters 
     at the beginning of part I of title 18, United States Code is 
     amended in the item relating to the chapter redesignated by 
     paragraph (1)--
       (A) by striking ``113B'' and inserting ``113C''; and
       (B) by striking ``2340.'' and inserting ``2340''.
       (k) Redesignation of Duplicate Paragraph Numbers and 
     Correction of Placement of Paragraphs in Section 3563.--
       (1) Redesignation.--Section 3563(a) of title 18, United 
     States Code, is amended by redesignating the second paragraph 
     (4) as paragraph (5).
       (2) Conforming connector change.--Section 3563(a) of title 
     18, United States Code, is amended--
       (A) by striking ``and'' at the end of paragraph (3); and
       (B) by striking the period at the end of paragraph (4) and 
     inserting ``; and''.
       (3) Placement correction.--Section 3563(a) of title 18, 
     United States Code, is amended so that paragraph (4) and the 
     paragraph redesignated as paragraph (5) by this subsection 
     are transferred to appear in numerical order immediately 
     following paragraph (3) of such section 3563(a).
       (l) Redesignation of Duplicate Paragraph Numbers in Section 
     1029 and Conforming Amendments Related Thereto.--Section 1029 
     of title 18, United States Code, is amended--
       (1) in subsection (a)--
       (A) by redesignating those paragraphs (5) and (6) which 
     were added by Public Law 103-414 as paragraphs (7) and (8), 
     respectively;
       (B) by redesignating paragraph (7) as paragraph (9);
       (C) by striking ``or'' at the end of paragraph (6) and at 
     the end of paragraph (7) as so redesignated by this 
     subsection; and
       (D) by inserting ``or'' at the end of paragraph (8) as so 
     redesignated by this subsection;
       (2) in subsection (e), by redesignating the second 
     paragraph (7) as paragraph (8); and
       (3) in subsection (c)--
       (A) in paragraph (1), by striking ``or (7)'' and inserting 
     ``(7), (8), or (9)''; and
       (B) in paragraph (2), by striking ``or (6)'' and inserting 
     ``(6), (7), or (8)''.
       (m) Insertion of Missing Subsection Heading.--Section 
     1791(c) of title 18, United States Code, is amended by 
     inserting after ``(c)'' the following subsection heading: 
     ``Consecutive Punishment Required in Certain Cases.--''.
       (n) Correction of Misspelling.--Section 2327(c) of title 
     18, United States Code, is amended by striking ``delegee'' 
     each place it appears and inserting ``designee''.
       (o) Correction of Spelling and Agency Reference.--Section 
     5038(f) of title 18, United States Code, is amended--
       (1) by striking ``juvenille'' and inserting ``juvenile'', 
     and
       (2) by striking ``the Federal Bureau of Investigation, 
     Identification Division,'' and inserting ``the Federal Bureau 
     of Investigation''.
       (p) Correcting Misplaced Word.--Section 1028(a) of title 
     18, United States Code, is amended by striking ``or'' at the 
     end of paragraph (4) and inserting ``or'' at the end of 
     paragraph (5).
       (q) Stylistic Correction.--Section 37(c) of title 18, 
     United States Code, is amended by inserting after ``(c)'' the 
     following subsection heading: ``Bar to Prosecution.--''.
       (r) Mandatory Victim Restitution Act Amendments.--
       (1) Order of restitution.--Section 3663 (a)(1)(A) of title 
     18, United States Code, is amended by adding at the end the 
     following: ``The court may also order, if agreed to by the 
     parties in a plea agreement, restitution to persons other 
     than the victim of the offense.''.
       (2) Forfeiture.--Section 3663(c)(4) of title 18, United 
     States Code, is amended by inserting ``or chapter 96'' after 
     ``under chapter 46''.

[[Page S12205]]

       (3) Animal enterprise terrorism.--Section 43(c) of title 
     18, United States Code, is amended by inserting after 
     ``3663'' the following: ``or 3663A''.
       (4) Special assessment.--Section 3013(a)(2) of title 18, 
     United States Code, is amended by striking ``not less than'' 
     each place that term appears.
       (s) Clarifications to Antiterrorism and Effective Death 
     Penalty Act of 1996.--
       (1) Jurisdiction.--Section 2332b(b)(1)(A) of title 18, 
     United States Code, is amended by--
       (A) striking ``any of the offenders uses''; and
       (B) inserting ``is used'' after ``foreign commerce''.
       (2) Providing material support.--Section 2339A(a) of title 
     18, United States Code, is amended by inserting ``or an 
     escape'' after ``concealment''.
       (3) Technical amendments.--Sections 2339A(a) and 
     2332b(g)(5)(B) of title 18, United States Code, are each 
     amended by inserting at the appropriate place in each 
     section's enumeration of title 18 sections the following: 
     ``930(c),'', ``1992,'', and ``2332c,''.

     SEC. 602. REPEAL OF OBSOLETE PROVISIONS IN TITLE 18

       (a) Section 709 Amendment.--Section 709 of title 18, United 
     States Code, is amended by striking ``Whoever uses as a firm 
     or business name the words `Reconstruction Finance 
     Corporation' or any combination or variation of these words--
     ''.
       (b) Section 1014 Amendment.--Section 1014 of title 18, 
     United States Code, is amended--
       (1) by striking ``Reconstruction Finance Corporation,'';
       (2) by striking ``Farmers' Home Corporation,''; and
       (3) by striking ``of the National Agricultural Credit 
     Corporation,''.
       (c) Section 798 Amendment.--Section 798(d)(5) of title 18, 
     United States Code, is amended by striking ``the Trust 
     Territory of the Pacific Islands,''.
       (d) Section 281 Repeal.--Section 281 of title 18, United 
     States Code, is repealed and the table of sections at the 
     beginning of chapter 15 of such title is amended by striking 
     the item relating to such section.
       (e) Section 510 Amendment.--Section 510(b) of title 18, 
     United States Code, is amended by striking ``that in fact'' 
     and all that follows through ``signature''.

     SEC. 603. TECHNICAL AMENDMENTS RELATING TO CHAPTERS 40 AND 44 
                   OF TITLE 18.

       (a) Elimination of Double Commas in Section 844.--Section 
     844 of title 18, United States Code, is amended in subsection 
     (i) by striking ``,,'' each place it appears and inserting a 
     comma.
       (b) Replacement of Comma With Semicolon in Section 922.--
     Section 922(g)(8)(C)(ii) of title 18, United States Code, is 
     amended by striking the comma at the end and inserting a 
     semicolon.
       (c) Clarification of Amendment to Section 922.--
       (1) Amendment.--Section 320927 of the Violent Crime Control 
     and Law Enforcement Act of 1994 (P.L. 103-322) is amended by 
     inserting ``the first place it appears'' before the period.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect as if the amendment had been included in 
     section 320927 of the Act referred to in paragraph (1) on the 
     date of the enactment of such Act.
       (d) Stylistic Correction to Section 922.--Section 922(t)(2) 
     of title 18, United States Code, is amended by striking 
     ``section 922(g)'' and inserting ``subsection (g)''.
       (e) Elimination of Unnecessary Words.--Section 922(w)(4) of 
     title 18, United States Code, is amended by striking ``title 
     18, United States Code,'' and inserting ``this title''.
       (f) Clarification of Placement of Provision.--
       (1) Amendment.--Section 110201(a) of the Violent Crime 
     Control and Law Enforcement Act of 1994 (P.L. 103-322) is 
     amended by striking ``adding at the end'' and inserting 
     ``inserting after subsection (w)''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect as if the amendment had been included in 
     section 110201 of the Act referred to in paragraph (1) on the 
     date of the enactment of such Act.
       (g) Correction of Typographical Errors in List of Certain 
     Weapons.--Appendix A to section 922 of title 18, United 
     States Code, is amended--
       (1) in the category designated

                 ``Centerfire Rifles--Lever & Slide'',

     by striking

``Uberti 1866 Sporting Rilfe''
     and inserting the following:

``Uberti 1866 Sporting Rifle'';
       (2) in the category designated

                  ``Centerfire Rifles--Bolt Action'',

     by striking

``Sako Fiberclass Sporter''
     and inserting the following:

``Sako FiberClass Sporter'';
       (3) in the category designated

                      ``Shotguns--Slide Actions'',

     by striking

``Remington 879 SPS Special Purpose Magnum''
     and inserting the following:

``Remington 870 SPS Special Purpose Magnum''; and
       (4) in the category designated

                       ``Shotguns--Over/Unders'',

     by striking

``E.A.A/Sabatti Falcon-Mon Over/Under''
     and inserting the following:

``E.A.A./Sabatti Falcon-Mon Over/Under''.

       (h) Insertion of Missing Commas.--Section 103 of the Brady 
     Handgun Violence Prevention Act (18 U.S.C. 922 note; Public 
     Law 103-159) is amended in each of subsections (e)(1), (g), 
     and (i)(2) by inserting a comma after ``United States Code''.
       (i) Correction of Unexecutable Amendments Relating to the 
     Violent Crime Reduction Trust Fund.--
       (1) Correction.--Section 210603(b) of the Violent Crime 
     Control and Law Enforcement Act of 1994 is amended by 
     striking ``Fund,'' and inserting ``Fund established by 
     section 1115 of title 31, United States Code,''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect as if the amendment had been included in 
     section 210603(b) of the Act referred to in paragraph (1) on 
     the date of the enactment of such Act.
       (j) Correction of Unexecutable Amendment to Section 923.--
       (1) Correction.--Section 201(1) of the Act, entitled ``An 
     Act to provide for a waiting period before the purchase of a 
     handgun, and for the establishment of a national instant 
     criminal background check system to be contacted by firearms 
     dealers before the transfer of any firearm.'' (Public Law 
     103-159), is amended by striking ``thereon,'' and inserting 
     ``thereon''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect as if the amendment had been included in 
     the Act referred to in paragraph (1) on the date of the 
     enactment of such Act.
       (k) Correction of Punctuation and Indentation in Section 
     923.--Section 923(g)(1)(B)(ii) of title 18, United States 
     Code, is amended--
       (1) by striking the period and inserting ``; or''; and
       (2) by moving such clause 4 ems to the left.
       (l) Redesignation of Subsection and Correction of 
     Indentation in Section 923.--Section 923 of title 18, United 
     States Code, is amended--
       (1) by redesignating the last subsection as subsection (l); 
     and
       (2) by moving such subsection 2 ems to the left.
       (m) Correction of Typographical Error in Amendatory 
     Provision.--
       (1) Correction.--Section 110507 of the Violent Crime 
     Control and Law Enforcement Act of 1994 (Public Law 103-322) 
     is amended--
       (A) by striking ``924(a)'' and inserting ``924''; and
       (B) in paragraph (2), by striking ``subsections'' and 
     inserting ``subsection''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall take effect as if the amendments had been included in 
     section 110507 of the Act referred to in paragraph (1) on the 
     date of the enactment of such Act.
       (n) Elimination of Duplicate Amendment.--Subsection (h) of 
     section 330002 of the Violent Crime Control and Law 
     Enforcement Act of 1994 is repealed and shall be considered 
     never to have been enacted.
       (o) Redesignation of Paragraph in Section 924.--Section 
     924(a) of title 18, United States Code, is amended by 
     redesignating the 2nd paragraph (5) as paragraph (6).
       (p) Elimination of Comma Erroneously Included in Amendment 
     to Section 924.--
       (1) Amendment.--Section 110102(c)(2) of the Violent Crime 
     Control and Law Enforcement Act of 1994 (Public Law 103-322) 
     is amended by striking ``shotgun,'' and inserting 
     ``shotgun''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect as if the amendment had been included in 
     section 110102(c)(2) of the Act referred to in paragraph (1) 
     on the date of the enactment of such Act.
       (q) Insertion of Close Parenthesis in Section 924.--Section 
     924(j)(3) of title 18, United States Code, is amended by 
     inserting a close parenthesis before the comma.
       (r) Redesignation of Subsections in Section 924.--Section 
     924 of title 18, United States Code, is amended by 
     redesignating the 2nd subsection (i), and subsections (j), 
     (k), (l), (m), and (n) as subsections (j), (k), (l), (m), 
     (n), and (o), respectively.
       (s) Correction of Erroneous Cross Reference in Amendatory 
     Provision.--Section 110504(a) of the Violent Crime Control 
     and Law Enforcement Act of 1994 (Public Law 103-322) is 
     amended by striking ``110203(a)'' and inserting ``110503''.
       (t) Correction of Cross Reference in Section 930.--Section 
     930(e)(2) of title 18, United States Code, is amended by 
     striking ``(c)'' and inserting ``(d)''.
       (u) Correction of Cross References in Section 930.--The 
     last subsection of section 930 of title 18, United States 
     Code, is amended--
       (1) by striking ``(g)'' and inserting ``(h)''; and
       (2) by striking ``(d)'' each place such term appears and 
     inserting ``(e)''.

     SEC. 604. ADDITIONAL AMENDMENTS ARISING FROM ERRORS IN PUBLIC 
                   LAW 103-322.

       (a) Stylistic Corrections Relating to Tables of Sections.--
       (1) The table of sections at the beginning of chapter 110A 
     of title 18, United States Code, is amended to read as 
     follows:

``Sec.
``2261. Interstate domestic violence.
``2262. Interstate violation of protection order.
``2263. Pretrial release of defendant.
``2264. Restitution.
``2265. Full faith and credit given to protection orders.
``2266. Definitions.''.

       (2) Chapter 26 of title 18, United States Code, is amended 
     by inserting after the heading for such chapter the following 
     table of sections:

``Sec.
``521. Criminal street gangs.''.

       (3) Chapter 123 of title 18, United States Code, is amended 
     by inserting after the heading for such chapter the following 
     table of sections:

``Sec.

[[Page S12206]]

``2721. Prohibition on release and use of certain personal information 
              from State motor vehicle records.
``2722. Additional unlawful acts.
``2723. Penalties.
``2724. Civil action.
``2725. Definitions.''.

       (4) The item relating to section 3509 in the table of 
     sections at the beginning of chapter 223 of title 18, United 
     States Code, is amended by striking ``Victims''' and 
     inserting ``victims'''.
       (b) Unit Reference Corrections, Removal of Duplicate 
     Amendments, and Other Similar Corrections.--
       (1) Section 40503(b)(3) of Public Law 103-322 is amended by 
     striking ``paragraph (b)(1)'' and inserting ``paragraph 
     (1)''.
       (2) Section 60003(a)(2) of Public Law 103-322 is amended by 
     striking ``at the end of the section'' and inserting ``at the 
     end of the subsection''.
       (3) Section 3582(c)(1)(A)(i) of title 18, United States 
     Code, is amended by adding ``or'' at the end.
       (4) Section 102 of the Controlled Substances Act (21 U.S.C. 
     802) is amended by redesignating the second paragraph (43) as 
     paragraph (44).
       (5) Subsections (a) and (b) of section 120005 of Public Law 
     103-322 are each amended by inserting ``at the end'' after 
     ``adding''.
       (6) Section 160001(f) of Public Law 103-322 is amended by 
     striking ``1961(l)'' and inserting ``1961(1)''.
       (7) Section 170201(c) of Public Law 103-322 is amended by 
     striking paragraphs (1), (2), and (3).
       (8) Subparagraph (D) of section 511(b)(2) of title 18, 
     United States Code, is amended by adjusting its margin to be 
     the same as the margin of subparagraph (C) and adjusting the 
     margins of its clauses so they are indented 2-ems further 
     than the margin of the subparagraph.
       (9) Section 230207 of Public Law 103-322 is amended by 
     striking ``two'' and inserting ``2'' the first place it 
     appears.
       (10) The first of the two undesignated paragraphs of 
     section 240002(c) of Public Law 103-322 is designated as 
     paragraph (1) and the second as paragraph (2).
       (11) Section 280005(a) of Public Law 103-322 is amended by 
     striking ``Section 991 (a)'' and inserting ``Section 
     991(a)''.
       (12) Section 320101 of Public Law 103-322 is amended--
       (A) in subsection (b), by striking paragraph (1);
       (B) in subsection (c), by striking paragraphs (1)(A) and 
     (2)(A);
       (C) in subsection (d), by striking paragraph (3); and
       (D) in subsection (e), by striking paragraphs (1) and (2).
       (13) Section 320102 of Public Law 103-322 is amended by 
     striking paragraph (2).
       (14) Section 320103 of Public Law 103-322 is amended--
       (A) in subsection (a), by striking paragraph (1);
       (B) in subsection (b), by striking paragraph (1); and
       (C) in subsection (c), by striking paragraphs (1) and (3).
       (15) Section 320103(e) of Public Law 103-322 is amended--
       (A) in the subsection catchline, by striking ``Fair 
     Housing'' and inserting ``1968 Civil Rights''; and
       (B) by striking ``of the Fair Housing Act'' and inserting 
     ``of the Civil Rights Act of 1968''.
       (16) Section 320109(1) of Public Law 103-322 is amended by 
     inserting an open quotation mark before ``(a) In General''.
       (17) Section 320602(1) of Public Law 103-322 is amended by 
     striking ``whoever'' and inserting ``Whoever''.
       (18) Section 668(a) of title 18, United States Code, is 
     amended--
       (A) by designating the first undesignated paragraph that 
     begins with a quotation mark as paragraph (1);
       (B) by designating the second undesignated paragraph that 
     begins with a quotation mark as paragraph (2); and
       (C) by striking the close quotation mark and the period at 
     the end of the subsection.
       (19) Section 320911(a) of Public Law 103-322 is amended in 
     each of paragraphs (1) and (2), by striking ``thirteenth'' 
     and inserting ``14th''.
       (20) Section 2311 of title 18, United States Code, is 
     amended by striking ``livestock'' where it appears in 
     quotation marks and inserting ``Livestock''.
       (21) Section 540A(c) of title 28, United States Code, is 
     amended--
       (A) by designating the first undesignated paragraph as 
     paragraph (1);
       (B) by designating the second undesignated paragraph as 
     paragraph (2); and
       (C) by designating the third undesignated paragraph as 
     paragraph (3).
       (22) Section 330002(d) of Public Law 103-322 is amended by 
     striking ``the comma'' and inserting ``each comma''.
       (23) Section 330004(18) of Public Law 103-322 is amended by 
     striking ``the Philippine'' and inserting ``Philippine''.
       (24) Section 330010(17) of Public Law 103-322 is amended by 
     striking ``(2)(iii)'' and inserting ``(2)(A)(iii)''.
       (25) Section 330011(d) of Public Law 103-322 is amended--
       (A) by striking ``each place'' and inserting ``the first 
     place''; and
       (B) by striking ``1169'' and inserting ``1168''.
       (26) The item in the table of sections at the beginning of 
     chapter 53 of title 18, United States Code, that relates to 
     section 1169 is transferred to appear after the item relating 
     to section 1168.
       (27) Section 901 of the Civil Rights Act of 1968 is amended 
     by striking ``under this title'' each place it appears and 
     inserting ``under title 18, United States Code,''.
       (28) Section 223(a)(12)(A) of the Juvenile Justice and 
     Delinquency Prevention Act of 1974 (42 U.S.C. 5633(a)(12)(A)) 
     is amended by striking ``law).'' and inserting ``law)''.
       (29) Section 250008(a)(2) of Public Law 103-322 is amended 
     by striking ``this Act'' and inserting ``provisions of law 
     amended by this title''.
       (30) Section 36(a) of title 18, United States Code, is 
     amended--
       (A) in paragraph (1), by striking ``403(c)'' and inserting 
     ``408(c)''; and
       (B) in paragraph (2), by striking ``Export Control'' and 
     inserting ``Export''.
       (31) Section 1512(a)(2)(A) of title 18, United States Code, 
     is amended by adding ``and'' at the end.
       (32) Section 13(b)(2)(A) of title 18, United States Code, 
     is amended by striking ``of not more than $1,000'' and 
     inserting ``under this title''.
       (33) Section 160001(g)(1) of Public Law 103-322 is amended 
     by striking ``(a) Whoever'' and inserting ``Whoever''.
       (34) Section 290001(a) of Public Law 103-322 is amended by 
     striking ``subtitle'' and inserting ``section''.
       (35) Section 3592(c)(12) of title 18, United States Code, 
     is amended by striking ``Controlled Substances Act'' and 
     inserting ``Comprehensive Drug Abuse Prevention and Control 
     Act of 1970''.
       (36) Section 1030 of title 18, United States Code, is 
     amended--
       (A) by inserting ``or'' at the end of subsection 
     (a)(5)(B)(ii)(II)(bb);
       (B) by striking ``and'' after the semicolon in subsection 
     (c)(1)(B);
       (C) in subsection (g), by striking ``the section'' and 
     inserting ``this section''; and
       (D) in subsection (h), by striking ``section 1030(a)(5) of 
     title 18, United States Code'' and inserting ``subsection 
     (a)(5)''.
       (37) Section 320103(c) of Public Law 103-322 is amended by 
     striking the semicolon at the end of paragraph (2) and 
     inserting a close quotation mark followed by a semicolon.
       (38) Section 320104(b) of Public Law 103-322 is amended by 
     striking the comma that follows ``2319 (relating to copyright 
     infringement)'' the first place it appears.
       (39) Section 1515(a)(1)(D) of title 18, United States Code, 
     is amended by striking ``; or'' and inserting a semicolon.
       (40) Section 5037(b) of title 18, United States Code, is 
     amended in each of paragraphs (1)(B) and (2)(B), by striking 
     ``3561(b)'' and inserting ``3561(c)''.
       (41) Section 330004(3) of Public Law 103-322 is amended by 
     striking ``thirteenth'' and inserting ``14th''.
       (42) Section 2511(1)(e)(i) of title 18, United States Code, 
     is amended--
       (A) by striking ``sections 2511(2)(A)(ii), 2511(b)-(c), 
     2511(e)'' and inserting ``sections 2511(2)(a)(ii), 
     2511(2)(b)-(c), 2511(2)(e)''; and
       (B) by striking ``subchapter'' and inserting ``chapter''.
       (43) Section 1516(b) of title 18, United States Code, is 
     amended by inserting ``and'' at the end of paragraph (1).
       (44) The item relating to section 1920 in the table of 
     sections at the beginning of chapter 93 of title 18, United 
     States Code, is amended by striking ``employee's'' and 
     inserting ``employees'''.
       (45) Section 330022 of Public Law 103-322 is amended by 
     inserting a period after ``communications'' and before the 
     close quotation mark.
       (46) Section 2721(c) of title 18, United States Code, is 
     amended by striking ``covered by this title'' and inserting 
     ``covered by this chapter''.
       (c) Elimination of Extra Words.--
       (1) Section 3561(b) of title 18, United States Code, is 
     amended by striking ``or any relative defendant, child, or 
     former child of the defendant,''.
       (2) Section 351(e) of title 18, United States Code, is 
     amended by striking ``involved in the use of a'' and 
     inserting ``involved the use of a''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of Public Law 103-
     322.

     SEC. 605. ADDITIONAL TYPOGRAPHICAL AND SIMILAR ERRORS FROM 
                   VARIOUS SOURCES.

       (a) Misused Connector.--Section 1958(a) of title 18, United 
     States Code, is amended by striking ``this title and 
     imprisoned'' and inserting ``this title or imprisoned''.
       (b) Spelling Error.--Effective on the date of its 
     enactment, section 961(h)(1) of the Financial Institutions 
     Reform, Recovery, and Enforcement Act of 1989 is amended by 
     striking ``Saving and Loan'' and inserting ``Savings and 
     Loan''.
       (c) Wrong Section Designation.--The table of chapters for 
     part I of title 18, United States Code, is amended in the 
     item relating to chapter 71 by striking ``1461'' and 
     inserting ``1460''.
       (d) Internal Cross Reference.--Section 2262(a)(1)(A)(ii) of 
     title 18, United States Code, is amended by striking 
     ``subparagraph (A)'' and inserting ``this subparagraph''.
       (e) Missing Comma.--Section 1361 of title 18, United States 
     Code, is amended by inserting a comma after ``attempts to 
     commit any of the foregoing offenses''.
       (f) Cross Reference Error From Public Law 103-414.--The 
     first sentence of section 2703(d) of title 18, United States 
     Code, by striking ``3126(2)(A)'' and inserting 
     ``3127(2)(A)''.
       (g) Internal Reference Error in Public Law 103-359.--
     Section 3077(8)(A) of title 18, United States Code, is 
     amended by striking ``title 18, United States Code'' and 
     inserting ``this title''.
       (h) Spelling and Internal Reference Error in Section 
     3509.--Section 3509 of title 18, United States Code, is 
     amended--
       (1) in subsection (e), by striking ``government's'' and 
     inserting ``Government's''; and
       (2) in subsection (h)(3), by striking ``subpart'' and 
     inserting ``paragraph''.
       (i) Error in Subdivision From Public Law 103-329.--Section 
     3056(a)(3) of title 18, United

[[Page S12207]]

     States Code, is amended by redesignating subparagraphs (1) 
     and (2) as subparagraphs (A) and (B), respectively and moving 
     the margins of such subparagraphs 2 ems to the right.
       (j) Table of Contents Correction.--The table of contents at 
     the beginning of the Antiterrorism and Effective Death 
     Penalty Act of 1996 is amended by inserting ``TITLE I--HABEAS 
     CORPUS REFORM'' before the item relating to section 101.
       (k) Correcting Error in Amendatory Instructions.--Section 
     107(b) of the Antiterrorism and Effective Death Penalty Act 
     of 1996 is amended by striking ``IV'' and inserting ``VI''.
       (l) Correcting Error in Description of Provision Amended.--
     With respect to subparagraph (F) only of paragraph (1) of 
     section 205(a) of the Antiterrorism and Effective Death 
     Penalty Act of 1996, the reference at the beginning of such 
     paragraph to ``subsection (a)(1)'' shall be deemed a 
     reference to ``subsection (a)''.
       (m) Addition of Missing Reference.--Section 725(2) of the 
     Antiterrorism and Effective Death Penalty Act of 1996 is 
     amended by inserting ``(2)'' after ``subsection (b)''.
       (n) Conforming Amendment to Table of Sections.--The table 
     of sections at the beginning of chapter 203 of title 18, 
     United States Code, is amended by inserting after the item 
     relating to section 3059A the following new item:

``3059B. General reward authority.''.

       (o) Insertion of Missing Punctuation.--Section 6005(b)(3) 
     of title 18, United States Code, is amended by adding a 
     period at the end.
       (p) Correction of Erroneous Section Number.--
       (1) Section 2401 of title 18, United States Code, is 
     redesignated as section 2441.
       (2) The item relating to section 2401 in the table of 
     sections at the beginning of chapter 118 of title 18, United 
     States Code, is amended by striking ``2401'' and inserting 
     ``2441''.
       (3) The table of chapters for part I of title 18, United 
     States Code, is amended in the item relating to chapter 118, 
     by striking ``2401'' and inserting ``2441''.
       (q) Duplicate section number.--That section 2332d of title 
     18, United States Code, that relates to requests for military 
     assistance to enforce prohibition in certain emergencies is 
     redesignated as section 2332e and moved to follow the section 
     2332d that relates to financial transactions, and the item 
     relating to the section redesignated by this subsection is 
     amended by striking ``2332d` and inserting ``2332e'' and 
     moved to follow the item relating to the section 2332d that 
     relates to financial transactions.
       (r) Correction of Word Usage.--Section 247(d) of title 18, 
     United States Code, is amended by striking ``notification'' 
     and inserting ``certification''.

     SEC. 606. ADJUSTING AND MAKING UNIFORM THE DOLLAR AMOUNTS 
                   USED IN TITLE 18 TO DISTINGUISH BETWEEN GRADES 
                   OF OFFENSES.

       (a) Sections 215, 288, 641, 643, 644, 645, 646, 647, 648, 
     649, 650, 651, 652, 653, 654, 655, 656, 657, 658, 659, 661, 
     662, 665, 872, 1003, 1025, 1163, 1361, 1707, 1711, and 2113 
     of title 18, United States Code, are amended by striking 
     ``$100'' each place it appears and inserting ``$1,000''.
       (b) Section 510 of title 18, United States Code, is amended 
     by striking ``$500'' and inserting ``$1,000''.

     SEC. 607. APPLICATION OF VARIOUS OFFENSES TO POSSESSIONS AND 
                   TERRITORIES.

       (a) Sections 241 and 242 of title 18, United States Code, 
     are each amended by striking ``any State, Territory, or 
     District'' and inserting ``any State, Territory, 
     Commonwealth, Possession, or District''.
       (b) Sections 793(h)(1) and 794(d)(1) of title 18, United 
     States Code, are each amended by adding at the end the 
     following: ``For the purposes of this subsection, the term 
     `State' includes a State of the United States, the District 
     of Columbia, and any commonwealth, territory, or possession 
     of the United States.''.
       (c) Section 925(a)(5) of title 18, United States Code, is 
     amended by striking ``For the purpose of paragraphs (3) and 
     (4)'' and inserting ``For the purpose of paragraph (3)''.
       (d) Sections 1014 and 2113(g) of title 18, United States 
     Code, are each amended by adding at the end the following: 
     ``The term `State-chartered credit union' includes a credit 
     union chartered under the laws of a State of the United 
     States, the District of Columbia, or any commonwealth, 
     territory, or possession of the United States.''.
       (e) Section 1073 of title 18, United States Code, is 
     amended by adding at the end of the first paragraph the 
     following: ``For the purposes of clause (3) of this 
     paragraph, the term `State' includes a State of the United 
     States, the District of Columbia, and any commonwealth, 
     territory, or possession of the United States.''.
       (f) Section 1715 of title 18, United States Code, is 
     amended by striking ``State, Territory, or District'' each 
     place those words appear and inserting ``State, Territory, 
     Commonwealth, Possession, or District''.
       (g) Section 1716 of title 18, United States Code, is 
     amended--
       (1) in subsection (g)(2) by striking ``State, Territory, or 
     the District of Columbia'' and inserting ``State'';
       (2) in subsection (g)(3) by striking ``the municipal 
     government of the District of Columbia or of the government 
     of any State or territory, or any county, city, or other 
     political subdivision of a State'' and inserting ``any State, 
     or any political subdivision of a State''; and
       (3) by adding at the end the following:
       ``(j) For purposes of this section, the term `State' 
     includes a State of the United States, the District of 
     Columbia, and any commonwealth, territory, or possession of 
     the United States.''.
       (h) Section 1761 of title 18, United States Code, is 
     amended by adding at the end the following new subsection:
       ``(d) For the purposes of this section, the term `State' 
     means a State of the United States and any commonwealth, 
     territory, or possession of the United States.''.
       (i) Section 3156(a) of title 18, United States Code, is 
     amended--
       (1) by striking ``and'' at the end of paragraph (3);
       (2) by striking the period and inserting ``; and'' at the 
     end of paragraph (4); and
       (3) by adding at the end the following new paragraph:
       ``(5) the term `State' includes a State of the United 
     States, the District of Columbia, and any commonwealth, 
     territory, or possession of the United States.''.
       (j) Section 102 of the Controlled Substances Act (21 U.S.C. 
     802) is amended--
       (1) by amending paragraph (26) to read as follows:
       ``(26) The term `State' means a State of the United States, 
     the District of Columbia, and any commonwealth, territory, or 
     possession of the United States.''; and
       (2) by redesignating paragraph (43), as added by section 
     90105(d) of the Violent Crime Control and Law Enforcement Act 
     of 1994, as paragraph (44).
       (k) Section 1121 of title 18, United States Code, is 
     amended by adding at the end the following new subsection:
       ``(c) For the purposes of this section, the term `State' 
     means a State of the United States, the District of Columbia, 
     and any commonwealth, territory, or possession of the United 
     States.''.
       (l) Section 228(d)(2) of title 18, United States Code, is 
     amended by inserting ``commonwealth,'' before ``possession or 
     territory of the United States''.
       (m) Section 1546(c) of title 18, United States Code, is 
     amended by adding at the end the following: ``For purposes of 
     this section, the term `State' means a State of the United 
     States, the District of Columbia, and any commonwealth, 
     territory, or possession of the United States.''.
       (n) Section 1541 of title 18, United States Code, is 
     amended--
       (1) in the first undesignated paragraph, by striking ``or 
     possession''; and
       (2) by adding at the end the following new paragraph:
       ``For purposes of this section, the term `State' means a 
     State of the United States, the District of Columbia, and any 
     commonwealth, territory, or possession of the United 
     States.''.
       (o) Section 37(c) of title 18, United States Code, is 
     amended in the final sentence by inserting before the period 
     the following: ``, and the term `State' means a State of the 
     United States, the District of Columbia, and any 
     commonwealth, territory, or possession of the United 
     States''.
       (p) Section 2281(c) of title 18, United States Code, is 
     amended in the final sentence by inserting before the period 
     the following: ``, and the term `State' means a State of the 
     United States, the District of Columbia, and any 
     commonwealth, territory, or possession of the United 
     States''.
       (q) Section 521(a) of title 18, United States Code, is 
     amended by adding at the end the following: `` `State' means 
     a State of the United States, the District of Columbia, and 
     any commonwealth, territory, or possession of the United 
     States.''.

  Mr. SPECTER. Mr. President, I am pleased that the Senate is acting 
today to pass the Economic Espionage Act of 1996, legislation Senator 
Kohl and I introduced earlier this year to combat economic espionage. 
This bill addresses an issue of critical importance to our Nation's 
economic well-being. It is a testament to the importance of the issue 
that we are able to act in a bipartisan fashion on the eve of national 
elections.
  As chairman of both the Select Committee on Intelligence and the 
Judiciary Committee's Subcommittee on Terrorism, Technology and 
Government Information, with jurisdiction over legal matters involving 
technology, I have been concerned with the threat posed to American 
economic competitiveness in a global economy by the theft of 
intellectual property and trade secrets.
  In an increasingly complex and competitive economic world, 
intellectual property forms a critical component of our economy. As 
traditional industries shift to low-wage producers in developing 
countries, our economic edge depends to an ever-increasing degree on 
the ability of our businesses and inventors to stay one step ahead of 
those in other countries. And American business and inventors have been 
extremely successful and creative in developing intellectual property 
and trade secrets. America leads the nation's of the world in 
developing new products and new technologies. Millions of jobs depend 
on the continuation of the productive minds of Americans, both native 
born and immigrants who find the freedom here to try new ideas and add 
to our economic strength.
  Inventing new and better technologies, production methods, and the 
like, can be expensive. American companies and the U.S. Government 
spend billions on research and development. The benefits reaped from 
these expenditures can easily come to nothing, however, if a competitor 
can simply steal

[[Page S12208]]

the trade secret without expending the development costs. While prices 
may be reduced, ultimately the incentives for new invention disappear, 
along with jobs, capital investment, and everything else that keeps our 
economy strong.
  For years now, there has been mounting evidence that many foreign 
nations and their corporations have been seeking to gain competitive 
advantage by stealing the trade secrets, the intangible intellectual 
property of inventors in this country. The Intelligence Committee has 
been aware that since the end of the cold war, foreign nations have 
increasingly put their espionage resources to work trying to steal 
American economic secrets. Estimates of the loss to U.S. business from 
the theft of intangible intellectual property exceed $100 billion. The 
loss in U.S. jobs is incalculable.
  For the benefit of my colleagues who wish more detail about the 
nature and scope of the problem of economic espionage, I ask unanimous 
consent that a copy of the article ``The Lure of the Steal'' from the 
March 4, 1996, U.S. News & World Report, and an article by Peter 
Schweizer, ``The Growth of Economic Espionage--America if Target Number 
One'' from the January-February 1996 edition of Foreign Affairs be 
printed at the end of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. SPECTER. Mr. President, a major problem for law enforcement in 
responding to the increase in such thefts has been a glaring gap in 
Federal law. For many years, the United States has had a variety of 
theft statutes in the United States Code. These laws are derived 
primarily from the common law of theft. For example, it violates 
Federal law to move stolen property across State lines. In order to 
violate such laws, however, the courts have held that the property 
stolen cannot be intangible property, such as trade secrets or 
intellectual property. In addition, theft usually requires that the 
thief take the property with the intention of depriving the lawful 
owner of its use. But such a test if useless when a person copies 
software and leaves the original software with the lawful owner, taking 
only the secrets on the software but leaving the physical property. The 
lawful owner still has full use of the property, but its value is 
significantly reduced.
  In order to update Federal law to address the technological and 
economic realities of the end of the 20th century, I began working 
earlier this year with Senator Kohl and officials from the Department 
of Justice and the Federal Bureau of Investigation on developing 
legislation. We developed two separate bills, that were introduced as 
S. 1556 and S. 1557. The former bill broadly prohibited the theft of 
proprietary economic information by any person. The latter bill was 
more narrowly drawn to proscribe such thefts by foreign nations and 
those working on behalf of foreign nations.
  At the end of February, I chaired a joint hearing of the Intelligence 
Committee and the Judiciary Subcommittee on Terrorism, Technology, and 
Government Information on the issue of economic espionage. Continuing 
to work closely with members of the Judiciary and Intelligence 
Committees, the administration, and various industry groups, Senator 
Kohl and I were able to produce the bill the Senate is today 
considering.
  The Senate adopted S. 1556 with an amendment I offered, based on S. 
1557, to bring together into a single vehicle the prohibition on the 
theft of trade secrets and proprietary information by both private 
individuals and corporations and by foreign governments and those 
acting on their behalf, and passed them using H.R. 3723, the House 
companion bill, as the vehicle. The language of my amendment dealing 
with foreign-government-sponsored economic espionage was, with minor 
changes, unanimously reported to the Senate by the Intelligence 
Committee earlier this year as part of the Intelligence Authorization 
Act. We have now reconciled the Senate- and House-passed bills in this 
agreement, which also incorporates several unrelated provisions. 
Senator Kohl and I are inserting into the Record a managers' statement 
which reflects the understanding of the bill's sponsors on the intent 
behind and meaning of the economic espionage bill.
  Adoption of this bill will not be a panacea, but it is a start. 
Congress has started moving to protect U.S. economic interests. For 
example, earlier this year we enacted strong anticounterfeiting 
legislation, S. 1136, to protect American business from counterfeit 
goods. This bill addresses cognate problems. Both are only a start. 
Corporations must exercise vigilance over their trade secrets and 
proprietary information. Contract law may provide civil remedies. In 
addition, some States have adopted legislation to allow the owners of 
trade secrets to use civil process to protect their ownership rights. 
We have been made aware that available civil remedies may not be 
adequate to the task and that a Federal civil cause of action is 
needed. This is an issue we need to study carefully, and will do so 
next year.

  For helping to make sure that this legislation was passed this year, 
I want to thank Senator Kohl for his leadership, and acknowledge the 
work of his excellent staff, Jon Leibowitz and Victoria Bassetti. I 
also want to thank the chairman of the Judiciary Committee, Senator 
Hatch, and his staff, especially Paul Larkin and Pat Murphy, for their 
valuable contributions to this legislation. I would also be remiss if I 
did not also thank Chairman McCollum of the House Crime Subcommittee, 
and Representative Schumer, ranking member of that Subcommittee, and 
their staff, Glenn Schmitt and Bill McGeveran, for their hard work. 
Finally, we worked closely with the Justice Department and the Federal 
Bureau of Investigation in developing this legislation, and I want to 
thank Alan Hoffman of the Justice Department and Pat Kelly of the FBI 
for their hard work on this bill.

                               Exhibit 1

             [From U.S. News & World Report, Mar. 4, 1996]

                         The Lure of the Steal

               (By Douglas Pasternak with Gordon Witkin)

       Not long ago, Subrahmanyam M. Kota went into hamsters--or, 
     to be more precise, their ovary cells. That was a big switch 
     for Kota. In the 1980s, he allegedly sold military secrets on 
     infrared detectors to the KGB. With the cold war over, 
     however, hamster ovaries were the coming thing. A Boston 
     biotech company had genetically engineered the cells to 
     produce a protein that boosted the manufacture of red blood 
     cells, making them a valuable commodity. Kota and a former 
     company scientist are charged with stealing a batch of the 
     hamster cells and offering them to an FBI undercover agent in 
     exchange for $300,000. Law enforcement officials suspect the 
     pair of selling another batch to a biomedical research outfit 
     in India. It was dramatic evidence of how the world of 
     espionage has changed--from selling secrets to the KGB one 
     year to moving hamster ovaries to a research firm in India 
     another. Kota has been charged with three counts of 
     espionage. He pleaded not guilty and is out on bail awaiting 
     trial.
       Today the field of economic espionage is wide open. Instead 
     of missile launch codes, the new targets of choice are 
     technological and scientific data concerning flat-panel 
     televisions, electric cars and new computers. ``During the 
     cold war, we thought of the threat as KGB agents crawling 
     into the facility,'' says Gregory Gwash, the deputy director 
     for industrial security matters at the Defense Investigative 
     Service. ``The game is no longer espionage in the classic 
     sense.''


                             growing threat

       Economic espionage is as old as greed itself. But with huge 
     sums to be made stealing designs for computer chips and 
     patents for hormones, the threat is growing. Rapid changes in 
     technology are tempting many countries to try to acquire 
     intellectual properties in underhanded ways, thus bypassing 
     the enormous costs of research and development. New 
     global communications--cellular phones, faxes, voice 
     transmissions and data on the Internet--make this type of 
     spying easier than ever.
       And it's not just hostile governments snooping. ``Countries 
     don't have friends. They have interests!'' declares a poster 
     from the Department of Energy's counterintelligence program. 
     ``Guess which countries are interested in what you do?'' A 
     senior U.S. intelligence official answers the question. ``The 
     ones who do it most,'' he says, ``are our greatest friends.''
       Indeed, countries such as France, Israel and China have 
     made economic espionage a top priority of their foreign 
     intelligence services. A congressional report released last 
     week confirmed that close U.S. allies are after critical U.S. 
     technology, saying they posed ``a significant threat to 
     national security.''


                          intensified efforts

       Friend or enemy, Washington is taking the trend seriously. 
     The nation's intelligence agencies are increasing their 
     overseas collection of information on foreign bribery

[[Page S12209]]

     schemes that put U.S. corporations at a disadvantage. The 
     agencies are also providing classified information to U.S. 
     policy makers engaged in trade negotiations with foreign 
     governments. Domestically, the FBI has also taken more-
     aggressive steps recently. This month, the Justice Department 
     sent new draft legislation that would bolster the FBI's 
     ability to investigate economic espionage to the Office of 
     Management and Budget. The new bill--named the Economic 
     Espionage and Protection of Proprietary Economic Information 
     Act of 1996--is badly needed, says the FBI, because there are 
     no statutes that deal with the theft of intellectual 
     property, making it difficult to prosecute such cases.
       In the past year, FBI agents have recorded more than a 100 
     percent increase in economic spying and now have more than 
     800 cases under investigation--espionage attempts from the 
     supersophisticated to the downright crude. ``We're seeing all 
     of the above,'' says Robert ``Bear'' Bryant, who oversees all 
     FBI counterintelligence investigations nationwide, ``from the 
     cyberattack to the shoplifter.''
       Economic-espionage investigations require the FBI to gather 
     intelligence through electronic surveillance and physical 
     searches, a source of concern to many civil libertarians. But 
     the FBI is empowered under existing law to gather 
     intelligence for such purposes, and the new legislation would 
     define more precisely how and when FBI agents could 
     investigate the theft of corporate secrets. The key, legal 
     specialists and FBI supervisors say, is defining precisely 
     what constitutes conducting intelligence investigations, 
     looking for spies and theft prevention, and what is a 
     primarily criminal investigation whose objective is to put a 
     spy behind bars. Both objectives can be accomplished, but the 
     law requires intelligence and law enforcement interests be 
     defined very carefully.
       The quest for corporate advantage has put many of the old 
     players from the cold war back on the chessboard. Just this 
     month. Russian President Boris Yeltsin ordered his senior 
     intelligence officials to increase their efforts to obtain 
     high-technology secrets from the West.
       Besides gathering intelligence and conducting criminal 
     investigations, federal law enforcement officials have been 
     trying to help corporations protect themselves. A law enacted 
     in 1994 authorizes Attorney General Janet Reno to make 
     payments of up to $500,000 for information leading to the 
     arrest and conviction of anyone involved in economic 
     espionage. The National Counterintelligence Center, headed by 
     an FBI agent but based at CIA headquarters in suburban 
     Virginia, was established in August 1994, in part to help 
     coordinate a governmentwide response to economic espionage 
     incidents. The center began providing regional security 
     briefings for industry last May. The FBI recently opened its 
     own Economic Counterintelligence Unit, and its Development of 
     Espionage, Counterintelligence and Counterterrorism Awareness 
     (DECA) program inaugurated an instant fax alert service to 
     U.S. corporations regarding specific economic-intelligence-
     collection activities. It is supplemented by the State 
     Department's Overseas Security Advisory Council, which, like 
     DECA, has begun posting economic threat information on an on-
     line bulletin board for its members.
       Some security experts say the FBI should employ more active 
     measures to counter the threat. Mike Sekora tracked the 
     global technology trade for the Defense Department in the 
     1980s, identifying foreign interest in U.S. technology to 
     pre-empt thefts. Now a technology consultant, he believes the 
     FBI should do the same.
       Profit motives aside, economic espionage is booming because 
     there are few penalties for those who get caught. Rarely do 
     economic spies serve time in jail. Nor do countries that 
     encourage such activities have much to lose; since most are 
     U.S. allies, Washington prefers to scold them in private 
     rather than risk political backlash in public.
       Companies and industries targeted by foreign spies often 
     contribute to the problem. Few report known acts of 
     espionage, fearing it will affect stock prices and 
     customer confidence. In a survey published in July by the 
     National Counterintelligence Center, 42 percent of the 
     responding corporations said they never reported suspected 
     incidents of economic espionage to the government. At the 
     same time, 74 of 173 companies that responded to the 
     survey reported a total of 446 incidents of suspected 
     economic espionage.


                              culturebound

       The methods used to acquire economic-related data are often 
     culturebound. ``The Chinese and Japanese flood you with 
     people collecting all sorts of things in different areas,'' 
     says a former FBI official. ``For the most part, it is 
     absolutely legal,'' he said. ``The Japanese don't invest a 
     lot of money in trade craft. They just send lots of people 
     out talking and pick up trade secrets in the process,'' says 
     the retired official. The Russians and French, on the other 
     hand, use both legal and illegal means to target specific 
     intelligence, experts say.
       Targeting economic data can take many forms. In two 
     separate incidents in the early 1990s, French nationals 
     working at Renaissance Software Inc. in Palo Alto, Calif., 
     were arrested at San Francisco International Airport for 
     attempting to steal the company's proprietary computer source 
     codes. Marc Goldberg, a French computer engineer, had worked 
     at the company under a program sponsored by the French 
     Ministry of Foreign Affairs that allows French citizens to 
     opt out of military service if they are willing to work at 
     high-tech U.S. firms. He was fined $1,000 and ordered to 
     perform 1,000 hours of community service. The other 
     individual, Jean Safar, was released soon after his arrest by 
     the FBI. ``They said they did not have the power to do 
     anything,'' recalls Renaissance's former president, Patrick 
     Barkhordarian. The company, in fact, had received start-up 
     funds from two French brothers, Daniel and Andrew Harari. In 
     return for their investment, they received positions on the 
     company's five-member board of directors. When an internal 
     dispute erupted in 1992, the Harari brothers were able to 
     place a third French citizen on the board. ``They converted 
     the company to a French company,'' said Barkhordarian. Safar 
     was told by the company, claims Barkhordarian, to take the 
     source codes to France. There was nothing illegal about it. 
     Renaissance was acquired by a publicly held U.S. company last 
     fall.
       Even when the collection methods are legal, the results can 
     hurt. In the summer of 1994, a film crew from Japanese public 
     television visited dozens of U.S. biotech corporations, 
     including California biotech giant Amgen, while filming a 
     documentary on the industry. William Boni, Amgen's security 
     director, was warned by a DECA agent that the FBI suspected 
     the film was a cover for intelligence collection. Still, Boni 
     allowed the visit, partly because the director of the film 
     said this would help Amgen break into the Japanese biotech 
     market. Once at Amgen, film crew members photographed every 
     document they possibly could, including company production 
     numbers. ``This was a very clear-cut case of benchmarking 
     America's best practices for their industry,'' says Boni. 
     ``They ran their vacuum cleaner over the U.S. biotech 
     industry.''
       Some efforts are not so subtle. In one case, an Amgen 
     employee attempted to steal vials of Epogen, a genetically 
     engineered hormone that controls the production of red blood 
     cells and is one of two patented items in the company's 
     product line. Security chief Boni was tipped to the threat 
     by an anonymous letter, which said that the employee was 
     planning to open up a black market in Epogen in his home 
     country in Asia. The employee confessed. He was fired, but 
     no charges were filed. Had the theft attempt succeeded, 
     the rogue employee and an accomplice could have made a 
     fortune. In 1995, Epogen sales amounted to nearly $1 
     billion.
       Neither of the two prongs of the U.S. attempt to combat 
     such threats is simple. Like his predecessors, Directories of 
     Central Intelligence John Deutch has provided clear marching 
     orders to the CIA and other agencies that gather intelligence 
     overseas. The agencies are to inform U.S. policy makers if 
     foreign competitors are winning business abroad through 
     bribery or other illegal means. In 1994, Boeing Aerospace, 
     McDonnel Douglas and Raytheon Corp, won two multibillion-
     dollar contracts from Saudi Arabia and Brazil after President 
     Clinton complained to those governments about bribes that 
     rival French companies had paid to win the contracts, the 
     information on the bribes came from U.S. intelligence 
     agencies, President Clinton strongly endorses such action. 
     ``You uncovered bribes that would have cheated American 
     companies out of billions of dollars,'' he told a gathering 
     of CIA employees last July. Over the past three years, the 
     CIA has reportedly saved U.S. corporations $30 billion as a 
     result of those efforts.


                           Threat information

       Deutch has made it clear that, unlike the foreign 
     intelligence services of at least 50 other nations, America's 
     spy services are forbidden to engage in economic espionage 
     for the benefit of corporate America. That's clear enough, 
     but in today's global, multinational economy, it is often 
     difficult to distinguish American from foreign corporations. 
     The FBI, in fact, makes no such distinctions and provides all 
     corporations operating in the United States with threat 
     information regarding economic expionage.
       The other mission of the CIA and its sister agencies that 
     operate abroad is to provide economic intelligence to U.S. 
     policy makers. Last spring, the intelligence community helped 
     U.S. trade officials learn of Japanese negotiating positions 
     during automobile trade talks. This was perfectly legal under 
     U.S. law, but the press disclosure prompted a firestorm of 
     criticism from Capitol Hill, prompting some intelligence 
     officials to grumble that such activities were more trouble 
     then they were worth. Last year, several CIA officers were 
     expelled from France for engaging in an intelligence 
     operation to obtain information on France's position on 
     global telecommunications talks. The CIA's inspector general 
     investigated the matter, and a report is expected shortly.
       Given the ratio of risk to potential reward, many 
     intelligence officials argue that America's espionage 
     agencies should not be used to acquire economic information 
     secretly when so much can be obtained from open sources. 
     ``What you try to gain covertly,'' says Charles Emmling, a 
     former CIA case officer who recruited Soviet agents from 
     1968 to 1991 and now teaches businesses how to protect 
     their corporate trade secrets at Aegis Research Corp., 
     ``becomes less and less important.'' Robert Steele, a 20-
     year veteran of the CIA's clandestine service, says the 
     agency relies on cloak-and-dagger techniques out of habit. 
     ``Don't send a spy,''

[[Page S12210]]

     Steele says, ``where a schoolboy can go.'' That was 
     precisely the mistake the CIA made last year in France, 
     critics say.
       The second prong of the U.S. effort, playing defense, is 
     also more complicated than ever. Kenneth Geide, the head of 
     the FBI's new economic counterintelligence unit, says that 
     there are a host of ways to go after a target and that often 
     ``foreign governments are hiding their collection 
     [activities] within legitimate activities.''
       But some former law enforcement and intelligence officials 
     fear that legal collection of information may be investigated 
     simply to determine if illegal methods are being used. They 
     argue that the onus of protecting proprietary information 
     should remain on the shoulders of industry, not government. 
     ``It is our responsibility to protect this [information], and 
     it is our liability if we don't,'' contends a former 
     intelligence official now in the private sector. There is 
     still debate on the proper balanced role of law enforcement 
     in countering this new threat within government as well. ``We 
     don't want the FBI in our bedrooms or our boardrooms,'' quips 
     a senior administration official.
       The FBI defends its approach and has vowed not to overstep 
     its bounds. How to meet such a varied threat? ``We don't 
     intend to, want to and can't investigate all foreigners,'' 
     Geide says. The threat to America's national security from 
     spies seeking economic secrets has increased significantly, 
     but Geide says: ``We don't want to be alarmist about it. It 
     deserves a measured approach.''
                                                                    ____


                    The Growth of Economic Espionage

                          (By Peter Schweizer)

       Shortly after CIA officer Aldrich ``Rick'' Ames began 
     selling secrets to the Soviet KGB in 1985, a scientist named 
     Ronald Hoffman also began peddling classified information. 
     Ames, the last known mole of the Cold War, received $4.6 
     million for names of CIA informants before he was apprehended 
     in early 1994. But Hoffman, a project manager for a company 
     called Science Applications, Inc., made $750,000 selling 
     complex software programs developed under secret contract for 
     the Strategic Defense Initiative (SDI). Hoffman, who was 
     caught in 1992, sold his wares to Japanese multinationals--
     Nissan Motor Company, Mitsubishi Electric, Mitsubishi Heavy 
     Industries, and Ishikawajima-Harima Heavy Industries--that 
     wanted the information for civilian aerospace programs.
       Ames received the more dramatic and sensational coverage, 
     as he should have, given that his betrayal led to the loss of 
     life. But the Hoffman case represents the future of 
     intelligence. While one spied for America's chief military 
     rival, the other sold information to a major economic 
     competitor. Perhaps it should induce an epiphany of sorts 
     that these two cases occurred in near congruence.
       As economic competition supplants military confrontation in 
     global affairs, spying for high-tech secrets with commercial 
     applications will continue to grow, and military spying will 
     recede into the background. How the United States elects to 
     deal with this troubling issue will not only determine the 
     direction of the American intelligence community, but also 
     set the tone for commercial relations in the global 
     marketplace.


                       the new currency of power

       Most economic agents systematically collect economic 
     intelligence using legal means. Major corporations collect 
     business intelligence to read industry trends and scout the 
     competition. Many nations track global and regional economic 
     trends and even technological breakthroughs to aid 
     policymakers. But a growing number of states have become 
     very active in gathering intelligence on specific 
     industries or even companies and sharing it with domestic 
     producers. Indeed, economic espionage, the outright theft 
     of private information, has become a popular tool as 
     states try to supplement their companies' competitive 
     advantage. This is sheer folly, threatening to restore 
     mercantilism through the back door.
       The United States has devoted increasing attention to 
     intelligence on economic issues, sometimes with diplomatic 
     consequences. French Interior Minister Charles Pasqua 
     summoned U.S. Ambassador Pamela Harriman to his office on 
     January 26 of this year to protest U.S. spying on French 
     commercial and technological developments. According to Le 
     Monde, CIA agents flush with 500-franc notes tried to bribe a 
     member of the French parliament to reveal France's 
     negotiating position on the nascent World Trade Organization. 
     A senior official in the Ministry of Communications was 
     offered cash for intelligence on telecommunications and 
     audiovisual policy. A technician for France Telecom, the 
     national telephone network, was also approached. All three 
     immediately notified the French Directorate of Territorial 
     Surveillance, which ordered them to play along with the 
     Americans and lay a trap.
       More recently, an October 15 story in The New York Times 
     disclosed that American intelligence agents assisted U.S. 
     trade negotiators by eavesdropping on Japanese officials in 
     the cantankerous dispute over car imports. U.S. Trade 
     Representative Mickey Kantor and his aides were the reported 
     beneficiaries of daily briefings by the CIA, including 
     information gathered by the CIA's Tokyo station and the 
     National Security Agency's vast electronic network. How 
     useful this information was remains open to debate. After 
     all, the agreement the United States and Japan ultimately 
     reached was hardly an unambiguous victory for Washington.
       These reports, which appear to be accurate, indicate that 
     the United States is following the model for economic 
     intelligence several recent CIA directors have proposed. In 
     1991, believing that the CIA could make a ``unique 
     contribution'' by uncovering foreign economic espionage in 
     the United States and gathering information about the 
     attempts of other governments to violate international trade 
     agreements and ``other basic rules of fair play,'' Robert 
     Gates called for a deeper look at applying the tools of 
     intelligence to economic matters. By 1993, James Woolsey had 
     declared no more Mr. Nice Guy and promised that the CIA would 
     sniff out unfair trade practices and industrial espionage 
     directed against American firms.
       Even with all this heightened activity and interest, the 
     United States is far less involved in economic espionage than 
     most of its major allies and trading partners. Spying on 
     trade negotiators and attempting to obtain commercial 
     information to assist government policymakers is economic 
     espionage at its most benign level and should be expected. 
     The United States has yet to surmount the critical firewall 
     of passing purloined information to domestic companies 
     competing in the global marketplace. It is in this area that 
     the most damage is done to the international trading system 
     and where most major industrialized countries have operated.
       Over the past 15 years, the FBI has chronicled numerous 
     cases involving France, Germany, Japan, Israel, and South 
     Korea. An FBI analysis of 173 nations found that 57 were 
     covertly trying to obtain advanced technologies from U.S. 
     corporations. Altogether, 100 countries spent some public 
     funds to acquire U.S. technology. Former French Intelligence 
     Director Pierre Marion put it succinctly when he told me, 
     ``In economics, we are competitors, not allies. America has 
     the most technical information of relevance. It is easily 
     accessible. So naturally your country will receive the most 
     attention from the intelligence services.''
       Recent data indicate that American industry has felt the 
     effects of such unwanted attention. A 1993 survey 
     commissioned by the American Society for Industrial Security 
     found a dramatic upswing in the theft of proprietary 
     information from corporate America. The number of cases 
     increased 260 percent since 1985; those with foreign 
     involvement shot up fourfold. A 1993 study by R. J. Heffeman 
     and Associates noted that an average of about three incidents 
     every month involve the theft of proprietary information from 
     American companies by foreign entities. These estimates are 
     probably conservative. Companies prefer not to admit they 
     have been victims. An admission can depress the price of 
     their stock, ruin joint ventures, or scuttle U.S. government 
     contracts.
       The sort of espionage that threatens U.S. corporations 
     varies with the national characteristics and culture of the 
     perpetrators. France possesses a well-developed intelligence 
     service, one of the most aggressive collectors of economic 
     intelligence in the world. Using techniques often reminiscent 
     of the KGB or spy novels, the French in recent years have 
     planted moles in U.S. companies such as IBM, Texas 
     Instruments, and Corning. Japan lacks a large formal 
     intelligence service such as the CIA or Direction Generale de 
     la Securite Exterieure (DGSE) but remains an active acquirer 
     of business information. A public-private partnership has 
     evolved between the Ministry for International Trade and 
     Industry and the Japan External Trade Organization, 
     supplementing and nurturing the already well-developed 
     commercial intelligence networks created by Japanese 
     corporations. These commercial networks rival the 
     intelligence services of medium-sized nations. Matsushita's 
     intelligence operations in the United States, for example, 
     occupy two full floors of a Manhattan skyscraper, according 
     to Herb Meyer, special assistant to CIA Director William 
     Casey during the Reagan administration.


                          the gains from theft

       That so many states practice economic espionage is a 
     testament to how profitable it is believed to be. Marion 
     boasts that during his tenure, France won a $2 billion 
     airplane deal with India thanks to the work of the DGSE. The 
     late French spy chief Count De Marenches typified the French 
     view when he wrote in his memoirs that economic espionage is 
     ``very profitable. . . . In any intelligence service worthy 
     of the name you would easily come across cases where the 
     whole year's budget has been paid for in full by a single 
     operation.''
       Economic espionage threatens to unhinge certain post-Cold 
     War goals such as arms control. On-site inspections, a 
     necessity for some agreements, create institutional 
     opportunities to engage in espionage. The Chemical 
     Manufacturers Association, for example, fears that a chemical 
     weapons treaty with a rigid on-site verification regime could 
     subject 50,000 industrial sites in the United States to 
     systematic international inspection and monitoring. Officials 
     from any number of countries would have access to sensitive 
     information about the American chemical industry, including 
     plant layouts, production levels, perhaps even formulas.
       Intelligence collection is a proper function of the state--
     protecting the national interest and informing statecraft. 
     But collecting proprietary information and sharing it with 
     domestic producers in an entirely different

[[Page S12211]]

     matter. That kind of economic espionage ought to be called 
     what it is: at best a subsidy to well-connected domestic 
     companies, at worst theft on a par with piracy. Economic 
     espionage can grossly disrupt trade and corrode a nation's 
     science and technology base. It is a parasitic act, relying 
     on others to make costly investments of time and money. And 
     to destroy the rewards of investment is to destroy the 
     incentive to innovate.


                        the quaint united states

       This is a decidedly minority point of view in the world 
     marketplace. The rest of the world does not share the 
     American capitalist ethos of vigorous but open competition. 
     In both Europe and Asia, the American law that bars U.S. 
     corporations from bribing foreign officials is viewed as 
     quaint. Antitrust laws are likewise dismissed as an American 
     idiosyncrasy. The semi-corporatist cultures of continental 
     Europe and Asia view the state-business relationship very 
     differently than does the United States. There is a popular 
     old joke in American business circles: ``What are the nine 
     scariest words in the English language?'' ``I'm from the 
     government and here to help you.'' This quip would hardly 
     garner a smile in Tokyo, Paris, or Berlin.
       Early indications are that Russia is more likely to embrace 
     the semi-corporatist view than the American laissez-faire 
     model. The transition from communism to capitalism means only 
     that Russian intelligence will have a greater business 
     orientation. Russian intelligence officials speak of 
     nonbudgetary resources for defense and security policy. 
     And as James Sherr of Oxford University pointed out in the 
     winter 1994-95 National Interest, Russian intelligence 
     officials are blurring the distinction between, if not 
     merging, state policy and private pursuits. The newly 
     created Federal Agency for Government Communications and 
     Information indicates this trend. Encompassing the former 
     KGB's communication's assets, it is both a ``strictly 
     classified organization'' and a business, with the right 
     to contract with foreign investors, invest in foreign 
     commercial entities, and set up companies abroad.
       As economic strength in part replaces military might as the 
     currency of national power, one can only expect this trend to 
     continue. Trade talks have supplanted arms control as the 
     most acrimonious, demanding, and headline--grabbing form of 
     diplomacy, a certain sign of changing priorities. 
     Consequently, most intelligence organizations around the 
     globe are all too willing to serve as a competitive tool to 
     protect budgets in lean times.
       The current interregnum between the Cold War and the new 
     era of economic conflict provides an opportunity finally to 
     address this issue. Fissures or disagreements within the 
     Western alliance no longer have the dangerous consequences 
     they might have had at the height of the Cold War. The United 
     States needs to treat economic espionage no only as an 
     intelligence issue, but as the competitiveness and economic 
     issue it has become. Until it does, the American response 
     will be spotty, and the results minimal.
       In 1991 the FBI began a quiet shift from the traditional 
     focus of its counterintelligence policy. The country criteria 
     list, which identified nations whose intelligence services 
     needed watching, has been replaced by the national security 
     threat list, which identifies key American technologies and 
     industries that should be protected. This is an important 
     first step. But even a successful counterintelligence 
     operation will accomplish little unless there are 
     consequences for those who are caught. In the past, ensnared 
     thieves usually receive a slap on the wrist. When prosecuted 
     in a court of law, it has usually been under statutes that 
     make it illegal to transfer stolen goods across state lines. 
     This is a difficult legal standard, particularly since some 
     judges believe that information is not a good.
       Changes in U.S. law and greater diplomatic fortitude offer 
     the best hope for grappling with this problem. When Hitachi 
     admitted in court that its employees tried to purchase stolen 
     ``Adirondack'' computer design workbooks from IBM, the judge 
     in 1983 fined the company a whopping $10,000. The U.S. 
     government did not blink an eye. Several months after the 
     trial, Hitachi reportedly won a major contract to equip the 
     Social Security Administration with computers. (Ironically, 
     the losing bid was submitted by IBM.) When it was disclosed 
     that between the early 1970s and late 1980s the French DGSE 
     had planted agents in Texas Instruments, IBM, and Corning and 
     shared the purloined information with Compagnie des Machines 
     Bull, the U.S. government merely sent a letter of diplomatic 
     protest. Likewise, when Israeli intelligence officers stole 
     valuable technological data from Illinois defense contractor 
     Recon Optical, no penalties were imposed. Selling SDI 
     computer software programs did get Ronald Hoffman a six-year 
     prison term, but the Japanese companies that purchased the 
     data faced no sanctions. This state of affairs should be 
     unsatisfactory.
       The United States should consider changing its privacy 
     laws. The data protection laws of countries such as Austria, 
     France, Switzerland, Belgium, Germany, New Zealand, Denmark, 
     Norway, and Luxembourg define ``persons'' to include 
     corporations for protection of privacy purposes. Their laws 
     provide a much higher level of protection for corporate 
     information, treating business secrets as equivalent to the 
     private data of individual citizens. Under much more firmly 
     defined privacy statutes, thieves could be prosecuted.
       When diplomats are involved, the United States should be as 
     aggressive and vigorous as it was when dealing with Soviet 
     spying, or at least as firm as France was last January. 
     Instead, diplomatic personnel have simply been asked to leave 
     quietly, a gesture with little punitive effect. Foreign 
     corporations involved in the theft of American technology or 
     corporate information should face real monetary costs for 
     their crimes. Until there is a price to be paid, companies 
     will not think twice about purchasing and using stolen 
     information, and foreign governments will not blink at 
     stealing American proprietary business information.
       How the United States chooses to deal with this problem 
     will set the tone internationally. Some, such as former CIA 
     Director Stansfield Turner, have proposed an American 
     economic espionage program, in effect imitating foreign 
     competitors. But this path is fraught with peril. There is no 
     groundswell of support for such a course in either corporate 
     America or the intelligence community. Ask intelligence 
     professionals what they think about the idea and they are 
     likely to tell you, ``I will risk my life for America, but 
     not General Motors.'' An economic espionage program could 
     also have a corrupting influence on the U.S. intelligence 
     community, as officials might be enticed by bribes from 
     companies seeking particularly useful information. Likewise, 
     American companies are nervous about getting entangled with 
     the intelligence world and the strings that are likely to be 
     attached to any such program. Rather than wanting to imitate 
     its competitors, corporate America seeks a level playing 
     field and protection from industrial thieves.
       The goal of the United States should be a world in which 
     governments do not try to outspend one another on stealing 
     each other's corporate secrets. But that goal cannot be 
     reached until the United States decides to grow up and face 
     down the threat. Ignoring economic espionage will not make it 
     go away.

  Mr. KOHL. Mr. President, today, we pass the Economic Espionage Act, 
which is based upon legislation drafted by Senator Specter and me and, 
on the House side, by Representatives McCollum and Schumer. In a 
Congress marked by so much partisanship, this legislation marks a 
significant bipartisan accomplishment. With this new law, we penalize 
the theft of vital economic information.
  Since the end of the cold war, our old enemies and our traditional 
allies have been shifting the focus of their spy apparatus. Alarmingly, 
the new target of foreign espionage is our industrial base. But for too 
many years, we were complacent and did not heed these warnings. And we 
left ourselves vulnerable to the ruthless plundering of our country's 
vital information. We did not address this new form of espionage--a 
version of spying as dangerous to our national well-being as any form 
of classic espionage. Today, that complacency ends.
  Mr. President, this legislation is crucial. Most Americans probably 
do not realize that anyone with the wherewithal to do it can walk out 
of a company with a computer disk full of its most important 
manufacturing information and sell that information to the highest 
bidder with virtual impunity--and no criminal penalties.
  This problem is even worse when foreign governments have specifically 
focussed on American companies in order to steal information from them. 
American companies are not prepared or equipped to fight off this kind 
of systematic targeting.
  The executive vice president of Corning, James Riesbeck, has said 
that:

       It is important to understand that State-sponsored 
     industrial espionage is occurring in the international 
     business community. It is very difficult for an individual 
     corporation to counteract this activity. The resources of any 
     corporation are no match for industrial espionage that is 
     sanctioned and supported by foreign governments.

  A report of the National Counterintelligence Center [NCIC] in 1995 
indicated that biotechnology, aerospace, telecommunications, computer 
software, transportation, advanced materials, energy research, defense, 
and semiconductor companies are all top targets for foreign economic 
espionage. These sectors are aggressively targeted according to the 
report. That report identified 20 different methods used to conduct 
industrial espionage. The traditional methods include recruiting an 
agent and then inserting the agent into the target company, or breaking 
into an office to take equipment and information. According to the 
report, computer intrusions, telecommunications targeting and 
intercept, and private-sector encryption weaknesses account for the 
largest portion of economic and

[[Page S12212]]

industrial information lost by U.S. corporations.

  But even as American companies are attempting to respond to foreign 
espionage, they also have to address theft by insiders. A survey by the 
American Society for Industrial Security [ASIS] of 325 companies in 
1995 found that almost half of them had experienced trade secret theft 
of some sort during the previous 2 years. They also reported a 323-
percent increase in the number of incidents of intellectual property 
loss. A 1988 National Institute of Justice study of trade secret theft 
in high-technology industries found that 48 percent of 150 research and 
development companies surveyed had been the victims of trade secrets 
theft. Almost half of the time the target was research and development 
data while 38 percent of the time the target was new technology. Forty 
percent of the victims found out about the theft from their 
competitors.
  Norman Augustine, the president of Lockheed Martin Corp., told us at 
our February hearings that a recent survey of aerospace companies 
revealed that 100 percent of them believe that a competitor, either 
domestic or international, has used intelligence techniques against 
them.
  And, Mr. President, make no mistake about it, economic espionage 
costs our country dearly. In 1992, when a representative of IBM 
testified at a House hearing on this issue, he told us that economic 
espionage had cost his company billions of dollars. The NCIC report 
concluded that industry victims have reported the loss of hundreds of 
millions of dollars, lost jobs, and lost market share. The ASIS survey 
concluded that the potential losses could total $63 billion a year.
  Because of the gap in our laws, Senator Specter and I introduced two 
companion measures that became the Economic Espionage Act earlier this 
year. This legislation will be used to go after the foreign 
intelligence services that take aim at American companies and at the 
people who walk out of businesses with millions of dollars worth of 
information.

  I will only briefly explain what we have done here because the 
managers' statement and the House and Senate committee reports fully 
and completely describe this act. This legislation makes it illegal to 
steal trade secrets from companies. It enhances the penalties when the 
theft is at the behest of a foreign government. With the help of 
Senator Hatch and Representatives McCollum and Schumer, we have 
carefully drafted these measures to ensure that they can only be used 
in flagrant and egregious cases of information theft. Moreover, trade 
secrets are carefully defined so that the general knowledge and 
experience that a person gains from working at a job is not covered.
  Mr. President, we do not want this law used to stifle the free flow 
of information or of people from job to job. But we built in a number 
of safeguards to prevent exactly these problems. They are elaborated on 
in the managers' statement and our committee reports.
  Mr. President, I ask unanimous consent that a copy of the managers' 
statement be printed in the Record. It reflects our understanding on 
this measure.
  There being no objection, the managers' statement was ordered to be 
printed in the Record, as follows:

     Managers' Statement for H.R. 3723, The Economic Espionage Bill

       This legislation is based upon two bills, S. 1556, ``The 
     Industrial Espionage Act of 1996,'' and S. 1557, ``The 
     Economic Security Act of 1996,'' which were introduced by 
     Senators Specter and Kohl. This Managers' Statement is 
     intended to clarify portions of the legislation and to 
     supplement the Committee reports already issued on these two 
     measures. It also explains how the House and Senate version 
     of the legislation were reconciled.


               DIFFERENCE BETWEEN SECTIONS 1831 AND 1832

       This legislation includes a provision penalizing the theft 
     trade secrets (Sec. 1832) and a second provision penalizing 
     that theft when it is done to benefit a foreign government, 
     instrumentality, or agent (Sec. 1831). The principle purpose 
     of this second (foreign government) provision is not to 
     punish conventional commercial theft and misappropriation of 
     trade secrets (which is covered by the first provision). 
     Thus, to make out an offense under the economic espionage 
     section, the prosecution must show in each instance that the 
     perpetrator intended to or knew that his or her actions would 
     aid a foreign government, instrumentality, or agent. 
     Enforcement agencies should administer this section with its 
     principle purpose in mind and therefore should not apply 
     section 1831 to foreign corporations when there is no 
     evidence of foreign government sponsored or coordinated 
     intelligence activity.
       This particular concern is borne out in our understanding 
     of the definition of ``foreign instrumentality'' which 
     indicates that a foreign organization must be ``substantially 
     owned, controlled, sponsored, commanded, managed, or 
     dominated by a foreign government or subdivision thereof.'' 
     Although the term ``substantially'' is not specifically 
     defined, it is a relative term that connotes less than total 
     or complete ownership, control, sponsorship, command, 
     management, or domination. Substantial in this context, means 
     material or significant, not technical or tenuous. We do not 
     mean for the test of substantial control to be mechanistic or 
     mathematical. The simple fact that the majority of the stock 
     of a company is owned by a foreign government will not 
     suffice under this definition, nor for that matter will the 
     fact that a foreign government only owns 10 percent of a 
     company exempt it from scrutiny. Rather the pertinent inquiry 
     is whether the activities of the company are, from a 
     practical and substantive standpoint, foreign government 
     directed.
       To make out a case under these two provisions (sections 
     1831 and 1832), the prosecution would have to show that the 
     accused knew or had reason to know that a trade secret had 
     been stolen or appropriated without authorization. This 
     threshold separates conduct that is criminal from that which 
     is innocent. Thus, for example, these sections would not give 
     rise to a prosecution for legitimate economic collection 
     or reporting by personnel of foreign governments or 
     international financial institutions, such as the World 
     Bank, because such legitimate collection or reporting 
     would not include the collection or reporting of trade 
     secrets that had been stolen, misappropriated or converted 
     without authorization.


                         WITHOUT AUTHORIZATION

       Several federal statutes already include the requirement 
     that information be taken ``without authorization.'' The most 
     notable is 18 U.S.C. Sec. 1030, which is amended in this 
     measure by the National Information Infrastructure Protection 
     Act introduced by Senators Leahy, Kyl and Grassley. That 
     provision essentially deals with authorization in relation to 
     computer systems. However, in this legislation the nature of 
     authorization may be slightly different since this measure 
     involves information ``whether or how stored.'' But the 
     principle remains the same: authorization is the permission, 
     approval, consent, or sanction of the owner.


                    PARALLEL DEVELOPMENT NOT COVERED

       It is important to note that a person who develops a trade 
     secret is not given an absolute monopoly on the information 
     or data that comprises a trade secret. For example, if a 
     company discovers that a particular manufacturing process 
     must be conducted at a certain ambient temperature and that a 
     more than 10 percent deviation from that temperature will 
     compromise the process, that company does not have the 
     exclusive right to manufacture the product at the key 
     temperature (assuming that this is not otherwise patented or 
     protected by law). Other companies can and must have the 
     ability to determine the elements of a trade secret through 
     their own inventiveness, creativity and hard work. As the 
     Supreme Court noted in Kewanee Oil Co. v. Bicron Corp., 416 
     U.S. 470 (1974): ``If something is to be discovered at all 
     very likely it will be discovered by more than one person. . 
     . . Even were an inventor to keep his discovery completely to 
     himself, something that neither the patent nor trade secret 
     laws forbid, there is a high probability that it will be soon 
     independently developed. If the invention, though still a 
     trade secret, is put into public use, the competition is 
     alerted to the existence of the inventor's solution to the 
     problem and may be encouraged to make an extra effort to 
     independently find the solution this known to be possible.'' 
     Id. at 490-91.
       This legislation does not in any way prohibit companies, 
     manufacturers, or inventors from using their skills, 
     knowledge and experience to solve a problem or invent a 
     product that they know someone else is also working on. Thus, 
     parallel development of a trade secret cannot and should not 
     constitute a violation of this statute. This includes the 
     situation in which an individual inventor, unsolicited, sends 
     his or her material to a manufacturer even as the company 
     itself is in the midst of its own parallel development. In 
     the first place, this wholesale disclosure of material likely 
     breaches the requirement that a trade secret owner take 
     reasonable measures to protect the information's 
     confidentiality. But more importantly, many companies 
     regularly receive such ideas and inventions and do not use 
     them. Some of these unsolicited ideas and inventions may 
     overlap with work being done within the company already. 
     Both the individual inventor and the company are 
     conducting parallel work, pursuing the same line of 
     inquiry. Neither can be subject to penalty under this law.


                          REVERSE ENGINEERING

       Some people have asked how this legislation might affect 
     reverse engineering. Reverse engineering is a broad term that 
     encompasses a variety of actions. The important thing is to 
     focus on whether the accused has committed one of the 
     prohibited acts of

[[Page S12213]]

     this statute rather than whether he or she has ``reverse 
     engineered.'' If someone has lawfully gained access to a 
     trade secret and can replicate it without violating 
     copyright, patent or this law, then that form of ``reverse 
     engineering'' should be fine. For example, if a person can 
     drink Coca-Cola and, because he happens to have highly 
     refined taste buds, can figure out what the formula is, then 
     this legislation cannot be used against him. Likewise, if a 
     person can look at a product and, by using their own general 
     skills and expertise, dissect the necessary attributes of the 
     product, then that person should be free from any threat of 
     prosecution.


                      DEFINITION OF TRADE SECRETS

       Unlike patented material, something does not have to be 
     novel or inventive, in the patent law sense, in order to be a 
     trade secret. Of course, often it will be because an owner 
     will have a patented invention that he or she has chosen to 
     maintain the material as a trade secret rather than reveal it 
     through the patent process. Even if the material is not novel 
     in the patent law sense, some form of novelty is probably 
     inevitable since ``that which does not possess novelty is 
     usually known; secrecy, in the context of trade secrets 
     implies at least minimal novelty.'' Kewanee Oil Co., 416 U.S. 
     at 476. While we do not strictly impose a novelty or 
     inventiveness requirement in order for material to be 
     considered a trade secret, looking at the novelty or 
     uniqueness of a piece of information or knowledge should 
     inform courts in determining whether something is a matter of 
     general knowledge, skill or experience.
       Although we do not require novelty or inventiveness, the 
     definition of a trade secret includes the provision that an 
     owner have taken reasonable measures under the circumstances 
     to keep the information confidential. We do not with this 
     definition impose any requirements on companies or owners. 
     Each owner must assess the value of the material it seeks to 
     protect, the extent of a threat of theft, and the ease of 
     theft in determining how extensive their protective measures 
     should be. We anticipate that what constitutes reasonable 
     measures in one particular field of knowledge or industry 
     may vary significantly from what is reasonable in another 
     field or industry. However, some common sense measures are 
     likely to be common across the board. For example, it is 
     only natural that an owner would restrict access to a 
     trade secret to the people who actually need to use the 
     information. It is only natural also that an owner clearly 
     indicate in some form or another that the information is 
     proprietary. However, owners need not take heroic or 
     extreme measures in order for their efforts to be 
     reasonable.


      GENERAL KNOWLEDGE NOT COVERED BY DEFINITION OF TRADE SECRETS

       In the course of reconciling the Senate and House versions 
     of this legislation, we eliminated the portion of the 
     definition of trade secret that indicated that general 
     knowledge, skills and experience were not included in the 
     meaning of that term. Its elimination from the statutory 
     language does not mean that general knowledge can be a trade 
     secret. Rather, we believed that the definition of trade 
     secrets in itself cannot include general knowledge. Thus, it 
     was unnecessary and redundant to both define what does and 
     what does not constitute a trade secret.
       Our reason initially for putting the exception in was to 
     state are clearly as possible that this legislation does not 
     apply to innocent innovators or to individuals who seek to 
     capitalize on their lawfully developed knowledge skill or 
     abilities. Employees, for example, who change employers or 
     start their own companies should be able to apply their 
     talents without fear of prosecution because two safeguards 
     against overreaching are built into the law.
       First, protection is provided by the definition of ``trade 
     secret'' itself. The definition requires that an owner take 
     objectively reasonable, proactive measures, under the 
     circumstances, to protect the information. If, consequently, 
     an owner fails to safeguard his or her trade secret, then no 
     one could be rightfully accused of misappropriating it. Most 
     owners do take reasonable measures to protect their trade 
     secrets, thereby placing employees and others on clear notice 
     of the discreet, proprietary nature of the information.
  In addition, a prosecution under this statute must establish a 
particular piece of information that a person has stolen or 
misappropriated. It is not enough to say that a person has accumulated 
experience and knowledge during the course of his or her employ. Nor 
can a person be prosecuted on the basis of an assertion that he or she 
was merely exposed to a trade secret while employed. A prosecution that 
attempts to tie skill and experience to a particular trade secret 
should not succeed unless it can show that the particular material was 
stolen or misappropriated. Thus, the government cannot prosecute an 
individual for taking advantage of the general knowledge and skills or 
experience that he or she obtains or comes by during his tenure with a 
company. Allowing such prosecutions to go forward and allowing the risk 
     of such charges to be brought would unduly endanger 
     legitimate and desirable economic behavior.
       As the Pennsylvania Supreme Court noted in Spring Steels v. 
     Molloy, 400 Pa. 354, 363 (1960):
       ``It is not a phenomenal thing in American business life to 
     see an employee, after a long period of service, leave his 
     employment and start a business of his own or in association 
     with others. And it is inevitable in such a situation, where 
     the former employee has dealt with customers on a personal 
     basis that some of those customers will want to continue to 
     deal with him in [that] new association. This is . . . 
     natural, logical and part of human fellowship . . .''
       This legislation does not criminalize or in any way hamper 
     these natural incidents of employment. The free and 
     unfettered flow of individuals from one job to another, the 
     ability of a person to start a new business based upon his or 
     her experience and expertise, should not be injured or 
     chilled in any way by this legislation. Individuals must have 
     the opportunity to take advantage of their talents and seeks 
     and accepts other employments that enables them to profit 
     from their abilities and experience. And companies must have 
     the opportunity to employ these people. This measure attempts 
     to safeguard an individual's career mobility and at the same 
     time to preserve the trade secrets that underpin the economic 
     viability of the very company that would offer a person a new 
     job.
       The second safeguard is provided by the bill's use of the 
     term ``knowingly.'' For a person to be prosecuted, the person 
     must know or have a firm belief that the information he or 
     she is taking is in fact proprietary. Under theft statutes 
     dealing with tangible property, normally, the thief knows 
     that the object he has stolen is indeed a piece of property 
     that he has no lawful right to convert for his personal use. 
     The same principle applies to this measure--for someone to be 
     convicted under this statute he must be aware or 
     substantially certain that he is misappropriating a trade 
     secret (although a defense should succeed if it is proven 
     that he actually believed that the information was not 
     proprietary after taking reasonable steps to warrant such 
     belief). A person who takes a trade secret because of 
     ignorance, mistake or accident cannot be prosecuted under the 
     Act.
       This requirement should not prove a great barrier to 
     legitimate and warranted prosecutions. Most companies go to 
     considerable pains to protect their trade secrets. Documents 
     are marked proprietary; security measures put in place; and 
     employees often sign confidentiality agreements.


                      MAINTAINING CONFIDENTIALITY

       We have been deeply concerned about the efforts taken by 
     courts to protect the confidentiality of a trade secret. It 
     is important that in the early stages of a prosecution the 
     issue whether material is a trade secret not be litigated. 
     Rather, courts should, when entering these orders, always 
     assume that the material at issue is in fact a trade secret.


                          VICTIM COMPENSATION

       We are also concerned that victims of economic espionage 
     receive compensation for their losses. This legislation 
     incorporates through reference existing law to provide 
     procedures to be used in the detention, seizure, forfeiture, 
     and ultimate disposition of property forfeited under the 
     section. Under these procedures, the Attorney General is 
     authorized to grant petitions for mitigation or remission of 
     forfeiture and for the restoration of forfeited property to 
     the victims of an offense. The Attorney General may also take 
     any other necessary or proper action to protect the rights of 
     innocent people in the interest of justice. In practice, 
     under the forfeiture laws, victims are afforded priority in 
     the disposition of forfeited property since it is the policy 
     of the Department of Justice to provide restitution to the 
     victims of criminal acts whenever permitted to do so by the 
     law. Procedures for victims to obtain restitution may be 
     found at Section 9 of Title 28, Code of Federal Regulations.
       In addition to requesting redress from the Attorney 
     General, any person--including a victim--asserting an 
     interest in property ordered forfeited may petition for a 
     judicial hearings to adjudicate the validity of the alleged 
     interest and to revise the order of forfeiture. Additionally, 
     forfeitures are subject to a requirement of proportionality 
     under the Eighth Amendment; that is, the value of the 
     property forfeited must not be excessively disproportionate 
     to the crimes in question.
       Finally, we have required that the Attorney General report 
     back to us on victim restitution two and four years after the 
     enactment of this legislation. We have heard from some 
     companies that they only rarely obtain restitution awards 
     despite their eligibility. We wish to carefully monitor 
     restitution to ensure that the current system is working well 
     and make any changes that may be necessary.


                            FINES PROVISION

       In the original Senate version of this measure, we included 
     a provision allowing courts to impose fines of up to twice 
     the value of the trade secret that was stolen. This specific 
     provision was eliminated because it was unnecessary in light 
     of 18 U.S.C. Sec. 3571(d). We have not used the specific 
     exemption available under 18 U.S.C. Sec. 3571(e). We, 
     therefore, fully expect that courts will take full advantage 
     of the provision in 18 U.S.C. Sec. 3571(d) allowing for fines 
     of up to twice the gain or loss resulting from the theft of 
     trade secrets and that courts will opt for the larger of the 
     fines available under 18 U.S.C. Sec. 3571(d) or the fines 
     provisions of this statute.

[[Page S12214]]

                    DEPARTMENT OF JUSTICE OVERSIGHT

       The Senate version of this measure included a requirement 
     that all prosecutions brought under the statute receive the 
     prior approval of the Attorney General, the Deputy Attorney 
     General or the head of the Department of Justice's Criminal 
     Division. That provision was eliminated in the measure that 
     the House returned to us. We have not reinserted it based on 
     the assurances of the Department of Justice. The Department 
     of Justice will insert a requirement in the U.S. Attorney's 
     Manual that prosecutions continue to be approved and strictly 
     supervised by the Executive Office of the United States 
     Attorney. The Attorney General has written a letter to us to 
     that effect which we will insert into the record. We expect 
     to review all cases brought under this Act in several years 
     to ensure that the requirement is being enforced and to 
     determine if it needs to remain in place.
  Mr. HATCH. Mr. President, I rise in support of H.R. 3723, the 
Economic Espionage Act of 1996. This bill makes the theft or unlawful 
appropriation and conversion of ``proprietary economic information'' a 
Federal felony. It is an important bill to all of Federal law 
enforcement, and I encourage my colleagues to support it.
  In today's technology revolution, the Congress has recognized the 
need to develop meaningful legislation that has real teeth to stop a 
burgeoning criminal enterprise. Such enterprise targets the cutting 
edge research and development of our Nation's industries, often on 
behalf of a competitor or foreign state. Until now, there has been no 
meaningful deterrent to such activity. Victims were often forced to 
resort to State civil remedies as their only redress. I am confident 
that all of my colleagues will agree that H.R. 3723, a bill which we 
have crafted and has undergone minor House modification, is a strong 
and meaningful deterrent to criminals considering engaging in economic 
espionage.
  There is one provision in the bill originally passed by the Senate 
but deleted from the House which requires clarification. The original 
bill passed by the Senate contained a provision that required Attorney 
General approval prior to the initiation of a prosecution under this 
legislation. The bill returned to the Senate by the House deleted this 
requirement. It was my intent to attach an amendment to this bill, 
reinserting the prior authorization requirement. After numerous 
discussions with administration and industry officials, a compromise 
has been reached which will allow this bill to be passed by the full 
Senate as approved by the House.
  We have a letter from the Attorney General which memorializes an 
agreement we have made concerning this prior authorization requirement.
  This agreement provides that the Department of Justice shall 
implement regulations that require that an indictment can be pursued 
under this legislation only upon the express prior approval of the 
Attorney General, Deputy Attorney General, or Assistant Attorney 
General-Criminal Division. This agreement shall remain in effect for a 
period of 5 years from enactment. During that timeframe, the Attorney 
General will be required to report to the Senate or House Judiciary 
Committees, any prosecutions carried out under this bill which did not 
receive such prior authorization. It shall also subject the U.S. 
Attorney or Justice Department official authorizing such prosecution, 
to appropriate disciplinary sanctions.

  I am confident that the Department of Justice will act in good faith 
and carry out its terms.
  I would like to mention three other provisions included in this bill. 
The first, included as a floor amendment by myself and Senator Kohl, 
authorizes $100 million in grants to the Boys and Girls Clubs of 
America to establish clubs in public housing and other distressed areas 
across the country. The Boys and Girls Clubs have an outstanding track 
record of reducing crime and drug use in the communities they serve, 
and this legislation will help them extend their reach into the 
communities that need them most.
  Second, I am pleased that this bill included another amendment I 
offered during Senate consideration, transferring to the Attorney 
General custody of certain Federal inmates hospitalized at St. 
Elizabeth's hospital. This provision will ensure that these persons, 
hospitalized because of not guilty by reason on insanity verdicts in 
Federal courts, receive appropriate care in safe, secure facilities.
  Finally, I would like to note that this legislation includes an 
amended version of technical corrections legislation to fix errors that 
have, over time, crept into the Federal criminal code. The continued 
integrity of the criminal laws depends on making these corrections from 
time to time, and I am pleased that we have addressed this matter here.
  For these reasons, I strongly urge all of my colleagues to fully 
support H.R. 3723.
  I ask unanimous consent that the letter I referenced earlier from the 
Attorney General be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                            Department of Justice,


                               Office of the Attorney General,

                                  Washington, DC, October 1, 1996.
     Hon. Orrin G. Hatch,
     Chairman, Committee on the Judiciary,
     U.S. Senate, Washington, DC.
       Dear Chairman Hatch: Thank you for your support of the 
     Economic Espionage Act of 1996 (``Act''). The need for this 
     law cannot be understated as it will close significant gaps 
     in federal law, thereby protecting proprietary economic 
     information and the health and competitiveness of the 
     American economy.
       The Department shares your concerns that the legislation be 
     implemented in accordance with the intent of Congress and 
     therefore will require, for a period of five years after 
     implementation of the Act, that the United States may not 
     file a charge under Chapter 90, or use a violation of Chapter 
     90 as a predicate offense under any other law, without the 
     personal approval of the Attorney General, the Deputy 
     attorney General, or the Assistant Attorney General for the 
     Criminal Division (or the acting official in each of these 
     positions if a position is filled by the Acting official). 
     This requirement will be implemented by published regulation.
       Violations of such regulations will be appropriately 
     sanctionable. Any such violations will be reported by the 
     Attorney General to the Senate and House Judiciary 
     Committees.
       Once again, thank you for your leadership in this critical 
     area.
           Sincerely,
                                                       Janet Reno.

  Mr. LEAHY. Mr. President, I am delighted that the Senate is today 
taking the important step of passing the Economic Espionage Act and the 
National Information Infrastructure Protection Act of 1996 [NII 
Protection Act].
  The NII Protection Act, which I have sponsored with Senators Kyl and 
Grassley, was sent to the House as S. 982, after passing the Senate 
unanimously on September 18, 1996. The NII Protection Act has come back 
to the Senate for final passage as part of a package of bills including 
H.R. 3723, the Economic Espionage bill. These bills are complimentary. 
The economic espionage bill will impose criminal penalties on those who 
steal valuable trade secrets from the U.S. Government and those doing 
business in our country, without regard to the means used to effect the 
crime.
  Spying on American companies in order to obtain their trade secrets 
and confidential proprietary information is--to put it bluntly--
stealing. Although the estimates of how much this stealing costs our 
Nation's business and our economy are rough, the range is in the 
billions of dollars per year.
  Unfortunately, the problem appears to be growing. The increasing 
dependence of American industry on computers to store information and 
to facilitate communications with customers, suppliers and farflung 
subsidiaries, presents special vulnerabilities for the theft of 
sensitive proprietary information.
  I have long been concerned about this vulnerability. That is why I 
worked with the Department of Justice, and my colleagues, Senators Kyl 
and Grassley, on introduction of the National Information 
Infrastructure Protection Act. This bill will increase protection for 
computers, both government and private, and the information on those 
computers, from the growing threat of computer crime. Our dependency on 
computers and the growth of the Internet are both integrally linked to 
people's confidence in the privacy, security, and reliability of 
computer networks. I have worked over the past decade to make sure the 
laws we have in place foster both privacy and security, and provide a 
sound foundation for new communications technologies to flourish.
  Both the NII Protection Act and the Economic Espionage Act reflect 
significant efforts to better protect our

[[Page S12215]]

industrial lifeblood--the imaginative ideas and the special know-how 
that give American companies the edge in global competition.
  The NII Protection Act will help safeguard the privacy, security and 
reliability of our national computer systems and networks and the 
information stored in, and carried on, those networks. Those systems 
and networks are vulnerable to the threat of attack by hackers, high-
technology criminals and spies.

  Every technological advance provides new opportunities for legitimate 
uses and the potential for criminal exploitation. Existing criminal 
statutes provide a good framework for prosecuting most types of 
computer-related criminal conduct. But as technology changes and high-
technology criminals devise new ways to use technology to commit 
offenses we have yet to anticipate, we must be ready to readjust and 
update our Criminal Code.
  The facts speak for themselves--computer crime is on the rise. The 
week before Senate passage of the NII Protection Act, on September 12, 
a computer hacker attack, which shut down a New York Internet access 
provider with thousands of business and individual customers, made 
front page news, and revealed the vulnerability of every network 
service provider to such an attack. The morning after Senate passage of 
this legislation, on September 19, computer hackers forced the CIA to 
take down an agency Web site because obscenities and unauthorized text 
and photograph changes had been made to the site and unauthorized links 
had been established between the CIA Web site and other sites. The 
Computer Emergency and Response Team [CERT] at Carnegie-Mellon 
University reports that over 12,000 Internet computers were attacked in 
2,412 incidents in 1995 alone. A 1996 survey conducted jointly by the 
Computer Security Institute and the FBI showed that 42 percent of the 
respondents sustained an unauthorized use or intrusion into their 
computer systems in the past 12 months.
  While the NII Protection Act may not address every form of computer 
crime or mischief, it closes a number of significant gaps in the 
computer fraud and abuse statute. This legislation would strengthen law 
enforcement's hands in fighting crimes targeted at computers, networks, 
and computerized information by, among other things, designating new 
computer crimes, and by extending protection to computer systems used 
in foreign or interstate commerce or communications.
  For example, while our current statute, in section 1030(a)(2), 
prohibits misuse of a computer to obtain information from a financial 
institution, it falls short of protecting the privacy and 
confidentiality of information on computers used in interstate or 
foreign commerce and communications. This gap in the law has become 
only more glaring as more Americans have connected their home and 
business computers to the global Internet.
  This is not just a law enforcement issue, but an economic one. 
Breaches of computer security result in direct financial losses to 
American companies from the theft of trade secrets and proprietary 
information. A December 1995 report by the Computer Systems Policy 
Project, comprised of the CEO's from 13 major computer companies, 
estimates that financial losses in 1995 from breaches of computer 
security systems ranged from $2 billion to $4 billion. The report 
predicts that these numbers could rise in the year 2000 to $40 to $80 
billion worldwide. The estimated amount of these losses is staggering.

  The NII Protection Act would extend the protection already given to 
the computerized information of financial institutions and consumer 
reporting agencies, to computerized information held on computers used 
in interstate or foreign commerce on communications, if the conduct 
involved interstate or foreign communications. The provision is 
designed to protect against the interstate or foreign theft of 
information by computer.
  Computer hackers have accessed sensitive Government data regarding 
Operation Desert Storm, penetrated NASA computers, and broken into 
Federal courthouse computer systems containing confidential records. 
These outside hackers are subject to criminal prosecution under section 
1030(a)(3) of the computer fraud and abuse statute. Yet, this statute 
contains no prohibition against malicious insiders: Those government 
employees who abuse their computer access privileges by snooping 
through confidential tax returns, or selling confidential criminal 
history information from the National Crime Information Center [NCIC]. 
The NCIC is currently the Nation's most extensive computerized criminal 
justice information system, containing criminal history information, 
files on wanted persons, and information on stolen vehicles and missing 
persons.
  I am very concerned about continuing reports of unauthorized access 
to highly personal and sensitive Government information about 
individual Americans, such as NCIC data. For example, a ``Dear Abby'' 
column that appeared on June 20, 1996 in newspapers across the country 
carried a letter by a woman who claimed her in-laws ``ran her name 
through the FBI computer'' and, apparently, used access to the NCIC for 
personal purposes.
  This published complaint comes on the heels of a General Accounting 
Office [GAO] report presented on July 28, 1993, before the House 
Government Operations Committee, Subcommittee on Information, Justice, 
Agriculture, and Transportation, on the abuse of NCIC information. 
Following an investigation, GAO determined that NCIC information had 
been misused by ``insiders''--individuals with authorized access--some 
of whom had sold NCIC information to outsiders and determined whether 
friends and relatives had criminal records. The GAO found that some of 
the misuse jeopardized the safety of citizens and potentially 
jeopardized law enforcement personnel. Yet, no federal or state laws 
are specifically directed at NCIC misuse and most abusers of NCIC were 
not criminally prosecuted. GAO concluded that Congress should enact 
legislation with strong criminal sanctions for the misuse of NCIC data.
  This bill would criminalize these activities by amending the privacy 
protection provision in section 1030(a)(2) and extending its coverage 
to Federal Government computers. If the information obtained is of 
minimal value, the penalty is only a misdemeanor. If, on the other 
hand, the offense is committed for purposes of commercial advantage or 
private financial gain, for the purpose of committing any criminal or 
tortious act in violation of the Constitution or laws of the United 
States or of any State, or if the value of the information obtained 
exceeds $5,000, the penalty is a felony.
  The current statute, in section 1030(a)(5), protects computers and 
computer systems from damage caused by either outside hackers or 
malicious insiders ``through means of a computer used in interstate 
commerce or communications.'' It does not, however, expressly prohibit 
the transmission of harmful computer viruses or programs from abroad, 
even though, a criminal armed with a modem and a computer can wreak 
havoc on computers located in the United States from virtually anywhere 
in the world. This is a significant challenge in fighting cybercrime: 
there are no borders or passport checkpoints in cyberspace. 
Communications flow seamlessly through cyberspace across datelines and 
the reach of local law enforcement.
  Indeed, we have seen a number of examples of computer crimes directed 
from abroad, including the 1994 intrusion into the Rome Laboratory at 
Griffess Air Force Base in New York from the United Kingdom and the 
1996 intrusion into Harvard University's computers from Buenos Aires, 
Argentina.
  Additionally, the statute falls short of protecting our Government 
and financial institution computers from intrusive codes, such as 
computer ``viruses'' or ``worms.'' Generally, hacker intrusions that 
inject ``worms'' or ``viruses'' into a Government or financial 
institution computer system, which is not used in interstate 
communications, are not Federal offenses. The legislation would change 
that limitation and extend Federal protection from intentionally 
damaging viruses to Government and financial institution computers, 
even if they are not used in interstate communications.
  The NII Protection Act would close these loopholes. Under the 
legislation, outside hackers--including those using foreign 
communications--and malicious insiders face criminal liability 

[[Page S12216]]

for intentionally damaging a computer. Outside hackers who break into a 
computer could also be punished for any reckless or other damage they 
cause by their trespass.
  The current statute protects against computer abuses that cause 
computer ``damage,'' a term that is defined to require either 
significant financial losses or potential impact on medical treatment. 
Yet, the NII and other computer systems are used for access to critical 
services such as emergency response systems, air traffic control, and 
the electrical power systems. These infrastructures are heavily 
dependent on computers. A computer attack that damages those computers 
could have significant repercussions for our public safety and our 
national security. The definition of ``damage'' in the Computer Fraud 
and Abuse statute should be sufficiently broad to encompass these types 
of harm against which people should be protected. The NII Protection 
Act addresses this concern and broadens the definition of ``damage'' to 
include causing physical injury to any person and threatening the 
public health or safety.

  Finally, this legislation address a new and emerging problem of 
computer-age blackmail. This is a high-technology variation on old 
fashioned extortion. One case has been brought to my attention in which 
a person threatened to crash a computer system unless he was given free 
access to the system and an account. One can imagine situations in 
which hackers penetrate a system, encrypt a database and then demand 
money for the decoding key. This new provision would ensure law 
enforcement's ability to prosecute modern-day blackmailers, who 
threaten to harm or shut down computer networks unless their extortion 
demands are met.
  Confronting cybercrime with up-to-date criminal laws, coupled with 
tough law enforcement, are critical for safeguarding the privacy, 
confidentiality, and reliability of our critical computer systems and 
networks. I commend the Attorney General and the prosecutors within the 
Department of Justice who have worked diligently on this legislation 
and for their continuing efforts to address this critical area of our 
criminal law.
  In sum, the NII Protection Act will provide much needed protection 
for our Nation's critical information infrastructure by penalizing 
those who abuse computers to damage computer networks, steal classified 
and valuable computer information, and commit other crimes on-line.
  Mr. NICKLES. Mr. President, I ask unanimous consent that the Senate 
concur in the amendment of the House.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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