[Congressional Record Volume 143, Number 89 (Monday, June 23, 1997)]
[House]
[Pages H4214-H4216]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     REPORT ON THE ACTIVITIES OF THE PERMANENT SELECT COMMITTEE ON 
                 INTELLIGENCE DURING THE 104TH CONGRESS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Florida [Mr. Goss] is recognized for 5 minutes.
  Mr. GOSS. Mr. Speaker, I am pleased to transmit herewith, pursuant to 
clause 1(d) of rule XI of the Rules of the House of Representatives, a 
report on the activities of the Permanent Select Committee on 
Intelligence during the 104th Congress.

                                 Report

       This report covers the activities of the House Permanent 
     Select Committee on Intelligence during the One Hundred 
     Fourth Congress. Larry Combest (Republican, Texas) served as 
     Chairman; Norman D. Dicks (Democrat, Washington) served as 
     Ranking Democratic Member.
       In carrying out its mandate from the House regarding 
     oversight of U.S. intelligence and intelligence-related 
     activities, the Committee created two subcommittees:


  Subcommittee on Human Intelligence, Analysis and Counterintelligence

       Jerry Lewis (Republican, California), Chairman
       C.W. Bill Young (Republican, Florida)
       Porter J. Goss (Republican, Florida)
       Bud Shuster (Republican, Pennsylvania)
       Bill McCollum (Republican, Florida)
       Michael N. Castle (Republican, Delaware)
       Ronald D. Coleman (Democrat, Texas)
       Bill Richardson (Democrat, New Mexico)
       Julian C. Dixon (Democrat, California)
       David E. Skaggs (Democrat, Colorado)


          Subcommittee on Technical and Tactical Intelligence

       Robert K. Dornan (Republican, California), Chairman
       James V. Hansen (Republican, Utah)
       Jerry Lewis (Republican, California)
       Bud Shuster (Republican, Pennsylvania)
       Bill McCollum (Republican, Florida)
       Michael N. Castle (Republican, Delaware)
       Nancy Pelosi (Democrat, California)
       Norman D. Dicks (Democrat, Washington)
       Robert G. Torricelli (Democrat, New Jersey)
       David E. Skaggs (Democrat, Colorado)

       The stated purpose of H. Res. 658 of the 95th Congress, 
     which created the House Permanent Select Committee on 
     Intelligence, was to establish a committee ``to oversee and 
     make continuing studies of the intelligence and intelligence-
     related activities and programs of the United States 
     Government and to submit to the House appropriate proposals 
     for legislation and report to the House concerning such 
     intelligence and intelligence-related activities and 
     programs.''
       H.Res. 658 also indicated that the Committee ``shall make 
     every effort to assure that the appropriate departments and 
     agencies of the United States provide informed and timely 
     intelligence necessary for the executive and legislative 
     branches to make sound decisions affecting the security and 
     vital interests of the Nation. It is further the purpose of 
     this resolution to provide vigilant legislative oversight 
     over the intelligence and intelligence-related activities of 
     the United States to assure that such activities are in 
     conformity with the Constitution and laws of the United 
     States.''


                                 report

                       scope of committee review

       U.S. intelligence and intelligence-related activities under 
     the jurisdiction of the Committee include the National 
     Foreign Intelligence Program (NFIP), the Joint Military 
     Intelligence Program (JMIP) and the Department of Defense 
     Tactical Intelligence and Related Activities (TIARA).
       The National Foreign Intelligence Program consists of 
     activities in the following departments, agencies or other 
     intelligence elements of the government: (1) the Central 
     Intelligence Agency (CIA); (2) the Department of Defense; (3) 
     the Defense Intelligence Agency (DIA); (4) the National 
     Security Agency (NSA); (5) the National Reconnaissance Office 
     (NRO); (6) the Departments of the Army, Navy and Air Force; 
     (7) the Department of State; (8) the Department of Treasury; 
     (9) the Department of Energy; (10) the Federal Bureau of 
     Investigation (FBI); (11) the Drug Enforcement 
     Administration; and (12) the National Imagery and Mapping 
     Agency (NIMA).
       The Joint Military Intelligence Program (JMIP) was 
     established in 1995 to provide integrated program management 
     of defense intelligence elements that support defense-wide or 
     theater-level consumers. Included within JMIP are 
     aggregations created for management efficiency and 
     characterized by similarity, either in intelligence 
     discipline (for example, Signals Intelligence, Imagery 
     Intelligence) or function (for example, satellite support or 
     aerial reconnaissance). The programs comprising JMIP also 
     fall within the jurisdiction of the National Security 
     Committee.
       The Department of Defense Tactical Intelligence and Related 
     Activities (TIARA) are a diverse array of reconnaissance and 
     target acquisition programs that are a functional part of the 
     basic military force structure and provide direct information 
     support to military operations. TIARA, as defined by the 
     Joint Chiefs of Staff and the Secretary of Defense, include 
     those military intelligence activities outside the defense 
     intelligence program that respond to requirements of military 
     commanders for operational support information as well as to 
     national command, control, and intelligence requirements. The 
     programs comprising TIARA also fall within the jurisdiction 
     of the National Security Committee.


     intelligence authorization acts for fiscal years 1996 and 1997

       During the 104th Congress, the Committee authorized funding 
     and personnel levels for fiscal years 1996 and 1997. This 
     activity was carried out at the full Committee level, rather 
     than through a separate subcommittee, as had been the 
     practice in past years.
       The Committee conducted detailed and extensive reviews of 
     the President's fiscal year 1996 and fiscal year 1997 budget 
     requests for intelligence and intelligence-related 
     activities. These reviews included substantive and 
     programmatic hearings member briefings and numerous staff 
     briefings. The Committee conducted hearings organized across 
     functional lines within the Intelligence Community rather 
     than by agency. This permitted the Committee to take a 
     broader view of each of the issues and analyze how the 
     various intelligence functions relate to one another.
       Testimony on the President's budget submission was taken 
     from the Director of Central Intelligence; the Assistant 
     Secretary of Defense for Command, Control, Communications and 
     Intelligence (CI); the Directors of the DIA, NSA and the FBI; 
     and major intelligence program managers.
       The Committee began its review of these budget submissions 
     with the view that the Committee's recommended authorization 
     levels for the past several years had been driven to some 
     degree by political considerations as to an ``acceptable'' 
     intelligence budget level. For the fiscal years 1996-1997, 
     the Committee emphasized the future needs and requirements of 
     the Intelligence Community, believing firmly that the U.S. 
     must start building now for the Intelligence Community we 
     will need in the 21st century.
       Four themes were central to the Committee's budget 
     deliberations: (1) evaluating each budget line solely on the 
     merits of that program; (2) eschewing the practice of 
     establishing an arbitrary budget ceiling and then forcing 
     program trade-offs to remain within the ceiling; (3) giving 
     increased emphasis to ``downstream'' activities (the 
     processing, exploitation and dissemination of intelligence 
     data and analysis) in order to create a better balance 
     between these activities and collection; and (4) thinking 
     about longer term intelligence priorities.
       As a result of these themes and its detailed reviews, the 
     Committee recommended very modest increases for both fiscal 
     years in order to reverse the decline of past years and to 
     create some stability in which intelligence program managers 
     could make necessary and appropriate plans for the future.


                       areas of special interest

       The following issues were of special interest to the 
     Committee during the 104th Congress:
     IC21: The Intelligence community in the 21st century
       IC21 was a major focus of the Committee's activities during 
     the 104th Congress--a review of the roles, functions, 
     missions and capabilities of the Intelligence Community with 
     an emphasis on how well suited these were to likely national 
     security concerns in the 21st century. IC21 started from the 
     premise that the United States continues to need a strong, 
     highly capable and increasingly flexible Intelligence 
     Community and

[[Page H4215]]

     that this need has not diminished with the end of the Cold 
     War. IC21 emphasized opportunity--a propitious time for us to 
     undertake such a review and to implement recommended changes, 
     not reform. All facets of the Intelligence Community were 
     subject to scrutiny; there were no preconceptions as to the 
     ``right answer'' to this study.
       The IC21 effort was buttressed by a significant 
     intellectual underpinning. Over 40 current and former 
     national security officials, academics and intelligence 
     veterans were queried in order to shape the initial inquiry. 
     It was decided that a functional approach (requirements; the 
     management of resources, collection, production; systems 
     development, the various collection disciplines; analysis; 
     infrastructure; evaluation) to intelligence was preferable to 
     an agency-by-agency review. The committee believed that an 
     agency-by-agency review would more likely lead to either a 
     confirmation or rejection of the status quo without providing 
     a basis for projecting future intelligence needs and how best 
     to meet them.
       IC21 was, to the fullest extent possible, an open and 
     public process. The Committee held seven open hearings and 
     one closed hearing that has since been declassified. 
     Witnesses included the Director of Central Intelligence (DCI) 
     and six of his eight predecessors, representing a wealth of 
     professional experience; experts in future technologies; and 
     former senior policy and intelligence officials. The 
     Committee also drew upon the extensive work that had been 
     done for the fiscal year 1996 and 1997 intelligence budgets. 
     Committee staff also conducted dozens of interviews and held 
     several staff panels with other intelligence experts.
       Majority staff used this functional approach as a template 
     for 14 staff studies, which were published in April 1996. The 
     IC21 staff studies included 87 findings and 105 
     recommendations. Chief among them was the need for a more 
     ``corporate'' Intelligence Community, i.e., an Intelligence 
     Community in which all components understand that they are 
     part of a larger coherent process aiming at a single goal: 
     the delivery of timely intelligence to policy makers at 
     various levels.
       The staff studies also identified continued shortcomings in 
     and recommended strengthening the authorities (versus 
     responsibilities) of the DCL, particularly in the areas of 
     budget and personnel, where individual program managers often 
     appear to have greater independence. The study also 
     recommended designating the Director, DIA as the Director of 
     Military Intelligence (DMI) and supporting him with a DMI 
     Staff, in order to improve corporate thinking in that major 
     part of the Intelligence Community.
       Among the more controversial proposals were several in the 
     area of intelligence collection, including the creation of a 
     Technical Collection Agency (TCA), combining signals 
     intelligence imagery intelligence and measurement and 
     signatures intelligence in a single agency so as to break 
     down the ``stovepipes'' in which these collection disciplines 
     are often bound and the creation of a Technology Development 
     Office (TDO), to be responsible for all research and 
     development of collection-related technology. IC21 also 
     recommended that the Clandestine Service be organizationally 
     separated from the CIA, giving the DCI direct authority over 
     that service.
       The concept of a TCA was in contrast to the proposal made 
     by the DCI to create a National Imagery and Mapping Agency 
     (NIMA) that would combine all imagery assets, including 
     collection, processing, exploitation and analysis in a single 
     Defense Department combat support agency. A majority of the 
     Committee did not support NIMA, citing concerns about the 
     ability of a Defense combat support agency to serve all 
     national customers. Similarly, concerns about the possibility 
     of tactical intelligence needs overwhelming competing 
     national needs for imagery was a key consideration in the 
     Committee's opposition to the creation of NIMA. There were 
     also concerns about putting imagery analysts within the 
     collection agency and the NIMA would reinforce the concept of 
     separate and competing collection ``stovepipes,'' rather than 
     a more corporate and cooperative system. Despite the 
     opposition of a majority of this Committee, NIMA was created 
     as part of the FY1997 Defense Authorization Act.
       As reported by the Committee in June 1996, the IC21 bill 
     advanced more modest changes in six main areas: (1) improving 
     the support structure for the DCI to carry out his Community-
     wide responsibilities, including a second Deputy DCI for 
     Community Management and an enhanced Community Management 
     Staff; (2) limited increases in the SCI's authority to 
     transfer personnel and money within the National Foreign 
     Intelligence Program; (3) establishing the Director, DIA as 
     the DMI, with a DMI Staff; (4) improving executive guidance 
     and direction, creating two committees on the National 
     Security Council, Foreign Intelligence and Transitional 
     Threats; (5) creating a Civilian Intelligence Personnel 
     Management System in the Defense Department; and (6) 
     authorizing the DCI and Secretary of Defense to undertake a 
     study on the future of intelligence collection, including the 
     concepts put forward in the IC21 study.
       The IC21 staff study also recommended changes in the House 
     rules for this Committee. Specifically, it recommended that 
     the system of rotating membership on this Committee be ended 
     and that membership be made permanent, although still 
     selected by the Speaker and the Minority Leader.
       The Senate Select Committee on Intelligence incorporated 
     its own proposals for ``intelligence community reform and 
     renewal'' in its version of the FY1997 Intelligence 
     Authorization Act. The conference over these bills then 
     became the venue in which final decisions ere made about IC21 
     issues and alternative Senate proposals.
       H.R. 3259 enacted the following provisions related to 
     Intelligence Community management and structure:
       Created National Security Council Committees on Foreign 
     Intelligence and on Transnational Threats;
       Created a Deputy DCI for Community Management, subject to 
     confirmation by the Senate;
       Under this new Deputy DCI, created three Assistant DCIs: 
     Collection; Analysis & Production; Administration. Each will 
     be subject to confirmation by the Senate;
       Strengthened the evaluation function of the National 
     Intelligence Council;
       Enhanced the DCI's authority over Intelligence Community 
     budget and personnel;
       Made the General Counsel of the CIA a statutory position, 
     subject to Senate confirmation;
       Required the concurrence of the DCI in the appointment of 
     the Directors of the National Security Agency, the National 
     Reconnaissance Office and the National Imagery & Mapping 
     Agency; and
       Required consultation with the DCI in the appointment of 
     the Director of the Defense Intelligence Agency; the 
     Assistant Secretary of State for Intelligence & Research; and 
     the Assistant Director of the FBI for the National Security 
     Division.
       The main thrust of these provisions is to enhance of the 
     DCI's ability to carry out his Community-wide 
     responsibilities either directly or through the enhanced 
     Community Management function.
     The National Reconnaissance Program
       In perhaps no area did the Committee have greater success 
     in meeting its goal of shaping a 21st century Intelligence 
     Community than in the National Reconnaissance Program (NRP), 
     which is responsible for the development, launch and 
     operation of spaceborne collection systems.
       Beginning with its work on the fiscal year 1996 
     intelligence budget, the Committee raised serious questions 
     about current management practices of the NRO and the future 
     of collection systems. Although the Committee approved 99% of 
     the funds requested for the NRP in that fiscal year, these 
     funds were significantly redistributed, a reordering that was 
     not without controversy on the Committee.
       The Committee and, ultimately, Congress also mandated in 
     the fiscal year 1996 Authorization Act that the DCI create a 
     panel to assess the feasibility of moving to smaller 
     satellites in the future. In asking for this report the 
     Committee was not advocating an immediate shift to such 
     satellites. Rather, the Committee believed the time was ripe 
     to look at the feasibility of such a step in the future, with 
     the clear understanding that if a panel of experts advised 
     against it, then it would not be an option. Nonetheless, the 
     Committee was gratified when the panel reported to the DCI in 
     May 1996 ``that now is an appropriate time to make a 
     qualitative change in the systems architecture of the 
     nation's reconnaissance assets.'' The panel stated that 
     capabilities currently exist to build an imagery satellite 
     75% lighter but with 50% more capacity than the currently 
     planned systems. The Committee agrees with the DCI that much 
     more work and study need to be done on the transition to such 
     systems. However, this change offers the prospects of 
     satellite systems that will be more flexible and less 
     expensive in terms of launch costs--both of which will be 
     important contributors to an improved Intelligence Community.
     Guatemala
       The Committee undertook an extensive review of allegations 
     concerning CIA involvement in certain activities in 
     Guatemala, especially the murder of U.S. citizen Michael 
     DeVine and the disappearance of Efrain Bamaca, a Guatemalan 
     guerrilla. The Committee also investigated allegations of the 
     destruction of documents by U.S. Army officers purported to 
     prove U.S. human rights violations in Guatemala, and a 
     possible circumvention of U.S. laws relating to the cut-off 
     of assistance to Guatemala via intelligence liaison 
     relationships. Many of these allegations were raised publicly 
     by Representative Torricelli.
       A draft report of the results of the investigation was 
     prepared by Committee staff but not considered by the 
     Committee during the 104th Congress. The draft report 
     concluded that there was no evidence to support these 
     allegations. There was no evidence that U.S. Government 
     personnel played any role in either the death of DeVine or 
     the disappearance of Bamaca, or that the U.S. Government 
     concealed any action that might have constituted a violation 
     of U.S. law. Further, the allegations concerning document 
     destruction by two Army officers appear to have been 
     fabricated by the person who provided them to Representative 
     Torricelli. This fabrication remains under investigation by 
     the U.S. Attorney in Baltimore, Maryland. The draft report 
     also concluded that the U.S. did not use intelligence 
     channels to unlawfully compensate Guatemala for the cutoff of 
     overt assistance.
       Finally, although there was no evidence that any U.S. 
     government employee knowingly misled Congress's intelligence 
     oversight committees, the draft report concluded

[[Page H4216]]

     that the CIA failed in its obligation under 50 U.S.C. 413 to 
     keep those committees ``fully and currently informed.'' The 
     President's Intelligence Oversight Board which also conducted 
     a review of these activities, made note of this failure in 
     its report.
       The draft report will be reviewed and released, as 
     appropriate, at the beginning of the 105th Congress.
     Haiti
       The Committee undertook an investigation as to whether 
     intelligence collection and reporting on Haiti was being 
     politicized by policy officials. The Committee heard 
     testimony from a variety of witnesses, including 
     representatives of CIA, DIA and the State Department. A 
     report has not been prepared pending further investigation 
     and the completion of an inquiry on Haiti by the Inspector 
     General of the Department of State.
     Iran/Bosnia
       In April 1996, press articles asserted that the Clinton 
     administration had not objected to the shipment of arms from 
     Iran into Bosnia. Specifically, the U.S. ambassador, when 
     asked by Croatian government officials for the U.S. position 
     regarding such shipments, was ordered by senior State 
     Department and NSC officials to respond to the Crotians that 
     he had ``no instructions.'' The Committee voted to 
     investigate ``those aspects of the transfer of arms to Bosnia 
     that fall within the committee's responsibilities to conduct 
     oversight of the intelligence activities of the United States 
     Government.'' Specifically, the Committee's investigation 
     focused on the following issues:
       How was the ``no instructions'' policy implemented?
       How did the State Department, National Security Council 
     (NSC) and CIA react to this policy?
       What effect did the CIA's lack of understanding of the 
     policy have on events in the region and on relations within 
     the embassy itself?
       Did the implementation of this policy constitute a covert 
     action?
       The Committee will review the findings of the investigation 
     and issue a report in the 105th Congress.
     The Ames espionage case
       The Committee continued to work on issues that arose as a 
     result of the espionage of Aldrich Ames. One issue, 
     identified in the Committee's 1994 report on this case, was 
     the failure of the CIA to keep the oversight committees fully 
     and currently informed of the 1985-86 losses of assets and of 
     important developments in its efforts to determine the cause 
     of those losses. This failure was made more egregious by the 
     fact that, in several instances prior to Ames' arrest, 
     members of the Committee had asked pointed questions about 
     ongoing counterintelligence problems.
       Acting DCI Admiral William Studeman stated that the CIA had 
     failed to meet its obligation under Section 502 of the 
     National Security Act, requiring that Congress be informed of 
     all intelligence activities including ``any significant 
     intelligence failure.'' The Committee then investigated 
     whether this failure to notify was intentional. The 
     Committee, as a result of the inquiry, did not find that any 
     senior CIA official ever directed the withholding of 
     information from Congress. The investigation did reveal, 
     however, that CIA officials did not consider bringing the 
     issue of espionage problems to the attention of Congress. Not 
     all CIA officials understood the requirement of Section 502. 
     Congress does not have to ``ask the right questions'' in 
     order for information to be conveyed the Intelligence 
     Community must be forthcoming.
       A second issue relating to Ames' espionage concerned 
     whether intelligence reporting that may have come from 
     controlled Soviet sources influenced U.S. decision making. 
     The Committee's investigation revealed management problems in 
     the dissemination of certain reports and the degree to which 
     these were conveyed to policy makers with accurate and proper 
     caveats. However, neither this Committee, the Defense 
     Department nor the CIA were able to discover any U.S. 
     decisions that were influenced by controlled-source reports. 
     Indeed, given the inherent complexity of Defense acquisition 
     decisions, it would be highly unusual--if not impossible--for 
     this process to be influenced solely by such reports alone, 
     whether accurate or controlled.
       Finally, the Committee asked the Inspector General of the 
     Department of Justice to conduct a review of the FBI's 
     performance in the Ames case. The Department of Justice 
     agreed to do this in February 1995. However, by the end of 
     the 104th Congress the Justice IG had not yet finalized what 
     has been described as a voluminous and weighty report that 
     the Committee expects to be of great value in its review of 
     the Nicholson and Pitts espionage cases.
     CIA drug trafficking investigation
       In August 1996, the San Jose Mercury News published a 
     series of articles regarding the introduction, financing, and 
     distribution of crack cocaine into communities of Los 
     Angeles. The articles alleged that one of the drug 
     trafficking rings responsible for introducing crack cocaine 
     to Los Angeles was operated by a Nicaraguan who used some of 
     his drug profits to provide lethal and non-lethal assistance 
     to the Contras. Furthermore the Mercury News articles implied 
     that the CIA either backed, or at least condoned, the drug 
     trafficking activity. In September 1996, the Committee began 
     a formal investigation into these allegations. Separate 
     investigations were also begun by the Inspectors General (IG) 
     of the Department of Justice and the CIA.
       The scope of the Committee's investigation focuses on the 
     following questions:
       Were any CIA operatives/assets involved in the supply or 
     sale of drugs in the Los Angeles area?
       If CIA operatives or assets were involved, did the CIA have 
     knowledge of the supply or sale of drugs in the Los Angeles 
     area by anyone associated with the Agency?
       Did any other U.S. Government agency or employee within the 
     Intelligence Community have knowledge of the supply or sale 
     of drugs in the Los Angeles area between 1979-1969?
       Were any CIA officers involved in the supply or sales of 
     drugs in the Los Angeles area since 1979?
       Did the Nicaraguan Contras receive any financial support, 
     through the sale of drugs in the United States, during the 
     period when the CIA was supporting the Contra effort? If so, 
     were any CIA officials aware of this activity?
       What is the validity of the allegations in the San Jose 
     Mercury News?
       The Committee, in keeping with past practice, also stated 
     that it would await the completion of the two IG 
     investigations and review the results as part of the 
     Committee's inquiry into this matter before issuing a report.
       Since the beginning of its investigation, the Committee has 
     engaged in many activities to gather information, including: 
     tasking the Congressional Research Service for background 
     data related to the Iran-Contra investigations; taking the 
     IGs of the Department of Justice and CIA to provide access to 
     all material that they compile in the course of their 
     investigations conducting several interviews in Washington, 
     Los Angeles, and attending and participating in two ``town 
     hall'' meetings in South Central Los Angeles.
       The Committee's investigation will continue into the 105th 
     Congress, with much more data to be reviewed and interviews 
     to be conducted. For example, the CIA IG has identified over 
     6000 documents available for Committee review. The Committee 
     also anticipates additional travel related to this 
     investigation, including additional trips to California and 
     Nicaragua. As previously mentioned, the Committee will not 
     complete its investigation until it has had the opportunity 
     to review the results of the two separate IG investigations 
     that will likely not be completed until the end of 1997.

                          ____________________