[Senate Report 104-258]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 388
104th Congress                                                   Report
                                 SENATE

 2d Session                                                     104-258
_______________________________________________________________________


 
 AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 1997 FOR THE INTELLIGENCE 
ACTIVITIES OF THE UNITED STATES GOVERNMENT AND THE CENTRAL INTELLIGENCE 
     AGENCY RETIREMENT AND DISABILITY SYSTEM AND FOR OTHER PURPOSES

                                _______


                 April 30, 1996.--Ordered to be printed

_______________________________________________________________________


    Mr. Specter, from the Committee on Intelligence, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 1718]

    The Select Committee on Intelligence, having considered the 
original bill (S. 1718), which authorizes appropriations for 
fiscal year 1997 for the intelligence activities and programs 
of the United States Government and the Central Intelligence 
Agency Retirement and Disability System, and which accomplishes 
other purposes, reports favorably thereon and recommends that 
the bill do pass.

                          purpose of the bill

    This bill would:
          (1) Authorize appropriations for fiscal year 1997 for 
        (a) the intelligence activities and programs of the 
        United States Government; (b) the Central Intelligence 
        Agency Retirement and Disability System; and (c) the 
        Community Management Account of the Director of Central 
        Intelligence;
          (2) Authorize the personnel ceilings as of September 
        30, 1997, for the intelligence activities of the United 
        States and for the Community Management Account of the 
        Director of Central Intelligence;
          (3) Authorize the Director of Central Intelligence, 
        with Office of Management and Budget approval, to 
        exceed the personnel ceilings by up to two percent;
          (4) Extend for two additional years the President's 
        authority to delay the imposition of sanctions when 
        necessary to protect 
        an intelligence source or method or an ongoing criminal 
        investigation;
          (5) Direct the DCI to develop regulations prohibiting 
        an Intelligence Community employee from working for a 
        foreign government for five years after retirement;
          (6) Clarify FBI's authority to access local and long 
        distance telephone billing records and expand the 
        application of the civil remedy provisions that apply 
        to violations of the access provision;
          (7) Criminalize theft of economic proprietary 
        information on behalf of, or with the intent to 
        benefit, a foreign government or its agent;
          (8) Provide for renewal and reform of the 
        Intelligence Community; and
          (9) Establish a Commission to review the organization 
        of the U.S. Government to combat proliferation and 
        recommend improvements.

           the classified supplement to the committee report

    The classified nature of United States intelligence 
activities prevents the Committee from disclosing the details 
of its budgetary recommendations in this Report.
    The Committee has prepared a classified supplement to this 
Report, which contains (a) the classified annex to this Report 
and (b) the classified schedule of authorizations which is 
incorporated by reference in the Act and has the same legal 
status as a public law. The classified annex to this report 
explains the full scope and intent of the Committee's actions 
as set forth in the classified schedule of authorizations. The 
classified annex has the same status as any Senate Report, and 
the Committee fully expects the Intelligence Community to 
comply with the limitations, guidelines, directions, and 
recommendations contained therein.
    This classified supplement to the Committee Report is 
available for review by any Member of the Senate, subject to 
the provisions of Senate Resolution 400 of the 94th Congress.
    The classified supplement is also made available to 
affected departments and agencies within the Intelligence 
Community.

              scope of committee program and budget review

    The Committee conducted a detailed review of the 
Administration's three major intelligence budget requests for 
fiscal year 1997: the National Foreign Intelligence Program 
(NFIP) of the Director of Central Intelligence; the Joint 
Military Intelligence Program (JMIP) of the Deputy Secretary of 
Defense; and the Tactical Intelligence and Related Activities 
(TIARA) of the Military Services. The Committee's review 
included a series of briefings and hearings with senior 
intelligence officials, numerous staff briefings, review of 
budget justification materials and numerous written responses 
provided by the Intelligence Community to specific questions 
posed by the Committee.
    In addition to its annual review of the Administration's 
budget request, the Committee performs continuing oversight of 
various intelligence activities and programs, to include the 
conduct of audits and reviews by the Committee's audit staff. 
These inquiries frequently lead to actions initiated by the 
Committee with respect to the budget of the activity or program 
concerned.
    As a result of a new Memorandum of Agreement between the 
leadership of the Senate Intelligence and Armed Services 
Committees, the Committee is including its recommendations on 
both JMIP and TIARA in its public report and classified annex. 
The SSCI has agreed that JMIP and TIARA issues will continue to 
be authorized in the defense authorization bill. SASC has 
agreed to involve SSCI staff in staff-level defense 
authorization conference meetings and to provide the Chairman 
and Vice Chairman of the SSCI the opportunity to consult with 
the SASC Chairman and Ranking Member before a JMIP or TIARA 
issue is finally closed out in conference in a manner with 
which they disagree. The Committee looks forward to continuing 
its productive relationship with the SASC on all issues of 
mutual concern.

              committee program and budget recommendations

    Most of the Committee's specific recommendations related to 
the Administration's budget request for intelligence and 
intelligence-related activities are classified. This includes 
the amount of the total fiscal year 1997 budget request, as 
well as any comprehensive treatment of program elements. 
However the Committee is committed, consistent with security 
considerations, to making its view regarding its concerns and 
priorities for intelligence public to the extent possible. 
Further recommendations, as well as classified details on these 
unclassified recommendations, are provided in the classified 
annex accompanying this bill.

                 national foreign intelligence program

Personnel and funding resources for national intelligence

    Since the beginning of the 1990s, the Committee has been at 
the forefront of actions to reduce and reorient intelligence 
funds and personnel to reflect new post-Cold War missions and 
priories.
    In fiscal year 1991, the Committee initiated the policy 
which became a congressional mandate to reduce the number of 
national intelligence personnel by 17.5 percent by fiscal year 
1999. The Secretary of Defense and the Director of Central 
Intelligence later agreed to extend downsizing by 2 percent per 
year for three years for a new objective of 22.5 percent by 
2002. All of the intelligence agencies are making progress in 
meeting this objective. The Intelligence Community is 
increasingly turning its attention to ``right-sizing'' its 
workforce, to ensure that it can attract, train, and retain 
personnel with the appropriate skills mix for the future.
    The Committee has also played a leading role in reducing 
and redirecting funding for national intelligence. Since 1990, 
the Committee has cut each successive Administration request, 
so that Intelligence Community spending has declined by 19 
percent in real terms compared to the beginning of the decade. 
This year, the Committee is recommending a modest increase--
just over 1 percent--to the Administration's budget request for 
national intelligence.

Areas of continuing committee emphasis

    Last year, the Committee focused on enhancing intelligence 
capabilities in the high-priority areas of proliferation, 
terrorism, counter narcotics, and counterintelligence. The 
Intelligence Community sustained in fiscal year 1997 most of 
the fiscal year 1996 Congressional initiatives in these areas. 
The Committee applauds the Director of Central Intelligence 
(DCI) and the Intelligence Community for recognizing the need 
to reorder priorities within the NFIP in this way. The 
Committee also makes additional recommendations for increased 
resources in fiscal year 1997 for these programs and 
activities.
    Another major theme of the Committee's review of the fiscal 
year 1996 budget request was an apparent imbalance between 
funding of new collection capabilities and funding required to 
fully process, disseminate, and exploit collected information. 
The Committee is gratified to note that this theme was major 
focus of the Intelligence Community fiscal year 1997 program 
build and that the DCI sustained in fiscal year 1997 many of 
the fiscal year 1996 Congressional initiatives to enhance 
processing, dissemination, and exploitation capabilities. 
Further work is required in this area, but the DCI has made a 
significant commitment in this area that is acknowledged by the 
Committee.

Continuing review of NRO financial management

    Section 310 of S. 922 of the Intelligence Authorization Act 
for Fiscal Year 1996 contained provisions addressing the 
financial management of the National Reconnaissance Office 
(NRO). It restricted the amount of forward funding permitted to 
the NRO at the beginning of fiscal year 1997 and directed a 
joint review of the NRO's financial management practices by the 
Inspectors General of the Central Intelligence Agency and the 
Department of Defense. It also directed the President to report 
to Congress with a proposal to subject the budget of the 
Intelligence Community to greater oversight by the Executive 
branch.
    The Committee continues to review in detail the NRO's 
financial condition and its management practices, including 
convening two separate on-the-record briefings on this topic. 
Further, the Committee approved the reprogramming of $820 
million additional excess forward funding from the NRO to 
support Bosnia deployment. The Committee has also reviewed the 
President's report and approves the measures detailed therein 
to enhance Executive Branch oversight of the NRO. Finally, the 
Committee awaits the final report of the Inspectors General 
related to the NRO's organization, forward funding, and 
financial management practices. While much has been achieved, 
additional steps are required to restore the confidence of the 
Committee in NRO financial management practices.

Arms control monitoring

    The Committee has become increasingly disturbed over the 
apparent disarray in the Intelligence Community over funding 
for arms control monitoring capabilities. Some critical arms 
control monitoring capabilities are funded for one year only, 
raising the question of whether these systems will be available 
to support monitoring requirements for existing arms control 
treaties. Shortfalls exist in other critical areas as well, 
including exploitation and analysis of arms control 
intelligence. In light of this situation, the Committee 
requests that the DCI--in coordination with the Director of the 
Arms Control and Disarmament Agency--provide a comprehensive 
plan for upgrading U.S. arms control collection, processing, 
and analysis capabilities by fiscal year 1999 in order to fully 
meet the requirement to provide effective monitoring of 
treaties signed by the United States or near completion. This 
plan should be submitted to the intelligence oversight 
committees no later than March 1, 1997.

Quality of life issues

    The Intelligence Community is putting renewed emphasis on a 
wide variety of quality of life issues for intelligence 
personnel. The DCI has recently focused attention on the need 
for comprehensive personnel reform for both the CIA and the 
defense components of U.S. intelligence. Although the 
Administration had not finalized its reform proposals by the 
time the Committee marked up the fiscal year 1997 Intelligence 
Authorization Act, the Committee is committee to pursuing 
legislation and funding for such reforms, as required.
    Further, the Committee addressed current shortfalls in 
another quality of life area--intelligence facilities. The 
Committee annually reviews the facilities plans and 
requirements of indivdiual intelligence agencies and 
components--including requirements for new facilities or 
modifications to existing facilities--funded in the DCI's 
annual budget submission. Indeed, Section 602 of the 
Intelligence Authorization Act for Fiscal Year 1995 established 
very stringent requirements for congressional notification and 
approval of Intelligence Community construction and improvement 
projects. This year, the Committee is recommending several 
changes to the Fiscal Year 1997 NFIP budget request, based on 
information received in congressional budget justification 
books, hearings, and answers to Committee questions-for-the-
record. Specifically, the Committee has recommended that new 
facilities be constructed to house the Army's National Ground 
Intelligence Center (NGIC) and the Defense Intelligence 
Agency's Missile and Space Intelligence Center (MSIC). In both 
cases, intelligence personnel are subjected to inadequate 
working conditions, with considerable potential structural, 
health, fire, and safety hazards. The Committee believes that 
new facilities are required and has included recommendations to 
this effect in its markup.

                  joint military intelligence program

Tactical unmanned aerial vehicle ACTD

    A request for proposal has been released, for a single 
Tactical Unmanned Aerial Vehicle (TUAV) to replace the former 
Hunter and Maneuver program, and contract award is expected 
within one month. The restructuring of the program and the 
creation of an Advanced Concept Technology Demonstration (ACTD) 
has resulted in an excess of unexpended funds in fiscal year 
1995 and fiscal year 1996. The Committee is also concerned that 
the DARO will not be able to exclude the final year 1997 budget 
request for the TUAV of $64.0 million as planned. Therefore, 
the Committee recommends that the fiscal year 1997 budget 
request for TUAV be reduced by $12.8 million and encourages the 
Department to reprogram any remaining prior year funds within 
the Defense Airborne Reconnaissance Program (DARP).
    The Committee wants to reiterate its strong support for the 
TUAV program. At the same time, the Committee is concerned 
about the high degree of concurrency in the TUAV program. The 
Committee understands the difficulties in transitioning an ACTD 
into procurement but still believes that the ``fly before you 
buy'' strategy of an ACTD is the correct one.

Global Hawk sensor upgrades

    The DARP fiscal year 1997 budget request for the Global 
Hawk unmanned aerial vehicle program is $81.2 million. Within 
this budget amount, the Administration proposes to initiate a 
new payload capacity for Global Hawk. The Global Hawk has not 
yet achieved first flight and has not yet successfully 
demonstrated its primary sensor capability. Moreover, the 
Committee is not aware of any decision to move Global Hawk from 
an ACTD into production. Therefore, the Committee believes that 
it is premature to initiate any additional payload development 
and recommends a reduction to the Administration's fiscal year 
1997 budget request of $9.8 million for the Global Hawk sensor 
upgrade.

RC-135 Rivet Joint aircraft No. 16

    The RC-135 RIVET JOINT airborne reconnaissance fleet 
provides worldwide tactical intelligence support to theater 
users. Its primary mission is to detect, collect, analyze, and 
disseminate tactically significant information in support of 
theater warfighting needs. The intelligence information 
gathered by this platform support a broad spectrum of theater 
and national intelligence requirements.
    Since the Gulf War, the operational tempo for the Rivet 
Joint fleet has been extremely high. This high operational 
tempo has caused the regional CINC's to make expansion of the 
Rivet Joint fleet by two aircraft a top priority. The Committee 
is aware that the Deputy Secretary of Defense and the Director 
of Central Intelligence have jointly signed an Enhanced Defense 
Review Board (EDRB) decision memorandum instructing that two 
additional Rivet Joint aircraft be built. Rivet Joint No. 15 is 
included in the fiscal year 1997 budget request and Rivet Joint 
No. 16 is programmed for FY 1998. Because of the high priority 
assigned to additional Rivet Joint aircraft by the CINC's and 
the efficiencies that can be realized by acceleration of the 
program, the Committee recommends an additional $52.3 million 
to build Rivet Joint No. 16 in fiscal year 1997. By 
accelerating this procurement into fiscal year 1997, the 
Committee believes that the Air Force will realize 15 percent 
cost savings over fiscal year 1998 procurement due to 
efficiencies from material quantity purchases and mechanical 
fabrication.

Rivet Joint technology transfer

    The Committee understands that there is an Air Force 
requirement for long-range detection and tracking of missile 
launches and rapid transmission of precise launch site 
information in order to destroy the launch vehicles as well as 
provide impact point data to friendly forces. The Committee is 
interested in the possibility of transferring operationally 
proven Cobra Ball sensor technology to the RC-135 Rivet Joint 
fleet to satisfy this requirement. Therefore, the Committee 
requests that the Air Force prepare a report and provide it to 
the congressional defense and intelligence committees by August 
1, 1996, on the proposed technology transfer. The report should 
include an assessment of Service requirements for the Cobra 
Ball sensor on the Rivet Joint, Rivet Joint program impacts 
(cost, schedule, technical risk), and any infrastructure 
(processing, dissemination, exploitation) implications of such 
a modification to the Rivet Joint program.

U-2 upgrades

    The Committee is concerned with the apparent decision by 
the Defense Airborne Reconnaissance Office not to continue 
upgrading current airborne reconnaissance platforms. The 
Committee understands that the Department of Defense will 
shortly be proposing a reprogramming that will add funds for U-
2 sensor upgrades; a move the Committee supports. The Committee 
also provides an additional authorization of $25.0 million in 
fiscal year 1997 for two separate sensor upgrade programs for 
the U-2 fleet, details of which are contained in the classified 
annex accompanying this report.

Common data link

    The Common Data Link (CDL) program is an effort within the 
DARP to define and implement an interoperable command, control 
and communications capability for intelligence and 
reconnaissance assets, to include manned and unmanned systems. 
The Congress authorized and appropriated $48.0 million for CDL 
in fiscal year 1996. The fiscal year 1997 budget request for 
CDL is $29.5 million. Poor program execution in fiscal year 
1996 allows the Committee to recommend a reduction to the 
fiscal year 1997 budget request of $6.5 million.

National training simulator

    The request for the Defense Space Reconnaissance Program 
(DSRP) includes $10.0 million to begin development of a new 
national training simulator. Because the outyear funding for 
this initiative has not been programmed, and the Committee has 
not received any information to justify this effort, including 
total program cost and schedule, the Committee recommends that 
the request to initiate development of a new national simulator 
be denied at this time, and further recommends deletion of 
$10.0 million from the DSRP fiscal year 1997 budget request.

              tactical intelligence and related activities

Theater Rapid Response Intelligence package

    The Theater Rapid Response Intelligence Package (TRRIP) is 
a manportable system for use by the Army to collect and 
disseminate actionable information from deployed locations. 
TRRIP have been funded under the Foreign Counterintelligence 
Program (FCIP) for theater and echelon above corps units. No 
funds have been requested to provide TRRIP to tactical forces. 
The Committee recommends an addition of $6.5 million to 
purchase approximately 300 sets for tactical units, equipping 
Corps and Division level counterintelligence and human 
intelligence teams.

Navy JSTARS

    The Committee believes that there are sound reasons for the 
Navy to acquire the ability to receive, process, display, and 
disseminate data on moving targets from the Joint Stars system. 
The Navy is requesting the Congress to authorize and 
appropriate funds for a new class of ``arsenal'' ship, which 
would be equipped with hundreds of surface-to-surface missiles, 
such as Tomahawk and the Army TACMS, to attack targets ashore. 
For this ship to contribute to halting an invading force, it 
must be able to attack mobile targets and not just fixed 
installations. As both the Tomahawk and TACMS program offices 
attest, the sensor of primary importance to attacking distant 
moving targets is the moving target indicator (MTI) radar on 
Joint Stars.
    Therefore, the Committee recommends that $10.0 million be 
provided in fiscal year 1997 in research and development to 
integrate Joint Stars into key Navy systems. Of this amount, 
approximately $5.0 million is required to integrate the 
standard Link 16 data link used on Joint Stars into the Navy's 
Tactical Command System. Another $5.0 million would be used to 
incorporate appropriate Joint Stars MTI data processing and 
display software, including Joint Stars Link 16 message sets, 
into standard Navy computer systems and fighter aircraft.

P-3 intelligence support

    The budget request includes $17.6 million to augment 
forward deployed aircraft with non-developmental, commercial-
off-the-shelf, roll-on/roll-off SIGINT sensors. The Committee 
is concerned that the Navy has not developed an operational 
concept for this added capability and that these aircraft will 
not be interoperable with other SIGINT platforms. The Committee 
therefore recommends denial of the authorization request.

RC-135 re-engining

    Last year the Committee recommended an initiative to begin 
re-engining of the RC-135 specialty aircraft. While the Defense 
Department is currently executing the fiscal year 1996 program, 
no additional RC-135 re-engining funds were included in the 
President's fiscal year 1997 budget request. Therefore, the 
Committee recommends an additional $100.0 million in fiscal 
year 1997 to re-engine four additional RC-135 aircraft.

Pacer Coin

    Pacer Coin is a day/night, all-weather reconnaissance and 
surveillance system which provides critical intelligence 
support to theater and other commanders. The Committee 
recommends an increase of $1.4 million to make air drop 
modifications to the Pacer aircraft, giving it a dual-use role.
    The Pacer Coin mission is currently being transitioned to 
the Air National Guard, and the 152nd Air Wing in Reno, Nevada. 
The Nevada Air National Guard is also transitioning to an air 
drop mission, and is receiving additional C-130 aircraft 
dedicated to this mission. By making the Pacer Coin aircraft 
dual-use, the utilization and mission capability of these 
aircraft will be significantly broadened. This modification 
will enable the Pacer Coin aircraft to maintain a primary 
mission of air drop/transport, while also preserving the unique 
imagery capabilities of the Pacer Coin for use by theater and 
other commanders when needed.

Over-the-Horizon Backscatter Radar

    The OTAH-B radar was originally built in the late 1980's to 
provide long-range, wide-area, all altitude surveillance and 
tactical early warning of aircraft approaching North America to 
provide NORAD and the national command authority (NCA) with 
maximum warning/decision time. This system has been in warm 
storage since 1994 with limited operations in FY 1994. The 
system is not as capable technically as other U.S. radar 
systems, therefore, the Committee recommends termination of 
this program, and a reduction to the request of $5.7 million.

                renewal and reform of u.s. intelligence

    Title VII of the bill marks the culmination of many years 
of efforts by this Committee and the Congress to renew U.S. 
intelligence.\1\ Prompted by changes that had taken place in 
Eastern Europe, the Committee began in December 1990 a 
comprehensive review of the missions, functions, and 
organizational arrangements for the Intelligence Community. 
During the course of that review, the staff conducted nearly 
130 interviews with current and former government officials and 
the Committee held two hearings on the specific subject of 
intelligence reorganization. In addition, intelligence 
capabilities and reorganization were discussed extensively at 
the confirmation hearings of Robert Gates to be Director of 
Central Intelligence.
---------------------------------------------------------------------------
    \1\ In 1987, 1988 and 1989, hearings and legislation recognized the 
need to integrate the various intelligence entities into a more 
coherent, effective and efficient structure by creating a Director of 
National Intelligence with greater authority over the Intelligence 
Community.
---------------------------------------------------------------------------
    While this review was underway, two significant 
developments highlighted the need to reassess the Intelligence 
Community. The first of these was the U.S. involvement in the 
Persian Gulf war. During and after the conflict, the Committee 
received considerable testimony both in hearings and briefings 
with respect to the quality and timeliness of intelligence 
support. This testimony indicated serious problems in existing 
organizational structures, particularly with regard to the 
exploitation and dissemination of imagery and regarding 
consolidation of intelligence support under U.S. field 
commanders. The other major development during this time period 
was the collapse of Communist Party rule in the Soviet Union 
and the ascendancy of pro-democracy reform elements, signaling 
the end of the Cold War.
    In February, 1992, then-Committee Chairman David Boren 
introduced a comprehensive proposal for Intelligence Community 
reform and reorganization. The Committee held five public 
hearings and one closed hearing on this legislation, with a 
total of 14 witnesses. While most of this ambitious effort was 
not enacted, these efforts did result in the adoption, for the 
first time in law, of a comprehensive statement of the 
responsibilities and authorities of the agencies and officials 
of the U.S. Intelligence Community.
    Efforts to reform the Intelligence Community gained 
momentum again in 1994 in the wake of the Ames espionage case 
and the revelation that the NRO had built an expensive new 
building without adequately informing this Committee. At the 
same time, there was a growing sense in Congress that the 
Intelligence Community needed clearer direction regarding its 
post-Cold war mission.
    To address these concerns, Congress--at the initiative of 
this Committee--included in the 1995 Intelligence Authorization 
bill a provision to establish a commission to ``produce a 
credible, independent, and objective review of the Intelligence 
Community.'' The President signed the bill creating the 
``Commission on the Roles and Capabilities of the U.S. 
Intelligence Community'' on October 14, 1994.

                          the brown commission

    The Commission on the Roles and Capabilities of the U.S. 
Intelligence Community was charged with reviewing ``the 
efficacy and appropriateness'' of U.S. intelligence activities 
in the ``post-cold war global environment.'' The Commission's 
statutory charter set forth 19 specific issues to be addressed 
by the Commission in its final report, which was to be 
submitted to the President and the congressional intelligence 
committees no later than March 1, 1996, a date selected to 
ensure that the Commission's recommendations could be 
considered during the legislative session of the 104th 
Congress.
    The 17-member Commission consisted of nine members selected 
by the President and eight selected by the leaders of the House 
and Senate.
    The Commissioners selected by the President included former 
Secretary of Defense Les Aspin and former Senator Warren 
Rudman, who were appointed as Chairman and Vice Chairman 
respectively; Zoe Baird, General Counsel of Aetna Life & 
Casualty Company; Ann Caracristi, a former Deputy Director the 
National Security Agency; Anthony Harrington, a lawyer in 
Washington, D.C.; General Lew Allen, a former Chief of Staff of 
the Air Force and former Director of the National Security 
Agency; Stephen Friedman, former chairman of Goldman Sachs & 
Co.; Robert Hermann, a former Director of the National 
Reconnaissance Office; and Paul Walfowitz, a former Under 
Secretary of Defense for Policy. The Commissioners appointed by 
Congress included Representative Norman Dicks (D-WA); former 
Representative Tony Coelho; Senator James Exon (D-NE); former 
Senator Wyche Fowler; Representative Porter Goss (R-FL); 
General Robert Pursley, a former Commander of U.S. Forces in 
Japan; Senator John Warner (R-VA); and David Dewhurst, a 
Houston businessman. The Commission assembled a staff of a 
number of former intelligence professionals headed by L. Britt 
Snider, former Chief Counsel of this Committee.
    The Commission held its first meeting on February 3, 1995, 
and met for one or two days each month from March 1995 through 
February 1996. The Commission heard formal testimony from 84 
witnesses and its staff interviewed over 200 present and former 
government officials as well as knowledgeable persons from the 
media, academia, and industry. Commissioners also visited a 
number of countries with whom the U.S. has cooperative 
relationships in the intelligence area.
    On May 21, 1995, Commission Chairman Les Aspin died 
unexpectedly after a stroke. He was replaced as Chairman by 
former Secretary of Defense Harold Brown.
    The Brown Commission submitted a 200-page report to the 
President and the congressional committees on March 1, 1996. 
The report, entitled ``Preparing for the 21st Century: An 
Appraisal of U.S. Intelligence,'' concluded that:

          [T]he United States needs to maintain a strong 
        intelligence capability. U.S. intelligence has made, 
        and continues to make, vital contributions to the 
        nation's security, informing its diplomacy and 
        bolstering its defenses. While the focus provided by 
        the superpower struggle of the Cold War has 
        disappeared, there remain sound and important roles and 
        missions for American intelligence.

    At the same time, the Brown Commission concluded that the 
effectiveness and efficiency of the Intelligence Community need 
to be improved in a number of ways. The Commission's report 
contains numerous specific recommendations for improving the 
performance of the Intelligence Community.
    Dr. Brown and Senator Rudman presented the Brown 
Commission's conclusions in formal testimony before the 
Committee on March 6. As a courtesy, Chairman Specter and Vice 
Chairman Kerrey introduced the Commission's legislative package 
as S.1593 on the same day.

             scope of the committee's recent reform review

    While the Brown Commission was conducting its review, this 
Committee continued its own efforts to examine the appropriate 
role of the Intelligence Community in the post-Cold War would 
and how to optimize the structure of the Community to 
accomplish that mission. The Community held six hearings and 
three Member-level briefings to consider aspects of the Renewal 
and Reform efforts. Twenty-six witnesses provided the Committee 
with views from a variety of perspectives. The Committee heard 
from a broad array of intelligence consumers, including 
representatives from the Departments of Justice, State, Energy, 
Defense, and Treasury. Witnesses also included former Directors 
of Central Intelligence, as well as the current DCI, former 
leaders of this Committee, academics, and representatives from 
organizations that had done their own review of needed reforms 
in the Intelligence Community. In addition, the Committee staff 
conducted numerous interviews and carefully reviewed the 
results of extensive work done by the Brown Commission.

                    the committee's reform proposals

    In the Committee's view, the Brown Commission did an 
excellent job identifying the key issues relating to the reform 
of the Intelligence Community. The Committee agrees with many 
of the Commission's recommendations, particularly regarding 
institutional mechanisms for getting policymakers more involved 
in identifying and prioritizing their information needs and for 
addressing transnational threats, ways to improve intelligence 
analysis, and the need to enhance accountability and 
oversight--to include declassifying the aggregate amount 
appropriated for the intelligence budget and abolishing term 
limits for membership on the intelligence oversight committees. 
The Committee believes, however, that the Brown Commission did 
not go far enough in providing the Director of Central 
Intelligence with both the necessary authority and the 
necessary support structure to ensure improved efficiency, 
effectiveness, and accountability in the U.S. Intelligence 
Community.

DCI authority

    The changes brought about by the collapse of the Soviet 
Union have dramatic implications for U.S. intelligence efforts. 
The demands for rapid responses to diverse threats in a rapidly 
changing would necessitate a streamlines Intelligence Community 
and a DCI with clear lines of authority. This is lacking in the 
intelligence bureaucracy that emerged during the bipolar world 
of the Cold War.
    As the Brown Commission noted, ``The Intelligence Community 
* * * has evolved over nearly 50 years and now amounts to a 
confederation of separate agencies and activities with 
distinctly different histories, missions, and lines of 
command.'' Recognizing the pitfalls of decentralized 
intelligence--less attention devoted to non-Defense 
requirements, waste and duplication, the absence of objective 
evaluation of performance and ability to correct shortcomings, 
and loss of synergy--the Commission supported centralized 
management of the Intelligence Community by the DCI. The 
Commission concluded, however, that the DCI has all the 
authority needed to accomplish this objective of centralized 
management, if only he spent less time on CIA matters and had 
the budget presented to him in a clearer fashion.
    The Committee believes that the current disincentives for 
intelligence to operate as a community, reduce unnecessary 
waste and duplication, and become more effective and efficient 
in meeting the Nation's needs can only be overcome by enhancing 
the DCI's statutory authority over the budget and 
administration of all non-tactical intelligence activities and 
programs. A key issue for Congressional oversight of the 
Intelligence Community is accountability. It has become 
increasingly clear that a single manager, the DCI, must be 
accountable for the success or failure of the Intelligence 
Community. Therefore, the DCI must be given the authorities he 
needs to carry out this responsibility.

Control of intelligence budget

    ``The annual budgets for U.S. intelligence organizations 
constitute one of the principal vehicles for managing 
intelligence activities,'' noted the Brown Commission in its 
Report. ``How effectively and efficiently the Intelligence 
Community operates is to a large degree a function of how these 
budgets are put together and how they are approved and 
implemented.'' The Committee agrees with this assessment and 
concludes that the DCI must have ultimate control over the 
execution of the principal national elements of the National 
Foreign Intelligence Program budget if he or she is to 
effectively manage the Intelligence Community.

Need for ``Goldwater-Nichols'' jointness in the intelligence community

    Similarly, there is a need to bring the ``Goldwater-
Nichols'' concept of ``jointness'' to the Intelligence 
Community. The Brown Commission recommended that the DCI 
establish common Intelligence Community standards in the areas 
of skills proficiencies, personnel evaluation systems, trial 
period performance criteria, personnel allowances and benefits, 
and personnel and physical security. If further recommended 
that the DCI establish cooperative arrangements within the 
Intelligence Community in the areas of job recruiting, 
background investigations, training programs, and facilities. 
The Commission acknowledges that similar recommendations have 
been made by numerous studies over the years and supported by 
Intelligence Community leaders, yet little or no progress has 
been made in implementing them. The Committee is convinced that 
the same fate awaits these latest recommendations unless the 
DCI is given not only the mandate but the authority to effect 
implementation.

DCI management support

    Once the DCI is given the authority needed to implement 
resource and administrative decisions throughout the Community, 
it is critical that he or she have a support structure to meet 
that enhanced Community role. The Brown Commission considered 
organizational arrangements for the Intelligence Community and 
concluded that the existing Deputy Director for Central 
Intelligence should be replaced by two deputies: one for the 
Community and one for the CIA.
    The Committee believes that the Brown Commission's proposal 
will not adequately support the DCI in overcoming bureaucratic 
tendencies, honed over 50 years, that have frustrated previous 
efforts to bring greater coherency and coordination to 
Intelligence Community efforts. In our view, the institutional 
structure to assist the DCI in managing the Community should be 
established along functional, rather than organizational, 
lines. Accordingly, the Committee recommends the establishment 
of three Assistant Directors of Central Intelligence: an 
Assistant Director for Analysis and Production, an Assistant 
Director for Collection, and an Assistant Director for 
Administrative Support.
    The Assistant Director for Analysis and Production (ADCI/
A&P) would be responsible for overseeing intelligence analysis 
and production throughout the Intelligence Community: 
establishing priorities and standards of analysis and 
production; monitoring allocation of analytical resources and 
identifying unnecessary duplication; tasking the Assistant 
Director for Collection with collection requirements; and 
providing analytical and production support to the President, 
National Security Council, and National Economic Council. 
Departments such as State, Defense, and Treasury would retain 
their residual analytic capability and provide competing 
analytic views.
    The Assistant Director for Collection would be responsible 
for ensuring that national intelligence collection meets 
requirements in an efficient and effective manner by tasking 
the collection disciplines--signals intelligence, imagery 
intelligence, human intelligence, and measurements and 
signatures intelligence; managing and evaluating the 
acquisition of collection systems and their operations; and 
developing a single, integrated plan, program and budget for 
national intelligence collection.
    The Committee believes that consolidating the collection 
disciplines is a useful way to enhance efficiency and 
effectiveness, but the benefits are limited unless these 
``stovepipes'' are embedded in a structure that ensures cross-
INT coordination at the top, when requirements are levied and 
procurement decisions are made, and at the other end when 
collected information is disseminated and analyzed. Having a 
single manager for collection and one for analysis and 
production--and ensuring strong links between the two--seems 
the most compelling structure for ensuring these cross-
fertilization.
    In addition, we would encourage the continued cooperation 
between analysts and collectors across the board--not just in 
HUMINT, Analysts should be encouraged to spend time on rotation 
in the various collection agencies to lend substantive 
expertise against increasingly technical targets and to return 
to their home offices with a greater understanding of the 
collection disciplines.
    Finally, the Committee would establish a Assistant Director 
for Administration who would have responsibility for personnel 
management, including education and training; information 
management systems; telecommunications systems; finance and 
accounting; security; and procurement of supplies and support 
services across the Community.

Legislative recommendations

    The Committee's legislative proposals are set forth in 
Title VII of this bill. Title VII would, among other things, 
create Committees on Foreign Intelligence and Transnational 
Threats within the National Security Council; establish the 
three Assistant Directors of Central Intelligence described 
above; give the DCI additional authorities over the 
intelligence budget, including budget execution authority over 
most of the NFIP; give the DCI the right to concur in the 
appointments of the heads of NSA, NRO, and NIMA and to be 
consulted on the appointments of the heads of DIA, the State 
Department's Bureau of Intelligence & Research, the Energy 
Department's Office of Nonproliferation & National Security, 
and the FBI's National Security Division.
    Title VII would also establish an Office of Congressional 
Affairs for the Intelligence Community, a statutory General 
Counsel for the CIA, and an Intelligence Community Senior 
Executive Service that would subsume the separate senior 
executive services for the individual intelligence agencies.

The Directorate of Operations

    Many of the most visible problems with the Intelligence 
Community involve the Directorate of Operations at CIA (the 
``DO''). Indeed, much of the Committee's oversight resources 
over the past year have been devoted to examining issues such 
as CIA's activities in Guatemala and Honduras, the so-called 
``French Flap'' involving allegations that CIA attempted to 
recruit French government officials to provide economic 
intelligence, and the DO's dissemination of reports from assets 
known or suspected to be under the control of the KGB.
    The insights gained from the Committee's oversight of DO 
activities and policies have been shared with the Director of 
Central Intelligence and reflected in a number of changes he 
has initiated in personnel and in policies. In addition, many 
of the Committee's proposals are designed to address problems 
identified through the Committee's oversight of the DO. For 
example, the Committee on Foreign Intelligence and the 
Committee on Transnational Threats will provide the 
Intelligence Community, and particularly the DO, with clearer 
guidance on high-profile policy issues such as whether 
intelligence agencies should collect economic or environmental 
intelligence; whether they should target friendly governments 
for intelligence collection; whether they should use certain 
forms of cover; and whether they should enter into 
relationships with individuals or other governments whose 
conduct may not live up to U.S. standards. Similarly, the 
Assistant Director of Central Intelligence for Collection will 
ensure that high-risk HUMINT collection is only employed where 
use of technical collection is not a feasible alternative for 
obtaining the needed information.
    Another key issue is ensuring that the vast majority of 
outstanding young men and women who work in the DO are given 
the quality of management and career opportunities that will 
make their public service personally rewarding, despite the 
lack of publicity surrounding their many successes and the 
abundance of criticism that greets each and every lapse. The 
Committee's proposal for a Senior Executive Service for the 
Intelligence Community is a first step in that direction. We 
understand the Administration is preparing a comprehensive 
personnel reform package and look forward to examining the 
legislation when it is finalized. In addition, the Committee 
agrees with the Commission's recommendations regarding 
strengthening management of the Directorate of Operations in 
the CIA, including creating specialized management tracks and 
improving training.

Other recommendations

    The Committee also endorses a number of additional non-
legislative recommendations made in the Brown Commission 
report. For example, the Committee agrees with the Commission's 
recommendations regarding promoting closer links between 
intelligence producers and consumers, including providing daily 
briefings to, and assigning intelligence aides to the staffs 
of, senior policymakers. While analysts must be wary of 
politicization, it is also clear that intelligence community 
efforts will go for naught unless intelligence producers are 
close enough to consumers to identify their needs on a daily 
basis. The Committee urges CIA to consider implementing the 
Brown Commission's suggestions for improving the quality of 
analysis, including providing more travel and educational 
opportunities for analysts and providing for more non-
managerial senior analyst positions.
    Finally, the Committee strongly supports the Commission's 
recommendation that the DCI develop a database of Community-
wide intelligence programs and activities to assist him in 
making resource allocation decisions and tracking spending. In 
the Committee's view, the development of such a database, 
together with the establishment of a permanent staff of program 
and budget analysts, is a key element to strengthening the 
DCI's control of the Community.

Conclusion

    The drumbeat for change in the Intelligence Community, 
initiated in earnest with the fall of the Soviet empire, 
amplified in recent months and years by a distressingly rapid 
succession of public scandals, and informed by thoughtful 
studies such as those undertaken by the Brown Commission, the 
Council on Foreign Relations, Georgetown University's Institute 
for the Study of Diplomacy, and others, has brought us to a 
propitious moment. Just as years of efforts aimed at 
reorganizing the Department of Defense finally came to fruition 
with passage of the ``Goldwater-Nichols'' legislation in 1986, 
years of efforts by this Committee and others to reform the 
Intelligence Community may finally succeed in significantly 
enhancing this nation's ability to meet the security challenges 
of the next century, renewing the Intelligence Community's 
sense of mission, and beginning the process of renewing the 
support of the American people of this essential capability.

                the national imagery and mapping agency

    The Committee was disappointed that the Administration had 
not completed drafting the legislation necessary to create the 
proposed National Imagery and Mapping Agency before the 
Committee marked-up this bill. Nevertheless, the Committee has 
included provisions establishing NIMA, providing for its 
leadership, and defining its mission. A key concern of this 
Committee is ensuring that NIMA serves all intelligence 
consumers, national and tactical, military and non-military.
    During the Cold War, the overriding threat was perceived to 
be the Soviet military. In the Post-Cold War world, many of the 
greatest threats to our security often do not lend themselves 
to military answer--terrorism, proliferation, political 
instability in the emerging democracies and the stress on those 
fragile institutions exacerbated by organized crime, to name a 
few examples. Cooperative bilateral and multilateral 
relationships in law enforcement, intelligence, and diplomacy 
present more options for addressing potential crises and 
endeavoring to avoid the need to commit U.S. troops. In 
addition, economic security is an increasingly important aspect 
of our national security, with the U.S. Trade Representative 
and the Secretary of Commerce, for example, playing important 
roles. Each of these potential avenues for U.S. action needs 
intelligence support to optimize their prospects for success.
    Imagery has been critical for national policymaking going 
back at least to the Cuban Missile Crisis. More recently, it 
has played a significant role in UN Representative Madeleine 
Albright's efforts to convince the international community to 
support continued sanctions on Iraq, in the negotiation of the 
Dayton Peace Accords, and in the efforts to bring Bosnian war 
criminals to justice, to cite just a few examples. It is 
essential that imagery collection, like signals and human 
collection, be organized and managed in a manner that ensures 
it will continue meeting these national needs.

               intelligence community inspectors general

    The Intelligence Community agencies are becoming 
increasingly interconnected and, as a result, Intelligence 
Community Inspectors General (IG) must work closely with each 
other on a growing number of interrelated issues. This has 
clearly resulted in more cooperation and coordination between 
the IGs. However, there is no central point of coordination or 
accountability for Intelligence Community IG issues, 
particularly as they relate to investigations whose subject 
matter crosses multiple agencies. For example, the Guatemala 
investigation spanned several agencies (CIA, DOD, Justice, 
State), with Inspectors General from each of the agencies 
providing a separate investigation and report. There was no 
central IG representing the overall intelligence interests, 
addressing overarching intelligence themes or weaknesses, or 
providing a consolidated report on the Guatemala matter.
    Other Intelligence Community Inspector General issues that 
have occasionally caused this Committee concern in the past 
include:
          Lack of effective coordination between the 
        Intelligence Community Inspectors General, particularly 
        between the Administrative and Statutory IGs.
          Lack of consistent IG coverage of high risk or high 
        dollar intelligence programs in certain agencies.
          Lack of effective management support and attention to 
        the Inspectors General and their products and 
        recommendations.
          Inconsistent training and professional standards for 
        IG employees.
    In addition, concerns have been expressed for intelligence 
officials outside the IG community regarding the 
professionalism, experience and training of the IG staffs.
    The Committee has considered a variety of options for 
addressing these concerns, including establishment of an 
Intelligence Community Inspector General. Prior to initiating 
these or other actions however, we direct that each of the 
Inspectors General, both statutory and non-statutory, from each 
organization concerned with intelligence matters, including 
CIA, CIO, DIA, DoD, Energy, the Military Services, NRO, NSA, 
State, Treasury and Justice provide by January 15, 1997 a 
report to the Committees describing the reviews involving joint 
intelligence issues they have participated in since January 1, 
1994; what their role was in each review effort; how they are 
currently staffed and organized to address Intelligence 
Community issues (including the number of personnel who have 
worked on the intelligence projects); and the percentage of 
their total projects since January 1, 1994 which concern 
intelligence matters; the percentage of their total 
intelligence projects since January 1, 1994 that are joint 
issues with other agencies; the formal and informal methods by 
which they communicate with the other Inspectors General which 
deal with Intelligence Community issues and the effectiveness 
of those methods of communication. In addition, we ask that 
each of the IGs make any recommendations they deem appropriate 
for improving coordination and communication between the IGs, 
as well as individual IG assessments of the feasibility and 
desirability of creating an IG for the Intelligence Community 
to coordinate all joint intelligence efforts. The individual IG 
reports to the Committees should also describe how intelligence 
related IG topics are selected, the training and other 
professional standards they ascribe to, and how they ensure the 
implementation of those standards.

                        combating proliferation

    In the view the Committee, the U.S. government at present 
is not well organized to meet the threat to U.S. national 
security posed by the worldwide proliferation of chemical, 
biological or nuclear weapons or devices, and their delivery 
systems. More than 80 departments, agencies and other 
organizations, including the Departments of Defense, State, 
Commerce, Energy, Health and Human Services and Justice, as 
well as the National Security Council and the intelligence 
community, have responsibilities for combating proliferation. 
Yet no one individual or organization is responsible for 
coordinating the political, military, diplomatic, economic and 
intelligence resources that are required to prevent or roll 
back proliferation.
    Moreover, the Committee believes that there is unnecessary 
duplication of effort and other inefficiencies among the 
departments and agencies that have responsibilities in this 
area, and that streamlining is required.
    Organizational inefficiencies and a lack of central focus 
and direction have made U.S. efforts to combat proliferation an 
hoc, reactive and less effective than they could be. Given the 
extraordinary challenge to U.S. national security posed by the 
proliferation of weapons of mass destruction (and the means to 
deliver them), and the current lack of focus within the Federal 
Government, the Committee believes that a thorough assessment 
and review of the institutional architecture of the Federal 
Government is required.
    The Committee's authorization bill includes legislation to 
create a commission to perform such an assessment, and to 
report to Congress on specific administrative, legislative and 
other changes it believes are required to improve U.S. 
performance. It also addresses the threat posed by the spread 
of so called dual use and other militarily useful technology by 
requiring the Director of Central Intelligence to report 
regularly to the Congress on this issue.

                           economic espionage

    The Committee was also concerned about the growing problem 
of economic espionage in our country. Foreign countries, 
recognizing the value of American proprietary economic 
information, have shifted intelligence resources and are now 
targeting business and other economic information that will 
help them compete in the world market. This shift in 
intelligence targeting poses a new threat to the U.S. national 
security.
    As the Intelligence Community appropriately provides 
greater emphasis and resources to counterintelligence, it must 
pay particular attention to this emerging economic threat. The 
Committee has addressed this threat several times since the end 
of the Cold War revealed an increased emphasis upon economic 
spying. Four years of hearings have exposed this problem as one 
our greatest counterintelligence threats.
    What the Committee is intending to combat is the theft of 
American proprietary economic information by foreign countries. 
When one considers the resources that can be brought to bear by 
the world's former superpowers, American companies, large and 
small, simply cannot defend themselves. FBI Director Louis 
Freeh, noting that the United States may lose almost $100 
billion a year to economic espionage, testified before the SSCI 
and the Senate Judiciary Committee that ``the United States has 
become, in effect, the basic research lab for the world.''
    Current federal law is inadequate to deal with this 
problem. Not a single federal law directly addresses the theft 
of propriety economic information. As current federal laws 
provide no systematic approach to the problem, the 
Administration, the FBI Director, and scores of others have 
informed the Committee that the United States needs a new, 
effective, and straightforward law to deal with this problem. 
Title V provides such a law.

              section-by-section analysis and explanation

Title I--Intelligence activities

    Section 101 lists the departments, agencies, and other 
elements of the United States Government for whose intelligence 
and intelligence-related activities the Act authorizes 
appropriations for fiscal year 1997.
    Section 102 makes clear that the details of the amounts 
authorized to be appropriated for intelligence and 
intelligence-related activities and personnel ceilings covered 
under this title for fiscal year 1997 are contained in a 
classified Schedule of Authorizations. The Schedule of 
Authorizations is incorporated into the Act by this section.
    Section 103 authorizes the Director of Central 
Intelligence, with the approval of the Director of the Office 
of Management and Budget, in fiscal year 1997 to exceed the 
personnel ceilings applicable to the components of the 
Intelligence Community under section 102 by an amount not to 
exceed two percent of the total of the ceilings applicable 
under section 102. The Director may exercise this authority 
only when necessary to the performance of important 
intelligence functions or to the maintenance of a stable 
personnel force, and any exercise of this authority must be 
reported to the two intelligence committees of the Congress.
    Section 104 provides details concerning the amount and 
composition of the Intelligence Community Management Account of 
the Director of Central Intelligence.
    Subsection (a) authorizes appropriations in the amount of 
$95,526,000 for fiscal year 1997 for the staffing and 
administration of the various components under the Community 
Management Account of the Director of Central Intelligence. It 
also authorizes funds identified for the Advanced Research and 
Development Committee and the Environmental Task Force to 
remain available for two years.
    Subsection (b) authorizes 265 full-time personnel for the 
components under the Community Management Staff for fiscal year 
1997 and provides that such personnel may be permanent 
employees of the Staff or detailed from various elements of the 
United States Government.
    Subsection (c) requires that personnel be detailed on a 
reimburseable basis except for temporary situations.

Title II--Central Intelligence Agency Retirement and Disability System

    Section 201 authorizes appropriations in the amount of 
$184,200,000 for year 1997 for the Central Intelligence Agency 
Retirement and Disability Fund.

Title III--General provisions

    Section 301 provides that appropriations authorizes by the 
conferee report for salary, pay, retirement and other benefits 
for federal employees may be increased by such additional or 
supplemental amounts as may be necessary for increases in such 
compensation or benefits authorized by law.
    Section 302 provides that the authorization of 
appropriations by the conference report shall not be deemed to 
constitute authority for the conduct of any intelligence 
activity which is not otherwise authorized by the Constitution 
or laws of the United States.
    Section 303 extends for an additional two years the 
authority granted by section 303 of the Intelligence 
Authorization Act for Fiscal Year 1996 for the President to 
stay the imposition of an economic, cultural, diplomatic, or 
other sanction or related action when the President determines 
and reports to Congress that to proceed without delay would 
seriously risk the compromise of an intelligence source or 
method or an ongoing criminal investigation.
    The FY 1996 Act terminates the President's authority one 
year after enactment, on January 6, 1997. This sunset provision 
was added last year during conference with the House to give 
Congress an opportunity to see how the delay authority would be 
implemented. Because the bill ultimately was not signed into 
law until January, there is not yet a sufficient record on 
implementation. Thus, the Committee is extending the 
application of this provision for an additional two years.
    Section 304 requires the DCI to issue regulations, within 
three months of enactment of this legislation, requiring each 
current or new employee of the Central Intelligence Agency to 
agree in writing not to represent, or advise the government of, 
or any political party of, a foreign country, for a period of 
five years after the termination of the employee's employment 
with the Central Intelligence Agency.
    The section is motivated by reports the Committee has 
received that some former CIA employees have, following 
retirement from the CIA employment, agreed to serve as advisers 
to the intelligence services of foreign countries or as 
representatives of such services in their dealings with other 
countries. The Committee believes that opportunities for 
conflicts of interest, or at least the appearance of a 
conflict, will arise if CIA employees, who frequently must deal 
with foreign governments during the course of their CIA 
employment, are permitted to work for foreign governments 
immediately following termination of their employment by CIA. 
Moreover, if a former CIA employee who acts as a representative 
of a foreign government uses contacts with third governments 
developed as result of his or her Agency employment, it may 
result in confusion regarding whether the former CIA's 
employee's activities are sanctioned by the U.S. Government.
    To avoid such possible conflicts, the Committee believes 
that there should be a five-year ``cooling off' period 
following a CIA employee's departure from the Agency during 
which the former employee is prohibited from working for a 
foreign government.
    The Committee directs the DCI to implement a regulation 
requiring all CIA employees to sign a post-employment 
agreement, similar to the non-disclosure and pre-publication 
review agreements currently required of all CIA employees, that 
the employee will not work for a foreign government within five 
years of leaving the CIA, The DCI would be permitted to take 
disciplinary action, including termination of retirement 
benefits, against any employee found to have violated his or 
here agreement.
    Section 305 of the bill requires the President to submit to 
Congress, within 90 days of enactment of this legislation, a 
report on the implementation of Executive branch proposals to 
improve oversight of the intelligence community budget. On 
April 9, 1996, the President submitted a report to Congress 
describing proposed Executive branch actions to improve budget 
oversight. The Committee believes the actions, if fully 
implemented, will be a major step in strengthening oversight of 
the intelligence budget by the Executive branch. However, the 
Committee is concerned that the Intelligence Community, and 
specifically the National Reconnaissance Office, may not be 
able to comply with the actions detailed in the report. 
Accordingly, the Committee is requesting the President to 
prepare a status report on the implementation of his proposals. 
Specifically, the report is to include:
          The extent to which NFIP programs are now held to 
        requirements comparable to other Department of Defense 
        components in the implementation and execution of the 
        Chief Financial Officers Act of 1990 and the Federal 
        Financial Management Act of 1994.
          The extent to which NFIP programs now submit to the 
        Office of Management and Budget budget justification 
        materials and execution reports similar to those 
        submitted by non-intelligence components of the 
        Department of Defense.
          The extent to which the National Reconnaissance 
        Office submits to the Office of Management and Budget, 
        the Community Management Staff, and the Office of the 
        Secretary of Defense detailed information related to 
        major new acquisitions.
          The extent to which the National Reconnaissance 
        Office has submitted to the Office of Management and 
        Budget, the Community Management Staff, and the Office 
        of Secretary of Defense monthly budget execution 
        reports similar to the budget execution reports 
        submitted by non-intelligence Department of Defense 
        programs.

Title IV--Federal Bureau of Investigation

    Section 401 amends Sections 2703 and 2709 of Title 18, 
United States Code. This amendment is a clarification of the 
meaning of the phrase ``telephone toll billing records'' as 
used in 2703 and 2709. Congress intends to make clear, with 
this amendment, that the phrase applies to both local and long 
distance telephone toll billing records.
    Section 2703 of Title 18, United States Code, among other 
things, authorizes law enforcement to obtain various records 
from providers of electronic communication during the course of 
an official investigation, pursuant to an administrative 
subpoena, a grand jury subpoena, or trial subpoena. The records 
that can be obtained pursuant to these subpoenas include among 
other things, ``the name, address, telephone toll billing 
records, telephone number * * *'' Section 2709 of Title 18, 
United States Code, authorizes the Director of the FBI to 
obtain similar records from providers of wire and electronic 
communications during the course of an authorized foreign 
counterintelligence investigation, to include ``the name, 
address, length of service, and toll billing records.''
    The precise interpretation of ``telephone toll billing 
records'' was recently called into question by Southwestern 
Bell Mobile Systems, Inc. Specifically, Southwestern Bell 
questioned whether the term referred to local as well, as long 
distance records. The issue arose in March of 1995, when 
Southwestern Bell received two grand jury subpoenas issued 
pursuant to Section 2703 for airtime telephone toll records. 
Southwestern Bell filed a motion to partially quash both 
subpoenas arguing that the words ``telephone toll billing 
records,'' as used in Section 2703, meant only information 
related to long distance cellular airtime records.
    The issue presented to the District Court was whether 
Congress intended by its use of the term ``telephone boll 
billing record'' to authorize a grand jury to obtain by 
subpoena only long distance billing records. In a May 19, 1995 
ruling, the United States District Court for the Western 
District of Missouri (Bartlett, D.J.) denied Southwestern 
Bell's motion to quash the grand jury subpoenas, finding that 
the ``plain meaning of the words `telephone toll billing 
records' is billing records that contain information which was 
used or could be used to charge for telephone calls or 
services.'' Based on this finding, the District Court concluded 
that the term ``toll billing records,'' as used in Sec. 2703, 
applies to ``all records of calls from or attributed to a 
particular number.''
    Despite this ruling favorable to the government, nothing in 
the plain wording of the statute or its legislative history is 
conclusive on this point. The best that the District Court 
could find is that there was nothing in the plain meaning of 
the term or in the legislative history which would contradict 
the ruling. This clearly leaves the interpretation open to 
other challenges by well-meaning providers concerned about 
their equities.
    It should also be noted that substantial punitive 
provisions have been added to the civil remedies available to 
providers, subscribers, or customers aggrieved by any violation 
of Chapter 121 of Title 18, United States Code. Currently, 
unauthorized access to stored communications, whether for 
purposes of commercial advantage, malicious destruction or 
damage, or private financial gain, subjects the perpetrator to 
not only criminal penalties but civil fines as well. These 
fines, however, do not include punitive damages, irrespective 
of the state of mind of the perpetrator. This provision makes 
clear that if the violation is willful or intentional, such 
punitive damages as the court may allow can be awarded by a 
jury. Also, in the case of any successful action to enforce 
liability under this section, the costs of the action, together 
with reasonable attorney fees as determined by the court, will 
be available to an aggrieved plaintiff.
    Finally, this provision provides for disciplinary actions 
if a court determines that any agency or department of the 
United States has violated Chapter 121 and the court finds that 
the circumstances surrounding the violation raise questions of 
whether or not an officer or employee of the agency or 
department acted willfully or intentionally with respect to the 
violation. This provision directs the agency or department to 
promptly initiate a proceeding to determine whether or not 
disciplinary action is warranted against the officer or 
employee who was responsible for the violation.

Title V--Economic Espionage Act of 1996

    Section 501 contains the short title of this title of the 
bill.
    Section 502 adds new sections 571-578 to Title 18, U.S. 
Code that criminalizes theft of economic proprietary 
information undertaken on the behalf of, or with the intent to 
benefit, a foreign government or its agent.
    Section 571 sets forth definitions of certain key terms 
used in the new chapter and builds upon definitions already set 
out in Chapter 1 of Title 18.
    Section 572(a) defines the offense of ``economic 
espionage'' and punishes the theft or wrongful appropriation, 
duplication, alteration, destruction, or conversion of 
proprietary economic information on behalf of a foreign 
government. Attempts, solicitations, and conspiracies to commit 
such offenses are also made punishable, as are wrongful 
receipts, possessions, or purchases of stolen vital proprietary 
economic information. To make out an offense, the prosecution 
must show in each instance either that the perpetrator intended 
to benefit a foreign government, instrumentality, or agent or 
had actual knowledge or reason to believe that they are acting 
on behalf of a foreign government, instrumentality, or agent.
    The intangible nature of vital proprietary economic 
information requires the section to be written broadly enough 
to cover both traditional instances of theft, where the object 
of the crime is removed from the rightful owner's control and 
possession, as well as non-traditional methods of 
misappropriation involving electronic duplication or alteration 
in which the original property never leaves the dominion or 
control of the rightful owner. The maximum punishments 
specified recognize the gravity of the offenses involved and 
their concomitant effect on the Nation's economy and security.
    Section 572(b) specifies a separate maximum punishment for 
an organization found guilty under this section. The higher 
maximum fine reflects the significant potential financial 
benefit to the offending organization from the theft and is 
designed to ensure that the fine is viewed as something more 
than a cost of doing business.
    Section 572(c) makes clear that it is not a violation of 
law in contravention of Section 571 to disclose proprietary 
economic information in the case of appropriate disclosures to 
Congress or disclosures that are deemed essential to reporting 
a violation of United States law.
    Section 573 is designed to permit recapture of both the 
proceeds and implements of the offenses specified in the 
chapter. These provisions may prove especially effective as the 
proceeds of economic espionage may be staggering. The section 
incorporates through reference existing law to provide for 
procedures to be used in the detention, seizure, forfeiture, 
and ultimate disposition of properly forfeited proceeds under 
the section. It provides for an in personam action against the 
offender, rather than one against the property itself, and 
preserves the rights of innocent third parties.
    Section 574 authorizes the President to prohibit, 
consistent with international obligations, for a period of up 
to 5 years, the importation into, or exportation from, the 
United States, whether by carriage of tangible items or by 
transmission, of any merchandise produced, made, assembled, or 
manufactured by a person convicted of any offense described in 
subsection 571, or in the case of an organization convicted of 
any offense described in subsection 571, its successor entity 
or entities. Any sanctions so imposed are enforceable through a 
civil action that may be brought by the Secretary of the 
Treasury and which could result in the imposition of a civil 
penalty of not less than $100,000. Imposition of such a penalty 
must be in accordance with applicable Custom laws.
    Section 575 is to rebut the general presumption against the 
extraterritorial effect of U.S. criminal laws, this section 
makes it clear that Section 571 is meant to apply to certain 
conduct occurring beyond U.S. borders. To ensure some nexus 
between the assertion of such jurisdiction and the offense, 
extraterritoriality is provided for only if the offender is a 
U.S. person or an act in furtherance of the offense is 
committed in the United States. ``United States'' is defined in 
Chapter 1 of Title 18. In pursuing such cases, it is expected 
that the Department of Justice will focus its investigative and 
prosecutorial resources on those in which there has been a 
substantial harm to U.S. interests.
    Section 576 makes clear that non-Federal remedies, whether 
civil or criminal, for dealing with the theft or 
misappropriation of economic proprietary information are not 
preempted by the Act. Several states have criminalized the 
theft of intellectual property but enforcement may be 
frustrated by the ease with which such property is transferred 
across state or national boundaries.
    Section 577 requires a court to preserve the 
confidentiality of alleged proprietary economic information 
during legal proceedings, consistent with the requirements of 
the Federal Rules of Criminal and Civil Procedure, the Federal 
Rules of Evidence, and all other applicable laws. This 
preserves the information's confidential nature and, hence, its 
value. Without such a provision, owners may be reluctant to 
cooperate in prosecutions for fear of exposing their 
proprietary information to public view--thereby destroying its 
value.
    Section 578 makes clear that this chapter does not prohibit 
or impair any lawful activity conducted by a law enforcement or 
regulatory agency of the United States, a State, or a political 
subdivision of a State, or an intelligence agency of the United 
States.

Title VI--Combating Proliferation of Weapons of Mass Destruction Act of 
        1996

    Section 601 contains the short title of this title of the 
bill.
    Section 611 authorizes the establishment of a commission, 
to be known as the Commission to Assess the Organization of the 
Federal Government to Combat the Proliferation of Weapons of 
Mass Destruction (the Commission). This section directs that 
the Commission would be composed of eight members, with four 
appointed by the President; one appointed by the Majority 
Leader of the Senate; one appointed by the Minority Leader of 
the Senate; one appointed by the Speaker of the House of 
Representatives; and one appointed by the Minority Leader of 
the House of Representatives. Section 611 also outlines the 
period of appointment of members of the Commission; vacancies; 
meetings; and the selection of a Chairman and Vice Chairman.
    Section 612 describes the duties of the Commission. In 
general, the Commission would be responsible for carrying out a 
thorough study of the organization of the Federal Government, 
with respect to combating the proliferation of weapons of mass 
destruction (WMD). This section describes specific 
requirements: to assess the current structure and organization 
of the Federal departments and agencies, including elements of 
the intelligence community, that have responsibilities for 
combating proliferation of WMD; and to assess the effectiveness 
of the cooperation between elements of the U.S. intelligence 
community and the intelligence services of foreign governments 
relating to WMD proliferation. Section 612(b) would require 
that the Commission make specific recommendations to improve 
the performance of the Federal Government with respect to 
combating WMD proliferation. Section 612(c) would require the 
Commission to submit to Congress a report containing detailed 
findings and recommendations no later than 18 months after the 
date of the enactment of this Act.
    Section 613 describes the powers of the Commission, 
including the power to hold hearings, take testimony and 
receive such evidence as the Commission considers advisable. 
This would include any information, both classified and 
unclassified, from any government department, agency or other 
organization the Commission considers necessary to carry out 
its duties. Finally, this section discuss the use of the United 
States mails, and the use of gifts or donations of services or 
property.
    Section 614 sets forth the compensation for members of the 
Commission. Members who are not officers or employees of the 
Federal Government would be compensated at a rate equal to the 
daily equivalent of the annual rate of basic pay described for 
level IV of the Executive Schedule. Members who are officers or 
employees of the Federal Government would receive no additional 
compensation for their work as members of the Commission. This 
section describes the travel allowances and per diem in lieu of 
subsistence that would be allowed to Commission members. This 
section contains provisions for the hiring and compensation of 
Commission staff personnel, including the detail of Federal 
Government employees.
    Section 615 provides that the Commission will terminate 60 
days after the date on which the Commission submits its report 
under section 612.
    Section 616 states that for the purposes of this Act, the 
term intelligence community would have the meaning given such 
term in section 3(4) of the National Security Act of 1947 (50 
U.S.C. 401a(4)).
    Section 617 authorizes to be appropriated for the 
Commission in fiscal year 1997 such sums as may be necessary 
for the Commission to carry out its duties. This section 
directs that the amounts appropriated pursuant to this 
authorization of appropriations would remain available until 
the termination of the Commission.
    Section 621 directs that not later than 6 months after the 
date of enactment of this Act, and every 6 months thereafter, 
the Director of Central intelligence would submit to Congress a 
report on the acquisition of dual-use and other technology 
useful for the development and production of WMD during the 
preceding 6 months. This section directs that the report would 
include a discussion of the trends in the acquisition of such 
technology by such countries. This section notes that the 
report would be submitted in an unclassified form, but may 
include a classified annex.

Title VII--Intelligence Activities Renewal and Reform Act of 1996

            Section 701
    Section 701 contains the short title of this title of the 
bill.
            Section 702
    Section 702 amends Section 101 of the National Security Act 
of 1947 by adding a new subsection (h) which creates a 
Committee on Foreign Intelligence (CFI) of the National 
Security Council. The CFI would consist of the Director of 
Central Intelligence, the Secretary of State, the Secretary of 
Defense, and the Assistant to the President for National 
Security Affairs, who would serve as Chairman of the CFI.
    The purpose of the CFI, the creation of which was 
recommended by the Brown Commission, would be to provide a 
better institutional mechanism to provide policy-level guidance 
for the conduct of U.S. intelligence activities. The CFI would 
identify the intelligence required to address U.S. national 
security interests, establish priorities to address these 
requirements, and evaluate the performance of the intelligence 
community in satisfying intelligence requirements. The NSC has 
on occasion issued statements of intelligence requirements, but 
the Committee believes that the process for setting 
requirements and priorities should be institutionalized and 
should be performed on a regular basis.
    The CFI would also establish policy guidelines for 
intelligence activities, such as whether intelligence agencies 
should collect economic or environmental intelligence; whether 
they should target friendly governments for intelligence 
collection; whether they should use certain forms of cover; and 
whether they should enter into relationships with individuals 
or other governments whose conduct may not live up to U.S. 
standards. Intelligence agencies have historically been left to 
make these difficult decisions themselves; in the Committee's 
view, these decisions should be made at the policy level.
    The Committee anticipates that the CFI would meet several 
times each year and, as recommended by the Brown Commission, 
would be assisted by a subordinate ``Consumers Committee'' 
composed of senior representatives of principal intelligence 
producers and consumers. The Consumers Committee would meet 
more frequently and provide continuous, ongoing guidance with 
respect to intelligence requirements and priorities as well as 
feedback on the performance of the Intelligence Community.
    The CFI would be required to prepare an annual report for 
the NSC and the DCI on its activities.
    The President recently announced his intent to create a CFI 
by executive order, as recommended by the Brown Commission. The 
Committee applauds the President's decision to create the CFI 
but believes that the entity should be created by statute 
rather than by executive order to ensure continuity from 
Administration to Administration.
            Section 703
    Section 703 would amend Section 109 of the National 
Security Act of 1947 to require the President to submit to 
Congress, no later than January 31 of each year, an annual 
report on U.S. intelligence requirements and priorities and the 
performance of the U.S. Intelligence Community. Section 109 
currently requires the DCI to submit an annual report 
describing the activities of the intelligence Community during 
the previous year, including significant successes and 
failures.
    Rather than require the Executive branch to prepare two 
separate but related intelligence reports, the Committee 
believes that an intelligence report submitted by the President 
could cover much of the same material previously submitted by 
the DCI but would focus more on requirements and priorities. 
Although the Committee has chosen not to request a copy of the 
annual report submitted by the CFI to the President, as 
required by Section 701 of this bill, the Committee expects 
that the President's annual report would be based largely on 
the findings and conclusions of the CFI.
    The bill states that the report should be submitted in 
unclassified form but may have a classified annex. It is the 
Committee's intention that the unclassified version should 
describe the President's intelligence requirements, as well as 
intelligence successes and failures, in as much detail as 
possible, consistent with the protection of sources and 
methods. The classified version should specify requirements and 
priorities in sufficient detail to assist the Congress in 
making resource allocation decisions.
    In addition, Section 108 of the National Security Act will 
continue to require the President to submit to Congress an 
annual ``national security strategy report'' which identifies 
U.S. national interests and sets forth a national security 
strategy. The Committee expects that the President's annual 
report on intelligence, which would be required to be submitted 
at the same time as the national security strategy report, 
would describe the intelligence required to address the 
national security interests identified by the President in this 
report.
            Section 704
    Section 704 amends Section 101 of the National Security Act 
of 1947 by adding a new subsection (i) which would establish a 
Committee on Transnational Threats of the National Security 
Council. The Committee would consist of the DCI, the Secretary 
of Defense, the Secretary of State, the Attorney General, and 
the Assistant to the President for National Security Affairs, 
who would serve as the Committee's chairperson.
    The creation of such a Committee was recommended by the 
Brown Commission, which found that the Federal government is 
not well organized to combat certain ``transnational'' 
activities, such as international terrorism, drug trafficking, 
weapons proliferation, and organized crime, that threaten the 
national security of the United States. (The Brown Commission 
referred to transnational activities as ``global crime'' to 
emphasize their links to global criminal elements. The 
Committee prefers to continue to refer to such activities as 
``transnational threats'' to emphasize, as discussed below, 
that law enforcement is only one of several possible Federal 
government responses to the problem.)
    A number of federal departments and agencies play important 
roles in combating transnational threats, but their activities 
are not well coordinated. Moreover, in the absence of higher 
level direction, law enforcement agencies have usually been 
left to take the lead. This has often resulted in conflicts 
with other agencies, including the Intelligence Community. In 
the Committee's view, a high-level group in needed to decide, 
as a policy matter, when to give priority to law enforcement, 
to intelligence, or to foreign policy or other considerations 
in responding to transnational threats. The Committee believes 
that a committee of the National Security Council would be best 
suited to fulfill this role. As with the Committee on 
Intelligence, the Committee believes the Committee on 
Transnational Threats should be established by legislation.
    The Committee on Transnational Threats would identify 
transnational threats; develop strategies to respond to them in 
a coordinated way; assist in resolving operational differences 
among federal departments and agencies; develop policies and 
procedures to ensure the effective sharing of information among 
federal departments and agencies, including between the law 
enforcement and foreign policy communities; and develop 
guidelines for coordination of federal law enforcement and 
intelligence activities overseas.
    The Department of Justice has objected to giving the 
Committee on Transnational Threats authority to ``direct'' law 
enforcement activities on the ground that law enforcement 
activities should not be directed on the basis of 
considerations unrelated to the enforcement of law. In the 
Committee's view, one of the key reasons to create a high-level 
Committee on Transnational Threats is to ensure that 
considerations other than law enforcement are taken into 
account in the Federal Government's response to terrorism and 
other transnational threats. The Attorney General and law 
enforcement officials would still be responsible for directing 
law enforcement operations on a day-to-day basis, but the 
broader policy decisions regarding whether to give priority to 
law enforcement, or to intelligence, or to foreign policy 
interests, should be made at a higher level.
            Section 705
    Section 705 amends Section 102 of the National Security Act 
of 1947 to add a new subsection (d) that establishes an Office 
of the Director of Central Intelligence. The Office would 
include the DCI, the DDCI; the newly established positions of 
Assistant DCI for Collection, Assistant DCI for Analysis and 
Production, Assistant DCI for Administration, the National 
Intelligence Council, and such other offices as the DCI may 
designate.
    Section 102(d)(3) directs the DCI to employ and utilize a 
professional staff to assist him in carrying out his Community-
wide responsibilities. This staff would be part of the Office 
of the DCI. The staff could, in the DCI's discretion, operate 
as a unit, or be divided among the three new Assistant DCIs. 
The Committee anticipates that this staff would replace the 
functions of the current Community Management Staff and, while 
it should include some detailees from the Intelligence 
Community, it should consist primarily of a core professional 
staff. And increase of new personnel levels is neither 
warranted nor authorized with the exception of the three 
assistant DCIS.
    Section 705 also transfers the current section 102(a)(1), 
which establishes the Central Intelligence Agency, to a new 
section 102A of the National Security Act. Section 102A would 
reference Section 103(d), which sets forth the responsibilities 
of the Director of Central Intelligence as head of the CIA.
            Section 706
    Section 706 would amend Section 103(b) of the National 
Security Act of 1947 to specifically authorize the National 
Intelligence Council (NIC) to enter into contracts with experts 
outside the intelligence Community to assist in the preparation 
of national intelligence estimates. Although the NIC has in 
recent years hired more individuals from outside the 
Intelligence Community to serve as National Intelligence 
Officers, it still has not, in the Committee's view, tapped 
sufficiently into the large reservoir of expertise on foreign 
policy issues that exists in the academic and business 
communities. The new authority would make clear that the NIC 
could contract for the services of such experts on a temporary 
basis. Section 103(b)(1)(B) currently directs the DCI, when 
prescribing security requirements for personnel appointed to 
the NIC from the private sector, to avoid unduly intrusive 
requirements. The Committee urges the DCI to consider ways to 
reduce the security requirements, such as eliminating or 
reducing the scope of the polygraph requirement, for contract 
employees of the NIC who may have limited access to sensitive 
intelligence information and who may be discouraged by 
intrusive security measures.
    In addition, Section 706 adds a new sentence to Section 
103(b)(1)(A) to provide that the NIC be located in a place 
readily accessible to policymaking officials and persons who 
are not otherwise associated with the Intelligence Community. 
The Committee believes that locating the NIC outside the 
Central Intelligence Agency would help it to attract more 
outside experts, who might otherwise be leery of a more direct 
affiliation with CIA.
    The foregoing changes were recommended by the Brown 
Commission. The Committee notes that the Brown Commission also 
recommended that the NIC be more fundamentally recast into a 
``National assessments Center'' that would produce unclassified 
assessments based largely on open sources as well as classified 
estimates. The Committee is not persuaded that the preparation 
of unclassified assessments is a proper function for the 
Intelligence Community and is not prepared to endorse such a 
change at this time.
            Section 707
    Section 707 of the bill would give the DCI increased 
authorities to manage the Intelligence Community. Despite his 
title of Director of Central Intelligence, the DCI, in the 
Committee's view, lacks sufficient authority to direct the 
activities of the various parts of the Intelligence Community 
in the most efficient and effective way.
    Section 707(a)(1) would amend Section 103 of the National 
Security Act of 1947 to give the DCI the authority--in addition 
to his current authority to develop the annual budget for the 
National Foreign Intelligence Program--to concur in the 
development of the annual budget for the Joint Military 
Intelligence Program and to be consulted by the Secretary of 
Defense in the development of the budget for Tactical 
Intelligence and Related Activities.
    Section 707(a)(3) gives the DCI authority to manage all of 
the national collection activities of the Intelligence 
Community. This would allow the DCI to ensure that collection 
resources are used in the most efficient and effective manner 
to meet intelligence requirements, rather than continuing to 
leave collection and acquisition decisions solely to individual 
program managers.
    Section 707(b)(1) would provide that no funds could be 
reprogrammed within JMIP programs without DCI approval. The DCI 
currently has the authority to disapprove a reprogramming only 
with respect to NFIP elements. While the Committee believes 
that the DCI should have authority to approve JMIP 
reprogrammings as an extension of his authority to concur in 
the JMIP budget, the Committee recognizes that JMIP programs 
are administered by the Secretary of Defense. The Committee 
expects that the DCI will work cooperatively with the Secretary 
of Defense in exercising the DCI's authorities under this 
section.
    Section 707(b)(2) would give the DCI authority to reprogram 
funds and transfer personnel among NFIP elements after 
consultation--in lieu of coordination, as required under 
existing law--with the head of the agency or department 
affected by the transfer. The Committee believes that the 
current requirement for coordination has prevented the DCI from 
exercising his authorities effectively.
    Section 707(b)(3) of the bill would give the DCI authority 
to allocate and expend all funds appropriated for national 
intelligence programs, projects, and activities that are 
managed by the directors of the National Security Agency, the 
National Reconnaissance Office, the Central Imagery Office, and 
the Central Intelligence Agency. Under current law, the DCI has 
budget execution authority only over funds appropriated for the 
CIA. Despite his responsibility for directing all NFIP 
elements, the DCI has lacked the ``power of the purse'' to 
ensure that his decisions stick. Giving the DCI budget 
execution authority over the principal national elements of the 
NFIP would significantly enhance the DCI's authority to manage 
the Community.
    Section 707(c) would give the DCI authority to rotate 
personnel among the national elements of the Intelligence 
Community and to consolidate personnel, administrative, and 
security programs to reduce overall costs, subject only to 
consultation (in lieu of the existing requirement for 
coordination) with affected department and agency heads.
            Section 708
    Section 708 would amend Section 105 of the National 
Security Act of 1947 to give the DCI shared responsibility, 
with the Secretary of Defense, for the performance of certain 
NFIP functions, including the operation of effective 
organizations for the conduct of signals intelligence, imagery 
intelligence, and the procurement and operation of overhead 
reconnaissance systems.
    Section 105 was added to the National Security Act in 1992 
in order to set forth the responsibilities of the Secretary of 
Defense for elements of the NFIP. As currently written, Section 
105 provides that the Secretary of Defense's responsibilities 
are to be undertaken consistent with the responsibilities and 
authorities given to the DCI under Sections 103 and 104 of the 
National Security Act.
    While recognizing that the National Security Agency, the 
Central Imagery Office, and the National Reconnaissance Office 
are line elements of the Department of Defense, the Committee 
believes that giving the Secretary of Defense sole 
responsibility for the operation of these organizations does 
not sufficiently recognize the responsibility of the DCI for 
the direction of the national intelligence functions of these 
organizations. Moreover, once the DCI has budget execution and 
reprogramming authority with respect to these national 
elements, it is difficult to continue to hold the Secretary of 
Defense solely responsible for ensuring they effectively 
fulfill their mission. Accordingly, Section 708 of the bill 
would provide that the Secretary of Defense and the DCI are 
jointly responsible for the performance of these functions. The 
Secretary of Defense would remain primarily responsible 
(consistent with the DCI's responsibilities and authorities 
under Sections 103 and 104) for the operation of the Defense 
Intelligence Agency and military service intelligence units.
            Section 709
    Section 709(a) of the bill would add a new subsection (e) 
to Section 102 of the National Security Act of 1947 to 
establish the position of Assistant Director of Central 
Intelligence for Collection. This position would be appointed 
by the President and confirmed by the Senate.
    The bill provides that if neither the DCI nor the DDCI is a 
commissioned officer in the Armed Forces, the ADCI for 
Collection shall be a commissioned officer in recognition of 
the fact that, except for the CIA, the major intelligence 
collection agencies are located within the Department of 
Defense.
    The ADCI for Collection would be one of three new Assistant 
Directors of Central Intelligence who would assist the DCI in 
carrying out his Community-wide management responsibilities. 
The ADCI for Collection, in particular, would assist the DCI in 
carrying out his new responsibility, as added by Section 707 of 
this bill, to manage all Intelligence Community collection 
activities. In performing this function the ADCI for Collection 
would manage all national intelligence collection activities, 
including identifying targets where a particular intelligence 
discipline offers a comparative advantage and allocation 
resources accordingly. The ADCI for Collection would also 
provide guidance for, and would be required to concur in, the 
procurement and operation of national collection systems and 
assist the DCI in formulating plans and budgets for national 
collection activities.
    Section 709(b) of the bill would provide for the 
consolidation of certain clandestine human-source collection 
activities currently conducted by the Defense HUMINT Service 
within the Department of Defense into the Directorate of 
Operations of the Central Intelligence Agency. This 
consolidation was recommended by the Brown Commission. The 
Commission found that, while military personnel are important 
to the successful collection of information from human sources 
about military topics, it is inefficient for the Department of 
Defense to maintain a large, separate infrastructure of 
military collectors who serve only a few years before returning 
to their regular career tracks.
    Section 709(b) would require the DCI and the Secretary of 
Defense to enter into an agreement, no later than June 30, 
1997, providing for the transfer of the clandestine collection 
elements of the Defense HUMINT Service to the CIA, which should 
be accomplished no later than June 30, 1998. CIA would be 
responsible for all clandestine intelligence collection from 
human sources, except those clandestine HUMINT activities 
undertaken by DoD elements in advance of, or as part of, a 
specific military operation. In collecting HUMINT on foreign 
military targets, CIA should, as needed, use military personnel 
on detail from DoD or the military services.
            Section 710
    Section 710 would add a new subsection (f) to Section 102 
of the National Security Act of 1947 to establish the position 
of Assistant Director of Central Intelligence for Analysis and 
Production. This position would be appointed by the President 
and confirmed by the Senate.
    The ADCI for Analysis and Production would assist the DCI 
in overseeing analysis and production of intelligence by all 
elements of the Intelligence Community, establish priorities 
for analysis, and monitor the allocation of resources in order 
to eliminate unnecessary duplication in analysis and 
production.
    Intelligence analysis and production of analytical products 
is broadly dispersed across the Intelligence Community. CIA, 
DIA, NSA, the State Department's Bureau of Intelligence & 
Research, and the intelligence units of the military services 
are all significant producers of intelligence analysis. 
Although some competitive analysis is necessary and some 
products are needed to serve purely departmental needs, the DCI 
currently lacks an effective mechanism to review intelligence 
analysis and production community-wide in order to ensure the 
most effective allocation of resources and to eliminate 
unnecessary duplication. Intelligence producers have worked 
together voluntarily to reduce overlaps, but the Committee 
believes that a better institutional structure in needed. The 
new ADCI for Analysis and Production would perform this 
function.
            Section 711
    Section 711 would add a new subsection (g) to Section 102 
of the National Security Act of 1947 to establish the position 
of Assistant Director of Central Intelligence for 
Administration. This position would be appointed by the 
President and confirmed by the Senate.
    Numerous studies, including the Brown Commission, have 
urged greater consolidation of personnel and administrative 
functions and use of common standards across the Intelligence 
Community. The largest agencies, nevertheless, continue to 
maintain separate administrative, personnel, security, and 
training systems. The Brown Commission concluded ``While the 
Commission is willing to accept that some latitude is needed 
for individual agencies to satisfy their unique requirements, 
we see no reason for all of these programs and activities to be 
administered separately, or, at least without greater 
uniformity.'' The Committee agrees with this conclusion.
    The role of the proposed ADCI for Administration would be 
to assist the DCI in bringing about this uniformity. The ADCI 
for Administration would coordinate the various personnel 
management systems, information systems, telecommunications 
systems, finance and accounting services, and security programs 
for the Intelligence Community. The Committee expects that the 
ADCI for Administration would also assist the DCI in exercising 
his authorities under Section 104(f) of the National Security 
Act to consolidate personnel, administrative, and security 
programs of Intelligence Community elements.
            Section 712
    Section 712 amends Section 5315 of Title 5, United States 
Code, to place the positions of Assistant Director of Central 
Intelligence for Collection, Assistant Director of Central 
Intelligence for Analysis and Production, Assistant Director of 
Central Intelligence for Administration, at Level IV of the 
Executive Schedule.
            Section 713
    This provision would establish the position of General 
Counsel of the Central Intelligence Agency to be appointed by 
the President and confirmed by the Senate. This provision is 
identical to Section 402 of this Committee's bill to authorize 
appropriations for fiscal year 1995. The provision was dropped 
from the Senate bill after opposition of the Administration. 
The Committee understands that the Administration no longer 
opposes the establishment of a statutory General Counsel for 
the CIA and, accordingly, has included the provision again in 
this year's bill.
    The Committee believes that the confirmation process 
enhances accountability and strengthens the oversights process. 
It is also important to note that currently, all elements of 
the Intelligence Community--except the CIA--are part of 
departments that have statutory general counsels who are Senate 
confirmed. Requiring that the CIA's General Counsel be 
confirmed has been recommended several times over the years, 
including proposals by the Church Committee and the Iran-Contra 
Committee. The Senate's version of both the FY 1994 and FY 1995 
Intelligence Authorization Bill also contained a provision 
requiring Senate confirmation of the CIA General Counsel.
    Subsection 20(a) provides that the General Counsel be 
appointed by the President from civilian life and be confirmed 
by the Senate. The statutory CIA General Counsel would be 
subject to the authority and supervision of the DCI by virtue 
of the DCI's authority as head of the CIA under Sections 
102A(a) and 103(d) of the National Security Act.
    Subsection 20(b) establishes the General Counsel of the CIA 
as the chief legal officer of the CIA. As chief legal officer, 
the General Counsel will be responsible for ensuring that legal 
advice and assistance are provided as appropriate throughout 
the CIA, and all personnel providing legal services within the 
CIA will be bound by the legal opinions issued by the General 
Counsel in the course of the General Counsel's duties.
    Subsection 20(c) provides that the DCI shall prescribe the 
functions of the statutory CIA General Counsel. Thus, the 
Director may assign the General Counsel functions beyond those 
inherent in the General Counsel as the CIA's chief legal 
officer. In particular, the DCI may assign to the statutory CIA 
General Counsel the function of providing legal advise to the 
DCI in the performance of the DCI's statutory functions that 
transcend the CIA.
            Section 714
    Section 714 would add a new subsection (h) to Section 102 
of the National Security Act of 1947 to establish an Office of 
Congressional Affairs of the Intelligence Community. The Office 
would coordinate the congressional affairs activities of the 
various elements of the Intelligence Community. It is not the 
Committee's intention that the Office direct the activities of 
other legislative affairs offices within the Intelligence 
Community; rather, the office would serve as a focal point for 
coordinating and responding to congressional requests that 
involve more than one department of agency.
    Section 102(h)(2)(B) would permit the DCI to designate the 
Director of the office within the Central Intelligence Agency 
currently known as the Office of Congressional Affairs to serve 
also as the Director of the Office of Congressional Affairs for 
the Intelligence Community. Section 102(h)(4) would provide 
that nothing in the provision is intended to preclude the 
individual offices of congressional affairs within elements of 
the Intelligence Community from responding directly to requests 
from the congressional committees.
            Section 715
    Section 715 would add a new Section 105A to the National 
Security Act of 1947 that would specifically authorize 
intelligence agencies to collect information outside the United 
States about non-U.S. persons at the request of a law 
enforcement agency. This change was recommended by the Brown 
Commission.
    CIA and NSA currently interpret their legal authorities as 
permitting them to engage in intelligence collection only for a 
``foreign intelligence'' purpose. (NSA believes that the 
``primary'' purpose of the collection must be to obtain foreign 
intelligence.) The Brown Commission concluded that the 
Intelligence Community may be taking to restrictive a view 
regrading whether intelligence assets can be tasked by law 
enforcement agencies to collect information overseas about non-
U.S. persons. The law enforcement proviso of the National 
Security Act was intended to prohibit the CIA from infringing 
on the domestic jurisdiction of the FBI and from becoming a 
national secret police that might be directed against U.S. 
citizens. These concerns are not present when the Intelligence 
Community collects against foreign persons outside the U.S.
    At the same time, the need to combat terrorism, drug 
trafficking and other transnational threats effectively 
requires that the capabilities of the Intelligence Community be 
harnessed to support law enforcement agencies as efficiently as 
possible.
    Section 715 would clarify that CIA is not violating the law 
enforcement proviso if it collects intelligence overseas about 
non-U.S. persons at the request of a law enforcement agency and 
would also ensure that CIA, NSA, and other collection agencies 
apply the same standard when responding to law enforcement 
requests.
            Section 716
    Section 716 would rewrite Section 106 of the National 
Security Act of 1947. Section 106(a) of the National Security 
Act, which was added in 1992, currently provides only that the 
DCI be consulted by the Secretary of Defense with respect to 
the appointments of the directors of the National Security 
Agency (NSA), the National Reconnaissance Office (NRO), and the 
Defense Intelligence Agency (DIA). Section 106(b) currently 
provides that the Director of the Central Imagery Office (CIO) 
shall be appointed by the Secretary of Defense ``upon the 
recommendation'' of the DCI.
    As revised by Section 716 of the bill, Section 106(a) of 
the National Security Act would require the Secretary of 
Defense to obtain the concurrence of the DCI before appointing 
the directors of the NSA and NRO. (Section 802 of the bill 
separately requires the DCI to concur in the recommendation of 
the Secretary of Defense to the President to appoint the 
Director of the National Imagery and Mapping Agency (NIMA).) 
New section 106(b) would require that the DCI be consulted with 
respect to the appointments by the relevant department or 
agency head of the heads of DIA, the State Department Bureau of 
Intelligence & Research (IN&R), the National Security Division 
of the FBI (NSD), and Office of Non-Proliferation and National 
Security (ON&NS). New section 106(c) would require the DCI to 
provide input to the annual evaluations of the directors of 
NSA, NRO, and NIMA by the Secretary of Defense.
    The Brown Commission recommended, and the Committee agrees, 
that the DCI should have a stronger voice in the appointments 
of the directors of the NSA and the NRO as well as some voice 
in the appointments of the heads of DIA, IN&R, ON&NS/DoE, and 
NSD/FBI.
    The Committee believes more involvement by the DCI in the 
appointment of the heads of NSA and NRO is desirable in light 
of the roles each of these individual plays in the collection 
of national intelligence. Similarly, while the heads of DIA, 
IN&R, and ON&NS manage activities that primarily support 
departmental requirements, their organizations play substantial 
roles in Intelligence Community activities.
    The Committee notes that the Department of Justice and the 
Director of the FBI strongly object to requiring the Attorney 
General to consult with the DCI on the appointment of the head 
of the FBI National Security Division. In the Committee's view, 
consultation with the DCI is appropriate given that the 
National Security Division Director, while also responsible for 
domestic law enforcement functions, controls a significant part 
of the NFIP.
            Section 717
    Section 717 would add a new Section 110 to the National 
Security Act of 1947 that would direct the Director of Central 
Intelligence to promulgate regulations to establish an 
Intelligence Community Senior Executive Service. This provision 
was recommended by the Brown Commission and serves the 
Committee's objective of establishing more uniform personnel 
policies. In addition, the new service borrows from the recent 
Defense reform legislation by requiring that career 
intelligence personnel serve in at least one assignment outside 
their home agency before being eligible for promotion into the 
Senior Executive Service.
    The new Senior Executive Service would include personnel 
from the CIA, NSA, DIA, CIO, and NRO as well as certain 
civilian employees of the Department of Defense. Individuals 
who are currently a member of the Senior Executive Service of 
any of these agencies would automatically become members of the 
Intelligence Community Senior Executive Service.
    The regulations issued by the DCI under this section would 
establish SES pay rates, performance appraisal standards, 
promotion guidelines, and standards for appointment to and 
removal from the SES.
    The DCI would be permitted to detail or assign any member 
of the Intelligence Community SES to serve in a position 
outside the individual's parent organization, including 
elsewhere in the Intelligence Community, another government 
agency, or outside the Federal government.
    The DCI would be required to consult with the Secretary of 
Defense when issuing the regulations under this section.
            Section 718
    Section 718 would require the President, as part of his 
annual budget submission to Congress, to provide in 
unclassified form the total amount appropriated by Congress for 
all intelligence and intelligence-related activities during the 
current fiscal year and the total amount requested in the 
budget for the next fiscal year.
    The Committee believes that public disclosure of the 
aggregate annual intelligence budget (including the budgets for 
the NFIP, JMIP, and TIARA) would allow the American people to 
know the amount that is being spent on intelligence as a 
proportion of all federal spending. The Committee believes that 
disclosure of the aggregate amount would not raise significant 
national security concerns. The Committee notes that a number 
of other major democratic governments, including the British, 
Australians and South Koreans, have in the last few years 
disclosed their aggregate intelligence budgets without adverse 
effect.
    The Committee also notes that the bipartisan Brown 
Commission, which was tasked specifically by its statutory 
charter to consider the question, unanimously recommended 
disclosure of the total amount appropriated for intelligence 
activities for the current fiscal year and the total amount 
requested for the next fiscal year.
            Section 719
    Section 719(a) would delete the first sentence of Section 
2(b) of Senate Resolution 400, which currently prohibits 
members of the Senate Intelligence Committee from serving 
continuously for more than eight years. This shall take effect 
with the commencement of the 105th Congress in January of 1997 
and will in no way affect the Senate Majority and Minority 
Leader's appointment prerogative as it relates to the 
Committee. Section 2(b) was part of the original S. Res. 400, 
which established the Senate Intelligence Committee in 1976.
    The SSCI is the only Senate committee with membership term 
limits, and it was the Committee's unanimous view that the 
SSCI's original charter relating to the length of tenure of its 
Members has proven unnecessary and even counterproductive to 
the Committee's oversight responsibilities. The Committee 
believes that limiting tenure on the SSCI limits Member 
experience and expertise, thereby detrimentally affecting the 
quality of oversight. The Committee notes that Senators with 
the most extensive service on committees have proved capable of 
the most far-reaching reforms--for instance in the Senate Armed 
Services Committee's work on the Goldwater-Nichols Defense 
Reorganization Act of 1986. As stated in the Brown Commission 
report, `` * * * because of the fixed tenure rule, Members 
often have to rotate off the [House and Senate intelligence 
oversight] committees at the very time they have begun to 
master the complex subject matter. Indeed, knowing their tenure 
is limited, some put their time in on other committees. As a 
consequence, in the view of many Commission witnesses, an 
unfortunate loss of expertise and continuity occurs, weakening 
the effectiveness of the committees.''
    The primary rationale for membership term limits on the 
Committee was the fear that Members would somehow be co-opted 
by the Intelligence Community. Yet at no point has the 
Committee faced a serious danger of co-optation. Indeed, SSCI 
Members are no more likely to be co-opted by the Intelligence 
Community than the Members of other authorizing Committees are 
likely to be co-opted by the Departments and agencies they 
oversee. In 1994, for example, the Committee issued a highly 
critical report of the CIA's handling of the Aldrich Ames 
espionage case--a report that was endorsed by all Committee 
Members representing a wide range of views about the 
Intelligence Community.
    Requiring rotation of Members was also seen as a means to 
ensure that the SSCI could benefit from a flow of fresh ideas 
and alternative viewpoints of new Members. Since the SSCI was 
created 20 years ago, sixty-one Senators have served on the 
Committee and the average Member term of service on the 
Committee has been just over 5 years--and approximately 60 
percent of Committee Members have served on the Committee less 
than 8 years (the current Committee term limit). This 
historical record underscores the fact that it is a virtual 
certainty that vacancies will continue to occur regularly on 
the SSCI, thus allowing for new faces and fresh ideas to enter. 
At the same time, however, Members who have a long-term 
interest in the area of intelligence can continue to serve and 
develop much-needed expertise.
    Both the Brown Commission and the Council on Foreign 
Relations task force on the future of U.S. intelligence 
recommended ending Member term limits on the SSCI as a means of 
increasing Member expertise in intelligence oversight. In 
addition, former Directors of Central Intelligence Robert Gates 
and R. James Woolsey have advocated the termination of 
Committee term limits, as have SSCI hearing witnesses Harold 
Brown and former Committee Members Warren Rudman and Howard 
Baker.
    While the Committee believes that the tenure of Members 
appointed to the Committee should not be constrained by term 
limits, the Committee does believe that it would be prudent to 
place limitations on the length of time that Members are 
allowed to serve in a Committee leadership capacity. The 
Committee notes that the Senate Republican Conference has 
recently established 6-year term limits for service as Chairman 
or Ranking Minority Member for any standing committee, 
effective in January 1997. Accordingly, the Committee imposed a 
6-year term limit for both the SSCI Chairman and Vice Chairman.
            Section 720
    Section 720 of the bill would require the DCI to submit a 
report to Congress on the threats to the national information 
infrastructure from information warfare and other non-
traditional attacks by foreign nations, groups, and entities. 
Government, including military, and private sector information 
and communications systems have become almost entirely reliant 
on commercial switching networks that are vulnerable to 
disruption. To date, identification of threats to these 
networks from foreign entities has not been a high priority for 
the Intelligence Community. The Committee believes it is 
important for the Intelligence Community to undertake a review 
of the plans and capabilities of foreign countries and groups 
to engage in, and of the capabilities of the Intelligence 
Community to provide indications and warning of, such attacks.

Title VIII--National Imagery and Mapping Agency

    Section 801 defines the terms ``imagery'', ``imagery 
intelligence'', and ``geospatial information''.
    Section 802 establishes the National Imagery and Mapping 
Agency.
    The mission of the National Imagery and Mapping Agency will 
be to provide timely, relevant, and accurate imagery, imagery-
related products, imagery intelligence and geospatial 
information to all of its customers within the U.S. Government 
in support of the national security objectives of the United 
States, with appropriate emphasis on support to the warfighter. 
The ability of all members of the Intelligence Community to 
obtain both imagery intelligence support regarding matters of 
common concern and support necessary for individual agency 
requirements will be maintained and expanded as appropriate.
    The National Imagery and Mapping Agency is being created to 
accelerate the fusion of geospatial information and imagery 
intelligence to benefit a growing and diverse customer base, 
which will include non-Department of Defense customers and 
customers supporting military operations. One of the Agency's 
key responsibilities will be to solicit and advocate the needs 
of those customers, and to act as focal point for their 
support. Creating a single agency, focused on the exploitation 
and dissemination of geospatial information and imagery 
intelligence to meet the needs of an expanding customer base, 
will increase the leverage on technology, research, and the 
expanding commercial imagery base to better serve both imagery 
and mapping customers. It will, acting on behalf of the 
Director of Central Intelligence, strengthen the management of 
imagery as an end-to-end process. It will also enhance the 
consistency of training, career development and career 
standards.
    Under this section, the President would appoint the 
Director of the National Imagery and Mapping Agency. The 
Secretary of Defense would, with the Concurrence of the 
Director of Central Intelligence, recommend an individual to 
the President for such appointment. This section would also 
provide for a Deputy Director of NIMA. The Director and Deputy 
Director could be selected from civilian life or from among the 
commissioned officers, except that, as with the DCI and DDCI, 
at no time could both the Director and Deputy Director be 
commissioned officers. The Committee urges the DCI and 
Secretary of Defense to ensure the appropriate balance between 
Defense and non-Defense needs by choosing either the Director 
or the Deputy Director from the non-Defense Intelligence 
Community.
    Section 121 would provide a clear, affirmative 
authorization for the Central Intelligence Agency to provide 
administrative and contracting services to the National Imagery 
and Mapping Agency (NIMA), to insure accomplishment of the 
national mission of the NIMA or the performance of intelligence 
community activities of common concern, notwithstanding 
provisions of law that would otherwise limit such an 
authorization. This section would permit the Central 
Intelligence Agency to detail CIA employees to NIMA for 
indefinite periods of time.
    It also would permit the Central Intelligence Agency to 
provide security police services for NIMA facilities, 
notwithstanding any limitations on jurisdiction of such 
personnel contained in section 15 of the Central Intelligence 
Agency Act of 1949 (50 U.S.C.A. Sec. 403o). This authority is 
required to provide continuity of physical security support for 
CIA facilities being transferred to the NIMA.
    Section 803 makes this title effective on October 1, 1996 
or the date of enactment of appropriations for the National 
Imagery and Mapping Agency for fiscal year 1997 whichever is 
later.

                            committee action

    On April 24, 1996, the Select Committee on Intelligence 
approved the bill and ordered that it be favorably reported.

                           estimate of costs

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the Committee attempted to 
estimate the costs which would be incurred in carrying out the 
provisions of this bill in fiscal year 1997 and in each of the 
five years thereafter if these amounts are appropriated. For 
fiscal year 1997, the estimated costs incurred in carrying out 
the provisions of this bill are set forth in the classified 
annex to this bill. Estimates of the costs incurred in carrying 
out this bill in the five fiscal years thereafter are not 
available from the Executive branch, and therefore, the 
Committee deems it impractical, pursuant to paragraph 11(a)(3) 
of rule XXVI of the Standing Rules of the Senate, to include 
such estimates in this report.

                    evaluation of regulatory impact

    In accordance with paragraph 11(b) of rule XXXVI of the 
Standing Rules of the Senate, the Committee finds no regulatory 
impact will be incurred by implementing the provisions of this 
legislation.

                        changes in existing law

    In the opinion of the Committee, it is necessary to 
dispense with the requirements of section 12 of rule XXVI of 
the Standing Rules of the Senate in order to expedite the 
business of the Senate.